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Carpenters Fiji Ltd v Dutt [1991] FJHC 51; Hbc0113d.91s (28 August 1991)

IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction

CIVIL ACTION NO. 113 OF 1991

Between:

CARPENTERS FIJI LIMITED
Plaintiff

- and -

RAM DUTT
Defendant
(f/n Not Known)

Mr. Lateef for the Plaintiff
Mr. V. Parmanandam for the Defendant

RULING

This is an application by the plaintiff under Order 14 of the High Court Rules for summary judgment in the sum of $10,000 against the defendant.

The action is based on a Memorandum of Guarantee executed by the defendant on the 16th of December 1986 in favour of the plaintiff company guaranteeing payment up to a sum $10,000 in respect of all goods and services supplied by the plaintiff company to Toorak Builders Ltd.

Although there is no Statement of Defence before the court the defendant has filed an affidavit disputing liability under the guarantee which it is not disputed was executed by him.

In particular the defendant raises several undisputed factual matters in his affidavit which may be summarised as follows:

"At the time of executing the guarantee he was an employee and shareholder of Toorak Builders Ltd. Subsequently on the 21st of July 1987 his employment with the company was terminated and this fact was advertised on the 23rd of July 1987 in a daily newspaper by way of a PUBLIC NOTICE signed by the Managing Director of Toorak Builders Ltd. Within a week of his termination the defendant transferred his shareholding in Toorak Builders Ltd. to a third party. He also wrote to the company withdrawing his personal guarantee given on behalf of the company."

The defendant also deposed in his affidavit that:

"the plaintiff company was aware of the facts that my guarantee had no effect on the credit facilities given to the said Toorak Builders after I had been terminated ..."

and furthermore:

"the plaintiff without my prior consent has supplied goods to the said Toorak Builders for the period 1990 to 1991 when they ought to have known my guarantee was of no effect at the time of the goods delivery."

Neither of the above paragraphs have been denied on oath as they could have been but learned counsel for the plaintiff company submits that they are irrelevant in any event because the defendant's liability is to be found in the guarantee document which is before the Court.

I cannot agree. The guarantee itself by Clause 4 permits the defendant " ... in respect of future transactions, ... to give one calendar month's notice in writing of the cessation of this guarantee".

In the circumstances, although no such written notice has been annexed to the defendant's affidavit, nevertheless, the undisputed assertion in the defendant's affidavit: " ... that the plaintiff company was aware of the facts that my guarantee had no effect ..." raises some prima facie evidence invoking the provisions of Clause 4 of the Memorandum of Guarantee.

Then counsel for the plaintiff company sought to rely on a recent decision of Jayaratne J. in C.A. 114/91 Carpenters Fiji Ltd. v. Chandra Lachmaiya Naidu but having perused a copy of the ruling I note that the learned judge was there dealing with an Order 14 application in which the defendant had completely failed to file any affidavit in reply to that of the Credit Manager of the plaintiff company. The judge's decision was, in the circumstances, perfectly understandable and easily distinguishable from the present application.

In Paclantic v. Moscow Naroduy Bank (1983) 1 WLR 1063 the following propositions were laid down in relation to applications under Order 14: (per Webster J. at p.1065).

"... summary judgment should not be given where there is a bona fide defence (i.e. an issue or question in dispute which ought to be tried) or where there ought for some reason to be a trial; that on an application for summary judgment disputes of fact should not be decided, serious questions should not be determined in a summary manner and issues should not be tried; and that a defendant seeking to resist summary judgment should state clearly and concisely what his defence is and what facts are relied upon as supporting it."

In this present application the defendant has shown cause by way of an affidavit with annexures which satisfies me that there is an arguable defence to the plaintiff's claim.

Accordingly the plaintiff's application is dismissed, the defendant is granted leave to defend the action and it is further ordered that the defendant file and serve a Statement of Defence within 21 days of the date hereof. The action is adjourned to Friday the 20th September, 1991.

(D.V. Fatiaki)
JUDGE

At Suva,
28th August, 1991.

HBC0113D.91S