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General Machinery Hire Ltd v Carpenters Fiji Ltd [2010] FJHC 501; HBC33.2007 (12 November 2010)

IN THE HIGH COURT OF FIJI AT LAUTOKA
CIVIL JURISDICTION

Civil Case No. HBC 33 OF 2007

BETWEEN

GENERAL GENERAL MACHINERY HIRE LIMITED a limited liability company having its registered office at Bouwalu Street, Lautoka in the Republic of Fiji Islands
Plaintiff

AND

CARPENTERS FIJI LTD a limited liability company having its registered office at Suva in the Republic of Fiji Islands
Defendant

Before: Master Anare Tuilevuka

Counsels: Messrs Mishra Prakash and Associates Lawyers for the Plaintiff
Messrs Lateef and Lateef Lawyers for the Defendant

Date of Ruling: 12th November, 2010

RULING

INTRODUCTION

[1]. Before me is a summons dated 12th of November 2009 filed by Messrs Lateef and Lateef for the defendant seeking an Order that Judgment be entered against the plaintiff in the sum of $65, 326.59 pursuant to the defendant' counter – claim.

[2]. The application is made pursuant to Order 14 Rule 1 and Order 27 Rule 3 of the High Court Rules 1988. It is supported by the affidavit of Prakash Narayan sworn on 09th November 2009. Narayan is the Financial Controller of Carpenters Motors, a trading division of Carpenters Fiji Ltd.

[3]. The plaintiff opposes the application. It has filed an affidavit of Alvin Kumar Singh sworn on 15th day of February 2010. Singh is a director of the plaintiff Company.

[4]. The background facts in this case might be summarized as follows. The plaintiff purchased from the defendant a prime mover registration number ET 640 which was paid off by credit financing. It is unclear to me which company actually financed that purchase.

[5]. In any event, part of the condition of the purchase was a trade warranty for three months or 6,000 km which the defendant undertook.

[6]. Within the warranty period, ET 640 developed some minor mechanical problems. These, the defendant duly attended to pursuant to its warranty.

[7]. However, major problems occurred outside the warranty period. The defendant also attended to these but actually invoiced the plaintiff for these. It is the total invoiced sum which is the subject of the defendant's counter claim.

[8]. The statement of claim appears to allege also that the plaintiff had purchased ET 640 from the defendant for commercial use to service a heavy-goods-cartage contract which the plaintiff had entered into. There appears to be some allegation that the plaintiff only purchased ET 640 on the defendant's representation that the said vehicle would be well suited for its intended commercial use by the plaintiff. This however has turned out to be not the case. It is alleged that the defendant was aware of the intended use of the vehicle. According to the plaintiff, it relied on the defendant for its expertise in selecting the vehicle for that purpose. The defendant gave the plaintiff a warranty for the said vehicle.

[9]. The debt that the defendant claims in its counter-claim is in respect of goods allegedly sold and delivered by the defendant to the plaintiff at the request of the plaintiff. It is alleged in the counter-claim that the total amount owing by the plaintiff on account of these goods is $65,329.59.

[10]. Invoices for these goods were issued from 2nd March 2006 to 1st May 2006 under a Trade Account No. 22759-01CM. A bundle of these invoices is annexed to two affidavits that Singh had filed in an earlier proceedings in February and March 2007. These invoices add up to $59,690.70. Singh deposes that as at 19th December 2006, these invoices had been reconciled at $65,326.59 inclusive of interest and fee.

[11]. These invoices relate mainly to various motor parts supplied by the defendant to the plaintiff from 2nd March 2006 to 1st May 2006. These parts apparently were used in the repair of ET 640.

[12]. According to Narayan, the plaintiff by its director Alvin Kumar Singh, who had sworn an affidavit on 5th February 2007 on behalf of the plaintiff, had admitted to owing the defendant $60,790.98 (Sixty Thousand Seven Hundred Ninety Dollars and Ninety Eight Cents) in relation to the goods sold and delivered under the said Trade Account. Annexed to that affidavit and marked "A" is a letter dated 20th of September 2006 by the Plaintiff which states inter alia as follows:

"We received a call on Monday (18/09/06) that our Truck ET 640 is now repaired and ready for delivery.

Our Mechanical Team has inspected and quite comfortable with the repairs undertaken. However, the release of the truck is now subject to the payment of $60,790.98 we owe to your company.

Given the delay in repair due to loss of income and interest/administrative cost, it is unfair that we are not compensated for the delay done by your Team

However, with the years of relationship, we request that we will all come to a common ground of understanding and prepare to contra our account against your Bill despite it has a loss of $6,930.27 to our Company"

[13]. Narayan deposes that if summary judgement is entered on the defendant's counter-claim, it will not prejudice the Plaintiff's claim in any way. He believes that the plaintiff has no defence to the counter-claim and opines that the plaintiff has never denied the said debt.

[14]. Narayan opines that the plaintiff's claim is a bogus one which it is using as an excuse to set-off the defendant's claim. He says that there is no connection between the debt claimed by the defendant under the trade account and plaintiff's claim. Narayan adds that there would be no prejudice on the plaintiff's claim if summary judgement is entered on the counter-claim because the former can still proceed on its normal course.

[15]. Alvin Kumar Singh points out that Phillips J had granted an injunction order to restrain the defendant from pursuing winding up proceedings on 25th May 2007 on the basis that there were triable issues between the parties. On that basis, the current summary judgement application is therefore scandalous. He also highlights that the pleadings in this case are more or less closed and that the matter is at pre-trial conference stage.

[16]. According to the plaintiff, it took the Defendant over a year to repair the vehicle. The plaintiff suffered losses of up to $67, 721.25 up to September 2006 and had to purchase a re-placement vehicle. The claim includes an allegation that the defendant breached its contract and its duty of good faith by supplying a defective machine and/or a machine which was not capable of carrying heavy goods.

[17]. The defendant's defence and counter-claim filed on 27th October 2008 states that the transaction relating to the sale of the vehicle registration no. ET 640 was a purely commercial transaction and the plaintiff was well aware or should have been aware of the risks involved in purchasing second hand vehicles.

[18]. The summary judgment procedure under Order 14 is available for the plaintiff who wants to obtain a quick judgment and avoid delay and the expense of a full trial.

[19]. It is only available in cases where there is no defence to a claim, or where any defence raised will merely have the effect of delaying judgement.

[20]. The task of the court is to determine whether there ought to be a trial.

[21]. The Fiji Court of Appeal in Carpenters Fiji Ltd –v- Joes Farm Produce Ltd Civil Appeal Number ABU 0019/2006 at pages 9 and 10 of the judgment stated the summary judgement principles as follows:-

"Here it is timely to state some of the well established principles relating to the entry of summary judgment:

(a) The purpose of 0.14 is to enable a plaintiff to obtain summary judgment without trial if he can prove his claim clearly and if the defendant is unable to set up, a bona fide defence or raise an issue against the claim which ought to be tried.

(b) The defendant may show cause against a plaintiffs claim on the merits e.g. that he has a good defence to the claim on the merits or there is a dispute as to the facts which ought to be tried or there is a difficult point of law involved.

(c) It is generally incumbent on a defendant resisting summary judgment, to file an affidavit which deals specifically with the plaintiffs claim and affidavit and states clearly and precisely what the defence is and what facts are relied on to support it.

(d) Set off, which is a monetary cross claim for a debt due from plaintiff, is a defence. A defendant is entitled to unconditional leave to defend up to the amount of the set of claimed. If there is a set off at all, each claim goes against the other and either extinguishes or reduces it Hanak v. Green (1958) 2 QB 9 at page 29 per Sellers LJ.

(e) Like wise where a defendant sets up a bona fide counterclaim arising out of the same subject matter of the action, and connect with the grounds of defence, the order should not be for judgment on the claim subject to a stay of execution pending the trial of the counter claim but should be fore unconditional leave to defend, even if the defendant admits whole or part of the claim; Morgan and Son Ltd v. S. Martin Johnson Co (1949) 1 KB 107(CA).

32. The onus is on the Plaintiff to prove each claim clearly and to satisfy the Court that the Defendant has no defence which has any realistic prospect of success.

33. Once a claim is established, at least the evidential and persuasive burden, shifts to the Defendant (see Thomas J in Hibiscus Shopping Town Pty Ltd -v- Woolworths Ltd [1993] FLR 106 at 109) who must adduce affidavit evidence dealing specifically with the plaintiffs claim and affidavit and also state clearly and precisely what the defence is and what facts he relies on to resist the entry of summary judgment; Magan Lal Brothers Ltd. –v- L. B. Masters & Company Civil Appeal No: 31/84.

34. And of course, if the Defendant has not filed an affidavit, but has filed a defence, the Court must then turn its attention on the issues raised in the defence to see whether it has merits and is not just a sham defence to delay judgment or avoid the necessity of showing cause by Affidavit (see the Fiji Court of Appeal in Magan Lal Brothers Ltd –v- L.B. Masters (supra); see also Halsbury's Laws of England (4th Edition) volume 37 para 413 – 415, notes 4).

[22]. I am of the view that the plaintiff's claim has merits and when juxtaposed against the counter-claim of the defendant, would have the same effect as a set-off. Therefore, applying Carpenters Fiji Ltd –v- Joes Farm Produce Ltd:

"If there is a set off at all, each claim goes against the other and either extinguishes or reduces it Hanak v. Green (1958) 2 QB 9 at page 29 per Sellers LJ."

[23]. In reaching this conclusion, I had considered it relevant also that Madam Justice Phillips had obviously seen that there were triable issues to be determined between the parties leading to her granting an injunction against the defendant on 9th day of February 2007 from proceeding with threatened Winding Up proceedings against the plaintiff.

[24]. The application for summary judgement on the defendant's counter-claim is therefore dismissed with costs to the plaintiff which I summarily assess at $350-00 to be paid in 14 days.

[25]. Meanwhile – this case is adjourned to Friday the 26th of November 2010 at 9.00 a.m. for directions on remaining pre-trial discoveries.

Anare Tuilevuka
Master

At Lautoka
12th November 2010.