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Chand v Kumar [2011] FJCA 54; ABU0043.2010 (25 November 2011)

IN THE COURT OF APPEAL - FIJI ISLANDS
ON APPEAL FROM THE HIGH COURT OF FIJI

CIVIL APPEAL NO. ABU0043 OF 2010

BETWEEN:

KAMAL CHAND
RESHMI LATA VARMA
Appellants

AND:

BIJAY KUMAR (aka) VIJAY KUMAR
Respondent

CORAM: Hon. Justice Sriskandarajah, Justice of Appeal
Hon. Justice Nimal Wikramanayake, Justice of Appeal
Hon. Justice William Calanchini, Justice of Appeal

COUNSEL: Ms T Draunidalo for the Appellants
Mr D S Naidu for the Respondent

Date of Hearing: Tuesday, 8th November 2011
Date of Judgment: Friday, 25th November 2011

JUDGMENT

Sriskandarajah, JA

1. I agree with the judgment, the reasons and the proposed orders of Wikramanayake JA.
   

Wikramanayake, JA

2. The Appellants appeal from the Judgment of Justice Inoke delivered on 31st May 2010 in the High Court of Fiji at Lautoka where his Lordship dismissed the Plaintiffs'/Appellants actions for specific performance of an alleged contract for the sale of a three bedroom house entered into between the Plaintiffs/Appellants as purchasers and the Defendant/Respondent as vendor, the land being a three bedroom home on Freehold CT25006 for a purchase price of $55,000. His Lordship also dismissed the Defendant/Respondent counter claim for rental arrears under alleged tenancy of claimant.
   
3. The Appellants issued a writ of summons dated 19 February 2004 containing a rather convoluted statement of claim in which they alleged:
   

"That the Respondent verbally offered to sell to the Plaintiffs the land and the Certificate of Title No: 12946 for $55,000. There are no terms of the contract".

4. They made a number of allegations of part performance which surprisingly were contained in this statement of claim.
   
5. In this regard I might mention two matters of some significance the first being that one of the first things a student of the Law of Property learns is that the contract for the sale of land must be in writing, signed by the party to be charged. This was laid down in Section 4 of the Statute of Frauds enacted by Lord Nottingham while he was Lord Chancellor in June 1677 during the reign of Charles II. The Statute of Frauds was taken to all parts of the British Empire and the necessity of writing in contract for the sale of land is to found in Section 59 of the Indemnity, Guarantee, and Bailment Ordinance in Fiji.
   
6. Secondly in Francis v. Francis [1951] VicLawRp 48; [1952] VLR 321 Sholl J at 328 stated that acts of part performance should not be alleged in a statement to claim and ought to be pleaded in a reply when the statute is taken up in way of defence.
   
7. Finally the Plaintiff must also allege and prove that he or she was ready and willing to perform the contract – Public Trustee (NSW) v. Gavel (1927) 169; Bishop Taylor [1968] HCA 68; (1968) 118 CLR 518 per Menzies J at 525. In this present case not only was there no allegation of readiness and willingness on the part of the Appellants to perform the obligations of the contract but no evidence was led that they were in a position to pay the sum of $55,000 under the alleged contract of sale at all material times.
   
8. Inoke J held that paragraph [35]:
   

"The difficulties which the Plaintiffs faced with that case was that there was no written Sale & Purchase Agreement."

9. In regard to the allegations by the Appellants that they made renovations to the building on the property as it was part of the term of the contract of sale. His Lordship found in paragraph [45]:
   

"The renovations to the house and the application for the Housing Authority loan were to enable the Plaintiff to obtain the cash. There were no actions taken pursuant to the agreement."

10. His Lordship found further at paragraph [47]:
    

"And I am therefore of the view that the Plaintiffs' claim for specific performance fails on the ground that there was no binding contract because the Plaintiffs fails to comply with the terms of their offer or, alternatively, failure to comply with the terms of the agreement, namely, to pay the Defendants $55,000, before he left Fiji in 2002 and 2004 or as extended to 28th February 2004."

11. Leaving aside for the moment the fact that there is no written contract and even if there was there are no sufficient acts of part performance, before any question arises as to the sufficiency of any writing to satisfy the statute it is necessary to show that the parties have arrived at a complete and unconditional agreement: Gibson Manchester City Council [1979] UKHL 6; [1979] All ER 972; [1979] 1 WLR 294 the House of Lords states:
    

"To be a good contract there must be a concluded bargain. And a concluded contract is one which settles everything i.e. necessary to be settled at least nothing to be settled by agreement between the parties. Of course, it may leave something which are still to be determined but then that determination must be a determination which does not depend upon the agreement between the parties": A decision of the House of the Lords.

12. In an early Victoria decision: Parker v Barnett [1889] VicLawRp 116; (1889) 16 VLR 214 Higinbotham C J stated at 221:
    

"The memorandum of contract must sufficiently identify the parties to the contract, the subject matter and the terms of the contract, including both the promised and the consideration, and it must be important agreement or acknowledgement of an agreement to the terms stated in the writing."

13. The parties, the subject matter and the terms of the contract are at least terms of any concluded contract for the sale of an interest in land: Toogood v Mills (1896) 23VLR 106, and any memorandum by which one or more of these matters is or are not fixed will be insufficient." If the parties have not reached an agreement at all on one or more of the essential terms, it is not a mere question of insufficiency of, the written evidence to the contract; the contract itself is void on the grounds of uncertainty: Duggan Barnes [1922] ArgusLawRp 88; [1923] VLR 27; J B Rogers v. Harry Lesnie Ltd (1927) SR (NSW) 427 at 431.
    
14. In addition to all the problems facing the Appellants in this matter it is my opinion that the contract was void for uncertainty because there was no agreement as to when the purchase price was to be paid, i.e. the date for payment of the purchase price. Although I run the risk of repetition at page [47] his Lordship stated:
    

"I am therefore of the view that, the Plaintiffs claims for specific performance fails on the grounds that there was no binding contract because the Plaintiffs failed to comply with the terms of their offer, or, alternatively, for failure to comply with the terms of the agreement, mainly to pay the Defendant $55,000 before he left for Fiji in 2002 and 2004 or as extended to 28th February 2004."

15. With all due deference to his Lordship he would be correct if he had stated:
    

"I am therefore of the view that the Plaintiffs claims for specific performance fails on the ground that there was no binding contract".

and stopped there.

16. His Lordships addition, with all due deference to his Lordship, when he added 'the Plaintiffs' failure to comply with the terms of the contract did not mean there was no binding contract it only rendered them in breach of their contractual obligations even if they had entered into a valid contract with the Plaintiff / Appellant.
    
17. According to the evidence the parties entered into an oral agreement in 2000 and the sale by the Respondent to the Appellant of the house for $55,000. Payment was to be in cash and no date was fixed for the payment. The ANZ Bank made an offer to lend the Appellants $55,000 on 18th December 2001. After the male Appellant got the loan approved his uncle did not come to Fiji to sign the transfer papers and the loan died a natural death. On 4th March 2002 a further offer of a loan was made by the ANZ Bank. Further letter of offer from ANZ Bank that was given to them on 4th March 2002 but no acceptance was signed.
    
18. His Lordship found that the male Appellant evidence was that this loan was on hold waiting for his uncle to come back to Fiji to sign the transfer. At paragraph [19] his Lordship stated:
    

"I accept that the only reasonable explanation for this was that Bijay did suggest to Kamal that he would sell his house to him for $55,000, this is supported by Bijay's own evidence in January 2002, he said to Kamal that he was leaving in February and if he got the money' it would be 'good'. Kamal then promised 'I will give you the money and when you leave Fiji you can take the money'."

19. That did not happen by the time Bijay and his family left. On 16th May 2003 the Respondent gave a written authority to his trusted friend Suresh Prasad to 'execute documents on my behalf'. Between May 2003 and March 2004 the Appellants pursued their application for the loan with the Housing Authority. But it was not until 3rd March 2004 that the Housing Authority approved the Appellant's application for a loan which the Appellant accepted on the 16th March 2004. On 28th November 2003 Respondent signed the Power of Attorney appointing his friend Suresh Prasad as his Attorney and this Power of Attorney became registered on 26th December 2003. The Respondent returned to Fiji on 9th January 2004 and of course the Power of Attorney would have no force or avail after that date. The male Appellant then approached the Respondent to give him yet another chance to purchase the property. The Respondent then wrote another letter to the Housing Authority on 22nd January 2004 confirming that Suresh Prasad had his consent and full authority to settle the loan to the Appellant for $55,000. The Respondent left for Australia on 2nd February 2004 and he still had not received the purchase price. He gave evidence that he telephoned the male Appellant on 14th February 2004 and gave him 14 days to find the money and as the money had not arrived by 28th February he called Suresh to find out if Kamal had contacted him about the sale and His Lordship found at paragraph [28]: "Suresh told him that no one had so he called the sale off".
    
20. In any agreement for the sale of land or for the grant of a tenancy of land, price is one of the essential elements of the transaction; and the agreement will be void on the ground of uncertainty where the parties have not reached agreement at all as to this matter or when the Court is unable to ascribe any particular meaning to the relevant provisions of the agreement. In McLachlan-Troup v. Peters [1983] 1 VR3 Beach J emphasized the importance, not only for there to be an agreement as to the purchase price but also for there to be an agreement as to the terms for the payment of the Purchase price, as there was no time for payment fixed by the option clause. Although this case related to an option to purchase the position is identical in relation to a contract for the sale of land.
    
21. However in Agius v. Sage [1999] VSC 100, a case relating to a contract for the sale of land, Byrne J held that the failure provided for the time of payment of the purchase price did not render the agreement void for uncertainty. He held that in considering whether essential terms were uncertain it is important to bear in mind that ambiguity does not mean uncertainty. It is only if the Court is unable to put any definite meaning of the contract that it can be said to be uncertain. In determining whether the contract is void for uncertainty, the court should adopt a construction that would preserve the validity of the contract. In the setting of the present case there was no time fixed for the payment of the Purchase price and the contract for the sale of the land in this present case in addition to all its other problems and difficulties is also void for uncertainty. I propose that the court should dismiss the Plaintiffs' action and order that the Plaintiffs pay to the Defendant the cost of this Appeal.
    

William Calanchini, JA

22. I agree with the proposed orders. I also agree with the conclusion that the contract was void for uncertainty because there was no agreement as to when the purchase price was to be paid.
    
23. I venture to add some comments on the pleadings in this case. In paragraphs 1 and 2 of the Statement of Claim the Appellants plead that a verbal agreement was made between the parties for the sale of property contained in Certificate of Title number 12946 (the property). It is accepted that the Appellants then allege certain facts which are relied upon as part performance. In his Defence the Respondent did not plead section 59 of the Indemnity Guarantee and Bailment Act Cap 232 ("the Statute of Frauds"). The Respondent denied the existence of any agreement between the parties for the sale of the property.
    
24. It is the inclusion in the Statement of Claim of facts raising the issue of part performance that warrant some comment.
    
25. In the Supreme Court Practice 1991 Volume I the following appears at paragraph 18/8/21 on page 293:
    

"Statute of Frauds _ _ _ Must be specially pleaded if the defendant desires to rely on it. Even where the plaintiff's counsel has clearly had the Statute of Frauds _ _ _ in his mind and pleaded with a view to it, alleging facts to take the case out of its operation, as e.g. part performance, still the defendant cannot raise the point unless the statute has been pleaded."

26. There is no additional material in the paragraph that would indicate that pleading facts alleging part performance was no longer appropriate or contrary to current pleading practice.
    
27. One of the authorities cited in the paragraph is Clarke v. Callow (1877) 46 L J Q B 53. Kelly, C B at page 54 stated:
    

"It is urged on the part of the defendant that the Plaintiff has anticipated the defence of the Statute of Frauds in his statement of claim and that therefore the defendant need not avow his reliance on the statute as that is already understood. But this would introduce into the system of pleading a fiction which would always be inconvenient, and sometimes extremely unjust."

28. The point to be made is that there was at that time a practice of pleading in the Statement of Claim facts that may constitute part performance in anticipation of the defendant pleading the Statute of Frauds which was not the subject of any adverse comment by the Court of Appeal. Of course, in the event that the defence is not pleaded, the paragraphs relating to part performance in the Statement of Claim can be regarded as unnecessary rendering the pleading prolix.
    
29. There is, however, a later decision which is cited as authority for the proposition that facts that take a claim outside the operation of the Statute of Frauds should be left to the reply. In Francis v. Francis [1951] VicLawRp 48; [1952] V L R 321 the Full Court of the Victorian Supreme Court considered the issue of the sufficiency of an act of part performance of a contract to take the case out of the Statute of Frauds. Although Sholl J at page 327 and 328 refers to an older practice of alleging acts of part performance in the claim, the Judge took the view that the modern practice was for part performance to be a proper matter for reply having regard to the Rule of the Victorian Supreme Court. The issue that was of concern to the Judge in that case was:
    

"But neither in the statement of claim nor in the reply did the Plaintiff allege that his mother gave or that he accepted possession of the property _ _ _. I do not think the evidence actually given went far enough to establish a transfer of possession, but there might well have been further facts available and relevant to that question _ _ _. But, at all events the plaintiff, if he had pleaded it, would have been in no worse position on that question, but in my opinion in a better one, than in relation to the delivery of the certificate" (P 328).

30. As a 1952 decision of the Victorian Supreme Court Francis v. Francis (supra) may be regarded in this jurisdiction as persuasive. However, the decision is not referred to in the 1991 Edition of the Supreme Court Practice (the White Book) and in view of section 22 of the High Court Act Cap 13 I feel compelled to express a preference for the less rigid approach to which reference is made in the Supreme Court Practice.
    
31. For my part I consider that the principal purpose of pleadings is to define the issues in dispute for the court and to enable the Defendant to determine the claim he must defend. Whether part performance should be pleaded in the reply or can be alleged in the Statement of Claim is a technical issue upon which there appears to be a divergence of opinion.
    
32. I consider that there is much merit, with respect, to the observations of Lawton J in Busch v. Stevens [1963] 1 Q B 1 at page 7:
    

"As one of the objects of the modern rules of pleadings is to inform the court what it is being asked to try, it seems to me to be a matter of indifference to the court whether the issue of acknowledgement is raised in the first pleading or the last – but it is a matter of concern to the parties that the cost of litigation should be kept down; and if costs can be kept down by making a reply unnecessary, so much the better."

33. Although Lawton J was referring to a Statute of Limitations defence, I can see no reason why the Judge's comments should not be applied to acts of part performance in anticipation of a defendant raising the Statute of Frauds as a defence.
    

Sriskandarajah, JA

ORDERS OF THE COURT

34. The orders of the Court are:
    

(1) The appeal of the appellants Kamal Chand and Reshmi Lata Varma be dismissed.

(2) The Appellants do pay to the Respondent Bijay Kumar his costs in the appeal assessed at $3000.

.............................................................
Hon. Justice Sriskandarajah
Justice of Appeal

..............................................................
Hon. Justice Nimal Wikramanayake
Justice of Appeal

.............................................................
Hon. Justice William Calanchini
Justice of Appeal