Narayan v Public Employees Union [2010] FJHC 29; HBC161.2009L (5 February 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 161 of 2009L

BETWEEN:

ADISH NARAYAN
Plaintiff

AND:

PUBLIC EMPLOYEES UNION
Defendant

INTERLOCUTORY JUDGMENT

Of: Inoke J.

Counsel Appearing: Mr C B Young on instructions of A. K. Lawyers for the Plaintiff
Mr H Rabuku for the Defendant

Solicitors: A. K. Lawyers for the Plaintiff
Gledvil Lawfirm for the Defendant

Date of Hearing: 4 February 2010
Date of Judgment: 5 February 2010

INTRODUCTION

[1] The Plaintiff is suing his former client, the Defendant, for unpaid legal fees totalling $75,136.22 as at 5 September 2009. The Writ was issued on 4 September 2009. The Defence is yet to be filed.

[2] The current matter under consideration is an application by the Defendant Union to stay execution of an order made by consent for payment of $39,000 as admitted due for the Plaintiffs fees. I must confess I had great difficulty understanding the nature of the application when it was heard. But that difficulty is cleared up once the background of the matter is understood.

THE BACKGROUND

[3] On 1 December 2009, the Plaintiff filed an application for summary judgment under O 14 r 1 of the High Court Rules 1988. The application was to be heard by the Master.

[4] The application was supported by the Plaintiffs affidavit. He says that the Defendant is and was justly and truly indebted to him as claimed in his Statement of Claim. On 5 September 2008, he wrote to the Defendant enclosing a Memorandum of Costs to that date in all the Defendant’s files. The Memorandum itemised 34 files, named the parties involved, gave the date and the amount of the bill of costs, and the amount outstanding. These totaled to $96,607.47. The letter also listed 7 pending files in respect of which the Plaintiff requested the Defendant to file Notices of Change of Solicitors. The Plaintiff thanked the Defendant for its instructions and gave them till 12 September 2008 for payment. On 15 September 2008 the Defendant wrote to the Plaintiff following discussions with the Union’s National President providing an arrangement for payment. The Plaintiff says the Defendant did not dispute the debt but offered payment by instalments. The offer was accepted by him to assist the Defendant. The letter was annexed to his affidavit. It records:

AK Lawyers

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Dear Sir

RE: UNDERTAKING TO ABIDE BY OUR MUTUAL AGREEMENT TO PAY OF(F) PEU DEBTS AS PER THE MODE OF PAYMENTS DISCUSSED

As per our discussion by Vodafone (Dauniyatu/Narayan) as per the above subject. As the National President, and Head of Public Employees Union do take this undertaking to ensure the Union will abide by its undertakings and obligations to pay off all PEU Debts to AK Lawyers as per the following modes of payments.

1. First payment of $10,000 ... to be made on the Wednesday 17 November 2008.

2. Second payment of $10,000 ... to be made on Friday 26 September 2008.

3. From the 30th of October onwards for the $3,000 will be paid weekly for the next 25.5 weeks till PEU debt is completed.

Submitted for your information and correspondence. Thank you.

Yours faithfully,

[Signed Dauniyatu Kautoga

National President]

[5] The Plaintiff then wrote to the General Secretary of the Union on the same day, 15 September 2008, acknowledging the Union’s letter of undertaking and replied:

Please note that we accept the undertaking to settle our outstanding fees in the manner proposed and look forward to the first payment on 17th instant.

[6] After making a few payments, the Plaintiff said the Union stopped. He sent a letter on 9 December 2008 reminding the Union that $68,064.93 was still owing and put the Defendant on notice that if payment of this sum was not made within 7 days he would have no option but to institute proceedings. The Plaintiff also wrote to the Union on 20 February 2009 giving them notice that if the amount outstanding was not paid within 7 days he would take steps to recover it including the de-registration of the Union. It was to be the last correspondence on this matter from the Plaintiff.

[7] On 25 February 2009, a business consultant on behalf of the Union wrote to the Plaintiff. The letter was essentially a plea for understanding and an explanation of the Union’s inability to meet its commitment to the Plaintiff. The relevant paragraphs state:

This response is specifically undertaken to provide you organisation with genuine underlying factors that has contributed to PEU’s inability to substantially honour its financial commitments towards the liquidation of its debt with your legal fraternity.

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Due to these challenges we humbly request your entity to consider receiving monthly commitments from PEU effective immediately on flexible payments amounts due to inherent financial constraints. In fact we have other pressing creditors like you that we are trying to manage continuously since we undertook this PEU consultancy.

[8] The Plaintiff replied to the consultant’s letter on 2 March 2009. He wrote:

As you have indicated that you would like us to consider receiving monthly commitments from PEU on flexible payment amounts.

We advise that in the past we had entered into arrangements with PEU on payment of our costs but PEU never kept up to the arrangement.

We now seek that you advise us on what exactly would be the monthly payments and the timeline for such payments.

Once we receive a response to the above, we will be in a better position to advise on whether we will accept the payment arrangements.

[9] The Plaintiff says neither the Union nor its consultant responded.

[10] The General Secretary in his affidavit in reply filed on 3 November 2009 denied owing moneys to the Plaintiff. He denied being issued with the invoices for each of the cases listed in the Plaintiffs Memorandum of Costs. He says the former National President had no powers to enter into the payment arrangements so the Union will not be held accountable for what the former President did.

[11] On 12 November 2009, the Plaintiffs application for summary judgment was heard by the Master. In the course of the hearing, Counsel for the Defendant produced a letter from his client to the Plaintiff dated 29 July 2008 admitting that $39,000 is owed for services rendered over the years. I think Mr Rabuku should be commended for disclosing the letter to the Court, despite the adverse consequences to his client. He did the right thing. His duty to the Court overrode his duty to his client.

[12] I set out the contents of the letter (as quoted in the Master’s Ruling, paragraph 26) because it is in direct contrast to what the General Secretary said in his affidavit of 3 November 2009:

I understand PEU owes a substantial amount of $39,000 to your firm for your services and it has been accumulating over the years.

As the new Acting General Secretary after the passing away of the late Mr Pita Delana, I would like to assure you that we are committed to clearing our outstanding dues on a weekly payment of $750.00.

[13] So, on that basis, by consent, the Master entered the following orders (the "Consent Order"):

(i) Judgment be entered against the Defendant in favour of the Plaintiff in the sum of $39,000 as at 29 July 2008 and;

(ii) the matter be adjourned to 24 November 2009 for ruling on the Application for Summary Judgment with respect to the balance of the sum claimed in the Plaintiffs Statement of Claim.

[14] The Consent Order was sealed on 16 November 2009.

[15] The Master delivered his Ruling on the application for summary judgment on 24 November 2009. The Ruling was in favour of the Defendant in that the Master allowed the Defendant to file its Defence and the matter would then take its normal course to trial. The resulting Order was sealed on 11 December 2009.

CURRENT APPLICATION FOR STAY

[16] It is to this background that the Defendant’s application for stay of the Consent Order was filed. It was filed on 25 November 2009. The Motion asked for:

AN ORDER that the orders made by the Learned Master of the High Court in Lautoka for the sum of $39,000 as at 28th July 2008 to be stayed until the determination of the matter AND FURTHER ORDER that the Plaintiff be re(s)trained from making any attempt to apply to de-register the Union with the Registry of Trade Union within 4 working days by the Plaintiff AND DECLARATION that any attempt to de-register the Union with a demand notice of 4 working days is unreasonable and prejudicial to the Defendant under the High Court Rules 1988 and upon the grounds stated in the affidavit in support of this application.

[17] Counsel informed me that his application is made under O 14 r 3(2). Order 14 r 3 provides:

(1) Unless on the hearing of an application under rule 1, either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against the defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed.

(2) The Court may by order, and subject to such conditions, if any, as may be just, stay execution of any judgment given against a defendant under this rule until after the trial of any counterclaim made or raised by the defendant in the action.

[18] He submitted that the basis for him asking for stay of execution of the Consent Order was the Master’s comment at paragraph 53(d) of his Ruling which states:

But, be that as it may, it is hard to ignore the issues raised by Mr Rabuku which in my view, deserve a proper trial hearing. In adopting that view, I have taken into account the following:

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(d) that PEU will have to go through its records from 2003 in order to deal with the issue.

[19] The Defendant’s application is supported by a further affidavit by the Union’s General Secretary. He annexed to his affidavit a schedule of payments for fees dating back to 2003 totalling $32,750. He explained the Consent Order as follows:

(5) I am informed by counsel and verily believe the same to be true after perusing the Ruling of the Master of the High Court in Lautoka, ..., stated that we will have to go through our records from 2003 in order to deal with the issue of costs and billings. Therefore I believe that the award our counsel consented to in the sum of $39,000 are included with the pending issues before this Honourable Court. Especially how much has been paid and how much do we owe the Plaintiff after all payments previously made are accounted thereafter since 2003 from the day of the instructions to the day of the billings as per records filed by the Plaintiff.

(6) I acknowledge that conclusive statement of the Master that we did not dispute the fact that the Plaintiff was representing the interest of the union. However, the issue of quantum is the only issue that needs to be addressed by the Judge on hearing of the matter. Therefore the consent judgment of $39,000 is part of the quantum issue before the Judge.

[20] The undertaking by the former President was accepted by the Plaintiff and a binding contract for repayment arose out of it. Part of the sum due under the contract was paid. The further correspondence from the Union’s consultant further supports what I find is an admission that the amount claimed is due. There can be no doubt in my mind that quantum cannot now be disputed.

[21] The Union’s position is aggravated further by its admission that $39,000 was owed to the Plaintiff and the entering into the Consent Order on that basis.

[22] I think the current application is misconceived. I think Mr Rabuku has misunderstood the effect of the Master’s Ruling and the entering of the Consent Order. I am of the view that the only issue left open now is the verification by documentation of the balance due, that is to say, the amount claimed in the demand of 9 December 2008 of $68,064.93 less the amount consented to $39,000.

[23] The Union says that it has already paid $32,750. Mr Rabuku argued that that amount could be included in the $68,064.93 that is claimed in this Writ. It is equally possible that none of that money has been paid in satisfaction of any of the current outstanding bills being claimed. That is why I believe the Master made the comments in paragraph 53 of his Ruling.

[24] The Plaintiff is confident that all the bills claimed have not been paid. His affidavits go into sufficient detail for the Union to check and verify against its own records. Instead, the Union now says, essentially, that it needs time to find the documentation to verify all those payments. And that has only come about following the Master’s Ruling in my view.

[25] If the former President did not have the powers as the General Secretary alleges, then that is a matter between the Union and its former President.

[26] Subject to what I say below, the view that I have come to is this: Liability is now admitted and the Union cannot now go back on the amount of $96,607.47 due under the payment arrangement agreed on 15 September 2008, the balance of which is now $68,064.93 which is the principal amount claimed in this action. It cannot re-open a challenge based on whether the work was done or not or whether it is of such a professional standard justifying the fees charged. The only issue now left open is quantum and only in respect of the balance left after deduction of $39,000. That much is clear from the Consent Order. So it is simply a matter of verification by documentation.

[27] Further, even though the Consent Order and the Order following the Master’s Ruling were issued and sealed separately, they should be read as one. It was clearly open to the Master under O 14 r 3(1) to make the Consent Order whilst leaving open the balance. This is another reason why I think the Defendant’s application fails.

[28] The result is that the application for stay of execution of payment of the sum of $39,000 is refused. All other relief sought by the Defendant in its Motion of 25 November 2009 are also refused.

[29] I realise that the Master has given directions as to filing of the Defence and Reply but the result of my findings is that these pleadings are necessarily limited. I also realise that the findings I have reached are contrary to what the Master found.

[30] Mr Young has filed an application for leave to appeal the Master’s Ruling. It is to be called on 8 February 2010 before me. This Judgment touches on matters to be argued in that application. This may be unfortunate but I think it is necessary for me to do that for full consideration of the Union’s application for stay. So to be fair to the Union, I will allow its Counsel, Mr Rabuku, and Mr Young, to fully argue these matters when Mr Young’s application is heard.

[31] The Master made orders following his Ruling on 24 November 2009. Those orders should be stayed if not complied with yet until the application for leave to appeal is decided.

COSTS

[32] The Union is struggling to meet its own legal costs so I make no order as to costs.

ORDERS

[33] The Orders are therefore as follows:

(1) Stay of Execution of the judgment for the sum of $39,000 in favour of the Plaintiff is refused.

(2) The Defendant’s application by Motion filed on 25 November 2009 is dismissed.

(3) There is no order as to costs.

(4) The Order of the Master sealed on 11 December 2009 is stayed until further order.

Sosefo Inoke
Judge