Sharma Design Group Ltd v FNPF Investments Ltd [2012] FJHC 2; Civil Action 181.2011 (16 January 2012)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

Civil Action No. 181 of 2011

BETWEEN:

SHARMA DESIGN GROUP LIMITED a limited liability company having it registered office at 2nd Floor, Prouds Building, Renwick Road, Suva, P O Box 13296, Suva.
PLAINTIFF

AND:

FNPF INVESTMENTS LIMITED a limited liability company having its registered office at Level 2, Provident Plaza One, 33 Ellery Street, Suva.
DEFENDANT

BEFORE: Master Deepthi Amaratunga

COUNSEL: Ms. Deven of Neel Shivam Lawyers for the Plaintiff
Ms. Soro S.A. for the Defendant

Date of Hearing: 25th November, 2011
Date of Ruling: 16th January, 2012

RULING

1. INTRODUCTION
   

1. The Plaintiff filled this summons dated 23rd August, 2011 for summary judgment for $ 78,750 against the Defendant for the alleged work done by the Plaintiff in terms of Order 14 rule 1 and also on Order 27 rule 3.The Plaintiff instituted this action claiming that FNPF Investments Limited that there was an oral contract between the parties to engage the Plaintiff for architectural services in respect of the refurbishment of Grand Pacific Hotel. No written contract was entered and the Defendant alleges that the work was done on free of charge basis and no contractual obligation to pay has arisen and also specifically deny engaging them for the work. In the absence of any formal request or contract the summary judgment for the specific amount stated in the summons would invariably be struck off with cost in favour of the Defendant. Though the summons mention Order 27 rule 3 which deals with the judgment on admission there is no admission of any legally binding contract to provide services which clearly leaves the issue of any admission by the Defendant.
   

2. LAW AND ANALYSIS.
   

2. The law relating to summary judgment is contained in Order 14 of the High Court Rules of 1988 and it states as follows
   

‘1(1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has given notice of intention to defend the action, the plaintiff may, on the ground that that defendant has no deface to a claim included in the writ, or to a particular part of such a claim, or has no deface to such a acclaim or part except as to the amount of any damages claimed, apply to the Court for judgment against that defendant.

(2).....

(3).....

2(1) An application under rule 1 must be made by summons supported by an affidavit verifying the facts on which the claim or the part of a claim to which the application relates is based and stating that in the deponent’s belief there is not defence to that claim or part, as the case may be or no defence except as to the amount of any damages claimed.

(2) Unless the Court otherwise directs, an affidavit for the purposes of this rule may contain statements of information or belief with the sources and grounds thereof.

(3) The summons, a copy of the affidavit in support and of any exhibits referred to therein must be served on the defendant not less than 10 clear days before the return day.

3(1) Unless on the hearing of an application under rule 1, either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which out to be tried or that there ought for some other reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed.’

3. In the case of FDB v Michael Desond Benefield Civil Action No 123 of 1995 Justice M.D.Scott held that without any evidence of calculation of the amount claimed the summary judgment application should be dismissed. It was held in that judgment
   

“The power to grant summary judgment is “intended only to apply to cases where there is no reasonable doubt that a plaintiff is entitled to Judgment and were therefore it is inexpedient to allow a Defendant to defend for the purpose of delay” ( Jones v Stone [1894] UKLawRpAC 2; [1894] AC 122). Where the subject matter of the action is a claim of indebtedness then a mere general denial will not suffice and the grounds on which a Defendant denies indebtedness must be revealed. (Walligfor v Mutual Society (1880) App. Cas. 685).

If the Defendant’s Defence simply denying the debt were all that was before me (even if accompanied by a verifying affidavit) then the Defendant would not be entitled to defend. The inconsistencies between the affidavits and the Defence are certainly stern but mere implausibility or inconsistency is not a ground for granting summary judgment. (Paclantic Financing Co. Inc v Moscow Narodny Bank Ltd. [1983] 1 WLR 106) and leave to defend should ordinarily be given where there is a reasonable ground for an enquiry or account to ascertain the precise amount owed (Contract Discount Corp. Ltd v. Furlong [1948] 1 All ER 274).”

4. In this case there is no calculation of the said sum that was claimed in the summary judgment and before the calculation of sum there is no contract established between the parties. The statement of claim alleges an oral contract, but in his own letters to the Defendant has admitted certain services up to a particular stage free of charge. In the circumstances on affidavit evidence one cannot come to a conclusion on vital issue of legally enforceable contract and also whether the services rendered were in fact supplied free of charge.
   
5. The Order 27 rule 3 states as follows:
   

"Where admissions of fact or of part of a case are made by a party to a cause or matter either by his or her pleading or otherwise, any other party to the cause or matter may apply to the Court for such judgment or order as upon those admissions he or she may be entitled to without waiting for the determination of any other question between the parties and the Court may give such judgment or make such order on the application as it thinks just."

6. In the Supreme Court Practice (White Book) on Order 27 "Admissions" it states at paragraph 27/3/4/ (at page 502) "Where the defendant admits a claim but pleads a counterclaim the plaintiff may obtain leave so sign judgment of the terms that the money is to be paid into Court, or that there is a stay of execution pending the trial, or it may be refused according to circumstances( see Showell v Bouron (1883) 52 L.J.Q. 284; Mersy.etc.,Co. V Shuttlewoth ([1883] UKLawRpKQB 85; 1883) 11 Q.B.D. 531".
   
7. In South Pacific Aquatic Inc V Information Technology Services(Fiji) Ltd (2001) FJHC 97 it was sited with authority the judgment of the New Zealand Court of Appeal case of Grant V NZ MC Ltd [1988] NZCA 135; (1989) 1 NZLR 8 and in that judgment, Sommers J held:
   

"The principle is we think, clear. The defendant may set-off a cross-claim which so affects the plaintiff's claim that it would be unjust to allow the plaintiff to have judgment without bringing the cross-claim to account. The link must be such that the two are in effect interdependent: judgment on one cannot fairly be given without regard to the other; the defendant's claim calls into question or impeaches the plaintiff's demand. It is neither necessary, nor decisive, that claim and cross-claim arise out of the same contract" Grant V NZ MC Ltd [1988] NZCA 135; (1989) 1 NZLR 8.

8. In this case there is no admission as to any contractual obligation by the Defendant. In the paragraph 3 of the statement of the defence it states
   

'3.That, in response to paragraph 3 and 4 of the statement of claim the Defendant says that the Plaintiff had offered to provide some ideas on the GPH development on a 'free of charge' basis however, the Defendant did not at any stage engage in the Plaintiff 's services as the Plaintiff claims.'

(emphasis is added)

9. This cannot by any stretch of imagination be considered as an admission of the claim as stated in the statement of defence. The application of the judgment on admission is clearly misconceived and I need not state more as the perusal of the statement of defence would reveal the fallacy of the application for the judgment on admission.
   
10. The Plaintiff in its letter of 25th March 2010 admitted that the initial meeting and concepts were free of charge and had further claimed that the concepts were approved which were later presented to the Board, but this clearly indicates an issue that needs to be ascertained in a trial.
    
11. The correspondences annexed by the Plaintiff in its affidavit records the arrangements between the parties and the manner in which the Plaintiff were to conduct its presentations to the Board. There are no records in the annexed correspondences that clearly express an agreement on the costs or a confirmation of engagement. No amount of cost of the Plaintiff was mentioned in the said correspondence.
    
12. The correspondences only refer to a number of occasions on which the Plaintiff attended to the Defendant for presentations and site visits and there was never an indication on any costs. The Plaintiff alleges that there were approvals after the stage upon which a free of charge service was agreed. However there are also no indication of the Defendant's approval as stated.
    
13. In the case of Courtney and Fairbairn Ltd v- Tolani Brothers (Hotels) Ltd and another [1975] 1 All ER 716, in this case the one Tolani wanted to develop a site and got in touch with Courtney (the Plaintiff) a property developer who could obtain finance for the development. It was proposed that Courtney should introduce a financier and Tolani the company as should employ the company which Courtney represented to construct buildings. Courtney wrote to Tolani "I would be very happy to know that, if my discussions and arrangements with interested parties lead to a financial arrangement acceptable to both parties you will be prepared to instruct your quantity surveyor to negotiate fair and reasonable contract sums in respect of 3 projects."In the above case no agreement could be reached and negotiations broke down. Courtney claimed there was an enforceable contract to employ the company as builders.
    

Page 719 at paragraph h, Lord Denning stated "Now the price in a building contract is of fundamental importance. It is so essential a term that there is no contract unless the price is agreed or there is an agreed method of ascertaining it, not dependant on the negotiations of the two parties themselves. In a building contract both parties must know at the outset, before the work is started, what the price is to be, or, at all events what agreed estimates are. No builder and no employer would ever dream of entering into a building contract for over £200,000 without there being an estimate of the cost and an agreed means of ascertaining the price."

Page 720 further added as follows

'Even if there was not a contract actually to build, was not there a contract to negotiate, but the negotiations broke down. It may be suggested that the quantity surveyour was to blame for the failure of the negotiations. But does that give rise to a cause of action? There is very little guidance in the book about a contract to negotiate. It was touched on by Lord Wright to Hillas & Co Ltd v Arcos Ltd [1932] UKHL 2; [1932] All E.R. 494 at 505 where he said: 'There is then no bargain except to negotiate, and negotiations may be fruitless and end with out any contract ensuing' Then he went on:'....yet even then, in strict theory, there is a contract (if there is good consideration) to negotiate, though in the event of repudiation by one party the damages may be nominal, unless a jury think that the opportunity to negotiate was of some appreciable value to the injured party.'

14. In the case before the court it is clear that the Defendant could not have agreed to services to be conducted with costs of $78,750.00 without an agreement between the parties. It is also noted that no basis of calculation of the said amount was made available and even if there was a contract no summary judgment can be entered without the said sum being justified and calculated precisely.
    

100. CONCLUSION
     

15. Defendant submits that there was never an agreement for engagement or provision of services at the cost of $78,750.00 between the parties. The Plaintiff relies on alleged oral contract, which the Defendant denies. No written agreement was proved and or admitted. In such circumstances the application for summary judgment is doomed to fail as much as the application for judgment on admission for the reasons given in the ruling. I will struck off the summons for summary judgment and also judgment on admission with cost summarily assessed at $1,500.
    

4. FINAL ORDERS
   

1. The summons dated 23rd August, 2011 is struck off.
   
2. The Plaintiff is ordered to pay a cost of this application assessed summarily at $1,500 to the Defendant within 21 days.
   

100. The matter is to take normal cause.
     

Dated at Suva this 16th day of January, 2012

Mr. Deepthi Amaratunga
Master of the High Court
Suva