Vunimoli Sawmills Ltd v Jainil Timber & Hardware Ltd [2001] FijiLawRp 11; [2001] 1 FLR 102 (3 February 2001)

VUNIMOLI SAWMILLS LTD. v JAINIL TIMBER & HARDWARE LTD., ANIL PRATAP, JAI PRAKASH & SUSHILA DEVI

High Court Civil Jurisdiction

14 February, 2 March, 2001

HBC 345/98S

Debt recovery – supply of treated and untreated timber – defence of below standard and unwanted supply of goods – Plaintiff invited to take timber away but $13,000 worth of timber disappeared from the First Defendant's yard - evidence - credibility of witness

The Plaintiff claimed it supplied D1 with both treated and untreated timber as ordered but was not paid for it.  It also claimed against the remaining Defendants as guarantors. The Court found difficulty quantifying the claim as D1 placed its orders orally with the Plaintiff and did not produce any documents to show precisely what amounts or what kind of timber it had sold, nor precise calculations of the amounts owed or claimed. Nevertheless, the Court held that the Plaintiff had supplied a quantity of timber which bore the appearance of treated timber but was in fact untreated and therefore was not only worth less than it would have been had it been treated but also was not what D1 required. The Plaintiff was given the opportunity and indeed invited to take it away, thus the Defendants could not be held accountable for its disappearance.  The Court disbelieved the evidence of the Plaintiff, preferring the evidence of a forestry and timber preservation officer who gave evidence that a random sample of timber tested had 100% failure rates both in H2 preservation penetration and H2 preservation loading. As the Court was unable to quantify the loss, the Court gave liberty to the parties one month to apply for further directions if recalculations are required. 

Held – where there is considerable doubt as to the exact values, amounts and quantities of timber supplied, and the Plaintiff supplied timber which gave appearance of being treated but was in fact untreated and unwanted and not of the quality ordered and that the Plaintiff was given the opportunity and indeed invited to take it away, but did not, the Plaintiff's claim is dismissed.

Liberty to parties to apply for directions if recalculations are required. Plaintiff's claim is unsubstantiated. Judgment for the Defendants on their counterclaim. The Plaintiff's claim is dismissed.

No cases referred to in Judgment

Hemendra K. Nagin for the Plaintiff
Devanesh Sharma for the Defendants

[The Plaintiff sought to appeal this matter in ABU 0028/01S but settled with the Respondent. This matter was removed from the appeal list on 13 May 2003.]

2 March, 2001

JUDGMENT

Scott, J

The Plaintiff is a sawmilling company.  It supplies sawn timber in various lengths and sizes to timber and hardware companies such as the First Defendant.  Various local hardwoods are supplied as well as pine.  The timber may be supplied either treated with preservative or untreated.
 
The Plaintiff's claim against the First Defendant is that it supplied it with both treated and untreated timber as ordered during the period March 1996 to February 1998 but that the First Defendant owes the Plaintiff $37,833 in respect of timber supplied but not paid for.  The claim against the remaining Defendants is as guarantors.
 
The Defence of the First Defendant is that instead of supplying the timber that was ordered and required the Plaintiff, especially during the months of December 1997 and January and February 1998 supplied a quantity of timber which bore the appearance of treated timber but was in fact untreated and therefore was not only worth less than it would have been had it been treated but also was not what the First Defendant required.
 
Both Counsel produced bundles of agreed documents PD 1-87 and DD 1-33 which were referred to by consent.
 
When the writ was issued the Plaintiff claimed $49,000 but after the parties accountants re-examined the records the Plaintiff's claim was reduced to $37,833 (see PD 86 and PD 87).  The First Defendant also produced a reconciliation of accounts as at 3 March 1998 (see DD 30) which resulted in a counterclaim of $7,644.47.  In a letter dated 1 May 1998 the First Defendant advised the Plaintiff that it had $13,242.05 worth of untreated timber which had been sold to it and paid for as treated timber and which it did not require and which the Plaintiff was free to take back.  By deducting from this amount the amount admittedly owed by the First Defendant to the Plaintiff ($5,597.58) the figure of $7,644.47 was reached.
 
It became clear during the examination of the witnesses that there was considerable doubt as to the exact values, amounts and quantities of timber supplied.  In view of the fact that the First Defendant placed its orders orally with the Plaintiff and did not produce any documents to show precisely what amounts of what kind of timber it had on sold precise calculations of the amounts owed or claimed could not be made. In these circumstances I advised Counsel, who accepted the position, that the best that could be done would be to resolve the central question which was whether or not the Plaintiff had supplied substantial quantities of timber described as treated and charged at no less than $400 per cubic meter which timber in fact, on examination, proved not to be treated at all except with some form of dye which gave it the appearance of being the genuine article.
 
The only witness called by the Plaintiff, apart from the Company's accountant, was Bashir Khan, the Plaintiff's managing director.  Mr. Khan's case was that the First Defendant had been supplied with all the timber it had ordered, that it was all of the quality ordered, that none supplied as treated was in fact untreated and that the whole issue of untreated timber being sold as treated timber was a wholly false concoction put together by the First Defendant who had simply got into financial difficulties and was unable to pay his bills.  He denied that the First Defendant had ever complained about the quality of timber supplied.  After receiving the letter of 1 May he visited the First Defendant's premises but none of his timber was there.  At about the same time the Third Defendant promised to pay him what he was owed.  They agreed to meet at the Habib Bank but the Third Defendant never arrived.
 
Mr. Khan was shown DD4, a 4 page document prepared by the Ministry of Agriculture, Fisheries and Forests. This document shows that ten samples of Fiji Pine described as originating from the Plaintiff were tested on 4 May 1998.  All the samples were stained blue (unlike untreated pine which is white) but upon being tested they all produced 100% failure rates both in H2 preservation penetration and H2 preservation loading.  Mr. Khan told me that the Third Defendant had never complained to him about the quality of the timber supplied and that he had never been told that the timber was being sent for testing.  Although the analysis showed that the timber came from the Plaintiff Mr. Khan told me that it might well have come from somewhere else. He pointed out that the packet numbers column on page 4 of the Document DD4 was not filled in.
 
I have to say that I was not much impressed with Mr. Khan's evidence but when the Defence called Mr. Hemant Kumar, a Forestry and Timber Preservation Officer with 27 years of experience with the Forestry Department my unfavourable impression of Mr. Khan was transformed into simple disbelief.  With admirable lucidity and palpable sincerity Mr. Kumar carefully explained how samples of timber are selected at random for testing, how the testing is done and what the results show.  While the packet numbers had indeed inadvertently omitted from DD4 page 4 his own contemporaneous diary notes, to which he referred without objection, showed the packet numbers of the sample timbers to have been 772, 862, 875, 868, and 776 which numbers coincide precisely with packets of timber delivered by the Plaintiff to the First Defendant in February 1998 (see PD 65, 66 & 67).  Furthermore, he told me that all timber has to be branded or otherwise indelibly marked when leaving its sawmill and that the timber which was examined was marked 90243H2 which happens to be the Plaintiff's brand.  Mr. Nagin's suggestion that the brand might somehow have been falsified by someone with a grudge against the Plaintiff was explained in detail to be too far fetched to be seriously worth considering.
 
The Third Defendant who is the First Defendant's Director was the last witness.  He explained that the First Defendant was a family business now in its 7th year.  In 1997 and 1998 it only purchased timber from the Plaintiff.  In late 1997 and early 1998 he began to receive complaints from customers about the quality of the so-called treated timber which he had been selling.  He complained to Mr. Khan.  He asked Mr. Khan to take $13,000 worth of timber away but Mr. Khan never collected it.  He agreed with Mr. Nagin that some of the cheques which he had given Mr. Khan had been returned by the bank but he denied that the First Defendant was ever in anything but short term cash flow difficulties.  Partly, he told me, this was because the Plaintiff began to dump such large quantities of timber on him that he was unable to sell it in time to pay for it.  But, he explained, even if a cheque did "bounce" he made good the debt in due course, either by paying cash or by issuing another cheque which was honoured.
 
The Third Defendant told me that his case was simply that he wanted to be credited for the timber which he had bought as treated timber at a rate of at least  $400 per cubic meter when in fact he had been supplied with untreated timber which was worth $100 per cubic meter less.
 
Given the exceptionally favourable impression made by Mr. Kumar the 3rd Defendant's evidence really did no more than confirm the view which I had provisionally reached which was that there was not the slightest doubt that the Plaintiff had supplied the First Defendant with a substantial amount of timber which was passed off as treated when in fact it was not.  Although I would imagine that there are few tricks of the trade of which the Third Defendant is ignorant I found his evidence to be generally frank and straightforward and in some ways refreshingly modest.  Although Mr. Nagin placed considerable emphasis on the apparent disappearance of $13,000 worth of timber from outside the First Defendant's Timber Yard and I accept that the Third Defendant's evidence was somewhat fragile on this point I nevertheless find that the timber was in fact untreated and unwanted and not of the quality ordered and that the Plaintiff was given the opportunity and indeed invited to take it away.  I do not believe Mr. Khan's evidence that he visited the yard and found the timber gone.  In the circumstances I do not see how the Defendants can be held accountable for the timbers disappearance.
 
As already explained the accounts as placed before me were somewhat unsatisfactory and I am not able to verify them.  Accordingly, I will give the parties one month to apply for further directions in the event that recalculations are required.  Meanwhile I find for the Defendants on the claim and the counterclaim.  The Plaintiff's claim is dismissed.

Plaintiff's claim dismissed. Judgment for Defendants on counterclaim.

Marie Chan