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Suva Forklift Hire Ltd v Sun Insurance Company Ltd [2015] FJHC 901; HBC354.2009 (18 November 2015)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO: HBC 354 of 2009

BETWEEN:

SUVA FORKLIFT HIRE LIMITED
Plaintiff

AND:

SUN INSURANCE COMPANY LIMITED
Defendant

COUNSEL : Mr. A. Sokimi for the Plaintiff
Ms. R. Naidu & Mr. R. Singh for the
Defendant

Dates of hearing : 07th to 10th September 2015
Dates of Written Submissions : 07th October 2015 & 14th October 2015
Date of Judgment : 18th November 2015

Judgment

[1] The plaintiff brought this action against the defendant claiming specific performance of the sale and purchase agreement entered into between them, damages in lieu of or in addition to specific performance or in the alternative judgment in a sum of $ 36,323.62, interest on the said sum and costs of the action.

[2] The plaintiff's statement of claim was later amended and in the amended statement of claim the plaintiff claimed compensation in a sum of $ 36,323.62 for the work done on the property in question, refund of the bond of $ 4000 under the tenancy agreement, refund of $ 5000 deposit paid to the defendant's agent and costs of the action on indemnity basis.

[3] The defendant while praying for the dismissal of the action of the plaintiff with costs sought damages for registering a caveat.

[4] The plaintiff came to an understanding with the defendant on 07th May 2009 with the defendant to rent out the property contained in CL 2955 being lot 20, situated at No. 61, Moala Street, Samabula.

[5] The said agreement contained inter alia, the following terms;

1. The plaintiff was to deposit a bond of $ 4000 with the defendant.
   
2. The term of tenancy was 24 months which was renewable.
   
3. The rent for the first month was $ 1000 and thereafter at the rate of $ 2000 per month payable on the first day of every month.
   

[6] By the letter dated 07th March 2009 (P2) the defendant accepted the offer of the plaintiff and requested him to contact is lawyers for the details of the tenancy agreement. The rent for the first month was reduced to $ 1000 on the undertaking by the plaintiff that it would clean the place up.

[7] Mr. Mohamed Sareem, the witness for the plaintiff who is also a director of the plaintiff company stated in his evidence that after paying the bond (P6) he could not occupy the premises since lot of repair works were required to be done. He testified that in the building there were no gutters, the roof was leaking, there was no proper drainage system, there were no washroom facilities, the gates were rusted and falling apart and debris in the garden.

[8] The Suva City Council had issued an intimation of insanity condition in respect of this property which was tendered in evidence marked as "P7". To show Court the condition of the property the plaintiff tendered some photographs marked as "P8" which corroborate the evidence of the witness on the condition of the property.

[9] The witness said that he cleaned the property, levelled the compound, repaired the building, and did the gate and the fence, electrical work and the washroom. All these works according to the witness had been done with the consent of the plaintiff and one Mr. Vikash Sharma had authorised the plaintiff to carry out these works on behalf of the defendant. The defendant had originally agreed to contribute $ 3000 towards the repairs of the property but later at the request of the plaintiff (P15c) increased it to $ 5000. It is the evidence of this witness that the defendant never paid the repair costs as agreed. Despite several requests made, the defendant failed to execute a formal tenancy agreement. The witness then had a discussion with Mr. Vikash Sharma, the representative of the defendant who informed him that the defendant did not want to rent the property but intended selling it. The plaintiff then stopped the repair work immediately and decided to purchase the property. The witness thereafter corresponded with Harcourts, the real estate agent of the defendant and one of its officers Mr. Arvin Pillay who, by e-mail dated 01st July 2009 (P19) informed the witness that first preference would be given to the witness to purchase the property. By its letter dated 03rd July 2009 (P21) the plaintiff offered $ 250,000 for the property and attached some photographs showing its condition before and after the repairs and also stated that he had constructed an office adjacent to the existing building which cost him $ 15,000. The parties thereafter negotiated the price for the property and the defendant offered the property for $ 272,000 which was accepted by the plaintiff.

[10] According to Mr. Sareem the agents of the defendant company obtained his signature on a blank sale and purchase agreement. The witness tendered two copies of the sale and purchase agreement marked as "P25" and "P26" in evidence.

[11] The witness testified that certain changes have been effected to the agreement and his concern was about the $ 22,200 deposit included in the agreement. The requirement of the additional deposit of $ 22,200 was disputed by the plaintiff and many correspondences were exchanged between the parties on this issue. However, the defendant cancelled the agreement with the plaintiff and requested the plaintiff to vacate the property by 31st August 2009 which was later extended till 15th September 2009 and the plaintiff in the meantime registered a caveat.

[12] The defendant entered into another sale and purchase agreement with Tai Shan Development (Fiji) Co Ltd and the evidence on record is that the defendant later sold the property to that company.

[13] The witness later in his evidence told that the plaintiff does not claim the deposit of $ 5000 because it had already been reimbursed by the defendant.

[14] To establish that the amount claimed by the plaintiff has in fact been spent on the repairs of the property certain invoices and receipts were tendered in evidence marked as P41A to P41Z, P41AA to P41AR, P42A to P42Z and P42AB to P42AL. Some of these documents sought to be tendered in evidence were objected to by the learned counsel for the defendant. I will later in the judgment make my ruling on the objection taken against these documents.

[15] The plaintiff sought to tender in evidence a sketch (P9) depicting the property in question which was also objected to by the learned counsel for the defendant on the ground that the plaintiff was not the author of the document. Although it was tendered in evidence subject to the objection of the defendant the plaintiff failed to call the author of the document to prove it. Therefore, the document was not considered as evidence.

[16] On behalf of the defendant its accountant Vikash Sharma testified. While admitting that the Mr. Sareem talked to him about the property and that the defendant agreed to pay $ 5000 for the repairs the witness said that the plaintiff did not obtain permission from the Suva City Council for the new extension to the existing building. When the witness was shown the document "P7" (Intimation of Insanitary Condition) the witness denied having seen it before. The witness also admitted that after the caveat registered by the plaintiff was removed the defendant sold the property to Tai Shan Development (Fiji) Co Ltd.

[17] The next witness for the defendant is the real estate agent appointed by Harcourts to manage the sale of the property. It is his evidence that Mr. Sareem met him on 21st July 2009 and discussed about the sale and purchase agreement. Referring to "P25" the witness said that he completed the form in the presence of Mr. Sareem and after he signed the agreement the witness had inserted another condition which was initialled by Mr. Sareem. The witness had received three offers for the property including the plaintiff's offer. He had handed over all the tenders to the defendant and on its instructions he had informed the plaintiff the price quoted by the defendant which was $ 272,000.00. The deposit required was $ 27,200 and after deducting the amount already deposited by the plaintiff ($ 5000) he was required to deposit $ 22,200 but the plaintiff did not agree with the amount to be deposited prior to the completion of the transaction. Witness said that by e-mail dated 03rd August 2009 Mr. Sareem informed that the deposit of $ 22,200 was not part of the agreement and when the e-mail was forwarded to the defendant the witness was instructed to inform the plaintiff to comply with this requirement before 4.00 p.m. the same day and when the message was conveyed to the Mr. Sareem he had told the witness that he would register a caveat. Explaining the last page of "P26" the witness said that it was not part of the agreement and it was a document to confer authority on the solicitors of the defendant to pay the real estate agent $ 8400.

[18] It appears from the evidence adduced in this case the defendant cancelled the agreement entered into with the plaintiff on the ground that the plaintiff failed and/or neglected to pay the deposit of $ 22,200 to the Agent's Trust Account.

[19] It is the position of the plaintiff that at the time the agreement was entered into he had already made a deposit of $ 5000 (the bond held by the defendant) and therefore he was not agreeable to the requirement that he should make an additional deposit of $ 22,200. It is his evidence that he did not initial the entry $ 22,200 in the agreement and that when he came to know about this requirement of an additional deposit he disputed it.

[20] In this regard the plaintiff sent an e-mail to Arvin Pillay the representative of "Courts", the real estate agent of the defendant which was tendered in evidence marked as "D8". I will, for ease of reference, reproduce below the relevant paragraphs of the said e-mail dated 03rd August 2009.

The additional deposit of $ 22,200.00 is not been paid. This would be settled together as we expect the settlement soon. This was not also part of the initial sale conditions and had been changed after you had brought me the offer. I think when you had come to me with all offers, your client should have cleared it then that the sale shall be subject to these additional terms and conditions. We are optimistic that settlement would take place within the agreed timeframe.

Rental - We do not understand why this added clause in the agreement when a separate rental agreement should have been signed. Please note that I have not occupied the place as the City Council requirements are that proper toilet and bathroom is required before they would issue licenses and health approvals to occupy the property thus we did not move in.

[21] The learned counsel for the plaintiff submitted that this evidence cannot be admitted in evidence for the reason that if admitted it would violate the parol evidence rule. It is to be noted that this objection was taken for the first time by the learned counsel in his written submissions. An objection to a document must be taken at the time it is sought to be tendered in evidence so that the court can hear the parties and make a ruling.

[22] Parol evidence rule is a rule that governs the extent to which parties to a case may introduce into Court evidence of a prior or contemporaneous agreement in order to modify, explain or supplement the contract at issue. The rule states that the parties to a contract intended for their written agreement to be the full and final expression of their bargain (i.e. the writing is an integration), other written or oral agreements that were made prior to or simultaneous with the writing are inadmissible for the purpose of changing the terms of the original agreement. The parol evidence rule is a principle that preserves the integrity of written documents or agreements by prohibiting the parties from attempting to alter the meaning of the written document through the use of prior and contemporaneous oral or written declarations that are not referenced in the document.

[23] The e-mail in question was sent by the plaintiff about six days after the signing of the sale and purchase agreement (D9). This does not have the effect of changing the terms of the original agreement and this is not an agreement entered into between the parties. This is only a document clarifying the additional clause included in the agreement by the defendant. Therefore, the argument of the learned counsel for the plaintiff that admission of this electronic mail would violate the parol evidence rule is without merit.

[24] Although the plaintiff stated in his evidence that the additional deposit of $ 22,200 had been inserted by altering the original terms of the agreement after he signed it, in "D8", which was sent within a week from the signing of the agreement he has not stated anything to that effect. What he says in this e-mail is that the conditions have been changed after the offer for sale was brought to him.

[25] All the alterations in the agreement (D9) have been initialled by Mr. Sareem on behalf of the plaintiff company. If it is his position that the alteration regarding the additional deposit had been included after he signed the agreement the burden is on him to prove it.

[26] At the time Mr. Sareem sent the e-mail "D8" dated 3rd August 2009 which is only six days after the signing of the sale and purchase agreement on behalf of the plaintiff he knew that the condition to deposit of additional bond had already been included in the agreement but he did not allege that it had been interpolated after the signing of the agreement. E-mail "P27" was sent by him on 29th July 2009 that is the day after the signing of the sale and purchase agreement informing the lawyers about the requirement of the additional deposit. In that e-mail too he has not mentioned anything about an interpolation of this clause after signing the agreement. In the circumstances the only reasonable conclusion one could arrive at is that the allegation of the plaintiff that the requirement of the additional deposit of $ 22,200 was interpolated after signing the agreement has no basis.

[27] The offer was first made to the plaintiff by the defendant because he effected certain improvement to the property which fact has been established by evidence and also the defendant has not denied it. The plaintiff claims $ 36,323 for the improvements done to the property. Apart from the repairs the plaintiff has constructed an office building on the property without prior approval of the Suva City Council. It is the evidence of the plaintiff's witness that he constructed the office building at his own cost. The cost of the new office building is also included in its claim of $ 36,323 (P21). To establish the cost incurred for repairs the plaintiff tendered invoices, receipts and delivery notes marked as P41A to P41N, P41P to P41Z, P41AA to P41AR, P42A to P42N, P42P to P42Z, and P42AA to P42AL. These documents were objected to by the learned counsel for the defendant on the grounds that some of these documents have been issued after the plaintiff stopped work at the site, most of them have no signature or authentication and some documents do not have the customer details. It is also important to observe that mere tendering vouchers, invoices and delivery notes do not prove that the materials so purchased were in fact used for the purpose of repairing the building in question, it is more so because some of the receipts and vouchers have been dated after the plaintiff stopped work at the site. As submitted by the learned counsel for the defendant some of the work had not been done with the consent of the defendant. By e-mail 21st May 2009 (P13A) the defendant informed the plaintiff that their commitment towards the repairs would be $ 3000 and later by email dated 3rd June 2009 (P15B) the defendant increased that amount to $ 5000. Therefore, the plaintiff is not entitled to claim anything more than what was approved by the defendant.

[28] The learned counsel for the defendant submitted that since there is no evidence that the plaintiff has in fact paid the amounts of money stated in the vouchers and receipts tendered in evidence it is not entitled to recover that amount. What is important here is whether the plaintiff purchased the goods for the purpose of repairs and not whether he paid money for the items so purchased. The recovery of the monies due to the seller is a matter between the buyer and the seller. The defendant, if he is held liable to pay the plaintiff for the work carried out the plaintiff's failure to pay its dealer cannot be considered as a ground to avoid payment.

[29] In consideration of the improvements done to the property the defendant made the offer for sale first to the plaintiff and parties entered into the agreement of sale. It is the plaintiff who refused to perform its part of the agreement by making the balance deposit of $ 22,200.00.

[30] The defendant has not paid the plaintiff the amount it undertook to pay for the repairs which is $ 5000 and the deposit of $ 4000 made by the plaintiff prior to the preparation of the tenancy agreement. There is ample evidence on record that the plaintiff made certain improvements to the property, with the concurrence of the defendant. Although, it is the plaintiff who refused to comply with the terms and conditions of the sale and purchase agreement in question in my view he is entitled to recover the above sums of money.

[31] The defendant claimed damages from the plaintiff for causing damage by lodging a caveat. It is not a fact in dispute that the plaintiff registered a caveat as claimed by the defendant. However, there is no evidence that, because of the caveat any damage was caused to the defendant. There is also no evidence that the defendant could not dispose of the property or the disposal of the property was delayed due to the registration of the caveat. The mere registration of the caveat is not sufficient for the defendant to claim damages. It must prove that damage was caused to it by lodging the caveat.

[32] For the aforementioned reasons I make the following orders.

ORDERS

1. The defendant shall pay the plaintiff $ 5000 for the repairs carried out in the property in question.
   
2. The defendant shall pay the plaintiff the deposit of $ 4000 made as a prerequisite to the preparation of the tenancy agreement.
   
3. The plaintiff will pay $ 1000 as costs (summarily assessed) to the defendant.
   
4. The plaintiff is entitled to interest on the said sums in terms of section 4 of the Law Reforms (Miscellaneous Provisions)(Death and Interest) Act as amended by Decree No. 46 of 2011.
   
5. The counter claim of the defendant is dismissed.
   

Lyone Seneviratne
JUDGE