Media Enterprises Pty Ltd v Fiji Broadcasting Commission [1999] FJHC 80; Hbc0146j.98s (6 August 1999)

Fiji Islands - Media Enterprises Pty Ltd v Fiji Broadcasting Commission - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

CIVIL JURISDICTION

CIVIL ACTION NO. 0146 OF 1998

BETWEEN:

MEDIA ENTERPRISES PTY. LTD.
Plaintiff

AND:

FIJI BROADCASTING COMMISSION
Defendant

Mr. W. Claor thintifintiff
Mr. S.r. S. Matawalu for the Defendant

JUDGMENT

On the 27th of May, 1998(2) months after issuing and serving its Writ, the plaintiff company oany obtained a judgment in default of defence against the defendant commission in the sum of $34,428.00 for services rendered pursuant to a contract entered into 'on or about January 1997'.

On the 9th of June 1998 the plaintiff obtained a Writ of Fifa issued out of the High Court with a view to the execution of the default judgment it had earlier obtained against the defendant commission.

On 10th June 1998 the defendant commission by Notice of Motion sought a stay of execution and leave to defend the action. The Fiji Court of Appeal in F.S.C. Ltd. v. Mohammed Ismail (1988) 34 F.L.R. 75 in dealing with a similar application said:

"The principle on which a Court acts where it is sought to set aside a judgment resulting from a failure to comply with rules was stated by Lord Atkin in the House of Lords case Evans v. Bartlam (1937) 2 All E.R. p.646 at p.650. He said:

'I agree that both R.S.C. Ord.13, r.10, and R.S.C., Ord.27, r.15, gives a discretionary power to the judge in chambers to set aside a default judgment. The discretion is in terms unconditional. The courts, however, have laid down for themselves rules to guide them in the normal exercise of their discretion. One is that, where the judgment was obtained regularly, there must be an affidavit of merits, meaning that the application must produce to the court evidence that he has a prima facie defence. It was suggested in argument that there is another rule, that the applicant must satisfy the court that there is a reasonable explanation why judgment was allowed to go by default, such as mistake, accident, fraud or the like. I do not think that any such rule exists, though obviously the reason, if any, to set it aside is one of the matters to which the court will have regard in excising its discretion. It there were a rigid rule that no one could have a default judgment set aside who knew at the time and intended that there should be a judgment signed, the two rules would be deprived of most of their efficacy. The principle obviously is that, unless and until the court has pronounced a judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has been obtained only by a failure to follow any of the rules of procedure.'

We draw attention to that part of Lord Atkin's statement referring to the fact that a defendant only has to establish a prima facie defence ... The statement also indicates that a draft defence is not necessary, what is required is the affidavit disclosing a prima facie defence."

In this latter regard the application was supported by an affidavit sworn by the Finance Manager of the defendant commission wherein he deposed inter alia:

'That the Company is not aware of the sales promotion programme advantage plan and requested for documents in support of the claim.'

A letter from the defendant's accountant dated 8th April 1998 was also annexed to the affidavit which requested the defendant's solicitor's 'to provide the actual contract signed by the two parties' or, failing which, 'an official company order is required for all goods and services acquired by (the defendant)'.

There is also annexed to the affidavit a proposed Statement of Defence which avers that the defendant commission 'has now been privatised and taken over by Island Network Corporation Limited', and thereafter, the defence essentially denies the existence of any contract between the parties or any knowledge of the details of any such contract or the expenses incurred by the plaintiff in the performance of the disputed contract or of having received any Statements of Accounts from the plaintiff as averred in its Statement of Claim.

The proposed defence is vigorously denied in an affidavit deposed by the Chief Executive of the plaintiff company to which are annexed amongst others, three (3) letters of the defendant commission addressed to the plaintiff company. The first, written by the then General Manager of the defendant commission dated March 20, 1997 (Annexure 'E'); the second, by its accountant dated 19th May 1997 (Annexure 'B'); and the third, by its present Finance Manager, dated July 03, 1997 (Annexure 'G').

It is only necessary for present purposes to set out the contents of the first letter written on the defendant commission's letterhead and signed by its then General Manager. It is addressed to the Chief Executive of the plaintiff company by name and reads:

'Dear Ian,

The Fiji Broadcasting Commission accepts the terms of your agreement as set out in your document 'THE Advantage PLAN'.

We at the Fiji Broadcasting Commission look forward to working with you on what we believe should be a very successful promotion.

Yours faithfully

(Sgd.)
Barry Ferber
General Manager'

The relevant document 'THE ADvantage PLAN' (included with the above letter) comprises seven (7) pages and comprehensively describes the nature, contents, potential benefits and costs of the programme which appears to include an initial mailing programme to existing and prospective radio advertisers, to be followed by a short video presentation of the programmes advantages and benefits; and by way of incentive, an opportunity for any client who signs up for the programme to win a major prize of a motor vehicle. There are also projected advertising revenue earnings to be made by the defendant commission.

The plan also sets out a detailed 'BUDGET' for the promotion which includes inter alia initial processing and mailing costs and video production costs, all of which would presumably be incurred prior to the plan being presented and sold to actual advertising clients.

These letters and annexures, the Chief Executive of the plaintiff company asserts: 'constitutes a valid and binding contract for services rendered by the plaintiff to the defendant'. As to the defendant commission's apparent 'change in status' he says:

'that change in the legal status of the defendant does not absolve the defendant from its prior obligations.'

In its reply, in an affidavit filed without objection in November 1998, the Finance Manager of the defendant commission denied any knowledge of the General Manager's letter (op. cit.) and further deposed:

'I deny that there was any formal contract entered into between the parties and even if there was some form of verbal agreement (which is denied) they did not amount to a contract since the proper procedures of entering into a contract was not followed by the then General Manager Barry Ferber who entered into a private arrangement with Mr. Ian Stockdale the Managing Director of the plaintiff company who is a personal friend of Mr. Barry Ferber. I further say that that being so Barry Ferber had acted outside the ambit of his ostensible and actual authority and therefore cannot bind the defendant.'

Interestingly however, other than referring to the above-quoted paragraph, no specific explanation or elucidation has been provided by the deponent for his own letter of July 03, 1997 (op.cit.) which, on the face of it, acknowledges receipt of 'your invoice and accompanying correspondence' and, after an adjusted calculation, appears to accept that there was 'commission payable' to the plaintiff company in the total sum of $34,432 at the rate 'over 12 months' of '$2,869'.

Quite plainly the question of whether or not a contract existed between the parties is a fundamental one which, were it a substantially oral contract, would have inevitably entailed the hearing of evidence viva voce.

I am satisfied however, that, notwithstanding the seemingly personalised opening of Mr. G. Ferber's letter (op.cit), when it is read together with the plaintiff company's 'Advantage Plan' proposal, they evidence, a firm 'signed contract between the parties' albeit not comprised in a single document signed by both parties.

In traditional contract parlance the plaintiff company's 'Advantage Plan' was an 'offer' in writing which was unconditionally 'accepted' in writing by the defendant commission's General Manager at the time notwithstanding that, and unbeknown to the plaintiff company, the defendant commission's internal accounting procedures may not have been complied with.

Needless to say:

'The law does not require a contract to be made in any particular form nor according to any particular formalities, it is sufficient that there be a simple contract; such a contract may be validly made either orally or in writing, or partly orally and partly in writing.'

(See: para. 214 Vol. 9 Halsbury's Laws of England 4th edn).

In the circumstances, given the commercial object of the 'Advantage Plan' and its obvious benefits to the defendant commission, I cannot accept the suggestion that the contract was a 'private or personal arrangement' between the chief executives of the two companies.

As for the question of Mr. B. Ferber's 'ostensible and actual' authority, doubtless neither the plaintiff Company or its Chief Executive could have known about Mr. Ferber's 'actual authority' to enter into a contract binding on the defendant commission, neither would they have been aware of the particular formal requirements of the defendant commission pertaining to its entry into such contracts.

Assuming however that Mr. Ferber had no 'actual authority' to enter into the contract, nevertheless that is not the end of the matter nor are such contracts necessarily unenforceable for, as was said by Diplock L.J. in Freeman and Lockyer v. Buckhurst Park Properties (Mangal) Ltd. (1964) 2 Q.B. 480 at 505:

'(there are) four conditions which must be fulfilled to entitle a contractor to enforce against a company a contract entered into on behalf of the company by an agent who had no actual authority to do so. It must be shown:

(1) That a representation that the agent had authority to enter on behalf of the company into a contract of the kind sought to be enforced was made to the contractor;

(2) That such representation was made by a person ... who had 'actual' authority to manage the business of the company either generally or in respect of those matters to which the contract relates;

(3) That he (the contractor) was induced by such representation to enter into the contract, that is, that he relied upon it;

(4) That under its memorandum or articles of association the company was not deprived of the capacity either to enter into a contract of the kind sought to be enforced or to delegate authority to enter into a contract of that kind to the agent.'

In this case bearing in mind the very senior managerial position occupied by Mr. Ferber in the defendant commission at the relevant time, and the very broad powers of the defendant commission under the Broadcasting Act (Cap. 105) which includes power to 'provide broadcasting facilities for commercial ... activities including the broadcasting of advertisements and make charges therefor', I am satisfied that Mr. Ferber's letter of March 20, 1997 (op.cit) satisfies Conditions (1) & (2) above of Diplock L.J's formulation and further that the plaintiff company relied upon it.

Furthermore in Dayaram Sharma v. Northern Hotels Limited (1968) 14 F.L.R. 157 Moti Tikaram J. (as he then was) said at p.159:

'It is settled law that no act by a person purporting to be an agent acting on his principal's behalf but having in fact no authority from the principal so to act is binding on the principal unless the latter is precluded by his conduct from denying the existence of the authority.'

Again in this case granted that the defendant commission confirms the authorship of the second and third letters (op. cit.) which both implicitly accepts the existence of a concluded contract with the plaintiff company, I am satisfied that it is now 'precluded by its conduct from denying the existence of the authority' of Mr. B. Ferber to enter into the contract with the plaintiff company.

The above findings effectively disposes of the proposed Statement of Defence which in my considered view raises no triable issue(s).

The application is accordingly refused with costs to be taxed if not agreed.

D.V. Fatiaki
JUDGE

At Suva,
6th August, 1999.

Hbc0146j.98s