Pillai v Pillai [1973] FijiLawRp 24; [1973] 19 FLR 121 (28 November 1973)

[1973] 19 FLR 121

COURT OF APPEAL

Civil Jurisdiction

KANDSAMI PILLAI

v

PERMAL PILLAI

Gould V.P., Marsack J.A., Henry J.A.

22nd, 28th November, 1973

Estoppel — equitable — promissory — payment of part of civil debt in satisfaction of whole — whether payment of balance can be later enforced.

The debtor who owed his uncle $1,300 sent his agent with $1,000. The debtor had, in fact, the full $1,300 available. The uncle agreed to accept the $1,000 in full satisfaction and signed a notice to this effect. Subsequently the uncle issued a bankruptcy notice claiming the $300 balance. The trial judge held that equity would not in the circumstances allow the appellant to bring further proceedings for its recovery and set aside the bankruptcy notice.

Held: 1. There was nothing in the facts to make it inequitable for the appellant now to enforce payment of the balance.

2. In the absence of true accord and satisfaction, payment of part of a debt does not debar a creditor from suing for the balance.

Cases referred to:

Foakes v Beer (1884) 9 App. Cas. 605; 51 LT 833.

Hughes v Metropolitan Railway Co. (1877) 2 App. Cas. 439; 36 LT 932.

Tool Metal Manufacturing Co. v Tungstan Electric Co. [1955] 2 All ER 657; [1955] 1 WLR 761.

Birmingham & District Land Co. v London & North Western Railway Co. (1888) 40 Ch. D. 286; 60 LT 527.

Combe v Combe [1951] 1 All ER 767; [1951] 2 KB 215.

Central London Property Trust Ltd. v High Trees House Ltd. [1947] KB 130; 176 LT 333.

Emmanuel Ayodeji Ajayi v R.T . Briscoe [1964] 3 All ER 556; [1964] 1 WLR 1326.

C.I.R. v Morris [1958] NZLR 1126.

D & C Builders Ltd. v Rees [1965] 3 All ER 837; [1966] 2 WLR 288.

Appeal from the judgment of the Supreme Court setting aside a bankruptcy notice.

G. P. Shankar for the appellant.

K. C. Ramrakha for the respondent.

The following judgments were read:

HENRY J.A. [28th November 1973]—

This appeal raises the question whether respondent is still indebted to appellant in the sum of $313.88 being the balance of a judgment obtained in 1969. The dispute turns on a payment of $1,000 made on March 24 1970 in respect of a judgment debt then standing at approximately $1,300. There was a serious conflict of evidence but the learned trial Judge has made certain findings of fact which have not been challenged on appeal. Appellant and respondent are brothers. They were not on speaking terms so one Chinsami s/o Narain Chetty, an uncle was asked by respondent to make a payment of $1,000 to appellant in full settlement of the debt. The evidence of Chinsatni was accepted so the appeal turns on the legal effect of the evidence of Chinsami and respondent. On this evidence the trial Judge found that the said sum of $1,000 was paid on the assurance of appellant that no further payment would be enforced by the appellant. The trial Judge held that equity would not, in the circumstances found by the Court, permit appellant to bring further proceedings for its recovery. The further proceeding was a fourth bankruptcy notice founded on the alleged debt of $313.88. The said notice was set aside and appellant was ordered to pay costs.

In evidence Chinsami said on the occasion when the payment of $1,000 was made:—

"I discussed the debtor's debt with Kandsami. We were given chairs to sit, tea to drink, Kandsami asked me the reason for our visit. I said, "You have issued a notice against your brother. I asked him to forgo some of the debt." At first he said, "I won't forgo any" I said, "Do not quarrel within the family. You should accept a little less." He still kept saying "No." I then took out all the money I bad taken, placed it on the table and asked him to take it. He at first wouldn't take it. Then the other Kandsami said, "You are getting all this money in a lump sum. If you refuse it, you may get it in bits and pieces. After that the judgment creditor came to pick the money. I then asked him to hold on, to give us a receipt before taking the money so that there would be no dispute in future. After that he went inside his room and brought a notebook. He then made out a receipt and said. "Uncle, take this receipt" I said, I don't know how to read. Please read it out to me so that I know what is in it." He then read it out to me to say that he was taking the money in full settlement of the debt. He then handed the receipt to me.
"Not true that I offered to pay the Creditor $1,300; that when he had signed the receipt I said I would pay only $1,000. I told him beforehand I had only $1,000. I did not offer to pay the balance on 31st December 1970. He did not take the receipt from me and add any words at the bottom."

The document signed was in the form following:

24.3.70

"THIS IS TO CERTIFY THAT I HAVE RECEIVED THE FULL AMOUNT DUE TO ME UNDER THE (P.N.) AND BANKRUPTCY WHICH I TOOK AGAINST PERMAL PILLAI.
I HAVE NO CLAIM AGAINST PERMAL PILLAI FROM TODAY.
(SGD.)
K. PILLAI
24.3.70 11"

Respondent in evidence said:

"On receipt of this notice money was arranged with Narsey. I borrowed $1,400 from him. Documents were made at Mr. P. B. Patel's office. Mr Hanish Sharma is now with that office I gave a Crop Lien to Mr Narsey I went to Mishra, the Solicitor. As a result of his advice I went to my uncle Chinsami and gave him £500 ($1,000) can't remember the date. We then went to Ba. I kept the other $400 with me. Kandsami s/o Chandunam went with us to Ba. I did not go to the Judgment Creditor's house."

It is trite that at common law the acceptance of a lesser sum than is owing will not amount to accord and satisfaction of a larger sum. The trial Judge cited well-known words of Lord Denning M.R. when his Lordship said the harshness of the common law has been relieved—equity has stretched out a merciful hand to help the debtor. The question is: Is that so in the instant case? The trial Judge said the sum of $1,000 was all the respondent had. But with respect, that was not so. Respondent had borrowed $1,400. He kept $400 and gave the balance of $1,000 to Chinsami who told appellant that was all the money he (Chinsami) had. This appears later in his evidence. The relevant passage reads:—

"Not true that I offered to pay the Creditor $1,300; that when he had signed the receipt I said I would pay only $1,000. I told him beforehand I had only $1,000. I did not offer to pay the balance on 31st December 1970. He did not take the receipt from me and add any words at the bottom "

The facts in this case closely resemble those in Foakes v Beer (1884) 9 App. Cas. 605 in which Mrs. Beer undertook, for a lesser payment, not to take any proceedings whatsoever. If the facts go no further that, in my respectful view, is still good law. The equity, of which the learned trial Judge spoke, was stated by Lord Cairns L.C. in Hughes v Metropolitan Railway Co. (1877) 2 App. Cas. 439, 448 where he said:

" .... It is the first principle upon which all courts of equity proceed if parties, who have entered into definite and distinct terms involving certain legal results afterwards by their own act, or with their own consent, enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, that the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable, having regard to the dealings which have taken place between the parties."

In Tool Metal Co. v Tungetan Electric Co. [1955] 2 All ER 657, 660 Viscount Simonds said:

"My Lords, the decision of the Court of Appeal in the first action was based on nothing else than the principle of equity stated in this House in Hughes v Metropolitan Rv. Co. (1877) (2 App. Cas. at p. 448) and interpreted by Bowen, L.J., in Birmingham & District Land Co. v London & North Western Ry. Co. (1888) (40 Ch. D. at p. 286) in these terms:
It seems to me to amount to this, that if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a court of equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before.'
These last words are important, for they emphasise that the gist of the equity lies in the fact that one party has by his conduct led the other to alter his position. I lay stress on this, because I would not have it supposed, particularly in commercial transactions, that mere acts of indulgence are apt to create rights, and I do not wish to lend the authority of this House to the statement of the principle which is to be found in Combe v Combe [1951] 1 All ER at p. 770 and may well be far too widely stated."

at p. 686 Lord Cohen said:

" .... the party setting up the doctrine must show that he has acted on the belief induced by the other party."

This principle of equity was brought to the fore by Denning J. in Central London Property Trust Ltd. v High Trees House Ltd. [1947] KB 130 and later reported in [1956] 1 All ER 256.

The principles were recently stated by the Judicial Committee of the Privy Council in Emmanuel Ayodeji Ajayi v R. T. Briscoe [1964] 3 All ER 556 at p.559 where Lord Hodson said:

"Their lordships are of opinion that the principle of law as defined by Bowen, L.J., has been confirmed by the House of Lords in the case of the Tool Metal Manufacturing Co., Ltd. v Tungsten Electric Co., Ltd