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High Court of Fiji |
IN THE HIGH COURT OF FIJI
(WESTERN DIVISION) AT LAUTOKA
CIVIL JURISDICTION
| | CIVIL ACTION NO. HBC 128 of 2007 CONSOLIDATED WITH CIVIL ACTION NO. 130 OF 2010 |
BETWEEN
| BIRONDA FIJI LIMITED t/as TRUE BLUE HOTEL a limited liability company incorporated under the laws of Fiji. |
| FIRST PLAINTIFF AND |
| SHANIL NAIDU father’s name Chinmunsami Naidu of Koala Way, Horsley Park, New South Wales 2175, Australia, Businessman/Managing Director. |
| SECOND PLAINTIFF AND |
| AVINESH CHANDRA NAIDU father’s name Muthu Krishan Naidu of Sigatoka, Nadroga/Navosa, Fiji, Medical Practitioner as a trustee of the Sigatoka Club. |
| FIRST DEFENDANT AND |
| SIGATOKA CLUB a club duly registered under the Registration of Clubs Act (as amended). |
| SECOND DEFENDANT |
Appearances : Mr S. Krishna with Mr N. Kumar for Plaintiff
Mr E. Narayan for Defendants
Date of Trial : 11 August 2016 & 1 March 2017
Date of Judgment : 06 July 2017
J U D G M E N T
Introductory
[01] The Plaintiff initiated these proceedings against the Defendants seeking among other things specific performance of a Tenancy Agreement, certain declarative orders and costs. In the second amended statement of claim dated 3 August 2016, the Plaintiffs seek the following orders against the Defendants:
[02] The Defendants filed their statement of defence and sought dismissal of the claim and counterclaimed against the Plaintiff in the sum of $1,144,400.00 with costs.
[03] At the trial of the matter, the Plaintiff gave evidence and called two (2) other witnesses in support of the claim and a Mr Vijay Singh testified on behalf of the Defendants.
[04] Having opted to file closing submissions, both the parties have filed their respective written submissions. I am grateful to both counsel for their elaborative submissions concerning their respective case.
Background Facts
[05] In January 2003, Shanil Naidu, the second Plaintiff and Sigatoka Club, the second Defendant made a verbal agreement to the effect that the second Plaintiff would develop the general property, by adding 2 floors to the property, including approximately 400 seating for an up-market restaurant and bar, accommodation, pool and jetty to run a tourist boat.
[06] In February 2003, they formally entered into an agreement (“the Base Agreement”) wherein the parties agreed that the Plaintiff would develop the first floor of the building on the Property (“the Premises”) and in consideration of the development, the Defendants would give the Plaintiffs a lease to run the property. The trustees including the 1st Defendant, Avinesh Chandra Naidu will not have any objection whatsoever and authorised to carry on with the Project as planned for the betterment of the Club and its members.
[07] The Plaintiffs commenced the development of the Property around the end of February 2003.
[08] As the construction was in progress, the parties entered into a Memorandum of Agreement dated 6 June 2003, (“the Tenancy Agreement”) in respect of the first and second floor with the following conditions:
[09] The Plaintiff developed the Premises substantially and invested, according to the Plaintiff, more than FJD $550,000.00 into the development of the Premises, which included the general upgrade of the ground floor, construction of the first and second floor of the building and addition of rooms for accommodation purposes.
[10] In the meantime, in October 2004, the Defendant entered into another Memorandum of Agreement for the Premises with the Plaintiffs then Caretaker and Manager, Jack Prasad (“the Second Tenancy Agreement”), which the Plaintiff alleges is illegal.
Defendants’ case
[11] On October 2004, the Plaintiff and the second Defendant entered into Memorandum of Agreement dated 5 October 2004 (the Agreement). According to the Agreement, the monthly rental for the premises is $1,800.00 per month. The Plaintiff did not pay the monthly rental, therefore, was in breach of the Agreement. Despite the numerous request made to the Plaintiff by the second Defendant, the Plaintiff failed to pay the rent. As a result of the Plaintiffs' breach, the Agreement was terminated. In the second amended statement of defence, the second Defendant claims:
Agreed Facts
[11] At the Pre-trial Conference Minutes dated 30 November 2010 the parties had agreed to the following facts:
Evidence
Plaintiff
[12] At the trial of the matter, the Plaintiff called three witnesses namely Shanil Naidu, the second Plaintiff (PW1), Madan Sen (PW2) and James Satish Bachu (PW3). The Plaintiffs also tendered the following documents:
3. A copy of the letter from Satish Kumar.
4. Letter dated 1st November 2013 by Sigatoka Town Council.
5. Letter from Sigatoka Town Council to FTIB.
6. Foreign Investment Certificate.
7. A copy of the Financial Statement of the Sigatoka Club.
10. Photos of the damages and harassments done by the Defendants.
11. A letter dated 12th February from Irene Nisha to the Plaintiff.
12. A copy of the letter dated 3rd February 2007.
14. A copy of the letter dated 7th October 2008.
17. Letter dated 17th October 2008 from the Plaintiff to the Defendant.
18. Letter dated 1st October 2008 from the Plaintiff to the Defendant.
19. A copy of a letter from True Blue Hotel.
20. Various copies of Boarding Passes of the Plaintiff.
21. Authority Letter.
22. Letter of Renewal of Tenancy Lease dated 5th February 2015.
[13] PW1 in evidence states that:
[14] Under cross-examination, PW1 states:
[15] PW 2’s evidence is that:
[16] During cross-examination, PW2 confirmed whatever he stated in his evidence in chief.
[17] Summary of evidence given by PW 3 is as follows:
Defendants
[18] The Defendants called only one witness namely Vijay Singh (DW1). He gave evidence on behalf of the Defendants. He in his evidence states:
[20] Under cross-examination he DW1 states:
Discussion
[21] The Plaintiff’s claim stems from a tenancy agreement dated 6 June 2003. The agreement includes the following conditions:
[22] Essentially, the arrangement between the Plaintiff and the Defendant was that the Plaintiff would develop the first floor of the building on the property and in consideration of the development, the Defendant would give the Plaintiff a lease to run the property. This arrangement resulted in the tenancy agreement.
[23] It is not in dispute that on 6 June 2003, the Plaintiff and the Defendant executed the tenancy agreement.
[24] The Plaintiff primarily seeks a declaration that he is entitled to the tenancy of the subject property till November 2018. The declaratory claim is based on the premise that the Defendant had extended the tenancy agreement for a further period of three years from November 2015 when the agreement expired.
Whether the tenancy agreement was extended
[25] The question arises whether the agreement was extended by the Defendant for a further period of three years upon expiration in November 2015.
[26] The Defendant denies extending the agreement for a further period of three years after expiration as claimed by the Plaintiff.
[27] According to the Plaintiff, he exercised his option to renew for a further period of three years, he made an application to the Defendant to that effect and the Defendant approved.
[28] Cl.6 of the Tenancy Agreement provides:
“If the tenant desire to have a further tenancy of the said premises granted to him to a further period of three (3) years after the expiration of the term hereby granted and gives to the landlords notice in writing to that effect not less than three months prior to the expiration of the term hereby created then provided that at the date of exercise of the powers under this clause there is no subsisting breach by the tenant of the Covenants, terms, conditions and provisions herein contained the Landlords shall grant to the Tenant and the Tenant shall accept a lease of the said premises for a period of three (3) years commencing on the day following the date of expiration of the term hereof upon and subject to the covenants, terms, conditions and provisions contained herein and agreed to between the parties.”
[29] By his letter dated 5 February 2015 (PE 22), the Plaintiff seeks an extension of the tenancy in this way:
“Thursday 5th of February 2015
The Secretary
Sigatoka Club
Sigatoka
Dear Sir,
RE: RENEWAL OF TENANCY LEASE NOTICE OF PROPERTY SITUATED AT 1ST FLOOR & 2ND FLOOR ON TOP OF SIGATOKA CLUB, TRADING AS BIRONDA FIJI LTD T/A TRUE BLUE HOTEL
Notice is hereby given to the SIGATOKA CLUB, ITS MEMBERS AND BOARD OF TRUSTEES that Bironda (Fiji) Limited trading as True Blue Hotel is exercising its rights, duties, obligations as to the said renewal of the said lease which will expire later this year.
Bironda (Fiji) Limited is seeking to express renewal of the said lease for a further... period of 3 years ...
Sgd/
Managing Director ...
Bironda (Fiji) Limited
T/A True Blue Hotel”
[30] PW1 stated in his evidence that one of his staff members delivered the letter to the Defendant’s Office. DW1’s evidence in this regard was that the letter may have been delivered to the office of the Defendant. Significantly, PW2 who was the member of the second Defendant and had authority from the Defendants to take legal decision on behalf of the Defendants confirmed in his evidence that the letter was put in the meeting of the members of the Defendants and that it was agreed by all members to grant renewal of the tenancy to the Plaintiff.
[31] It is noteworthy that if the Defendant had not received any application for renewal of the tenancy, the Defendant would have issued quit notice on the Plaintiff if he is still in occupation after expiration the tenancy and if there were non-compliance with the notice, then the Defendant would have initiated eviction proceedings against the Plaintiff. None of these occurred.
[32] The Defendant did not write to the Plaintiff informing him of their intention not to renew the agreement for a further period of three years upon expiration of the agreement. Nor did they take out any eviction proceedings against the Plaintiff after the agreement expired in November 2015. In the absence of any of these actions by the Defendants, the Court can reasonably infer that the Defendant had approved the extension of the agreement for further three years commencing November 2015. I would, therefore, find that the Defendants by their conduct extended the agreement for a further period of three years entitling him to have agreement till November 2018.
Breach of the agreement
[33] I now turn to the issue of breach of the agreement.
[34] The Plaintiff alleges that the Defendant breached the tenancy agreement firstly by entering a second agreement with a Jack Prasad for the same subject property while the first agreement with the Plaintiff still existing and secondly through their acts of harassment and intimidation.
Second agreement
[35] While the Plaintiff was in Australia, in October 2004 the Defendant entered into another tenancy agreement with a Mr Jack Prasad who was the care taker and manager of the Plaintiff. As a result of this agreement, Jack Prasad took over the business of the Plaintiff and paid $20,000.00 to the Defendant from the Plaintiff’s account. He also paid increased rate of rental ($1,800.00) for the property.
[36] The Plaintiff gave evidence to the effect that he had to travel to Fiji from Australia as the Plaintiff (True Blue Hotel) was not allowed to enter the premises of its own property. The Plaintiff complained of this to Police and the Fiji Trade and Investment Bureau. They did their investigation and the business was returned to the Plaintiff.
[37] The plaintiff is not privy to the second agreement. It is made with an employee of the Plaintiff without the Plaintiff’s company seal.
[38] PW2 who was the president of the Defendant (Sigatoka Club) in his evidence stated that: The agreement made between Jack Prasad and the Club is illegal. It was not signed by the Director, Shanil Naidu because the club had entered into a legal agreement in which Sanil Naidu was carrying out works. Jack Prasad was the only employee of Sanil Naidu and a member of the Club and as such he used his influence on the trustees to get into that contract.
[39] The second agreement the Defendant entered with Jack Prasad has been made while the first agreement entered with the Plaintiff was still valid and existing. The second agreement is silent about the first agreement. The Defendant should have terminated the first agreement before entering the second agreement. I would, therefore, find that the second agreement the Defendant entered into with Jack Prasad is illegal and not binding on the Plaintiff. I also find that Defendant breached the agreement with the Plaintiff by entering an illegal agreement with an employee of the Plaintiff, Jack Prasad.
Injunction
[40] After the second agreement, the Defendant started to or caused to harass and intimidate the Plaintiff in order to disturb the Plaintiff’s business. As a result, the Plaintiff had to apply for interim injunction to prevent the Defendants from committing acts of harassment and intimidation. The court, considering the Plaintiff’s application, on 23 July 2010 granted an interim injunction as sought by the Plaintiff to be valid until the final determination of the substantive claim.
[41] The Plaintiff gave evidence on how the Defendant and their agents harassed and intimidated him and his business. He stated in his evidence that: The Defendants were refusing the entry of the guests of the 1st Plaintiff by locking the main gates, not providing a key for the gates locked, sabotaging the gas and the water supply by shutting it off, making noise in early hours of the morning disturbing guests, urinating in front of guests, trespassing on the premises, throwing stones and beer bottles, demanding extra rent and not obeying the court order and the Defendants stealing electricity and water. He tendered photographs of the acts and intimidation.
[42] The Plaintiff’s evidence concerning the harassment and intimidation was confirmed by PW2 who is the member and former president of the Defendant (Sigatoka Club).
[43] DW1 merely asserted that no such things happened as alleged by the Plaintiff. DW1 could not disprove that the Plaintiff’s complaint to Police and then to Fiji Military about the acts of harassment and intimidation by the Defendant or their agents.
[44] I accept the Plaintiff's evidence that he and his business was harassed and intimidated by the Defendant and/or their agents. I accordingly find that the Plaintiff is entitled to the injunction sought in the claim.
General Damages
[45] The Plaintiff also claims general damages against the Defendant for breach of contract and loss suffered as a result of harassment and intimidation.
[46] PW1 states in his evidence that he spent approximately a sum between $400,000.00 and $500,000.00 on the development and upgrading the Defendant’s property in term of the agreement.
[47] The Defendant denies that the Plaintiff developed the building as agreed.
[48] The Plaintiff’s development work reflects on the Financial Statement of the Defendant (PE 7), where it states that the Defendant owes the building investor (Plaintiff) a sum of $400,000.00. The Defendant could not deny the fact that their financial statement reflecting this figure. In addition, PW2, the member and former president of the second Defendant also confirmed that the Plaintiff had spent around $400,000.00 on the building development. I, therefore, have no problem in accepting the Plaintiff’s evidence that he spent a sum of approximately $400,000.00 on the building development.
[49] Giving evidence on the acts of harassment and intimidation, PW1 states that: The Defendants were refusing the entry of the guests of the 1st Plaintiff by locking the main gates, not providing a key for the gates locked, sabotaging the gas and the water supply by shutting it off, making noise in early hours of the morning disturbing guests, urinating in front of guests, trespassing on the premises, throwing stones and beer bottles, demanding extra rent and not obeying the court order and the Defendants stealing electricity and water. He tendered photographs of the acts and intimidation (PE 10). Because of this harassment and intimidation, his (the Plaintiff's) guests demanded refunds, had to be compensated and he had to travel from Australia to solve the issues or problems raised by the Defendants (PE 20). He also tendered a letter from Ms Nisha confirming the above acts and harassment (PE 11).
[50] The Plaintiff gave straightforward evidence on the Defendant’s act of harassment and intimidation. He lodged police complaint about the Defendant’s acts. He even complained to the Fiji Military. Eventually, he had to obtain an injunction against the Defendants to restrain them from harassing and intimidating the Plaintiff and/or their guests.
[51] PW2 confirmed that the acts of harassment and intimidation did happen and that the Plaintiff and his business were disturbed immensely due to the Defendants acts of harassment and intimidation.
[52] In breach of the agreement made with the Plaintiff, the Defendant entered into a second agreement with Jack Prasad, the Plaintiff’s Caretaker and Manager.
[53] I am satisfied that the Plaintiff and his business suffered loss and damages as result of the acts of harassment and intimidation and breach of the contract. I am also satisfied that the Plaintiff’s peaceful enjoyment of the property was greatly disturbed or interrupted by the Defendant’s acts. The Plaintiff had to travel from Australia to deal with all these issues. I, considering all, assess the loss and damages at $50,000.00. I accordingly award a sum of $50,000.00 to the Plaintiff for loss and damages suffered. However, I would decline to grant interest on the award of general damages. This is because both parties have contributed to the delay. The action was instituted in 2007 and the Plaintiff was able to obtain an injunction to stop the Defendant's acts of harassment and intimidation. The Plaintiff could run his business smoothly after obtaining the interlocutory injunctive orders in July 2010.
Counterclaim
[54] The Defendant counterclaims in the sum of $1,144,400.00. The counterclaim is based on the mesne profit of the rental from 1 November 2004.
[55] The Plaintiff is paying the rent in accordance with the agreement. There is no evidence that the Plaintiff is in arrears of the rent. Although the rent agreement provides for the review and reassessment of the rent payable under contract at two-year interval for the remaining ten year period, this was never exercised by the Defendant. The issues that the rent was reassessed and the Plaintiff failed or refused to pay the rent according to reassessment and that he is in arrears of the rent did not arise at the trial.
[56] There is no evidence whatsoever to prove the counterclaim. I would, therefore, dismiss and struck out the counterclaim as baseless.
Costs
[57] As a winning party the Plaintiff is entitled to costs of these proceedings. He brought this action in 2007. He is appearing through his solicitors throughout the proceedings. He has made a few interlocutory application in the meantime. As I said elsewhere in this judgment both parties contributed to the delay. I, taking all into my account, summarily assess costs at $3,500.00.
Conclusion
[58] On the evidence adduced by the Plaintiff, I am satisfied that the Plaintiff has, on the balance of probability, proved its claim. I, on that basis, find that the Plaintiff exercised its option to renew the tenancy agreement with their terms and that there is no evidence whatsoever to establish that the Defendant terminated the agreement. Therefore the Plaintiff is entitled to the declaration that they are entitled to the tenancy of the property in dispute till November 2018. I also find that there should be an injunction in place to protect the Plaintiff’s right under the agreement. I accordingly grant an injunction as prayed for in the prayer (c), (d) and (e) of the second amended statement of claim. I further find that the Plaintiff is entitled to general damages for breach of the contract on the part of the Defendant and for loss suffered as a result of the Defendants’ and/or their agents’ acts of harassment and intimidation. I award a sum of $50,000.00 to the Plaintiff as general damages. However, I decline interest on the sum allowed as general damages. The Plaintiff is also entitled the summarily assessed costs of $3,500.00. I decline to grant punitive damages and special damages, for they are not proved.
[59] As to counterclaim made by the Defendant, I find that the counterclaim is not proved. As such, I dismiss and struck out the counterclaim as baseless.
The Result
DATED THIS 6 DAY OF JULY 2017 AT LAUTOKA
........................................
M.H. Mohamed Ajmeer
JUDGE
Solicitors:
M/s. Krishna & Co, Barristers & Solicitors for Plaintiffs
M/s. Patel Sharma Lawyers, Barristers & Solicitors for Defendants
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