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High Court of Fiji |
IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION
ACTION NO. HBC 0409 OF 1994
IN THE MATTER of an Application for possession of Land
under Section 169 of the Land Transfer Act Cap. 131, 1971.
BETWEEN:
KARIM BUKSH
(f/n Madar Buksh) of
1 Ragg Avenue, Tamavua, Suva
Plaintiff
AND
PACIFIC TIMBER DEVELOPMENTS LIMITED
a company duly incorporated in Fiji and
having its registered office at Pacific
Harbour, Deuba
Defendant
Plaintiff in person.
I. Fa for the Defendant
Dates of Submissions: 25th September, 17th and 25th
October 1996
Date of Interlocutory Judgment: 25th April 1997
INTERLOCUTORY JUDGMENT
By a Contract of Sale dated 24th June 1992 the Defendant agreed to purchase from the Plaintiff for the price of $300,000.00 all that land comprised in Certificate of Title No. 26549 known as Deuba Block 1 being Lot 1 D.P. 6510.
The purchase price was to be paid in instalments as follows:
(a) By payment to the Plaintiff no later than 31st January 1991 of a deposit of $40,000.00.
(b) The balance of the purchase price namely $260,000 was to be paid by monthly instalments of $3,350.00 on the first day of each month commencing 1st April 1990 until 1st August 1990 and thereafter $5,500.00 per month until October 1991 and thereafter $6,000.00 per month until October 1993.
(c) Interest on the balance on a reducing basis was chargeable at a rate of 13.5%.
(d) The Purchaser was entitled at its option at any time to pay the balance of the Purchase Price to the Plaintiff whereupon title to the property would be transferred in accordance with the provisions of the Contract.
Clause 7 of the Contract states:
"IF the Purchaser shall make default in payment of any moneys when due or in the performance or observance of any other stipulation or agreement on his part herein contained and if such default shall continue for the space of thirty (30) days then and in any such case the Vendor without prejudice to any other remedies available to him may at his option exercise all or any of the following remedies namely:
(i) May enforce this present contract in which case the whole of the purchase money then unpaid shall become due and at once payable;
(ii) May rescind this contract of sale and thereupon all moneys theretofore paid or under the terms of sale applied in reduction of the purchase moneys shall be forfeited to the Vendor as liquidated damages;
(iii) May at the option of the Vendor and without first tendering any transfer to the Purchaser re-sell the Property either by public auction or private contract for cash or on credit and on such other terms and conditions as the Vendor may think proper with power to vary any contract for sale buy it in at any auction and re-sell and and any deficiency in price which may result on and all expenses attending a re-sale or attempted re-sale shall be made good by the Purchaser and shall be recoverable by the Vendor as liquidated damages the Purchaser receiving credit for any moneys paid or under the terms of sale applied in reduction of the purchase money. Any increase in price on re-sale after deduction of expenses shall belong to the Vendor."
Clause 8 provided that upon payment of the Purchase Price of $300,00.00 and any other moneys due under the Contract by the Purchaser the Plaintiff undertook to give and execute in favour of the Defendant a valid and registrable transfer of the property free from all mortgages and charges at least 7 days prior to the date for completion of the transfer.
By Clause 11 time was to be of the essence of the Contract.
The Defendant fell into arrears in its payments as a result of which the Plaintiff through its first solicitors Munro Leys & Co and later by himself wrote letters dated 1st March 1994, 14th April 1994, 6th July 1994 and 2nd August 1994 requiring payment of the balance of purchase money allegedly due on those dates.
The Plaintiff had mortgaged the property to the Australia and New Zealand Banking Group Limited and had executed a Charge in favour of the Fiji Development Bank. These are mentioned in Clause 3 of the Contract of Sale.
By Clause 19 all sums of money payable under the Contract of Sale were to be paid by the Defendant to the Australian and New Zealand Banking Group Limited and Fiji Development Bank.
On the 22nd of August 1994 the Plaintiff issued a Summons under Section 169 of the Land Transfer Act Cap. 131 calling on the Defendant to show cause why it should not give up immediate vacant possession to the Plaintiff of all the Plaintiff's property which the Defendant is occupying. In support of this Summons the Plaintiff swore an affidavit on the 19th of August 1994 in which in paragraphs 8 to 11 he states that the Defendant has met its obligations in paying the necessary instalments to Australia and New Zealand Banking Group Limited to which no further liability remains. The Plaintiff states that the Defendant has met its obligation to the Fiji Development Bank until July 1993 since which it has paid nothing more to the Bank.
By a Letter of Demand dated 23rd June 1994 the Fiji Development Bank as Mortgagee informed the Plaintiff that the balance due to it as at 31st March 1994 was $144,155.80 together with interest at 8% per annum on $20,000.00 and 13.5% on the balance from 1st of June 1994 to the date of payment.
The Bank gave notice that if those amounts were not paid forthwith the Bank would commence legal proceedings against the Plaintiff to recover the same.
In their letter of 4th January 1993 to the Defendant the Plaintiff's former solicitors stated that the Defendant was currently in default for over 64 days and that the balance owing at 31st December 1992 was $188,056.48 together with interest accruing at the rate of $69.56 per day since 1st January 1992.
On the 1st of March 1994 the Plaintiff wrote another letter to the Defendant in which he referred to the failure of the Defendant to meet its payments under the Contract of Sale and to the fact that the Plaintiff and Defendant had held discussions in October 1993 as a result of which he stated that on December 24, 1993 the Defendant through its former General Manager Mr. Sly had promised that the Defendant would make final settlement in full by mid January 1994.
The Plaintiff stated that the Defendant had made no payments following Mr. Sly's promise and that as at 28th February 1994 there was a balance owing of $139,959.39 of which the Plaintiff demanded payment within 14 days following which he would rescind the Contract.
On 14th April 1994 the Plaintiff wrote to the Defendant stating inter alia "That unless I receive adequate payment by midday of 15/4/94 I shall have no option but take possession and sell the property to those who have shown genuine interest in buying".
On 6th July 1994 the Plaintiff wrote to the Defendant referring to his earlier Demand Notice and later discussions as to a revised scheme for payment of the balance of Purchase Price.
On 2nd August 1994 the Plaintiff wrote to the Defendant in a letter which omitting formal parts reads as follows:
"Recission of Contract of Sale and Forfeiture of Monies
I refer to my previous demands ending with my demand of 6th July, 1994.
As you have failed to pay the monies as demanded in notice of 6th July 1994, please take notice that I hereby rescind the contract of sale dated 24/6/1992 and have forfeited all monies paid or applied as therein stated as liquidated damages.
I now require vacant possession of the property within 7 days from the date hereof failing which I will issue ejectment proceedings under Section 169 of the Land Transfer Act, 1971.
Yours faithfully,
Sgd.
...............
Karim Buksh"
Following an alleged conflict of interest between Messrs Munro Leys & Co. and the Plaintiff and the Defendant that firm ceased to act on behalf of the Plaintiff who then engaged another solicitor Messrs Tamara & Associates. This firm appeared on behalf of the Plaintiff on several occasions following 13th January 1995 during which the Court was informed that settlement talks were proceeding between the parties. A timetable for the delivery of written submissions was agreed before me on 29th December 1995 but on the 19th of June 1996 the Deputy Registrar (Legal) gave Messrs Tamara & Associates leave to withdraw as solicitors for the Plaintiff on the ground of the Plaintiff's continuing failure to give them instructions.
Thereafter the Plaintiff has acted in person.
On 28th June 1996 the Defendant's present solicitors Messrs Fa & Co. issued a Summons seeking dismissal of the Plaintiff's action on the ground of his failure to file and serve written submissions in the time fixed. Apparently the parties reached agreement later as to the filing of these submissions which have now been received by the Court.
These submissions relate to the Plaintiff's Summons for Ejectment of 22nd of August 1994.
On p.12 of his submission the Plaintiff states that he received a second Demand Notice from the Fiji Development Bank on 26th August 1995 requesting payment of $162,648.36. The Plaintiff states that this amount was not paid after which the Bank advertised the property for sale and accepted the tender of the Defendant for $330,00.00 with a preliminary deposit of 20%. The Plaintiff alleges, and it is not denied by the Defendant, that the Defendant failed to pay even the deposit which led the Bank to advertise the property for sale again on two other occasions.
The Plaintiff alleges that the Defendant is in a precarious financial position which is evident by a Winding Up Petition against it in Action No. HBE30/96. This Petition was subsequently withdrawn before Pain J. on 15th November 1996 and two supporting creditors did not seek leave to be substituted.
In its submission of the 17th of October 1996 the Defendant refers to a number of cases in which the principles governing equitable relief against forfeiture are stated - Shiloh Spinners v. Harding Ltd (1973) A.C. 691 at pp 722-723 and Starside Properties Ltd. v. Mustapha (1974) 1 WLR 816 at p.821. These are well known and I will not repeat them here. The Defendant also relies on Kilmer v. British Columbia Orchard Lands Limited [1913] UKLawRpAC 8; (1913) A.C. 319 as authority for the proposition that relief against penalty by means of rescission and forfeiture of instalments would be granted if the Purchaser is ready and willing to carry out the Contract.
It is submitted that the Defendant is ready and willing to proceed with the Contract and paragraph 13 of the affidavit filed on behalf of the Defendant sworn by its General Manager Greig Joseph Hill on 11th November 1994 is cited to support this claim.
In my judgment this statement can hardly be supported on the facts as they are known and not disputed by the Defendant. No where in its submissions does the Defendant through its counsel deny the statement made on p.12 of the Plaintiff's first submission that as at 26th August 1995 the Fiji Development Bank had made a demand for $162,648.31; nor could it in my view because of paragraph 4.4 of the Defendant's submission that the Defendant had substantially paid out the liability to the Bank until July 1993. It is begging the question in my view for Mr. Hill to state in paragraph 9 of his affidavit that the Defendant disputes that there are any moneys due to the Plaintiff and that the only moneys due by the Defendant are payable to the Fiji Development Bank as mortgagee. Mr. Hill appears to conveniently forget the provision in the Contract of Sale that all sums of money payable under the Contract are to be paid to the Australia and New Zealand Banking Group Limited and the Fiji Development Bank. As such any payment to the Bank would in law be regarded as payment on behalf of the Plaintiff to whom the Defendant is primarily liable.
It is then submitted by the Defendant that the Court should consider three matters:
(i) Conduct of the Defendant in the whole contract.
(ii) Sums paid by the Defendant - whether substantial.
(iii) Whether he is prepared to proceed with the contract.
Then it is submitted that the letters by the Plaintiff to the Defendant mentioned above amount to a waiver of the alleged breaches by the Defendant and that therefore the Plaintiff cannot be heard to rely on the alleged breaches to found proceedings under Section 169. I do not agree with this submission in so far as it alleges the Plaintiff has waived his rights to rescind by his conduct and the letters.
As Barry J. said in Bull v. Gaul [1950] VicLawRp 50; (1950) V.L.R. 377 at p.380 quoting Lord Wright in Smyth & Co. v. Bailey, Son & Co. (1940) 3 All E.R. 60 at p.70, the word `waiver' is a vague term used in many cases. It is used among other senses where the party expressly or impliedly gives up a right to enforce a condition or rely on a right to rescind a contract.
One thing is clear that waiver is always a question of fact.
As Voumard in the Sale of Land 3rd Edition says at p.303 "It is not a valid general proposition that in a contract of sale of land by instalments that wherever some instalments are accepted late without demur the party accepting them is precluded in respect of later instalments from insisting upon the agreement that time shall be of the essence." The High Court of Australia so held in Tropical Traders Limited v. Goonan [1964] HCA 20; (1963-1964) 111 C.L.R. 41. In that case it was held that the acceptance by a vendor of late payments of the earlier instalments did not preclude the vendor from insisting that time should continue to be of the essence. The Court also held that the extension of time granted by the vendor merely substituted a later date for the original date, so that time continued to be of the essence though in respect of the later date.
In the course of its judgment the Court referred to Kilmer v. British Columbia Orchard Lands Ltd and said that that case is clear authority for the proposition that a stipulation making time of the essence may be rendered no longer applicable by the granting of an extension of time in particular circumstances; but it is not authority for the more general proposition that every grant of an extension of time deprives such a stipulation of effect for the future - per Kitto J. 111 C.L.R. p.53.
The Defendant has failed to satisfy me that the Plaintiff has waived his rights under the Contract by his conduct and his letters to the Defendant.
In my opinion it is clear from these letters that the Plaintiff was prepared to give the Defendant a reasonable opportunity of making good its default but was obviously under increasing pressure by the Bank not to extend any further time. Significantly in my view the Defendant in its submission does not question the amount of $162,648.36 claimed by the Bank on 26th August 1995.
It is now trite law that once a Defendant shows that he has some serious claim to resist an application under Section 169 an Order should not be made against it. However in my judgment if, as the Defendant claims, it has at all times been ready and willing to proceed with the purchase it should now provide tangible evidence not only of its willingness but also its ability to pay the balance of the purchase money.
In his submission of 24th October 1996 the Plaintiff submits that as evidence of its bona fides the Defendant should now pay into Court the following amounts:
(a) FDB debt ($186,277.00) as at 31/8/96 plus interest at 13½% plus any other costs to FDB;
(b) pay costs to the Plaintiff - $5,000.00 for this action; and
(c) damages at $50,000.00.
In my judgment it would be fair, and I now order, that the Defendant should pay into Court within 14 days of the delivery of this judgment the sum of $180,000.00. This is based on the Demand Notice to the Plaintiff of 23rd June 1994. On my own calculation it would appear that as at 24th October 1996, the date of the Plaintiff's last submission, the amount owing to the Bank is approximately $187,000.00. Allowing for any possible errors I will take this figure to be $180,000.00 to be paid into the Court within 14 days of this judgment. If that sum is not paid in then the Plaintiff will be at liberty to apply for further Orders. I also order that the Defendant pay the Plaintiff costs of the Summons of 22nd August 1994 to be taxed if not agreed.
JOHN E. BYRNE
JUDGE
Legislation and authorities referred to in judgment:
1. Land Transfer Act Cap. 131.
2. Bull v. Gaul [1950] VicLawRp 50; (1950) V.L.R. 377.
3. Kilmer v. British Columbia Orchard Lands Limited [1913] UKLawRpAC 8; (1913) A.C. 319.
4. Starside Properties Ltd. v. Mustapha (1974) 1 WLR 816.
5. Tropical Traders Limited v. Goonan [1964] HCA 20; (1963-1964) 111 C.L.R. 41.
6. Voumard's The Sale of Land 3rd Edition
The following additional cases were mentioned in argument:
1. Dinesh Jamnadas & Anor v. Honson Limited [1985] 31 FLR 62
2. Mersey Steel & Iron Co. v. Naylor, Benzon & Co. (1884) 9 APP CAS 434.
3. Hughes v. Metropolitan Rail Co. (1874-80) ALL E.R. 187.
4. Morris Hedstrom Limited v. Mohammed Prasad Khan [1987] 33 FLR 97.
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