Latianara v Suva City Council [2004] FJHC 233; HBC0130j.2004s (5 August 2004)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 130 OF 2004

Between:

EMORI MASIMEKE LATIANARA
SANDRA BERNKLAU
Plaintiffs

and

SUVA CITY COUNCIL
Defendant

Mr. H. Lateef for the Plaintiff
Ms. T. Waqanika for the Defendant

JUDGMENT

By originating summons dated 2 April 2004 the plaintiffs seek the following declaration and order:

1. A declaration that the Plaintiffs are not liable to pay city rates on the property comprised in Certificate Title Number 8359 for the years prior to 2003;
   
2. An Order that the Defendant do expunge the rates for the years prior to 2003;
   

100. That any interest accrued on the said property for the years 2003 and 2004 also be expunged from the rate book on the grounds contained in the affidavit of Sandra Bernklau and Mere Silivale filed herein;
     

Background

Background to the case and chronology of events (as stated in Mr. Lateef’s written submission) are as follows:

1. Plaintiffs entered into a Sale & Purchase Agreement to purchase CT8359 situated at 12 Kumi Road, Nasese for $225,000.00 from Peter Anoop Pal and Dhanyanti Pal.
   
2. Prior to settlement on or about late January 2003, Mere Silivale (Mere), a law clerk at the Plaintiffs Solicitors called the Defendant and: -
   
   • (a) informed them of the pending settlement;
     
   • (b) inquired about the rates; and
     
   • (c) was informed of the arrears of rates;
     
3. Mere then called the seller of the property and informed him of the arrears of rate and for him to clear same.
   
4. The seller later informed Mere that he had paid the arrears of $2,032.32, which was confirmed by the Defendant to Mere.
   
5. After this settlement took place, and City Council was informed of the transfer by letter dated 30^th January 2003.
   
6. The payment by the seller by a cheque drawn on one Pravir Rattan was dishonoured. This dishonour was not recorded in the rates registry until 24^th September 2003 (Annexure “B” – Sandra’s Affidavit).
   
7. By the time the Plaintiffs came to know of the dishonour (January 2004 – Shailendra’s Affidavit, paragraph 6), the sellers had emigrated from Fiji.
   
8. Numerous correspondences written to the Defendant to expunge the above rates but the Defendant is refusing to accept the blame.
   

Issue

The issue for Court’s determination is as to who should have the responsibility of the dishonoured cheque?

Consideration of the issue

There is no doubt that the proper practice in conveyancing is that, for the protection of the intended purchaser of a property, it should be ascertained from the Suva City Council (in this case) whether the rates have been paid otherwise after the sale the new purchaser would be required to pay whatever rates is due.

In this case I have read the affidavits filed herein and have considered the submissions of both counsel.

The following facts emerge from the affidavit evidence which I find as fact:

(a) that the arrears of rates for 2003 was paid by the sellers of the property and confirmed by the sellers by producing the defendant’s receipt for it. The defendant also confirmed payment.

(b) the Rates Officer Shailendra Dutt in his affidavit confirmed that payment of arrears of rates together with interest was made on 24 January 2003. Payment was made by the defendant accepting the cheque from one Pravir Rattan. The cheque was dishonoured on 28 January 2003 and the Bank informed the defendant on 28 January 2003. The defendant says that it tried to locate the payer of the cheque but without success.

(c) the plaintiffs informed the defendant of the change of ownership of the property on 30 January 2003.

(d) the defendant went to the plaintiffs’ house a year later on 25 January 2004 looking for Peter Pal (the previous owner). It was discovered by the plaintiffs that in September 2003 (about 8 months later) the plaintiffs were debited with the amount.

(e) The sellers have emigrated and there is no possibility of recovery from them.

In this case I find as a fact that the defendant was paid the rates in question albeit by a cheque and the plaintiffs’ counsel’s office was informed accordingly. It was the concern of the plaintiffs’ lawyers that they did not want their clients to be made liable to pay rates for the period of arrears in question. That is good conveyancing.

There is no merit whatsoever in the defendant’s arguments in response that the plaintiffs should have ascertained whether the said cheque was met or not. There is no burden on the plaintiffs to do so. This is a novel point and it does not convince me at all. If anything it was the defendant’s duty to be more careful when accepting cheques. It should take certain precautions. I do not know what direction the defendant has given to its cashiers in regard to acceptance of cheques. It could have been stated on the receipt ‘subject to cheque being met’. Then of course after the dishonour very early in the piece the defendant was informed of it but it did not inform the vendors and it is probable that they were still in the country at that time.

One disturbing feature of the case is that although dishonour was received on 28 January 2003, the Statement of account of the plaintiffs was not debited until some 8 months later.

There is one other point that I wish to comment on and that is that the defendant did not take serious steps to locate the payer of the cheque. It appears from argument in Chambers that the defendant knows him. It is understood from Mr. Lateef that the ‘payer’ is very much in Suva, and that he is a son of a former Principal of a College in Samabula.

In all the circumstances I cannot see how the plaintiffs can be made liable to pay the defendant’s claim as the plaintiffs’ solicitors were told in no uncertain terms that rates has been paid and receipt issued which they produced to Court.

The defendant should learn from this mistake on its part. It may be that they will have to review their system of collection of rates and plug the holes.

I must observe though that with extra effort it would have located the ‘payer’ of the cheque (Pravir Rattan) and that would have enabled the defendant to recover the amount on the cheque from him. The defendant can still proceed against him once they locate him.

Conclusion

For these reasons the plaintiffs are not liable to pay the said sum of $2032.32 being arrears of rates inclusive of interest owed by the previous owner upto end of 2003.

The plaintiffs are therefore entitled to the declarations sought in the Originating Summons and it is ordered accordingly with costs to the plaintiffs’ solicitors in the sum of $250.00 (two hundred fifty dollars) to be paid within 21 days.

D. Pathik
Judge

At Suva
5 August 2004