Prasad and Chand Investment Ltd v Ali [2011] FJHC 56; HBC 216.2010 (9 February 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC 216/2010

BETWEEN:

PRASAD AND CHAND INVESTMENT LIMITED a limited liability having its registered office at 25 Tukani Street, Lautoka
1st Plaintiff

AND:

RAIYAZ ALI and AIYAZ RAMZAN ALI (both father's name Amzad Ali) of Olosara, Sigatoka, Businessman
1st Defendant

AND:

A.R. QUARRY & CONCRETE LIMITED a limited liability company having its registered office at Kennedy Avenue, Nadi.
2nd Defendant

Before: Master Anare Tuilevuka

Counsel: 1st Plaintiff – Mr. Rahul R. Prasad (a director)
2nd Plaintiff – In person
: Defendants – Mr. R. Singh

Date of Ruling: 09th February 2011

RULING

[1]. By way of background, the 2nd plaintiff hired the 1st plaintiff to construct and renovate his Motel – Kiran Palace. By agreement between them, the 1st plaintiff had 26 weeks to complete the work. And the hotel was expected to start operation sometime in the 2nd week of December 2010.

[2]. The 1st defendant is a director of the 2nd defendant company. The 2nd defendant did supply ready mix concrete to the 1st plaintiff. In June 2010, the 1st plaintiff company requested the defendants to supply ready mix concrete at a strength of 20 mega pascal and it was agreed that the 2nd defendant would deliver mix concrete to the 1st plaintiff at that strength – which was mandatory as per building specifications.

[3]. The delivery was duly made and the 1st plaintiff was assured by the 2nd defendant that the delivery complied with the building specification of 20 mega pascal. The 1st plaintiff relied on this and paid $14,695-00 to the 2nd defendant.

[4]. Sometime in August 2010, the 1st plaintiff observed that the ready mix was feeble. Tests carried out by Standard Concrete Industries revealed that the relative strength of what was delivered to the 1st plaintiff was well below requirement. Construction and renovation work carried out so far will now have to be demolished at a considerable cost to the 1st plaintiff.
[5]. Both plaintiffs sue for losses and damages which – allegedly arose out of the fraud or negligence of the 2nd defendant's servants.

[6]. Before me is an application by the 1st and 2nd Defendants under Order 5 Rule 6 (2) and Order 18 Rule 18 (1) (a) and (d) of the High Court Rules seeking the following orders:

• (i) the 1st and 2nd Plaintiffs' claim be struck out on the grounds that there is no reasonable cause of action and is an abuse of the process of this Honourable Court.
  
• (ii) such further or other orders as the Court sees fit.
  
• (iii) costs of this application on client solicitor on indemnity basis.
  

[7]. Order 5 Rule 6 (2) of the High Court Rules provides as follows:

"Except as expressly provided by or under any enactment, a body corporate may not begin or carry on any such proceedings otherwise than by a barrister and solicitor."

[8]. As regards the 1st plaintiff, Mr. Singh relies on the decision in Sunview Motel and Youth Hostel Limited v Babu Singh and ors (2006) HBC 97/06 which states categorically that conformity with Order 5 Rule 6(2) is mandatory and that Order 2 of the High Court Rules cannot be invoked to save the cause of action.

[9]. In Sunview Motel, Finnigan J did not allow an action to proceed where the plaintiff, claiming to be a limited liability company, was proceeding through (presumably) one of its directors. Finnigan J maintained this view even though – at the hearing – a certain firm of solicitors had appeared for the plaintiff. Notably – that firm of Solicitors had not filed the requisite Notice of Appointment under Order 67 when it appeared – and Finnigan J noted that there was still no solicitors on record. It is not clear to me whether Finnigan J would have maintained that view had the firm of Solicitors in question in that case had filed the appropriate Order 67 Notice before the hearing.

[10]. In any event, Mr. Singh submits that the wording of Order 5 Rule 6(2) is clear that proceedings already afoot cannot be allowed to continue otherwise than by a barrister or solicitor.

[11]. In this case before me – Mr. Prasad – the director appearing for the 1st plaintiff company – seeks time to engage a lawyer so as to regularize the 1st plaintiff's compliance with Order 5 Rule 6(2). He says that at the time of filing of the writ and statement of claim, he could not afford a lawyer. He needs time to be able to find a lawyer. As to when that will happen he does not know.

[12]. I cannot accede to this request as it would entail allowing the proceedings to continue for the 1st plaintiff without a barrister and solicitor and thereby contravene Order 5 Rule 6(2).

[13]. As regards the 2nd plaintiff, Mr. Singh submits that he has no cause of action against the defendants. He highlights that there was no privity between the 2nd plaintiff and the defendants and therefore the claim should be struck out. I agree with that submission. The 2nd plaintiff's best course is to sue the 1st plaintiff and let the 1st plaintiff rope in the current defendants as third party. He relies on the case of Pacific Transport Company Limited v Latchman Express Services Limited Civil Action Number 494 of 1994 the High Court dealt with the doctrine of privity in striking out a cause of action against the defendants as follows:

"What the basis of this action is, it is not clear at all. The situation that prevails here leads me on it consider the 'doctrine of privity of contract'. There is no privity between parties to this action. The doctrine as stated in Halsbury's Vol 9 4th Ed. Para 329 is as follows and it is pertinent to bear it in mind in considering the issues before me:

The doctrine of privity of contract is that, as a general rule, a contract cannot confer rights or impose obligations on strangers to it, that is persons who are not parties to it. The parties to a contract are those persons who reach agreement and whilst it may be clear in a simple case who those parties are, it may not be so obvious where there are several contracts, or several parties, or both, for example in the case of multilateral contracts; collateral contracts, irrevocable credits, contracts made on the basis of the memorandum and articles of a company collective agreements and contracts with unincorporated associations.

Despite some earlier doubts, the doctrine of privity has been accepted by the Courts and would seem to be intimately connected with the doctrine of consideration and the rule that consideration must move from the promisee"

[14]. In the final, I strike out the 1st plaintiff's claim against the defendants on the basis of non-compliance with Order 5 Rule 6(2) and also strike out the 2nd plaintiff's claim against the defendants on the basis that – there being no privity between the 2nd plaintiff and the defendants – there is no cause of action. I also award costs in the sum of $200-00 (two hundred dollars) each against the 1st plaintiff and against the 2nd plaintiff to be paid to the defendants in 14 days.

Anare Tuilevuka
Master

At Lautoka
09th February 2011.