Beachcomber Island Resort Ltd v International Freight and Clearance Services Ltd [2018] FJHC 318; HBC188.2012 (20 April 2018)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION
AT LAUTOKA

[CIVIL JURISDICTION]

Civil Action No. HBC 188 of 2012

BETWEEN : BEACHCOMBER ISLAND RESORT LIMITED a limited

liability company having its registered office at Lautoka

PLAINTIFF

A N D : INTERNATIONAL FREIGHT AND CLEARANCE

SERVICES LIMITED a limited liability company having its registered office at c/- Shyam Narayan & Co, 1^st Floor, Crown Investments Building, Nadi

DEFENDANT

A N D : BRENDAN LUKE HANNON shareholder/director of

Beachcomber Island Resort Ltd; Fineline holdings Ltd and Anchorage Beach Resort, of Vuda, Lautoka.

1^ST THIRD PARTY

A N D : TUBREN AIRFREIGHT CONSULTANTS of Nayau Street,

Samabula North, Suva.

2^ND THIRD PARTY

A N D : FINELINE HOLDINGS LIMITED a limited liability company

having its registered office at 52 Narara Parade, Lautoka.

3^RD THIRD PARTY

Before : Master U.L. Mohamed Azhar

Counsels : Ms.V. Lidise for the plaintiff
Mr. R.Kumar for the Defendant
Date of Ruling : 20^th April 2018

RULING

01. This is the summons filed by the defendant on 02.03.2017, pursuant to Order 20 rule 5 of the High Court and the inherent jurisdiction of the High Court, seeking leave to amend the paragraph 8 of its Statement of Defence and Counter Claim. The affidavit of the Financial Controller, one Mr. Ifran Zoheb Ali Janab of the defendant was filed in support the summons. The summons seeks the following orders;

1. The defendant be given leave to amend paragraph 8 of its statement of defence and counter claim as proposed, and
   
2. The cost of this application be paid by the plaintiff, the 1^st and 3^rd Third Parties on a client and solicitor indemnity basis.
   

02. The 1^st Third Party, who is the majority shareholder and the managing director of the plaintiff company, and the shareholder and the director of the 3^rd Third Party, filed the affidavit in opposition to the proposed amendment. The defendant company then filed the affidavit of its same Financial Controller in reply to the said affidavit in opposition.

03. The plaintiff’s claim against the defendant is based on the dishonoured cheque No. 000687 drawn on Westpac Bank Corporation for sum of $ 445,997.61 in favour of the plaintiff. The said cheque was issued for the amount allegedly paid by the plaintiff to the International Air Transport Association (IATA) at the request of the defendant, by way of telegraphic transfer for the credit of the defendant’s account with IATA. On presentation, the cheque was dishonoured with the notion “R” which means ‘Refer to drawer’. Therefore, the plaintiff moves for judgment against the defendant for the said amount together with the interest under the Law Reforms Miscellaneous Provisions (Death and Interest) Act and the cost on solicitor/client basis.

04. The defendant, upon service of the writ and before filling its defence, issued Third Party Notices on all the Third Parties added to this action and then filed a very lengthy statement of defence. The defendant, denying the allegation that, it requested the plaintiff to pay a sum of $ 445,997.61 to IATA, stated that, the 1^st Third Party, being the director and the shareholder of the plaintiff company and the consultant of the defendant company, had made the payment through a ‘systematic fraud’. The defendant then explained how the alleged ‘systematic fraud’ was committed by the 1^st Third Party. Briefly, the defendant had a freight consultancy agreement with the 2^nd Third Party at a fee of $ 1,265 per week. The 2^nd Third Party then employed the 1^st Third Party for this purpose under a work permit at the remuneration of $ 25,000 per annum to provide services to the defendant.

05. The defendant further states in its statement of defence that, apart from the said remuneration, the 1^st Third Party was not supposed to carry out any other business in Fiji unless approved in accordance with the provisions of Exchange Control Act Cap 211. The 1^st Third Party, given nature of service he provided to the defendant company, had his own office space at the premises of the defendant at Nadi Airport since 1996 till 2012, and had assumed the control of day to day operation of the defendant company. In addition, the 1^st Third Party, as the consultant, had access to the pre-signed cash cheques of the defendant company that were made out due to the 24 hours operation of freight business, which required payment outside normal office hours. The defendant, denying any contractual relationship with the plaintiff and issuing the disputed cheque to the plaintiff, went on to say that, the 1^st Third Party, through his ‘systematic fraud’ directed the accounts clerk of the defendant company to prepare the said cash cheque in favour of the plaintiff. The defendant, in its counter claim, states that, the 1^st Third Party through his ‘systematic fraud’ removed $ 12.735 Million from the defendant company and the plaintiff, being the vehicle for the said ‘systematic fraud’ unjustly enriched. Therefore, the defendant sought to strike out the claim of the plaintiff, whilst seeking special and general damages for the alleged ‘systematic fraud’ together with the interest and cost on a solicitor and client basis.

06. The plaintiff, 1^st and 3^rd Third Parties then filed an equally lengthy reply to the defence and denied the alleged ‘systematic fraud’ and the unjust enrichment. The 1^st Third Party specifically stated that, as a result of the consultancy agreement, he and the defendant agreed that, he would receive a consultancy fee or commission of 40% for each and every job he secured for the defendant. In addition, the 1^st