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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION
Civil Action No: HBC 321 of 2000L
BETWEEN:
CHANDAR LOK
Plaintiff
AND:
ANAND KUMAR SINGH
1st Defendant
FINAL JUDGMENT
Of: Inoke J.
Counsel Appearing:Mr D Gordon for the Plaintiff
Mr H A Shah for the Defendant
Solicitors: Gordon & Co for the Plaintiff
H A Shah Esq for the Defendant
Date of Hearing: Judgment on the trial notes
Date of Judgment: 20 January 2010
INTRODUCTION
[1] This is a claim by Mr Lok for payment of $15,000 by Mr Singh due under a Promissory Note given by the latter on 24 September 1998. Mr Lok also claims interest on that sum from the date of the Statement of Claim, 24 September 2000, of $4,350 making a total claim for $19,350 plus further interest and costs.
CASE HISTORY
[2] The Writ of Summons was filed on 3 October 2000. The Defence was on the basis that the $15,000 had been paid to the Colonial National Bank at the request of Mr Lok in satisfaction of the Promissory Note. Mr Lok denies that the money had been paid as Mr Singh alleged in his Defence. Pleadings closed on 27 March 2001 and the Order on Summons for Directions was made on 23 May 2001. The Plaintiff filed his list of documents on 10 September 2001. The matter then lay dormant for about 4 years. Attempts to settle failed and the matter was eventually set down for trial on 16 June 2006. It is not clear why the hearing did not proceed on that day but the matter was called again on 11 August 2006 and Counsel for the Defendant asked for an opportunity to pursue mediation before a Magistrate. The Court then further adjourned the matter for that purpose to be recalled on 25 August 2006 for review. The Court file notes indicate that on 22 September 2006, this Court struck out the Defence and entered judgment for the Plaintiff because neither the Defendant nor his Counsel appeared at the mediation. Six days later, the Defendant filed a Summons to set aside the Default Judgment of 22 September 2006. The Summons was eventually heard on 11 December 2006 and on the same day this Court delivered a judgment in which the Default Judgment was set aside and the Defence reinstated and costs of $2000 awarded to the Plaintiff. The matter eventually came to trial on 8 August 2007. Both Counsels were given time to file submissions but only the Plaintiff’s Counsel filed submissions. Judgment was to be delivered on notice but remained outstanding because the trial Judge is no longer sitting on the Bench. After several mentions, Counsel agreed on 7 December 2009 that I deliver judgment based on the trial Judge’s notes and submissions.
THE EVIDENCE FROM THE TRIAL JUDGE’S NOTES
[3] The Minutes of Pre-Trial Conference noted as agreed fact that on 24 September 1998 the Defendant executed a Promissory Note in the sum of $15,000 in favour of the Plaintiff which was payable on demand. The agreed issue was whether that sum had been “settled by the Defendant”. The Promissory Note was tendered as an exhibit by consent.
[4] The Defendant gave evidence first. He is an experienced lawyer. He said he repaid the money to the National Bank of Fiji (“NBF”), now the Colonial National Bank, sometime in 2000. He confirmed his signature on the Promissory Note which was witnessed by his clerk. The money was lent to him by the Plaintiff, Mr Lok. He went with Mr Lok to the Bank and he arranged the loan which was paid into his law firm’s account. He has received the loan documents but has not been able to locate them because he closed his office in 1999 following the General Elections in May that year and Mr Lok’s file was transferred to another law firm, Iqbal Khan & Associates. He said there was a certificate signed by Mr Lok authorising him, Mr Singh, to uplift the loan. Mr Lok also signed another certificate stating that he had the option of seeking independent legal advice but chose not to exercise that option. Mr Singh said it was his intention to ensure that the dealing was above board because he was aware of bad allegations against solicitors. The funds were uplifted from NBF and eventually paid into his law firm’s account pursuant to Mr Lok’s signed authority. Mr Lok later “became apprehensive” so Mr Singh agreed to repay the Bank which he did “completely” in 2000.
[5] When asked to explain why there was a need for the Promissory Note, Mr Singh said it was “evidence of the fact that $15,000 was lent to his office and this was the Plaintiff’s security”. He also explained that “he was doing a lot of cases for Mr Lok at the time”. He was very surprised when the Writ was served on him. After the coup of 2000 he was much traumatised and was at a meeting when he was served with the Writ.
[6] In cross examination, Mr Singh said that he requested the loan from Mr Lok 2 to 3 months prior to signing the Promissory Note. He needed the money. Mr Lok was his client at the time and he borrowed the money from him. When asked to explain why the loan was arranged through NBF, Mr Singh said: “I needed a 6 to 12 months term on the loan and Mr Lok agreed. I had been billing Mr Lok for on going work and he thought it best that the loan be treated separate and apart as a loan and he would repay my professional fees as and when I billed him”. The following passages of cross examination of Mr Singh appears from the trial Judge’s notes:
Q: So you say he borrowed money to lend him (sic) money?
A: Yes.
Q: It is a serious offence to borrow from your client?
A: My understanding is that going through prerequisites it can be done and he had opportunity to take independent legal advice.
Q: You caused Mr Lok to mortgage his property to borrow from the bank to loan to you?
A: At his suggestion.
Q: Who prepared the mortgage documents?
A: I did.
Q: Another conflict of interest?
A: Denies.
Q: Proceedings issued 3/10/2000 – 2 years later?
A: Yes.
Q: You aware you obliged to keep records for 7 years?
A: Yes.
Q: Did you cause a search to enable you to defend this action?
A: Later. I was traumatised and took time to recover.
Q: I put it to you that you didn’t find records because there were no records. He didn’t apply for a loan to pay you.
A: He did.
Q: Moneys (were paid) from the bank to your trust account?
A: Yes.
Q: And from there you paid yourself?
A: Yes.
Q: And you used the money?
A: Yes for (my) office.
Q: Any documents to evidence the transaction between you and the plaintiff?
A: The promissory note (is) the only security that Mr Lok had. Mr Lok was quite happy with the promissory note.
Q: Why was the promissory note done 2 to 3 months later?
A: That was when the draw down took place.
Q: When did you repay the Bank?
A: Sometime in 2000.
Q: How were you able to repay (the) sum?
A: I broke ranks with fellow hostages - Government offering 6 months salary compensation – I uplifted money from there and paid Mr. Lok’s accounts at National Bank - $11,000 or $12,000.
Q: Why only $11 - $12, 000
A: There were already some payments made on the account.
Q: What evidence you got of that?
A: With the bank. Mr. Lok knows the money paid up.
Q: You agree the promissory note is nothing more than a follow up loan transaction between you and Lok and you said he pressured you to settle – that is a demand?
A: No such demand. He pressured me to settle with the Bank.
Q: Paragraph 2 of Reply to defence – Lok says you unlawfully received loan from NBF and it has nothing to do with the promissory note. What evidence do you have that the promissory note and loan (are the) same?
A: There was no other loan. Promissory Note to secure moneys uplifted from Bank. Lok uplifted file from Iqbal Khan.
Q: Where on promissory note is reference to NBF?
A: None.
Q: Where is the agreement between you and Lok that you would pay the NBF account?
A: On the file which Mr. Lok uplifted from Iqbal Khan.
Q: When did he uplift?
A: Don’t know – at time he hadn’t issued the writ and was concerned about his lease documents. Documents would say that he applied (for a) loan (from the) bank and between us documents would say (it is my) obligation to repay (the) account.
Q: Audited trust accounts?
A: Yes
Q: Cause a search Law Society to show that?
A: No perhaps should have.
Q: Caused a search with your auditors?
A: No – now very far removed from legal practice.
Q:
A: Done in anger – he asked me to represent him in another case – Clutch Systems – and I failed to appear and Judgment was entered against him and Lok angry with that and subsequently I closed my office – matter taken on appeal. Winding Up Petition against his company and he was angry I didn’t turn up to do his case and he was put to a lot of unnecessary nuisance because of my not turning up – he thought I had made him suffer. I was a bit lackadaisical about the court case which I thought was done in anger and thought Lok would reconsider and not pursue this case. When proceedings issued, I had already paid moneys to the Bank, that is why writ was a shock.
Q: Bank gave you receipt?
A: Yes. I believe I sent the receipt to Mr. Lok. At time I (was) concerned for Lok. I was traumatised, (and) was glad I had one problem out of the way.
Q: Shown document 24/1/01 letter – says loan paid off in 2000 – 15/12/00 – after writ issued.
Objection.
No reference that the $15,000 – we (are) talking about (is the) same as the loan. No prior disclosure. Surprise.
Reply
Witness says he paid it before. No prior disclosure.
Court: Objection upheld. No prior disclosure and no leave sought to introduce document.
Q: Why didn’t you ask Lok to return the promissory note to you or cause it to be cancelled?
A: (I) paid (the) money to bank in Suva and Lok (was) not there. Thought Lok would be happy that money’s paid. He was a friend. Thought it would be relief for him as it was for me – completely overlooked promissory note.
Q: How were moneys paid?
A: By cheque.
Q: Personal or bank?
A: Believe it to be a 3rd party source.
Q: So should be records?
A: Had subpoenaed Colonial Bank staff but my lawyer said not necessary because not in issue.
Q: You have evidence that Lok authorised you to uplift the moneys?
A: The Promissory Note.
Q: Was the mortgage registered?
A: No, moneys were uplifted on an interim certificate. We prepared the Mortgage document and Housing Authority consent – which we sent to Housing Authority – we heard they not objecting to consent – wanted outstanding rent paid – informed Mr. Lok to pay ... so we could send mortgage to Suva for registration.
Q: So it was never consented to?
A: In principle it was.
Q: Never given in writing?
A: Procedure is Housing Authority will say it is prepared to consent provided arrears of ground rent are paid – conditional upon ground rent being paid – not paid – not granted.
Q: Interim Certificate issued on basis of documents in registrable form, agree?
A: Yes. We had a letter from Housing Authority and conv(ersation) from Lok saying he’ll pay the arrears in ground rent – happens a number of times – Bank advances the money to pay the arrears.
Q: So money paid on your certificate (that the) documents (were) in order.
A: We wrote – up to Bank to pay.
Q: Promissory Note does not reflect (the) true transaction?
A: Promissory note was to evidence to Mr. Lok that $15,000 (was) borrowed from his account.
Q: Paragraph 2(xx) of the Reply to Defence – you (were) put on notice in March 2001 that (the) NBF moneys not related to plaintiff’s claim on the Promissory Note?
A: It is there in the Reply.
Q: And you agree you had ample time from that date to now to prove that the NBF transaction is the same as (for the) Promissory Note?
A: Tried to locate file. Lok told me he had uplifted file so I was handicapped. I tried to reconstruct file and obtain documents from 3rd parties – whatever I could.
Q: You subpoenaed Bank Officer?
A: Yes.
Q: And the Bank apart from your oral testimony, you have no other evidence or documents to show that the NBF loan is the same as that covered in Promissory Note?
A: As far as I can recall no other loan of $15,000 – The Promissory Note is evidence of that loan – file uplifted and I have been put to great disadvantage because of that.
Q: Instructed that Mr Lok didn’t uplift file.
A: He himself told me that Original lease was in file – he has since sold the property would have had to uplift file; Can’t locate even the jacket of the file. Lok’s friendship with Mr. Naidu probably had something to do with that; 2 day search and we simply couldn’t locate this conveyancing file.
[7] The next witness for the Mr Singh was his law clerk. He said he has known Mr Lok for the last 10 years. Mr Singh called him to his office and asked him to draw up the Promissory Note. Mr Lok was there. Mr Singh told him that he owed Mr Lok $15,000 and he took instructions and prepared the Promissory Note granting “further time” to pay $15,000. Mr Singh signed it and he witnessed his signature. He was not aware of how the loan was incurred.
[8] Mr Lok gave evidence. The trial Judge’s notes of his evidence is as follows:
Q: Show plaintiff (the Promissory Note).
A: Recognises the document. This is, Promissory Note for $15,000 which I gave to Mr. Anand Singh. On demand he should pay me. Mr. Singh gave me the document on the same day written here in his office. Document secures $15,000 owed to me.
Q: How did Mr. Singh come to owe you $15,000?
Objection: Never pleaded how he came to give money. Nowhere in any of plaintiff’s pleadings has plaintiff averred to fact of how loan incurred. No particulars pleaded. Never put to Mr. Singh in the witness box that on such and such date you incurred a loan – never been plaintiff’s case, how loan was incurred.
Reply: Not obliged to plead evidence.
Court: Objection overruled. Uphold plaintiff’s counsels submission in this regard.
A: Mr. Anand Singh was a regular visitor to my home. A few days before, one Shailendra Singh came to request on behalf of Anand Singh – said he was desperate. On day defendant came to my office – gave him the money – went to Anand Singh’s office, he prepared Promissory Note as security for money given.
Q: When did you make demand?
A: Can’t recall exact date – after 6 months – verbally demanded money many times. Before coup, I asked Singh ... moneys not paid.
Q: You heard Anand Singh say he paid off your debt at NBF?
A: Nothing to do with this loan. This loan was a cash loan. NBF loan was another loan I took from NBF. Singh prepared the documents. He repaid because he used the money from his trust account. The cheque went from NBF to Mr. Singh’s office. I signed documents in his office – money went to Mr. Singh’s office and used by Mr. Singh when NBF put pressure on me I put pressure on him to repay. I was supposed to receive the money. He was my solicitor. We were friends. I only gave pressure to him to repay the money to the Bank.
Q: He said you borrowed to loan him?
A: I never had cash problem. I never authorised him for money to go to his trust account.
Q: Mr. Singh says the Promissory Note is security for $15,000 to NBF?
A: No, this was different. Promissory Note got nothing to do with NBF loan. I had more than one account with NBF.
Q: Did you make repayments on NBF account?
A: No, Anand Singh made the repayments because he took the money which he was not supposed to take. That money was paid. Promissory Note money not paid.
Cross-Examination
Q: You sold the property which you borrowed from NBF?
A: Yes
Q: You took (the) Lease (document) from Iqbal Khan’s (office)?
A: No, never visited once to Iqbal Khan’s office.
Q: Where you got (the) Lease from?
A: NBF or Mr. Singh’s office.
Q: When from Mr. Singh’s office?
A: I can’t recall date. Maybe 6 months or 1 year after the Promissory Note.
Q: No mortgage on (the) Lease? None registered?
A: Don’t know. Mortgage cancelled. Lease sold.
Q: Why loan?
A: Wanted to develop property. [Denies that he mortgaged property to loan to Mr. Singh.]
Q: Read English?
A: Yes.
Q: Read Promissory Note?
A: Yes.
Q: There is no reference to payment of $15,000 to Mr. Singh – no cash lent and advanced on that day?
A: I agree it is not there.
Q: You agree $15,000 cash given should have been there?
A: Agree.
Q: You didn’t even tell the clerk you’ve given Mr. Singh $15,000?
A: Mr. Singh always told me not to tell anybody. I haven’t told my lawyer – I didn’t think it necessary.
Q: Only reason you filed case was because you (were) upset with Mr. Singh on defaulting on (your) case?
A: I am a man of principles. Don’t take revenge. I am not that type of person.
Q: And you signed a proper authority for Mr. Singh to use the NBF money?
A: No, never.
Q: You ever complained to Fiji Law Society or to police that he used your money without your authority?
A: No.
Re-examination
Q: When was money paid to Mr. Singh?
A: Same day 10.00 am 24/9/98. The Promissory Note was made between 1 – 2 in Mr. Singh’s office.
[9] The second witness called on behalf of Mr Lok was Mr Shailendra Singh. He said he had known Mr Lok for 10 years but had known Mr Anand Singh, the Defendant, much longer; since 1982. He has no animosity towards Mr Singh. Mr Lok had shown the Promissory Note to him a few days after it was signed. He knows that the money had not been repaid.
[10] The material parts of the Promissory Note are as follows:
PROMISSORY NOTE
Principal $15,000
Interest Bank’s rate
Due On Demand (one month after date hereof)
Payable At Lautoka
On demand one (1) month after date hereof I, ANAND KUMAR ...promise to pay CHANDAR LOK ... the sum of $15,000 being the amount due and owing by me to the payee. (The indebtedness of which sum the maker doth hereby admits and acknowledges)
Consideration: being grant of further time to pay the said sum of $15,000.
Dated...this 24th day of September 1998.
[Signed by Mr Singh]
CONSIDERATION OF THE TRIAL EVIDENCE
[11] I do not think that it can be disputed that Mr Singh made the Promissory Note and gave it to Mr Lok as evidence that Mr Lok had lent him $15,000. Even Mr Singh admits that. However, I do not accept that the loan was repaid in the way that he explained or at all. Not only does Mr Singh’s explanation not make any sense, he failed to prove on the balance of probabilities that the NBF loan money was the same money secured by the Promissory Note.
[12] Instead, I accept Mr Lok’s explanation that the moneys that Mr Singh paid to the NBF was for repayment of other moneys that Mr Singh took from Mr Lok’s other account supposedly secured by a mortgage over his lease, which is completely unrelated to the moneys due under the Promissory Note. I also accept that Mr Lok had made several demands and Mr Singh had ignored those demands.
[13] I also note that the “consideration” for the Promissory Note was for the “grant of further time to pay the said sum of $15,000” which confirms Mr Singh’s own evidence in cross examination that the money was paid to him some 2 to 3 months before the Promissory Note was signed. Mr Singh’s clerk also said in evidence that the Note was to grant Mr Singh further time to pay. I also note that Mr Lok said in re-examination that the money was paid to Mr Singh on the same day that the Promissory Note was signed but he may have been mistaken. The weight of the evidence is against Mr Lok’s recollection.
THE LAW
[14] The Bills of Exchange Act [Cap 227] provides:
88. (1) A promissory note is an unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person or to bearer.
93. The maker of a promissory note by making it:
(a) engages that he will pay it according to its tenor;
APPLICATION TO THE FACTS
[15] The Promissory Note has not been cancelled or otherwise satisfied. Its validity is not in dispute. The Note remains unsatisfied. The Plaintiff has therefore proven his entitlement to the moneys due under it, namely, $15,000.
INTEREST
[16] Mr Lok also claims interest. No evidence of the applicable interest rate was called. However, this Court can award interest under s 3 of the Law Reform (Miscellaneous Provisions)(Death and Interest) Act, if it thinks fit, on the whole or any part of the damages for the whole or any part of the period between the date when the cause of action arose and the date of judgment.
[17] Mr Lok said that he verbally demanded repayment about 6 months after the money was lent which would be about mid 1999, ten and half years ago. I take the usual interest rate of 6% pa and compute the interest payable as $15,000 x 10.5 x 6% = $9,450.
COSTS
[18] Mr Lok asks for costs on an indemnity basis. In Khan v Carpenters Fiji Ltd [2009] FJHC 149; HBC132.2003 (23 July 2009), I adopted the principles discussed by Judge Hickey In Singh v Naupoto [2008] HBC 199/08, Costs Decision of 8 August 2008, and Rokotuiviwa v Seveci [2008] FJHC 221; HBC374.2007 (12 September 2008):
In Singh (supra)[2] His Lordship referred to the Federal Court of Australia decision in Colgate-Palmolive Company and Colgate-Palmolive Pty Limited v Cussons Pty Limited; Cussons Pty Limited v Colgate-Palmolive Company and Colgate-Palmolive Pty Limited [1993] FCA 536; (1993) 46 FCR 225 (10 November 1993), in which Sheppard J outlined the principles as follows:[3]
"It seems to me that the following principles or guidelines can be distilled out of the authorities to which I have referred:-
[19] I think this is one of those exceptional cases that warrants an award of costs on an indemnity basis. Mr Singh must have known that his Defence would not have stood up to scrutiny. He made no attempt to produce any documentation which could have been obtained from the NBF or the Titles Office had they existed. The necessity to adduce evidence that was critical of his reputation and conduct as a legal practitioner was a direct result of his Defence that he repaid the moneys due under the Promissory Note. I think this case was indefensible. Mr Singh took a deliberate and calculated risk to defend it which failed miserably and therefore should pay for Mr Lok’s costs on an indemnity basis. This Court previously ordered $2,000 costs when the Default Judgment was set aside on 11 December 2006. Those costs were not stated to be on an indemnity basis. The costs incurred prior to the one day trial and subsequent to it must be significantly more if considered on an indemnity basis. I therefore assess them summarily at $5,000.
[20] I therefore award costs of $7,000 to be paid to the Plaintiff if the costs ordered on 11 December 2006 have not been paid. If those costs have been paid then the Defendant shall pay the balance of $5,000.
ORDERS
[21] The Orders are therefore as follows:
- The Defendant shall pay to the Plaintiff the sum of $15,000 and interest thereon of $9,450.
- The Defendant shall pay to the Plaintiff costs of $7,000 if the costs ordered on 11 December 2006 have not been paid. If those costs have been paid then the Defendant shall pay the balance of $5,000.
Sosefo Inoke
Judge
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