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High Court of Fiji |
IN THE HIGH COURT OF THE REPUBLIC OF FIJI
WESTERN DIVISION
AT LAUTOKA
[CIVIL JURISDICTION]
CIVIL ACTION NO. HBC 150 OF 2011
BETWEEN:
ENGINEER PROCURE CONSTRUCTION FIJI LTD a limited liability company having its registered office at 5 Nagaga Street, Lautoka in Fiji
Plaintiff
AND:
SIGATOKA ELECTRIC LIMITED a limited liability company having its registered office at Valley Road, C-/P.O.Box 113, Sigatoka, Fiji
Defendant
Messrs R Patel Lawyers, Barristers and Solicitors for the Plaintiff
Messrs Pillai Naidu & Associates, Barristers and Solicitors for the Defendant
Date of Hearing : 8 October 2013
Date of Judgment : 13 November 2013
JUDGMENT
INTRODUCTION
[1] I have before me a SUMMONS TO ENTER SUMMARY JUDGMENT (the application) filed by the Plaintiff on 26 April 2013 in conjunction with affidavit sworn on 17 April 2013 by Vijay Zutshi in support of the application with documents marked "VJ1" – "VJ13". The application is made under O.14 r.1; and O.18 r.18 (1) (d) of the High Court Rules 1988 (HCR) and the inherent jurisdiction of this Court. The application seeks for an order that Summary Judgment be entered against the Defendant herein for the following sums and costs of this action:
[2] The Defendant filed affidavit sworn on 26 August 2013 by Vijay Narayan (the Managing Director of the Defendant Company) in reply to together with documents marked "VN1" –"VN4.
[3] On 20 September 2013 the Plaintiff filed affidavit of Vijay Zutshi sworn on 16 September 2013 in reply to affidavit filed by the Defendant in reply (sic).
[4] The application for summary judgment was set down for hearing on 8 October 2013 after granting 7 days for the Plaintiff to file and serve their affidavit in reply to the affidavit in reply filed by the Defendant and 14 days for both parties to file their respective written submissions. The Plaintiff filed its affidavit in reply and its written submissions within the time allowed by the Court. But the Defendant did not file its written submissions within the time permitted by the Court for that purpose. Instead, on 4 October 2013 the Defendant filed another affidavit sworn by Vijay Narayan in reply to affidavit of Vijay Zutshi filed on 20 September 2013 (affidavit of the Plaintiff in reply to affidavit of the Defendant). This 2nd affidavit or supplementary affidavit (if I may call it) in reply by the Defendant has been filed just 4 days before the hearing date without leave of the Court or without consent of the opposite party (the Plaintiff) and the Plaintiff never had an opportunity to respond to this 2nd affidavit in reply filed by the Defendant. The Court therefore on 8 October 2013 made order expunging the 2nd affidavit in reply filed on 4 October 2013 by the Defendant. Nonetheless, the Defendant filed its written submissions on 11 October 2013 i.e. after hearing of the matter completed. I will consider that written submission in this ruling.
[5] By Writ of Summons filed on 23 September 2011 endorsed with statement of claim, the Plaintiff claims from the Defendant the following reliefs:
[6] On 28 October 2011 the Defendant filed statement of defence, denied owing the Plaintiff the sums claimed in the statement of claim or any sum at all and stated that the Plaintiff is well aware that this is a joint venture and that the Defendant is not personally liable to the Plaintiff and prayed that the Plaintiff's claim be dismissed with costs.
[7] In the meantime, on 31 October 2011 the Defendant filed a THIRD PARTY NOTICE against Matapo Limited (ML) in accordance with HCR O.16. That third party notice has been dealt with by Honourable Master Anare Tuilevuka (as he then was). He ruled in his ruling dated 21 February 2012 that the third party proceedings against M L is not prohibited under section 9 of the Momi Bay Development Decree 2010 and that M L however is not entitled to institute 4th party proceedings against FNPF or the FDB under section 9 of the Decree.
[8] On 8 November 2011 the Plaintiff filed its reply to statement of defence denying that there was a joint venture partnership between the Plaintiff and the Defendant for the Momi Bay Project but only had a subcontract with the Defendant in relation to the Momi Bay Project.
[9] Summons for directions was filed on 12 December 2012 and order was made in terms of summons for directions. On 19 March 2013 the Defendant filed its list of documents and affidavit verifying list of documents and the Plaintiff filed its list of documents and affidavit verifying list of documents on 9 April 2013. Afterwards the Plaintiff filed the present summons to enter summary judgment.
FACTUAL BACKGROUND
[10] The relevant facts as stated by the Plaintiff's affidavit in support are as follows:
DEFENDANT'S AFFIDAVIT IN REPLY
[11] The Defendant in its affidavit in reply to the application for summary judgment admitted most of the facts stated by the Plaintiff in its affidavit in support but stated the tenders were submitted based on a joint venture between the Plaintiff and the Defendant and the same was revised due to change in design and cable from XLPE to PVC. The Defendant also stated that the Defendant agrees that the Plaintiff did not have a contract directly with Temo Consulting Limited (TCL) or M L as this was a joint venture between the Plaintiff and the Defendant and the contract was with both the Plaintiff and the Defendant jointly under the joint venture partnership. With regard to the amounts claimed in summary judgment the Defendant states in its affidavit in reply as follows:
"AMOUNTS SOUGHT IN SUMMARY JUDGMENT
ISSUES
[12] The issue to be determine by the Court in these proceedings is whether the Plaintiff is entitled to a summary judgment on the ground that the Defendant has no reasonable defence to his claim.
STATUTORY FRAMEWORK
[13] The Plaintiff may, under HCR O.14 r.1, apply for summary judgment against the Defendant on the ground that the Defendant has no defence to a claim. HCR O.14 deals with summary judgment. O.14 r.1 provides that:
"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 defence to a claim included in the writ, or particular part of such a claim, or has no defence to such a claim or part except as to the amount of any damages claimed, apply to the court for judgment against that defendant.
(2) ...
(3) ... (Emphasis added).
[14] Pursuant to HCR O. 14 r.3 the Plaintiff may obtain judgment against the Defendant on the claim or part as may be just. O.14 r.3 states that:
"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 ought to be tried or there ought for some other reasons 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 as may be just having regard to the nature of the remedy or relief claim".
[15] HCR O. 18 r. 18 reads:
PRINCIPLES RELATING TO SUMMARY JUDGMENT
[16] Honourable Justice Gate (as then he was) in ANZ Banking Group Ltd v Buckley [2004] HBC 272 of 2000 under paragraph 11 has this to say:
"[11] But sometimes the court needs something more than mere assertion. It requires a sufficiency of information or more detail in order to find that there is a genuine and substantial issue to be heard."
[17] In Hanak vs. Green [1958] 2 QB at 29 Sellers LJ set out the principles in relation to entering a summary judgment as follows:
"(a) purpose to enable a plaintiff to obtain summary judgment without trial if he can prove his claim clearly and if the defendant is unable to set up, a bona fide defence or raise an issue against the claim which ought to be tried; (b) defendant may show cause against plaintiff's claim on the merits e.g. that he has a good defence on the merits or there is a dispute as to the facts which ought to be tried or there is a difficult point of law involved; (c) incumbent on a defendant to file an affidavit which deals specifically with the plaintiffs claims and affidavit and states clearly and precisely the defence and facts; (d) set off, which is a monetary cross claim for a debt due from the plaintiff, is a defence. A defendant is entitled to unconditional leave to defend up to the amount of the set off claimed. If there is a set off at all, each claim goes against the other and either extinguishes or reduces it"
DETERMINATION
[18] Engineer Procure Construct Limited, the Plaintiff has filed a summons seeking summary judgment against Sigatoka Electric Limited, the Defendant for the sums (a) $959,250.06 VIP being the amount due and owing for materials and services provided for the Momi Bay Project plus post judgment interest of 4% per annum until the date of full repayment, (b) $228,294.79 VIP being the amount wrongly withheld by the Defendant as the Plaintiff's retention fees plus post judgment interest of 4% per annum until the date of full repayment, and (c) $47,812.50 being the amount charged M L for the Plaintiff's High Voltage Cables and retained it, which sum was due to the Plaintiff plus post judgment interest of 4% per annum until the date of full repayment. The Plaintiff has applied for the summary judgment after the Defendant had filed its statement of defence on the ground that the Defendant has no defence to its claim included in the writ, or particular part of its claim. The Plaintiff may apply to Court for a summary judgment on that ground. The application for summary judgment is supported with affidavit of Vijay Zutshi, MD of the Plaintiff's company (the supporting affidavit). The Plaintiff has complied with the requirement of HCR O.14. r.1, which deals with summary judgment.
[19] The Defendant in its affidavit of Vijay Narayan filed in reply to the application for summary judgment (the affidavit in reply) states, inter alia, that the Plaintiff's claim should be under the joint venture and the same should be against TCL)and ML and therefore the Plaintiff's whole claim is misconstrued and should be dismissed.
[20] In its statement of defence the Defendant stated that the Defendant denies owing the Plaintiff the sum claimed or any sum at all and further stated that the Plaintiff is well aware that this is a joint venture and that the Defendant is not personally liable to the Plaintiff.
[21] The Plaintiff states in the reply to statement of defence that there was no joint venture partnership between the Plaintiff and the Defendant for the Momi Bay Project and further stated that the tender referred to the Plaintiff as the Sub Contractor.
[22] In short, the Defendant's defence is that there was a joint venture partnership agreement between the Plaintiff and the Defendant therefore the Defendant is not liable personally. Does this defence disclose a reasonable or bona fide defence or raise an issue against the claim which ought to be tried? That is what I am going to determine in this judgment.
JOIN VENTURE
[23] Let me decide the issue of joint venture first. Was there any joint venture partnership relationship between the parties? If you want to answer this question, one must find the definition of joint venture.
[24] There is no single body of regulation in Fiji that applies to this type of legal relationship, nor are there settled legal rules that determine the rights and obligations of parties to a joint venture relationship.
[25] The joint venture is a legal relationship to which the law of contract applies. It can be created by conduct, verbally or in any number of documents, but the key terms and conditions of the joint venture relationship should be set out in a written agreement.
[26] The term "joint venture" does not have a technical legal meaning and it is used to describe a variety of business arrangements involving two or more parties pursuing a joint undertaking with a view to mutual benefit (see Halbury's at [305 – 1035]- [305 – 1040]. An unincorporated joint venture is essentially a business relationship in which the participants hold the joint venture hold the joint venture property as tenants in common rather than through ownership of a corporate entity which owns the joint venture property. An incorporated joint venture is a joint venture in which a special purpose company owned by the joint venture participants hold the joint venture property and conducts joint venture operations.
[27] Where the joint venture is unincorporated the relationship between the participants is usually documented in the form of a joint venture agreement. In the case of incorporated joint venture, the key relationship document is the shareholders agreement, supported by the company's constitution.
[28] The learned counsel for the defendant sited a case authority of UNITED DOMINIONS CORPORATION LIMITED V BRIAN PROPRIETARY LIMITED, [1985] HCA 49; (1984-1985) 157 C.L.R. 1. This case is of a little or no assistance to the Defendant's case. The issue in that case was not the same like in the present case. In that case Brian sought to recover from the present appellant ("U.D.C.") its "share" of the surplus of a "joint venture" in which Brian, U.D.C. and others had been participants. However, their Lordships by way of general proposition stated as follows:
"The term "joint venture" is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to a mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. Such a joint venture (or, under Scots' law, "adventure") will often be a partnership. The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than partnership: such as a company, a trust, an agency or joint ownership. The boarder line between what can properly be described as a "joint venture" and what should more properly be seen as no more than a simple contractual relationship may on occasion be blurred. Thus, where one party contributes only money or other property, it may sometimes be difficult to determine whether a relationship is a joint venture in which both parties entitled to a share of profits or a simple contract of loan a lease under which the interest of rent payable to the party providing the money or property is determined by reference to the profits made by the other. One would need a more confined and précised notion of what constitutes a "joint venture" than that which the term bears as a matter of ordinary language before it could be said by way of general proposition that the relationship between joint ventures is necessarily a fiduciary one:"
[29] I would consider the defence of joint venture in light of the above definition.
[30] The Plaintiff brought a winding up action No. HBE 43 of 2009L against the Defendant. That action was subsequently withdrawn by the Plaintiff. In that winding up action, learned counsel for the Defendant submits, the interlocutory judgement of Justice Inoke clearly states that he was of the view that the whole relationship between the Plaintiff and the Defendant pointed to a joint venture and that in order to determine whether it was a joint venture partnership or a contractor-sub contractor relationship there would be need to call oral evidence. I cannot agree. The Plaintiff withdrew the winding up action brought against the Defendant. In fact, Honourable Justice Inoke (as he then was) did not make a finding on the relationship between the Plaintiff and the Defendant but only expressed his view in that regard as an obiter dictum. So, in my opinion there was no a definite judgement pronounced in the winding up action for this court to be bound by.
[31] M L was the developer of the Momi Bay Resort development (the Momi Bay Project). The Consulting Engineers and Project Manager for the Momi Bay Project was T C L. By tender dated 5th May 2005 the Defendant submitted tender for $6,028,562.00 excluding VAT with TCL for the "Electrical High Voltage and Low Voltage Infrastructure Installation" for the Momi Bay Project. In that tender the Defendant nominated the Plaintiff as its sub contractor for the "In ground HV Cable Installation". In December 2005 the Defendant submitted a revised tender to TCL. In June 2006, the Defendant submitted a further revised tender to TCL. In July 2005, the Plaintiff was engaged to commence design and material procurement activities. Between December 2005 and August 2006, the Plaintiff supplied materials, and carried the works it was engaged for. In December 2006, Momi Bay Project was halted as result of financial difficulties. By that time the Plaintiff had supplied 100% of the materials; and carried out approximately 70% of the works it had been engaged to carry out as per the Defendant's tender documents. In September 2011, with the consent of ML and the Defendant, the Plaintiff removed 1400m of 11kVx70mm2AL XLPE cables worth $69,665.40 VIP from the Momi Bay site. The Plaintiff had supplied these cables for the Momi Bay Project But, he says, these were no longer to be utilised when the project was halted. However, the Plaintiff gave credit note to the Defendant. In November 2007 again, with consent of M L and the Defendant, the Plaintiff removed 10 kiosks worth $534,563.76 VIP from the Momi Bay site. The Plaintiff issued credit note to the Defendant. The procedure for submitting invoices and receiving payments was that the Plaintiff would prepare and submit its invoices to the Defendant. The Defendant then pays to the Plaintiff. The Plaintiff says, the Defendant made partial payments and did make any payments on invoice numbers 008 ($148,829.13) and SEL/001 ($48,825.00). According to the Plaintiff, the Defendant owes to it the sum of $959,250.06 VIP being outstanding amount due and owing for materials and services the Plaintiff provided for the Momi Bay Project.
[32] I now turn to the defence of joint venture. The Plaintiff says that he had a sub-contract with the Defendant for the supply of High Voltage Cables for Momi Bay Project. The tender dated 5 May 2005 and submitted to the TCL (VZ3) by the Defendant signed by its Project Manager, Mr Damodar Naicker and General Manager, Mr Vijay Narayan wherein the Plaintiff has been recommend as sub contractors for the high voltage works. It reads as follows:
"... We would also like to take this opportunity to thank you for recommending EPC (Fiji) Limited to us as our sub contractors for the high voltage works."
[33] It should be noted that the Plaintiff is not a party to the tender (VZ3) submitted by the Defendant.
[34] By email dated 25 June 2007 (VZ5), TLC advised the Plaintiff that it had a contract with the Defendant. And the Plaintiff was to direct its enquiries to the Defendant rather than to TCL. This email has been sent to the Plaintiff with Cc to the Defendant on the subject of "Meeting Momi Project Status" .The email reads thus:
"As discussed with Vijay Zutsi last week and Sigatoka Electric Ltd, we advise that all enquiries should be directed via Sigatoka Electric Ltd as they are the company that we have a contract with. We have in the past as a matter of courtesy met directly with your office and provided you with regular updates.
..."
[35] Importantly, TCL through that email categorically denies having any contract with the Plaintiff.
[36] In addition, all Payment Certificates ("VZ11 Schedule C") for the payments the Defendant made to Plaintiff from March 2006 till August 2006 carries the statement that:
"This is to certify that the sub contractor is entitled to a payment of ...."
[37] All the published documents by the Defendant describe and identify the Plaintiff as sub contractor.
[38] The Plaintiff supplied goods and service and submitted invoices to the Defendant for payment and the Defendant settled the invoices after deducting its commission, which now the Defendant say discount and Retention fees. Does it have characteristics of a joint venture? To my mind it does not. If there were a joint venture relationship between the Plaintiff and the Defendant the question of commission and retention fees would not have arisen.
[39] If the Defendant's proposition that it had a joint venture partnership with the Plaintiff were to accept, a number of cumulative conditions had to be satisfied. As stated earlier, joint venture can be created by conduct, verbally or in any number of documents, but the key terms and conditions of the joint venture relationship should be set out in a written agreement. There was no written agreement between the Plaintiff and the Defendant which contained the key terms and conditions of the joint venture relationship. Joint venture is formed with a view to mutual benefit. There must be joint venture property, joint venture accounts and contribution of each joint venture participant. Nothing of this sort was shown by the Defendant in its affidavit in reply. In the absence of these it is very difficult to imply joint venture relationship between the parties. Furthermore, The Defendant is a limited liability company. In the case of an incorporated joint venture, the key relationship document is the shareholders agreement, supported by the company's constitution. In this case, the Defendant did not show that it had shareholders agreement and its constitution supported the alleged joint venture agreement with the Plaintiff. The Plaintiff had all the dealings with the Defendant as the principal contractor. Therefore there is apple evidence to show that the relationship the Plaintiff had with the Defendant is one of sub contractor relationship and not joint venture partnership relationship as argued by the learned counsel for the Defendant.
[40] As His Lordship Anthony Gate (as he then was) stated in ANZ Banking Group Ltd case (supra) the court needs something more than mere assertion. It requires a sufficiency of information or more detail in order to find that there is a genuine and substantial issue to be heard. In my view the issue raised by the Defendant that there was a joint venture relationship with the Plaintiff is a mere assertion only. It is not supported by documents or otherwise. Hence the defence that the Defendant had a joint venture relationship with the Plaintiff does not set up a bona fide defence or raise an issue against the claim which ought to be tried.
STATEMENT OF DEFENCE
[41] In the statement of defence the Defendant denied the Plaintiff's claim and stated that the Plaintiff is well aware that this is a joint venture and that the Defendant is not personally liable to the Plaintiff. In the affidavit in reply and in his written submission state that the Plaintiff has made the claim against the Defendant fraudulently. Whereas the Defendant did not raise that issue in the statement of defence.
[42] The Defendant did not dispute in the Statement of Defence that the Plaintiff supplied materials and carried out works. In affidavit in support (para 37) the Plaintiff sates that Mr. Temo advised that TCL had paid the Defendant the amount it owed to the Plaintiff. The Defendant could not deny this piece of affidavit evidence in his affidavit in reply. Instead, the Defendant says that this is clearly evidence of joint venture and not sub contract.
[43] The Plaintiff claims from the Defendant $959,250.06 VIP being the amount due and owing for materials and services provided for Momi Bay Project. The Defendant says that it is not personally liable to the Plaintiff. Who is then liable to the Plaintiff? The Plaintiff did not have any contract with TCL or ML. The only contract the Plaintiff had was with the Defendant. If the Defendant were not personally liable to the Plaintiff, they should have initiated third party proceedings against the persons who are liable to the Plaintiff. The Defendant failed to do so. The Defendant brought a third party proceeding against ML, but eventually the Defendant abandoned such third party proceedings for one reason or the other, albeit the Court granted permission to proceed with the third party notice. The Defendant submitted that M L rather than the Defendant owes this amount to the Plaintiff. The Plaintiff cannot make his claim against M L because he has no contract with it. It should be noted that the Defendant has already received the sum of $959,250.06 VIP but has failed to pay it to the Plaintiff (see para 39 of affidavit in support).
THE CLAIM
[44] The Plaintiff admitted that he has recovered some of the material (kiosks and cables) worth $604,229.00 with consent of the Defendant and ML. The Plaintiff says the removed items were no longer to be utilized. The Plaintiff had issued credit note for the removed material but the Defendant says the Plaintiff had double charged. It appears that there are some triable issues with regard to removed items. Interestingly, the Defendant did not make any counterclaim against the Plaintiff. In my view the Defendant has satisfied me that there is an issue or question in dispute which ought to be tried in relation to the part of the claim as contemplated in the HCR O.14 r.3. Hence the Plaintiff is entitled to summary judgment for part of its claim. Having considered all material placed before me, I am of opinion that it would be just to grant 65% of the claim by way of summary judgment. Accordingly, I enter summary judgment in favour of the Plaintiff in the sum of $623,512.50 (being 65% of $959,250.06 VIP) with post judgment interest of 4% per annum until the date of full payment.
[45] Another $228,294.79 is claimed against the Defendant for retention fees. The Plaintiff says TCL only charged $76,029.09 for the entire Momi Bay Project. The Plaintiff says, $76,029.09 is retention fees for both the services provided by the Plaintiff and Defendant. The Defendant says that the Plaintiff is not entitled to the sum claimed under the summary judgment as the Plaintiff was overpaid a sum of 259,218.99. The Defendant further says that the retention money was retained by ML not by it. It appears to me that there is a triable issue which ought to be heard. I therefore decline to grant summary judgment on the claim based on retention fees.
[46] Further sum of $47,812.50 VIP being an amount the Defendant charged M L for the Plaintiff's High Voltage Cables and received and retained is claimed under summary judgment. The Defendant states that it charged $47,812.50 since it incurred costs for handling charges, security, insurance, use of truck and driver and cable laying and hire of labour. In contrast, the Plaintiff states that the cables were supplied and installed by the Plaintiff and therefore the Defendant did not incur any handling, security, insurance, transport or labour charges. Again it appears to me that there is a triable dispute in this regard. I therefore decline to grant summary judgment on this claim too.
[47] I feel that I cannot make an order striking out the defence under HCR O.18. r.18 as I have already decided that statement of defence discloses reasonable defence in relation to a particular part of the claim. Learned counsel for the Plaintiff did press and pursue an order under O.18 r.18, albeit application for summary judgment stated that the application is also made under O.18 r.18. Hence, I refrain from making any order pursuant to O.18 r.18.
[48] As a winning party the Plaintiff is entitled to costs of these proceedings. The Plaintiff has made few appearances through his counsel. He had to collect documents to support his application and also incurred disbursements. I therefore summarily assess the cost at $1,650.00.
ORDERS
M H Mohamed Ajmeer
Acting Master
At Lautoka
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