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Credit Corporation (Fiji) Ltd v Taka [2002] FJHC 28; Hbc0416j.2000s (11 September 2002)

IN THE HIGH COURT OF FIJI
(AT SUVA)

CIVIL ACTION NO. HBC 416 OF 2000S

Between:

CREDIT CORPORATION (FIJI) LIMITED
Plaintiff

and

JOSAIA TAKA
SHIVA KRISHNA MURTI
RATU HENRY KUBUABOLA
BRENNAN SUKHDEO
RATU TIMOCI VESIKULA
Defendants

M. Arjun for the Plaintiff
Tikaram for the 1st, 2nd, 4th and 5th Defendants
No appearance by the Third Defendant

JUDGMENT

In 1995 Xero Tech (Fiji) Ltd entered into three lease agreements with the Plaintiff covering the supply of office equipment. According to the Statement of Claim filed in September 2000 the total rental payable under the 3 agreements was $246,768.00. The Plaintiff’s claim is that Xero Tech breached the agreements and that as a consequence the Defendants, each of whom signed a form of guarantee incorporated into the lease agreements have become liable for the debt owed by Xero.

The represented Defendants have all filed Statements of Defence in the same form. The agreements are admitted but the Defendants say that they have not been supplied with particulars of the amounts owed under the agreement, that no notice of demand has been made upon them and that in the circumstances in which the guarantees were obtained from them they are not bound.

This is an application for summary judgment brought under the provisions RHC O 14. The following affidavits were filed:

(i) Uday Raj Sen, in support, 8 April 2002;
(ii) First Defendant, in answer, 11 July 2002;
(iii) Shaireen Begum, in reply, 1 August 2002.

Both Mr. Arjun and Mr. Tikaram filed helpful written submissions.

Mr. Sen’s affidavit is somewhat confusing. In paragraph 2 he states that:

“the above named Defendants was and is at the commencement of this action justly and truly indebted to the above named Plaintiff in the sum of $161,272.57 being money owing to the Plaintiff for arrears of monthly lease instalments. The particulars of the said claim appear by the Statement of Claim on the writ of summons in this action.”

The sum of $161,272.57 was the amount claimed in the Statement of Claim. In paragraph 5 of his affidavit Mr. Sen gives particulars of the three accounts relating to the three agreements. The accounts are numbered 42036, 42044 and 42051. None of the copy lease agreements exhibited bears any of these numbers. According to Mr. Sen the total rental instalments to be paid were $104,296.00, $65,652.00 and $94,720.00. According to the three lease agreements the “total rental and instalments” for the three agreements were three quite different figures of $88,320.00, $97,296.00 and $61,152.00. If these three figures are added up they amount to $246,768.00 and not $161,272.57. How this latter figure was calculated is nowhere revealed except very generally in the Statement of Claim.

Having stated that the Defendants owed $161,272.57 in paragraph 2 Mr. Sen then went on in paragraph 6 of his affidavit to state:

“the total amount due and payable under the three accounts mentioned above is $93,577.00.”

In paragraph 7 Mr. Sen stated that the Defendants:

“have neglected to pay the sum of $161,272.57 or any part thereof.”

In paragraph 15 of his affidavit Mr. Sen stated:

“I am informed and verily believe that the said debt of the amount $161,272.57 was incurred and is still owing.”

In paragraph 14 of his affidavit Dr. Taka states:

“I am not clear at all what is the correlation between the interest that was charged upfront on each of the accounts and the rebate now being given. We need full information on this because as consumers we have been kept totally in the dark on this particular aspect of accounting.”

In paragraph 4 of her affidavit Shaireen Begum states:

“the Defendant at the date the writ of summons endorsed with a Statement of Claim was filed in High Court owed $161,272.57 however after rebate being deducted the Defendants owed to the Plaintiff as arrears of monthly lease payments the sum of $93,577.57.”

No explanations of these rebates was offered by Shaireen Begum. Whether these are the same rebates as those disclosed by Mr. Sen in his affidavit is not clear. Mr. Sen’s rebates together total $150,009.13 which added to $93,577.57 produces a figure of $243,586.70 and not the figure sometimes claimed of $161,272.57.

In the closing paragraph of his written submission Mr. Tikaram suggested that the Plaintiff’s reduction of their original claim from $161,272.57 to $93,577.57:

“illustrates the danger of entering summary judgment when complex accounts are involved without the benefit of oral hearing which is subject to scrutiny and cross examination.”

Where there is uncertainty as to the amount actually due by a defendant it is settled that leave to defend should be given (Lynde v. Waithman [1895] UKLawRpKQB 112; [1895] 2 QB 180). Leave to defend should also be given when an account is ordered (Contract Discout Corporation Ltd v. Furlong [1948] 1 All ER 274).

In the present case it is not only Dr. Taka who is “totally in the dark” about what precisely is said to be owed and how the amount is calculated. Despite strenuous efforts by the Court and counsel Mr. Arjun could really go no further than to assert that a much greater figure then the $93,577.57 now claimed was in fact owed by the Defendants. Why that should be the case was not explained. Neither was it explained why a claim filed at $161,272.57 should, according to Shaireen Begum, have been reduced with the passage of time. In my experience the reverse is generally the case.

Given the singular lack of clarity in the Plaintiff’s claim the Defendants must have leave to defend. The question is whether that leave should be conditional.

While it is not disputed that the Defendants only repaid a very small amount of the sum borrowed the measure of the Plaintiff’s loss is not straightforward. On a preliminary reading of clause 18 of the lease agreements the unpaid balance of rent became payable upon determination by default. Clauses 12 and 19 however appear to envisage surrender of the equipment leased or payment of its residual value. The equipment was leased in October 1995 and only 4 monthly payments were made. It is not at all clear therefore why the Plaintiff stated in March 2002 (Exhibit URS 4) that:

“none of the items were seized as it was not worth anything.”

If the equipment had been repossessed when only 4 or 5 months old it would doubtless have had a considerable value.

The purpose of Order 14 is to enable a Plaintiff who can prove his claim clearly to obtain summary judgment without trial. In my opinion the Plaintiff’s claim here is insufficiently clear to obtain summary judgment at all and I think it would be wrong to limit the Defendants right to defend. Unconditional leave to defend will accordingly be given.

M.D. Scott
Judge

11 September 2002