Digicel (Fiji) Ltd v Tecraft Engineering (Fiji) Ltd [2012] FJHC 18; HBC30.2011 (20 January 2012)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION HBC 30 OF 2011

BETWEEN:

DIGICEL (FIJI) LIMITED
a limited liability company having its registered office at
1st Floor, Kadavu House, Victoria Parade, Suva.
1st PLAINTIFF

AND:

TECRAFT ENGINEERING (FIJI) LIMITED limited liability company
having its registered office at J. Kevi Complex, Shop 1, Nadi Back Rd, Nadi.
1st DEFENDANT

AND:

KEVI REDDY
of Nadi (full address not known to the Plaintiff),
Company Director.
2nd DEFENDANT

AND:

RANGEETA DEVI REDDY
of Nadi (full address not known to the Plaintiff),
Company Director.

Before : Master Anare Tuilevuka.
Counsel : Ms. Mary Muir on instructions from Siwatibau & Sloan for the Plaintiff.
:Mr. Rupesh Singh, Patel & Sharma, Nadi – for the Defendants.

Date of Ruling: Friday 20 January 2012.

RULING

INTRODUCTION

[1]. Digicel (Fiji) Limited is a mobile telecommunications service provider. Tecraft Engineering (Fiji) Limited (“TEFL”) is an engineering company. Digicel and TEFL had a memorandum of understanding. In essence – this MoU (hereinafter “agreement”) was a legally binding document rather than just a formal gentleman’s agreement. Digicel is claiming under the MoU. And TEFL relies on its provisions in its defence and counter-claim.

[2]. Under the agreement, TEFL was to supply Digicel with 24 shelters. These shelters were to be used by Digicel in its business operations. The agreement actually detailed the specifications for the 24 shelters. It is common ground that the total value of the 24 shelters was to be $766,456.29[1]. It was agreed between the parties that Digicel would initially pay TEFL a 60% deposit. The balance of 40% was to be paid on completion. Digicel understood “completion” to be the time of final delivery. TEFL on the other hand has a different account.

[3]. Anyhow, it is common ground that pursuant to the agreement, Digicel did pay TEFL the sum of $478,526.48 plus VAT[2]. This sum was actually paid out in three installments[3]. The parties also agree that TEFL has since only delivered two shelters to Digicel.

[4]. Ratiram deposes that TEFL is refusing to refund Digicel all monies paid. From the statement of defence, counter claim, and affidavit in opposition filed, it appears that TEFL is refusing to refund Digicel because of expenses and losses it has allegedly suffered. TEFL’s case appears to be premised on a claim for offset for expenses incurred and monies spent under its agreement with Digicel.

APPLICATION FOR ACCOUNT

[5]. Before me is a summons filed by Siwatibau & Sloan for Digicel seeking an Order for Account against TEFL. Digicel’s application is made pursuant to Order 43 Rules 1, 2, 3 and 4 of the High Court Rules 1988. In particular, Digicel seeks an Order that TEFL files an Affidavit Verifying Accounts to take account of the following:

(a) the FJD$766,456.29 received by TEFL from Digicel which, according to TEFL- it has spent in the performance of TEFL’s obligations under their agreement - as stated in paragraph 12 of the Statement of Defence and Counterclaim.

(b) the losses listed below which TEFL alleges in paragraph 15.11 of the Statement of Defence and Counterclaim.

(i) 12.5% VAT portion collected by FIRCA.

(ii) Duty Clearance on containers cleared.

(iii) Payment for communication but already paid.

(iv) Special vehicle purchased for project.

(v) Salary paid.

(vi) Workshop modifications.

(vii) Holding costs of 22 shelters.

(viii) Compensation paid to workmen.

(ix) Loss of exchange.

(x) Loss of exchange for holding shelters for 5 months.

(xi) Sundry expense due to delays; and

(xii) Loss of business.

SCOPE OF ORDER 43

[6]. Order 43 Rule 1 of the High Court Rules 1988 states as follows:

ACCOUNTS AND INQUIRIES

Summary order for accounts (O.43, r.1)

1. – (1) Where a writ is indorsed with a claim for an account or a claim which necessarily involves taking an account, the plaintiff may, at any time after the defendant has acknowledged service of the writ or after the time limited for acknowledging service, apply for an order under this rule

[7]. Order 43 Rule 2 states as follows:

Court may direct taking of accounts, etc (O.43, r.2)

2 – (1) The Court may, on an application made by summons at any stage of the proceedings in a cause or matter, direct any necessary accounts or inquiries to be taken or made,

(2) Every direction for taking an account or the making of an inquiry shall be numbered in the judgment or order so that, as fas as may be, each distinct account or inquiry may be designated by a number.

[8]. Both counsel appear to agree that Digicel’s writ is not indorsed with a claim for an account or a claim which necessarily involves taking an account such as to entitle it to an order under Order 43 Rule 1.

[9]. The White Book (1976 edition) at page 652, a copy of which Mr. Singh has provided, states as follows in relation to the application of Order 43 Rule1:

Application of Rule. – Rule 1 only applies where it is clear that the defendant is an accounting party and that if the action went to trial an account must be directed. Special accounts will not be ordered, the right to which depends on the plaintiff establishing a case at the hearing.....

If there are accounts which must be taken in any event and others which depend on plaintiff’s success at the hearing, the first mentioned should be directed at once unless they are involved with subsequent accounts....

As to accounts in equity generally, see Seton 1313.

It appears that the jurisdiction hereunder is limited to an order for an account of money dealings and payment of the balance e.g. an order will not be made for an account of dealings with chattels and delivery of the balance thereof.

[10]. The real issue is whether or not the seemingly all-encompassing wording of Order 43 Rule 2 is wide enough to support Digicel’s application in this case. The scope of Order 43 Rule 2 is described as follows in the White Book 1976 edition:

Application of Rule. – This rule does not authorize the sending the whole cause to Chambers, but only the directing before trial such accounts and inquiries as are subsidiary to determining the rights of the parties and which would otherwise be directed at the trial

[11]. Miss Muir relies on the following extract from a latter edition of the White Book which describes the effect of Order 43 Rule 2 as follows:

Effect of rule – Whereas r.1 only applies in an action for an account, this rule applies in any action.

[12]. The copy of the White Book that I accessed from the High Court Library in Lautoka describes the application of Order 43 Rule 2(1) in the following terms:

Application of rule – whereas r.1 only applies in an action for account, this rule applies in any action. It is probably most frequently used to decide the interests of parties in joint ownership cases, but there are many other instances where it can be invoked to decide the rights of the parties and avoid a long trial.

[13]. I am of the view that Order 43 Rule 2 is not necessarily limited to cases where the defendant is an accounting party (such as in matters concerning the administration of estates, or trusts). Rather, Order 43 Rule 2 applies to all other actions where the provision of an account by one or both of the parties will decide their respective rights and avoid a long trial. I am convinced that this case now before me is such a case.

[14]. Accordingly, I order that TEFL file within 28 days of the date of this Ruling an Affidavit Verifying Accounts to take account of the matters in paragraph 4(a) and (b)(i) to (xii) above. This Affidavit Verifying Account s must be supported by all relevant documentation that TEFL would have relied on at trial to substantiate each particular claim. The case is now adjourned to Monday 20 February 2012 at 8.30 a.m. for mention.

................................
Anare Tuilevuka
Master

At Lautoka.
20 January 2012.

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^[1] See paragraph 5 of the Affidavit of Ratiram and paragraph 15.1 of the counter claim.

^[2]See paragraph 7 of the Affidavit of Ratiram and paragraph 15.3 of the counter claim. That this sum was paid is admitted to by TEFL in paragraph 4 of its statement of defence.
^[3] On 20 November 2007, 20 December 2007 and finally on 01 September 2008.