| Fiji Islands - HP Kasabia Brothers Ltd v Khan - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
CIVIL ACTION NO: HBC 460 OF 1999
BETWEEN:
H.P. KASABIA BROTHERS LIMITED
Plaintiff
AND:
SHAMEEMA KHAN
t/a G. KAY CONSTRUCTIONS
1st Defendant
G. KAY CONSTRUCTIONS LIMITED
2nd Defendant
SULTAN MOHAMMED KHAN
aka GEORGE KHAN & SHAMEEMA KHAN
3rd Defendant
Counsel: Mr G. Keil for Plaintiff
Mr D. Sharma for 2nd Defendant
Ms V. Narayan for Sheriff
Ms P. Narayan for Claimant
Hearing: 14th March 2000
Judgment: 20th March 2000
JUDGMENT
This is a claim made for vehicles seized by the Sheriff of Fiji, by China Huashi enterprises (Fiji) Ltd. (the Claimant) under Order
17 Rule 1 of the High Court Rules 1988.
On 16th November 1999, default judgment was entered against Sultan Mohammed Khan also known as George Khan, in the sum of $98,572.99
and costs of $65.00. The Plaintiff then proceeded to debt recovery, and a number of vehicles were seized from the premises of G.
Kay Construction Ltd., the second Defendant. The Sheriff then proceeded to advertise the vehicles for sale by auction.
Amongst the vehicles was a 1200A Vibrating Roller Registration E4380 and a McDonald Road Roller, which the Defendants said, were under
lien to the Claimant, China Huashi.
On 17th January 2000 the Claimant wrote to the Chief Registrar (the Sheriff) claiming a lien over the Roller and the McDonald three
point steel roller. This claim was referred to solicitors for the Plaintiff. Messrs Mitchell Keil and Associates wrote to the Sheriff
on 19th January 2000, in the following terms:
“We confirm that notice through the Defendant’s solicitors was given exhibiting what purports to be an agreement between the claimant
and the Second Defendant which by paragraph 6 provided inter alia ‘As the security for the said advance loan and the execution of
the works G. Kay agrees to provide the following items of plant and vehicles to Huashi to retain and have a lien over such items
as mentioned below until the works are satisfactorily completed and the advance loan fully paid. The chattels are:-
i) KATO 400 SEV Excavator;
ii) Terex 82-30 Bulldozer;
iii) Pacific 1200A Vibrating roller;
iv) McDonald three-point steel roller;
G. Kay further undertakes to execute a transfer of the said chattels to Huashi or grant a Bill of Sale or other security which Huashi
may require and in the event of default by G. Kay, Huashi will execute sale of the above chattels to recover costs to losses. The
above securities will be released to G. Kay by Huashi once the practical certificate is obtained and the advance loan fully paid.’
No evidence has been produced by the Claimant or the Second Defendant that in fact the steps to be taken to perfect the lien over
the items for which the claim is made have been effected so as to be legally binding between the parties and any third party.
Until such evidence is produced, verified by the affidavit, the Plaintiff cannot accept the purported claim of the claimant to the
items in question.”
(My underlining)
On 20th January the Deputy Registrar Ms V. Narayan communicated these views to the Claimant. She asked for a copy of the sub-contract
and any other supporting documents, to be sent to her.
The Claimant replied on the same day enclosing a copy of a document purporting to be the sub-contract agreement. The agreement is
dated 21st September 1999. However there is a substantial difference between this agreement, and the agreement referred to in the
letter written by Messrs. Mitchell Keil & Associates of 19th January.
Firstly, the items listed in Paragraph 6 of the Agreement are as follows:
(i) Caterpillar 920 loader CX 693;
(ii) MazdaTwin Cab DK 624;
(iii) Pacific 1200 Vibrating Roller;
(iv) McDonald three-point Roller.
Secondly the portion I have underlined in of the agreement sent to the Plaintiff by the Defendants (above), does not appear in the
copy sent to the Sheriff by the Claimant. Thirdly, the agreement sent to the Sheriff is not signed by the Secretary of the Claimant
company.
The Plaintiff disputed the claim, and the Sheriff issued Interpleader Summons under Order 17 Rule 1 of the High Court Rules, on 28th
January 2000. The summons was in respect of a 3 Point MacDonald Road Roller, a Pacific 1200A Vibrating Roller, a Mazda Twin Cab registration
number DK624 and a Caterpillar 920 load registration No. CX693.
The matter was called on 8th February 2000. There was no appearance for the Claimant. Counsel for the Plaintiff asked for leave to
file an affidavit annexing all correspondence. The matter was adjourned to 17th of February for hearing.
On that day, Ms P. Narayan informed the court that she had just received instructions to represent the Claimant, and wished to study
the papers. By this date the Plaintiff had already filed the affidavit of Dinesh Bala, sworn and filed on 11th February. The matter
was then adjourned to
6th March 2000. On that day the Claimant had still not filed an affidavit verifying its claim. Ms Narayan informed the court that
attempts were being made to settle the matter.
On 8th March 2000, counsel agreed to a hearing date. On 14th March the matter proceeded to hearing. The Claimant filed the affidavit
of Frank Ou, Chief Executive of the Claimant Company, claiming an equitable mortgage over the four items in Paragraph 6 of the sub-contract
annexed to his affidavit. The contract annexed is similar to the copy sent to the Sheriff on 17th January 2000. However in this copy,
both signatures (of Director and Secretary) appear on the second last page of the agreement.
Ms Narayan for the Claimant submitted that the sub-contract created an equitable mortgage over the four items listed. She was unable
to explain the discrepancies in the agreements. Mr G. Keil submitted that under Paragraph 6 of the agreement attached to the affidavit
of Sanjlesh Lal (Annexure A-29) the equitable mortgage would only have been effective if the conditions of transfer and Bill of Sale
had been satisfied. This would have resulted in the registration of a charge. This was not done, and no such mortgage existed. Mr
Keil pointed out the discrepancies in the agreements before the court and said that in any event, it was doubtful whether the sub-contract
itself was a genuine document.
Mr D. Sharma for the Defendants agreed that the Claimant had failed to show the existence of a lien when the conditions in Paragraph
6 had not been met. He said that the agreement provided in the affidavit of Sanjlesh Lal was the genuine sub-contract.
Ms V. Narayan for the Sheriff agreed that the agreements tendered to her and to the court had material discrepancies.
The question for the court is whether the items claimed by the Claimant are the property of the Claimant or of the execution creditor.
Order 17 Rule 1 provides as follows:
“(1) where -
(b) claim is made to any money, goods or chattels taken or intended to be taken by a sheriff in execution under any process,
or to the proceeds or value of any such goods or chattels, by a person other than the person against whom the process is issued,
..... the Sheriff may apply to the court for relief by way of interpleader.”
Order 17 Rule 2 provides that a Claimant must give notice of his claim to the Sheriff, and that the Sheriff must then give notice
of the claim to the execution creditor. If the claim is disputed the Sheriff may apply for relief under the Order. On a hearing,
the Court has powers to summarily determine the question at issue and make an order accordingly, or to state and try an issue.
It is clear that under this Order, the Court may consider an equitable claim (Jennings v. Mather (1901) 1 KB 108 p.115).
The claim in this case is in equity, the Claimant basing its claim on the sub-contract(s) of 21st September 1999. I note that the
items in question have not been valued, and that if the claim has substance, the question will then arise as to whether there would
be any surplus on sale of the security and after satisfaction of the Claimant’s rights, to be paid to the execution creditor.
Turning to the substance of the Claimant’s claim, it is apparent that the evidence of the terms of the agreement, is far from clear.
The parties have tendered several versions of what purports to be one agreement.
I asked Counsel for the Defendants and Counsel for the Claimant (both of whom said they held the original version) to show me the
sub-contracts in their custody. The Defendant’s copy has a full version of Clause 6, all signatures and includes reference to two
vehicles, which are not in the Claimant’s version. The Claimant’s version has the second part of Clause 6 deleted, two vehicles not
referred to in the Defendant’s contract and all signatures. Neither party produced to me a third version of the contract with one
signature missing, with half of Clause 6 missing and with the same vehicles listed as in the Claimant’s version tendered in court.
This last version undoubtedly exists, because a copy was faxed to the Sheriff by the Chief Executive of the Claimant company on January
20th 2000.
Ms Narayan was unable to explain these astonishing discrepancies. Mr D. Sharma agreed that there was doubt as to what the agreement
was in the light of these discrepancies. Mr G. Keil said that it was clear that there was no equitable mortgage because the full
version of the contract was conditional as to the existence of a lien.
Having considered the contents of all affidavits and annexures before me, the fact that the claim rests on an agreement of which there
appear to be three versions, and counsel’s inability to explain the discrepancies in the contract, I consider that there is no basis
for the claim. I consider that the Claimant has not shown that there was a valid and binding agreement between the Defendants and
the Claimant which gave rise to an equitable mortgage over the items in the custody of the Sheriff.
I therefore dismiss the claim made and order that the Sheriff proceed to auction the Vibrating Roller E4380 and the McDonald Road
Roller.
I order costs to be paid to the Sheriff and the Defendants by the Claimant from the time of the notice of the claim. The Claimant
must also pay the execution creditor’s costs from the time of the notice of the claim. Costs are to be taxed if not agreed.
That is not the end of the matter. The sub-contracts tendered or sent to the court in the course of these proceedings are significantly
different from each other. If the only version which the court had seen, had been the version originally sent to the Sheriff by the
Claimant, then this claim may well have been undisputed. The very part deleted from Paragraph 6, was the portion on which the execution
creditor based its opposition to the claim. It is the portion missing from that version that made the existence of a lien conditional
upon transfer or execution of a Bill of Sale. It is therefore far too significant an omission to be an accident. Furthermore, it
is clear that the document given to the Court by Ms Narayan is a different document from that sent to the Court by her clients on
20th January. The document she tendered appears to be fully executed with all signatures. The contract sent on 20th January has a
signature missing.
In the circumstances I believe that there has been an attempt to mislead this court as to the nature of the agreement between the
Defendants and the Claimant. Obstructing or Perverting the Course of Justice is a criminal offence. In the circumstances I consider
it prudent to refer this matter to the Director of Public Prosecutions, through the Chief Registrar, for his attention. The Chief
Registrar is therefore directed to send a copy of this judgment, together with the copies of the sub-contracts to the DPP forthwith.
Nazhat Shameem
JUDGE
At Suva
20th March 2000
Hbc0460j.99s
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