Total v Ministry of Agriculture, Sugar and Resettlement [2009] FJHC 368; HBC28.2009 (2 December 2009)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION HBC 28 OF 2009

BETWEEN

TOTAL formerly known as
SHELL FIJI LIMITED
PLAINTIFF

AND:

MINISTRY OF AGRICULTURE, SUGAR
AND RESETTLEMENT
FIRST DEFENDANT

AND:

OFFICE OF THE ATTORNEY-GENERAL
SECOND DEFENDANT

Mr A Reddy for the Plaintiff
Ms K Vuibau for the Defendants

DECISION

This is an application by the Defendants (the Applicants) for an order to strike out the Writ of Summons (and Statement of Claim) filed by the Plaintiff (the Respondent) on 28 January 2009.

The application was made by Summons dated 1 June and filed on 5 June 2009. In support of the application the Applicants filed an affidavit sworn by Unaisi Korolaga on 5 June 2009. The documents were not served on the Respondent until 15 September 2009.

The Respondent opposes the application and filed an affidavit sworn by Debashish Sanyal on 15 October 2009. The Applicants then filed a reply affidavit sworn by Unaisi Korolaga on 22 October 2009.

The Applicants are seeking an order that the Plaintiff’s Writ be struck out on the ground that:

"(a) It discloses no reasonable cause of action, and

(b) It is an abuse of the process of the Court."

The application is made pursuant to Order 18 Rule 18 (1) (a) and (d) of the High Court Rules and this Court’s inherent jurisdiction.

Order 18 (1) Rule 18 (1) so far as is relevant, states:

"The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement of any writ in the action ... on the ground that:

(a) it discloses no reasonable cause of action or defence, as the case may be; or

(b) ....

(c) ...

(d) it is otherwise an abuse of the process of the Court;

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be."

It should be noted that Order 18 Rule 18 (1) is concerned with striking out a pleading or an endorsement on a writ. The Summons issued by the Applicants refers to an application to strike out the Writ itself. The point was not raised before me by the Respondent to the application and it is on that basis that I have proceeded to determine the application as if the Summons had referred to the Statement of Claim.

Although the rule states that the order may be made at any stage of the proceedings, the application should be made without delay and at least before the close of pleadings.

In this case the Defendants filed their Defence on 5 June 2009 and the Plaintiff filed its Reply on 27 July 2009. Pursuant to Order 18 Rule 19 (1) (a) the pleadings are deemed to be closed at the expiration of 14 days after service of the reply.

The application was made some time before the date on which pleadings were deemed to have closed. Although the application was made some months after the writ was served and hence could not be described as having been made without delay, I note that the Plaintiff did not take any steps to pursue its rights under the Rules as a result of the Defence not having been filed until 5 June 2009. Under those circumstances I am prepared to disregard the delay and deal with the application on its merits.

The Applicants submit that the Respondent’s claim, being a claim for moneys owing for goods supplied between August 1997 and December 2001, is subject to the limitation period specified by section 4 of the Limitation Act Cap 35 (the Act). The Applicants also submit that the appropriate limitation period is six years and that as a result the action should have been commenced by December 2007. Since the action was commenced in January 2009 it is outside the limitation period and is therefore statute barred. The Applicants submit that the statement of claim does not disclose a reasonable cause of action and is an abuse of the process of the Court. They say that the statement of claim and therefore action should be struck out.

The Respondent submits that the Defendants acknowledged the debt and made part payment in respect of the debt. As a result the limitation period is extended. Therefore the claim is not statute barred and the application must fail.

The appropriate starting point is the Plaintiff’s Statement of Claim. In paragraph 4 the Plaintiff pleads that the First Defendant purchased from the Plaintiff fuel products between 18 August 1997 and 5 December 2001 either on credit or by way of part payment. The particulars of the purchases made in that period are set out in table form and conclude by showing that the total debt for fuel products purchased in the period is $98542.95.

Paragraph 5 of the Statement of Claim pleads that the Plaintiff made a written demand for that amount. The Respondent’s affidavit in opposition to the application annexed a copy of that demand letter which was made in the form of a letter dated 9 January 2006 from the Plaintiff’s Legal Practitioners. The letter stated that the amount was owing "in respect of goods supplied and delivered at your request ...." Copies of statements were also enclosed with the letter. The letter claimed that the amount remained owing despite numerous requests and reminders. The letter also stated that failure to pay the full amount owing within seven days would result in the commencement of legal proceedings.

By letter dated 12 January 2006, the First Defendant replied to the Plaintiff’s demand letter as follows:

"I write to acknowledge receipt of your correspondence concerning the above matter.

I also write to request if your client could submit copies of all relevant documents of their claims. This would certainly assist my office in the verification process.

Your demand for payment within seven (7) days is most unreasonable.

Verifying accounts as far back as 1997 will certainly need more time to check and pay any unpaid accounts if any."

Although there was no acknowledgment (and certainly no admission) of indebtedness in that letter, a subsequent letter dated 9 May 2006 from the First Defendant addressed to the Plaintiff’s legal practitioner raises an issue of some substance. That letter stated:

"Re: Shell Fiji Ltd – Monies Owing

The above matter refers.

I am attaching herewith cheque 112575 dated 9/5/06 in the sum of twelve thousand three hundred fifty two dollars and eight cents ($12352.08) payable to Shell Fiji Ltd.

This is the first payment while verifications are continuing to establish other unpaid accounts.

Please acknowledge receipt of remittance."

The letter was signed by a Mr Vamarasi for the Chief Executive Officer of the First Defendant.

Paragraph 6 of the Statement of Claim pleads that as a result of the payment of $12352.08 by the First Defendant, there remains an outstanding balance of $76561.86.

There can be no doubt that the Respondent’s claim arises out of a cause of action in simple contract and is prima facie subject to the six year limitation period for which provision is made in section 4 of the Act.

However Part III of the Act provides for the extension of limitation periods in certain cases. Section 12 (3) states:

"Where any right of action has accrued to recover any debt or other liquidated pecuniary claim ... and the person liable or accountable therefore acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment or the last payment."

The Respondent submits that the letter and cheque constitute at least part payment of the amount owing and therefore comes within section 12 (3) of the Act. I do accept that the correspondence complies with section 13 of the Act. It is also clear from section 12 (3) that there need only be evidence of either an acknowledge of the amount claimed or part payment of the amount claimed as a debt for the extension of time to become operative.

However, mere evidence of a payment by the First Defendant of an amount that is less than the amount claimed is not necessarily the same thing as part payment of an admitted larger debt. It may represent the full payment of the total amount that the party considers to be what is owed. This distinction was acknowledged in Surrendra Overseas Ltd –v- Government of Sri Lanka [1977] 1WLR 565 where Kerr J at page 576 stated:

"But that is not what the payment purported to be. It purported to be, and was, a payment of the only sum which the charterers admitted to be due. It was not on account, nor a part payment of any kind. In my view this is fatal to the owners’ contention for the same reasons as those which define the character of an acknowledgment. A part-payment, like an acknowledgment, can only revive the cause of action and start time running afresh if it provides evidence in the form of an admission by the debtor that the debt remains due despite the passage of time. This is consonant with the authorities. ... the doctrine of part-payment was in my view correctly described in the argument as "payment of money in part-payment of the whole debt, which is an acknowledgment of a debt being due, not in words, but by act done."

At page 577 His Lordship succinctly put the issue in this way:

"A part-payment, like an acknowledgment, must be evidence of an admission of liability for the debt claimed."

In my opinion the two letters that were forwarded to the Plaintiff by the First Defendant do not constitute an acknowledgment that there was a debt owed in the amount claimed by the Plaintiff. I am also of the view that the payment that was made by the First Defendant was a payment of the full amount that the First Defendant accepted as being owed to the Plaintiff on the basis of investigations up to that time. It was not a part payment of the much larger amount claimed by the Plaintiff. It did not constitute an admission that the First Defendant was indebted to the Plaintiff for the full amount claimed in the demand letter. The payment may have represented full payment of the only amount that it considered itself to be liable for and therefore the only payment. The use of the word "first" does not necessarily amount to an admission of liability for the full amount of the debt. It leaves open the possibility that there may or there may not be further payments.

I have concluded that the correspondence does not either expressly or by implication contain any admission that the Applicants owed the full amount claimed by the Respondent. The payment that was made by the Applicants on 9 May 2006 did not constitute an admission of liability as to the balance of the debt claimed by the Respondent. I am therefore satisfied that the cause of action is subject to the limitation that is prescribed by section 4 of the Act. That time ran out in December 2007 and as a result the claim is statute barred.

The statement of claim is struck out and as a result so is the Writ. Costs are awarded to the Applicants in the sum of $300.

W D Calanchini
JUDGE

2 December 2009
At Suva