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Narayan v Housing Authority [2011] FJHC 120; HBC120.2001L (28 February 2011)

IN THE HIGH COURT OF FIJI
WESTERN DIVISION AT LAUTOKA

Civil Action No. HBC 120 of 2001L

BETWEEN:

HARI NARAYAN father's name Raja Ram of Natabua, Lautoka, unemployed.
NIRMALA WATI father's name Ram Khelawan of Natabua, Lautoka, Domestic Duties.
PLAINTIFFS

AND:

THE HOUSING AUTHORITY a body corporate constituted by the Housing Authority Act and having its registered office in Nasinu, Suva.
FIRST DEFENDANT

FIJI CARE INSURANCE LIMITED a duly incorporated body having its registered office in Suva.
SECOND DEFENDANT

Before: Master Anare Tuilevuka
Solicitors: Sahu Khan & Sahu Khan for the Plaintiffs
Maharaj Chandra & Associates for the 1st Defendant
Mishra Prakash & Associates for the 2nd Defendant
Date of Ruling: 28th February, 2011.

RULING

[1]. Narayan and Wati (plaintiffs) acquired a piece of land comprised in sub-lease No. 215266 on finance from Housing Authority. The loan was secured by a registered mortgage to Housing Authority (Mortgage No. 215267). The mortgage was insured under Housing Authority's compulsory group mortgage protection insurance scheme which was covered by Fiji Care Insurance Limited ("FCIL"). According to paragraph 11 of the statement of claim, the group scheme covers permanent disability as well as death. I gather from the statement of claim that FCIL took over the group scheme from April 1996. Prior to that, the group scheme was covered by a different insurer. All premiums in this group scheme was paid to the Housing Authority. On 2nd of May 1996, barely a month after FCIL took over the group insurance scheme, Narayan suffered a heart attack. He was absent from work for at least six consecutive months as a result. He alleges that he was "incapacitated to such an extent that rendered him unable ever to engage in or work for reward in the occupation or work as a carpenter and which work he was reasonably capable of performing by reason of his education, training and experience". At the time Narayan suffered the heart attack, the total amount owing on his mortgage was "the sum of about $40,000". And since he was the registered proprietor of half the land in question, he expected FCIL to pay for half the balance owing at the time of his became incapacitated (i.e. $20,000).

[2]. Both Housing Authority and FCIL were notified and kept informed of Narayan's condition. Some five months after Narayan suffered the heart attack, in October 1996, he lodged a claim of payment under the FCIL group scheme cover. However, FCIL refused to pay Narayan because it was of the view that Narayan was not employed at the time he suffered the attack. Apparently – FCIL maintained that position and remained unmoved when Narayan re-lodged his application for payment in April 1998 and also in February 1999. Apparently – Narayan persisted in trying to engage with FCIL. His efforts paid off when FCIL arranged for him to be reviewed medically sometime in July/August 1999. That review favored FCIL which then relied on the findings to reject fresh claims lodged by Narayan. This time around – FCIL was adamant that Narayan had not suffered any total permanent disability.

[3]. Against Housing Authority, the plaintiffs allege that it was negligent in handling the insurance matter. Particulars of the negligence alleged are set out in paragraph 26 (i) to (v) of the statement of claim. It is alleged that – because of FCIL's refusal of cover (which Narayan says was $20,000 at the time of the heart attack) – the mortgage debt had escalated to some $55,914.15 to the time the statement of claim was filed in 2001. Apparently – in March 2001, the Housing Authority issued a demand letter to the plaintiffs for the settlement of the whole debt amount plus arrears.

[4]. On 3rd of May 2001, the plaintiffs obtained an ex-parte injunction to restrain the Housing Authority from exercising its powers of sale over the property in question pursuant to the mortgage.

[5]. The defendants both filed their defence in 2001. On 23rd October 2001, the Housing Authority filed an application to discharge the interim injunction. This was followed by numerous call-overs in Court on that application. In October 2002, Narayan finally filed his affidavit in opposition. In September 2003, the Housing Authority filed its submissions.

[6]. There was to be no movement on the file thereafter as noted by Finnigan J on 09th February 2007 when he struck out the action for want of prosecution. Finnigan J's Order was not sealed – but the minutes read inter alia as follows:

I now strike out this action for want of prosecution. If either party wishes to reinstate it, he (or it) will have to show cause as if under O. 65.

[7]. There is nothing in the files to show that any application was ever made under Order 65. However, the file records show that Mishra Prakash & Associates did inquire with the Deputy Registrar by letter on 17th July 2008 as to the status of this matter and was advised on 21st August 2008 by Pravin Anand the Court Officer as to the ruling of Finnigan J and the condition for reinstatement under Order 65 (which deals with service of documents).

[8]. However, more than three years after Finnigan J's Order, FCIL, on 04th August 2010, filed a summons to strike out the action for want of prosecution under Order 25 Rule 9. This was followed by an application by Sahu Khan & Sahu Khan on 19th August 2010 to substitute the first plaintiff (now deceased) by the second plaintiff as administratrix of his estate. I see from the records that – without properly reviewing the file, I had granted Order in Terms of the application on 04th October 2010. On the same day, the Housing Authority filed an application to strike out the claim against it under Order 18 Rule 18. Summons for Directions was filed by Sahu Khan & Sahu Khan on 12th November 2010. In my view, this matter remains struck out after Finnigan J's Orders of 09th February 2007. The fact that the matter has somehow found its way back onto the cause list and appears to be taking its normal course does not "reinstate" the matter. Accordingly – I will just take this matter now off the cause list in accordance with Finnigan J's Order with no order as to costs.

Anare Tuilevuka
MASTER

At Lautoka
28th day of February 2011.