IN THE HIGH COURT OF FIJI
(AT SUVA)

CIVIL ACTION NO. 462 OF 2000S

Between:

CREDIT CORPORATION (FIJI) LIMITED
Plaintiff

and

APISAI VUNIYAYAWA TORA
and
MELANIA GANIVITI TORA
Defendants

M. Arjun for the Plaintiff
S. Krishna for the Defendants

JUDGMENT

On 18 October 2000 the Plaintiff issued a writ and Statement of Claim against the Defendants seeking judgment against them for the amount of $41,340 representing arrears of instalments due under an asset purchase agreement between the Plaintiff and Tuwawa Transport Limited, guaranteed by the Defendants.

On 10 January 2000 a Defence was filed. The defendants admitted executing a guarantee and admitted that Tuwawa Transport Limited was in receivership. They did not admit the amount claimed and put the Plaintiff to strict proof. In paragraph 8 of the Defence it was pleaded that the full terms of the agreement were not satisfactorily set out in the Statement of Claim. It was also claimed that the Defendants were discharged from their obligations under the agreement when the goods covered by the agreement were seized by the Plaintiff.

On 7 March 2000 this summons under RHC O 14 was issued supported by an affidavit by Uday Raj Sen, the Plaintiff’s business development manager. Mr. Sen exhibited a copy of the agreement. He deposed that whereas the payments scheduled under the agreement amounted to $79,920 only 2 instalments together worth $3,330 had been paid. He averred that at the commencement of the action $41,340.82 was owed by the Defendants. He pointed out that under clause 24 of the agreement the guarantee was continuing.

On 28 November 2001 the application came on for hearing. No evidence had been filed by the Defendants in answer to Mr. Sen but Mr. Krishna filed and spoke to a careful and concise written submission presented on the day of the hearing.

Mr. Krishna first pointed out that it is not normal for an Order 14 summons to be filed after a Defence has in fact been lodged. He however acknowledged that the filing of a Defence does not debar an application for summary judgment. In fact, in Fiji it is relatively common for Order 14 proceedings to be commenced after a Defence has been filed. The question after all is whether or not the defence disclosed by Defendant whether by affidavit or pleading is arguable, not whether a document entitled “Defence” has been filed.

Mr. Krishna next suggested that the Statement of Claim wanted particularity and referred to paragraph 8 (a) of the Defence. While I agree that the Statement of Claim does not contain all the detailed provisions of the agreement no omission affecting the liability of the Defendants to repay the sum owed was referred to. Furthermore, the Defendants have never asked for further and better particulars of the Statement of Claim in the fourteen months since it was filed, as might have been expected if they were in any way embarrassed by the pleading. I do not find any merit in this argument.

The main thrust of Mr. Krishna’s submission arose from clause 6 (ii) (b) (ii) of the agreement and paragraph 9 of Mr. Sen’s affidavit.

Under the clause an owner who has repossessed the goods must sell them at the best price reasonably available and must offset that price against the amount owed by the hirer. Mr. Krishna referred to the $57,000 value of the goods on 31 December 1995 as set out in the agreement and suggested that a resale price of only $3,500 obtained on 20 October 1999 was a clear breach of the owner’s obligations under the clause.

While superficially attractive I am satisfied that this argument cannot succeed. In the first place there is no evidence whatever that the owner did not do its best to secure the best price, something which it was obviously in the owners interests as well as the hirers to achieve. Secondly, there was no evidence at all as to the condition of the goods when they were repossessed in July 1997, that is 18 months after being sold to the hirer. Thirdly, as already seen, the value of the agreement was just under $80,000. If $3,500 for the value of the goods is offset against that sum minus $3,300 repaid then a balance remains of roughly $73,200. Since the Plaintiffs are only claiming $41,340 they are apparently forgoing a sum of $31,860. Since the goods were only worth $57,000 to begin with the Defendants cannot reasonably claim to be out of pocket as a result of any default on the part of the Plaintiff.

In my opinion this is the clearest possible case of guarantors failing to live up to their contractual obligations. Despite Mr. Krishna’s valiant efforts I can find no arguable defence to the claim. In the circumstances their will be judgment for the Plaintiff as prayed.

M.D. Scott
Judge

7 December 2001