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Deep Sea Holdings Ltd v J. Santaram (Stores) Ltd [2015] FJHC 367; HBC241.2014 (19 May 2015)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION


Civil Action No. HBC 241 of 2014


BETWEEN:


DEEP SEA HOLDINGS LIMITED
a limited liability company duly incorporated in Fiji having its registered office at c/- Naidu Law, Level 2, Central Rentals Building, 293 Victoria Parade, Suva, Fiji.
PLAINTIFF


AND:


J. SANTARAM (STORES) LIMITED
a limited liability company duly incorporated in Fiji having its office registered at 40 Robertson Road, Suva, Fiji.
DEFENDANT


BEFORE: Master Vishwa Datt Sharma

COUNSELS: Mr. Ritesh Naidu for the Plaintiff.

Mr. Ritesh Singh for the Defendant.


Date of Hearing : 18th February, 2015
Date of Ruling : 19th May, 2015


JUDGMENT


INTRODUCTION


  1. This is an application filed by the Plaintiff in terms of a Summons seeking Summary Judgment for the following orders-
  2. The application was strongly opposed by the Defendant.
  3. The parties to the proceedings filed written submissions with case authorities and the matter proceeded for hearing on a defended basis.

PLAINTIFF'S CASE


  1. The Plaintiff commenced proceedings with a substantive application by way of a Writ of Summons against the Defendant filed on 25th August, 2014.
  2. The following Orders were sought for in the substantive application-
  3. The Plaintiff and the Defendant entered into an agreement on 08th October, 2013 wherein the Defendant agreed to sell and the Plaintiff agreed to purchase the said property for a price of $795,000; and the Defendant thereafter executed the instrument of transfer over the Certificate of Title on 09th October, 2013.
  4. According to the Plaintiff the settlement was to take effect on 17th July, 2014, but did not take place due to a typing error on the instrument of transfer which the Registrar of Titles refused to register.
  5. The Plaintiff agreed to rectify the error and the parties agreed to defer the settlement to the following day on 18th July, 2014.
  6. The Defendant failed to attend to settlement on 18th July, 2014 and advised the Plaintiff's Solicitor Naidu Law by telephone that the deal has been cancelled, thereby refusing to perform its obligations under the Sale and Purchase agreement.
  7. The Writ of Summons was served on the Defendant on 25th August, 2014 and the Defendant filed an acknowledgment of service together with a statement of defence and counter-claim respectively.
  8. On 13th November, 2014 the Plaintiff filed a SUMMONS FOR SUMMARY JUDGMENT with AN AFFIDAVIT IN SUPPORT of his application of Albert William Chand.
  9. The affidavit in support deposed by Albert William Chand at paragraph 19 states that the Defendant has no Defence to this action and the Defendant's defence is a sham and has no merit.
  10. The Plaintiff also filed an affidavit of Timaleti Dutt and a further affidavit by Albert William Chand and relied on the same in support of his case seeking summary judgment.

DEFENDANT'S CASE


  1. The Defendant strongly opposed the application for summary judgment.
  2. The Defendant stated that he obtained Capital Gain Tax Certificate from FRCA and the Plaintiff was advised that the Defendant was ready to effect settlement of the sale.
  3. The Defendant admits executing the transfer document in respect of Certificate of Title No. 6983 and was ready for settlement within the stipulated time but the Plaintiff failed to honour the Sales and Purchase Agreement dated 08th October, 2013 by failing to affect settlement within the stipulated time. Thus the agreement lapsed and became null and void on 08th January, 2014.
  4. On 03rd March, 2014 the Defendant requested for settlement monies but received no response from the Plaintiff until 12th June, 2014 when Plaintiff's Solicitor advised that they were ready for settlement.
  5. The Plaintiff advised the Defendant that the date of settlement was scheduled on 17th July, 2014 at midday and the Defendant informed the Plaintiff that if the settlement did not eventuate on 17th July, 2014 then the Defendant will withdraw from the sale and treat the contract terminated due to non-performance by the Plaintiff.
  6. The Plaintiff had informed both Westpac Bank and the Defendant that the settlement would take place on 17th July, 2014 at 1pm; however, settlement did not eventuate.
  7. The Defendant says that the Plaintiff unlawfully and illegally put a Caveat on the Defendant's property Certificate of Title No. 6983 when it had no further interest in the property.
  8. The Defendant denies that the Plaintiff is entitled to specific performance as sought for since the Contract was terminated due to the Plaintiff's conduct and delay.
  9. The Defendant seeks an order for the Plaintiff's claim to be dismissed with costs.
  10. The Defendant filed affidavits of Arpana Reshma Ram and Vishal Shalvindra Prasad and relied on the same in support of his case.

ISSUES


  1. The issues that this court needs to determine are as follows-

LAWS and PRINCIPLES relating to Summary Judgment


  1. The Plaintiff may, under ORDER 86 RULE 1 of the HIGH COURT RULES 1988, apply for summary judgment against the Defendant on the ground that the Defendant has no defence to a claim. HCR O.86 deals with summary judgment. O.86 r. 1 provides that:

"1. (1) In any action begun by writ indorsed with a claim-


(a) For specific performance of an agreement (whether in writing or not) for the sale, purchase, exchange, mortgage or charge of any property, or for the grant or assignment of a lease of any property, with or without an alternative claim for damages, or
(b) -------,or
(c) -------.

The plaintiff may, on the ground that a Defendant has no defence to the action, apply to the Court for judgment.


  1. Order 86 Rule 3 states as follows-

"3. Unless on the hearing of an application under rule 1 either the Court dismisses the application or the defendant satisfies the Court that there is an issue or question in dispute which ought to be tried or that there ought to be some other reason to be a trial of the action, the Court may give judgment for the plaintiff in the action."


  1. Order 14 deals with an application by plaintiff for summary judgment and states as follows-

Rule 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) Subject to paragraph (3), this rule applies to every action begun by writ other than-


(a) an action which includes a claim by the plaintiff for libel, slander, malicious prosecution or false imprisonment,


(b) an action which includes a claim by the plaintiff based on an allegation of fraud.


(3) This Order shall not apply to an action to which Order 86 applies.


28. Order 14 Rule 3 states as follows-


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 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 as may be just having regard to the nature of the remedy or relief claimed.


(2) The Court may by order, and subject to such conditions, if any, as may be just, stay execution of any judgment given against a defendant under this rule until after the trial of any counterclaim made or raised by the defendant in the action.


  1. Order 14 Rule 4 deals with leave to defend and states as follows-

(1) A defendant may show cause against an application under rule 1 by affidavit or otherwise to the satisfaction of the Court.


(2) Rule 2 (2) applies for the purposes of this rule as it applies for the purposes of that rule.


(3) The Court may give a defendant against whom such an application is made leave to defend the action with respect to the claim, or the part of a claim, to which the application relates either unconditionally or on such terms as to giving security or time or mode of trial or otherwise as it thinks fit.


ANALYSIS and DETERMINATION
(Substantive Claim)


  1. The Plaintiff brought the initial substantive action against the Defendant by a Writ of Summons filed on 25th August, 2014 and sought, inter alia, the following orders-
  2. The Plaintiff's claim arose for the following reasons-
  3. The Defendant filed an acknowledgment of service followed by a Statement of Defence and Counter-Claim in order to oppose, rather, contest the substantive statement of claim filed by the Plaintiff within this proceedings.
  4. Subsequently, the Plaintiff filed a Reply and Defence to Counter-Claim, and thereafter the Defendant filed his Reply to Defence to Counter-Claim accordingly.

(Summary Judgment Application)


  1. On 13th November, 2014, the Plaintiff proceeded by filing a Summons to Summary Judgment with An Affidavit in Support and applied for summary judgment against the Defendant on the ground that the Defendant had no defence to the claim and that the Defendant's Defence was a sham and had no merits.
  2. The Summary Judgment application was made under Order 86 Rule 1 of the High Court Rules 1988.
  3. In terms of Order 86 Rule 1 of the High Court Rules 1988 the Plaintiff in an action for specific performance of an agreement for sale of any property apply to court for summary judgment on the ground that the Defendant has no defence to the action.
  4. The Defendant resisting the summary judgment must establish that there is an issue or question in dispute with respect to the claim or the part of the claim which ought to be tried or there ought for some reasons to be a trial of that claim or part. If the defendant fails to do so, then the court will enter summary judgment against the defendant on that claim or part thereof.
  5. Both Counsels representing the parties to the proceedings filed in their respective written submissions coupled with case authorities.

(Sale and Purchase agreement dated 08th October, 2013)


  1. Both parties to the proceedings do not dispute executing a sale and purchase agreement for the purchase of the Defendant's property described as Certificate of Title No. 6983 being Lot 1 on deposit plan No. 1430 situated at Rodwell Road in Suva.
  2. Bearing in mind the nature of the application before this court, it is necessary to read the sale and purchase agreement in its entirety and make particular reference to the following clauses-

'if the purchaser defaults in the performance or observation of any terms and conditions for a period of seven [7] days from the date of notification of such default, the vendor without prejudice to any other remedies available to it:


(i) May enforce this present contract in which case the whole of the purchase monies then unpaid shall become due and at once payable; or

(ii) May rescind this contract of sale and thereupon all monies therefore paid or under the terms of the sale applied in reduction of the purchase money shall be forfeited to the vendor as liquidated damages;

(iii) May sue for specific performance of this agreement;

(iv) May sue for special and general damages.

(d) Clause 12.01 deals with vendor's default and states as follows-

'if the vendor defaults under this agreement for a period of seven [7] days from the date of notification of such default, the purchaser shall be entitled to exercise all its right and remedies under the law and may without prejudice to any other remedies available to it exercise all or any of the following remedies namely:


(i) May rescind this contract of sale and thereupon all monies therefore paid or under the terms of the sale applied in reduction of the purchase money shall be refunded forthwith to the purchaser without deduction; or
(ii) May sue for specific performance of this agreement; or
(iii) May sue for special and general damages;
(iv) May claim damages in addition to seeking specific performance of his agreement.
  1. The Plaintiff referred to Clause 3.01 of the agreement that required the parties to complete the sale and transfer within 3 months from the date of execution of the agreement or such other date as may be mutually agreed in writing between the parties.
  2. The Plaintiff submitted that the sale was not completed and the transfer did not take place within 3 months from the date of the execution of the agreement due to the plaintiff having problems in arranging finance with the Home Finance Corporation. Despite the delay in arranging finance, both the plaintiff and the defendant mutually agreed in writing to extend the date of settlement, time was allowed to pass by and both parties took steps to complete the sale notwithstanding that 3 months had lapsed. The Counsel cited court to numerous e-mails exchanged between the parties to the proceedings from 12th June, 2014 to 17th July, 2014 inclusive.
  3. The Plaintiff submits that agreeing to extend the date of settlement beyond 3 months, the Defendant waived the condition to complete settlement within 3 months and is not entitled to rely thereon and relied on case authority- Solomons v Halloran (1906) NSWSR, vol VII, 32: This case talks about whether time is of the essence and states as follows-

'Wherein time is of the essence, it is well settled that a party may by his conduct and course of dealing waive his right to insist upon strict compliance with the terms of the contract in that respect. If for instance, after the stipulated time has been allowed to pass, a party goes on negotiating for completion of the contract or does any act in respect of it which shows that he treats it as still subsisting, he cannot afterwards abandon it without giving reasonable notice of his intention to do so, except in the case where the waiver has only taken the form of substituting an extended time for that originally specified.


  1. The Plaintiff also relied on local case authority of Tradesplus (Fiji) Limited v Moti Chand, Suva High Court Civil Action No. HBC 65 of 2004, wherein Justice Singh cited the following paragraph from Webb v Hughes [1850] EngR 321; LR 10 Eq. 281 at 287 as follows-

'But if time be made the essence of the contract, that may be waived by the conduct of the purchaser, and if the time is once allowed to pass, and the parties go on negotiating for completion of the purchase, then time is no longer of the essence of the contract.'


  1. Now, in the present case the sale and purchase agreement was executed by the parties on 08th October, 2013 and in terms of clause 3.01 the date of settlement should have been within 3 months' time from the date of the execution, meaning the settlement should be effected and completed on or before 08th January, 2014.

The question that arises is - was the settlement effected and or completed then? The answer is no. But still the parties agreed to complete the settlement on 17th July, 2014 that is the reason why the representatives of the Plaintiff, the Defendant and Westpac Bank staff attended to the settlement at the office of the Registrar of Titles. This in itself explains and confirms that the parties still continued to negotiate and complete the settlement on 17th July, 2014, which was beyond the stipulated time frame of 3 months in terms of the agreement which had already expired on 08th January, 2014. The parties allowed the settlement time frame of 3 months to pass by until the 17th July, 2014.


  1. It cannot be denied by the representatives of both parties to the proceedings and the Westpac Bank staff, the fact that the Titles office discovered an error on the Transfer Instrument and the Plaintiff agreed to rectify the same and produce it to the Title office on the following morning of 18th July, 2014. According to the Plaintiff's representative, all the parties effecting settlement were simultaneously informed that the settlement would take place on the following morning.
  2. Further, the Defendant did in fact informed the Plaintiff by an e-mail dated 17th July, 2014 at 11.26 that the Defendant specifically notified the Plaintiff and other parties that they will withdraw from the sale if the settlement was not effected on the 17th July, 2014.
  3. The question that I need to ask is did the Defendant give the Plaintiff reasonable notice of his intention to withdraw the sale of the property or was it a short notice?
  4. The answer to the above is that the Defendant in fact may have given one day notice on the 17th July, 2014 and it cannot be interpreted as reasonable time in law.
  5. The Plaintiff does not deny the fact that the settlement could not be effected on 17th July, 2014 and admits that the Plaintiff, Defendant, and Westpac Banking Corporation attended the office of the Registrar of Titles with the settlement cheques to effect settlement. However, the Titles office picked up an error on the instrument of transfer and asked that to be corrected before registration can be done or proceeded with.
  6. According to the Plaintiff the settlement clerks from both parties including the Westpac Bank staff agreed to defer the settlement to the next morning on Friday 18th July, 2014 so that the error could be corrected.
  7. The Defendant failed to attend to do the settlement on 18th July, 2014 although informed and allegedly agreed upon, but advised the Plaintiff's solicitors Naidu Law on the same morning of settlement that ' the deal has been cancelled' and refused to perform its obligations under the said agreement.
  8. In the present case before this court, bearing in mind the two case authorities as discussed above of Solomons v Halloran (1906) NSWSR, vol VII, 32 and Tradesplus (Fiji) Limited v Moti Chand, Suva High Court Civil Action No. HBC 65 of 2004; in terms of the sale and purchase agreement,' time was made the essence of the contract', but it was waived by the Defendant and that because 'the time was allowed to pass by till the 17th July, 2014 in order to complete the settlement, 'then time is no longer of the essence of the contract in this case'. The Plaintiff wanted to ensure that the Transfer Instrument was corrected and lodges with the Title office so that the settlement could be completed. Therefore, I find there was nothing wrong in deferring the settlement to the following morning of the 18th July, 2014.
  9. Accordingly, the Plaintiff's solicitors issued a notice against the Defendant in terms of Clause 12.01 of the agreement demanding that the Defendant to specifically perform its obligations and complete the transfer of the said property to the Plaintiff but the Defendant failed to respond to the same.
  10. The Plaintiff also relies on the affidavits of Timaleti Dutt and Albert William Chand respectively and the court has taken the contents into consideration.
  11. On the other hand, the Defendant submitted otherwise as follows-

'On 17th July, at 9.54 am the Plaintiff's solicitor via e-mail sent a copy of the agreement to the Defendant requesting the revised settlement together with the receipt of the city rates payment and said' the deadline for settlement was 12 midday. Despite the delay of almost 6 months, the parties agreed to settle this matter on 17th July, 2014 at 12 pm at the Registrar of Titles office, and this deadline for settlement was fixed by the Plaintiff's solicitor. On 17th July, 2014 at 11.26 am the Defendant emailed to the Plaintiff's solicitor forwarding the settlement statement, rates and copy of CGT certificate and the mentioned documents would be brought by its representative for settlement at 12 pm. Further, the Defendant specifically informed the Plaintiff's solicitor, Westpac Bank and other parties by e mail that they would be ready for settlement at 12 pm at the Registrar of Title's office and clearly stated in that e-mail that 'in the event if the settlement does not take place today, they will withdraw the sale.'


  1. According to the Defendant, the settlement was not effected on 17th July, 2014 as per the time frame fixed by the Plaintiff's solicitor. The transfer documents were verified by the clerical staff of the Registrar of Titles office who noticed an error and the Plaintiff's representative was asked to correct the error before the transfer could be accepted for registration. The settlement did not eventuate on that day, the 17th July, 2014.
  2. The Defendant states that at no point in time, did the Defendant's representative indicate or gave any assurance to other parties (Westpac Bank and Naidu Law) that the settlement date would be deferred and or postponed on the following day which was the 18th July, 2014.
  3. The Defendant further states that on 18th July, 2014, the Plaintiff's Director met with the Defendant's Directors and the Plaintiff offered two month's additional rental plus further $20,000 to proceed with the settlement but this offer was declined.
  4. The Defendant adds that during this meeting it was highlighted that the initial offer was made on 28th May, 2013, some 14 months ago and that the market price of the property had substantially gone up. The Defendant was ready to effect settlement on 17th July, 2014 but it was the Plaintiff who failed to honour its obligations to effect the settlement. (Court was referred to paragraph 10 of the affidavit of Arpana Reshma Ram sworn on 24th December, 2014.)
  5. It was during this meeting that the Defendant raised the fact that the market price of the property had substantially gone up. Therefore, it can be ascertained from this fact that the Defendant had a desire to fetch a higher price for his property and therefore had the intention not to honour its obligations in terms of the sale and purchase agreement and decided not to attend to the settlement on the 18th July, 2014.
  6. The Defendant relies on the affidavits of Arpana Reshma Ram and Vishal Shalvindra Prasad respectively and this court has taken into consideration the contents of both affidavits.
  7. Reference is also made to the case of Metalworks & Joinery Limited v Fiji Islands Revenue & Customs Authority, Justice Pathik applying the Court of Appeal decision delivered by Greig J in Australia Guarantee Corporation (NZ) Ltd-v- Mc Beth [1992] 3 NZLR 54 at 58 held in determining the issue before him on the facts and circumstances of this case:-

'The summary judgment procedure is a simple expeditious way to enable a plaintiff to obtain judgment where there is no real defence to the claim made. See Pemberton v Chappell [1986] NZCA 112; [1987] 1 NZLR 1 at 2-


The essence of the procedure is the plaintiffs own verification by affidavit of his own statement of claim and the allegation made in it: Harry Smith Car Sales Ltd v Clay com Vegetable Supply Co Pty Ltd [1978] 29 ACTR 21-


There has to be balancing between the right of the defendant to have his day in court and to have his proper defences explored and the appropriate robust and realistic approach called for by the particular facts of the case: BilbyDimock Corporation Ltd v Patel {1987] [1987] NZCA 193; 1 PRNZ 84 and Cegami Investment Ltd v AMP Financial Corporation [NZ] [1990] 2 NZLR 308 at p. 313-


'Although the onus is upon the plaintiff, there is upon the defendant a need to provide some evidential foundation for the defences which are raised. If not the plaintiffs verification stands unchallenged and ought to be accepted unless it is patently wrong.'


  1. I have very carefully perused and borne in mind the following before arriving at my final decision -
  2. The power to give summary judgment for specific performance in terms of Order 86 is intended to apply only in clear cases, where there is no reasonable doubt that the plaintiff is entitled to summary judgment, and where it is entitled to judgment and it is inexpedient to allow a defendant to defend for mere purposes to delay the proceedings unnecessarily. Further, it is also important to reiterate at this stage that the ground upon which the Plaintiff may seek summary judgment is when the Plaintiff is able to show that the Defendant has no defence to the action.

Unless, the Defendant satisfies the court that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of the action, the court may give judgment for the Plaintiff in the action. This is the law.


  1. For the aforesaid rational, I find that the Defendant does not have any defence to the Plaintiff's action.
  2. Further, the Defendant has not satisfied this court that there is an issue or question in dispute which ought to be tried by this court.
  3. This is a proper case to grant summary judgment for specific performance in terms of the Plaintiff's application.
  4. Following are the final orders of this court.

FINAL ORDERS


  1. The Plaintiff's application for summary judgment succeeds.
  2. An order for specific performance of the sale and purchase agreement dated 08th October, 2013 to be formalized within 14 days or its earliest convenience.
  3. An order that the Defendant perform all its obligations under the sale and purchase agreement dated 08th October, 2013 in order to convey the said property to the Plaintiff comprised and described in Certificate of Title No: 6983 being Lot 1 on Deposit Plan No: 1430 containing an area of 10.p situated at Rodwell Road, Suva, Fiji.
  4. An order that the Caveat No: 800804 registered against the Certificate of Title No: 6983 be extended until further application by the Plaintiff and or an order of this court.
  5. Costs is summarily assessed at $500 against the Defendant.

Dated at Suva this 19th Day of May, 2015

cc: Naidu Law;
.....................................
VISHWADATT SHARMA
Master of High Court, Suva


Sherani & Co.

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