Kumar v Australia and New Zealand Banking Group Ltd [2011] FJHC 819; Civil Appeal001.2009 (9 December 2011)

IN THE HIGH COURT OF FIJI ISLANDS
AT LABASA
CIVIL JURISDICTION

Civil Appeal No: 001 of 2009
(On appeal from Magistrates Court Civil Action No. 61 of 2006)

BETWEEN:

ATEN KUMAR (f/n Bal Ram)
[Appellant]

AND:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
[Respondent]

Counsel: Mr. A. Sen for the Appellant
Mr. S. Singh for the Respondent

Date of Judgment: 9th December 2011

JUDGMENT

[1]. This is an appeal against the judgment of the Labasa Magistrate's Court delivered on 01.08.2008, in which the appellant (the defendant in court below) was ordered to refund to the respondent (the plaintiff in court below) the sum of $ 5209.70 together with the interest.

[2]. The respondent's claim against the appellant in the Magistrate Court was for recovery of money it had mistakenly paid to the appellant on or about 19.10.2001 together with interest and costs.

[3]. The defendant appellant in his statement of defence claimed that he did not owe any money to the plaintiff and stated that the acknowledgement of debt that he executed on 16.05.2002 was invalid because he executed the same under duress.

[4]. In the Magistrate's Court trial, the learned Magistrate found that the plaintiff had proved its case and was entitled to be paid restitution by the defendant for the loss they suffered.

[5]. Being aggrieved by the decision of the Magistrate, the appellant made this appeal seeking to set aside the Magistrate's decision and has advanced several grounds of appeal.

[6]. One of the main grounds advanced by the appellant is that the learned magistrate erred in law by holding that the doctrine of unjust enrichment was the cause of action upon which this claim was made although that was not the basis of claim as pleaded in the statement of claim.

[7]. The respondent submitted that there was no requirement under the Magistrate's Court Rules to state the cause of action being relied upon; and, it is sufficient for the plaintiff to state all material facts of the case which it relied upon.

[8]. Order XVI (3) a, b and c of the Magistrate Court Rules provide for the requirements in a statement of claim.

1. Every pleading shall contain a statement of all the material facts on which the party pleadings relies, but not the evidence by which they are to be proved, such statement being divided into paragraphs numbered consecutively, and each paragraph continuing, as nearly as may be, a separate allegation.
   
2. The facts shall be alleged positively, precisely and distinctly, and as briefly as is consistent with a clear statement.
   

100. Every statement of claim shall state specifically the relief which the plaintiff claims either simply or in the alternative, and may also ask for general relief, and the same rule shall apply to any counterclaim made or relief claimed by the defendant in his statement of defence.
     

[9]. The particulars of claim, when perused do not seem to be inconsistent with the above provisions and has provided sufficient information as to the claim levelled against the appellant. In the particulars of claim, it is clearly stated that the plaintiff claimed from the defendant the sum of $ 5209.70 being monies credited in error to the defendant's account No.5561993 held and maintained by the plaintiff bank. It is further stated the defendant duly acknowledged the said amount, demands for payment had been made but the defendant failed to pay the same.

[10]. Therefore, the statement of claim did provide sufficient information to enable the defendant to apprehend the claim against him; hence, I see no merit in the appellant's 1st ground of appeal.

[11]. The 2nd ground of appeal relied upon by the appellant is that the learned Magistrate erred in law and in fact in holding that there was a contract between the appellant and the respondent.

[12]. However, when the Magistrate's decision is scrutinized, no such finding can be seen. The learned magistrate extensively dealt with the principle of restitution, and came to a conclusion that the plaintiff was entitled to be paid by means of restitution by the defendant for the loss it suffered.

[13]. It was further argued that the learned Magistrate erred in holding that the law of restitution was applicable in the circumstances and further applied wrong principles of law in holding that there was a cause of action.

[14]. In considering the above argument it is necessary to set out the most vital parts of the learned magistrate's judgment which are as follows:

• What is the law that governs money paid under a mistake of fact?
  

There is a dearth of decided cases or understanding locally in an area of the law that has developed in leaps and bounds in other common law jurisdictions in the last 17 years or so since the recognition by the House of lords in Lipkin Gormn v. Karpnale Ltd [1991] 2 A.C.148 that such claims are based not on tort or contract but on the law of restitution. The decided cases in Fiji on restitution in general rely on Fibrosa Spolka Ascyjna v. Lawson Combe Barbour Ltd [1942] UKHL 4; [1943] AC 32. There is clear recognition of this area of the law in the speech of Lord Wright when he said at p.161:

It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money of or some benefit, that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep. Such remedies in English Law are generally different from remedies in contract or in tort, and are now recognized to fall within a third category of common law which has been quasi-contract or restitution.'

[15]. It is plain from the above passages that the learned magistrate based his decision on two main legal principles namely, 'unjust enrichment' and 'restitution'.

[16]. The appellant's contention, as can be seen from his submission, is that the Magistrate had no power to apply the principle of restitution.

[17]. The Magistrate dealt in detail with the law of restitution in Fiji, and stated:

'The law of restitution in Fiji was restricted in its application by the Courts to claims for money had and received for unjust enrichment of the type in Fibrosa and was not widely accepted as a cause of action on its own. Courts were reluctant because it is difficult to overthrow well-established precedents derived from the implied contract theory. Common law lawyers knew that if a common law action is not grounded in contract then it must be in torts. When grey areas are encountered we revert to the old forms of action which had been abolished for more than 100 years.'

[18]. It can be observed that the learned Magistrate relied on Lipton Gorman v. Karpnate Ltd. [1991 2 A.C 548 which discussed rules concerning with reversing a defendant's unjust enrichment at the plaintiff's expense.

[19]. When the evidence adduced by both parties is analyzed, it is abundantly clear that the plaintiff's claim in the Magistrate's Court was based on the ground of unjust enrichment, though it was not specifically stated in particulars of claim.

[20]. The law of restitution normally applies in cases where unjust enrichment is apparent and in the present case there was ample evidence before the Magistrate's Court that the defendant appellant was unjustly enriched since the plaintiff by mistake credited the defendant's account with $ 5209.70. Therefore, the learned magistrate has correctly applied the doctrine of restitution in order to recover the monies from the appellant who was unjustly enriched by the respondent's mistake.

[21]. Having regard to the above, I do not see any merit on the appellant's argument that the Magistrate had considered a different cause of action, which was not pleaded by the plaintiff respondent.

[22]. Unjust enrichment is a benefit for which the recipient is required to make restitution to the person at whose expense it was obtained. The law of restitution is not a cause of action but a legal remedy which is often granted in cases where unjust enrichment is evident.

[23]. Therefore, it is plain and obvious that the learned magistrate correctly applied the relevant principles of law.

[24]. The appellant further submitted that the evidence before the Magistrate did not establish any loss incurred to the plaintiff respondent. However, the learned Magistrate had analyzed evidence and at no point stated that the respondent had not suffered any loss. The way he analyzed the evidence clearly shows that the Magistrate very correctly identified and addressed relevant issues and satisfied that the plaintiff respondent did establish its case on a balance of probabilities.

[25]. The appellant further submitted that the magistrate erred in failing to analyze the evidence before him and failed to read the pleadings before making a decision. But the defendant has not identified as to what evidence the Magistrate has failed to analyze. A general statement merely challenging the analysis of the evidence would not suffice. The appellant must clearly and precisely identify the evidence alleged to have been disregarded by the Magistrate.

[26]. The appellant further submitted that the learned Magistrate had made a finding of fact that the plaintiff's claim was neither founded on tort nor on contract but was on a different cause of action and therefore the Magistrate had no jurisdiction to try the cause of action pursuant to section 2 of the Magistrate Court Civil Jurisdiction Decree 1988.

[27]. However, no such a finding could be observed in the Magistrate's decision dated 01.08.2008. Further, the appellant should have raised his objections as to the jurisdiction at the commencement of the proceedings in the Magistrate's court. Therefore, I see no merit in the above argument.

[28]. The appellant further argued that the learned magistrate erred in holding that there was an interest rate of 13.5% applicable on the sum claimed when the claim was for 8.5% interest as per the statement of claim.

[29]. The respondent admitted that the plea in the particulars of claim is for interest to be awarded at the rate of 8.5%, but submitted that the evidence given by the respondent witness proved that the bank would have lent the monies at the rate of 13.5% per annum.

[30]. It could also be observed in the decision of the Magistrate that he simply concluded that the rate of interest for personal loans at the relevant period was 13.5% and therefore applied the 13.5% as the rate of interest, which, in my view, is inconsistent with the law relating to the awarding of an interest.

[31]. According to the Order XXXII rule 8 of the Magistrate Court Act the interest rate which could be awarded is 5%. Therefore, the interest rate awarded by the learned Magistrate's court was inconsistent with the above section.

[32]. Further, the section 3 of the Law Reform (Miscellaneous Provisions) (Deaths and Interest) is amended by Decree No 46 of 2011, and the interest rate according to the said amendment is 4%.

[33]. Having regard to the above I am of the view that the interest rate awarded by the learned magistrate was excessive and hence, I vary the interest rate to be paid by the appellant as at 4%

[34]. Another ground of appeal advanced by the appellant was that the learned Magistrate erred in holding that doctrine of laches was not applicable when the respondent had filed a claim almost 5 years after the cause of action arose.

[35]. When the copy record of the Magistrate's Court is perused it appears to me that the proceedings in the Magistrate Court were initially commenced on 06.10.2004. Hence, it is apparent that the writ was issued within the limitation period for filing the claim and, therefore, it could not be concluded that the plaintiff was guilty of laches.

[36]. The appellant further argued that the learned Magistrate erred in dismissing the counter claim of the appellant when there was sufficient evidence which was not contradicted by the respondent.
[37]. The learned magistrate in his judgment has analyzed the defendant's evidence in great detail and very clearly stated as to why he disbelieved the defendant's testimony.

[38]. More importantly, the learned Magistrate has evaluated the credibility of the defendant and also observed the inconsistency of the defendant's evidence. Paragraphs 21 to 26 of the Magistrate's Court judgment when read, clearly shows that the learned magistrate has carefully analyzed and evaluated the defendant's evidence before the counter claim was dismissed.

[39]. Having carefully considered the evidence, the learned Magistrate's findings and the submissions of counsel, I am firmly of the view that the trial Magistrate's final conclusion was correct and hence I see no reasons to intervene with the findings of the Magistrate, except on the interest rate awarded on the principal sum.

[40]. Hence, the appeal is allowed to the extent only that the interest rate is reduced from 13.5% to 4%.

[41]. Parties are to bear their costs.

Pradeep Hettiarachchi
JUDGE