Sivams Transport v Nadi Town Council [1981] FijiLawRp 23; [1981] 27 FLR 192 (4 April 1981)

[1981] 27 FLR 192

COURT OF APPEAL OF FIJI

CIVIL JURISDICTION

SIVAMS TRANSPORT

v

NADI TOWN COUNCIL

[COURT OF APPEAL (Gould, V.P., Spring, J.A., Henry, J.A.)]

Contract - Trial Judge having heard witnesses, should not readily be overruled as to his version of what he heard.

B.C. Patel for the Appellant
Ram Krishna for the Respondent

Date of Hearing: 10 March 1981
Date of Judgment: 4 April 1981

The Court of Appeal reasons included a summary viz. that appellant had brought an action for damages in the Supreme Court at Lautoka against the respondent claiming that respondent having accepted appellant's tender for garbage collection breached that contract by accepting a tender from another to whom the contract was subsequently let, to the exclusion of the appellant.

On 1 February 1980, after a hearing in the Supreme Court the learned trial Judge dismissed the action. He held that there had been no binding contract between appellant and respondent.

The Court of Appeal stated the facts thus: The Nadi Town Council early in 1978 decided tenders should be called for the letting of any contract to commence on 1 January 1979 for the collection of garbage. Advertisements were issued, inviting tenders.

Appellant tendered as did the then current contractor Ram Pratap. On 6^th December, 1978, the Health Committee of the Council which included seven Councillors, opened and considered the tenders: the appellant tendered the sum of $41,330.20 for the cost of garbage collection for each of three years - 1979, 1980 and 1981. It forwarded a letter stating "our above prices are open for negotiation and we request you to call us at any time to reconsider the prices". A cheque for $1,000 deposit was enclosed.

A Committee (Health Committee) of four-named persons were appointed to carry out the negotiations with the appellant. After discussion between the Committee and Mr Kumar Singh of the appellant the tender price was reduced to $35,000 a fresh tender reflecting this step was produced by the Council completed by appellant and delivered to the Council.

On 8 December, 1978 the appellant by letter sought "confirmation of your decision".

There continued discussions between the respondents representatives and the appellant. On 28 December, 1978 a letter was received by appellant from respondent stating that its tender had been unsuccessful and return the $1,000 deposit. The learned trial Judge deciding that there had not "on 7 December, 1978 or thereafter been a concluded contract between the parties".

In its appeal, appellant contended there had been a concluded oral contract on 7 December 1978, its terms agreed at the meeting and that the committee had been delegated by the full Council to settle the terms of the contract which terms had been accepted by the Committee. Further that appellant was entitled to assume the committee had power to act on behalf of the respondent; that appellant was not required nor obliged to enquire into the indoor management or procedures of the respondent. It was said that when the tender price was finally fixed there had been unconditional parol acceptance by the committee. The respondent said that the evidence of the Engineer at the meeting was accepted by the trial Judge, and was in effect inconsistent with there being a concluded contract: that there was no evidence as to delegation empowering an ad hoc committee to accept tenders. The learned Judges on appeal referred to the principles governing the position of the Court of Appeal in relation to findings of fact made by a lower court including Benmax v Austin Motor Co. Ltd.  (1955) A.C. 37 on the issue of credibility. Evidence of conversations to which Saram Singh deposed were either not accepted or the construction he put on them was not accepted: or favoured the respondents. It was unnecessary to decide whether the ad hoc committee had authority to accept plaintiffs' tender.

Held: There had been no concluded contract between the parties. Appeal dismissed.

Cases referred to:

Powell v Streathem Manor Nursing Home (1935) A.C. 243
Watt (or Thomas) v Thomas (1947) A.C. 484
S.S. Hontestroom v S.S. Sagaporack (1937) A.C. 37
Benmax v Austin Motor Co. Ltd. (1955) A.C. 370
Batteley v Finsbury Borough Council (1958) 56 L.G.R. 165

SPRING. Justice of Appeal:

JUDGMENT

Appellant brought an action for damages in the Supreme Court of Fiji at Lautoka against the respondent Council claiming that respondent having accepted appellant's tender for the collection of garbage within its area breached that contract by accepting a tender from another contractor to whom the contract for garbage collection was subsequently let.

On 1^st February 1980, after an hearing in the Supreme court which lasted five days, the learned trial Judge dismissed the action and, in so doing, held that there was no binding contract between appellant and respondent.

The brief facts are as follows: The Nadi Town Council had previously employed an independent contractor to collect garbage within its boundaries: early in 1978 as a result of audit recommendations respondent was advised that tenders should be called for the letting of any contract for the collection of garbage; on 13^th September, 1970, the Finance Committee of the respondent recommended that advertisements be issued not later than mid October, 1978, calling for tenders for the collection of garbage, the contract to commence on 1^st January, 1979, confirmed this recommendation. Advertisements were issued, somewhat tardily, on 18^th and 21^st November, 1978, which read as follows:

"TENDER
NADI TOWN COUNCIL
GARBAGE REMOVAL CONTRACT

Tenders are invited from approved and eligible contractors for providing garbage service on a yearly basis from and within the Nadi Town Boundary and part of the Airport area. Tender papers with terms and conditions can be obtained from the Office of the under-signed during working hours from Mondays to Fridays. Tenders close at 4 p.m. on 4^th December, 1978. Late tenders will not be accepted.

S.S. PILLAY
Town Clerk"

Appellant tendered as did the then current contractor Ram Pratap. A third tender was received but as no deposit accompanied this tender it was not considered. On 6^th December, 1978, the Health Committee of the Councillors, opened and considered the tenders; the appellant tendered the sum of $41,330.20 for the cost of garbage collection for each of three years - 1979, 1980 and 1981 - and forwarded a letter stating "our above prices are open for negotiation and we request you to call us any time to reconsider the prices". A cheque for $1,000 deposit was also enclosed. Ram Pratap tendered $43,390.08 for the year 1978, and thereafter to increase by 8 percent for the 3 year period. The Health Committee resolved that "that the lowest tender of Sivams Transport be recommended for acceptance subject to further negotiation as indicated by the tenderer in its letter with a view to reducing the quoted amount. His Worship the Mayor, the Town Clerk, the Town Engineer and the Health Inspector were given the mandate to carry out the negotiations with Messrs Sivams Transport."

This Committee of the four named persons was called an "ad hoc" Committee of the Health Committee. Doubts as to the validity of the appointment of such a committee were expressed by the learned trial Judge in his judgment. A meting was called for 7^thDecember, 1978, at the Town Clerk's office and Kumar Sivam attended together with his brother Param Sivam; they were advised that the respondent did not require the market area to be included in the tender price; further, appellant was asked to reduce its price in view of the comments contained in the letter enclosing the tender. After discussion the tender price was reduced on 7^th December, 1978, to $35,500. A fresh tender form was produced by the Town Clerk which was duly completed by Kumar Sivam on behalf of appellant sowing garbage work $33,000 and dump service $2,500. The new tender form was attached to the other relevant tender documents. The tender form signed by Kumar Sivam contained provision for the Town Clerk to sign, but the Town Clerk did not sign, nor did anyone present at the meeting request that the tender form be signed on behalf of respondent. On 8^th December, 1978, a letter was sent to respondent council by appellant in the following terms:

"The Town Clerk
Nadi Town Council
Nadi

Dear Sir

Re: Garbage Removal Contract 1979 - Tender Dated 4^th December 1978.

Further to our discussion herein we hereby reconfirm our new price for the undermentioned work and to be done in accordance with the above contract except the cleaning of the market on Saturdays which work with our agreement your Council elected to have done by its own employees.

(a) Collection and Removal of
Garbage                         $33,000.00 per year

(b) Dump Maintenance   $2,500.00 per year

                                      _________

                                      $35,500.00

                                      =========

(Thirty Five Thousand and Five Hundred Dollars).

We also confirm that our above price is quoted per year and shall be in force for 3 (Three) years only with effect from the 1^st day of January 1979.

Thanking you for your kind consideration and an early confirmation of your decision.

Yours faithfully,

SIVAMS TRANSPORT"

This letter appears to have been received by respondent on 8^th December, 1978. Kumar Sivam stated in evidence that his reason in sending the letter was for audit purposes and to reconfirm the price; Param Sivam confirmed:

(a) that the price for the garbage collection was deleted as respondent did not require the cleaning of the market area and,

(b) a fresh tender form completed and signed by Kumar Sivam with whom the Mayor shook hands; and the Mayor stated that work was to start on the 1^st January, 1979.

Respondent's Engineer discussed with Kumar Sivam various matters relating to the garbage collection contract and Param Sivam heard the Engineer inquire "where he would park his truck if he got the contract". The Engineer in his evidence said that he told Kumar Sivam that "if he was successful he could park lorries for the time being with us at our depot". Appellant assumed that once the tender price for the garbage collection contract has been agreed upon there was an oral contract binding upon respondent and appellant. Kumar Sivam in his evidence said:

"The form needed a signature of the Town Clerk. He was there. I was told it would be signed and copies sent to me. I had faith in the four of them. There was a contract, it was verbally agreed .... I was not told it would be put before the Council for consent."

The Mayor stated in evidence that he made it clear to Kumar Sivam that appellant's offer had to be approved by the full Council; that the ad hoc committee acted merely as negotiators; that the ad hoc committee had "no powers to accept anything without approval of full council". The Mayor said:

"We were to finalise fresh tender figures to put to Council. We were to negotiate to reduce price. Plaintiff wanted to bring figures down and he did so. Certain work was to be deleted. These were recommendations of Health Committee. He submitted new tender figures and cancelled previous figures. Tender figures were signed to be put before full council. Health Committee had no powers. We reported back to Health Committee with new figures."

The Town Clerk said in evidence:

"I referred tenders for garbage collection to Health Committee. Tenders opened on 6.12.78. I was present. Subsequently I asked plaintiff to come and see me. He came on 7.12.78 to see an ad hoc committee. Mayor arrived. Tender was made 'subject to negotiation'. We asked him to reduce figure. He cancelled his original figure and I have him another tender form to complete. Nothing was said about a contract. It was said that committee would recommend his tender to full council and it was most likely that Council would accept it".

On or about 15 December, 1978, Kumar Sivam telephoned the Town Clerk of the respondent council advising that he had heard disquieting news that some Councillors were in favour of the garbage contract being given to the other contractor; he was advised to speak to the Mayor who confirmed the Town Clerk's advices . On 18^th December, 1978, Kumar Sivam was requested by Town Clerk to come to his office along with the other tenderer; no satisfactory reason was given to Kumar Sivam for this summons. He called at the Town Clerk's office and handed him a letter from his solicitors claiming that appellant was the successful tenderer, and, that the Council through its ad hoc committee had accepted the tender; after waiting for some time in the Town Clerk's office Kumar Sivam left as nothing eventuated on that day. On 27^th December, 1978, the full Council met and resolved "that the report of the ad hoc committee of the Health, Market, Fire and Parks be rejected". Thereupon the Council resolved that fresh tenders be called for the garbage collection contract. On 28^th December, 1978, a letter was received by appellant from respondent Council stating that its tender had been unsuccessful and refunding the $1,000 paid.

On 1^st January, 1979, Kumar Sivam saw an advertisement in the local paper whereby respondent was calling for fresh tenders for garbage collection within its boundaries; appellant submitted a fresh tender together with a cheque for $1,000 deposit. On 31^st January, 1979, respondent wrote to the appellant's solicitors advising that its subsequent tender was unsuccessful and returned the cheque for $1,000.

After considering the evidence in detail the learned trial Judge made several findings of fact and held "that there was not on the 7^th December, 1978, nor at any time thereafter a concluded binding contract between the plaintiff and the defendant".

Appellant appealed to this Court and submitted that the full Council had resolved to call for tenders and the committee acting on behalf of the full Council finalised the terms with appellant; that an oral contract had come into existence at the meeting on 7^thDecember, 1978, when appellant's tender was accepted by the committee; that all the terms of the contract had been agreed upon at the meeting and that the committee had been delegated by the full Council to settle the terms of the contract which terms had been accepted by the Committee; that the $1,000 deposit was receipted on 11^th December, 1978 - after the settlement of terms - which was supportive of the claim that appellant was the successful tenderer; that if the agreement reached on 7^th December, 1978 required formal confirmation by respondent a binding contract had nevertheless come into existence. That appellant was entitled to assume the committee had the necessary power to act on behalf of respondent; that appellant was not required, nor obliged, to inquire into the "indoor management" or respondent's procedures and that when the tender price was finally fixed there was an unconditional parol acceptance by the committee.

Another ground of appeal dealing with the admissibility of certain evidence was abandoned.

Mr Ram Krishna submitted that the 'ad hoc' committee had power merely to negotiate a fresh tender price consequent upon the removal from the tender of the cleaning of the market area: that appellant knew something further had to be done before a contract came into existence and submitted that the letter written by appellant dated 8^th December, 1978, to the Town Clerk giving details of the new tender price confirmed this submission. That the evidence of respondent's Engineer (which was accepted by the learned trial Judge) clearly indicated that there were matters yet to be finalised; that there was no evidence of delegation empowering an ad hoc committee of the Health Committee to accept tenders on behalf of the respondent; that the learned trial Judge saw and heard the witness; made correct findings of fact on the evidence, and drew correct inferences therefrom; that the onus was on appellant to show that the learned trial Judge, in determining as he did the issues of fact, fell into error.

The real issue in this appeal therefore is whether the trial Judge erred in his finding that the appellant's tender, finally submitted as amended on the 7^th December, 1978, was not accepted, in fact, by the respondent Council.

The principles governing the position of a Court of Appeal in relation to findings of fact made by a lower court are fully stated in Powell v Streatham Manor Nursing Home  (1935) A.C. 243, Watt (or Thomas) v Thomas  (1947) A.C. 484 Benmax v Austin Motor Co. Ltd. (1955) A.C. 370 S.S. Hontestroom v S.S. Sagaporack  (1937) A.C. 37 and need not be repeated.

In the Court below the learned Judge analysed the case for the plaintiff - now the appellant - and said:

"The plaintiff's claim is based on breach of contract, on the basis that the meeting with the ad hoc committee on the 7^th December 1978, ended with a concluded agreement, binding on the Town Council even though there was no written signed agreement".

"What transpired at the meeting on 7^th December, 1978, is in dispute and that it was the difference in versions which is one of the issues in this case".