Rahiman v ISP Pacific Ltd [1979] FJSC 47; Civil Appeal 3 of 1979 (20 September 1979)

IN THE SUPREME COURT OF FIJI
Appellate Jurisdiction

Labasa Civil Appeal No. 3 of 1979

BETWEEN

ABDUL RAHIMANA
s/o Jang Bahadur
Appellant
(Plaintiff)

AND

I.S.P PACIFIC LIMITED
Respondent
(Defendant)

Mr. K.C. Ramrakha and Mr A. Singh for the Appellant
Mr. D.C. Maharaj and Mr. J. Singh for the Respondent

JUDGMENT

This is an appeal from a judgment of the Magistrates Court in Labasa dismissing the appellant's (plaintiff's) claim for the return of $2,000 paid as a deposit in respect of an agreement to purchase a tractor and allowing the respondent's (defendant's) counterclaim for $750 being the loss suffered by him due to plaintiff's refusal to accept delivery of a sawmilling engine ordered by him. For the sake of clarity I will call the parties "plaintiff" and "defendant" in this judgment.

Plaintiff is a sawmiller of Solevu in Vanua Levu. Defendant is an importer of machinery. In 1975 plaintiff wanted to buy a Komatsu tractor. He gave the defendant a cheque for $2,000 by way of deposit but the cheque was not cleared and no order was placed for the tractor. Negotiations, however, continued and in March 1976 the defendant did at last receive $2,000 by way of deposit. By a letter dated 9th April 1976 the defendant advised the plaintiff that "the machine has definitely been ordered and is to the following specifications........... We are advised that this machine will be sent from Japan early in June and we should therefore be able to deliver it to you at approximately the end of July this year." At the end of July or early in August the plaintiff informed the defendant that he no longer wanted the tractor. This is clear from the defendant's letter of 10th August 976 in which he says:

"This letter is to note our recent meeting at the premises of A. Hussein & Co. Ltd. whereby you stated that you now do not want to do business with this company, do not want the new D50 Komatsu bulldozer and that you wanted your deposit of $2,000 back."

At the hearing before the Magistrate the plaintiff claimed that time was of the essence of the contract and that the defendant had failed to deliver the tractor on time. He was therefore entitled to recover the deposit. The learned Magistrate found against him. He said:

"I find on that date (9/4/76) there was a firm order from plaintiff for the D50A, he had paid his deposit of $2,000 and the defendant company was to supply that tractor. There was, however no date for delivery, and even Raghwan said in evidence that there was no date for delivery."

Raghwan was a witness called by the plaintiff himself. On the evidence before him the Magistrate was quite correct in finding that no firm date of delivery was, or could have been, given by the defendant as indeed is clear from his letter dated 9th April 1976.

The learned Magistrate also found that the plaintiff's plans for raising finance had fallen through and he was in fact in no position to pay for the tractor when he told the defendant that he no longer wanted it. He said:

"One thing that is quite clear is that plaintiff did not have, and never did have, the finance to buy the tractor let alone the tractor and sawmilling engine as well. He never had the cash and he never had the credit."

I see no reason to disturb the Magistrate's finding that the failure to complete the contract was the plaintiff's and not the defendant's. That being so he applied the law correctly.

With regard to forfeiture of deposit the law is stated as follows in 34 Halsbury's Laws of England, 3rd Edn. P. 118:

"A deposit is paid primarily as security that the buyer will duly accept and pay for the goods, but, subject thereto, forms part of the price. Accordingly, if the buyer is unable or unwilling to accept and pay for the goods, the seller may repudiate the contract and retain the deposit. If the seller is unable or unwilling to deliver the goods, or to pass a good title thereto, or the contract is voidable by the buyer for any reason, the buyer may repudiate the contract and recover the deposit."

In this case, as the learned Magistrate held, it was the plaintiff who was both unable and unwillinging to accept and pay for the tractor. He was therefore not entitled to recover the deposit. The plaintiff's appeal relating to the disallowance of his claim is therefore dismissed.

The defendant's counterclaim relates to an entirely different transaction. At about the same time as the plaintiff was negotiating the purchase of the Komatsu tractor he was also interested in acquiring a re-conditioned engine for his sawmill. He requested Raghwan who was, at that time, working at Labasa as the defendant's sales agent to look for a suitable engine for him. Raghwan who travelled a great deal in connection with the defendant's business agreed to do so and found an engine at the store of Kumar's Motor Spares at Lautoka which he considered suitable. Upon returning to Labasa he informed the plaintiff about this engine and the plaintiff himself telephoned Kumar's Motor Spares and closed the deal. At his request the defendant paid the purchase price of this engine to Kumar's Motor Spares and shipped it to Labasa where the defendant refused to take delivery on the ground that it was not the kind of engine he had ordered.

There was ample evidence before the Magistrate to show that the defendant had nothing to do with the selection of the engine and that the deal was made entirely between the plaintiff and Kumar's Motor Spares. Raghwan, while inspecting the engine, was working not on behalf of the defendant but on that of the plaintiff. This is also clear from the defendant's letter dated 9th of April 1976 in which he mentions the sawmill engine and informs the plaintiff that he was to deal direct with Kumar's Motor Spares. The only agreement between the plaintiff and the defendant in relation to this engine was for the latter to pay for, and ship, it to Labasa at the plaintiff's expense. The learned Magistrate, in my view, correctly held that Raghwan, in inspecting and selecting the engine, was acting as the plaintiff's agent.

The amount of loss incurred by the defendant as a result of the plaintiff's failure to take delivery was not in dispute. The learned Magistrate, therefore, was correct in allowing the counterclaim and the plaintiff's appeal in relation to it is therefore also dismissed.

The plaintiff will pay the costs of this appeal which will be taxed in default of agreement.

(Sgd.) G. Mishra
JUDGE.

Suva,
20th September, 1979