Goodway Rubber Company Pty Ltd Gurbachan Singh Tyre Centre& Industries Ltd [2012] FJHC 1489; Civil Action425.2012 (23 November 2012)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

Civil Action No. 425 of 2004

BETWEEN:

Goodway Rubber Company Pty Limited
Plaintiff

AND:

Gurbachan Singh Tyre Centre & Industries Limited
Defendant

Appearances: Mr I. Samad for the plaintiff
Mr A.Sen for the defendant
Date of hearing: 19th March,2012

JUDGMENT

1. In these proceedings, the plaintiff seeks to recover an outstanding debt due for goods sold and delivered to the defendant.
   

The amended statement of claim recites that the plaintiff, a company incorporated in Australia, was engaged in the business of manufacturing and supplying rubber products. In 2001, a director of the plaintiff, Mr Brian Smith had entered in an oral agreement in Fiji with Mr Jack Singh, a representative of the defendant, to supply rubber products manufactured by the plaintiff to the defendant. The plaintiff had supplied rubber products to the defendant, and rendered invoices for the goods supplied .

The statement of claim proceeds to state that on 6th February, 2004, an agreement was reached between the plaintiff and the defendant, for settlement of the outstanding debt owed by the defendant to the plaintiff in a sum of AUD $ 120,200.17 together with interest in a sum of AUD$10,998.32 before 30th March, 2004. The plaintiff had received an initial payment of AUD$4,000.00. Consequent to a demand being issued to the defendant by the plaintiff through its solicitors, a further payment of AUD $3,892.50 was made by the defendant. The statement of claim concludes that the defendant have failed to pay the balance debt owing to the plaintiff totalling a sum of AUD$112,307.67.

2. The primary facts are undisputed. It is not disputed that a director of the plaintiff, Mr Brian Smith had entered in an oral agreement in Fiji with Mr Jagjeet/Jack Singh, a director of the defendant to supply rubber products to the defendant. The defendant, in its amended statement of defence states that this agreement was premised upon several representations made to the plaintiff by the defendant as regards offer and credit terms and the quality of the products.
   

The amended statement of defence provides further that the subsequent written agreement of 6th February, 2004, relied on by the plaintiff, is inoperative, since it was also entered into, upon several representations made to the plaintiff by the defendant, which were not fulfilled. The representations included that the plaintiff would not seek repayment, until the plaintiff provides pre-cured rubber trecks to the value of AUD$155,000.00, as a replacement of defective products that was supplied to the defendant between 2001–2003.It is further provided that the representations were partly written; the rest were implied and oral. The written representations were in a typed form and presented to an agent of the plaintiff to be taken to Australia to be executed. The pleading continues that the plaintiff supplied to the defendant goods, which were worthless .The defendant counter claimed in a sum of AUD $ 155,000.

The plaintiff's reply to the amended statement of defence, is basically to the effect that the defendant never made any complaints, as regards the goods supplied.

The Agreed facts

The plaintiff is a limited liability company incorporated and having its registered office in New South Wales, Australia and is primarily engaged in the business of manufacturing and supplying rubber products.

The Defendant is a limited liability company having its registered office in Labasa and operating elsewhere in Fiji and is primarily engaged in the business a tyre center.

. Sometimes in 2001 Mr Brian Smith, a director of the Plaintiff entered in an oral agreement in Fiji with Mr Jagjeet Singh also known as Jack, a representative of the defendant to supply rubber products manufacturing Plaintiff.

A Statement of Account dated the 8th day of January 2004, was provided by the Plaintiff to the Defendant in reflecting the payment activity of the Defendant for the period between the 1st day of January 2000 and the 31st day of December 2003 for goods supplied to it by the Plaintiff which indicate that the Defendant was in payment arrears in the sum of AUD$120,200.17 (Australian Dollars One Hundred Twenty Thousand Dollars and Seventeen Cents) ("the debt").

On or April 2004 the plaintiff received an initials payment of AUD$4,000.00 (Australia Dollars Four Thousand).

On the 22nd day of July 2004 the Defendant made a further payment of AUD$3,892.50 (Australian Dollars Three Thousand Eight Hundred Ninety-Two Dollars and Fifty Cents).

The issues to be determined, as recorded at the pre-trial conference, were as follows:-

WHETHER on the 6th day of January 2004 an agreement was reached between the plaintiff and the defendant for the settlement of the outstanding debt owed by the defendant to the plaintiff the sum of AUD$120,200.17 (Australian dollars one hundred twenty thousand two hundred dollars and seventeen cents) plus interest totalling AUD$10,998.32 (Australian dollars ten thousand nine hundred ninety-eight dollars and thirty two cents) which was agreed to be settled on or before the 30th day of March 2004 ("the agreement").

IF the answer to the above is affirmative, then is the agreement:

1. Conditional?
2. An acknowledgement of debt.
3. Enforceable?
   

DID the defendant agree to pay interest in the sum of AUD$10,998.32 to the plaintiff?

WHETHER the defendant was rendered invoices for the goods supplied by the plaintiff on each occasion of such supply?

IF the answer to the above is negative, then can the defendant rely on section 6 of the Sales of Goods Act to avoid the claim?

WAS the Defendants supplied rubber products contrary to representations made as to the origin?

DID the Plaintiff breach sections 54 and 56 of Fair Trading Decree by supplying products in breach of such section?

WHETHER the goods supplied to Defendant were of merchantable quality?

WHETHER the Plaintiff in the year 2001 to 2003 supplied to the Defendant products that were factory seconds?

WHETHER section 6 and 16 of the Sales of Goods Act are relevant in this case?

HAS the defendant suffered any loss and damages?

3. The determination
   

The issue to be determined in this case is whether the defendant had agreed and undertaken to pay the plaintiff, the outstanding debt of AUD$112,307.67.

At the forefront of the defendant's case is the contention that the goods were not supplied to the defendant, but a separate legal entity. Mr Sen, counsel for the defendant argued that the goods were admittedly invoiced to Jack's Tyre Centre and Industries Ltd and not the defendant, as evidenced in the statement of account produced .

The starting point of this case was the facsimile dated 24 March,2000, produced in evidence by the plaintiff's Managing Director, S. Thong, where "JACK'S INDUSTRIES LTD. A Division of:GURBACHAN SINGH TYRE CENTRE AND INDUSTRIES LTD" had evinced its interest to the plaintiff to import pre-cured rubber for retreading.

The next set of documents of interest, produced by that witness were the following letters from the defendant, "GURBACHAN SINGH TYRE CENTRE & INDUSTRIES LIMITED Trading As: JACK'S TYRE CENTRE" to the plaintiff:

1. On 24 January, 2003, the defendant wrote that the credit system is bad in Fiji and concluded as follows " You have given us so much time, only a little more will see you have your money ".
   
2. There is an undated letter where the Managing Director Mr Jagjeet Singh had stated that he would make payment of $ 5000 per week.
   
3. There is a further letter of 11 February, 2004, stating a letter of credit was opened.
   
4. Then, on 18 May, 2004, the defendant had stated that legal action will sour their business relationship.
   

It is evident from the letter heads of the above documents and its contents that the Managing Director of the defendant company has held out to the plaintiff that the defendant GURBACHAN SINGH TYRE CENTRE AND INDUSTRIES LTD" and Jack's Tyre Centre and Industries Ltd were trading as one concern. The plaintiff's witness also produced a credit advice from its Bank that a payment of AU $ 8209 was received in their favour from the defendant .

It is often the case that companies belonging to a group trade as one concern. I refer to the following dictum of Lord Denning MR in DHN v Borough of Tower Hamlets, (1976) 3 All ER 462 at page 467:

"We all know that in many respects a group of companies are treated together for the purpose of general accounts, balance sheet and profit and loss account. They are treated as one concern..

They should not be treated separately, so as to be defeated on a technical point. They should not be deprived of the compensation which should justly be payable for disturbance".

I am satisfied and find as a fact that the defendant has held itself out to the plaintiff that the defendant and Jack's Tyre Centre and Industries Ltd conducted and operated their business with the plaintiff coterminously, as one concern.

Mr Samad also rests his case on the written agreement dated 6th February,2004, entered into between the plaintiff and the defendant, in support of his claim.

The statement of defence provides that this agreement is unenforceable for the reason that the agreement did not contain the seal of the defendant company and was not executed as either a guarantee or undertaking to create any legal obligations. The closing submissions of the defendant contends that the agreement was signed by only one Director of the defendant company .

I do not consider it necessary for me to express my views on that point. The upshot of the matter is that the defendant admittedly made part payments of the debt to the plaintiff. In my judgment, the part payments constitutes acknowledgement of the debt. There is now no need to go back to the written agreement, except to the effect that it constitutes evidence of the acknowledgment of the debt by the Managing Director of the defendant. company.

It is contented in the statement of defence that the part payments were done in good faith and relying on the representations made by the plaintiff that it would supply replacement rubber trecks. This contention was not pursued at the hearing.

To make part payment of a claim signifies an admission that it is due. It must then be held that the defendant has acknowledged the plaintiff's claim and accepted liability to pay that which the plaintiff seeks to recover. There will therefore be judgment for the plaintiff against the defendant for the sum of AUD $ 112,307.67.

The statement of claim pleads interest, but the plaintiff did not present any evidence in this regard . The claim for interest is hence declined.

This finding reduces the matters which have to be decided. As regards the counter-claim, there was evidence of rejects, but as Mr Samad has pointed out in his closing submissions, the claim has not been established.

4. Orders
   

The plaintiff is entitled to judgment against the defendant for the sum of AUD $ 112,307.67. together with costs summarily assessed in a sum of $ 2000 payable by the defendant to the plaintiff.

23rd November, 2012
A.L.B.Brito-Mutunayagam Judge