Chand v Kumar [2010] FJHC 185; HBC044.2004L (31 May 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 44 of 2004L

BETWEEN:

KAMAL CHAND
father’s name Girdhari
1st Plaintiff

AND:

RESHMI LATA VARMA
father’s name Surendra Versa
2nd Plaintiff

AND:

BIJAY KUMAR
also known as VIJAY KUMAR
father’s name Arjun Kumar
Defendant

FINAL JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Mr. R Singh for the Plaintiffs
Mr. D Naidu for the Defendant

Solicitors: Patel & Sharma for the Plaintiffs
Pillai Naidu & Associates for the Defendant

Dates of Hearing: 26, 27 March 2007, 17, 30, 31 October 2007
Date of Judgment: 31 May 2010

INTRODUCTION

[1] This is another of those family disputes which take up a considerable amount of the time and resources of this Court. My experience so far is that these cases make up about 75% of the case load. It is true that a person is entitled to his day in Court but there must be a better and more efficient and less antagonistic way of resolving such disputes. Most of such disputes scream for settlement out of court and the legal profession could greatly assist the functioning of this Court by a more aggressive approach to settlement.

[2] The Plaintiff, Kamal Chand, is the nephew of the wife of the Plaintiff, Bijay Kumar (aka Vijay). His mother is the sister of Bijay’s wife, so through marriage, the Plaintiff Kamal is the nephew of the Defendant Bijay and Kamal calls Bijay "uncle". The second Plaintiff is Kamal’s wife.

[3] In this action, Kamal and his wife claim that their uncle agreed to sell to them his 3 bedroom home on freehold land (CT 25006) for $55,000. They want an order for specific performance of that agreement. They say that not only did they obtain loans from the ANZ Bank and the Housing Authority to buy the home, they were otherwise ready and able to complete the purchase so this Court should grant the order allowing them to complete the purchase.

[4] Bijay, on the other hand, denies that he agreed to sell. He says that it was Kamal who approached him to buy his house so he gave him time to pay the price on several occasions but he did not come up with the money so out of frustration he refused to go on with the sale. Bijay also alleged that Kamal was occupying his home as a monthly tenant without paying rent of $200 per month which he now claims as well as damages for the loss of use of his property. Kamal and his family are still occupying his uncle’s home.

THE CLAIM

[5] The relief sought by the Plaintiffs is:

(a) Specific performance of the Agreement and/or Memorandum of Agreement by the Defendant;

(b) The Defendant and/or his attorneys, agents, employees transfer the Property forthwith for value to the Plaintiffs pursuant to the Agreement and/or Memorandum of Agreement;

(c) The Defendant and/or his attorneys, agents, employees or servants transfer the Property forthwith to the Plaintiffs in consideration of the sum of $55,000 less expenses and other sums of money paid by the Plaintiffs in lieu of the Agreement and/or Memorandum of Agreement;

(d) Interest on any monetary award;

(e) Costs.

[6] The set off claimed in paragraph (c) (as underlined) was abandoned in the course of the trial so the consideration to be paid for the transfer of the property was limited to $55,000. It appears that the reason for this was that the Plaintiffs’ evidence did not support it. Those expenditures are those pleaded in paragraphs 16 and 18 of the Statement of Claim so any claims in respect thereof are accordingly abandoned.

[7] In paragraphs 5 and 6 of the Statement of Claim, the Plaintiffs allege that they paid $3,240 for the furniture in the Defendant’s home as part of the terms and conditions of the Agreement. However, the prayers for relief do not seek any specific orders in this respect so no orders are made accordingly.

THE COUNTER-CLAIM

[8] The Defendant’s counter-claim is for $7,400 rent arrears for the period up to May 2006 (the time of filing the Defence and Counter-claim) and further arrears of $200 per month thereafter whilst the Plaintiffs remain in occupation. Interest on $7,400 at 13.5% pa from February 2004 is also claimed. He also claims damages for loss of use and for loss of better rental income limited to $150,000.

CASE HISTORY

[9] The Writ was filed on 20 February 2004. On the same day the Plaintiffs filed an ex-parte application to restrain the Defendant from selling his house. The Court granted the application on the same day and adjourned the application to be heard inter-parte on 16 April 2004. The Defendant acknowledged service of the Writ on 13 April 2004. Further directions were given on 16 April 2004 and subsequently over the next 2 and a half years with no real progress in the hearing of the interim application or the action. Pleadings eventually closed on 2 November 2006 and the action was set down for hearing on 23 November 2006. On 20 November 2006, the Defendant sought an adjournment of the hearing because of his illness so the hearing was reset for dates either in January or March 2007. Again, the Defendant was not able to travel from his home in Australia in January so the trial dates of 26 and 27 March 2007 were confirmed.

[10] The hearing took 5 days commencing on 26 March 2007 and ending on 31 October 2007. At the end of the hearing, counsel for the Plaintiffs asked for two weeks for the parties to narrow down the issues before filing submissions. The trial Judge acceded to the request and listed the matter for mention on 14 December 2007. The matter was then called a further 14 times before the Judge, the last of which was on 27 March 2009, with no final narrowing down of issues. Then followed the abrogation of the Constitution later that month and the closing down of the courts. The trial Judge did not rejoin the Bench and the matter eventually came before me on 20 October 2009 after the Registry sought counsels’ views as to how judgment was to be delivered. Wisely, both counsel agreed for me to deliver judgment on the trial Judge’s notes so I gave directions for them to file written submissions to be supplemented by oral submissions on 3 December 2009. Further time was given for counsel to file submissions and the matter finally came to be heard on 20 January 2010.

THE FACTS

[11] The facts as I can ascertain from the 80 pages of the typed up trial transcript are as follows.

The Plaintiffs moving in to the Defendant’s home

[12] The Defendant Bijay, his wife and daughter obtained visas to migrate to Australia in 1999 and in late 2001 they decided to leave Fiji permanently. His son, however, was not able to obtain a visa so he was destined to remain in Fiji pending an appeal against the refusal to grant his visa. When the Plaintiff, Kamal, found out that his uncle and aunt were migrating to Australia he approached them and asked if he and his family could stay in Bijay’s house. At that time, December 2001, the house was occupied by Bijay, his wife, his daughter and son, and his mother-in-law (Kamal’s grandmother). Bijay says that he took pity on his nephew but I think the arrangement to let Kamal and his family move in just suited him perfectly because his son would then not be staying alone in the home and the house would be looked after as well. Kamal and his wife worked on a resort on Plantation Island and would only come to the home on their rostered days off. Also, Bijay and his family used the home as a base when they came back to Fiji from Australia, which they did on several occasions, from which they visited family in Navua and Suva.

[13] So in December 2001, with Bijay’s approval, Kamal and his wife moved into the home. Bijay and his family were still living in the home but they were visiting relatives in Navua before migrating to Australia. Bijay, his wife and daughter eventually left for Australia on 16 March 2002, leaving his son behind with the Plaintiffs. The arrangement did not go on well because Bijay’s son left the home only after two months to live with his aunt in Navua.

The Tenancy Agreement

[14] Following the refusal of his son’s visa, Bijay said he appealed against the decision and succeeded so he came back to Fiji on 7 May 2002 to take his son with him to Australia. It took him another three months to get his son’s paper work in order and on 18 August 2002 he, his wife and their son left for Australia. Before they left, he signed a Tenancy Agreement with Kamal on 10 July 2002. Under the agreement, Kamal was a monthly tenant. He was to pay rent of $200 per month from 1 July 2002, pay water rates, electricity and phone charges and keep the premises in good order. He was not to sublet the premises and the only persons allowed to live in the home with him were his wife and children, his grandmother and a brother.

[15] Prior to entering into the Tenancy Agreement, Bijay said he was quite happy not to charge Kamal rent because his son was living with them as well as his mother-in-law. However, after his son left things changed. Kamal said in his evidence that the Tenancy Agreement was a sham. He said it was entered into to stop other relatives from interfering with his occupation. Kamal paid 3 months rent, $500 at first (receipt dated 28 January 2003) and then $100 subsequently (receipt dated 25 March 2003). No further rent was paid by him but no steps were taken to enforce the tenancy. As Bijay said in re-examination in answer to why he did not enforce payment of rent: "My mother-in-law and sister-in-law also there – all family - and I didn’t want to throw them out on the street."

[16] Bijay denies that the Tenancy Agreement was a ploy to ward off his relatives. He said the reason he did not ask for rent was that Kamal promised to pay rent arrears together with the money for the house.

First Offer to Sell

[17] In respect of the evidence concerning the sale of the home, an offer of a loan was made by the ANZ Bank for $55,000 on 18 December 2001. Kamal and his wife signed their acceptance of the offer on 2 January 2002 but nothing further happened. Kamal’s evidence was that after he got the loan approved, he rang his uncle to come to Fiji and sign the transfer papers but his uncle could not come straight away. That seemed to be the end of that loan.

[18] A further letter of offer from the ANZ Bank was given to them on 4 March 2002 but no acceptance was signed. Kamal’s evidence was that this loan was on hold waiting for his uncle to come back to Fiji to sign the transfer. It was not otherwise explained why this loan offer also was not pursued further. However, I note from the Statement of Claim that the Plaintiffs allege that the bank "cancelled" the loan because the Defendant did not sign the transfer documents.

[19] I accept that the only reasonable explanation for this was that Bijay did suggest to Kamal that he would sell his home to him for $55,000. This is supported by Bijay’s own evidence that in January 2002 he said to Kamal that he was leaving in February and if he "got (the) money" by then "it would be good". Kamal then promised: "I will give you the money and when you leave Fiji you can take the money". That did not happen by the time Bijay and his family left.

[20] No one was subpoenaed or appeared from the ANZ Bank to give evidence.

Second Offer to Sell

[21] After Bijay left with his son for Australia on 17 August 2002 nothing of consequence happened until after he returned to Fiji on 6 May 2003. Bijay stayed here in Fiji for two weeks returning to Australia on 20 May 2003. The visit seemed to have rekindled the parties desire to sell and buy because on 16 May 2003, Bijay gave a written authority (P9) to his trusted friend Suresh Prasad to "execute documents on my behalf". Subsequently, Suresh Prasad on behalf of Bijay on the one hand and Kamal and his wife on the other, signed a document (P8) which recorded that Vijay had the authority to sell Bijay’s home and agrees to sell it to Kamal and his wife for $55,000. The document was undated and the evidence not precise but it is clear that it was signed sometime after Bijay had returned to Australia on 20 May 2003. Suresh Prasad gave evidence that he signed P8 after Bijay instructed him and in cross examination Bijay accepted that it was in August 2003 that he instructed Suresh Prasad to draw up and sign P8.

[22] I note however, that the PTC Minutes record as agreed fact that the Defendant gave the undated letter "sometime prior to 10th July 2002". This must be a mistake because the authority (P9) pursuant to which Suresh signed the undated document (P8) was dated 16 May 2003. Suresh could not have possibly had the authority to sell in July 2002. The correct date must be sometime in July 2003.

[23] The document was signed to allow Kamal to get finance he said. He did not know where Kamal was getting finance from or how long it would take to get it. Bijay also said that he did not know that Kamal was applying for a loan from the Housing Authority but I do not accept that neither Bijay nor Suresh knew of it. The circumstances under which P8 was drawn up and Suresh’s later refusal to sign further documents clearly show that they knew of the application for the Housing Authority loan at the early stages in 2003.

[24] So between May 2003 and March 2004 Kamal and his wife pursued their application for a loan with the Housing Authority instead of the ANZ Bank. Kamal spoke to his cousin in the Authority who told him that the Authority was giving good deals on home loans. But he was required to do certain renovations to the home to obtain the Engineer’s Certificate. Some painting, roof screws to be installed and some work had to be done on the cyclone shutters. In August 2003, he said he bought materials through his employer and the renovations were done by the foreman from his workplace. The two invoices were dated 21 August 2003 and totaled $666.20. On 30 August 2003 the Engineer inspected the home and granted his Certificate on that date. Bijay said that he was not aware of the renovation works being done on his house and obviously could not and did not give his permission. Kamal then applied for his loan and paid the loan application fee of $27.50 on 16 September 2003. It was not until 10 March 2004 that the Housing Authority approved the Plaintiffs application for a loan which they accepted on 16 March 2004.

[25] On 28 November 2003, Bijay signed a Power of Attorney appointing his friend Suresh Prasad as his attorney. He was in Australia during this time so the Power of Attorney was signed in Sydney before a solicitor. He explained the reason he did that was he got injured at work and his son took ill and after consultation with his doctor he decided to give the Power of Attorney to Suresh Prasad. The Power of Attorney became registered on 26 December 2003.

[26] Bijay next returned to Fiji on 9 January 2004 to see his father who was sick. Kamal approached him again to give him another chance to purchase his home. He then wrote another letter to the Housing Authority on 22 January 2004 (P10) confirming that Suresh Prasad had his consent and full authority to sell his home to Kamal for $55,000. The letter was noted as having been received by the Authority on 23 January 2004. Bijay said in cross examination that he took the letter there himself. When asked why he wrote this letter when Suresh Prasad had already written a similar letter, Bijay explained that Kamal had rung his cousin at the Housing Authority who told him that the money was with the Housing Authority but they needed a letter from him (Bijay) to say that he was selling his home and in 10 days Bijay would get his money. Kamal himself said that he gave the earlier authority (P9) and the undated document (P8) to the Housing Authority but when they wanted Suresh Prasad to sign some documents, Suresh refused and told them that they would have to wait for his uncle, Bijay. Kamal also admitted in cross examination that he called Bijay in January 2004 and told him that the Housing Authority loan had been approved but they needed an "authority letter" from him and for him to sign the papers and that after signing Bijay would get his money. I accept that Kamal said this even though the documentation shows that the loan was not approved in fact until 10 March 2004.

[27] Bijay also said in cross examination that when he took the letter (P10) to the Housing Authority he was directed to someone who informed him that the money was with the Authority and that she said that he would receive his money in 10 days. He denied that he was told that "the loan was in process" rather than that he would get his money within 10 days. I note that counsel for the Plaintiffs informed the Court that the process server who attempted to serve the witness subpoena on the Housing Authority was chased away so as a result no one from the Authority gave evidence.
[28] By the time Bijay left for Australia on 2 February 2004 he still had not received his money. He said he rang Kamal from Australia on 14 February 2004 and gave him a further 14 days to 28 February 2004 to pay up but still no money was paid so he rang Suresh to find out if anyone had contacted him about the sale. Suresh told him that no one had so he called the sale off.

[29] Bijay however admitted in cross examination that he changed his mind about selling his home because there was a possibility that he and his son might have to come back to Fiji because of ill health. However, that is not fatal to his defence if he was entitled to refuse to sell despite that being his motive.

THE ISSUES

Specific Performance

[30] I agree with counsel for the Defendant that this is not a case of specific performance but rather a case of whether there was a binding contract in the first place. In other words: (1) was there an offer capable of acceptance and was it accepted giving rise to an agreement? (2) was the agreement intended to be legally binding? and (3) was it supported by consideration?

Tenancy Agreement

[31] In respect of the claim for rent arrears, I think its success depends on whether the Tenancy Agreement was intended to be legally binding or was it just a sham as Kamal claims.

CONSIDERATION OF THE ISSUES

Specific Performance

[32] Issue (2) was not raised in this action.

[33] Issue (3) was raised rather obliquely by the Defence and the PTC Minutes that there was "no binding contract" although lack of consideration was not specifically pleaded and argued by counsel. Even if it was so pleaded and argued, because of the view that I have come to in this case, good consideration was absent and fatal to the Plaintiffs case.

[34] Issue (1) was argued on the basis that it was the Defendant uncle that made the offer to sell his home to his nephew and wife.

[35] The difficulty which the Plaintiffs faced with their case was that there was no written sale and purchase agreement. They could have strengthened their position by getting one drawn up as suggested by their uncle but chose not to. There is no evidence that he would have refused to sign it had it been drawn up although that is not a material consideration in this action.

[36] Was the "first offer" in 2002 an offer by the Defendant? In my opinion it was not. What the uncle suggested to his nephew was nothing more than an "invitation to treat" in my view. In response to that his nephew made the offer to buy which the evidence, in my view, clearly show, was in these terms:

"I will pay you the purchase price of $55,000 before you go back to Australia".

[37] What happened in this case is similar to that in Harvey v Facey [1893] AC 552, a decision of the Privy Council on appeal from the Supreme Court of Jamaica. The appellants wanted to buy the respondent’s property. They claimed that this series of telegrams gave rise to a binding agreement:

The appellants telegraphed: "Will you sell us BHP? Telegraph lowest cash price,"

The respondent telegraphed in reply: "Lowest price for BHP £900"

The appellants telegraphed back: "We agree to buy BHP for £900 as asked by you. Please send us your title deed in order that we may get early possession"

No reply by respondent.

[38] The Privy Council held that there was no contract.[1] The final telegram was not the acceptance of an offer to sell. It was an offer to buy which could only be accepted expressly and not implied. The respondent’s telegram was nothing more than an answer to the query for the lowest price. It was only binding in that respect. Everything else was left open. The reply telegram from the appellants could not be treated as an acceptance of an offer to sell to them; it was an offer that required to be accepted by the respondent. The contract could only be completed if the respondent accepted the appellant’s last telegram. The Privy Council rejected an argument that the respondent’s telegram should be read as "yes" to the first question. There was nothing to support it. The mere statement of the lowest price at which the vendor would sell contains no implied contract to sell at that price to the person making the inquiry.[2]

[39] So having come to the view that it was Kamal who made the offer to buy his uncle’s home for $55,000 and to pay the price before his uncle left for Australia, whatever Kamal did to get a loan from the ANZ Bank was to enable him to meet the terms of his own offer and not a term of the offer. His own evidence fell short of showing that his offer to buy was subject to him obtaining finance from the bank or that his uncle agreed to sell subject to his nephew obtaining finance. Indeed the Plaintiff’s case was not argued on that basis. I think the weight of the evidence is that the uncle was only prepared to sell for cash to be received before he left for Australia.

[40] Kamal could not get the money before his uncle left for Australia on 16 February 2002. It is true that the first loan approval from the ANZ Bank was given on 2 January 2002, but the money was still not available before the uncle left. He may not have appreciated that it may be practically impossible to have the money available in the next month and a half but I think his intention was clear that it was not his but his nephew’s responsibility. I also note that the loan approval was subject to a contribution by the Plaintiffs of $15,000 and no evidence was led as to their ability to meet this requirement. In any event, no one was subpoenaed or called from the ANZ Bank to explain the circumstances of the loans so I am entitled to assume that that evidence would not have assisted the Plaintiffs in this respect: Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298.

[41] So whether the Defendant accepted the offer or not, although I tend to think that he did, is immaterial because the Plaintiffs could not comply with the terms of their offer.

[42] Further, even if I am wrong in holding that it was the nephew that made the offer, the offer, whoever made it in the terms that I have expressed above, would automatically lapse, when the money was not paid by the time the uncle left Fiji to go back to Australia.

[43] Similarly, even if I am wrong in holding that there was no agreement in those terms, whatever agreement that was reached would have also lapsed or come to an end when the moneys were not paid as agreed.

[44] I think the same situation arose in 2003. It was the nephew that made the offer. The agreement was for the Plaintiffs to pay the purchase price before their uncle left for Australia. It did not happen so their uncle extended it for another 14 days to 28 February 2004. That did not happen either so their uncle validly in my view refused to go on with the sale as their was no longer any agreement after 28 February 2004.

[45] The undated document (P8) and the 22 January 2004 (P10) were not memoranda signed by the uncle or on his behalf intended to bind him. As the evidence showed, they were signed to enable the Plaintiffs to obtain their loan from the Housing Authority. The documents themselves support the contention that the contract was a "cash" contract and not one subject to finance. The renovations to the house and the application for the Housing Authority loan were to enable the Plaintiffs to obtain the cash. They were not actions taken pursuant to the terms of the agreement.

[46] Having come to the view that the actions taken by the Plaintiffs were done to enable them to meet the terms of their offer and for their own benefit, such actions cannot be considered as good consideration flowing from them (i.e. a detriment to them or a benefit to their uncle) sufficient to bind their uncle to accept $55,000 before he left for Australia or as subsequently extended to the end of February 2004.

[47] I am therefore of the view that the Plaintiffs’ claim for specific performance fails on the grounds that there was no binding contract because the Plaintiffs failed to comply with the terms of their offer or, alternatively, for failure to comply with the terms of the agreement, namely, to pay the Defendant $55,000 before he left Fiji in 2002 and 2004 or as extended to 28 February 2004.

[48] It also follows that the injunction granted on 20 February 2004 restraining the Defendant from selling his property should be dissolved.

Tenancy Agreement

[49] In respect of the claim for rent, I think the Tenancy Agreement was not intended to be legally binding. It is a family arrangement which weighs against such an intention despite the agreement being in writing: Balfour v Balfour [1919] 2 KB 571. Putting it into writing is explained away if I accept the Plaintiffs evidence, which I do, that it was entered into to ward off possible harassment by the Defendant’s relatives. Whilst the Defendant’s son remained in the home, the possibility of that happening would have been remote. After the Defendant took his son to Australia I think the situation changed. The payment of rent was to further strengthen the sham. I think this conclusion is also supported by the fact that no active steps were taken to enforce the payment of rent until after this action commenced. Bijay was quite content not to put his mother-in-law and sister-in-law out in the streets. In other words, the Plaintiffs were merely occupying the Defendant’s home as licensees.

[50] I therefore find that the claim for rent arrears and lack of use is not made out and should be dismissed.

COSTS

[51] Neither party has won so I make no order as to costs.

ORDERS

[52] The Orders are therefore as follows:

1. The Plaintiffs’ claim for specific performance and transfer of the Defendant’s property CT 25006 is dismissed.

2. The injunction granted on 20 February 2004 restraining the Defendant from selling his property is dissolved forthwith.

3. The Defendant’s counter-claim for rent arrears and interest is also dismissed.

4. There is no order as to costs.

Sosefo Inoke
Judge

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^[1] [1893] AC 552, 555
^[2] Op.cit. 556.