Abdeans Electrical Ltd v Virs Construction Ltd [2011] FJHC 99; HBC169.2005 (1 February 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 169 of 2005

BETWEEN:

ABDEANS ELECTRICAL LIMITED a limited liability company having its registered office at 37 Fulaga Street, Samabula, Suva.
PLAINTIFF

AND:

VIRS CONSTRUCTION LIMITED a limited liability company having its registered office at Suva.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSELS: DIVEN PRASAD LAWYERS for the Plaintiff
LAJENDRA LAW for the Defendant

Date of Hearing: 21st October, 2010
Date of Ruling: 1st February, 2011

RULING

1. INTRODUCTION
   

1. This is the application for indemnity cost filed by the Defendant. The plaintiff has made an application to the Court to substitute for the Defendant. The Defendant is a Limited liability Company and the substitution is for natural persons.
   

2. FACTS
   

2. The Plaintiff filed this writ action against the Defendant on 14th April, 2005 for the alleged supplies of electrical items for the period of 2000 to 2003.
   
3. The Defendant Company was incorporated on 8th March, 2004, but an affidavit of service of Apisai Baraki a registered bailiff was filed and judgment in default was entered 6th September, 2005 since there is no acknowledgement of service.
   
4. The same bailiff filed an affidavit of service of the Default Judgment on 14th September, 2005 stating that he had served the Default Judgment to the Registered office of the Defendant Company, but the addresses in the bailiff's two affidavits differ and non of them was actual registered office of the Defendant Company..
   
5. The Wirt of Fieri Facias directed to the Sheriff against Defendant for the sum of $30,199.74 and cost of action in the sum of 185 together with interest at the rate of 10% was filed on 12th August, 2009
   
6. In pursuant to this Writ of FIFA a sheriff's report is filed to the effect that the Sheriff Officer had seized goods and chattels including 3 tonne truck and all the goods that were seized were also loaded to the truck and it was driven to the Government Building.
   
7. The items seized were mentioned in Annexed B of the Defendant's application to set aside the Default Judgment. There are 27 types of items on that list including a truck, vibrator machine and various other instruments and items needed in the construction industry. All the items in the said annexed document were confirmed by the Plaintiff as seized, in lieu of the Default Judgment.
   
8. The Defendant filed an application for the setting aside the Default Judgment stating inter alia:
   
   1. That the Defendant Company was incorporated only in 8th March, 2004 annexing the certificate of incorporation.
      
   2. The Defendant did not and could not receive the writ of summons in the circumstances.
      
   3. In any event the Defendant could not contract with the plaintiff prior to incorporation.
      
   4. The Defendant did not receive the default judgment as it was not served at its registered office..
      
   5. The registered office of the Defendant after incorporation is different from the address of the affidavit of service where the bailiff served the summons and default judgment.
      
9. The Plaintiff filed an affidavit in opposition to the Defendant's application to set aside the Default Judgment and stated inter alia
   
   1. Reiterated that the Defendant owed money to the Plaintiff as stated in the summons.
      
   2. The Defendant was aware of the court proceedings
      
   3. Defendant was provided the electrical works by the Plaintiff for the period of 2000 to 2003.
      
   4. Though the Defendant was not properly registered it was operating under the name of Virs Construction Limited.
      
   5. Plaintiff admitted the execution of writ of fier facias and the seizure of the items stated by the Defendant.
      
10. After the hearing the Default Judgment was vacated and the items seized were handed over to the Defendant forthwith and Defendant was also granted time to file their statement of defence. .
    
11. In their Statement of Defence again the objection was taken that the company was non existence in the period 2000 to 2003 and could not be sued for that reason.
    
12. A reply was also filed denying the contents in the Statement of Defence.
    
13. Summons for directions was filed on 3rd March 2010 and after defendant filed their affidavit verifying list of documents and at the discovery and Pre Trial Conference stage the Plaintiff's lawyers made an application to amend the Defendant's name since the company was not incorporated at the alleged cause of action occurred. The Plaintiff's solicitors blame the previous solicitors who filed the writ of summons for the error, but it is noted that the change of solicitors had happened on 14th August, 2009, even before the writ of FIFA was executed and repeatedly they had reiterated their position regarding the status of the Defendant and its incorporation.
    
14. At this stage the Plaintiff sought indemnity cost as the plaintiff's solicitors were put on adequate notice of this position that the Plaintiff was incorporated in 8th March, 2004 and could not be sued for the period of 2000 to 2003 from the time they made an appearance in this case.
    
15. The Defendant Company filed an affidavit in support for their application for indemnity cost and the Plaintiff was granted time to file and affidavit in opposition and hearing was adjourned to 21st October, 2010, but the Plaintiff has neither filed any affidavit in reply nor he was ready for the hearing on that day. The Plaintiff was granted further time to file their affidavit in opposition to the Defendant's application for the indemnity cost, and the matter was adjourned to 12th November, 2010 subject to a cost as it has not filed an affidavit in opposition and was not ready for the hearing as well. Even on the 12th November, 2010 no affidavit in opposition was filed but the hearing was conducted and since the Plaintiff sought to submit a written submission instead of oral submission, the Plaintiff was granted time to file written submissions and Defendant made oral submissions within the time period allocated, Plaintiff did not file any written submission but again on application Plaintiff was granted time to file written submissions.
    
16. It should be noted that since the Plaintiff has not filed any affidavit in opposition it cannot adduce new evidence in the written submissions and can only make submissions on the documents that are before the court. The submissions filed by the Plaintiff are full of facts and had even filed annexed documents marked A to D which should have been annexed to an affidavit. So the affidavit of the Defendant seeking indemnity cost is not challenged as there is no affidavit in opposition, obviously the new evidence submitted in the written submissions of the Plaintiff has to be disregarded.
    

100. LAW AND ANALYSIS
     

17. In terms of Order 61 rule:
    

8(1) "subject to paragraph (2), the cost of any proceedings shall not be taxed until the conclusion of the cause of matter in which the proceedings arise.

(2) If it appears to the Court when making an order for costs that all or any part of the costs ought to be taxed at an earlier stage it may order accordingly". (emphasis added)

18. It is clear that in terms of the above provisions that a court can make an order for costs at an earlier interlocutory stage, and this is a matter that the court should invoke jurisdiction in terms of the above provision to assess costs before the conclusion of the case as the Plaintiff is seeking to substitute the Defendant Company and they will not be represented in this case in future.
    
19. Order 61 rule 12 (2) states "on a taxation on the indemnity basis all costs shall be allowed except insofar as they are of an unreasonable amount or have been unreasonably incurred any doubts which the taxing officer may have as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the receiving party and in these rule the term "the indemnity basis" in relation to the taxation of costs hall be construed accordingly."
    
20. In this case the Defendant from the time it came to court have been asserting their position with evidence that the Defendant Company was incorporated only on 8th March, 2004 and whatever the transaction alleged in the writ of summons filed could not been done by it as the transactions had happened prior to 2004. This is a thing that can be easily ascertained as the certificate of incorporation was also filed in the Defendant's application to set aside the Default Judgment, and the Plaintiff could have been at least taken note of this fact once it was brought to their notice. The complete disregard of this fact by the Plaintiff has led to this predicament and in the circumstances this is a fit and proper case to order Indemnity cost.
    
21. The Plaintiff has not carried out a search before this action was filed to ascertain the existence of the legal personality and the registered office. In the affidavit of service of the writ the address of the registered office of the Defendant Company is given as Khalsa, Nasinu town but in the affidavit of service of the default judgment it was stated that the registered office was at Suva. The actual registered office as per the registry was at Lot 28, Nasilivata Road, Nadera, Suva. This document was filed marked 'E' to the affidavit in support for the setting aside the default judgment.
    
22. The plaintiff has ignored these evident facts that were supported by an affidavit and supporting documents, and has categorically denied them even without verifying them. These can be easily verified from the company registry even at that late stage, but opted to reiterate their position in opposing the application for the default judgment as well as in the reply to the Statement of Defence where it stated "That in further reply to paragraph 2 of the statement of defence, the Plaintiff says that Virs Construction and Virs Construction Limited are one company and evidence will be given at trial", but in sharp contrast to that in an affidavit filed on 7th September, 2010 for the substitution of the Defendant, Safiq Ali the law clerk state "that the said solicitors made an error buy inserting the Defendant's name as Virs Construction Limited which should have read as KAMPTA PRASAD aka VIR CHAND PRASAD t/as VIR CONSTUCTION. No explanation was given as to why the present solicitors did not fit to check the position once they were informed repeatedly by the Defendant.
    
23. This clearly shows that what the Defendant had been stating all along in this action was correct and Plaintiff's solicitors were given ample notice of this fact, but they have categorically denied the position of Defendant Company and now trying to put the blame on the previous solicitors, when the present solicitors were on record at least from the time the default judgment was entered.
    
24. In the circumstances it is clear that Plaintiff's business was disrupted by the seizure of its tools of trade including a truck and could have a separate cause of action for the damages against the Plaintiff. Their present application is seeking indemnity cost since they were brought to this action unnecessarily.
    
25. It is clear that Plaintiff has denied an evident fact of incorporation of the Defendant. This has resulted the Defendant's toots of trade including a Truck being seized and they had incurred legal cost unnecessarily. The Defendant has repeatedly stated with evidence that it was incorporated only on 8th March, 2010 and could not be held liable for acts alleged in the writ from 2000 to 2003. This fact was ignored, and this amounted to the present litigation against the Defendant Company unnecessarily.
    
26. In the circumstances the Defendant is justified in seeking indemnity cost.
    
27. The Defendant is seeking following cost of $ 6,363.39 and the tax invoices are marked as c1,c2,c3,c4.
    

C1 is for a sum of $ 1,817.30

C2 is for a sum of $ 1,697.25

C3 is for a sum of $1,033.03

C4 is for a sum of $1,815.81

Total $ 6,363.39

28. The invoices and the annexed affidavit substantiate the amounts and there is no affidavit in opposition challenging these amounts. From the evidence before me the amounts stated in invoices can be considered as reasonably incurred cost to the Defendant in this action, as they were made a party unnecessarily.
    
29. In the circumstance the Defendant Company is granted a sum of 6,363.39 as the indemnity cost and the Plaintiff is ordered to pay the Defendant the said sum within 21 days from today.
    
30. The Defendant is also granted $ 1,500 as the cost of this application assessed summarily.
    

Dated at Suva this 1st day of February, 2011

Mr. Deepthi Amaratunga
Acting Master of the High Court

Suva