Fiji National Provident Fund v Prasad [2001] FJHC 143; Hba0015j.2001 (12 November 2001)

IN THE HIGH COURT OF FIJI
(AT SUVA)

CIVIL APPEAL NO. HBA 15 OF 2001 S
(SUVA MAGISTRATES’ COURT CIVIL ACTION NO. 1058 OF 2000)

Between:

FIJI NATIONAL PROVIDENT FUND
Appellant

and

JAGDISH PRASAD
Respondent

H. Lateef with I. Razak for the Appellant
S. Chandra for the Respondent

JUDGMENT

In July 2000 the Respondent herein (Prasad) commenced proceedings in the Suva Magistrates’ Court. In his Statement of Claim he stated that in June 1999 he and his uncle Vijay Kumar who were both members of the Fiji National Provident Fund (the Fund) went to the Fund’s office. Vijay Kumar wished to nominate Prasad under the provisions of section 34 of the FNPF Act (Cap. 219-the Act) and upon enquiries being made he was asked to complete a nomination form which Prasad then witnessed.

The following February Vijay Kumar died. When Prasad went to the Fund’s Office he was advised that the nomination was invalid.

Regulation 53 of the FNPF Regulations (Cap 219-Subs-the Regulations) provides that:

“Any person who attests the signature of a nominator to a nomination shall not be entitled to any benefit thereunder.”

Prasad’s case was quite simple: owing to the negligent advice of the Fund the nomination was invalid. Had the nomination been valid then it would have been worth $11,667.59 to him. He sought compensation for his loss by an award of damages.

The Fund filed a Statement of Defence. It repeated that the nomination was invalid but denied negligence and in particular denied that Prasad was ever advised to witness his uncle’s signature. From paragraph 5 of the statement of Defence it appears that the Fund became aware that there was an invalid nomination and attempted to advise Vijay Kumar of this fact but was unsuccessful in doing so to enable rectification to occur before his death.

In paragraph 8 of the Statement of Defence the Fund pleaded that on 10 May 2000 the sum of $11,667.59 was paid into the High Court under the provisions of section 35 of the Act (as amended – see Act 29/86) and that therefore the Plaintiff should have applied to the High Court for the release to him of the funds claimed to be standing to his credit.

In paragraph 7 of the Statement of Defence the Fund pleaded that no particulars of negligence had been provided by Prasad. On 13 October 2000 when the matter came up before the Resident Magistrate (Jiten Singh Esq. RM) this point was raised by Mr. Razak. On 23 October Prasad was ordered to furnish particulars of the negligence upon which he relied.

On 2 November 2000 10 particulars of negligence were filed. A copy is at pages 20 & 21 of the record of the proceedings in the Magistrates’ Court. The particulars are really different ways of making the 3 basic complaints which Prasad laid before the Resident Magistrate on oath when the matter came on for hearing on 29 January 2001.

Prasad’s evidence was that when he and his uncle went to the Fund’s office they explained that they each wanted to make a nomination. Vijay Kumar wish to nominate Prasad and Prasad wished to nominate his wife. The clerk in the office was named Tui Fasala and it was he who suggested that they witness each other’s nominations. After the forms were completed and witnessed they were handed in to and accepted by Tui Fasala. About one month later Prasad went back to the office where it was confirmed to him that he was indeed his uncle’s nominee. About 7 months later his uncle died and he then went back to the office to arrange withdrawal of the funds. He completed a withdrawal form which was handed in. The following month the Fund advised him that the nomination was invalid because he had witnessed his uncle’s signature and therefore the nomination fell foul of regulation 53. Later Prasad went to the High Court where he was advised that nothing had been received in his name. He then filed his writ.

No other significant evidence was called and it may in particular be noted that nobody was called on behalf of the Fund and that no fund records, not even the nomination forms, were produced.

In his careful Judgment the Resident Magistrate first accepted that the Fund owed a duty of care “to ensure that nominations are properly done and if not properly done to promptly inform the member and the nominee”. He stressed the importance and the special nature of the transaction under consideration and relied on and applied the leading authority Hedley Byrne & Co. Ltd v. Heller and Partners Ltd [1963] UKHL 4; [1964] AC 465.

The Resident Magistrate then evaluated Prasad’s evidence noting that it was not contradicted by evidence called on behalf of the Fund. He did not overlook the fact that Prasad’s evidence was not always entirely consistent observing for example that Prasad first said that he had read the nomination form but then claimed to have overlooked the warning contained on the form against nominees witnessing nominations. But he found that Prasad had established on the balance of probabilities that he did indeed sign the nomination form at the suggestion of the Fund’s counter clerk.

In these circumstances the Resident Magistrate concluded that as a result of the Fund’s want of care Prasad had been led into error and had lost the entitlement which he would have had, had the nomination been valid. He awarded Prasad $11,667.59 plus costs.

The Appellant’s grounds of appeal are set out on pages 3, 4 & 5 of the record. They were amplified by a most comprehensive written submission filed by Mr. Razak. Mr. Chandra filed a very helpful written submission in answer.

Mr. Razak took the first 3 grounds together. He highlighted each of the weaknesses in Prasad’s evidence and suggested that the Resident Magistrate erred in concluding that Prasad had made out his case on the balance of probabilities. This is always a difficult ground of appeal to argue successfully since it is well settled that in the absence of misdirection an appeal Court will seldom reverse findings of fact reached at first instance (see e.g. Benmax v. Austin Motor Corp [1955] 1 All ER 326). Mr. Razak pointed out that the evidence of Prasad was not corroborated but as a general rule there is no requirement for corroboration. In the present case there was no evidence to contradict the Plaintiff. These grounds fail.

In ground 4 it was argued that the Resident Magistrate was wrong to hold that the Fund had a duty to advise Prasad that the nomination was invalid. In ground 5 it was argued that the Fund owed no duty of care to Prasad. While I agree that the Fund’s primary duty is to its members the circumstances of this case are such that had the Fund advised Vijay Kumar that his nomination was invalid either when it was accepted or promptly when the error was discovered the effect would have been to prevent Prasad’s loss occurring. It will also be remembered that Prasad was also a member of the Fund and wished, at the same time as becoming his uncle’s nominee, to nominate his wife. In this era of growing awareness of the benefits of consumer protection my view is that it is quite unrealistic to suggest that a large well endowed specialist organisation has no duty of care to persons with whom it deals but who are not it members. Despite the several authorities referred to by Mr. Razak I am satisfied that Hedley Byrne was properly applied.

The 6^th ground was to the effect that the Resident Magistrate should have stopped Prasad proceeding in the Magistrates Court when it was drawn to his attention that the moneys standing to his uncle’s credit had been paid into the High Court. Within jurisdictional limits a litigant is free to commence proceedings wherever convenient. I find no merit in this ground.

The 7^th & 8^th grounds raised a number of technical objections to the pleadings and pointed to the fact that no evidence was placed before the court that $11,667.59 was lost by Prasad. It was also suggested that a nominated person is, by virtue of regulation 51 of the Regulations not entitled as of right to the amount standing to the late member’s credit. Taking the evidence as a whole and the concession contained in paragraph 8 of the Defence, bearing in mind that Prasad was a litigant in person and that Magistrates’ Courts are essentially summary in their nature I do not find that there was any error in the Resident Magistrate’s approach. In reply to my question Mr. Razak was unable to advance any reason at all why the Fund should have invoked regulation 51. These grounds fail.

The final ground of appeal argued by Mr. Razak was that the Resident Magistrate had no jurisdiction to entertain Prasad’s action since it was concerned with the validity of an inheritance and was therefore excluded by section 2 (1) (i) (ii) of the Magistrates’ Courts (Civil Jurisdiction) Decree 47/88.

In view of certain obiter remarks recently made by an acting judge of this court it may be worth pointing out that this Decree in common with many other Decrees is a perfectly valid piece of legislation. This is because of the operation of sections 194 (1) and 195 (1) (e) of the 1997 Constitution which define Decrees to be Acts, define written laws to include Acts and continue in force written laws passed before the commencement date of the Constitution. The statement “no Decree can amend an Act of Parliament” is simply incorrect.

Under section 43 (2) of the Act moneys paid out by the Fund on the death of a member are not part of the deceased’s estate. I am therefore satisfied that the Resident Magistrate had jurisdiction to entertain this action which, it should not be forgotten, was in negligence.

With admirable diligence Mr. Razak advanced every possible argument in support of this appeal but I am satisfied that the Resident Magistrate reached the right conclusion. Accordingly the appeal fails and is dismissed.

There was a cross-appeal by Prasad the first limb of which was a claim that the Resident Magistrate should have awarded interest on the sum given to Prasad. The Statement of Claim did not seek interest and accordingly the Resident Magistrate was right not to award it.

The second claim advanced by the Respondent was for an award of damages over and above the $11,667.59 awarded. Since Prasad gave no evidence of separate loss apart from funeral expenses which would reasonably be expected to come out of the nominated funds I find no merit in this argument. The cross-appeal also fails and is dismissed.

M.D. Scott
Judge

12 November 2001