Quadrant Developments Fiji Ltd v Davis [2010] FJHC 392; HBC138.2009L (10 September 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 138 of 2009L

BETWEEN:

QUADRANT DEVELOPMENTS FIJI LIMITED
Plaintiff

AND:

BRUCE WILLIAM DAVIS
1st Defendant

AND:

BURROWES INVESTMENTS LIMITED
2nd Defendant

INTERLOCUTORY JUDGMENT

Of: Inoke J.

Counsel Appearing: Ms T. Draunidalo for the Plaintiff

Mr E. Maopa for the Defendants

Solicitors: Tupou Draunidalo Law for the Plaintiff

Babu Singh & Associates for the Defendants

Date of Hearing: 7 May 2010
Date of Judgment: 10 September 2010

INTRODUCTION

[1] On 22 January 2010 I refused the Defendant's application for stay of my orders of 30 September 2009 requiring the Plaintiff to pay the sum of $75,422.81 and interest into court.

[2] On 12 February 2009, the Plaintiff filed a motion for the release of those moneys to it. This is the third interlocutory hearing and judgment in this matter.

[3] The Defendants have filed their Defence and Counter-claim which was principally on the basis that they had overpaid the Plaintiff and the Plaintiff had poorly or not performed the contract. The challenge to the jurisdiction of this court was dismissed on 30 September 2009 and is not the subject of this application.

REASONS FOR ORDER FOR PAYMENT TO THE PLAINTIFF

[4] The reasons for my order for the Defendants to pay the Plaintiff were given in my judgment of 30 September 2009 which were:

THE ARBITRATION CLAUSE

[17] The next question concerns the Scott v Avery clause. Clause 88 of the Contract provides:

"If a dispute arises between the Contractor and the Principal about anything in relation to:

(a) The Contract, or

(b) The Contract Works

the Principal or the Contractor must notify the other of the disputed matters."

The clause then sets out the steps that the parties are to follow in the resolution of such disputes.

[18] The word "dispute" is not defined in the Contract. There is no express exclusion of the Court's jurisdiction. In fact clause 88.6 shows the contrary and provides that:

"However, the Principal and the Contractor are entitled to bring court proceedings to:

(a) Recover any undisputed payment due under the Contract; or

(b) Seek urgent injunctive or declaratory relief."

[19] Thus, it is clear that clause 88 does not exclude the jurisdiction of the Court to hear contractual disputes. The claims here are for payment of Progress Claim No 8 amount of $75,422.81, which the Contractor says is undisputed and injunctive relief so they fall within clause 88.6 and therefore can be brought before this Court.

PROGRESS CLAIM NO. 8

[20] It is therefore necessary for me to decide whether Progress Payment No 8 is disputed or not.

[21] By Certificate of Payment No 8 dated 28 May 2009, the Contract Manager and Principal's representative, Matz Architects, certified payment of $75,422.81. The Certificate states:

"This is to certify that in accordance with the terms of the contract referred to herein, the contractor is entitled to payment from the employer in the sum of: Seventy Five Thousand and Twenty Two Dollars, and Eighty One Cents only (Fijian Currency) As Progress Payment."

[22] The Certificate has an explanatory note at the bottom which states:

"Under the terms of the Contract the Employer is required to pay the Contractor the amounts certified by the Matz Architects. These payments must be made within seven (7) working days of the date of the Certificate of Payment. Neither this Certificate nor the payments made as a consequence of it shall constitute an approval by Matz Architects of the quality of work, materials or services provided under the Contract."

[23] The relevant Contract Payment provisions are in clauses 71 to 74. Clause 71 states that the Contractor is entitle to give to the Principal a claim for progress payment. Clause 72 says the Principal must assess the claim and in assessing take certain factors into account and make deductions from the claim. Clause 73 then says:

"The Principal must pay the amount assessed by the Principal within 7 Working Days of receiving the Contractor's claim. If the Principal fails to pay on time, the Principal must pay interest compounding monthly.

73.1 The interest rate is the Contractor's average Trading Bank overdraft rate payable, or which would be payable, by the Contractor over the period during which the amount was outstanding until it is paid, multiplied by 1.25.

73.2 The Principal must pay the accruing interest with the assessed amount (whether the Contractor is in overdraft or not)."

[24] The Certificate for Quadrant's claim No 8 was given by Matz Architects as the Principal's representative. It has been given unconditionally in that all allowable deductions have been made. I note that in Mr Matz's affidavit, the only complaint was that Quadrant's claim was for a higher amount than that which was certified and he admits that it was a part certification. Therefore under the terms of the Contract the Principal must pay within 7 working days from the date of the Certificate (28 May 2009), which on my calculation the last date for payment fell on 8 June 2009. Whatever claims that Burrowes, Matz Architects or Davis now raise as defences or excuses for non payment are matters to be decided at trial. They do not justify the withholding of payment under Certificate No 8.

[5] The orders were that the Defendants pay to the Plaintiff within 3 days the sum of $75,422.81 and interest thereon and costs of $800 within 14 days. The Order was sealed on 9 October 2009.

REASONS FOR ORDER FOR PAYMENT INTO COURT

[6] The Defendants did not pay as ordered but instead, they filed on 21 October 2009 a Motion for stay of my Judgment of 30 September 2009 pending appeal and leave to appeal.

[7] On 22 January 2010, I dismissed the application for leave to appeal and gave the following reasons.

[13] The Proposed Grounds of Appeal fall into two main categories, first, want of jurisdiction to hear and determine this action, and second, that I was wrong in ordering payment of $75,422.81 when the amount is said to be disputed.

[14] I will deal first with the second category of Grounds of Appeal. The moneys that I ordered to be paid to the Plaintiff have now been paid into Court. It is often a condition for leave to appeal and stay pending appeal that the judgment sum is ordered to be paid into Court pending determination of the appeal. The Defendants are therefore not in an unusual or a position of disadvantage. So, if I have made an error of law in ordering payment, which I do not accept, there is no substantial injustice to them if I refuse leave to appeal. If they succeed at the trial their moneys will be paid back to them. On the other hand if they lose then the moneys will be paid to the Plaintiff. This Court can make an order for payment of interest in either case to compensate for being deprived of the funds whilst awaiting trial.

[15] Conflicting affidavit material is not a sufficient ground for granting leave to appeal. It does not constitute exceptional circumstances.

[16] As to the second main category of Grounds of Appeal, the jurisdiction point, that can be taken up (at the) trial. If the Defendants lose at the trial and wish to take up the point on appeal, an appropriate order for stay would protect their interests. On the other hand, the delay that would be caused by allowing the point to be taken on appeal now, considering the limited sittings of the Court of Appeal, could be considerable. It may well be that the appeal would not be heard until 2011. For a commercial matter such as this, I think the long delay would be quite unacceptable to both parties.

[17] I think the time that would be taken up on an appeal of my interlocutory Judgment would be better utilised by the parties getting themselves ready for an early hearing which I will accommodate, despite the already heavy list for this year.

[18] Taking all these matters into account I think considerable injustice to the parties and inefficient use of judicial resources would result if the appeal is allowed to proceed. I therefore refuse leave to appeal.

[19] It is therefore not necessary for me to consider the stay application.

[8] I also explained in that judgment why I ordered the Defendants to pay the moneys into court:

[2] ... When the (Defendants') Motion (for stay) was called on 30 October 2009 I was informed that my orders in my Judgment had not been complied with. Counsel for the Plaintiff did not press for contempt of Court by the Defendants but I took a dim view of it and ordered that the moneys be paid into Court within 7 days before the Defendants' application could be heard. The application was adjourned to 10 November 2009 for mention pending compliance by the Defendants. (my emphasis)

[3] On the day before the mention the Defendants' solicitors paid into Court the principal sum but not the interest component. That is to say, the Defendants were 2 days late and did not fully comply with my Court Orders. The interest component still remains unpaid into Court. I urge Mr Singh to impress upon his clients that I view his clients' contempt very seriously. No explanation has been given as to why the Court Orders have not been fully complied with. I therefore take it that their disobedience is deliberate. I remind them of the seriousness of their contempt for the reasons given by Sir Moti Tikaram PA in Kelton Investments Ltd v Civil Aviation Authority of Fiji [1995] FJCA 15; Abu0034d.95s (18 July 1995):

Every Judge must be allowed to protect and maintain the dignity and authority of his Court. Otherwise the judicial system will fall into disrepute and the authority of the Courts will be compromised and their influence diminished. This is neither in the public interest nor in the interest of legal practitioners. The Courts derive their authority and respect largely from the sanctions that attach to orders they make.

[4] I will therefore re-order that they pay the outstanding interest into Court. If they fail to comply with this Order strictly this time, they will be summoned to appear before me to explain why they did not comply and be dealt with accordingly, which may include this Court refusing to hear them and allowing the Plaintiff to prove its claim in their absence.

SHOULD THE MONEYS BE PAID TO THE PLAINTIFF NOW

[9] It is clear that the reason for my order that the Defendants pay the moneys into court was for their disobedience of the court orders of 30 September 2009 and not because the Plaintiff was not entitled to the moneys now.

[10] I have not changed my mind after having read the new affidavits and submissions. This is only a small part of the Plaintiff's claim. I have taken the view that the payment certified by the Defendants' architect cannot be re-opened. The Plaintiff still has to prove the rest of its claim so does the Defendants in respect of their counter-claim. Their respective claims may well cancel each other they may not. At this stage, either possibility is open. Because of the view I have taken of the certified payment I think it is only just that the Plaintiff should get that payment now.

[11] In my judgment of 22 January this year I said the parties would be well advised to get themselves ready for an early hearing which I would accommodate. Instead they have been pre-occupied with interlocutory applications which did not advance the matter at all. I can only repeat what I said in January because this matter is not likely to be heard until this time next year unless the interlocutory steps are completed well before the end of this year.

COSTS

[12] This application was necessitated by the Defendants' failure to comply with the orders that I made a year ago. They should pay the Plaintiff's costs which I set at $800 to be paid within 28 days.

ORDERS

[13] The Orders are therefore as follows:

1. The moneys paid into Court by the Defendants shall be released to the Plaintiff forthwith.
   
2. The Defendants shall pay to the Plaintiff costs of $800 within 28 days.
   
3. The matter shall take its normal course.
   

Sosefo Inoke
Judge