Janardhan v Khan - Judgment [2005] FJHC 414; HBC0358J.2004L (7 November 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. 0358 OF 2004

Between:

JANARDHAN
s/o Shiu Narain
Plaintiff

- and -

MOHAMMED NASIR KHAN
s/o Mohammed Yakub Khan

CHEN BUNN YOUNG,
Solicitor

THE DIRECTOR OF LANDS AND
SURVEYOR GENERAL

THE REGISTRAR OF TITLES

KHAN BUSES LIMITED

THE DIRECTOR OF TOWN AND
COUNTRY PLANNING DEPARTMENT

THE ATTORNEY GENERAL OF FIJI
Defendants

Counsel: Mr. S. Maharaj for the Plaintiff
Miss N. Khan for the First and Fifth Defendants
Mr. B.C. Patel for the Second Defendant
Mr. A. Farouk for the Third, Fourth, Sixth and Seventh Defendants

Date of Hearing: 26th-30th September 2005
Date of Judgment: 7th November 2005

JUDGMENT

The plaintiff Janardhan is a cane farmer. In 1995 he was the lessee of an area of land of approximately nine acres near Lautoka. He and his wife decided to sell the land to raise money for family purposes, principally the education of their children.

The first defendant Mohammed Nasir Khan is a businessman. One of his businesses is running his company, the fifth defendant Khan Buses Limited. In 1995 he was looking for somewhere to park the company’s buses and also the trucks from another of his businesses.

On the 11th of September 1995 Mr. Janardhan and Mr. Khan entered into a sale and purchase agreement for the land. The sale price was $170,000.00 Settlement date was set as 8th December 1995.

By mid 2004 just over half the purchase price had been paid in various sums over the years. Mr. Khan was using half an acre of the land for the parking of his buses and trucks. Mr. Janardhan was using the remaining land for growing and harvesting cane. Settlement had not taken place.

The lease which Mr. Janardhan sold expired on 31st December 1995. He was entitled to a renewal of the lease for 20 years from 1st of January 1996. All the documents to effect settlement had been signed and progressed as far as possible. No new lease had been issued so settlement could not occur until the issue of a new lease.

In the months and years following the signing of the agreement the first defendant, Mr. Khan, had applied for and been granted a change of use for the land from “agricultural/residential B” to “commercial”. This increased greatly the value of the land. Mr. Khan had also, to the benefit of the lessee of the land, successfully negotiated with the authorities to reduce the outgoings on the land.

By a letter dated 13th September 2004 Mr. Janardhan’s current lawyers informed the first defendant that as settlement had not taken place the contract was rescinded, the monies paid to that date were forfeited as liquidated damages in accordance with Clause 17(b) and Mr. Khan was required to remove all his property from the land.

In essence, Mr. Janardhan alleges that through a long history of misrepresentation and deception the first defendant persistently put off settlement for his own purposes. Those purposes were to ensure that he was able to obtain a change of use of the land, that the outgoings on the land would be at a modest level, that he could have the use without paying the full price and other reasons. The plaintiff states in this regard that every time the question of settlement was raised the defendant would make excuses and pay a little more money as deposit. Mr. Janardhan says that Mr. Khan deliberately befriended him and his family, assisted him in his attempts to gain permanent residence in New Zealand and indeed was invited as the guest of honour at the wedding of his daughter.

The plaintiff says that any postponement of the settlement date, by the terms of contract, had to be in writing. No such writing took place. Therefore he was entitled to rescind the contract. In the alternative, he argues that if the settlement date was orally postponed by agreement between the parties then it could be orally reset and it was abundantly clear in the months and years up to the letter of rescission that he wanted settlement. Further, Mr. Janardhan’s wife, Vijay Lakshmi had been persistently telephoning the lawyers of Mr. Khan, namely the second defendants, seeking settlement and approximately two weeks before the rescission letter was sent, orally required settlement.

The first defendant denies this. He states that he is ready and able to settle, that any postponements in settlement had been by mutual agreement, that he had expended a good deal of his own time, money and friendship in looking after the plaintiff and his family, that any notice, if there was any, making time of the essence could not be done orally and in any event the oral notice was far too short.

The plaintiff claims against the second defendants that they were the lawyers acting for both the first defendant and himself, that they were persistently negligent in not looking after his interests in the contract, that it was only when he resorted to the services of other solicitors that any arrangements to settle came about.

The second defendants deny that they are liable in any way. First, they say that Chen Bunn Young has been sued personally and as such had nothing whatever to do with the negotiations or the contract. If there was any viable action it should have been brought against the partnership and not the individual. Further, the second defendant says that there is a clear clause in the contract which states that Messrs Young and Associates were only acting for the purchaser, namely Mr. Khan. He alleges that this was specifically pointed out to the plaintiff before the signing of the contract, its effect explained and the advice given that Mr. Janardhan had the opportunity to be advised by another lawyer. A further document to this effect was later signed by Mr. Janardhan.

The third, fourth, and sixth defendants are the various government bodies involved in the transfer and other dealings with land. The seventh defendant is the Attorney General. There is a claim in negligence against these defendants, although the ambit of that claim ranges from negligence to breach of duty, deceit and collusion. The plaintiff says that the first, second, third, fourth and sixth defendants worked together to bring about the set of circumstances whereby settlement did not take place, yet Mr. Khan had the use of part of the land and an enforceable contract to purchase the whole land whilst he went about obtaining a change of use, a ninety-nine year lease and associated negotiations. The inference is that if no change of use could be obtained or the terms were uneconomic then the first defendant would not settle the contract and leave it to Mr. Janardhan to try to enforce it.

The fifth defendant, Khan Buses Limited, is part of the proceedings given the presence of its property on the land and the dealings of that company by and through the first and second defendants. There was an assignment by the first defendant of all his interest in the Sale and Purchase Agreement to Khan Buses.

I will consider each of the groups of defendants in turn.

The Third, Fourth, Sixth and Seventh Defendants – The Director of Lands and Surveyor General, The Registrar of Titles, The Director of Town and Country Planning Department and the Attorney General

In 2004 the plaintiff Mr. Janardhan went to visit the office of Shri Narayan, Divisional Surveyor Western, who works for the Director of Lands. At that stage Mr. Janardhan had signed the documents for the transfer of the land. His understanding was that, the land had not been transferred. Mr. Narayan gave evidence. He told the court that no settlement had or could be effected as Mr. Janardhan had not obtained the new twenty-year lease, a lease to which he was entitled. For understandable reasons but not brought about by Mr. Narayan, Mr. Janardhan left the office with the impression that settlement had taken place, and that Mr. Khan’s interest had been transferred to Khan’s Buses. Janardhan considered, at the very least, all that could be done had been done to transfer the lease and that he was not in a position to “get out of” or rescind the contract.

This was an erroneous understanding by Mr. Janardhan. However, it appears to be the principal plank upon which the proceedings have been brought against the third, fourth, sixth and seventh defendants. Leaving aside the question whether or not his solicitor’s letter of the 13th September 2004 was a valid rescission, no party has argued that, had a valid rescission notice been given and no settlement taken place, then this contract could not have been lawfully rescinded in September or October of last year.

The third, fourth, sixth and seventh defendants adduced no evidence. I have looked carefully at the evidence adduced on behalf of the plaintiff. Quite simply, there is nothing which even begins to support the allegations in the pleadings against these defendants. Indeed, if anything, evidence adduced by the plaintiff tended to support the case of these defendants.

I need not go into any further detail on this aspect of the case. However, it is trite to say that if proceedings are brought against a defendant then there should be evidence adducable to support those proceedings. This is particularly so if allegations of deceit or collusion are made. Whilst the proceedings are brought by and in the name of Mr. Janardhan, it is clear they were done on legal advice and a trust in his lawyers by Mr. Janadhan. He is a cane farmer and does not profess to know or particularly understand the manner and way in which his case is pleaded. The basis and origin of his misunderstanding of the situation was clear and he should have been told in clear terms that no action could be brought against these defendants.

In these circumstances, I dismiss the case against the third, fourth, sixth and seventh defendants. I will hear their counsel in respect of costs and the basis upon which those costs should be measured.

Second Defendant – Chen Bunn Young Carrying on Business as Young and Associates, Barristers and Solicitors of Lautoka

Mr. Janardhan, and his wife gave evidence. They said they understood at the time of signing of the contract that Young and Associates were acting as the lawyers for both themselves and the purchaser, Mr. Khan. The plaintiff’s brother-in-law and father-in-law came to the offices of Young and Associates for the signing. The brother-in-law had worked for many years in the bank particularly in the loan department and he was there to help them. He regards Young and Associates as a reputable company.

Vinesh Prakash, a law clerk was present before and at the signing of the contract. He was an employee of Young and Associates. The plaintiff and his wife say that before the contract was signed Vinesh said that Young and Associates could act for him as well as the first defendant. This was so despite Clause 21 of the contract which states that “the vendor hereby expressly acknowledge that Messrs. Young and Associates have acted only for the purchaser in connection with this agreement and the transaction contemplated hereby and the vendor has been expressly advised to obtain separate legal advice and representation”.

The second defendant called Paul Cowey to give evidence. He was and is a qualified solicitor who in 1995 was working with Young and Associates. He was not part of the conveyancing department. He gave evidence that he was concerned that the firm did apparently act for purchaser and vendor in conveyances. The practice was adopted of inserting a specific clause in the terms of Clause 21 in such contracts. It would then be carefully explained to the vendor or purchaser that Young and Associates were not acting for them and this was done before any contract was signed.

Mr. Cowey stated that he was the signatory witness to the signing of this sale and purchase agreement. He could not remember the event. He did however say that in this kind of circumstance it was his invariable practice before the parties signed the agreement he would point out that particular clause to those concerned and explain its effect. He continued that if those concerned did not speak English then what he was saying was translated into the language in question.

At page 48 in the bundle of documents of the second defendant there is a memorandum signed by the plaintiff confirming and acknowledging that “you (Young and Associates) have fully advised me of the legal implications and effects arising out of the Transfer of Crown Lease (LD Ref: 4/7/1944) I have executed in favour of Mohammed Nasir Khan f/n Mohammed Yakub Khan. Notwithstanding your advice that I should obtain independent legal advice in relation to this matter, I record and hereby instruct you I do not wish to do so”.

The original typed date on this memorandum was 23 September 1997. That has been altered in handwriting to 28th October 1998.

The second defendant therefore says it was made abundantly clear to the plaintiff at the time of signing of the agreement that Young and Associates were not acting for him and he was then and later advised to obtain his own independent advice.

Both the plaintiff and his wife gave evidence that although they were aware of the presence of that clause in the contract when the plaintiff signed they regarded Young and Associates as their lawyers. Mr. Janardhan said he collected a copy of the agreement some years later from Young and Associates. Mrs. Janardhan stated that over months and months she was persistently ringing Vinesh Prakash to ask what was happening about settlement. She says that all she was told in reply was that it was “being processed”.

I have not heard any evidence from Vinesh Prakash.

I accept the evidence of Paul Cowey. I noted his concern that the firm should draw up documents and agreements for both purchaser and vendor in the sale of land. I accept his evidence that it was his invariable practice to inform a party of the existence and effect of clause 21 and that it was done in this case.

It is pertinent to note that the conversations Janardhan relies upon concerning representation had taken place with Vinesh Prakash before Mr. Cowey came into the room. This is the evidence of the plaintiff and his wife and there is no evidence to contradict it. I accept it.

However, the plain fact is that as far as Young & Associates were concerned there was such a clause in the contract and it had been brought to the attention of the plaintiff in clear terms. Mr. Janardhan had present his wife and brother-in-law and chose to go ahead and sign the contract at that time. In those circumstances I must find on the balance of probabilities that Young and Associates were not at or after the signing of the contract the legal representatives of the plaintiff or under a legal duty to look after his interests. In these circumstances the action against the second defendants must fail.

Counsel for the second defendant also puts forward the defence that the wrong party has been sued. The defendant should have been the partnership or firm of lawyers and not the individual. Indeed there is no evidence whatever to show that Chen Bunn Young himself was involved in this contract at any time.

There is a corollary. Despite the position in law in the months and years following upon the signing of the contract the Janardhans thought that Young and Associates were acting for them and looking after their interests. They thought that the oral representations of Vinesh Prakash were sufficient for them to be able rely on Young and Associates to look after their interests in this transaction.

First, in this regard, all the documents which were signed on 11th September 1995 were retained by Young and Associates. There is no evidence that the plaintiff or his family left those offices with any documents. Those documents did not just include the contract itself but also other documents which had been signed and would be needed in the future to complete the settlement. It was only at a later stage and on specific request to Young and Associates that Mr. Janardhan obtained a copy of the Sale and Purchase Agreement itself.

Second, Mrs. Janardhan gave evidence that over the months and years she persistently rang Vinesh Prakash to ascertain what was happening as far as this contract was concerned. She stated that all she was told was that it was “being processed”. She said she was not told about applications for rezoning, applications for reduction of land rent, etc. I accept her evidence in this regard. Further, there is nothing to contradict it. This means that the employee of Young and Associates, Vinesh Prakash, must have known by the frequency and nature of her calls that she regarded Young and Associates as their solicitors, that she was not disabused in clear terms of this misapprehension, that he did not urge her to go and see another lawyer, and that he must have realized she was not aware of the reasons why settlement was not taking place.

There was no obligation in law for Prakash to talk to Mrs. Janardhan. However, having come into such close contact with the Janardhans over time in respect of this contract and having made the remarks before the presence of Mr. Cowey at the signing about how Young and Associates could act, then it is understandable why the Janardhans should feel aggrieved with Young and Associates and seek to bring legal proceedings against them.

When I come to consider costs I will hear the arguments of counsel for the plaintiff and the second defendants bearing in mind these findings.

First and Fifth Defendants – Mohammed Nasir Khan and Khan Buses Limited

There are two central questions as far as the plaintiff’s case against the first and fifth defendants is concerned:

1. Why did settlement not take place?
   
2. Was the rescission valid?
   

The resolution of these two questions hinges on the credibility and reliability of the principal witnesses. There are a number of documents and surrounding circumstances which assist in the resolution of these questions.

When considering the first question it is useful to ask what interest did the plaintiff have in delaying the settlement? What interest did the first defendant have in delaying the settlement?

The plaintiff’s wife Vijay Lakshmi was the first witness to give evidence for the plaintiff. The plaintiff’s skills are those of a cane farmer. His wife is more formally educated than the plaintiff and deals more with the business affairs of the family then the plaintiff himself.

Vijay Lakshmi told the court that the purpose in selling the land was to raise money for family purposes, particularly the education of their four children. She related how the parties came to be in the offices of Young and Associates on 11th September 1995 to sign documents. She states that before the agreement was signed Vinesh Prakash told them “if it is o.k. with you guys it’s o.k. for us to act for both of you”, meaning purchaser and vendor. She accepts that Paul Cowey came and explained Clause 21 and the agreement was signed.

Vijay Lakshmi states that a few days before settlement was due to take place Nasir Khan came and saw them and asked for settlement to be delayed a month and then “as soon as my loan is through I will pay”. $5,000.00 was paid at the time “as first deposit”. She described how over the following months and years Mr. Khan befriended the family, paid for family medical attention for her mother and paid for their air tickets to New Zealand when they were seeking permanent residence there. These sums were in fact added to the list of payments against the purchase sum. Throughout her evidence she referred to these sums as “deposits”. The schedule of payments drawn up from the record kept by Mr. Khan (Plaintiffs documents page 27) refers to the “sum of $60,000.00 as deposit for the above-mentioned land”. The next schedule (page 28) refers to $26,300.00 as “deposit” for the land. The individual receipts (pages 29) supporting the latter schedule speak of “payment” for the land.

She said that Nasir Khan said he had a client in New Zealand who could give New Zealand visas and would help them get permanent residence. He said the balance could be paid when they were there in New Zealand dollars. At one time he flew there to help the Janardhans.

Both before and after this Vijay Lakshmi said she was always asking about settlement and asking for full payment. “We never agreed to instalments.” Every time she asked Nasir Khan he said that his loan was not through. Whenever she rang Young and Associates they told her the matter was still “being processed”. She told Prakash that it has been a long time and no settlement. When pressed, Prakash kept saying the matter was being processed. She says no mention was made of rezoning or the negotiations over the outgoings on the land.

In 1998 she said that she and her husband had become so frustrated that settlement was not taking place they saw Singh and Fatiaki and the letter dated 5th May 1998 (1st Defendants Bundle page 42) was sent rescinding the contract. She stated within a very short time the first defendant’s brother Mohamed Ali Khan came round to their house and begged and pleaded with them to give them another chance, “one last chance”. The first defendant himself saw them shortly afterwards. They relented and orally withdrew the rescission. The periodic payments then continued. These could be as little as $50.00 or a $100.00. She said that in 2000 “with the coup, Nasir Khan said to them that work could stop on the processing of the matter because of the coup”. She said “we believed him and we trusted him. Now my children are all in Fiji except one overseas”.

She said she only found out about rezoning in or about September 2004. She only saw Nasir Khan once after their solicitor’s letter of the 13^th of September 2004 (Plaintiffs bundle pages 46-50). That was at Diwali when Nasir Khan came to see them seeking settlement and saying that all was ready.

She stated that earlier in 2004 her husband had gone to the Lands Department and what he learnt had precipitated their rescinding the contract in September 2004. He came home and told her that the lease had already been transferred. It is important to note that she then went down to Young and Associates and it was at that stage that they got a copy of the Sale and Purchase Agreement.

She stated that sometime in 1997 Mr. Khan occupied part of the land. This was half an acre for the parking of the trucks and buses. This was done with their consent and the plaintiff assisted in laying on water and electricity for the first defendant. She stated we never wanted the money in instalments he, the plaintiff, never agreed to that either. They wanted more land and we said “after the half acre, that’s it”. She said she did not understand that much about land transfer processing.

The plaintiff gave evidence. He also described the payments of varying sums over the years and the reasons that were given for the delays. He said when the first settlement date was being put off Nasir Khan came to him and said “brother my loan is not approved, as soon as it is approved I will pay the full amount”. “Whenever we asked for full settlement he brought a small amount of money and paid it as deposit. He kept saying my loan is not approved. The loan officer has changed”. He stated by “extending settlement Nasir Khan did a lot behind my back. He rezoned the land, he got it transferred and then transferred to Khan Buses”.

He stated “I have four children and I wanted to give them a better education. I wanted to make a flat of my own and rent it. We had the intention to emigrate. It was my biggest ambition”.

The plaintiff stated that he was not aware of any applications for rezoning. He denied receiving any letter from the plaintiff to that effect, (see 1st Defendants bundle page 11). He accepted he had signed the Sale and Purchase Agreement and acknowledged that Young and Associates according to the face of the documents were not working for him. He agreed that in 1998 he signed a document saying he was willing to settle for $100,000.00 payment in respect of outstanding monies, (1st Defendants, supplementary documents page 7). At that time, that would have meant he received, in total, approximately $17,500.00 less than the full contract price.

He denied knowing about the rezoning plans either from the defendant himself, the defendant’s brother or from seeing plans upon his visits to the first defendant’s office at the premises. He said he had not seen Mr. Khan’s letter of 15th July 1996 (1st Defendants bundle p.11) telling him the rezoning had been approved and asking him to clear “by harvesting the cane in that area which you and Mr. Khan have seen”. He denied saying to Shri Narayan that he had another buyer. He denied that the putting off of the settlement throughout was by agreement.

He said that he did want to harvest his cane crops, that early in the course of events new cane had been put in and that would last some two and three years. However he stated that he wanted settlement.

Nasir Khan gave evidence. He described himself as a businessman including being managing director of the fifth defendant Khan Buses. He wanted somewhere to park his buses and trucks. He said this was known to the plaintiff and his wife from the time of signing of the agreement. He said the plaintiff was well aware of his plans to apply to rezone the land. He said throughout the months and years he kept the plaintiff informed of the progress of events. He stated that whenever he was asked for money towards the purchase price he would pay some more, that the postponements of settlement were agreed to by Janardhan and he was happy with that. He said he had made, over the period of time, a number of applications for loans. However Janardhan was interested in harvesting his cane at various stages and these loans were lost as they were not taken up.

He stated that he acted in a very friendly way to the plaintiff and his family. He paid for medical attention for Mrs. Janardhan’s mother, paid for their airfares to New Zealand, went across to help them with their application for permanent residency at one time and was the guest of honour at the wedding of their daughter. He states he is now and still is ready and able to effect settlement.

He called Ifraz Ali and Mohammed Ali Khan as witnesses in support. The former stated he was a clerk and the plaintiff would visit the office of the garage on the half acre occupied by the first defendant. He said the plaintiff would be called in, given the file of the land and then they (Janardhan and Khan) would talk.

Mohammed Ali Khan was the first person to see the plaintiff and his wife after the rescission letter in 1998. He states “I had a conversation with Janardhan, his wife and a young girl. I talked in a way, as they were not prepared to listen. What they wanted was money ... I visited again with Nasir. The second time Nasir took a whole bunch of files, they were discussing the whole thing. They wanted more money. They wanted money. They were talking about rezoning ... Nasir showed them all the plans in the files. He said at the end of the meeting everyone was very amicable. Nasir said come and get more money. What I thought was the reason for being upset was that they wanted money. Once they were told they could pick up the money they were happy”.

Where the evidence of Janardhan and his wife differs on material matters from that of the first defendant Nasir Khan, I prefer the evidence of Janardhan and his wife.

There is no reason on the face of the evidence or documents why the Janardhans should want to put off settlement. The very reason for the sale was to raise money for the education of their children. The more they put off settlement the longer was put off the time when they would receive the money for their children’s education. It came to them in dribs and drabs over years sometimes in sums as small as a $100.00 and $50.00. The fact that Janardhan is a cane farmer does not alter the matter. If he wished to continue cane farming to educate his children then there was no reason to sell the land. If he wanted to reap the benefit of whatever cane was growing on the land at time of settlement he had the opportunity to do so. This was accommodated at Clause 9 in the contract.

There was no consideration flowing from Nasir Khan to Janardhan for the putting off of what Janardhan was entitled to under the contract. Any estoppel that might have arisen after the first postponement of settlement had ceased by the end of 1996. In any event, the agreement to postpone settlement was not genuinely brought about. The first defendant said he was waiting for his loan to come through, the real reason was to set about rezoning. The contract was not dependent on any loan for the purchaser.

It has been argued that had Janardhan wished to enforce the contract he could have asked for specific performance. This does not take account of the reality of what was happening. The Janardhans were persuaded by deliberate misrepresentations into thinking that settlement was not possible for reasons beyond the control of Nasir Khan. This was the illusion he sought to create and did create. The result was that the Janardhans believed they could not move to settlement and receive the balance of the purchase price as a result of what was told to them by Nasir Khan.

Whenever they contacted Vinesh Prakash of Young and Associates, whom they thought were acting for them, they got the same message namely the matter was “being processed”. Vinesh Prakash did nothing to disillusion them of this misunderstanding. He was limited in what he told them and when Young and Associates were concerned about their professional position they asked Mr. Janardhan to sign the further declaration in similar terms to Clause 21 of the original Sale and Purchase Agreement (see page 48 of the 2nd Defendants bundle). It was no accident that the document was initially dated 23rd September 1997, and then when it was needed was re-dated 28th October 1998. The Singh and Fatiaki letter had been sent a few months earlier, and the Janardhans persuaded to withdrew the rescission.

All the documents were held by Young and Associates.

Mr. Khan befriended the Janardhans and this also maintained the illusion that settlement was genuinely not possible. I find as a fact Nasir Khan knew that the Janardhans wanted settlement throughout the whole of this period and that it was his deliberate misrepresentations and omissions that meant they did not take proper steps to enforce it.

In this regard by 1998 the Janardhans had became desperate and went and sought the advice of another firm of lawyers, Singh and Fatiaki. This resulted in the latter’s letter of 5th May 1998 (1st Defendants documents page 42). The result of the receipt of this letter by Nasir Khan was to get concerned he might lose the contract. He immediately sent round Mohammed Ali Khan. When he had managed to calm the Janardhans down, Nasir Khan also saw them and they were again persuaded to delay settlement. There was an oral withdrawal of the Singh and Fatiaki letter of rescission. However, it must have been abundantly clear to Nasir Khan that the Janardhans wanted the money and wanted settlement. As a businessman he could see that the Janardhans were entitled to all their money and were only receiving small instalments over many years.

So desperate was Janardhan that by 1998 he was willing to accept approximately $17,500.00 less than what he was entitled to purely for the purpose of getting settlement. The evidence for this is signed but not dated or witnessed, (1st Defendants Supplementary Bundle page 7). Janardhan can only have signed this as he wanted settlement.

It must further have been clear to Nasir Khan that the Janardhans wanted settlement by the persistence of the phone calls of Mrs. Janardhan to Vinesh Prakash at Young and Associates. She estimated she made over the time between 200 and 300 calls. I cannot say what the exact number was but it was clear there were many, many calls and she was persistent in her telephoning of Vinesh Prakash. Young and Associates, as Nasir Khan’s lawyers, must have been making this fact known to Nasir Khan.

The question must be asked “what advantages were there to Nasir Khan in delaying settlement?” The answer is there were several.

First of all by 1997 or 1998 (the evidence varies on this) he had the use of sufficient area for his buses and trucks, with water and electricity supplied with the help of Janardhan, and had only paid less than half the purchase price. He still had what he considered was an enforceable agreement for the purchase of the whole land. He calculated that Janardhan could be persuaded to further delay settlement. It is pertinent to note that on both occasions a letter of rescission was sent Nasir Khan acted quickly, on the first occasion seeking reconciliation and on the second stating he was ready and able to settle.

There is no doubt from the outset Nasir Khan was seeking somewhere to park his buses and trucks. Janardhan’s land was agricultural or agricultural/residential B. As a businessman he knew he would need rezoning to industrial usage for his purposes. This was not apparent as a requirement to Janardhan. In fact I find specifically that Janardhan did not know at the time of signing the agreement or postponement of settlement that Nasir Khan was seeking rezoning or indeed needed rezoning for the purposes he had in mind.

If settlement had taken place but rezoning had not been permitted then Nasir Khan would have been left with a piece of land which was zoned agricultural/residential B. This was not what he required at all. He wanted the land for parking his buses and trucks. It therefore was to his advantage to postpone settlement until he knew whether or not rezoning would be permitted. If it was not permitted then he could then seek to extricate himself from the contract.

It is also pertinent to note that Nasir Khan had bought a piece of adjoining land and was looking to rezone that as well.

Mr. Khan had a further interest in delaying settlement in that he wanted to negotiate the leasehold value and other potential outgoings on the rezoned land to as low a figure as possible. This took several months and in fact in this regard, including through the intervention and attendance of the Minister, he was successful. Thus by 1999 he had rezoning, he had negotiated down the values for and outgoings on the land and was seeking and had every prospect of getting a ninety-nine year industrial lease. He was on the land with electricity and water connected and was using it for what he wanted yet had only paid approximately half of the purchase price.

In 2000 in Fiji there were violent political actions of a far-reaching nature. Mr. Khan himself unprompted in evidence stated there had been concerns that if a new regime was established in the country then much land might revert to native land. It was clear that he had been concerned that had he been the owner of the land then he might have lost it on very disadvantageous terms. This then was another reason why Nasir Khan wished to put off settlement.

It is supportive of these conclusions that Nasir Khan on the transfer documents and on the application to the Fiji Sugar Corporation for transfer of their licence described himself as a cane farmer and that he would be farming cane on the land. This was simply not true. It was a statement made for the purposes of the sale and transfer of the land. It might be this is a common fiction in land dealing, however, it does illustrate the fact that Nasir Khan was willing to state an untruth on official document for the purposes of progressing his interest in this land.

The Janardhans were repeatedly told that as soon as his loan came through Mr. Khan would complete settlement. He called evidence to show that at various stages loans had been available to him. He blamed Janardhan for wanting to continue cane farming as to why these loans were not taken up and eventually lapsed by running out of time. I do not accept this explanation. First, the contract itself has no clause stating that settlement is dependant upon the provision of a loan by Mr. Khan. Second, on the occasions that, even on his own evidence, loans were available Mr. Khan made no attempt whatsoever to settle the transfer. I do not believe that a businessman in these circumstances when asked by the Janardhans if he could harvest yet another cane crop would yet again put off settlement. The plain fact is that postponement of settlement suited Nasir Khan.

There is the stark question that had the Janardhans not, through their new solicitors, rescinded the contract when would settlement have taken place?

A further question that must be posed is this. Had the rezoning not been approved what would Mr. Khan have done? The simple fact in law was that he was bound to purchase the land for the sum of $170,000.00. The possibilities of rezoning, of obtaining of a 99 year lease, of an advantageous valuation and setting of outgoings on the land were simply of no relevance to the agreement between Janardhan and Khan.

In my judgment Nasir Khan knew that had Janardhan realised rezoning was taking place and the effect on the value of the land of that rezoning then Khan would have moved quickly to settlement. It was the fact that he correctly assessed that Janardhan did not know about the rezoning and therefore could not know about its consequential increase in value of the land that he could postpone settlement with comfort for so long.

Whilst I don’t dismiss the evidence of Ifraz Ali and Mohammed Ali Khan and what was on view in the bus office on the land, I find Janardhan was not told in terms he would understand what was going and its full import.

The full import of what was going on did not dawn on Janardhan until late 2003 or early 2004. That is what prompted him to see Shri Narayan and his reactions there. I accept Mr. Narayan’s evidence that Janardhan did say that he had another buyer. It is not surprising he should think in that way even though he did deny that remark.

In my judgment this was a calculated course of conduct by Nasir Khan to manipulate the Janardhans, the contract and the use of the land to his greatest commercial and financial benefit.

I am satisfied that he knew throughout that the Janardhans wanted settlement. He knew the reasons why they wanted settlement. He was instrumental in bringing about their understanding of affairs which meant they thought they were unable to get settlement. He utilised his “friendship” to maintain them in this state. Whenever they got worried and needed money he paid them sufficient to keep them going and allay their fears.

It must be accepted that Janardhan and his wife to some extent have been naïve in these matters. They were trusting of Mr. Khan and his representations and considered that Young and Associates through Vinesh Prakash were looking after their interests and they believed what Vinesh Prakash was telling them, even despite their brief visit to Singh and Fatiaki.

Janardhan said in evidence he felt he had been made a fool of. When he went to Shri Narayan he says he “felt sick” when he understood that the land had been transferred and there was nothing he could do about it. As a result of what Shri Narayan said he went to Young and Associates, got a copy of the agreement and then went to see his current lawyers. By that time his wife had already said in a telephone conversation with Nasir Khan a fortnight earlier that they wanted settlement. The rescission letter was sent. It is pertinent to note that within a short time of receipt of that letter Nasir Khan declared that he was ready and able to settle.

Counsel for the first defendant has addressed the court at length about the necessity for making time of the essence before rescission takes place and the allowing of sufficient time to complete the act required before rescission can take place. I am satisfied that Nasir Khan knew throughout the months and years that the Janardhans wanted settlement. They had been pressing continually and persistently and had been fobbed off with a variety of misrepresentations, “friendship”, small payments and persuasion.

At best it can be said as far as the first defendant is concerned, that there was an oral agreement made between Janardhan and Khan to postpone settlement a few days before the original settlement date in the contract. That oral postponement was based on the representation that Khan needed to get his loan sorted out before he could settle. However, even on his own evidence that representation held no validity by the end of 1996. He had a clear offer of loan and had he wished to settle he could have done so. Therefore if there was any valid oral variation of the contract to postpone settlement it expired sometime in the latter part of 1996. Having orally varied the contract the Janardhans orally informed the first defendant that they wanted settlement and Mr. Khan must have known that time was of the essence. If that was insufficient then the letter of Singh and Faitaki must have made the position clear that the Janardhans wanted settlement. They were persuaded to withdraw the rescission and that could only have been done on the basis that settlement would take place.

Accordingly,

1. The claim against the third, fourth, sixth and seventh defendants is dismissed.
   
2. The claim against the second is dismissed.
   
3. The claim against the first and fifth defendants is successful. I find that the letter of the 13th of September 2004 addressed to first defendant Nasir Khan and to his lawyers Young and Associates did constitute lawful rescission of the contract.
   

The first defendant has had the use of half an acre of the land for six or seven years. He has made a number of constructions on and fixtures to that land which might or might not increase its value. He has brought about the rezoning of that land and negotiations concerning the outgoings which certainly have increased the value of the land.

The Janardhans have not had the benefit of the full purchase price when it was due. They received a variety of sums over time. They have received no benefit for the postponement of settlement or the use of part of this land. It is not a legal consideration but the very purpose for which they sought sale and settlement, namely the education of their children, has been thwarted by the defendant’s activities.

The defendant claims “general damages and compensation for breach of contract against the first ... and fifth defendants”.

The fifth defendant Khan Buses is the assignee of the first defendant's interests under the agreement. The first defendant is the guiding mind behind that company.

It is not possible accurately to assess the damages if any in respect of each of these. The original agreement itself at Clause 17 states:

”If the Purchaser makes default in payment of any monies hereby agreed to be paid and such default shall continue for the space of fourteen (14) days from the due date then and in such case the Vendor without prejudice to any other remedies available to him may at his option exercise all or any of the following, namely:

(a) ...

(b) ... May rescind this contract of sale and thereupon all monies theretofore paid shall be forfeited to the Vendor as liquidated damages; or

(c) ...”

At the time of signing the agreement $5,000.00 was paid to Young and Associates. The balance, according to the contract, was due on settlement. At the time of rescission the $5,000.00 was being held by Young and Associates in their trust account and $94,300.00 had been paid.

It was Mr. Khan himself who kept a record of all the payments even at a time when this was being done on trust and without the writing of any receipts. It was that record that gave rise to the first schedule in the plaintiff’s documents. I find the evidence shows that both the plaintiff and first defendant did regard those monies paid in instalments over the years as being deposits in respect of the purchase of this property. The very documents in the way they are drawn up and the evidence of the Janardhans support this. Can it then be said these monies should be regarded as damages as claimed in the Writ or as envisaged by Clause 17(b) and forfeited? Or are they liable for refund upon rescission?

In the normal course of events settlement would not take place until the full purchase price had been paid, yet the full balance of the purchase price would not be due until settlement had been made. This agreement and its subsequent events did not proceed in the normal way. The first defendant persistently put off settlement in the way I have found and the payment of monies agreed under the agreement was consequentially and necessarily put off. The first defendant did default in making payment and the sums paid are therefore forfeited as liquidated damages. Mr. Khan gratuitously made the applications for rezoning and the costs thereof cannot be held to the detriment of Mr. Janardhan.

Mr. Janardhan suggested a monthly rental of $1,000.00 per month for Mr. Khan’s use of the land to park his buses and trucks. I have no other specific figures. That would make a figure of $12,000.00 per year. For a period of six to seven years that would make a figure between $72,000.00 and $84,000.00, ignoring any interest value. These figures are close to the sums already paid by Mr. Khan to Mr. Janardhan.

In those circumstances, I find that I make no order for payment of any money by Nasir Khan to the defendants or any refund by Janardhan to Khan of the monies paid. I will give a date for the vacation of the land later in this judgment. I find that the liquidated sum for Janardhans damages against the first and fifth defendant is covered by the sums already paid, up and until the date given for vacation of the land.

The deposit of $5,000.00 held by Young and Associates in their trust account is included in the sums and I therefore order it be paid out within 14 days to Mr. Janardhan.

The first and fifth defendants were required under the letter of rescission of September 2004 to vacate the premises. That had not occurred up to the date of trial. In those circumstances I will give until the 31st of January 2006 for the first and fifth defendants to remove all their properties from the land in question. This removal must be of all objects which are not affixed to the land. Any objects, buildings construction hard standing etc. which are affixed to the land must remain. I do make it clear that there must be no damage of fixtures and the land must be left in a clean and tidy state.

I have considered the first and fifth’s defendants' counterclaim and can find no basis on the evidence upon which it could succeed. In these circumstances that is dismissed.

(R.J. Coventry)
JUDGE