In re Templetec (Fiji) Ltd [2011] FJHC 647; HBE58.2010 (11 October 2011)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBE 58 of 2010

IN THE MATTER of
TEMPLETEC (FIJI) LTD a limited liability company
having its registered office at 68 Moala Street, Samabula

AND

IN THE MATTER of the Companies Act.

BEFORE : Master DeepthiAmaratunga

COUNSEL : Mr. Odriscoll G of O' Driscoll & Co. for the Plaintiff
Mr. Nagin of Sherani & Co. for the Defendant

Date of Hearing:25th August, 2011
Date of Ruling: 11th October, 2011

RULING

1. INTRODUCTION
   

1. This is a winding up action filed by the Petitioner for the non payment of the alleged debt due to a sub contract awarded to Debtor Company in terms of the contract. The main contract was between the Debtor Company and the Government, and the sub contract was awarded to the Petitioner for pilling of 80 piles in 8 days, but admittedly only 16 were pilled and a payment of $30,000 was made and the alleged debt is the payment due on the work that was carried out by the Petitioner on the sub-contract. The Debtor Company, disputes the debt and state that there was a written agreement regarding the sub contract between the Debtor Company and the Petitioning Creditor and in terms of that agreement the Company was required to obtain approval from the Ministry of Works and this had not been done and also alleges other grounds and state that the Debt is disputed.
   

2. FACTS
   

2. The Templetec (Fiji) Limited (the Company) awarded a contract by the Ministry of Works to build a jetty at Yasawa I Rara.
   
3. On 14th November, 2009 the Company and its joint venture partner Shaghari Urban Construction (Group) corporation and the Petitioner entered in to a sub-contract agreement and the said agreement is annexed to the affidavit in opposition marked as 'B' and the parties to the contract are described as follows
   

'TEMPLETEC FIJI LIMITED, a limited liability company having its registered office in Suva in the Republic of Fiji Island and its joint venture partner Shaghari Urban Construction (Group) corporation

4. The said contract inter alia stated as follows
   

"a. The Contractor has been awarded the Construction Contract No: WSC 21/09 from the Ministry of Works of the Fiji Government to build a jetty at Yasawa I Rara.

2. On the Sub-Contractor is a firm of Civil Engineers and Contractor is now desirous of sub-contracting the Pile Driving portion of the said Project to the sub-contractor which has agreed to take on that part of the said Project upon the terms and conditions hereinafter appearing."
   

100. ANALYSIS
     

5. Following objections were taken and the debtor states that the debt is substantially disputed on the following grounds and the analysis of the said grounds with the available evidence are as follows
   
   1. In terms of the clause 1 of the said contract between the Company and the petitioner the completion of the work assigned was to be approved in writing to the satisfaction of the main contractor namely the Ministry of Works. No such approval in writing was obtained by the Petitioner. The said provision in the contract states as follows
      

'1. The sub- Contractor shall undertake and perform it duties, complete and carry out pile driving works to the satisfaction of the main contractor and the Ministry of Works or representative and to be approved in writing.'

So there is a need to obtain a letter of completion of works from the Ministry of Works or its representative and there is no evidence of such letter indicating satisfactory completion of work by the Petitioner, clearly a breach of a vital condition of the contract by the Petitioner, in order to claim money on the said contract. There is no explanation as to why such letter was not obtained. There is no evidence of even a request being made to Ministry of Works for such a letter. There is no independent certificate from even any other independent body as to the work that was completed. The parties are at dispute as to the completion of work. The parties are not in dispute as to pilling of 16 out of 80 piles that were initially agreed. Out of 135,800 (VEP) that was agreed for the completion of works $30,000 was paid and the Petitioner is claiming more, where as the Company is making a counter claim for non-completion as per the agreements between parties.

2. In terms of the Contract the payment was to be made to the Petitioner by the main contractor directly hence the non-payment cannot be imputed on the Company. Clause 2- "the Principle shall pay the sub-contact the total sum of F$135,800 (VEP) inclusive of disbursement and Head Office Administration coats as detailed in the Scope Schedule Payments shall be done in stages based on Ministry of Works Approvals."

The Principal is the Ministry of Works and there is no indication of such agreement between the Ministry of Works to carry out its obligation as they were not a signatory to the agreement between the Petitioner and the Debtor Company. The contract was between two parties the debtor company and their contribution is not determined by the Principal, who was to pay the amount stated in the contract directly to the Petitioner, and it is clear that no liability could be imposed on non party to a contract to pay money to the Petitioner, but strangely the Petitioner has agreed to such terms. If the Debtor Company is an agent of the Principal (Ministry of Works) this can be accepted and the third party is liable for payments, provided that other requirements were met, but it is clear that there cannot be any such agency since the Principal is a government ministry.

100. In terms of clause 8 (b) and (c) any dispute has to be referred to arbitration and the arbitration has not been resorted by the parties and under the circumstances of this case this is perhaps the best method to resolve the dispute between parties. The Petitioner does not state why they did not refer the dispute to the arbitration as per terms of the agreement between the parties. It is clear that the dispute is regarding the amount of the money allegedly owed by the Company for the Petitioner for the work done and there is no easy method to calculate the work completed under the circumstances of this case and considering the work is a specialized area it should be determined by some independent expert report and or through expert evidence in arbitration proceedings or in an action filed by way of Writ.
     

4. Clause 5 of the agreement between the Petitioner and Company, quantified the losses in case of non completion. It is clear that the work is still in non completion stage. The agreed sum for the loss in case of a delay of completion is $500 per day and based on this the Company is making a counter claim. In a Winding Up action this cannot be decided and clearly, this shows the disputes between the parties regarding the alleged debt. Supplementary terms of agreement provide pro rata payment per day. Supplementary terms 3 and 4 refer to the pro rata payment in case of unsuitable ground for their equipment 'pro rata daily basis. The said clause 4 is in conflict with the main contract clause 5. Main contract was executed after the supplementary terms were entered into but strangely the earlier terms or agreement was not mentioned in the main contract. The reason for not including the said terms in the main agreement cannot be understood easily and no explanation was given.
   

4. CONCLUSION
   

6. Under the circumstances the debt is clearly disputed and dispute does not limit to the amount alone. So, under the petition for winding up is dismissed, but I do not order a cost considering the facts of this case.
   
7. The Court Orders as follows
   
   1. The Winding up petition filed by the petitioner is struck off.
   2. No cost.
      

Dated at Suva this 11th day of October, 2011.

.................................................
Mr. Deepthi Amaratunga
Master of the High Court
Suva