Sundar v Prasad [1996] FJHC 161; Hbc0233j.1993 (28 November 1996)

IN THE HIGH COURT OF FIJI

CIVIL ACTION NO. 233 OF 1993

BETWEEN:

PETER SUJENDRA SUNDAR
(f/n Ram Sundar)
1st Plaintiff

and

CONCAVE INVESTMENTS LIMITED
2nd Plaintiff

CHANDRIKA PRASAD
(f/n Badri Maharaj)
Defendant

Dr. M. S. D. Sahu Khan for the Plaintiffs
H.K. Nagin for the Defendant

JUDGMENT

At all material times the Defendant has been the registered proprietor of a residential building No. 123 Princes Road which consists of 3 flats and which is Lot 4 CT 10321 D.P. 1663 (the property).

On a date unknown in 1989 the 1st Plaintiff and the Defendant entered into a written sale and purchase agreement (the first agreement) whereby the 1st Plaintiff agreed to purchase the property from the Defendant for a total of $51,000 (see Exhibit 2).

Clause 1(a) of the first agreement provided for the payment of a deposit of $1,000 and this amount was paid. Clauses 1(b) and 4 provided for the balance to be paid by no later than 11a.m. 30 April 1992. It is not disputed that in fact settlement did not take place on the due date.

On 8 June 1989 the 1st Plaintiff and the Defendant entered into a second agreement (the second agreement) (see Exhibit 5). This agreement referred to an outstanding sum of $50,000 arising from the purchase of "a property in Fiji" by the 1st Plaintiff from the Defendant together with a second sum of $50,000 previously lent by the Defendant the 1st Plaintiff. No purpose or date for the loan was identified. The agreement provided that the two sums together totalling $100,000 which bore interest at a rate of 10% per annum were to be repaid by minimum monthly instalments of $1,000, the whole amount being repayable by no later than 13 April 1992.

On 19 May 1993 the Plaintiff commenced this Action. The 1st Plaintiff claimed that in April 1993 he had assigned his "rights as purchaser under the (first) agreement to the 2nd Plaintiff" but that while the Plaintiffs were willing to pay the Defendant the "agreed purchase price" the Defendant was unwilling to perform the first agreement and in particular was not willing to execute the necessary transfer of the Certificate of Title CT 10321. The Plaintiffs sought an Order for specific performance of the first agreement, damages and other associated reliefs.

The somewhat rancorous nature of the proceedings (which unfortunately and most unusually persisted throughout the hearing) can first be seen in the Defence filed, paragraph 1 of which describes the 1st Plaintiff as a "confident trickster and a fraud". The Defence asserts that the first agreement was "rescinded for non performance by the 1st Plaintiff as (he) was not able to effect settlement on or before 30th April 1992" and that therefore the 1st Plaintiff had nothing to assign. The Defendant also counter-claimed damages for breach of contract and the recovery of rent said to have been collected by the 1st Plaintiff from the tenants of the property but improperly converted by him to his own use.

On 22 December 1993 the standard pre-trial directions were made by the Deputy Registrar. On 14 September 1995 after solicitors for the Defendant had complained that the Plaintiffs solicitors had failed to "execute" the minutes of a pre-trial conference a conference was ordered by the Court. According to the minutes filed on 16 October 1995 the conference took place on 19 September and both Dr. Sahu Khan and Mr. Nagin were present.

The purpose of holding a pre-trial conference is clearly set out in Order 34 rule 2(2). As appears from the minutes when compared with the pleadings no effort at all was made to comply with the requirements of the Rule: no progress was made beyond the pleadings at all. Such deliberate disregard of the Rules is quite unacceptable and it is for this reason that it has become the established practise that a failure to hold a proper pre-trial conference will result in a conference being held before the judge under the provisions of Order 34 rule 2 (6). In the present case, partly as a result of an omission to place the file before me for perusal prior to the date for trial being fixed no Rule 2(6) conference was held and by the time the trial commenced almost no discovery and inspection of documents had taken place at all. There was no agreed bundle of documents, no copies of agreed documents for witnesses and the Court. The evidence was frequently interrupted by objections to documents which it was sought to produce. This type of non-co-operative ambush tactics is out of date, inefficient and altogether unsatisfactory. It is not how modern litigation ought to be conducted. It does not serve the interests of justice. I hope not to come across it again.

On 24 November 1995 the matter was set for trial on 30 and 31 July 1996.

On 16 April 1996 solicitors for the 1st Plaintiff filed a summons seeking an Order that the 1st Plaintiff be examined on commission in Australia. The supporting affidavit averred that the 1st Plaintiff was serving a term of imprisonment in Australia, that his evidence was of vital importance, but that he would not be able to attend the trial. The deponent asked for the trial to be stayed until the 1st Plaintiff's depositions taken on commission had been filed.

On the return date for the summons counsel for the Plaintiffs did not appear. I was told by counsel for the Defendant that the matter had been settled. I adjourned the matter to 15 May for mention. On 15 May I was told by Dr. Sahu Khan and Mr. Nagin that settlement discussions were continuing. I adjourned the matter to 29 May for mention only. On 29 May I was told that the settlement had fallen through. Mr. Chandra who appeared for Dr. Sahu Khan moved the Court in the terms on the summons filed on 16 April. No authority was cited either in support or in opposition to the summons. Having heard counsel I delivered the following Decision ex tempore:

Decision

This is an application for an Order that the Plaintiff, presently detained in prison in Australia, be examined on oath under the provisions of RHC O.39. Counsel for the Applicant does not know when the Plaintiff is likely to be released from prison following his conviction for visa offences. From examination of the pleadings it is clear that the Plaintiff's credibility is central to this Action and accordingly I am of the view that the Plaintiff's examination before someone other than the trial judge would be quite inappropriate. The application accordingly fails.

On 14 June solicitors for the Plaintiffs filed a further summons seeking three Orders namely:-

(i) that leave to appeal be granted against my Decision of 29 May;

(ii) that the trial be adjourned until after 11 February 1998 and/or until the determination of the appeals; and

(iii) that the Plaintiffs be given leave substantially to amend their statement of claim in the proposed form filed.

On 3 July, the return date for the Summons, Dr. Sahu Khan did not appear but was represented by Mr. Raza who had no proper instructions and was unable to argue the applications which were adjourned to 18 July.

On 18 July the first application for leave to appeal was argued. Instead of addressing the questions relevant to such an application (see generally Nieman v Electronic Industries Ltd [1978] VicRp 44; [1978] VR 431; ex-parte Bucknell [1936] HCA 67; 56 CLR 221; Dunstan v Simi and Co Pty Ltd [1978] VR 649 and Wilson v Wilson [1984] 3 NZLR 161, 163) Dr. Sahu Khan re-opened the whole argument which had already taken place before me on 29 May when he had been represented by Mr. Chandra. He proceeded to place before me all the authorities which should have been placed before me on the earlier date. This was not the proper course to take but in view of the obviously critical importance of the application to the 1st Plaintiff I felt I had no alternative but to allow Dr. Sahu Khan to proceed even though he thereby secured for himself the opportunity to argue the same application before the same Court twice. In view of the number of authorities referred to me I reserved my Decision and also adjourned the hearing of the second and third applications to the next appointment date.

On 30 July I delivered my written Decision refusing Dr. Sahu Khan's first application. 30 July was of course the date fixed for the first day of the trial but Dr. Sahu Khan first argued the remaining two applications which had been adjourned from 18 July. Having heard argument I refused both. I refused to adjourn the hearing date until 11 February 1998 because it was clear to me that the 1st Plaintiff was seeking to continue to prevent the Defendant selling a property of which the Defendant was the registered owner, because I accepted that the Plaintiffs' conduct of the case since they had chosen to issue the writ in Fiji indicated an intention deliberately to delay the hearing of the Action, because the application was being made at the very last possible moment and because I was of the view that the application was unnecessary and could have been avoided. If proper arrangements had been made it might indeed have been possible to have the 1st Plaintiff's evidence taken on commission. Alternatively the property could have been sold and the proceeds argued over at another time.

I rejected the application for leave to file an amended statement of claim for similar reasons. The application was quite unnecessarily made at the very last minute and if granted would have entailed the pleadings being reopened and the trial being adjourned. The date for trial having being fixed over eight months before, the late application was quite inexcusable.

Having refused both applications Dr Sahu Khan then sought leave to appeal and also sought to have the trial adjourned in order to make application to the Fiji Court of Appeal. I refused these applications in the following terms:-

Decision

The trial dates 30 and 31 July were fixed on 29 November 1995. The application for a special examiner was not made until 16 April 1996 and not fully argued before me until 18 July. In these circumstances I find it a bit rich that Dr Sahu Khan complains that my ruling was not delivered until today. If I adjourned to allow an application to be made to the Fiji Court of Appeal now then the Plaintiffs will have achieved the adjournment which is what I have just ruled against. The applications are refused.

Finally, having taken the ruling, Dr. Sahu Khan opened his case.

The first and only witness for the Plaintiffs was Vijay Kumar, the 1st Plaintiff's brother-in-law and a director and majority shareholder in the 2nd Defendant. He was, in other words, the person to whom the 1st Plaintiff maintained he had assigned his rights under the first agreement. Mr. Kumar produced the first four exhibits by consent. His evidence hinged on two cardinal assertions: first, that he had had extensive discussions with the 1st Plaintiff during which discussions he had been shown a number of documents and secondly, that he had had extensive discussions with the Defendant during the course of which the Defendant had made a number of important admissions to him.

The fifth document which Mr. Kumar wished to produce led to the first of many disputes on the admissibility of different documents. After I had ruled that I would admit most of these documents for what they were worth it turned out that several were not actually disputed after all. The fifth document was exhibit 5, already referred to and Mr. Kumar explained that the Defendant had told him that the $50,000 loan referred to in the document was in fact not a loan but represented the rent which the 1st Plaintiff and the Defendant had agreed that the 1st Plaintiff would have received from the premises during the three years between the date of the first agreement and settlement. It was not disputed that during this period the 1st Plaintiff had in fact taken over management of the property and received rents paid by tenants although this appears to conflict with paragraph 6 of the first agreement.

The next document which Mr Kumar wished to produce was Exhibit 6, a paper containing hand written figures. Mr. Nagin strongly objected to its production but Mr. Kumar had told me that the 1st Defendant had told him that the Defendant's son had prepared the document and had given it to the 1st Plaintiff who had given it to him. Given the form of the document and the almost total lack of any particulars indicating a nexus with the parties to this action I did not think it was worth excluding.

The last three documents which Mr. Kumar produced were Exhibit 7, an assignment by the 1st Plaintiff to the 2nd Plaintiff, Exhibit 8 a Land Sales Act declaration and Exhibit 9 an unregistered transfer. According to Mr. Kumar the Defendant whom he had met in February or March 1993 on his visit to Fiji was more than happy that he should take over the property. He knew all about the assignment and accepted it. So far as he was concerned all he wanted was to recover the $24,000 which, according to Exhibit 6, was still owed to him by the 1st Plaintiff. As for the $74,000 also shown in Exhibit 6 the Defendant had told him that he had received that sum in cash from the 1st Plaintiff and had used it to renovate his house. The Defendant had certainly never complained that the 1st Plaintiff had taken rent monies but failed to account for them. Mr. Kumar having given his evidence Dr. Sahu Khan closed the Plaintiff's case. The next morning however and before Mr. Nagin had called the Defendant Dr. Sahu Khan applied, under the provisions of Order 32 r2 to file an affidavit (marked for convenience only as Exhibit 13) sworn by the 1st Plaintiff. Having heard argument I refused the application in the following terms:-

Decision

On 30 July I refused an application for leave to appeal against my refusal to allow the 1st Plaintiff to give evidence on commission pursuant to RHC O39.

Dr. Sahu Khan now applies for his client's evidence to be given by way of affidavit under RHC O38 r2.

My fundamental reason for refusing the O 39 application was that the 1st Plaintiff's evidence would not be tested in front of me in a case where his credibility is clearly central. To allow his evidence to be placed before me now by affidavit would be to allow evidence which is entirely untested by cross examination either on commission or before me. In other words the objection to the O 39 application can only apply with even more force to this application. There is authority for the view that where the motives or good faith of the deponent are at issue the Court should not act without cross examination (re Smith and Fawcett [1942] Ch 304). None of the procedures set out in paragraph 38/2/1 of the 1988 edition of the White Book has been followed. The Plaintiff's case has been closed. I have read the affidavit which clearly seeks to introduce material which has not been pleaded. I direct that a copy of the proposed affidavit be filed but refuse the application. The affidavit can be marked, for convenience only, as Exhibit 13.

Mr. Nagin then called the Defendant.

The Defendant's account of what had taken place was very different from that of Mr Kumar. He told me that although he knew Mr Kumar who was related to him by marriage and although it was possible that he had in fact driven with Mr Kumar from Nadi to Suva in 1993 he denied that he had then or at any other time discussed the property with him. He had certainly never agreed to any assignment of any interest in the property to Mr Kumar. He agreed that the first sum of $50,000 mentioned in the second agreement represented three years rent but stated that the second $50,000, despite the wording of the agreement, was in fact another sum of $50,000 which had nothing whatever to do the purchase of the property but which had been lent by him to the 1st Plaintiff on the occasion of his son's marriage to the 1st Plaintiff's daughter.

The Defendant told me that he had come over to Fiji shortly before settlement date and had actually gone to the Registrar of Titles Office and had been there at 11.00 a.m. on settlement day. Neither the 1st Plaintiff nor any representative of his had turned up. About a month later and after he had returned to Australia he had sent a formal notice of rescission to the 1st Plaintiff (Exhibit 14). It was only after the 1st Plaintiff had failed to complete and when he had made alternative arrangements to sell the property that the 1st Plaintiff had lodged a caveat against the property and he had come to know that the 1st Plaintiff was still claiming an interest. So far as Exhibit 6 was concerned he had never seen it until it was exhibited to an affidavit filed by the 1st Plaintiff. He had never received $74,000 from the 1st Plaintiff: the 1st Plaintiff had actually given him a post dated cheque for $74,000 in April 1991. The 1st Plaintiff had asked him to wait for two weeks before presenting the cheque but before the two weeks had elapsed he had asked him for his cheque back saying that he would give him a bank cheque in its place. The Defendant had returned the personal cheque to the 1st Plaintiff but had never received the promised bank cheque in its place. He had never extended or renovated his house at all. So far as the $50,000 capitalised rental income was concerned the 1st Plaintiff had simply taken over management of the property after the second agreement had been reached. He had been content to permit the 1st Plaintiff to rent out the flats and take the income from them.

At the close of the Defence case Dr Sahu Khan applied to amend the Statement of Claim in terms of a document marked for convenience only as Exhibit 18. Having heard argument I refused the application in the following terms:

Decision

When amendment has become necessary by reason of variation between the Statement of Claim and the evidence given at a trial it should be asked for at the close of the Plaintiff's case. This is obvious since otherwise the Defendant does not know what case he has to answer (Rainy v Bravo (1872) LR4 PC 287) and as a rule an application to amend after the close of both cases will be refused (Soar v National Coal Board [1965] 1 WLR 886). This matter was set down for hearing last November. There was ample time to allow the application to be made sooner. No reason for not doing so has been advanced. If the amendments were allowed now the pleadings would have to be reopened and rulings already made would be affected. I have already refused an application to plead very similar material. I can see no justification for allowing amendment at this stage. The application is refused. The proposed amendment will be marked Exhibit 18 for convenience only.

The only remaining matter was addresses. Both counsel invited me to accept addresses by way of written submissions and exceptionally I agreed. This was because of the lateness of the hour and the state of my diary which would not have permitted me to consider oral submissions for several weeks. The Defendant's written submissions were filed on 13 August 1996, the Plaintiffs in answer was filed on 3 October 1996 and the Defendant filed a brief written submission in reply on 4 November 1996 although this had not been provided for in my Order of 31 July.

As has been seen the principal relief sought by the Plaintiff is specific performance of the first agreement. The Defendant on the other hand claims that the 1st Plaintiff did not complete and that the first agreement was accordingly rescinded. In these circumstances the status of the first agreement must initially be established.

The meaning of the word "rescission" has not always been entirely clear. Originally it was thought to refer only to the unmaking of a contract or an undoing of it from the beginning and not merely a termination. If the contract was rescinded ab initio then the right to damages under it were thought to be lost. Since 1979 however the English Courts have followed the Australian approach (see e.g. McKenna v Richey [1949] VicLawRp 17; [1950] VLR 360) and awarded damages where the Plaintiff was suing on the basis that it was the purchaser Defendant's breach which amounted to a repudiation discharging the contract (see Buckland v Farmer and Moody [1979] 1 WLR 221, 237 and Johnson v Agnew [1980] AC 367).

In the present case it was not disputed that settlement of the first agreement had not taken place by completion day 30 April 1992. According to paragraph 16 time was of the essence of the agreement. Given the well known movement of property prices I am satisfied that the completion date amounted to a fundamental term of the first agreement. Dr Sahu Khan suggested that the first agreement had somehow been superseded by the second agreement and in some respects it does appear that this was the case. Thus paragraphs 1(b), 4(c) and 6 were all affected by the agreements, not all recorded in the second agreement, to allow the 1st Plaintiff to manage the property in return for the right to collect rents the value of which were capitalised and which, together with the purchase price of the property were made subject to the payment of interest at the rate of 10%. I cannot however accept that the second agreement was capable of amounting to such a variation of the first agreement that the completion date of 30th of April 1992 ceased to apply. The reasons I cannot accept this proposal are first, that the repayment date under the second agreement was 13 April i.e. 27 days before settlement date under the first agreement and secondly, because the second agreement nowhere refers to, let alone varies the first agreement's completion date at all. In my view the meaning of the second agreement is quite clear and I am therefore not minded either to accept the Defendant's description of the second sum of $50,000 mentioned in the second agreement as being a wedding loan. The second agreement clearly describes it as being unpaid purchase price for the property. Whether the Defendant was merely confused and mistaken I do not know and in my view it does not matter. He is not suing for the return of wedding monies. In my opinion the first agreement was fundamentally breached by the 1st Plaintiff when he failed to complete on 30 April. The failure to complete led to the Defendant's decision to rescind, in other words to treat the contract as having been discharged. I accept that the 1st Plaintiff came to know that this was the Defendant's decision and I see no reason to find that Exhibit 14 was not sent to the 1st Plaintiff by the Defendant. In fact I do not think Exhibit 14 had or has any legal effect or significance.

It follows that rescission having taken place there was nothing to assign and that therefore all the discussions and dealings which the Plaintiffs claimed to have had after the date of rescission were all a waste of time. In so far as Mr. Kumar's evidence was advanced as being indicative of an intention by the Defendant to regard the first agreement as still subsisting I reject it. Although I was not entirely happy with the 1st Defendant's evidence on the question of the wedding advance I found him generally to be a rather more credible witness than Mr Kumar who did not impress me at all save as one who was prepared to say anything in the witness box providing that it made up for the 1st Plaintiff's absence. The Plaintiff's claim must fail.

There remains the Counter Claim. As has been seen the Defendant agreed that the rents to which the 1st Plaintiff was entitled following the second agreement would be calculated in advance at $50,000. This being the case I can see no scope for an account. If the 1st Plaintiff in fact collected more than $50,000 then he was lucky, and if not then he was unlucky. Although this is an Action by the Defendant for breach of contract it seems to me that there is no evidence of any breach of the arrangement by which the 1st Plaintiff would collect the rents. There was no agreement that the 1st Plaintiff would account for the rents collected. As for the purchase price of the property the evidence is that following the failure to complete the Defendant arranged to sell it for a much higher price then that agreed with the 1st Plaintiff. No evidence of any loss arising from the breach was led. This is not, as has been seen, an action for wedding money had and received. The wedding is in fact not pleaded at all. If the Defendant wishes to recover that sum then he is free to do so in another place. In my judgment the Counter Claim also fails.

In the result both the Claim and the Counter Claim fail and are dismissed.

M.D. Scott
JUDGE

28th day of November 1996

HBC0233J.93