Kumar v Wati [2011] FJHC 704; Action 20.2000 (4 November 2011)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

ACTION NO. 20 OF 2000

BETWEEN:

RAJENDRA KUMAR
Plaintiff

AND:

MAYA WATI
Defendant

Mr A Kohli for the Plaintiff
Mr A Sen for the Defendant

JUDGMENT

This is yet another dispute resulting from a transaction involving land. The proceedings were commenced by writ issued on 23 March 2000. The land in question is described in paragraph 2 of the amended Statement of Claim as Lot 5 on DP6361 on Certificate of Title 26454 containing 54 acres. The Defendant was at all material times the registered proprietor of the land. Although the certificate of title describes the lot as containing 21 hectares 5560 square metres, the Defendant in her Defence admitted paragraphs 1 to 4 of the amended Statement of Claim. As a result it is unnecessary to consider any further the different descriptions of the land area. The land is situated in the district of Vuna on Taveuni Island.

The action was initially listed for hearing before Inoke J on 26 March 2009. Counsel for the Plaintiff could not attend due to illness. His Lordship vacated the hearing date and relisted the action for mention before the Master to fix a new hearing date.

Pursuant to leave the Plaintiff filed an amended Statement of Claim on 20 April 2009. An amended Defence and counterclaim was filed in 4 May 2009. The parties filed Minutes of Pre-trial Conference on 25 November 2010.

The hearing of the action commenced in Labasa on 2 June 2011 and was completed the following day. The Plaintiff and one other witness were called to give evidence and the Defendant also gave evidence. At the conclusion of the evidence the parties sought and were granted leave to file written closing submissions. The Plaintiff filed closing submissions on 6 July 2011. The Defendant filed answering submissions on 19 July 2011 and the Plaintiff filed brief reply submissions on 29 July 2011.

In his amended Statement of Claim the Plaintiff claims that he and two others (the purchasers) entered into an agreement dated 11 February 1993 (the first agreement) whereby the Defendant agreed to sell 34 acres of Lot 5 to the three purchasers. The other two purchasers were named as Rang Naicker and Vishwa Naicker. The Plaintiff claims that in consideration the three purchases would take over the debt owed by the Defendant to the Fiji Development Bank (the Bank) and commence payment of the said debt two years from the date of agreement.

In her Defence the Defendant in effect admitted the allegations up to this point.

The Plaintiff claims that a second agreement dated 14 July 1997 (the second agreement) varied the first agreement whereby instead of three purchasers there were two being the Plaintiff and Rang Naicker. Vishwa Naicker was no longer a party to the transaction. The second agreement amongst other things contained a term that specified the amount of the payments to be made by each purchaser.

The Defendant pleaded that the second agreement nullified the first agreement and rendered it unenforceable.

The Plaintiff claims that under the second agreement his entitlement became two thirds of the 34 acres. He also claims that in reliance of the agreement he made payments to the Bank and improvements to the land.

The Plaintiff alleges that the Defendant has breached the agreement by not performing her obligations under the agreement. The Plaintiff claims (a) specific performance of the agreement, (b) a declaration that the Defendant is holding 13.5 acres in trust for the Plaintiff, (c) refund of $31,579.00, (d) interest on that amount, (e) injunctive relief and (f) general damages.

In addition to the Defendant's Defence to the amended Statement of Claim the Defendant filed an amended counterclaim dated 29 April 2009. Paragraph 15 of that document alleges that the Plaintiff and another person agreed and undertook to pay to the Bank the whole of the moneys owed by the Defendant as at 11 February 1993. The Defendant counterclaims for (a) vacant possession of the land, (b) the sum of $6,502.00, (c) interest on that amount, (d) injunctive relief, (e) damages and (f) costs.

In the Minutes of the Pre-trial Conference the following facts were agreed:

"• That there are two agreements in contention in this action, namely:-

(a) "Agreement" dated 11 February 1993

(b) "Leasing Agreement" dated 14 July 1997

• That on or about 11 February 1993 by a conditional agreement the Plaintiff agreed to sell 34 acres of the aforementioned land to the Plaintiff and two others namely Rang Naicker and Vishwa Naicker.

• That the consideration for the said sale was that the intending purchasers were to take over the debt owed by the Defendant to the Fiji Development Bank. The repayments were to commence by 11 January 1995 and which were to be paid directly to the bank.

• It was a term of the agreement that once the Plaintiff, the Defendant and the two others had repaid the whole of the moneys owing to the Fiji Development Bank, only then the land was to be sub-divided in four equal shares.

• In the meantime Vishwa Naicker, one of the intending purchasers pulled out of the agreement.

• On 14 July 1997 a fresh document captioned as "Leasing agreement" was executed by three instead of the initial four persons, being the plaintiff, the defendant and Rang Naicker."

At the commencement of the hearing the Plaintiff applied to amend paragraph 10 of his amended claim so as to read:

"That pursuant to the said agreement the Plaintiff and other purchasers commenced payment to the Fiji Development Bank. The amount owing to the FDB under the mortgage has been fully paid by the purchasers."

Although the amendment was not opposed by the Defendant, the claim made in the amended paragraph was not admitted.

The first agreement dated 11 February 1993 (ex1) is a handwritten document signed by the Defendant, the Plaintiff, Rang Naicker and Vishwa Naicker. It is relatively brief and in order to understand the agreement it is appropriate to state its terms in full:

" Agreement

This Agreement made this 11th day of February 1993 at Nabouono, Taveuni between Maya Wati (Widow) _ _ _ hereinafter called the Vendor and Rajendra Kumar _ _ _ Rang Naickam _ _ _ and Vishwa Naickam _ _ _ hereinafter called the Purchasers.

Maya owns 54 acres of land at Nabou, Waineqera Taveuni Lot No.34 – Account No. 140199 – File No.1849/89/A on the following terms and conditions: The land is still under the FDB and Maya is willing to sell 34 acres to the abovementioned persons providing all three of the mentioned persons namely Rajendra Kumar, Rang Naickam and Vishwa Naickam shall pay the full amount owing to the Bank and that is for 54 acres. The payment by all three persons (Purchasers) will commence from two year from date direct to the Bank. Upon the full settlement of the full sum owing the land shall then be divided into 4 divisions and the survey fees shall be paid by all members concerned, the Vendor and the Purchasers. This Agreement is subject to the approval of the Fiji Development Bank."

Although the description of the land in the Agreement is different from the description in paragraph 2 of the amended Statement of Claim, the issue was not raised during the course of the trial. As the Defendant has admitted the contents of paragraph 2 it would appear that there is no real issue between the parties as to which Lot is the subject matter of the dispute.

It is clear that the Agreement is a sale and purchase of land agreement. The parties are described as vendor and purchasers. They are named. The land, the subject matter of the agreement, has been identified. The consideration is stated in the agreement. The time for performance is stated. A condition precedent is also stated in the agreement.

Under the agreement the Defendant agreed to sell 34 acres to the three purchasers. In the absence of any material to the contrary I accept the evidence of the Plaintiff that it was understood as amongst the three Purchasers that each purchaser was to receive an equal one third portion of the 34 acres. The consideration was that the three purchasers together would pay the amount owing to the Bank. Furthermore the three purchasers were to commence making payments to the Bank on a date that was two years from the date of the agreement, in other words on 11 February 1995. It was only after the full amount that was owing to the Bank under the mortgage had been paid by the purchasers that a survey and division would take place.

The amount to be paid by each purchaser was not stated and it may be inferred that in return for lots of equal size each purchaser would be responsible for one third of the debt.

In my judgment the references to survey and division in the agreement indicate that each purchaser was ultimately to become a registered proprietor of his own lot on a separate title. In that sense there were in effect three agreements whereby the Defendant agreed to sell land to each purchaser once the debt to the Bank had been paid. I do not accept that the 54 acres was to be subject to joint ownership as tenants in common nor that 34 acres was to become subject to joint ownership as tenants in common. However the language of the agreement makes it quite clear that there would be no survey nor any division nor any entitlement to registration as proprietor until the debt had been fully paid.

There are two matters in the statement of agreed facts that are misleading. First, in the third paragraph (as listed above) the date for the purchasers to commence payments should be 11 February 1995. Secondly, the fourth agreed fact refers to the land being sub-divided into four equal shares. That is not what the agreement said. The same paragraph also refers to the Plaintiff, the Defendant and the other purchasers making repayments to the Bank.

There are a number of issues that arise from these arrangements. The first concerns whether the Defendant was up to date with her payments as at 11 February 1993. The second issue is whether it was intended that the Defendant would continue to make payments between 11 February 1993 and 11 February 1995. The third issue is whether the Plaintiff and the other two purchasers were to be liable only for payments due to FDB on and from 11 February 1995. In my judgment it is clear from the agreement that the Defendant was certainly under an obligation to make payments to the Bank as and when they fell due up to 11 February 1995. It would appear, however, that the purchasers were to take responsibility for the debt after 11 February 1995.

The last sentence of the agreement contains what is referred to as a "condition precedent." It is expressly stated that "the agreement is subject to the approval of the Fiji Development Bank." The agreement for which approval must be obtained is the agreement that is contained in the written document. It is the agreement itself which must be approved by the Bank.

In his amended Statement of Claim the Plaintiff does not expressly refer to the condition precedent nor is there any allegation that the Defendant failed either to attempt to obtain or to obtain the approval of the Bank. However in paragraph 11 the Plaintiff pleaded:

"11. That the Plaintiff has always been ready and willing to perform the agreement on his part and has performed the said agreement and the Defendant has defaulted on her part to perform the said agreement."

In her Defence the Defendant does not refer to the condition precedent and pleads that as the Plaintiff has failed to perform his obligation under the agreement the time had not yet arrived for her to perform any obligation on her part.

Although not pleaded by either party, evidence was adduced at the hearing and witnesses examined and cross-examined concerning the requirement for Bank approval without objection from either party. Furthermore, the parties specified the issue as a matter to be tried by the Court. As a result it may be inferred that the pleadings were amended in a way so as to put the question of the Bank's consent in issue.

Copies of two letters were admitted into evidence. They originated from the Bank's file which was produced by the witness Sitiveni Nakacia. Mr Nakacia was the Bank Branch Manager at Savusavu at the time of giving evidence.

The first letter (exhibit 6) is dated 3 November 1993 addressed to the Defendant from B Lal who signed as Manager. The letter stated:

"Further to your discussions with the writer, we advise that the bank is agreeable to you entering into a share farming agreement with Rang Naicker, Vishwa Naicker and Rajendra Kumar subject to the following:

1. Repayment dues of $2000 is met fully on or before 31/12/93
   
2. Cropping target of $4000 yaqona and 4000 dalo is achieved.
   

Kindly note that your failure to adhere to above will leave us with no option, but to re-activate the interest charge on your account and institute recovery actions against you.

We look forward to your co-operation."

On the same letter there appeared a handwritten note by B.Lal also dated 3 November stating:

"(1) M.A.D.

Attached is a copy of the agreement.

Please ratify my decision."

In his evidence Mr Nakacia indicated that there was a copy of an agreement in his file. The agreement in the Bank's file was a copy of the first agreement dated 11 February 1993.

The second letter (exhibit 5) dated 30 November 1993 addressed to the Defendant was signed by Tukana Bavoro, Manager – Agriculture Division (M.A.D). It was cc copied to the Manager (B. Lal) at the Bank's Savusavu Branch. This letter stated:

"Re: Share Farming Agreement.

We refer to our letter dated 3/11/93 and advise you that the Bank is agreeable to you entering into a share farming agreement with Rang Naicker, Vishnu Naicker and Rajendra Kumar subject to the following:

"Without impairing in any way the right of the Bank to call for repayment of the indebtedness at any time on demand, you undertake to meet repayments as under –

- $2,000.00 is to be met fully on or before 31/12/93 and $7,053.00 pa thereafter,

- Cropping target of 4000 yaqona and 4000 dalo is to be achieved.

All other terms and conditions previously stipulated remain unaltered."

The letters raised two issues. First, the names of the parties to which reference is made in the letters are not identical to the names that appear in the agreement dated 11 February 1993. However the discrepancies are not significant and I am satisfied that the letters and the agreement are referring to the same parties. Secondly, the letters refer to a share farming agreement that has been approved. Mr Nakacia stated in his evidence that the Bank referred to agreements such as the agreement in question as a share farming agreement. It is an unusual description for an agreement that by its terms contained the essential ingredients of a sale and purchase agreement for 34 acres of land.

On balance I am satisfied that the Bank had approved the agreement dated 11 February 1993. There was no other material before the court that would lead me to conclude that there was a different agreement between the same parties.

Under the terms of the agreement the Plaintiff and the other two purchasers were not required to start making payments until 11 February 1995. Since the Bank had in its possession a copy of the agreement it must be assumed that the Bank was aware of its terms. The requirements to make a $2000.00 payment by 31 December 1993 and a payment of $7,053.00 in 1994 were obligations that fell to the Defendant. The Bank must be presumed to have known that the agreement contained an express term the effect of which was to render the Defendant liable for any payment required to make prior to 11 February 1995. I find against the Defendant in respect of her claim in paragraph 15 of the counter-claim. Any payment that fell due between February 1993 and February 1995 was the responsibility of the Defendant.

I accept the evidence that about three weeks after the agreement was made (that is, about three weeks after 11 February 1993) the Plaintiff and the other two purchasers together with the Defendant all went onto the land. I accept that together they measured out four Lots on the 54 acres block. The Defendant's lot was the largest (being approximately 20 acres) and the three purchasers measured three lots of approximately equal area from the remaining 34 acres. Shortly afterwards the three purchasers commenced cultivating their lots and growing dalo. I also accept the Plaintiff's evidence that both he and Rang Naicker made payments to the Bank between February 1993 and February 1995. The Plaintiff stated in his evidence that the purchasers had entered onto their lots on the basis that they would make payments to the Bank.

A Fiji Development Bank Folio Sheet showing details of money received for the Defendant's loan account with the Bank was admitted into evidence as exhibit 4. I accept its contents as accurately recording amounts received by the Bank between September 1990 and September 1998.

Between September 1990 and up to February 1993 the Defendant had paid an amount of $2000 by way of intermittent installments of differing amounts. For the period 11 February 1993 to 11 February 1995 the Defendant paid a total of $2202.00 to the Bank. The condition upon which the Bank had given its approval was that the Defendant was to pay "$2000.00 by 31/12/1993" and $7053.00 per annum thereafter. Her obligation for the period 11 February 1993 to 11 February 1995 was to make payments totaling $9053.00.

Between 11 February 1993 and 11 February 1995 the Plaintiff made payments of $2332.00. In the same period Rang Naicker made payments of $965.00. The third purchaser Vishwa Naicker did not make any payments in that period. For the period 11 February 1993 to 11 February 1995 the Bank received a total amount of $5834.00 which was somewhat less than the Bank had requested the Defendant to pay in the same period. It would appear that the Bank did not pursue the failure by the Defendant to comply with its conditions.

From 11 February 1995 to 14 July 1997 the Plaintiff, the Defendant and Rang Naicker all made intermittent payments to the Bank. During that period the Plaintiff made payments of $9035.00 ($700, $1635, $1700, $4000, $1000). In the same period Rang Naicker made payments of $3501 ($500, $666, $1000, $900, $435). However in the same period the Defendant made payments of $2300 ($500, $500, $400, $400, $500).

Although the agreement contained an express term that the purchasers were to make all payments after two years from the date of the agreement (i.e. on and from 11 February 1995) it would appear that although the agreement was still "on foot" at least some of its terms had been varied. At no time prior to 14 July 1997 had Vishwa Naicker made any payment to the Bank.

It was therefore not surprising that the parties should attempt to formalise the arrangements that existed after 11 February 1995 and which at least represented an implied variation of the terms of the agreement of 11 February 1993.

Following a meeting on 14 July 1997 a document with the heading "Leasing Agreement" was signed by the Plaintiff, Rang Naicker and the Defendant. Again, it is appropriate to set out the terms of the second agreement in full:

" Leasing Agreement

Following the meeting held on 14/7/1997 the following people have agreed to divide and share the Waimaqera block CT26454 Lot 5 on DP6361 having 54 acres (fifty four acres) registered under the name of Maya Wati which is mortgaged to the Fiji Development Bank to secure monies owing to the Bank for land purchase. We Rajendra Kumar, Rang Naicker and Maya Wati all of Qarawalu in Taveuni hereby agree to the following shares on the subject property, namely Lot 5, DP6361 on CT26454.

Rajendra Kumar 2/3 undivided share

Rang Naicker 1/3 undivided share

This Agreement is made effective hereof and subject to a payment of $7,000.00 (seven Thousand Dollars only) being 1997 repayment dues plus arrears payment of $660.00 (Six Hundred and sixty dollars). These payments are to be made to the Bank under the following terms and conditions:-

• Rang Naicker to pay $1,300.00 (One Thousand and Three Hundred Dollars) by 31 December 1997 and balance of $1,363.00 (One Thousand Three Hundred and Sixty Three Dollars) by April 1998.
  

- Rajendra Kumar to pay $2,500.00 by 31 December 1997 and another payment of $2,500.00 (Two Thousand and Five Hundred Dollars) by April 1998.

• Payment thereafter will be met by both parties in accordance with their respective shares, that is Rang Naicker 1/3 undivided share or equivalent of $2,333.00 per year and Rajendra Kumar 2/3 undivided share or an equivalent of $4,666.00 per annum commencing December 1998."
  

I accept that between 14 July 1997 and 23 September 1998 the Defendant did not make any payments to the Bank. Between July 1997 and September 1998 the Plaintiff paid $20,212.00 to the Bank and in the same period Rang Naicker paid $11,245.00 to the Bank.

In summary, between February 1993 and September 1998 the Plaintiff had paid a total amount of $31,579.00 to the Bank and in the same period Rang Naicker had paid a total of $15,711.00 to the Bank. In the same period the Defendant had paid $4,502.00 to the Bank of which $2,202.00 had been paid between February 1993 and February 1995. She had also made payments of $2,000.00 prior to 11 February 1993. Although not required to do so under the first agreement, between February 1995 and July 1997 the Defendant had paid $2,300.00 to the Bank.

Mr Nakacia gave evidence that as at 30 September 1998 there was an outstanding balance of $2,178.13 owing to the Bank under the mortgage. The receipts that were admitted into evidence indicate that between September 1998 and April 2005 the Defendant paid a total amount of $3,360.00 to the Bank by seven installments of differing amounts.

The evidence given by the witnesses at the trial which took place many years later, was not always consistent with the documentary material, was in conflict, inconsistent and contradictory. I considered the oral testimony of the parties generally to be unreliable. Evidence appeared to be based more on reconstruction. Consequently I have attached greater weight to the documentary material that was admitted into evidence. In respect of conflicting evidence I regarded the evidence of the Plaintiff as being more reliable and credible. His evidence was more consistent with the documentary material. He appeared to have a better memory of events than the Defendant.

I find that between February 1993 and September 1998 the Defendant did not ask the Plaintiff to leave the land nor did she attempt to exercise any right that may have accrued to her under the agreement as varied.

I find that by the end of 1998 the Plaintiff had paid to the Bank the amount of $31,579.00 which represented his obligation under the agreement as varied. He made no further payments after that date.

I also find that as at the end of 1998 the Defendant had paid to the Bank the sum of $6,502.00. However, of that amount $2,000 was paid to the Bank by the Defendant prior to 11 February 1993. A further sum of $2,202.00 was paid to the Bank by the Defendant between February 1993 and February 1995. These payments were made by the Defendant at a time when it was her responsibility to make them. After February 1995 and up to September 1998 the Defendant had paid $2,300.00 to the Bank. In fact those payments had been made by the Defendant prior to July 1997 when the first agreement was varied by the second agreement. The Defendant did not make any payment between 14 July 1997 and September 1998.

Although the evidence did establish that the Defendant had made payments to the Bank after 1998 I am satisfied that they arose out of her dispute with the other purchaser, Rang Naicker who is not a party to these proceedings.

So far as the two agreements are concerned, I have concluded that the second agreement represented a variation in writing of the first agreement. The second agreement cannot stand alone and in order for it to have meaning it must be construed as, by its terms, varying the terms of the first agreement. Although headed with the words "Leasing Agreement" the substance of the document clearly assumes the existence of the first agreement and its essential terms.

On a proper construction of the first agreement I find that it was a conditional agreement for the sale and purchase of land. In addition to being a conditional agreement, it also contained a condition precedent. The condition precedent term was to the effect that the agreement required the consent of the Bank. I have already indicated that I am satisfied that the Bank had given its consent. It was a conditional agreement in the sense that the land would only be sold to the purchasers if they complied with the obligation that was to commence two years later on 11 February 1995.

I am satisfied that on a proper construction of the first agreement the Defendant was required to continue to make payments to the Bank between 11 February 1993 and 11 February 1995. The amount that the Bank required to be paid by the Defendant during that period was a total of $9,053.00. As noted earlier, of that amount the Defendant paid only $2,202.00. Two of the three purchasers contributed $3,297.00 in the same period.

It was perhaps to assist her to meet the required payments prior to 11 February 1995 that the Defendant and the Plaintiff and the other purchasers came to an arrangement whereby the purchasers would enter on the land and commence farming immediately. I am satisfied that shortly after 11 February 1993 the purchasers entered on the land and with the approval of the Defendant commenced farming on lots that had been informally marked by agreement. In return two of the purchasers made payments to the Bank. There was no evidence as to the terms of this informal arrangement.

It is clear that the purchasers were not able to meet the payments as and when they fell due after 11 February 1995. The purchaser Vishwa Naicker made no payments at all. The Defendant did not elect to exercise any right against the purchasers between 11 February 1995 and 14 July 1997. In fact the Defendant preferred to make payments to the Bank during that period rather than bring the agreement to an end.

The parties varied their initial agreement in the form of the second agreement dated 14 July 1997. I am satisfied that by the end of September 1998 the Plaintiff had paid the balance of his share of the amount due under the varied agreement. The material provided by the Bank confirmed this. The position with Rang Naicker was different and there appeared to be a dispute between him and the Defendant. It was the dispute between Rang Naicker and the Defendant that formed the basis of the Defendant's Defence to the Plaintiff's claim. Relying on the agreement the Defendant denied any obligation to settle with the Plaintiff since Rang Naicker had not paid in full his one-third share of the debt.

It is clear that it was the intention of the parties that upon payment by the purchasers of the amount owed to the Bank each purchaser would receive a title after survey and division.

The second agreement varied the first agreement by specifying the amounts to be paid by each of the two remaining purchasers. The first agreement was silent as to the obligation of each of the purchasers. However under the variation effected by the second agreement, each purchaser became responsible for making his own payment as and when such payments fell due. The result was that the failure by Rang Naicker (for whatever reason) to make his payment or payments did not affect the right of the Plaintiff to receive a title for the lot that was to be surveyed and subdivided upon payment in full of the amount payable by him under the agreement as varied. The second agreement had varied the first agreement by specifying the obligation of each purchaser. Although the agreement as varied remained a conditional agreement, the conditions had been altered. After July 1997 the Plaintiff and Rang Naicker would each receive a surveyed and sub divided piece of land when each had paid the amounts specified in the agreement dated 14 July 1997.

As a result of the second agreement the Defendant was not entitled to insist upon full payment by Rang Naicker in order to deny the Plaintiff a title to the land he had paid for in full.

I was informed from the Bar table that the Defendant and Rang Naicker had resolved their dispute.

In my judgment the Plaintiff is entitled to an order for specific performance of the agreement as varied. The parties are to share equally the cost of survey and subdivision of the two third share (of 34 acres) that is referred to in the agreement dated 14 July 1997.

To the extent that it is necessary it is ordered that the Defendant and/or her agents be restrained from interfering with the Plaintiff's possession and cultivation of the said land.

Any right that accrued to the Defendant between February 1995 and July 1997 was waived when she agreed to vary the first agreement and signed the second agreement. I am satisfied that she was aware of the contents of the second agreement. There was no evidence to support a claim of misrepresentation or mistake.

The money that has been paid to the Bank by the Defendant since September 1998 has arisen out of different issues involving her dispute with Rang Naicker and does not in any way impact upon the Plaintiff's right to receive what he has paid for.

The counterclaim against the Plaintiff is dismissed.

The Plaintiff is entitled to costs which are fixed summarily in the sum of $1,900.00.

The orders of the Court are:

1. Specific performance of the agreement dated 11 February 1993 as varied by the agreement dated 14 July 1997.
   
2. Costs of survey and division to be met jointly by the Plaintiff and Defendant.
   
3. The Defendant and/or her agents, servants and employees are restrained from interfering with the Plaintiff's possession and cultivation of the said land.
   
4. Counterclaim is dismissed.
   
5. Defendant to pay to the Plaintiff the costs of the action which are fixed summarily in the sum of $1,900.00.
   

W D Calanchini
JUDGE

4 November 2011
At Suva