Sarif v Fiji Sugar Corporation Ltd [2019] FJHC 756; HBC12.2018 (31 July 2019)

IN THE HIGH COURT OF FIJI AT LABASA

CIVIL JURISDICTION

Civil Action No. HBC 12 of 2018

BETWEEN

MOHAMMED SARIF of Vunimoli, Labasa, Businessman.

PLAINITFF

AND

FIJI SUGAR CORPORATION LIMITED a limited liability company

having its registered office at Drasa Avenue,

Balawa, Lautoka.

DEFENDANT

Counsel : Mr. Kohli A. for the Plaintiff

Ms. Devan S. with Mr. Nadan for the Defendant

Dates of Hearing : 10^th, 11^th & 12^th June, 2019

Date of Judgment : 31^st July, 2019

JUDGMENT

[1] The plaintiff entered into an agreement with the defendant for land preparation, sugar cane planting and cultivation of Seaqaqa Estate on 10^th September, 2013 but the contracted came to effect on 21^st August, 2013 for a period of five years.

[2] On 20^th October, 2017 the plaintiff was informed that the contract has been suspended with effect from 14^th October, 2017.

[3] The plaintiff instituted these proceedings alleging that the defendant breached the contract and seeking the following reliefs:

(a) $200.000.00 as for the work done, checked, verified and invoiced but unpaid;
(b) $35,000.00 for the harvesting and transporting of cane which remains unpaid;
(c) Damages for loss of income due to the defendant’s refusal to allow the plaintiff to enter the estate and remove plant and machinery depriving him from using them;
(d) $8000.00 as the amount spent by the plaintiff for the transportation of cane cutters and for their food;
(e) Refund of the bond in the sum of $5000.00;For an injunction restraining the defendant from stopping from uplifting his plant and equipment;
(f) An injunction restraining the defendant from stopping the plaintiff from uplifting his plants and equipment;
(g) Interest;
(h) Damages; and
(i) Costs.

[4] The defendant while denying the allegation that it acted in breach of the contract alleges that the plaintiff failed to carry out the work in conformity with the terms of the contract and by way of counter claims sought damages as follows:

1. Loss of $1,646,086.47 by way of overpayments made to the plaintiff under the contract dated 27^th September, 2013; and
2. Loss of $146,000.14 overpayments made to the plaintiff under the contract dated 28^th March, 2017

[5] The parties admitted the following facts at the Pre-trial conference:

1. That the plaintiff is a businessman and a farmer and resides in Labasa.
2. That the defendant is a limited liability company established under section 3 of Fiji Sugar Corporation Act 1983 (hereinafter referred to as the Corporation) with sole and exclusive right to manufacture raw sugar fron sugar cane.
3. That one of the objects of the Corporation is to plant, cultivate, acquire, use, sell and dispose of sugar cane and other raw products or material from which sugar can be manufactured.
4. That on or about July, 2013 the defendant had called for an expression of interest for land preparation, cane planting and cultivation of its Seaqaqa Estate and had advertised the same in the Fiji Sun, a daily newspaper circulated in Fiji.
5. That prior to tendering for the works the plaintiff was shown the FSC Seaqaqa Estate land.
6. That after the visit to the Estate land the Plaintiff tendered for the works on the 2^nd of July, 2013 and paid the deposit of $100.00.
7. That on the 10^th of July, 2013 the defendant submitted his formal tender to the defendant. (This should be read as “....the plaintiff submitted...”).
8. That upon receipt of the tender the plaintiff’s tender was shortlisted and a meeting was held at the defendant’s Mill at Labasa on 11^th of July, 2013 to clarify some of the matters contained in the tender and the rates for some of the works were renegotiated and agreed upon.
9. That the plaintiff in his tender submissions represented to the defendant:
   • (i) That he already owned five farms which was yielding 1,800 tons of cane;
   • (ii) That he had read and understood the “General and Special Conditions” that was in the tender document.
10. That during a meeting with the defendant on 11^th of July, 2013 the defendant represented to the plaintiff that he owed five farms of his own however he will prioritize the defendant’s work and will work day and night to get the work done at the HSC Seaqaqa estate.
11. That the plaintiff’s tender was accepted on 21^st of August, 2013.
12. That the plaintiff was awarded tender for a period of five (5) years effective from 26^th day of August, 2013. The initial award was for one year and the extension for a further four (4) years was subject to the successful completion of the contractual obligations during the first year and at the sole discretion of the Corporation. It was further agreed that quarterly meetings would be held to review the performance.
13. That on 27^th day of September, 2013 the plaintiff and the defendant entered into an agreement to bind the contract for land preparation, cane planting and cultivation of Seaqaqa Estate pursuant to tender number Lab 21/13, hereinafter referred to as the Agreement. That the following documents were deemed to form and read and construed as part of the Agreement:-
    • (a) Mohammed Sharif’s acceptance letter dated 21^st August, 2013;
    • (b) The Tender Specification Documents including the General and Specific Conditions;
    • (c) A copy of Mohammed Sarif’s submission dated 10^th July, 2013;
    • (d) MOM FCS/Mohammed Sarif;
    • (e) A copy of receipt for payment of Performance Bond;
    • (f) Summary of costs.
14. That terms and conditions of the Contract were as follows:

The plaintiff would prepare, plant cane and cultivate in total 600 hectares of land serf forth below:

• First year (2013) 50 hectares
• Second year (2014) 138 Hectares
• Third year (2015) 138 hectares
• Forth year (2016) 138 hectares
• Fifth year (2017) 136 hectares

In consideration of the payments to be made to the plaintiff, the plaintiff agrees to carry out the work in conformity in all respects with the provisions of the contract.

That the actual sums to be paid for work will depend on the actual work done and will be in accordance with the Contract.

The Corporation’s (Defendant’s) representative(s) may provide prior estimate of the jobs (i.e. No. of days a job may take) which the Contractor (Plaintiff) is called upon to perform, but this is no way should be construed as the actual days the job will take.

If there is a wide variation between the Corporations’ (Defendant’s) estimated time and the actual time taken by the Contractor (Plaintiff), the Contractor (Plaintiff) may be called upon to justify the variations to the satisfaction of the corporation, failure of which may result in disallowance of payment of part thereof which becomes due to the Contractor (Plaintiff)

The Contractor (Plaintiff) shall keep a proper record of each operation and provide invoices for processing of payment on monthly basis.

15. That in consideration of the Plaintiff carrying out the land preparation, cane planting and cultivation of the Defendant’s estate the defendant agreed to pay the sum of $1,982,608.70 for 5 years.
16. That in pursuance of the said Contract, the defendant gave possession of the Seaqaqa Estate to the plaintiff to enable the plaintiff to commence the work.
17. That the defendant made payment on the basis of the data provided for the worked performed.
18. The Estate Officer Makario Tabuakuru was assigned to Seaqaqa Estate to oversee the work carried out at Seaqaqa Estate.
19. That after satisfactory performance in the first year the contract was extended for further four years.
20. That on 04^th of May, 2916 the defendant appointed the plaintiff as the sole operator responsible to cart cane from Seaqaqa to the mill for 2016 and 2017.
21. That the defendant called for an expression of interest to transport defendant’s sugar cane from Seaqaqa Estate to Labasa Mill.
22. That on 25^th of May, 2016 the defendant accepted the plaintiff’s offer for harvesting and transportation of sugar cane from Seaqaqa Estate Farm to Labasa Mill, pursuant to a meeting held on 9^th November, 2016. The contract was for a period of 3 years effective from 28^th November, 2016. The contract could be extended for another 2 years subject to annual review and at the sole discretion of the Corporation.
23. That the defendant again on 2^nd December, 2016 accepted the plaintiff’s offer with the contract being effective from 2^nd December, 2016 and on the same terms and conditions.
24. That the defendant entered into a written contract with the plaintiff on 28^th March, 2017 for the harvesting and transportation of sugar cane from Seaqaqa farm to Labasa mill and that the plaintiff thereafter started transporting the harvested cane under the contract.
25. That on 14^th October, 2017 the plaintiff was called into the defendant’s office at Labasa and informed that his Land Preparation Contract had been suspended and was told not to enter the estate.
26. That by letter dated 20^th October, 2017 the defendant advised the plaintiff that his contract for land preparation, Cane Planting and cultivation was suspended with effect from 14^th October, 2017 until further notice on suspicion of fraud. The defendant relied on Section G25 of the General Conditions which read:

“Nothing herein mentioned shall restrict the Corporation from terminating the contract in case(s) of fraud, incapacity or upon death of the Contractor and without prejudice to the Corporation’s right to seek further damages.”

27. That on October, 2017 one Kameli Batiweti on behalf of General Manager Corporate Service of the Defendant Corporation wrote to the plaintiff inviting him to a meeting at the General Manager’s office in Labasa as part of internal investigations into suspected fraudulent claims made by the plaintiff. At the said meeting the plaintiff was questioned as to the discrepancy in the areas claimed to have been prepared, planted and cultivated as against the actual area planted and paid for.
28. That at the said meeting the plaintiff offered his explanations and responses.
29. That the plaintiff was advised that he would be advised of the outcome of the investigation and is yet to be advised of the same.
30. That the plaintiff (..this should be read as “the defendant”) has withheld further payments to the plaintiff.

[6] The first relief prayed for by the plaintiff is an order on the defendant to pay him $200,000.00 for the work done, invoiced, checked but not paid. This is a claim of special damages that is, for the work done and not paid for. In such a case the burden is on the plaintiff to prove that he in has fact carried out work to the value of that amount and the court needs the details of the work done and the amount due for each item of work to see whether the plaintiff is entitled to recover the amount he claims.

[7] The plaintiff in his testimony explained how he was given the contract which are facts admitted by both parties. He said after completing the work he gave invoices to the defendant and Mr. Makario the Estate Officer, the Accountant, Assistant Accountant and the General Manager came to see the farm. The plaintiff and seven other witnesses testified at the trial for the plaintiff. However, none of these witnesses was able to tell court the basis of the plaintiff’s claim of $200,000.00. It is the evidence of the plaintiff and the witness Makario that he measured the area prepared for cultivation by using Global Positioning System (GPS) he raised the invoices and prepared the vouchers but for reasons best known to the plaintiff he refrained from tendering any of the voucher or copies thereof at the trial for the court to ascertain the amount the plaintiff is entitled to recover from the defendant. Even the plaintiff is not certain the extent of the work he has carried out. In the statement of claim what he alleges is “approximately $200,000” remains unpaid. The evidence adduced by the plaintiff in support of his claim for the work done is not sufficient for the court ascertain the exact amount due to the plaintiff from the defendant for the work done but not paid.

[8] The plaintiff also claims $35,000.00 for harvesting and transportation of sugar cane but there is no evidence as to how he arrived this figure. Witness Mohammed Shafeel said for harvesting and transport they spent $21,277.00 which was withheld by the defendant. Here too, there are no documents or other evidence to establish that the defendant is liable to pay this amount to the plaintiff for harvesting and transportation of sugar cane. I find some bank statements in the agreed bundle of documents which were never referred to in evidence. The bank statements also does not indicate how much he received from the defendant.

[9] The plaintiff also claims damages for not allowing him to remove his machinery and tools from the estate after the suspension of the contract. The evidence is that for some time after the suspension of the contract, the plaintiff’s machinery and tools remained in the estate and the plaintiff was not allowed to enter the estate. I am of the view that the plaintiff is entitled to damages for such an act of the defendant if he proves to the satisfaction of the court the extent of the damage caused to him. Witness Mohammed Shafeel said the contract was suspended on 14^th October, 2017 and the machinery was released on 20^th January, 2018 that is after three months and six days later. He also said if they hired the machinery they would have earned about $1500.00 a day which comes to about $144,000.00. However, for the court to award damages there must be evidence that there were requests from other customers to hire these machinery and for how many days during that period the plaintiff could have hired the machinery but no such evidence was adduced by the plaintiff. The court is not entitled to assume the number of machines that could have been hired and for how many hours each machine could have been hired. The difficulty the court is facing now is to ascertain the quantum of damages that should be awarded to the plaintiff. The assessment of the witness without any basis is not sufficient for the court to ascertain the quantum of damages that could be awarded.

[10] The court needs evidence to calculate the damages claimed by the plaintiff. It is the duty of the plaintiff to adduce sufficient evidence to assist court in deciding whether the amount claimed is justly due or if not what is the amount the plaintiff is entitled to recover from the defendant. The court cannot be expected to go on a voyage of discovery in finding evidence for the parties.

[11] The defendant in its counter claim avers that the plaintiff failed to carry out the work in conformity with the contract and particulars of breach according the defendant are as follows:

(i) The plaintiff failed to prepare, cultivate and plant 6000 hectares of land under the contract.
(ii) The plaintiff falsely and/or fraudulently misrepresented information in order to procure payments totaling a sum of $2,822,163.67 from the defendant.
(iii) The plaintiff was called upon by the defendant to justify the variation in 545.85 hectares of land claimed to have been cultivated by the plaintiff in comparison to 301.16 hectares of land actually cultivated as per the findings of the detailed survey. However, the plaintiff failed to justify the variation to the satisfaction of the defendant.
(iv) The plaintiff was called upon by the defendant to justify the variation in 683.19 hectares of land claimed to have been slashed and burnt by the plaintiff in comparison to 545.85 hectares of land actually cultivated as per the findings of the detailed survey. However, the plaintiff failed to justify the variation to the satisfaction of the defendant.
(v) The plaintiff failed to keep proper record of work performed under the contract and in fact falsified record or submitted inaccurate record to unlawfully procure payments form the defendant.

[12] In reply the plaintiff avers:

(i) Not all of 600 hectares of land can be cultivated with cane. All the cultivable land could have been cultivated had his contract not been terminated;
(ii) He denied any fraudulent misrepresentation and says that all works done were measured and verified and payments were only made after proper verification. The works were also audited. The sum of 2,822,163.67 includes moneys for all extra works done including moneys paid to cane cutting gangs arranged by the plaintiff and paid for by the defendant through the plaintiff’s bank account, slashing of head-land, making roads, clearing burnt cane and replanting. That sum also includes moneys paid to him for payments for harvesting and transportation of the cane in year 2017;
(iii) The variation if any, is due to the replanting of the cane that had been destroyed due to severe drought and inclement weather. The defendant refused to accept the justification despite representatives of the defendant present at the meeting vouching for same;
(iv) He denies any falsification of records and says that after every work and before any payment the defendant’s representatives would check and verify the same. The independent verification was also done in the absence of Makario and payments were made.

[13] The defendant called Savinesh Kumar, Manager Risk and Compliance to testify at the trial. He testified that the plaintiff could not complete the contract because the contract was suspended pending investigations due to discrepancies they found. He said the discrepancies arose in respect of tow payment vouchers. The defendant has thereafter measured the cultivated are by using GPS and also employed a surveyor to verify the measurements and the difference of the measurements was 7 hectares. When the vouchers shown to the witness he said there was a difference between the area claimed by the plaintiff and the area measured and the manual planting in 2014 has not been done.

[14] The learned counsel for the plaintiff objected to the tendering of the Internal Audit Report on the following grounds:

The report does not have the signature of its maker.

One officer named Dhurup has participated in conducting the verification work but the report was not shown to him.

[15] It is the submission of the learned counsel for the plaintiff that if this document is allowed to be tendered in evidence it would be contrary to the Brown and Dunn rule.

[16] Witness Ravinesh Kumar referred to this report but there is no evidence as to who prepared this report. As per the report and evidence of the witnesses the officers Amrika, Dhurup and Estate officer Makario has participated in the investigations but he said he was not aware of any report and cannot recall receiving any report. From the evidence it appears that this report has been prepare by someone without the knowledge of all the officers who conducted the investigations. I am therefore of the view that it will cause injustice to the plaintiff if this document is admitted in evidence and therefore, I refuse to admit this report in evidence.

[17] Witness Ashishwant Dayal is the surveyor who surveyed the farm to ascertain the actual area cultivated by the plaintiff. He evidence is that boundaries of the FSC estate were not located and he picked the cultivated area. He also said the he did not do plotting in this case although it is the practice to plot before surveying. He said creek area and reserved area have to be taken off and he was not asked to measure creeks and reserved areas.

[18] Under the agreement the plaintiff’s agreed to cultivate 600 hectares and the agreed amount was $1,982,608.70. The agreement between the plaintiff and the defendant was for land preparation, cane planting and cultivation at the defendant’s Seaqaqa estate. The defendant denies that he cultivated only 301 hectares. He said there was interference for the defendant. When they asked to stop work he stopped and again resumed cultivation asked him. He said further that the weather conditions also affected the cultivation.

[19] Samuela Railoa was an employee of the defendant. He was a Cane Development Manager. According to him the last production from this land was taken in early 80’s. He said it was a grass land and the roads on the land were basically non-existence, there were certain areas of the farm where cane could not be planted and the roads and drains were constructed by the plaintiff.

[20] Makario Tabuakuru was the Estate Manager of this estate at the time the plaintiff and the defendant entered into the contract which is the subject matter of this action. It is his evidence after measuring the area cultivated by the plaintiff he raised the invoice, prepared the voucher and sent it for authorisation. The witness testified further that before the payments were made the accountant came to the farm and confirmed the area of cultivation. He said the management of the defendant corporation instructed him to do the roads and drainage system within the farm which was not included in the contract but the plaintiff did all this work because it was necessary for the transportation of sugar cane. The plaintiff has submitted vouchers for ratoon management which was approved by the witness and posed a question as why his contract was not terminated then if he acted outside the contract. Explaining why the plaintiff could not achieve the target he said it was due to continuous rain and drought affected the plantation.

[21] Witness Atish Chand was also an employee of the defendant corporation. He said he went to the land and found that the work had been done.

[22] Witness Christopher joined the defendant corporation in 1979 and he said when he became the G.M. his task was to increase the production. He testified further that when the Seaqaqa was given to the plaintiff except for few acres the entire land was overgrown with grass and he had gone to this land on many occasions and it was a successful project. The witness also said he did not receive any complaints against the plaintiff on malpractices and he could have completed the cultivation by 2018 if he was allowed to continue.

[23] Witness Dhurp Kumar had worked for the defendant corporation for 26 years. In 2016 he had been at the Head office and was doing auditing and compliance. He said he visited Seaqaqa farm and it was bushy before awarding the contract to the plaintiff but after that it was brilliant and extremely happy about the work. In cross-examination the witness said what he heard from his immediate superiors was that that intention was to make this a model farm. When he was questioned about auditing he said Makario did not have records when he conducted the auditing but in one audit he showed him the records.

[24] Vimlesh Kumar joined the defendant corporation on 23^rd September, 2003 and still works for the defendant. He is the Cane Logistic Manager and involved in harvesting and transporting cane. The witness explaining the procedure adopted by the corporation he said as soon as the work is done area is measured and the information is given to the contractor for him to send invoices and Mr. Makario sends it to the relevant officer for processing. This witness has done verifications in 2014 and 2016 and for that he has accompanied Vijendra Singh, the accounting Officer and in regard to harvesting and transportation he has gone again to the farm.

[25] From this evidence it appears very clearly that the plaintiff could not have taken any money by tendering false invoices because each and every invoice was subject to the scrutiny of several officers of the defendant corporation. The invoices were approved after measuring the area cultivated. If there had been any mistake it is the officers of the defendant corporation who were responsible and not the defendant. The defendant did not, as I have stated earlier, produce any evidence that it was the plaintiff who was responsible for tendering invoices for the work he had in fact not done. I do not have to repeat it again, however, the witnesses of the defendant were all once employees of the defendant and one witness is still an employee of the defendant. I have summarised their evidence and the plaintiff could not have tendered any invoice directly without the approval of these officers. There could not have been a single invoice that went directly to the accountant by passing these officers. Therefore, the allegation that the defendant submitted invoices fraudulently claiming that he cultivated 545.85 hectares, in my view, has no basis.

[26] The plaintiff also claims the $5000.00 deposited with the defendant as a bond and $8000.00 he spent to bring the cane cutters and to provide them meals which was the responsibility of the defendant. This position has not been challenged by the defendant. However, the defendant in its statement of defence has averred that the defendant is entitled to retain the bond of $5000.00 since the defendant acted in breach of the contract which is not correct. The defendant based this allegation on two grounds, they are, the defendant tendered false invoices for payment which was baseless and that the plaintiff did not cultivate the extent of land as agreed in the contract. The evidence show that if the defendant was allowed to continue his work he could have cultivate the entire extend as required by the agreement. On the other hand he had to do many other work to bring the farm to a cultivable land. These additional works were done on the instructions of the defendant’s officers. If he did not constructed access roads the defendant could not have transported the cane to the mill. One does not have to be an expert to understand that without drains it is not possible to maintain the cultivations for the reasons that the entire plantation can get washed away or if the water gets collected within the cultivated area sugar cane plantation can be damaged. The defendant is strictly looking at the terms of the contract but the plaintiff or the defendant has no control over natural disasters such as heavy rain, floods and drought (Force Majure). The plaintiff is entitled to be paid for the additional works done by him and the defendant cannot claim whatever that has been paid to the plaintiff for the additional work done.

[27] The defendant is entitled to recover the bond of $5000.00 and the expenses incurred by him to bring and maintain the cane cutters which is $8000.00.

[28] For the reasons set out above the termination or suspension of the agreement is wrong and unreasonable and the defendant is not entitled to any damages. The defendant is also not entitled to a judgment as prayed for in the counter claim since it has failed to establish by adducing evidence how the defendant arrived at those figure of $1,792,231.61 and there are no proper accounts to assist the court in determining whether there is any amount remaining after deducting for the additional works done by the plaintiff.

[29] The plaintiff also claims damages for prematurely terminating the contract and loss of income from 14^th October, 2017 to 25^th August, 2018. However, the plaintiff has adduced no evidence for the court to ascertain the extent of the loss he suffered. One witness said that he could have completed his task had the contract was not prematurely terminated. It is a fact that was established at the trial that the plaintiff, for reasons beyond his control, could no achieve the target set by the agreement at the time it was suspended. The evidence of this witness is only his opinion. He has not explained on what basis he expressed this opinion. Apart from this evidence the plaintiff did not adduce any evidence to show the loss of income from 14^th October, 2017 to 25^th August, 2018.

ORDERS

1. The defendant is ordered to pay the plaintiff $13,000.00 ($5000.00 + $8000.00) with interest until the payment in full pursuant to section 4 of the Law reforms (Miscellaneous Provisions)(Death and Interest) Act 1935.
2. The other claims of the plaintiff and the counter claim of the defendant are dismissed.
3. The defendant is also ordered to pay the plaintiff $5000.00 as costs (summarily assessed) of this action.
   

Lyone Seneviratne

JUDGE

31^st July, 2019