Tagavellu v Deo [2009] FJHC 222; HBC289.2005L (1 October 2009)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No. HBC 289 of 2005L

BETWEEN:

TAGAVELLU
(father’s name Subarmani)
of Vuniyasi, Nadi, Farmer
Plaintiff

AND:

DHIRENDRA DEO and DHIREND CHAND
(both sons of Jai Ram)
of Bilalevu, Valley Road, Sigatoka, Farmers
Defendants

FINAL JUDGMENT

Of: Inoke J.

Counsel Appearing: Dr. M. Sahu Khan for the Plaintiff
Mr. M A Sahu Khan for the Defendant

Solicitors: Messrs Sahu Khan & Sahu Khan for the Plaintiff
Messrs M. K. Sahu Khan for the Defendants

Dates of Hearing: 4, 11 August 2009
Date of Judgment: 1 October 2009

INTRODUCTION

[1] This is a claim for specific performance of a contract for the sale and purchase of land and damages for not being able to use the land being purchased.

[2] The facts are very simple. The Plaintiff, Tagavellu, and the Second Defendant, Dhirend Chand, entered into a Sale and Purchase Agreement (the "Agreement") on 26 November 1996 for the purchase by Tagavellu of farm land owned by the two Defendants. The purchase price was to be paid in installments to the Defendants’ bank. Chand’s brother, Dhirendra Deo, the First Defendant, now lives overseas and took no part in these proceedings or the transactions involved. He has given his brother a power of attorney to act on his behalf according to his Counsel and not disputed by Tagavellu’s Counsel. In any event, as between Tagavellu and the Defendants nothing turns on this and the outcome of this case does not depend on the existence of the power of attorney.

[3] Tagavellu says that he has paid off the full purchase price. Chand denies it. According to him Tagavellu paid only half of the purchase price and did not meet one other condition. So he refused to transfer the land to Tagavellu or let him take possession. Tagavellu now sues for the transfer of the land and for damages for loss of use.

[4] The matter was heard over two days. Tagavellu called two other witnesses and Chand gave evidence himself. At the end of evidence I allowed Counsel, at their request, to file submissions over a period of 5 weeks and my judgment to be delivered on notice. That period expired on 15 September 2009. Only Counsel for Chand filed submissions. As at the date of writing this judgment, Counsel for Tagavellu had not filed his submissions. This matter has been ongoing since 4 October 2005 over a cause of action that arose in 2001 and I am not prepared to hold up delivery of judgment because his submissions had not been filed.

THE AGREED FACTS

[5] The agreed facts were that the Defendants are the registered proprietors of land comprised in Certificate of Title No 26101 known as Bilalevu in Sigatoka, Viti Levu (the "land"). The land was mortgaged to the Bank of Baroda. Tagavellu agreed to purchase and the Defendants agreed to sell the land and after payment of the purchase price the Defendants would transfer the land to Tagavellu.

THE TRIAL EVIDENCE

[6] What is not agreed is the purchase price and one other condition. The purchase price as written in the Agreement was $15,000. Chand says the purchase price was $30,000 and not $15,000. He also says that Tagavellu agreed to carve out a quarter acre block out of the land on which his house is built and transfer it to him.

The Evidence of the Plaintiffs first witness:

[7] The first witness for Tagavellu was the lawyer’s clerk who drafted the Agreement. He had been working for this particular law firm for about 3 years at the time he drew up the Agreement. He said both Tagavellu and Chand were present in his office and after getting their instructions he prepared the Agreement dated 26 November 1998. After preparing the Agreement he read it back to them and explained it in Hindustani because both parties understood the language. Both parties understood the terms and conditions and signed the Agreement in his presence. He witnessed their signatures. He said the Agreement contained all the terms and conditions. After the Agreement was signed he went to the Bank of Baroda with the parties and had it approved and stamped by the Bank.

[8] In cross examination, he admitted that the principal of the firm did not look at the Agreement. He did not advise Chand to seek independent advice. He agreed that the Agreement was an attempt by him to combine a sale and purchase agreement with a mortgage. The default clause in the Agreement only referred to execution by the Bank of its mortgage when the purchaser defaults. He could not explain why he did not include a default clause in favour of Chand when Tagavellu defaults.

The Evidence of the Plaintiffs second witness

The second witness was Tagavellu himself. He said he knew Chand through their association as farmers. He had bought vegetables from Chand on several occasions. Chand approached him in 1996 and asked him to buy the land because the land was on mortgagee sale. At first Chand wanted to sell at $20,000 but he said he could not afford it so they finally agreed on $15,000. The purchase price was to be paid to the Bank. He said he did not know how much was owed to the Bank so they both went to the Bank to find out. When they were at the Bank the Manager drew up a letter dated 24 September 1996 which they both signed. The letter said:

"24.9.96

The Manager

Bank of Baroda

Sigatoka

Dear Sir

Re: Loan of Dhirend Chand
Bilalevu Sigatoka

As discussed with Mr. Dhiren Chand. I hereby advise that I intend to buy the said property. Mr. Dhiren Chand has advised that I have to take over the entire debt outstanding of approximately $15000/-. He has further advised that upon full payment the mortgage over the property will be discharged by the bank and he will transfer the property in my name. To this effect I shall make some agreement with my solicitor. In repayment I now deposit my 1st installment of $2000/- and advise that I shall make monthly repayment of $350/- or minimum of $4200/- per year till such time the entire debt has been paid.

I now look forward for your assistance in respect of accounts.

Yours faithfully .............................. I hereby consent to above

(Signed) Tangavellu ................... (Signed) Dhiren Chand"

[10] Chand then took him to a firm of solicitors and saw the clerk that drew up the Agreement. This firm was not his lawyers. He confirmed that the Agreement was explained to both of them in the Hindustani language. After they signed the Agreement they went to the Bank and the Bank Manager signed and stamped the Agreement as well. There was no agreement that Chand would remain on the land after payment of the purchase price. Chand was to vacate after the purchase price was paid. The first payment under the Agreement was $2,000 paid on 24 September 1996. He made payments into the Chand’s bank account from 1997 to 2001. By December 2001 he had paid a total of $20,200. He and his lawyers have asked many times but Chand has refused to give vacant possession or transfer the land to him.

[11] In cross examination Tagavellu insisted that the purchase price was $15,000 and not $30,000. He said the reason he paid $20,200 was bank interest charged on the account. He also said that it was Chand who persuaded him to buy the land. After he signed the Agreement he started planting vegetables for export so that he could pay off the debt. Chand is harvesting for him.

The Evidence of the Plaintiffs third witness

[12] The third witness for Tagavellu was a business colleague of his. The witness said he was present during the discussions between the Tagavellu and Chand in 1996 for the purchase of the land. He said the parties discussed a price of between $20,000 and $18,000 but later thought that they should go and confirm it with the Bank. He went to the Bank with them. The amount of the debt with the Bank was a little more than $14,000 so agreement was reached on $15,000. The letter of 24 September 1996 was prepared by the Bank. The letter was read over to them in English and translated in Hindustani as well. He confirmed he was present when the parties signed the letter at the Bank. They then went to the solicitor’s office and he was present there when the Agreement was being prepared. He confirmed that the Agreement was explained to the parties and they signed it. They then went to the Bank again. All four of them, Tagavellu, Chand, the law clerk and himself. There was no agreement to pay an extra $15,000. There was no agreement for Tagavellu to give Chand a house site on the land. When asked what his interest was in all this, he answered that he had a common interest with Tagavellu in that they were both farmers and exporters and often shared transportation of their vegetables to Sigatoka.

The Evidence of the witnesses for the Defendant

[13] The only witness for the Defence was Chand himself. He was educated to class 3 primary school level. He knew Tagavellu through selling vegetables from his farm to him. He confirmed that he discussed the sale of his land to Tagavellu because the land was on mortgagee sale. He approached Tagavellu to make the repayments for his mortgage to his Bank. But he said the agreement was that $15,000 was to be paid to the Bank, $15,000 was to be paid to him and he was to be given a quarter acre block of the land. He did not receive the $15,000 that was to be paid to him nor did he get the block of land that was promised. He had a witness present with him in these discussions and in the Bank but the witness has moved overseas so he was not able to call him at the trial. He recalls signing the letter to the Bank and the Agreement. He does not read English or Hindustani. The contents of the documents were read to him. He thought that the lawyer’s clerk was a lawyer.

[14] In cross examination, Chand admitted that it was a long time ago and his recollection was not very good. He confirmed that he gave instructions to the law clerk and that the clerk read back the Agreement to him in Hindustani. He signed it after that. He also confirmed that the Bank letter was also read to him in Hindustani.

ANALYSIS OF THE EVIDENCE AND FINDINGS OF FACT

[15] This case has two of the difficulties that our Courts face in a significant number of civil trials: the fading of memories through the passage of time because of delays in bringing matters to trial, and, the accuracy of the evidence that is first given by a non-English language speaker and then translated by an interpreter into English for the trial Judge. The difficulties are further compounded because the outcome of the case depends on my assessment of the accuracy of a document that is written in English yet at least one of the parties does not read or speak English so the document has to be explained to him in a language that he understands. In this analysis of the evidence I have found that not only do I have to take into account the demeanour, background of the witnesses and their evidence but as well my own personal experience.

[16] Chand is an elderly man. He came across as a simple hardworking vegetable farmer with little knowledge of the commercial world. He neither spoke nor read English. He did not read Hindustani either. I observed him in his evidence in chief and cross examination and can well understand how the two conditions that he wanted were not inserted into the Agreement yet he made no protest when it was read back to him. He totally relied on and trusted Tagavellu, the law clerk and the Bank Manager to look after his interests.

[17] On the other hand, Tagavellu and his colleague appeared to be well versed in the commercial world and spoke good English when they chose to answer questions in English, although most of their evidence was given in Hindustani and translated into English. They are farmers who export vegetables and crops overseas so I have no doubt that they can well handle themselves in the sort of transaction that was entered into here. They have a common interest to support each other in business and I consider their evidence against that background.

[18] I do not accept that Chand received full and independent legal advice. Although he admitted that he took the parties to the firm of solicitors I do not think the evidence was unequivocal that the solicitors were acting for him alone. In fact it was quite the contrary. The law clerk admitted in cross examination that he did not advise Chand to seek independent legal advice. This is explained by the practice in Fiji. More often than not, the practice is that a solicitor acts for both parties in such matters, with the inherent risk that neither party’s interest is properly looked after.

[19] Also, it is my experience that quite often important terms and conditions are left out of written contracts. It happens often that agreements are drawn up by law clerks who in reality act for both parties, and that in such situations a representation is made that it is not necessary to write them in or that the unwritten promise will be honoured in any event. Sometimes it is deliberately done with the approval of both parties and sometimes it is done with the dishonest intention of one of them to secure an advantage over the other from the lack of writing.

[20] The end result is that I find the facts as follows. The contents of the Agreement were read over to Chand in the Hindustani language and he understood them and signed the Agreement accordingly. Tagavellu promised to pay an extra $15,000 and transfer a quarter acre block containing Chand’s house out of the land to Chand after the mortgage was paid out. These two promises were made orally before they went to the Bank and the lawyer’s office. They were not to be written into the agreement but were nevertheless to be honoured.

THE ISSUES

[21] Dr Sahu Khan, Counsel for Tagavellu, says that the Agreement contained all the terms of the contract between the parties so the parol evidence rule applies. The written terms of the Agreement cannot be contradicted and he submitted that I should disregard any of the oral evidence that does this.

[22] The relief sought by his client is specific performance of the Agreement by transfer of the land to his client with ancillary orders to effect this transfer. His client also seeks special damages of $10,000 per annum for loss of income from the land from 2002.

[23] The main defence raised by Mr Sahu Khan, Counsel for Chand, is the principle of non est factum. He submitted that his client did not understand what he had signed. The Agreement is void or voidable and the money paid by Tagavellu to the Bank should be repaid by Chand. Counsel submitted other grounds for finding against Tagavellu but I find them unsustainable or not made out.

THE LAW

[24] Having come to the conclusion that the contents of the Agreement were read over to and understood by Chand, the defence of non est factum does not apply.

[25] It has been said in Hussain v Ali [2005] FJHC 44; HBC0429J.1999L (1 March 2005) by Gates CJ, quoting the Court of Appeal in Hewitt and Anor v Habib Bank Ltd (unreported) Court of Appeal, Fiji Civil App. ABU0007 of 2004S, 26 November 2004, (p.6) that:

"it is settled law in Fiji that a defence of non est factum will not lightly be allowed when a person of a full age and capacity has signed a written document embodying contractual terms (Fiji Development Bank v. Raqona [1977] FamCA 81; (1984) 30 FLR 151). The general rule is that a party of full age and understanding is bound by his/her signature to a document whether he/she reads or understands it or not. (See Gallie v. Lee [1971] A.C. 1004, 1016, 1019)"

[26] However, this is not the end of the matter because I have found as a matter of fact that there was a promise by Tagavellu to pay an extra $15,000 and to subdivide and transfer a quarter acre block to Chand.

[27] The remedy of specific performance is discretionary and the Court will not exercise its discretion if to do so would cause a hardship amounting to injustice. Bacon VC in Barrow v Scammel [1881] UKLawRpCh 260; (1881) 19 Ch D 175, 182 stated:

"It cannot be disputed that courts of equity have at all times relieved against honest mistakes in contracts, where the literal effect and the specific performance of them would be to impose a burden not contemplated, and which it would be against all reason and justice to fix, upon the person who, without the imputation of fraud, has inadvertently committed an accidental mistake; and also where not to correct the mistake would be to give an unconscionable advantage to the other party."

[28] The parol evidence rule says that "if there be a contract which has been reduced to writing, verbal evidence is not allowed to be given...so as to add to or subtract from, or in any manner to vary or qualify the written contract". The rule has been extended to exclude written evidence. Its justification is that it upholds the value of written proof, effectuates the finality intended by the parties in recording their contract in writing and eliminates great inconvenience and troublesome litigation in many instances: Chitty on Contracts, no 1, vol 1, 27th edn, para12-081 and the cases there cited.

[29] However, the rule is subject to many exceptions. In Gillespie Bros & Co v Chenney, Eggar & Co [1896] UKLawRpKQB 55; [1896] 2 QB 59, 62 Lord Russell CJ stated:

"...although when the parties arrive at a definite written contract the implication or presumption is very strong that such contract is intended to contain all the terms of their bargain, it is a presumption only, and it is open to either of the parties to allege that there was, in addition to what appears in the written agreement, an antecedent express stipulation not intended by the parties to be excluded, but intended to continue in force with the express written agreement"

[30] Application of the rule is further explained by Roskill LJ in J. Evans Ltd v Andrea Merzario Ltd [1976] 1 WLR 1078, 183C:

"The matter was apparently argued before the judge on behalf of the plaintiffs on the basis that the defendants’ promise (if any) was what the lawyers sometimes call a collateral oral warranty. That phrase is normally only applicable where the original promise was external to the main contract, that main contract being a contract in writing, so that usually parole evidence cannot be given to contradict the terms of the written contract...But that doctrine, as it seems to me, has little or no application where one is not concerned with a contract in writing ... but with a contract which, as I think, was partly oral, and partly in writing, and partly by conduct. In such a case the court does not require to have recourse to lawyer’s devices such as collateral oral warranty in order to seek to adduce evidence which would not otherwise be admissible. The court is entitled to look at and should look at all the evidence from start to finish in order to see what the bargain was that was struck between the parties. That is what we have done in this case and what, with great respect, I think the judge did not do in the course of his judgment. I unreservedly accept Mr Hallgarten’s submission that one must not look at one or two isolated answers given in evidence; one should look at the totality of the evidence."

[31] That is the approach I have taken here and have found that the contract between the parties was partly in writing (the Agreement) and partly oral, the two promises that I have referred to above.

[32] This is the contract that is to be specifically enforced and the orders that I make are to give effect to it’s terms.

[33] There was no specific time set by the parties for Tagavellu to pay the balance of $15,000 and to subdivide the land and transfer the quarter acre block to Chand. This Court can set a reasonable time. Tagavellu had taken from 1997 to 2001 to pay about $20,000 to the Habib Bank. That would be too long. The subdivision of the land and registration of Chand’s house block in his name may take two years. In the circumstances, I think two years is a reasonable time for Tagavellu to pay the balance and obtain Chand’s title to his quarter acre block. Until these two things are done, Chand is to remain on the land. On Tagavellu paying the total balance sum and completing the subdivision and obtaining Chand’s certificate of title, Chand shall sign all transfer documents to enable the balance of the land to be transferred to Tagavellu. All the costs of subdivision and transfers of title shall be paid by Tagavellu. But Chand shall sign all papers and otherwise assist Tagavellu to complete the contract. It is up to Tagavellu to bring this matter to an early conclusion.

CLAIM FOR LOSS OF INCOME

[34] Tagavellu cannot claim for loss arising out of his own failure to meet his obligations under contract. Further, the evidentiary proof he provided at trial falls far short of satisfactory proof. I therefore dismiss his claim.

COSTS

[35] Chand has in a sense succeeded in this action but since Tagavellu has to pay the extra costs to bring this matter to an end, I make no order as to costs.

ORDERS

[36] The Orders are therefore as follows:

1. The Plaintiff shall pay to the Defendant Dhirend Chand (hereinafter the "Defendant") the sum of $15,000 within 2 years.

2. The Plaintiff shall subdivide or cause to be subdivided the land described in Certificate of Title No 26101 being lot 39 on DP 6655 in Sigatoka, Vitilevu (hereinafter the "said land") so that a quarter acre block of the said land containing the Defendant’s house is transferred to and registered in the name of the Defendant within two years.

3. The Defendant shall assist the Plaintiff including signing all papers and documents to enable the Plaintiff to give effect to paragraph 2 of this Order.

4. The Defendant shall remain in occupation of the said land until paragraphs 1 and 2 of the Order have been fully complied with.

5. On full compliance with paragraphs 1 and 2 and on written notice being given by the Plaintiff to the Defendant, the Defendant shall sign and hand over all titles, transfers and other documents to enable the Plaintiff to become registered as proprietor of his portion of the subdivided land, that is to say, the said land less the Defendant’s quarter acre block. The Defendant shall then give immediate vacant possession of that part of the land to the Plaintiff.

6. The Plaintiff shall pay for all costs for and incidental to giving effect to paragraphs 1, 2 and 5 of this Order.

7. The Plaintiffs claim for loss of use is dismissed.

Sosefo Inoke
Judge