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Ratulevu v Bruce [2004] FJHC 405; HBC0016.2002L (19 April 2004)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0016 OF 2002L

BETWEEN:

NEUMI RATULEVU
PETITIONER

AND:

MARIA SENIMILI BRUCE
Complainant/Respondent

Counsel for the Plaintiff: Mr. A. Patel
Counsel for the Defendant: Ms. S. Saumatua

Date of Hearing: 30 March 2004
Date of Judgment: 19 April 2004

JUDGMENT

The Action

The plaintiff by a Writ of Summons dated 28^th January 2002 seeks the recovery of monies, allegedly owing to it by the defendant, pursuant to an alleged agreement for the provision of services between 8 June 1998 and 6 March 2000.

Background

The plaintiff company is a Marine Survey Company carrying on business relevantly at Lautoka.

In 1987, when the defendant company commenced to export wood chips from the Port of Lautoka, the plaintiff company was engaged by the defendant to carryout marine survey works and wood chip sampling and testing.

The plaintiff company continued to carryout those works and provide those services until 6 March 2000.

The initial arrangement was oral and it was subsequently reduced to writing. The writing evidencing the initial agreement has not been produced to the court.

However, by letter dated 4^th May 1995 from the defendant to the plaintiff the terms of which were accepted by the plaintiff by signature to a copy of that letter, a contract was formed. The terms of that contract are that the plaintiff provide to the defendant draft survey and chip testing that the rates be those set out in the letter and that: -

“As mentioned in your letter these rates would be applicable from 1 May, 1995 and will be reviewed every 1^st January, based on the movement in CPI (All Items) from the previous year.”

The term of this agreement is such that it is intended to continue from year to year with an annual adjustment to the rates to be charged.

The defendant carried out calculations of the Consumer Price Index adjustment to the rates from time to time and by computer print out dated 4^th February 1996 (Exhibit P-4), he calculated that the draft survey rate as at February 1996 was $0.064 per metric tonne.

From the pleadings, it is apparent that the defendant admits: -

1. The plaintiff agreed to provide draft surveys and chip testing for wood chips exported by the defendant and the defendant agreed to remunerate the plaintiff.
   
2. The rates of remuneration would be reviewed on the 1^st January in each of the ensuing years during the existence of the contract.
   
3. The review of the rates payable by the defendant to the plaintiff was to be in accordance with the movement in the Consumer Price Index (All Items) for the previous year to year in respect of which the review rates would be payable.
   
4. The contract was a contract from year to year.
   
5. The rates fixed for 1996 were –
   

(a) draft survey - 6.4 cents per metric tonne draft weight.

(b) chip testing - $128.00 per 1,000 metric tonne draft weight.

6. At about the 23^rd September 1996, it was agreed between the plaintiff and the defendant that for the year 1997, the rates with respect to draft surveys and chip testing, would remain the same as for the previous year 1996 and that all other terms and conditions of the contract would remain the same.
   
7. The plaintiff requested an increase for the year 1998 of 10%.
   
8. By letter dated 23^rd March 1998, the plaintiff rejected the rates suggested by the defendant for that year and offered for the year commencing 1^st January 1998, the rates applicable for the year 1996.
   

It is apparent therefore that there is no issue with respect to the formation of the initial agreement or its terms or the rates up to and including calendar year 1997.

The issue is with respect to the rates payable by the defendant to the plaintiff for services provided in the year 1998 and thereafter until 6 March 2000.

It is agreed on the evidence that a meeting took place between representatives of the plaintiff and the defendant on 22^nd April 1998. The meeting appears to have been precipitated by the plaintiff’s request for an increase in rates for the 1998 year of 10% and the defendant’s reduction of the rates for that year.

This seems to have occurred notwithstanding the terms of the agreement that the Consumer Price Index would adjust the rates on an annual basis on the 1^st January in each year.

The defendant by its letter of the 19^th March 1998 unilaterally dictated that the draft survey rate would be $770.00 per vessel. This apparent view of the defendant that it had the right to unilateral fix the rate was very evident in the evidence of Mr. Mani.

The outcome of the meeting of the 22^nd April 1998 is the subject of dispute on the evidence of the respective parties.

The plaintiff contends that it maintained its position that it required an increase in rates and did not agree to a reduction in rates. In support of the plaintiff’s contention, is a letter dated 27th April 1998 forming part of Exhibit P-1. This letter clearly states that the plaintiff was prepared to accept the sum of Eight Hundred and Eighty Dollars ($880.00) for the “next schedule shipment only”. The reason for this is also set out in the letter and is:

“As we appreciate the time may not be permit you to make alternative arrangements for such services should we become unavailable and that such action may have a damaging effect on Fiji’s reputation as a reliable supplier of wood chips to the international market.”

Further support for the plaintiff’s position is evidenced by the plaintiff having rendered invoices for services rendered after the “next scheduled shipment” at the 1996 rates.

The 1996 rates were the rates in existence and being used for payment as at 1^st January 1998.

The defendant via Mr. Mani evidences that at the meeting on 27^th April 1998 agreement was reached between the parties that the rate henceforth would be $880.00 for draft survey certification.

It is difficult to accept the evidence of Mr. Mani in the light of the letter of the 27^th April 1998 referred to earlier and the subsequent invoices through until 6^th March 2000 together with the repeated demands for payment by the plaintiff to the defendant.

The defendant continued after April 1998 and until 6 March 2000 to engage the plaintiff to carryout inter alia draft survey certification for all of its shipments of wood chip. For each certification it was invoiced by the plaintiff at the 1996 rates. For each certification it paid the plaintiff at the rate of $880.00.

The evidence then is that in April 2000, the plaintiff withdrew its services due to the defendant’s refusal to make payment of the monies outstanding that are the subject of the claim before the court.

As it is stated above, it is apparent on the evidence that as at the 1^st January 1998, the applicable rates were those determined as at 1^st January 1996. By virtue of the terms of the agreement as evidenced by the letter dated 4^th May 1995 being part of Exhibit P-1, the contract was to continue on a yearly basis with the rates being determined on the 1^st January each year based on the movement in the CPI (All Items). Clearly, this adjustment did not take place as at 1^st January 1998 but in all other respects the contract continued on foot until April 2000.

In the absence of any agreement in 1998, it would seem that the rates applicable as at 1^st January 1998 would continue until such time as they were amended or contract was varied.

It is trite that the contract between the parties can only be varied by mutual agreement. Neither party has the right to unilaterally vary any term of the contract.

Whilst it is clear on the evidence that the defendant agreed to perform the “next schedule shipment only” at a rate of $880.00, it is not clear that any agreement was reached as to any rate applicable for the 1998 year and thereafter.

There being no agreement as to the rate as is stated above, the rate applicable as at 1^st January 1998 would continue until such time as the contract was terminated or further agreement was reached with respect to any particular term of the contract.

As the plaintiff is claimed only those fees payable in accordance with the rate applicable as at 1^st January 1998, I find that it is entitled to payment at that rate and accordingly is entitled to a verdict and judgment in accordance with the statement of claim.

The only evidence with respect to interests is that given on behalf of the plaintiff. That evidence is that the plaintiff has an overdraft and that the rate of interest payable on an overdraft is 13.5%. Accordingly, it seems only reasonable that any interest awarded to the plaintiff should be such as to compensate the plaintiff for the loss of having access to the funds since March 2000.

The Orders of the Court therefore are:

1. A verdict and judgement for the plaintiff in the sum of Twenty Thousand, One Hundred Forty Dollars and Fifty Cents ($20,140.50).
   
2. Interests on judgement sum to be payable at the rate of 13.5% from the 6^th March 2000.
   
3. Defendant to pay the plaintiff’s costs on solicitor-client basis.
   

JOHN CONNORS
JUDGE

AT LAUTOKA
19 April 2004