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Prakash v Prasad [2004] FJHC 307; HBC0207'B'.2004 (8 September 2004)

FORMATTED
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC0207’B’ OF 2004

BETWEEN:

SALEN ANAND PRAKASH AND ARVINA PRAKASH
Plaintiff

AND:

JANE CHANDRA KUMARI PRASAD
Defendant

Counsel: Mr. C. Cameron – for the Plaintiff
Mr. D. Sharma – for the Defendant

Date of Hearing: 24th August, 2004
Date of Judgment: 8th September, 2004

JUDGMENT

Introduction

This was an application for summary judgment for specific performance and/or damages pursuant to Order 86 or one of the High Court rules.

Background

By a written agreement dated the 25th of March 2004 the defendant contracted to sell to the plaintiff the freehold property known as 205 Rewa Street, Suva being land comprised and described in Certificate of Title 8795 (Lot 2 Deposited Plan No. 2085 situated in the City of Suva in the Island of Viti Levu containing an area of 34 perches and 800th of a perch (34.8) more or less together with all improvements thereon). The agreed purchase price was $160,000.00 payable by a deposit of $5,000.00 and the balance sum to be paid on the day of settlement. It was agreed between the parties that settlement would proceed on the 16th of April 2004.

The deposit was paid on the signing of the agreement. On the 5th of April 2004 the defendant executed an appropriate transfer document in the presence of a Barrister and Solicitor of the High Court who certified not only the vendor’s identity but the fact that she understood the transaction.

The defendant did not complete the transaction. She refused to settle on the agreed date. The plaintiff stood ready willing and able to settle and the conveyancing solicitors were advised of this. The defendant wrote on the 20th of May admitting her binding duty and obligation to complete the contract but requesting for family reasons that the deal be cancelled.

The Plaintiffs Case and Application

The plaintiffs filed a writ on the 20th of June 2004 claiming specific performance and or damages.

This was followed with an application for summary judgment. The plaintiff claims that they are a bona fide purchaser for value of a legal estate in land. As such they claim an order for specific performance of the contract. In addition they claim special damages.

It is conceded that damages are normally not awarded in conjunction with an order of specific performance. However, they claim that this is an exceptional case. The plaintiffs submit that they have had to rent accommodation in the interim are being put to the expense of this litigation and so should be entitled to be restored to their pre-settlement position.

The defendant has filed a “sympathy” response. It is claimed by her that following a marriage settlement in the mid 1980’s this property was transferred into her name on condition that it be held in trust for her two children. It is said the children are unhappy with their mother’s decision to sell the property and that accordingly the Court should not make an order for specific performance because the defendant forgot about this trust and made a fundamental error by mistakenly contracting to sell the property. The discretionary beneficiaries did not want the property sold.

At hearing this legal proposition was tested and ultimately defendant’s counsel conceded that there could be little force or strength in that argument.

Firstly, even if there were a trust it is clear the only trustee would be the defendant. It is equally clear that the children would be the discretionary beneficiaries of that trust. The children are not party to these proceedings nor did they interplead

Even if they had it was conceded that the defendant as the sole trustee was able to contractually bind the trust in any agreements for sale and purchase. Accordingly, while on a moral level the defendant mother may have made a fundamental error, legally the argument could not be pitched quite as high.

Defendant’s counsel also properly conceded that the first “notice” of this trust was given to the plaintiffs in the Statement of Defence. Accordingly, his argument that specific performance should be denied on the classic Taylor –v- Johnson principles [1983] HCA 5; (1983, 151 CLR 422) could not be sustained as even if there was a mistake the purchaser plaintiffs remained pre-contractually ignorant of that. In the absence of notice they remain bona fide purchasers for good value.

Decision

The plaintiffs were bona fide purchasers for good value. They had no notice of any contractual mistake or equitable interest in a trust.

It was encumbent on the defendant at this hearing to satisfy me that there was some question or dispute which ought to be tried or that they were for some other reason entitled to a trial on the action as a whole. Apart from a strong sympathy submission there was nothing at law that could even begin to motivate me to find an issue or question or dispute in this matter that required a full hearing and judgment (cf Upjohn v Simmon, [1963] 1 ALL ER 615).

At all times the plaintiffs were ready willing and able to settle. They were never put on notice before settlement about any equitable issues arising. In any event the attempt at raising an equitable interest has floundered for the reasons earlier outlined in this judgment. The alleged equitable claim was first raised in the Statement of Defence served on the plaintiff's solicitors on the 22nd of June 2004 nearly 4 months after the agreement was entered into and 2 months after the agreed settlement date.

As for the issue of damages. I do not find that this is an exceptional case in which damages should be awarded. Although there was a wilful refusal to settle I find that this case is distinguishable from that line of authorities referred to by the plaintiff in the authoritative text of Atkins Encyclopaedia of Court Forms in Civil Proceedings second edition p.8.

Had settlement been completed then the plaintiff would have had the expense of interest payments on its mortgage and loss of interest on the equity invested in the property. In my mind this would counterbalance any payments of rent they have had to make in the meantime whilst awaiting possession. They seek to claim payment of the insurance premium at $2.46 per day. Again, however, they have had the benefit of double insurance cover during the intervening period. A cover no doubt they would have turned to if there had been any damage to the property in the intervening period.

At best they have a fair claim to a bank interest on the $5,000.00 deposit they made in terms of the contract for sale and purchase. However, that interest should run from the date of settlement (16 April 2004) down to the date of actual settlement of the transaction. I find a reasonable interest rate to be 8% or $1.10 per day calculated from the 16th of April 2004 to the date of actual settlement.

Conclusion

I am satisfied that the defendant has no defence or arguable point on any issue. This is a proper case for entry of summary judgment.

I accordingly order specific performance of the agreement for sale and purchase dated the 25th of March 2004. I order a simultaneous settlement at the Registrar of Titles Office, Suva at 11.00am on Thursday the 30th of September 2004. I order that upon the plaintiffs paying the defendant the sum of $155,000.00 by a bank cheque the defendant will simultaneously handover all documents to the plaintiff or his solicitors necessary to complete settlement. All documents to be in good, valid and registrable form including:

(a) the original sale and purchase agreement duly signed

(b) stamped transfers and duplicate

(c) any land sales declarations

(d) title or duplicate title 8795 together with any necessary discharges of encumbrances all in good and registrable form.

At the same time and place I order the defendant to pay the plaintiffs a sum of interest of $1.10 per day from the 16th of April 2004 to the actual date of settlement.

I further order that the defendant pay the plaintiffs costs within 7 days of this judgment. Those costs to be fixed by agreement or taxed and fixed by the Registrar.

Gerard Winter
JUDGE

At Suva
8th September, 2004