Koya v Naicker [2013] FJHC 541; HBC35.2011 (16 October 2013)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

CIVIL NO. HBC 35 of 2011

BETWEEN:

Sadiq Koya
PLAINTIFF

AND:

Dalip Naicker
DEFENDANT

COUNSEL : Ms. Tabuakuro L with Silo E for the Plaintiff
Mr. Lomaloma P for the Defendant

Date of Judgment: 16 October 2013

JUDGMENT

1. The Plaintiff by his Writ of Summons dated 4 November 2011, instituted this action against the Defendant seeking inter-alia specific performance of the Agreement dated 31 May 1996 for sale of 4 acres of land which is part of CT 261412, by the Defendant.
   
2. The Plaintiff in his pleadings in the Statement of Claims dated 28 October 2011, stated that after the contract was signed between parties, the Plaintiff has paid the full purchase price of $10,000.00 but the Defendant has failed or refused to transfer the land to him. The Plaintiff further stated that he made several legal notices through his solicitors for the transfer of the land.
   
3. The Defendant by his Statement of Defence, dated 5 January 2012 whilst denying the claim of the Plaintiff, takes up the position that the Plaintiff has failed to pay the full consideration as agreed between the parties and states that the land was sold for a consideration of $35,622.81 which consists $10,000.00 plus the total debts owed to the Fiji Development Bank at the time of the execution of the agreement.
   

The Defendant in his Statement of Defence, also makes a counter claim against the Plaintiff for vacant possession, alleged breach of contract by the Plaintiff for failing to repay the Fiji Development Bank debt of $25,622.81, damages, restitution, interest on damages and costs.

4. The Plaintiff filed his reply to defence dated 23 February 2012 on 28 February 2012 and takes up the position, whilst denying the counter claim that the amount of $25,622.81 owing to the bank by the Defendant was never disclosed to the Plaintiff at the time of the execution of the agreement.
   
5. The action proceeded to trial on 13 August 2013 on the basis of the following minutes of the pre-trial conference held on 22 February 2013:
   

"Agreed Facts

1. The Defendant was and is the registered proprietor of the land comprised in the Certificate of Title No. 26412 being Lot 5 on DP 6360 situated in the island of Taveuni (said title).
   
2. On or about 31 May 1996, the Defendant and the Plaintiff entered into an agreement wherein the Defendant agreed to sell 4 acres of the land from the said title.
   

Disputed Facts

1. The consideration for the said 4 acres of land from the said title under the agreement dated 31 May 1996.
   
2. The amount the Plaintiff paid to the Defendant pursuant to the said agreement.
   
3. When the Plaintiff first occupied the said land.
   

Agreed issues to be Determined

1. The party who breached the terms and conditions of the agreements.
   
2. Whether the innocent party is entitled for damages for the breach.
   
3. Whether the innocent party is entitled to claim for interest on damages (if any).
   
4. Whether the Defendant is entitled to any restitution.
   
5. Whether either party is entitled for costs."
   

The Hearing

6. At the hearing, on behalf of the Plaintiff, Sadiq Koya, the Plaintiff, and Abhai Kanaiya gave evidence and tendered exhibits PEX1 to PEX 12. The Defendant gave evidence on behalf of the Defendant and tendered exhibits D1 to D5.
   

The Plaintiff's Evidence

7. The Plaintiff in examination in chief testified that he is 76 years old and resides in Taveuni for the last 53 years and knows the Defendant for last 30 years. He admitted that he entered in to an agreement to purchase 4 acres of land in CT 26412. He also stated that the Defendant along with his parents approached him to purchase 4 acres of land in CT 26412 which was under mortgage. He stated that he went to Labasa and met Mr Sarju Prasad, a solicitor for the preparation of the agreement and thereafter went back to Taveuni with the solicitor, his son Michael to meet the Defendant. Son of the solicitor one Michael, had explained the contents of the agreement to the Defendant and he was informed by the Defendant that he must pay $10,000.00 to the bank.
   
8. He testified that he paid $5,000.00 initially to the Defendant and balance of $5,000.00 in installments to Fiji Development Bank. After the execution of the agreement and payment of $10,000.00 to Fiji Development Bank he got the services of one surveyor Mr Inoke to survey the land which cost him $2,800.00. He has thereafter spent $25,000.00 to build 8 bedroom house, $2,000.00 for water tanks and $2,200.00 for fencing. He also stated that he requested the title from the Defendant several times which he promised but never eventuated. The Defendant has never issued any demand notice for bank debt of $25,000.00 from the Plaintiff and never told him that he breached the agreement and also not taken any steps to remove him from the land.
   
9. He also stated that the delay in resolving the matter has affected him as he not received the title of the land he bought for his retirement and seeks specific performance of the agreement he signed with the Defendant.
   
10. In relation to clause 2(c) of the agreement, he testified that his understating of agreement was to pay only $10,000.00 and clause 2(c) was incorporated only to help the Defendant. He also stated the previous occasions that he helped the Defendant when he was in difficult situations. He also said that the Defendant informed him that he sought legal advice for one Mr Kholi and he agreed to transfer the land if $5,000.00 is paid to him.
    
11. The Plaintiff tendered P1, the Sales and Purchase Agreement, P2 to P7 are the payment receipts for $5,000.00, $1,000.00, $1,000.00, $1,000.00, $1,000.00, $300.00 and $700.00 to Fiji Development Bank. P8 was the Survey receipts for $2,300.00, P9 was the payment receipt for $110.00 paid to solicitors, P10 was the Bank Statement of Fiji Development Bank as at 31/12/1997, P11 was the Demand Notice from Kholi and Singh solicitors and P12 was the legal notice by the Koya's solicitors.
    
12. The Plaintiff, under cross examination admitted the execution of the agreement and payment of $10,000.00 to the Defendant. He further admitted that he came to Labasa and met Mr Sarju Prasad as he was his lawyer and gave instruction to him to prepare the agreement for the purchase of the 4 acre land from the Defendant. Upon his instructions, Mr Sarju Prasad prepared the agreement, and signed as a witness to the agreement which was explained to all parties by the son of Mr Sarju Prasad.
    
13. He also admitted that he never paid any money to the Defendant pursuant to clause 2 (c ) of the agreement although he understood clause 2(a), 2 (b) and 2(c) of the agreement. His position under cross examination in relation to clause 2 (c) was that he incorporated the clause to help the Defendant and it was done by the lawyer who he paid for.
    
14. The Plaintiff further stated under cross examination it was the Defendant who came to him and requested him to buy 4 acres of land for $10,000.00 and his parents to contribute $10,000.00 and the Defendant to pay $20,000.00.
    
15. He admitted that he commenced plantation of yaqona and dalo only from 2004.
    
16. In re-examination, he admitted that he agreed to pay the lawyer because the Defendant did not have any money. He further stated that he instructed solicitors on numerous occasions to demand 4 acres of land from the Defendant.
    
17. The testimony of the Plaintiff's second witness, Abhai Francis Kanhaiya, was that he knew the Plaintiff as honest person and also a person who never got involved in any legal issues in the past.
    
18. This witness was cross examined to ascertain the price per kilo of yaqona and dalo in the year 1996 to 1997 and details about the plantation of two varieties. He stated that he did not see what was planted by the Plaintiff in his land as he is not a person who wants to find about other people.
    
19. The Defendant in examination in chief testified that he bought the disputed land from Fiji Development Bank for over $46,000.00 by paying $4,000.00 to Fiji Development Bank in a mortgagee sale and taking over the debts of the previous owner of the land which amounted to over $42,000.00. He said that the Plaintiff approached his father and requested 4 acres from the land which he agreed to, because of his father has agreed to sell 4 acres to him when he was alive. He further stated that after he agreed to sell the disputed land to the Plaintiff, the Plaintiff had met Mr Sarju Prasad, and got him to prepare an agreement on his instruction. He also stated although he signed the agreement, he was not given the draft agreement prior to the execution or explained by any person about the clauses in the agreement.
    
20. He also stated that after his house burnt down, he requested for a copy of the agreement from the Plaintiff which he refused to give. He has obtained a copy through Mr Kholi in Labasa who also advised him to wait for the Plaintiff to file a case and for him to defend.
    
21. The Defendant also stated that the son of the Plaintiff was planting dalo and yaqona on the 4 acres land even prior to 1996 and explained the income that the Plaintiff and his son could have got from the harvest in the disputed land. He also stated that he never sold the disputed land of 4 acres to $10,000.00 to the Plaintiff and he was not in any financial difficulty during that period.
    
22. The Plaintiff tendered DEX1 to DEX5 namely the letter from Mr Hari Ram, certification of Title, Fiji Development Bank statement, Fiji Development Bank statement as at 30/06/1996 and Fiji Development Bank statement as at 31/12/1998 respectively.
    
23. The Defendant under cross examination, stated that he was the successful bidder in the mortgage sale and bought 7 acres land from Fiji Development Bank. He also stated that he initially paid $4,000.00 to Fiji Development Bank and took over the debts of the previous owner amounted to over $42,000.00. The Defendant was cross examined in detail to establish that he had defaulted the payment of monthly installment in full to the bank. The Defendant's position in this regard was that the Fiji Development Bank never sent any letters for defaults but advised him that interest may accumulate if full installment is not paid as agreed between him and the bank. He also admitted that the Plaintiff made payment to the bank totaling $10,000.00 to settle the outstanding loan.
    
24. In relation to the agreement between Plaintiff and Defendant, the Defendant's position was that he never intended to sell the 4 acres of the land for $10,000.00 and Plaintiff still owes him $25,000.00 for title of the land. He admitted that the Plaintiff had constructed a house in the disputed land without any objection from him. He also admitted receiving three letters from the solicitors for the Plaintiff.
    

The Determination

25. At the outset, it is important to examine the nature of the clauses stipulated in the agreement entered into between parties and submitted as PEX1 is for consideration and determination of the issues before court.
    

"1. That the vendor shall sell to the purchaser and the purchaser shall purchase from the vendor all that piece of land known as Ura Waioba Nalovo Wai-Nigeri and Holmhurst and other improvement thereon.

2. That the purchase price shall be the sum of $10,000.00 [Ten Thousand Dollars] and agreed to be paid to the vendor by the Purchaser in the manner following:
   

(a) The sum of $5,000.00 [Five Thousand Dollars] upon seeking consent from the Mortgagee (Fiji Development Bank) for the subdivision and sale of 4 acres from the Master C.T.

(b) The balance of $5,000.00 (Five Thousand Dollars) will be paid into the Trust Account of Messrs. Vuataki Prasad & Associates, Solicitors, Labasa on or before 31 day of December 1996 and which will be paid to Fiji Development Bank upon subdivision and obtaining Title in the Purchaser's name.

(c ) Purchaser shall take over all debts together with interest, Bank charges now owing by the Vendor to the Fiji Development Bank.

3. That the Purchaser shall not be entitled to claim any moneys from the vendor for any extra moneys paid to the Fiji Development Bank and the said Purchaser shall [be] responsible for all debts owing by the said vendor to the Fiji Development Bank which shall be read and construed to be part and parcel of this Agreement." [Underlining mine].

4. That upon payment of all purchase price and Bank Debt due hereunder, provided the Purchaser shall have fully complied with all conditions and stipulations herein contained, the purchaser shall be entitled to and the Vendor will execute in favour of the purchaser a registrable transfer of the said land and all chattles thereon and all costs which may be occasioned by the said Transfer shall be paid by the said purchaser including Vendors and perusal costs.

26. On perusal and examination of the relevant clauses in the agreement, it is abundantly clear that there is an inconsistency between the clause 2 and the other relevant clauses in the agreement.
    
27. The clause 2 of the agreement states that the purchase price of the land is $10,000.00 but rest of the clauses makes it clear that the purchaser is liable to pay the outstanding debts to Fiji Development Bank in addition to $10,000.00.
    
28. In view the above inconsistency in the agreement the court needs to interpret the clauses taking into consideration of the evidence adduced before court to ascertain the intention of the parties at the time of the execution of the Agreement.
    
29. The evidence adduced by the parties before the court clearly reveals that it is the Plaintiff who gave instruction to Mr. Sarju Prasad to prepare the agreement. It was further revealed that the Defendant admitted his obligation to transfer and give effect to the specific performance provided the Plaintiff fulfills his obligation as per the agreement which is the settlement of the outstanding bank balance as at May 1996. It is not in dispute that the Plaintiff has paid only $10,000.00 in full to the bank and the Defendant has settled the outstanding bank balance. The assertion of the Plaintiff was that the Defendant is liable in terms of the agreement to pay the amount settled by him to the bank for the transfer of the title for 4 acres.
    
30. The gist of the entire case revolves on the obligations of the parties as per the agreement. The position of the Plaintiff is that he is liable to pay only $10,000.00 whereas, the Defendant takes up the position that the Plaintiff is liable to pay the outstanding debt to the bank, which $25,622.81 in addition to the $10,000.00 was already paid for the transfer of the land.
    
31. In answering to the questions under cross examination, the Plaintiff admitted his knowledge of the relevant clauses which makes him obliged to pay the bank debt. However, he asserted that he incorporated such clauses, i.e. 2(a), (b), (c), clause 3 and clause 9 as a help to the Defendant.
    
32. It is to be noted that, although there was evidence to the effect that the Plaintiff has helped the Defendant in his difficult times in the past, no evidence was adduced in this case to demonstrate that there was a necessity for the Plaintiff in this instance to help him by incorporation of such clauses in the agreement.
    
33. Chitty on Contracts, a leading authority as law of contract provides sufficient guidelines in interpretation of the inconsistent contract clauses in an agreement, taking in to consideration of the facts and circumstance of the case.
    
34. Chitty on Contracts, 20th Edition, para 836, P.528 states as follows:
    

"Construction against grantor: Another rule of construction is that a deed or other instrument shall be construed more strongly against the grantor or maker thereof. "It is a maxim of law that every man's grant shall be taken by construction most forcibly against himself." Per Lord Coke in Co. Litt 36a, 183a, 183b. In 1949, Evershed M.R. said: We are presented with two alternative readings of this document and the readings which one should adopt is to be determined, among other things, by a consideration of the fact the defendants put forward the document. They have put forward a document which is by no means free from obscurity and have contended ... that it has remarkably, if not extravagantly, wide scope and I think that the rule contra referendum is to be applied..." John Lee & Son (Grantham Ltd v. Railway Executive [1949] 2 All E.R. 581, 583.

35. As I have already stated in my earlier paragraphs that the Plaintiff was the one who gave instruction to prepare the agreement and should be interpreted in view of the above passage from the text.
    
36. In paragraph 833 titled Inconsistent or Repugnant Clauses, Chitty (Supra) says:
    

"Where the different parts of an instrument are inconsistent, effect must be given to that part which is calculated to carry into effect the real intention of the parties as gathered from the instrument as a whole, and that part which would defeat it must be rejected: Walker v Giles (1848) 6CB 662. The old rule was, in such a case, that the earlier clause was to e received and the later rejected, but this rule was a mere rule of thumb, totally unscientific and out of keeping with the modern construction documents.

To be inconsistent, a term must contradict some other tem or be in conflict with it, such that effect cannot fairly be given to both clauses: Pagnan S.p.A v Trdax Ocen Transportation S.A [1987] 2 Lloyd's Rep 342, 350. A term may also be rejected if it is repugnant to the intention of the parties as it appears from the document. However, an effort must be made to give effect to every clause in the agreement and not to reject a clause unless it is manifestly inconsistent with or repugnant to the rest of the agreement. Thus if there is a personal covenant and a proviso that the covenanter shall not be personally liable under the covenant, the proviso is inconsistent and void. But if a clause merely limits or qualifies without destroying altogether the obligation created by another clause, the two are to be read together and effect is to be given to the intention of the parties as disclosed by the instrument as whole [Pagnan S.p v Tradax Ocean Transportation S.A. (Supra at 351)."

37. In relation to the intention of the parties the Chitty on Contracts pages 808, states as follows:
    

"Intention of the parties. The cardinal presumption is that the parties have intended what they have in fact said, so that their words must be construed as they stand: British Movietonews v London District Cinemas [1952] A.C. 166. That is to say, the meaning of the documents or of a particular part of it is to be sought in the document itself: One must consider the meaning of the words used, not what one may guess to be the intention of the parties.": Smith v Lucas (1881) Ch.D. 531, 542, Penn v Simmonds [1971] 1 W.L.R. 1381, 1385 (H of L). However, no contract is made in a vacuum. In construing the document, the court may resolve an ambiguity by looking at its commercial purpose and the factual background against which it is made."

38. Taking into consideration of the above paragraphs from the leading text, the court needs to necessarily interpret the clauses in favour of the Defendant and conclude that the parties intended at the time of the execution of the agreement that the Plaintiff undertook to settle the debt to the Bank in addition to the payment of $10,000.00 made by the defendant as consideration of the agreement. I also conclude in this judgment that the Plaintiff has failed to prove the fulfillment of his complete obligations for specific performance on balance of probabilities.
    

Counter Claim of the Defendant
Claim in Restitution

39. The Defendant contends that the Plaintiff occupied and cultivated 4 acres of the Defendant's land for at least one year before the agreement for the sale of land. The Plaintiff did not pay any rent on the said land and had not purchased the land, by his occupation and cultivation.
    
40. The Defendant contents that the income from the 4 acres land was calculated on the presumption of the income derived by the Defendant from his land and therefore such calculation is hypothetical and cannot be considered as the evidence to establish the exact income derived by the Plaintiff from the plantation of dalo and yaqona. This court of the view that the claim of restitution needs to be in a separate cause and cannot be considered in the present case for proper consideration.
    

Vacant Possession

41. In my view, the Defendant is entitled to the vacant possession of the land if the Plaintiff fails to honour his obligations as per the agreement. The Defendant in his evidence testified that he is agreeable to transfer the title if the debt paid by him to the bank is settled with the accumulated interest for the period that the loan was outstanding.
    

Orders

1. The Plaintiff's claims are dismissed.
   
2. The Defendant is entitled to the vacation possession of the land within three months from this judgment, if the Plaintiff fails to pay $32,318.90 to the Defendant.
   
3. The Defendant is ordered to transfer the title to the Plaintiff upon the payment of $32,318.90.
   
4. A sum of $2,000.00 is payable by the Plaintiff to the Defendant as costs summarily assessed.
   

Susantha N. Balapatabendi
JUDGE