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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 32 OF 2013
BETWEEN:
DENARAU CORPORATION LIMITED
a company duly incorporated under the laws of Fiji having its registered office at Level 10, FNPF Place, 343 Victoria Parade, Suva
in the Republic of Fiji.
PLAINTIFF
AND:
VIMAL DEO Director as Trustee of the DEO FAMILY TRUST
of Lot 3 Paradise Point, Denarau Island, Nadi in the Republic of Fiji.
DEFENDANT
Appearances
Mr S A Lateef for plaintiff
Mr A K Narayan for defendant
Date of Hearing : 20 November 2014
Date of Judgment: 24 February 2015
RULING
[01] This ruling concerns with a preliminary objection raised by the defendant.
[02] On 23 August 2013 plaintiff, DENARAU CORPORATION LIMITED ('DCL') filed a summons for summary judgment ('the application') seeking the following orders:
[03] In support of the application DCL filed two affidavits of RUPENI FONMANU, namely (i) affidavit in support sworn on 16 August 2013, (ii) supplementary affidavit sworn on 14 February 2014 and two affidavits in reply; one is sworn on 31 March 2014 and other on 18 September 2014.
[04] The application is made pursuant to Order 14 Rule 1 of the High Court Rules 1988 ('HCR').
[05] Opposing the application, Vimal Deo (defendant) filed two affidavits namely (i) affidavit in reply to affidavit of Rupeni Fonmanu sworn on 16 August 2013 and (ii) affidavit in reply to affidavit of Rupeni Fonmanu sworn on 31 March 2014.
[06] At hearing only the defendant handed in his written submissions. But the plaintiff sought time to file his. The court accordingly granted 14 days for the plaintiff to file and serve its written submissions and 14 days thereafter for the defendant to file and serve his replying submission. Both parties have complied with this direction.
Background
[07] DCL is a body corporate which administers, manages and controls Denarau Island on an integrated basis in accordance with its constitutional documents, being the Charter of Denarau Island, Articles of Association and By-laws, is the regulatory body established as a body corporate with perpetual succession and can sue and be sued in its own name. DCL states that, it is empowered under the said constitutional documents to impose levies on owners of land on Denarau Island who by virtue of being owners are also its shareholders. The costs incurred by DCL for administering, managing and controlling the Island in accordance with its Charter and Articles of Association are to be borne by its shareholders, in manner catered for in its Articles of Association. DCL states that, the defendant as an owner of the lots contained on State Lease No. 16815 being lot 7 on SO No. 5486 and on State Lease No. 16822 being lot 11 on SO No. 5486 (Lots") on Denarau Island and as a shareholder in DCL is liable to pay the levies imposed by it in accordance with the constitutional documents governing the affairs of Denarau Island. According to DCL the defendant is in arrears with regard to levies owing towards the said Lots, $59,284.63 in respect of Lot 7 and $18,518.96 in respect of Lot 11. In December 2012, a fifteen (15) day written Demand Notice by DCL was served on the defendant but he has failed or neglected to make the payment. In February 2013, DCL through its Solicitors also served a final seven (7) day Demand Notice via Registered mail demanding payment of the outstanding levies. As the defendant failed to make payment as demanded DCL instituted these proceedings to recover the said amount from the defendant.
The Law
[08] The relevant rule that deals with summary judgment is O. 14, rr.1 & 2 of HCR which, so far as relevant, states:
'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 to a 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) ...
(a)...
(b)...
(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 no 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.' (Emphasis provided).
Determination
[09] The defendant has taken some preliminary issues against the plaintiff's application for summary judgment. The preliminary issues are as follows:
(i) The Affidavit is irregular and produces no authority to swear affidavits attached or resolution to bring the action.
(ii) The Affidavit is not properly sworn as it is in breach of Order 41 Rule 8 of the High Court Rules.
(iii) Cause of action in Statement of Claim is based on shareholding and the affidavit in Support is inconsistent.
[10] I will deal with these objections in turn.
Irregular affidavit
[11] Firstly, the Defendant objects to the Plaintiff's application and submits that the Application be dismissed as the Affidavits of Rupeni Fonmanu should not be received in evidence to support the application as there is no authority for Mr Rupeni to swear affidavit on behalf of the plaintiff company. He relies upon s.40 of the Companies Act (C A). That section provides that:
"A document or proceeding requiring authentication by a company may be signed by a director, secretary or other authorised officer of the company, and need not be under its common seal."
[12] Mr. AK Narayan, counsel for the defendant submits that, Affidavit is irregular as there is no authority attached to show that the deponent is authorised to swear affidavit on behalf of the company.
[13] Rupeni's affidavit of 14 February and 31 March 2014 state that, 'I am the Chief Executive Officer of the plaintiff and have its authority to swear this affidavit. In term of s.40 of CA a document or proceeding may be signed by a director, secretary or other authorised officer. Mr Rupeni merely states that he is authorised to swear affidavit on behalf of the plaintiff, a company. A company being an artificial person cannot act by itself. It should act through agent. That agent must have proper authority to act on behalf of the company. Merely stating that the deponent is Chief Executive Officer of the plaintiff and has authority to swear affidavit on behalf of the plaintiff company is not sufficient. He must state the person who gave that authority, whether it is a director or secretary or other authorised officer of the company. In the absence of this the deponent will lack authority to swear affidavit on behalf of the company. Counsel for the plaintiff argues that, provisions of the HCR do not require any authority to be annexed by the deponent swearing an affidavit in a professional, business or other professional capacity. For my part, I would say it is preferable to show authority when a deponent swear an affidavit on behalf of a company because the deponent is giving evidence by affidavit. The court cannot take judicial notice in this regard. The deponent must show that he has proper authority to swear affidavit on behalf of the plaintiff which he has failed to do so.
[14] It should be noted that Mr Rupeni's affidavit of 18 September 2014 (third affidavit in reply) attaches an authority to swear affidavit on behalf of the plaintiff. That authority is dated 16 September 2014 and there is nothing to suggest that that authority operates retrospectively. The subsequent authority does not cure the defects of Mr Rupeni's previous affidavits.
[15] Another objection raised by counsel for the defendant in relation to Mr Rupeni's affidavit is that the affidavit is sworn against O. 41, r.8 of HCR. In that counsel submits that, the affidavit in support (initial affidavit) was sworn on 16 August 2013 before Mr F Khan. The supplementary affidavit was sworn on 14 February 2014 before Mr Thomson Lee. Both these practitioners are and were principal and associate respectively in the practice of Messrs Faiz Khan Lawyers. Mr Lee has since then left. Messrs Faiz Khan Lawyers happen to be city agent for Messrs Lateef & Lateef Lawyers, solicitors for the plaintiff.
[16] Counsel for the plaintiff submits that, the affidavits of Rupeni are not irregular as these were signed in the presence of Commissioner for Oaths and unknown by Mr Rupeni that two lawyers concerned are city agent for the plaintiff's solicitors. According to him, it is not in breach of O.41, r.8 as Messrs Faiz Khan Lawyers are not lawyers in carriage of the matter and they are plaintiff's solicitors' well known city agents are involved more procedurally than having any significant knowledge of the gist of the action.
[17] O. 41, r. 8 of HCR provides:
"No affidavit shall be sufficient if sworn before the barrister and solicitor of the party on whose behalf the affidavit is used or before any agent, partner or clerk of that barrister and solicitor"
[18] I have read both affidavits of Mr Rupeni, affidavits sworn on 16 August 2013 and 14 February 2014. His affidavit of 16 August was sworn before Mr Faiz Feroz Khan, principal of Messrs Faiz Khan Lawyers (FKL) who is city agent of Messrs Lateef & Lateef Lawyers, plaintiff's solicitors. His affidavit of 14 February was sworn before Mr Thomson Lee who was an associate of Messrs Faiz Khan Lawyers. Interestingly, counsel for the plaintiff does not deny that Messrs F K L is plaintiff's solicitors' city agent.
[19] Hon. Justice Gates (as he then was) in State v His Excellency the President of the Fiji Islands & 4 others, ex-parte I. Iqbal A Khan [2000] FJHC 271; [2000]1FLR 241 (12 October 2000) dealt with this issue. His Lordship citing Bourke v Davis [1889] UKLawRpCh 180; (1890) 44 Ch. D. 110 at 126 said:
"This particular observation appears to have been directed at the importance of a deponent understanding what was in the affidavit and of accepting the statements therein as his or her true evidence, independently from the solicitor who assisted in drafting the affidavit".
[20] In Singh & Ots v Mehendra Pal Chaudhry & Ots [2005] FJHC 363; HBC0291.2005 (18 October 2005) Finnigan, J observed:
"At the outset the supporting affidavit of Arvind Kumar Singh is challenged on the ground that it is not properly sworn. Counsel for Ba Town Council points out that is sworn before a solicitor in the employ of the City Agents of the Solicitors for the applicants. He relies on the High Court Rules Order 41 Rule 8. My ruling is that by the terms of Rule 8 this affidavit clearly must be held "not sufficient" and therefore it cannot be read" (emphasis added)
[21] O.41, r. 8 of HCR expressly prohibits affidavit to be sworn before barrister and solicitor of the party. If an affidavit sworn before the barrister and solicitor of the party on whose behalf the affidavit is to be used or before any agent, partner or clerk of that barrister and solicitor, that must be held 'not sufficient' and therefore it cannot be read.
[22] Obviously, Mr Rupeni's affidavit of 16 August 2014, the initial affidavit filed in support of the application for summary judgment, was sworn before the plaintiff's solicitors' city agent, and Mr Rupeni's affidavit of 14 February 2014, the supplementary affidavit filed in support of the application for summary judgment, was sworn before an associate of the plaintiff's solicitors' city agent. These affidavits were clearly sworn against O.41, r. 8. I would therefore hold that both the initial affidavit and the supplementary affidavit filed in support of the application for summary judgment are insufficient and therefore cannot be read in evidence.
[23] Mr Lateef submits that Mr Rupeni has sworn an affidavit in his occupational capacity and which does not require the deponent to annex any proof of authority. To substantiate this contention he cited O.41, r. 1(4) of the HCR. That rule provides:
'(4) Every affidavit must be expressed in the first person and, unless the Court otherwise directs, must state the place of residence of the deponent and his occupation or, if he has none, his description, and if he is, or is employed by, a party to the cause or matter in which the affidavit is sworn, the affidavit must state that fact.
In the case of a deponent who is giving evidence in a professional, business or other occupational capacity the affidavit may, instead of stating the deponent's place of residence, state the address at which he works, the position he holds and the name of his firm or employer, if any (Emphasis provided).
[24] It would be clear that proper details of the deponent's professional address should be provided when giving evidence in professional, business or occupational capacity. Mr Rupeni's affidavit states 'I... of Nadi in the Republic of Fiji, Chief Executive Officer...' It should be noted his affidavit fails to provide his professional address.
[25] Hon. Justice Gates (as he then was) in Buckley & Ors v Sutton & Ors [2002] FJHC 302; HBCo350.2001L (8 July 2002) held:
'It is sufficient for professional witness to give professional addresses. Insufficient to merely state; "I, XYZ of Nadi, Company Director". No deponent gave sufficient details of their respective addresses'.
[26] Mr Rupeni in the affidavits states that, I, Rupeni Fonmanu of Nadi... He does not provide sufficient details of his address. If he were a professional witness, he would have given the address at which he works in compliance with O.41, r.1 (4). As Mr Rupeni's affidavits fail to state sufficient details of his address, it contravenes O.41, r. 1 (4) of HCR.
[27] Counsel for the plaintiff submits that, the defendant by raising technical objection at late stage of the proceedings attempts to avoid the real issues to be determined. He invoked O.2, r.1 (1) of HCR which provides:
1.-(1) Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these Rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.
[28] For my part, I would say failure to file proper affidavit in an application for summary judgment, cannot be considered a mere irregularity that could be cured under O.2, r.1 (1). The phrase 'in any other respect" in that rule, in my view, does not cover an affidavit filed without authority or an affidavit sworn before barrister and solicitor of a party or his agent against O.41, r.8 and O.41, r.1 (4).
[29] Counsel for the plaintiff further submits that, the defendant is not entitled to raise issues of irregularities in these proceedings at this late stage without having made a proper formal application for same. He relies on O.2, r.2 of HCR which states:
'2.-(1) An application to set aside for irregularity any proceedings, any step taken in any proceedings or any document, judgment or order therein shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity.
(2) An application under this rule may be made by summons or motion and the grounds of objection must be stated in the summons or notice of motion.'
[30] With due respect to counsel, this is not an application to set aside proceedings for irregularity hence O.2, r.2 (2) has no application. The defendant has taken a preliminary objection in relation to evidence which the plaintiff attempts to lead against the defendant. Preliminary objection on point of law could be taken at any stage of the proceedings before judgment or order is given. Moreover, evidence must be objected at the time when it is sought to bring. The plaintiff attempts to lead or read affidavit evidence in these proceedings. So the defendant is entitled to take objection in relation to that affidavit on the ground that it is defective. There is no need for the defendant to file a formal application to raise such objection. State v His Excellency the President of the Fiji Islands & 4 others, ex-parte I. Iqbal A Khan shows that no O.2, r.2 application was required to be filed by the party taking an objection to the use of affidavits. I therefore reject the submission advanced by counsel for the plaintiff that the defendant is not entitled to raise issues of irregularities without making a formal application.
[31] Greater lengthy submissions were made by both parties on the issue of requirement in law that a company has to file a Resolution to institute any legal action. I do not need to decide on this issue as it affects the substantive matter. It will be open to the defendant to raise such issues as preliminary issues at trial.
[32] O.14, r.2 requires that an application for summary judgment 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. The burden is on the plaintiff who makes an application for summary judgment to establish a case for summary judgment through affidavit evidence supported by document. The plaintiff's both affidavits filed by its representative, Mr Rupeni in support of the application for summary judgment are bad and insufficient to support such an application.
Conclusion
[33] For the reasons set out above, I am perfectly persuaded by the argument advanced by counsel for the defendant that the affidavits filed in support of summary judgment are defective and insufficient. It follows that the plaintiff fails to verify the facts on which the claim to which the application is based. I would therefore uphold the preliminary objection raised by the defendant. In my view, Mr. Rupeni's affidavits of 16 August 2013 and 14 February and 31 March 2014 are thoroughly bad affidavits in support of a summons under HCR, Ord 14. I would accordingly dismiss the application for summary judgment with cost which I will assess summarily.
Costs
[34] The defendant as successful party is entitled to costs of these proceedings. The defendant seeks costs of this application in the sum of not less than $8,500.00 to take into account the voluminous affidavit, the number of calls including one aborted hearing. Counsel for the plaintiff submits that, the defendant should bear substantial costs for causing delay to the summary judgment through technicalities. I note the summary application itself is filed belatedly. The plaintiff could have filed the application for summary judgment after the defendant filed his acknowledgment of service. Acknowledgment of service was filed on 11 March 2013. But summary judgment application came in on 23 August 2013, viz. after the defendant filed the reply to defence to counterclaim on 13 May 2013. O.14, r.1 (1) allows the plaintiff to apply for summary judgment after the defendant has given notice of intention to defend the action. The defendant in the reply to Mr Rupeni's affidavit of 16 August 2013 has stated that he responds without prejudice to his counsel taking objection to the use of the affidavit at the hearing of the plaintiff's application for summary judgment. This shows the defendant has given prior notice to the plaintiff that an objection will be taken at the hearing. In the circumstances, the plaintiff had every opportunity to re-swear and re-file its affidavits in support. Counsel for the plaintiffs nevertheless maintained that, at any rate, the original and supplementary affidavits were sufficient affidavits. I therefore, taking all into my consideration, fix the costs at $3,500.00. The plaintiff will pay the defendant the costs in 28 days of the date of this ruling.
Final Result
[35] The final results are as follows:
..........................................
M H Mohamed Ajmeer
Puisne Judge
At Lautoka
24/02/2015
Solicitors:
For plaintiff: Messrs Lateef & Lateef Lawyers
For defendant: Messrs A K Lawyers, Barristers & Solicitors
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