Chan Chui & Sons Ltd v Sundarjee Bros Trading Ltd [1994] FJHC 55; Hbc0486d.93s (27 May 1994)

IN THE HIGH COURT OF FIJI
At Suva
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0486 OF 1993

Between:

CHAN CHUI & SONS LIMITED
(of Apia, Western Samoa)
Plaintiff

-and-

SUNDARJEE BROS TRADING LIMITED
(formerly known as Yatulau Sundartex Limited)
Defendant

Mr. H. M. Patel for the Plaintiff
Mr. P. Sharma for the Defendant

RULING

In this application the plaintiff company seeks summary judgment under Order 14 of the High Court rules against the defendant company in the sum of $9,503.39 with interest.

The amount claimed represents the purchase price paid by the plaintiff company to the defendant company for a shipment of 20 metric tonnes of raw sugar shipped by the plaintiff company to the defendant company in a container on board the 'Forum Samoa' in late February 1992 and which entire shipment was condemned and destroyed on arrival at Apia, Western Samoa by the relevant Health Authorities.

It is common ground that the container-load of sugar had been damaged due to water leaking through a hole at the top of the container.

Furthermore although the shipment was insured under an all risks marine insurance policy, the insurer denies liability on the ground of the "unfitness of the container for the safe carriage of the subject matter insured." Equally the shipper Pacific Forum Lines have denied liability for the loss or damage caused to the shipment owing to the "unsuitability of the Container..." which co-incidentally was packed by the defendant company.

In the plaintiff company's Statement of Claim it is averred:

"1. THE Plaintiff agreed to buy and the Defendant agreed to sell 20 tonnes (400 x 50kg) of raw sugar for the agreed price;

and

5. THE Defendant had failed to deliver the raw sugar in a good and merchantable condition even though the full purchase price was paid by the plaintiff."

The defendant company however in its Statement of Defence denies the existence of any 'Sale and Purchase Contract' between the parties and refers instead to an Agreement dated the 10th October 1989 whereby the defendant company claims:

"... the Plaintiff requested the defendant to act as the Plaintiff's Agent and purchase 20 metric tonnes of raw sugar on behalf of the Plaintiff and export the same to the Plaintiff in Apia, Western Samoa, which the defendant did."

It is sufficiently clear from the pleadings that the plaintiff company's claim is a straight-forward one based on a breach of contract for the sale of goods. Equally clearly the defendant company's defence is based on the terms of an agency agreement (annexed to the defendant company's affidavit in reply) under which it is appointed 'Sole agent' for the purchase and export of sugar for and on behalf of various Pacific Island Countries including Western Samoa.

The Managing Director of the Plaintiff company however in his affidavit in reply denies that he was aware of the existence of the Sole Agency Agreement and deposes inter alia:

"As far as I am concerned my company was dealing directly with the supplier in a normal purchase - supplier situation."

and later he deposes:

"At no stage did I regard the said company as being my company's agent."

Those concerns and beliefs however are no sure guide to the legal relationship(s) that may or may not exist between the parties particularly when faced with the defendant company's denials and the managing director's own admissions as to the Western Samoa government's involvement in the transaction.

Furthermore a perusal a preamble "C" of the Sole Agency Agreement indicates that the plaintiff company itself was clearly within the contemplation of the parties to the Agreement of which the defendant company is 'the Agent' and its 'principals' are named Pacific Island Countries (including Western Samoa) or their appointed importers (referred to in the Agreement as "the Buyers").

If therefore the plaintiff company was a "Buyer" in terms of the Sole Agency Agreement then undoubtedly the defendant company was legally its 'agent' for the purchase and export of the raw sugar and it is trite that in such a situation, in the absence of negligence, an agent cannot be sued by its principal.

In Risbourg v. Bruckner and Another (1858) 111 RR 846 where a principal unsuccessfully sued his agent for the purchase price of a shipment of corn which the agent bough and paid for after it had been fraudulently sold by the captain of the ship.

Williams, J. is dismissing the principal's claim against his agent said at p 851, 852:

"The question is, to whom is the principal to resort to recover back his money-, the person who received it, or the agents? I am clearly of opinion that his only remedy is against the former; .... If one were to hold the contrary, we should be altogether changing the character of agents, who have a right to look to their principals for indemnity, and making them a sort of intermediate contractor, buying from the one party and selling to the other party on their own account."

The defendant company maintains it acted as the plaintiff company's agent and complied fully with its express duties under the written agency agreement. On the other hand the plaintiff company denies any knowledge of the Sole Agency Agreement or the existence of any such relationship and maintains the defendant company was a seller under a normal contract for the sale of goods. They can't both be right.

In the light of the above I am satisfied that the pleadings, affidavits and annexure raises serious questions to be tried not the least of which is the true legal relationship between the parties and the effect (if any) of the Sole Agency Agreement on their relationship.

Accordingly the application is dismissed with costs and the defendant company is given leave to defend the action which is to follow its normal course hereafter.

D. V. Fatiaki
JUDGE

At Suva
27th May, 1994

HBC0468D.93S