Prasad v Muniamma [2011] FJMC 103; Civil Action 135.2008 (13 September 2011)

IN THE RESIDENT MAGISTRATE'S COURT
WESTERN DIVISON AT NADI

NADI CIVIL ACTION NO. 135 OF 2008

BETWEEN:

SURUJ PATI PRASAD f/n Bhagwan Din
Of Malolo, Nadi &

ANJULA DEVI PRASAD f/n Ram Surat
Of Wailoaloa Beach, Nadi.
PLAINTIFFS

AND:

DOROTHY MUNIAMMA f/n Anmaiya Reddy
Of Malolo, Nadi
DEFENDANT

JUDGMENT

1. The Plaintiffs instituted this action against the Defendant seeking the following claims:

(a) Special damages in the sum of $12,470.63

(b) General damages.

(c) Interest of 10% from 15.10.2003.

(d) Costs.

2. The Defendant filed Statement of Defence and denied the Plaintiffs claim and stated that:

(a) The Plaintiff who breached the Agreement dated 15th October 2003 by failure to comply with clause 9 and clause 12(1) of the said Agreement.

(b) That the Plaintiffs by their non-compliance have forfeited the deposit and/or any other sums paid due to their non-compliance with Section 9 & 12(1) of the Agreement dated 15th October 2003 within one (1) year of its execution or within a reasonable time and hence the Agreement was rescinded on 13th January 2006 by the Defendant.

(c) That the Plaintiffs action cause loss and damages to the Defendant who could not access the settlement nor use the land in anyway until after the 13th day of January 2006 when the Defendant rescinded the Agreement.

3. The Defendant filed and served reply to the Statement of Defence and denied matters stated in the Statements of Defence and moved for struck out and dismissal of the Statement of Defence.

Facts

3. The Defendant is the lawful owner of all that land known as Crown Lease No. 6491 known as Lot 6 ND 5161 & Lot 7 ND 5169 part of Nacaqara and Navo formerly Certificate of Title No. 11913 having an area of 21a 3r 5p situated in the district of Nadi.
The Plaintiffs had entered into a sale and purchase agreement with the Defendant on the 15th day of October 2003 for the purchase of 8 acres of Crown Lease from Crown Lease No. 6491 for a total purchase price of $30.000.00. A sum of $10,000.00 as deposit was to be paid into the trust account of the Plaintiffs solicitors upon execution of the sale and purchase agreement and to be released to the Defendant upon consent to this dealing by the Director of Lands.

The Plaintiffs instituted this action against the Defendant for breach of the agreement and failure to refund the deposit and other incidental cost such as survey fees.

Evidence

4. At the trial one of the Plaintiffs, namely Anjula Devi Prasad gave evidence and the Plaintiffs case was closed. The Plaintiffs marked and tendered the following documents without objection:

1. Exhibit P1 Agreement dated 15th October 2003

2. Exhibit P2 Copy of Receipt No. 60

3. Exhibit P3 Copy of Receipt No. 42

4. Exhibit P4 Copy of Bank of Baroda cheque

5. Exhibit P5 Copy of letter dated 1st May 2008

6. Exhibit P6 Copy of letter dated 2nd May 2003 from the Ministry

The Defendants documentary evidence:

1. Exhibit D1 Copy of letter dated 13th January 2006
   

Non suit application and submissions

5. The Defendant submitted that the Plaintiffs had failed to provide evidence to prove some ingredients essential to the case against the Defendant. The Defendant further submitted that she had suffered damages and financial loss due to the Plaintiffs inability or lack of desire to complete that contract by carrying the subdivion. She has waited four years six months for the Plaintiffs to wake up from their slumber. Time was of the essence and therefore the Plaintiffs have by their own inaction forfeited any right to claim special damages from the Defendant. Nor have they established any damages suffered, right to 10% interest or costs.

The Plaintiffs submission in essence was that they have made out their case for damages and therefore the Defendant is liable to refund the full purchase price of $30,625.00 to the Plaintiffs. The Plaintiffs also submitted that the Defendant is not allowed to get benefit of the deposit or unjustly enriched.

The Law

6. On this aspect in a situation such as this DEANE in FORAN v WRIGHT [1989] HCA 51; (1989) 168 CLR 385 at 438 said:

"Upon rescission, the purchasers were entitled to obtain restitution of the deposit which they had paid. Their claim for the return of the deposit was not founded on the rescinded contract. Nor did it represent a claim for damages for the vendor's breach of its term. It was a claim founded in the equitable notions of fair dealing and good conscience which require restitution of a benefit received as, or as part of, the quid pro quo for a consideration which has failed (cf. per Lord Wright, Fibrosa Spolka Akcyjna v Fairbairn, Lawson, Combe, Barbour Ltd (26); Muschinski v. Dodds (27)). If it be necessary to clothe that claim in a nomenclature, the appropriate one in a modern context is "restitution" for, or of, "unjust enrichment"."

7. On the question of 'deposit' I conclude this aspect with the following passage from the judgment of BOWEN L.J in HOWE (supra) at 97 which is a leading case on the subject of deposit as to matter which ought to be taken into consideration in deciding the rights of a purchaser to the return of the deposit money:

"The question as to the right of the purchaser to the return of the deposit money must, in each case, be a question of the conditions of the contract. In principle it ought to be so, because of course persons may make exactly what bargain they please as to what is to be done with the money deposited. We have to look to the documents to what bargain was made. If any authority were wanted to prove that in each case it is a question of construction (I do not think it is wanted) it would be found in Palmer v. Temple (1), the case to which Lord Justice Cotton has referred, and which – whatever may be the value of the case as an authority on the construction of the contract in that case, as to which I agree with everything that has fallen from Lord Justice Cotton – adopts the principle that in each case we must consider what was the bargain. At page 520 there is this observation. "The ground on which were rest this opinion, is that in the absence of any specific provision, the question, whether the deposit is forfeited, depend0;on the in60;intent ofe;parties to60;to be coed&#t60;fr60 the&#16e whole instrumeni>

8. Here there can be no doubt that the Plaintiff (purchaser) "means bss" we wenond paying deposit. he cot beeformed thed this pais paymentyment "shall be brought into account, <butu>but if t if the contract is not performed by the payer it shall remain the property of the payee." (FRY J. In HOWE v SMITH [1884] UKLawRpCh 142; (1884) 27 Ch.D 89 at 101.

9. The no case answer submission in civil proceedings is generally known as "non-suit". A submission of non-suit is a motion made by the defendant for dismissal of the case against him/her on the ground that no case has been made out. This submission is made at the close of the plaintiffs case or at the conclusion of his or her evidence in chief-Vye v Vye [1969] 2 AER 29.

10. "...the test of insufficiency-inquires whether there is evidence capable of satisfying the jury [or a judge alone in the absence of trial jury] on a balance of probabilities, that each of the constituents of the plaintiffs claim has been established." Per Mr. Justice Glass [1981] 55 ALJR 842 at 843.

11. "When a no case submission has an evidentiary foundations rather than a basis in some proposition of law, there no logical inconsistency in the court holding that there is a case to answer but thereafter dismissing the claim. The question for the court on no case submission is whether there is evidence upon which the court could enter judgment for the applicant. A rejection of a no case submission does not carry with it an inevitable consequence that the claim must succeed..." [James v ANZ Bank [1986] FCA 41; (1986) 64 ALR 347 at 400; per Toohey J, cited in Ashley v Geoffery & Others No. 1217/1990, Supreme Court of Tasmania; (6.12.1991 at para 8].

Plaintiffs Evidence

11. Anjula Devi Prasad one of the Plaintiffs (PW1) gave evidence on behalf of the Plaintiffs. She told in court that they entered into a sale and purchase agreement [P1] with the Defendant. She also said that her husband paid the money to the Defendant and a cheque [P4] in the sum of $10,000.00 was drawn and signed by him as deposit pursuant to the agreement. She further told that the Defendant is liable to pay all money paid and compensate them for her default as provided under clause 12 (ii) of the agreement.

12. In cross examination PW1 stated that no transfer was ever executed. According to the agreement the Plaintiffs were to do all the subdivision works and that too within 12 months (Cl.9). The 12 months period expired in October 2004. The Defendant informed the Director of Lands by letter dated 13th January 2006 of her intention not to proceed further (D1). This is 2 years 3 months after the agreement had been signed.

13. In re-examination PW1 stated that she did not know about D1. The Defendant was granted 2 years 2 months to complete the agreement. Her husband paid survey fees. Most of the works were done by her husband and her sister in law. She also told that she was not aware of what type of work her husband did.

Determination

14. The Plaintiffs and the defendant entered into a purchase and sale agreement on 15 October 2003 to sell an area of 8 acres for the price of $30,000.00 (P1). The conditions were that the Plaintiffs shall pay a deposit $10,000.00 into the trust account of Messrs Babu Singh & Associate and released to the Defendant upon grant of consent for Lands Department. The balance sum of $20.000.00 was to be paid and released to the Defendant on the date of settlement.

15. Clause 9 of the Agreement states that "whole of the transaction to be completed within 12 months and or any other date mutually agreed by the parties". The contract dated 14 October 2003 was not completed as the Plaintiffs failed to obtain all consent and to complete subdivision within 12 months as required by clause 9 of the Agreement. There is no evidence whatsoever before court that the Plaintiffs applied for extension of time. PW1 merely say that their surveyor had delayed. The Plaintiffs had made payments in 2003 for survey and subdivision on the land. In the meantime the Defendant by a letter dated 13 May 2006 informed the Divisional Surveyor that she does not wish to proceed with the earlier application for transfer in favour of the Plaintiffs.

16. The Plaintiffs did not seek extension of time. Instead they sent a demand letter dated 1 May 2008 to the Defendant demanding $12,470.63 being the deposit and interests from October 2003. The Plaintiffs had every opportunity to apply for the extension of time which was possible under clause 9 of the Agreement (P1). If the delay was on the part of the surveyor the Plaintiff could have applied to the Defendant for extension of time on that ground. Seemingly, the Plaintiffs failed to perform and act diligently to complete the agreement within 12 months as stipulated under clause 9 of the Agreement (P1).

17. PW1 (2nd named Plaintiff) when giving evidence stated that her husband paid the deposit on her behalf but there is nothing in the Agreement to suggest that the deposit was made by her husband for and on her behalf. PW1 also told in court that she did not know much about the dealing and her husband did everything. The 1st named Plaintiff was not called to give evidence to prove Plaintiffs case.

18. The question, whether the deposit is forfeited, depends on the intent of the parties to be collected from the whole instrument. In the matter at hand the whole transaction must be completed within 12 month from the date of Agreement and or any other date mutually agreed by the parties according to clause 9 of the Agreement. However, the Plaintiffs did not take active actions to complete the dealing within the stipulated period.

19. In this case there is no evidence that the contract was not performed by the Defendant hence the deposit shall be the property of the Defendant.

20. In the light the law enunciated above and the evidence adduce in this case I find a no case to answer.

Orders

1. Plaintiffs' case is non-suited.
   
2. Plaintiffs shall pay costs on a solicitor /client indemnity basis.
   

M H Mohamed Ajmeer
Resident Magistrate, Nadi

13.09.2011