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Court of Appeal of Fiji |
IN THE COURT OF APPEAL, FIJI
On Appeal from the High Court of Fiji at Labasa
CIVIL APPEAL NO. ABU 0110 of 2023
High Court Civil HBC Case No. 24 of 2023
BETWEEN:
AIMADH BEGG aka AHMED BEGG
1st Appellant
AND:
MAQSUM BEG, HAZURAT BEG
AND HAZRA KHATOON
2nd Appellant
AND:
ABDUL AZIZ BEG, FEROZ BEG
AND FAIAZ BEGG
Respondent
Coram :
Prematilaka, RJA
Dobson, JA
Heath, JA
Counsel
Mr. A K Singh for the Appellant
Mr. A C Kholi for the Respondent
Date of Hearing:
7 July 2025
Date of Judgment:
25 July 2025
JUDGMENT
Prematilaka, RJA
[1] I agree with the reasons and conclusions of Dobson JA.
Dobson, JA
Introduction
[2] This is an appeal from a High Court ruling that certain Terms of Settlement completed by the relevant personnel in a long-running dispute between two branches of one family constituted a binding and enforceable contract.
Factual Background
[3] In 1979, two brothers, Jaffar Begg (also known as Naseeb Begg and referred to in this judgment as Jaffar) and Aziz Begg (also known as Abdul Azis Begg, referred to in this judgment as Aziz) formed a company called Waiqele Sawmills Pte Limited (the company). They each held 10,001 shares and were the company’s directors.
[4] On the death of Jaffar in 1985, his 50 per cent shareholding was transferred to his widow, Hazra Khatoon, as administratrix of his estate. The Court has been advised that she has also now died, in which case a new administrator or administratrix of Jaffar’s estate will no doubt be appointed. That change is not relevant to the issue in this appeal and the judgment will be binding on Jaffar’s estate, irrespective of the identity of its administrator or administratrix.
[5] One of Jaffar and Hazra’s six children, Ahmed Begg (also known as Aimadh but referred to in this judgment as Ahmed) became a director in 1987 and he has been a director of the company for much of the period (but not at all times) since then.
[6] Aziz was a director until 30 November 2020 when he retired due to ill health and appointed one of his two sons, Faiaz, in his stead.
[7] In October 2019, one share was transferred by Jaffar’s estate to each of three of his and Hazra’s six children namely Ahmed, Maqsum and Hazurat. Jaffar also had four other children with a de facto partner, Nazra Bi. That group are either beneficiaries in Jaffar’s estate, or claimants against it. None of them has taken part in the events relevant to his judgment.[1]
[8] At the same time, Aziz transferred one share to each of his two sons, namely Faiaz and Feroz.
[9] Since at least 2019 there have been bitter differences between the two branches of the family over the running of the company. One dispute was purportedly resolved on terms that both sides of the family requested and obtained consent orders from the High Court, which provided for certain real properties owned by the company to be transferred respectively to Aziz, and to Jaffar’s estate. The transactions provided for in those consent orders were not carried out and Aziz’s side of the family ( hereafter “Aziz’s family”) sought orders that Ahmed was in contempt for failure to effect the relevant transfers. An appeal against a High Court finding that Ahmed and Jaffar’s estate were in contempt has recently been heard by this Court, with judgment also being delivered on 25.7.25.
[10] Ahmed has resisted Aziz’s attempts to have Faiaz appointed a director of the company. In 2021, Aziz and his sons pursued an application to wind the company up on grounds including claims that Ahmed was acting oppressively and in a discriminatory manner in conducting the company’s business. Ahmed did not file an affidavit contesting serious criticisms of him, many of which were upheld in the judgment.[2] The Court declined to wind the company up but made orders requiring the company’s accounts for the previous four years to be completed, for a valuation to be conducted, and for one side of the family to buy the other out at that valuation, should either side consent to selling. Failing such a transaction, the company was to be sold to the highest bidder.
[11] Although there have been other aspects to the disputes the relevant narrative can then move to the attempt to resolve the disputes, in March 2023.
The Settlement Document
[12] The document was headed “Terms of Settlement made on this ......... day of ....... 2023”. It then listed Jaffar’s side of the family and his estate as “First Party”, with Aziz and his two sons specified as “Second Party”. There was then a band describing the document as:
TERMS OF SETTLEMENT
(With respect of buying the Waiqele Sawmill Pte Limited)
[13] The text then included:
“1. The parties today agree to settle all the differences by entering into a Deed of Settlement that will be prepared and executed within a week.
[14] Paragraphs 8 to 13 of the document then recorded how identified assets and liabilities of the company were to be dealt with as terms of the settlement. Then followed:
“14. All staffs currently working will be paid as advance 2 weeks salaries as required under the employment law;
15. Parties also agree that there will be further terms and conditions that will form part of Deed of Settlement;
Entire Agreement
Covenant not to sue
[15] After a clause confirming that each party would bear their own costs, there followed:
“Severability
Enforceability
Governing Law
1. This term of settlement is governed by and is to be construed under the laws of Fiji and the parties submit to the Jurisdiction of the Fiji Courts.”
[16] The document was executed on that day of the meeting, 14 March 2023, by all the individuals listed, under an acknowledgement saying that it had been signed “... after it was read and explained to them in Hindi language”. All signatures appear except for that of Hazra Khatoon who had placed her mark instead. They were witnessed by commissioners for oaths.
[17] In the days after the terms of settlement were concluded, there was positive co-operation between Faiaz, representing Aziz’s family, and solicitors for Jaffar’s family on details for inclusion in the deed contemplated on settlement. Those exchanges were consistent with a deal having been done. A first draft of the deed was unexceptional. However, on 4 April 2023, Aziz’s family’s solicitors objected to new provisions included in a second draft prepared on behalf of Jaffar’s family that made reference to a previously undisclosed court case that the company was a party to, and made separate provision in respect of valuation of the company’s stock at the time of the transaction. These provisions appear to have materially changed the respective financial outcomes for the parties. The letter insisted that the settlement had to be carried out consistently with its terms. The letter ended with the following:
“ In the event that your clients fail to honour the Terms of Settlement and renege on the deal we will have no option but to institute civil action in High Court seeking damages and costs. Not to mention that we will seek orders from the court that the company be wound up.
Your client is welcome to purchase our client’s shares for $3 million and our client will only require one vehicle to be assigned to Abdul Aziz Begg. The rest of the terms may remain as per the Terms of Settlement and the first deed sent to us.”
[18] The following day Ahmed’s solicitor responded, purporting to accept the offer in the last paragraph on just Ahmed’s behalf that he would buy Aziz’s family’s share at the price of FJ$3 million and otherwise on the same terms as stated in the 14 March 2023 settlement terms.
[19] That initiative was rebuffed initially on 16 April 2023, and on 1 May 2023 Aziz’s family set out reasons for objecting that Ahmed’s family seemed to be reneging and insisting that the terms of the settlement be honoured. The letter explained why they would not sell their shares to only Ahmed in the following terms:
“After discussion amongst themselves, our client had offered to sell their shares to your clients who were parties to the Terms of Settlement. However, you wrote back saying that Aimadh Begg was prepared to purchase the shares. Ahmed Begg was only one of the shareholders who owned only one out of 10001 shares. Our client Mr Aziz Begg feels that Ahmed Begg is trying to hoodwink the rest of the shareholders by acquiring majority of the shares. This is not what late Mr Jaffar Begg intended and Mr Aziz Begg strongly feels that he has a moral duty to see that the Estate of his late brother Jaffar Begg have the shares of late Mr Kaffar Begg.”
[20] The letter ended with a confirmation that Aziz’s family remained willing to purchase the other side’s shares on the terms agreed on 14 March 2023.
The Proceedings
[21] Ahmed’s family instituted proceedings in the High Cour at Labasa to enforce their acceptance of the alleged counter-offer pursuant to which Ahmed would buy (rather than his side of the family selling) the other side’s shares in the company. Aziz’s family responded in those proceedings with an Order 33 summons on a preliminary issue, seeking declarations including that the 14 March 2023 settlement remains a valid binding contract, and if so, for orders for its specific performance. In a ruling dated 31 October 2023, Justice Ratuvili held that the 14 March 2023 settlement was indeed a valid binding contract, and that the parties were to take immediate steps to finalise the deed of settlement contemplated by it.[3]
[22] On 14 December 2023, the Judge granted a stay of his ruling pending appeal, on terms intended to protect the business of the company for the benefit of all shareholders. It was then under Ahmed’s effective control.
Did the parties intend to be bound by the terms of settlement?
[23] The appeal was advanced essentially on two grounds:
- (a) First, that the Judge was wrong to treat the parties as intending to be bound by the 14 March 2023 terms of settlement, when that was only to occur when they concluded the deed of settlement they had provided for.
- (b) Secondly, that the Judge wrongly characterised the counter-offer by Aziz’s family in their solicitor’s letter of 4 April 2023 which purportedly had the effect of rescinding the previous agreement and had been properly accepted by Ahmed in his solicitor’s letter of 5 April 2023.
[24] The case for the appellant depended primarily on the approach of the High Court of Australia in Masters v Cameron.[4] That judgment proposed that all cases questioning the existence of a binding contract when something in the nature of a preliminary agreement was present fell into one of three categories:
- (a) First, one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which would be fuller or more precise but not different in effect.
- (b) Secondly, where parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to their agreed terms express or implied but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal contract.
- (c) Thirdly, there are cases in which the intention of the parties is not to make a concluded bargain at all unless and until they execute a formal contract.
[25] Mr Singh submitted for the appellants that the terms of settlement were to be characterised within this third class.
[26] For the respondents, Mr Kohli submitted that the three categories in Masters v Cameron were too rigid to be exhaustive, and are no longer to be applied as strict categories into which all cases must fall.[5] Mr Kohli invited the Court to apply the approach of the New Zealand Court of Appeal in its decision in Electricity Corporation of New Zealand v Fletcher Challenge Energy Ltd [6](ECNZ). In the judgment of the four judges in the majority, it was observed:
[57] It is also very important, in considering the intention of the parties to be bound, to bear in mind the dynamics of the negotiation process and the internal inter-relationship of the terms of a commercial bargain.
[27] That observation would have had more bearing in the ECNZ case where the heads of agreement that one party sought to enforce related to a complex, long-term gas supply contract.
[28] The majority in ECNZ also made points including that a contract is not legally incomplete merely because consequential matters have been omitted, particularly when they relate to questions of contingency and risk allocation.[7] The analysis of the parties’ intention is to reflect the position at the time the contract was alleged to have been formed.
[29] The minority judgment of Thomas J, although differing from the majority on the outcome, was not inconsistent on the approach to interpretation:
[127] No case law need be cited, beyond that relied upon by Wild J [the High Court Judge whose decision was under appeal], to arrive at the correct approach. It is long-established. The first question is whether the parties intended to be bound at the time of their agreement. The intention of the parties is paramount and the courts must give effect to that intention. ...
[30] The approach in the ECNZ decision has previously been applied by this Court in determining whether parties intended to be bound.[8] The all-important context here included long-standing and bitter differences between the two parts of the Begg family. The attempt to have the company wound up had been unsuccessful, but resulted in orders requiring an independent valuation to be prepared, leading to the opportunity for either side of the family to buy the other out at that valuation. A parting of the ways was therefore inevitable.
[31] All those with an interest in resolution of the dispute were gathered together in one room, with a solicitor present, at least for Ahmed’s side of the family.
[32] Turning then to the wording used in the Terms of Settlement, the Court notes, first, that the context in which the document was prepared was recorded in clause 7. (The terms that are material to discerning the intention of the parties are set out at [12] to [15] above).
[33] In clause 7, the parties acknowledged that they had convened an extraordinary meeting that day at which the option was to be provided for “other party” to purchase the company by agreement. It may be that the term was intended to be “either party” but in any event it reflects the essence of the orders that had been made in the winding up proceedings in December 2021.
[34] For the appellants, Mr Singh relied primarily on the wording of clauses 1 and 15 as bringing this document within the third category of those defined in Masters. He submitted that, properly construed, they demonstrated that the parties did not intend to be bound until the deed of settlement, which was to include further terms and conditions, had been completed.
[35] However, the essence of clause 1 was to record that the parties had that day agreed to settle all their differences. We will return shortly to the effect of clause 15, but note now that it did not allow for further terms that went beyond the scope of what had been recorded in the terms of settlement. Given these limitations on the effect of clauses 1 and 15, we are not satisfied that they represent the equivalent of “subject to contract” which is the essence of the third category in Masters. They certainly do not reflect an intention by the parties to defer the making of a contractual commitment.
[36] Clause 2 records which side of the family is to buy the other out, and the price at which that purchase is to occur. Clause 4 provides for a time frame for settlement to be completed.
[37] Clause 5, in providing that the business of the mill was to be closed until the deed of settlement had been executed, might be seen as equivocal: it could mean that the parties had agreed for a standstill on operation of the company until they had committed to their contract, or alternatively that they had finally concluded a deal and they wanted the company’s business to come to a standstill until the agreement they had concluded was formally committed in terms of the anticipated deed.
[38] Clauses 6 and 8 to 13 record agreements on the disposition of identified assets and liabilities.
[39] Clause 14 recorded the parties’ agreement that the company would pay two weeks’ salaries in advance for the staff who would not be working until the contemplated deed was completed.
[40] At first blush, there may appear to be an inconsistency between clause 15, which recognised that the deed of settlement would include further terms and conditions, and the two clauses (numbered 1 and 2) that follow it immediately under the heading “Entire Agreement”. However, the clauses specifying that the terms of settlement comprise an entire agreement can be given priority over the scope of further terms and conditions that might appear in the formal deed of settlement. The first paragraph of the entire agreement clause gives absolute priority to the terms then being settled, over anything that had previously been agreed between the parties. The second paragraph stipulated that the terms agreed that day could not be modified except by written agreement between all parties. That provides a limitation on the scope of the further terms and conditions that might reasonably be contemplated to flesh out the detail of what had been agreed.
[41] The following provision, under the heading “Covenant not to sue” is the sort of important matter that created a commitment for both sides to stop suing the other. That would be important given the extensive litigious activity that had gone on in recent years and is not the sort of provision that parties would readily include in a conditional arrangement that was not intended to be binding.
[42] The separate “Enforceability” provision certainly reflects the assumption of binding commitments by both sides. It concludes with confirmation that each party “ is bound by and has a separate right to enforce” the terms then agreed to. That is the essence of a binding commitment and is fundamentally inconsistent with a conditional agreement that would not be binding until further documentation is completed. The same status is reflected in the latter part of the preceding paragraph on severability. Should any provisions of the document need to be severed, that was not to affect the legality or enforceability of the remaining provisions.
[43] At the end of it, the document has a degree of formality about its execution, which again reflects a level of care inconsistent with it being only a note of agreed terms not intended to be binding. We accordingly agree with the High Court ruling that it was intended by the parties to be binding notwithstanding the anticipation that there would later be a formal deed of settlement.
A later counter-offer?
[44] By the end of numerous exchanges with Mr Singh during the hearing on the intention conveyed by an analysis of these terms of settlement, he appeared to concede that overall the document did reflect an intention for the parties to immediately be bound by it. If that were the case, Mr Singh’s fallback position was that in any event the terms of settlement ceased to be binding once Aziz’s family made an inconsistent “counter-offer” to sell, rather than purchase, the other party’s shareholding in the company.
[45] This arose out of the 4 April 2023 letter despatched by Mr Kohli’s firm to solicitors acting for Ahmed’s side of the family, the final two paragraphs of which are quoted at [17] above. Those paragraphs appear after some one and a half pages of protest at Ahmed’s family resiling from the terms of settlement completed on 14 March 2023 and specifying the extent to which a second draft deed of settlement had gone beyond the four corners of the terms of settlement that had been agreed. In terms conveying a measure of frustration, that letter ended with the prospect of the parties Mr Kohli acted for being prepared to sell, rather that buy the shares of the other side of the family.
[46] Subsequent conduct occurring after a contract was allegedly formed may be considered to throw light on what the parties intentions had been at the time of its alleged formation.[9]
[47] Given our finding that the 14 March 2023 document represented an enforceable contract, the parties were thereafter bound by its terms and had moved beyond negotiation. A counter-offer could only be made before a contract had been concluded and it is therefore inappropriate to characterise the concluding statement in Mr Kohli’s 4 April 2023 letter as a counter offer having the contractual effect of bringing the binding contract concluded on 14 March 2023 to an end.
[48] Mr Singh argued that use of the singular in the offer: “Your client is welcome....” meant it was capable of acceptance just by Ahmed. However Mr Kohli explained use of the singular as a typographical error and that all dealings had been between the two factions of the wider family. That characteristic is reflected in the Terms of Settlement which described them as “First Party” and “Second Party”. The correspondence that followed consistently treated the settlement, and dealings involved in carrying it out, as a resolution of issues between the two sides.
[49] When Ahmed’s solicitors sought to accept the 4 April suggestion as an offer for him to purchase on his own, by their letter of 5 April, the position was clarified by Mr Kohli insisting on 16 April that the 14 March terms be honoured. He later explained more fully in his 1 May letter quoted at [19] above why Aziz’s side of the family was not prepared to see control of the company vested solely in Ahmed.
[50] Interestingly, Mr Singh had written on 29 April contending that his clients were interested to buy the other side’s shares. In that letter he described Mr Kohli’s 4 April letter not as a counter offer, but as an offer. Further, he listed all those in Ahmed’s family as purchasers (not just Ahmed alone). That might indicate that he appreciated Ahmed acting on his own did not qualify to accept the 4 April offer, which had in any event been countermanded on 16 April.
[51] Analysed in this light, we do not accept that the exchanges between 4 April 2023 up to 1 May 2023, when Mr Kohli’s firm clarified the reasons why any offer was not capable of acceptance by Ahmed alone, amount to conduct which disentitles Aziz’s side of the family to enforce the contract that had been created on 14 March 2023. The content provided in the rest of the 4 April letter makes it clear that Aziz’s side of the family held to the contract and were pressing Ahmed’s side to honour it.
[52] Accordingly, we dismiss the appeal. The respondent is entitled to costs.
Heath, JA
[53] I concur.
Orders of the Court:
Hon. Mr. Justice Chandana Prematilaka
RESIDENT JUSTICE OF COURT OF APPEAL
Hon. Mr. Justice Robert Dobson
JUSTICE OF APPEAL
Hon. Mr. Justice Paul Heath
JUSTICE OF APPEAL
Solicitors:
A.K Singh Lawyers for the Appellant
Kohli & Singh Law for the Respondent
“A”
WAIQELE SAWMILL PRE LTD {EST 1979}
AZIZ BEGG {50% SHAREHOLDER} JAFFAR BEGG {AKA NASEEB BEGG} 50% SHAREHOLDER
JAFFAR BEGG PASSED AWAY IN 1985
AZIZ BEGG {50% SH} ESTATE OF JAFFAR BEGG {50% SH}
HAZRA KHATOON {ADMINISTRATIX 50% SH} LEGAL NAZRA BI {DEFACTO WIFE}
AZIZ BEGG {50% SH} AIMADH MASOOD MAQSOOM AZURAT NAZMA ASMA FARINA AZIM AZMAT AZAM
2019 (BEFORE COURT ORDER DATED 12/03/20) TO CURRENT
AZIZ BEGG (48% SH) HAZRA KAHTOON (47% SH)
FEROZ (1% SH) FAIAZ (1% S) AIMADH (1% SH) MAQSOOM (1% SH) AZURAT (1% SH)
TOTAL SHARES 50% TOTAL SHARES 50%
[1]A family tree, provided by counsel at the hearing which shows the relationships is attached as annexure “A”
[2] Winding up action no HBE 03/2021 in the matter of Waiqele Sawmills Pty Ltd, judgment 20 June 2022 of Justice Amaratunga.
[3] Aimadh Beggs (Plaintiff) v Abdul Aziz Begg (Defendants), Civil Case No HBC 24/2023, ruling dated 31 October 2023.
[4] Masters v Cameron [1954] HCA 72, (1954) 91 CLR 353 at [9]
[5] Citing, by way of example, Wong v Wong [2022] FCA 78 at [31].
[6] Electricity Corporation of New Zealand v Fletcher Challenge Energy Ltd [2002] 2 NZLR 453 (CA).
[7] Electricity Corporation of New Zealand v Fletcher Challenge Energy Ltd, above n 6, at [51].
[8] Ratu Solomone Naqa v The Attorney-General of Fiji, Civil Action No HBC 576 of 1990 (31 October 2005). [2005] FJHC 758
[9] ECNZ op cit fn6 above, at [56]
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