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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL ACTION NO. 70 OF 2005
BETWEEN
PACIFIC GREEN INDUSTRIES (FIJI) LIMITED
Plaintiff
AND
SUN INSURANCE COMPANY LIMITED
Defendant
Appearances: Mr. S. K. Ram for the plaintiff
Messrs Suresh Maharaj & Associates for the defendant
Date of Hearing: 20 June 2008
Date of Ruling: 4 July 2008
RULING
[1] Before me is a summons dated 5 June 2008 filed by the defendant for the following orders:
(i) That leave be granted to the defendant to further amend the amended statement of defence and file a counter-claim.
(ii) That the hearing date for quantum set down for 8th and 9th of July, 2008 be vacated.
(iii) That the costs of this application be costs in the cause.
(iv) Any further or other order this Honourable Court may deem just.
[2] The summons was supported by an affidavit from Arvendra Kumar, a Claims Officer employed by the defendant. The grounds for amendment sought are contained in his affidavit and in an affidavit in reply by Thomas Naua dated 18 June 2008. Mr. Kumar deposed the following:
(i) In the court’s judgment on liability which was delivered on 29 February 2008, the court found amongst other findings, that fraud was not pleaded in the amended statement of defence.
(ii) Upon legal advice from the defendant’s present solicitors and in view of the court’s findings above, it has become necessary that the amended statement of defence be further amended and a counter-claim against the plaintiff be pleaded.
(iii) The proposed amendments raise some very important questions of law and fact and which will require a reply to defence, defence to counter-claim, further discovery of documents and a further pre-trial conference.
[3] When the application was heard Mr. Maharaj submitted that the proposed amendments would impact only on the assessment of damages hearing and not on the question of liability which had already been determined. He submitted that there was no prejudice to the plaintiff because quantum had yet to be determined and the liability judgment had been appealed and is presently pending. Mr. Ram who strongly opposed the application stated that if the application were allowed this would re-open the hearing of liability where findings on the evidence have already been made and I am functus so to speak to consider anew the new defence alleging fraud which would require me to reconsider evidence in respect of which I have already considered and have already made findings.
[4] In my view the proposed amendments, if allowed, would introduce a completely new defence with additional issues and would involve reconsideration of evidence which has already been the subject of my findings in my judgment on liability. The proposed amendments go directly to liability and are not limited to the issues of quantum which are yet to be determined. The proposed amendments (emphasized) are contained in Mr. Kumar’s affidavit as follows:
14. AS to paragraph 25 it admits the policy provided for a deductible sum of $25,000.00 for each and every loss but denies the other allegations made therein. That the defendant by way of further defence states that the policy was subject to a condition that it should be void if the plaintiff made and delivered to the defendant a fraudulent or fraudulently exaggerated claim or declaration of loss and the plaintiff did on the 9th of December, 2004, make and deliver to the defendant a fraudulent or fraudulently exaggerated claim and declaration of loss.
PARTICULARS OF FRAUD
(i) The plaintiff has submitted claim for building and other structures including lean to building in the sum of $2,648,400.00 when it knew or ought to have known that the actual assessed damage was only $650,204.00.
(ii) The plaintiff has submitted claim for damages plants, machinery and other contents in the sum of $1,735,000.00 when it knew or ought to have known that the actual assessed damage was only $952,700.00.
(iii) The plaintiff has submitted claim for stock in the sum of $275,000.00 when it knew or ought to have known that the actual assessed damage was only $164,217.00.
(iv) Falsifying and or attempting to falsify public records kept by the National Fire Authority, Sigatoka Office to reduce the severity of previous fires and thus submitting claim for the full insured sum.
(v) Providing a specimen letter to the National Fire Authority and then colluding with an officer of National Fire Authority and having a letter done identical to that of the contents of an email from one Mrs. Ryan to the plaintiff’s General Manager namely Ravin Chandra.
(vi) That the plaintiff has submitted claim for building and other structures in the sum of $2,648,000.00 when it knew or ought to have known that when it took out the policy, the premises and structures were smaller in area size than what got destroyed after the plaintiff had without any approval and/or notification increased the size of the insured premises.
[5] A proposed new counter-claim is also sought to be introduced. This is pleaded as follows:
(i) Investigation - $13,445.00
(ii) Forensic - $11,385.57
(iii) Assessment/Loss Adjustment - $21,896.15
(iv) Quantity Survey - $ 6,593.93
(v) Transport/accommodation/other expenses - $ 5,851.00
(vi) Legal Opinion and charges - $81,435.97
TOTAL - $140,607.68
The defendant claims the said sum against the plaintiff.
The relevant principles to be considered on applications for leave to amend
[6] In the ordinary course of litigation, an amendment to pleadings is generally allowed for the purpose of determining the issues between the parties if no injustice was caused to a party by the amendment. The principles applicable to the exercise of the court’s discretion when dealing with an application for amendment are well settled.
"It is a guiding principle of cardinal importance on the question of amendment that, generally speaking, all such amendments ought to be made "for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings." (Jenkins L.J. in G.L. Baker Ltd. v. Medway Building & Supplies Ltd. [1958] 1 W.L.R. 1216,
"It is a well established principle that the object of the Court is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights..... I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. (Bowen L.J. in Cropper v. Smith [1884] UKLawRpCh 91; (1883) 26 Ch.D. 700 at p. 710-711.[1]
[7] In this case the defendant has applied to amend after the trial on liability, after the judgment and after the sealing of the judgment, by adding what is essentially an entirely new defence designed to avoid the policy altogether. It cannot be described as rectifying a procedural defect e.g. amending the name of a party or adding an additional party. If allowed the proposed amendment would change the whole nature of the defence and would require the re-litigation of the entire liability aspect of the action. There is no explanation before me as to why the proposed amendments were not made prior to the trial or judgment. This is an important consideration in view of the fact that Mr. Kumar’s affidavit does not disclose at all whether the late application to amend has been brought about by the discovery of new evidence which was not available or not known to the defendant prior to or during the trial. I have assumed in the absence of this information that the only evidence available to the defendant is the evidence that was available to it prior to the trial. I find it astonishing that the defendant is proposing, in effect, by making the present application without disclosing any new evidence, that I re-visit the evidence produced at the trial in a fresh hearing on liability, (assuming that I was inclined to allow the application) and potentially arrive at different findings of fact on the same evidence. In 2006 a trial fixture had to be vacated because of applications to amend by both parties, which was allowed. There is no explanation before me as to why the defendant did not raise the amendments sought in this application in June 2006.
[8] An amendment for the purpose of adding a plea of fraud is generally allowed at an early stage if the circumstances warrant it, but it will only be allowed at a late stage in exceptional circumstances.[2] There are no exceptional circumstances established in the present application. Moreover the defence of fraud is being raised after judgment on liability, suffice it to say, at a very late stage. An amendment may be allowed at any stage of the proceedings, whether before or at the trial, and even after trial, and in exceptional circumstances, after judgment.[3] In the present application the defendant has failed to establish that there are exceptional circumstances justifying the amendment sought after judgment. The onus of establishing these requirements in law and in fact lay with the defendant. Neither requirement has been met.
[9] The proposed re-amended pleadings are also inadequate. It has long been established that the pleading of fraud requires the greatest particularity. In a case of fraudulent misrepresentation, (the essence of the proposed re-amendments), the allegation of fraud must be distinctly pleaded. A general allegation of fraudulent misrepresentation, unsupported by particulars of the acts alleged to have been fraudulent, will be insufficient.[4] If fraudulent misrepresentation is alleged, what must be pleaded are any facts relied upon to establish knowledge on the part of the plaintiff that the representation was false (e.g. that it had previously been told the truth by some person in which event the informant should be identified and the occasion pleaded) and any facts relied upon as showing that the plaintiff was reckless.[5] The particulars of fraud pleaded in the proposed further amended defence touching in both liability and the counter-claim are completely devoid of the particularity required to sustain the allegations. The defendant was required to plead the facts upon which it alleges that the plaintiff knew or ought to have known that the actual assessed damage for the buildings, for plants and machinery, for stock etc. was significantly lower than what it claimed. The defendant has completely failed to do this.
[10] The reliance on my judgment on liability as justifying the application made is misconceived. My comments regarding fraud at paragraph 56 of my judgment were in respect of my findings on the conspiracy theory raised by the defendant in the course of the trial and in closing submissions, which amounted to fraud. After assessing the evidence relied on, I concluded that the evidenciary basis needed to arrive at findings of fraud did not exist. To allow the further amendments proposed would of necessity mean a re-hearing on the question of liability where I would be placed in a position of having to re-visit and re-assess evidence where findings of fact and credibility have already been made. I would have to re-consider the National Fire Authority records and witnesses, Mr. Chandra’s testimony and Mr. Ryan’s testimony amongst others. The House of Lords in Bradford Third Equitable Benefit Building Society v. Borders[6] considered a similar scenario where a claim for fraud had been amended in the course of a protracted trial, but the Court of Appeal in the course of the hearing permitted yet another amendment to be made. In regard to the Court of Appeal’s decision to allow a further amendment, His Lordship Viscount Maugham stated at page 207 as follows:
"This again is very unusual in a case based on fraud. The necessity for accurate pleadings in such a case was explained in forcible terms by Lord Westbury, L.C., in New Brunswick & Canada Railway & Land Co. v. Conybeare (1) at p. 724, and it is plain that an amendment after the witnesses have given their evidence may lead to grave injustice" and at page 217 His Lordship continued "To make a charge of fraud is a serious thing, and, before people make it, they should be clear as to the grounds and facts upon which they rely as the basis of their charge. If they fail at the trial in establishing the chosen basis of their allegation, they should not (except in very rare and special circumstances) be allowed, on appeal, to present a fresh case which has never been put to witnesses, and upon which the trial judge has never been called upon to express a view."
[11] The present application for further amendment, not being confined to assessment of damages, cannot be allowed. There are no facts establishing that the defendant has obtained some new evidence that was not available to it prior to or during the trial. If there was indeed new evidence available, bearing in mind that the court has jurisdiction to grant an application to amend pleadings to raise new points and/or to call fresh evidence and/or to hear fresh arguments, then that presents a different proposition than what is presently before me.
[12] As was said in Charlesworth v Relay Roads Ltd (in liquidation) and others[7]:
"Quite apart from, and over and above, those principles, because it is inherently contrary to the public interest and unfair on the other side that an unsuccessful party should be able to raise new points or call fresh evidence after a full and final judgment has been given against him, it would generally require an exceptional case before the
court was prepared to accede to an application where the applicant could not satisfy the three requirements in Ladd v Marshall.
The court should be astute to discourage applications which involve parties seeking to put in late evidence, but cases where new evidence is found after judgment is given and before the order is drawn up will be comparatively rare."
[13] There are no exceptional features in the present application. The plaintiff will be significantly prejudiced if the application was allowed. More importantly the order after judgment has been drawn up and I am functus officio. As a consequence of the order having been perfected I lack jurisdiction to re-consider the question of liability afresh with or without further evidence.
Order
The summons dated 5 June 2008 is dismissed with costs to the plaintiff assessed in the sum of $550.00.
Gwen Phillips
Judge
At Lautoka
4 July 2008
[1] Referred to in the Court of Appeal in Ahmed v Ibrahim [2002] FJCA 74; ABU0081 U.2000S (29 November 2002)
[2] Halsbury’s Laws of England Fourth Edition Vol. 36 para. 70
[3] Ibid at para. 71
[4] Atkin’s Court Forms Second Edition 27 1995 Issue p. 214
[5] Ibid at p. 215
[6] [1941] 2 All ER, 205, at 207 & 217
[7] [1999] EWHC 829; [1999] 4 All ER 397 at 406
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URL: http://www.paclii.org/fj/cases/FJHC/2008/294.html