Home | Databases | WorldLII | Search | Feedback Magistrates Court of Fiji

Kooline Refrigeration Lautoka Ltd v Air Terminal Services (Fiji) Ltd [2011] FJMC 71; Civil Action 05.2010 (14 June 2011)

IN THE RESIDENT MAGISTRATE'S COURT
(WESTERN DIVISION) AT NADI

Nadi Civil Action No. 05 Of 2010

BETWEEN:

KOOLINE REFRIGERATION LAUTOKA LMITED
having its registered office at Level 8 Dominion House, Suva.
PLAINTIFF

AND:

AIR TERMINAL SERVICES (FIJI) LIMITED
having its registered office at Cruickshank Road, Private
Mail Bag NOP0356, Nadi Airport.
DEFENDANT

JUDGMENT

1. Plaintiff originated writ of summons claiming inter alia $15,425.13 and 10% interest per annum from the defendant.
   
2. Defendant filed statement of defence and prayed that the plaintiff's action be dismissed with the costs.
   
3. The plaintiff in reply to statement of defence stated that the plaintiff adopts any admission made by the Defendant in the statement of the Defendant and prayed that the Defendant's statement of defence be struck out with the costs on a solicitor/client indemnity basis and judgment be entered in favour of the Plaintiff as per the Plaintiff's statement of claim.
   
4. On 17 November 2010 this matter was fixed for hearing. By consent the parties filed the following:
   
   1. Agreed facts;
      
   2. Agreed issues; and
      
   3. Agreed bundles of document.
      

The matter was further adjourned to 8 December 2010 for mention.

5. The following were agreed facts:
   
   1. The Defendant called for tenders for providing services related to Freezer/Processing Rooms as per a document titled ATS (FIJI) LTD TENDER DOCUMENT FREEZER/PROCESSING ROOMS. Attached to this document was an empty price schedule.
      
   2. The Plaintiff by a letter dated 12th February 2009 offered to provide services to the Defendant and filled out the price schedule and submitted the letter to the Defendant.
      
   3. The Defendant accepted the offer by letter dated 12 March 2009.
      
   4. The Plaintiff and the Defendant executed a contract dated 15 April 2009.
      
   5. By a letter dated 17 April 2009, the Plaintiff informed the Defendant of the devaluation of the Fiji dollar.
      
   6. By a letter dated 29 April 2009, the Plaintiff informed the Defendant of the variations to the price with details of all variations.
      
   7. By a letter dated 17 September 2009, the Plaintiff informed the Defendant that the devaluation variation has not been paid and requested payment of the same.
      
   8. All variation as per letter dated 29 April 2009 has been paid except item 7 of the letter.
      
6. The Plaintiff is a limited liability company incorporated in Fiji and capable of suing in its corporate name and style. The Defendant also is an incorporated company in Fiji having its registered office at Cruickshank Road, Private Mail Bag NAPO356, Nadi Airport and capable of being sued in its corporate named and style.
   
7. The defendant called for tender on the installation of Freezer/Processing Rooms that was to be closed by 3pm on 13 February 2009. The plaintiff by letter dated 12 February 2009 addressed to the defendant responded to the tender with the tender price of $71,523.00 (VIP) [Document no. 2 of the Agreed Bundles of Documents]. The defendant accepted and awarded the tender to the plaintiff on the same date [Document no. 3 of the Agreed Bundles of Documents]. An agreement was entered into on the 15 April 2009 between the defendant and the plaintiff with the consideration sum of $71,523.00 [Document no. 4 of the Agreed Bundles of Documents].
   
8. On the 27 March 2009 the defendant issued a purchase order number 6108 in the sum of $71,523.00 to the plaintiff for the construction of the Freezer/Procession Rooms. The plaintiff carried out its task to build a Freezer at the defendant's compound.
   
9. In the meantime, the Fiji dollar currency devalued and the plaintiff advised the defendant of this and demanded for devaluation of money [Document no. 5-8 of the Agreed Bundles of Documents]. The plaintiff sent demand letters to the defendant to pay for the devaluation amount but the defendant has not done so until today.
   
10. The issues in this case are as follows:
    
    1. What is a tender?
       
    2. Can the plaintiff claim the extra money it incurred due to the devaluation of the money?
       
11. "Tender: A tender for work and labour, even though in the form of an "estimate" (u), amounts to an offer, which, when accepted, constitutes a binding contract (a). An advertisement inviting tenders for supply of goods extending over period of times is not an offer, but an invitation for offers" [Halsbury's Laws of England (3rd Edition) Vol.8 pg. 70].
    
12. The plaintiff by a letter dated 12 February 2009 (document no.2 of the lists of document) wherein it was stated that:
    

"The price is based on today's exchange duty and VAT rates any change in these to buyers account, we have no control over these. All other prices are fixed."

13. The defendant by a letter dated 12 March 2009 (document no.3 of the lists of document) accepted everything in the plaintiffs offer. The defendant stated in its letter that:
    

"We refer to your tender dated 12 February 2009 and would like to confirm that service contract has been awarded to your Company."

14. The defendant called for tenders for the processing freezers, the plaintiff forwarded with clear written conditions of the price and the defendant accepted and confirmed that offer without any change to the condition. Hence a valid contract has been made between the plaintiff and the defendant when the defendant communicated its acceptance to the plaintiff on 12 March 2009.
    
15. "It is necessary that the offer should be communicated to the other party in order that its acceptance may constitute a contract." [Halsbury's Laws of England (3rd Edition) Vol.8 pg. 71]. "An offer remains open, that is to say can be accepted, during the time (if any) expressly or impliedly mentioned in the offer, or, if no time is mentioned, during a reasonable time having regard to the nature and circumstances of the offer, provided that it has not in the meantime been revoked (i) [Halsbury's Laws of England (3rd Edition) Vol.8 pg. 71- PS-2].
    
16. The plaintiff communicated the offer to the defendant, the defendant had sufficient time to reject or accept the condition of the offer, but the defendant accepted the plaintiff's tender offer.
    
17. The defendant does not deny that the processing freezers were to be imported from overseas and there was devaluation of Fiji dollar. The plaintiff quoted the tender price subject to exchange duty and VAT rates for that day and the plaintiff did not have control over the change of exchange rate or devaluation of the Fiji dollar. Therefore it is just and equitable to hold that the plaintiff is entitled to recover the extra money incurred due to the devaluation of the Fiji dollar from the defendant.
    
18. 9. Now I have to determine the amount the plaintiff is entitled to recover from the defendant as extra money incurred due to fluctuation of exchange rate. Originally the plaintiff quoted the tender for $.71, 523.00 VIP based on the then current market value of the Fiji dollars. The plaintiff claims $15,425.13 from the defendant for increase in cost of the work as a result of devaluation of the dollar. The plaintiff does not give the exchange rate that was applicable at the time when they offered the tender, nor the rate that was relevant at the time they imported the machine. The defendant complains that: the amount claimed by the plaintiff is exorbitant, the plaintiff is confused as to the calculation and the correct amount. The plaintiff does not give basis for its calculation. However, I considering all the circumstances decide that the plaintiff is entitled to claim the sum of $10,000.00 as extra money incurred for the processing machine due to devaluation of the Fiji dollar.
    

Order:

19. [a] I enter judgment in favour of the plaintiff in the sum of $10,000.00 being extra money incurred for the procession machine due to devaluation of the Fiji dollar.

[b] I make no order as to costs.

M H Mohamed Ajmeer
Resident Magistrate

Nadi

Dated at Nadi on this 14th day of June 2011.