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

Airport Land Development Company v Swarup [2014] FJCA 16; Civil Appeal 0061.2012 (27 February 2014)

IN THE COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT
CIVIL JURISDICTION
CIVIL APPEAL NO. 0061 OF 2012
(High Court Civil Action HBC 296 of 2005L)

BETWEEN:

AIRPORT LAND DEVELOPMENT COMPANY
Appellant

AND:

VISHNU DEO SWARUP
Respondent

Coram: : Calanchini, P
Brito-Mutunayagam, JA
Kotigalage, JA

Counsel: : Mr D.S.Naidu for the appellant
: Mr V.M.Mishra for the respondent
Date of Hearing : 22 November,2013
Date of Judgment : 27 February, 2014

JUDGMENT

Calanchini P:

1. I have read the draft judgment of Brito-Mutunayagam JA and agree with his conclusions and proposed orders.
   

Brito-Mutunayagam JA:

2. This appeal is from a judgment of the High Court at Lautoka delivered on 7th September,2012.
   
3. The respondent commenced proceedings in the High Court at Lautoka against the appellant, by writ of summons. The respondent was employed by the appellant, as its General Manager, pursuant to an employment contract dated 13th May,2005, effective from February,2005. His monthly salary was $ 4,167.00.His annual remuneration package was $ 50,000. His employment contract also entitled him to a commission on the sale of land in excess of the fixed price, after deduction of the 10% NLTB charge. His employment was terminated on 30th June,2005.
   
4. In his amended statement of claim dated 24th January,2007, the respondent sought relief under the heads of breach of contract of employment and defamation. Under the first head, the respondent claimed that:
   
   • (a) He was paid $3000 for the month of February,2005, as part of his salary. He claimed the balance of his salary for the period February,2005, to 30th June,2005,and loss of employment from 1stJuly, 2005, to 31st December,2006.
     
   • (b) 65 lots of land were sold in excess of the fixed price during his employment with the defendant, in respect of which he was entitled to a commission under his employment contract, in a sum of $ 327,750.00. This was not paid to him.
     

(c) He lost the opportunity and right to earn his commission on the balance 52 lots of land not sold, for which he would have earned a sum of $ 262,200.00. This claim was not pursued.

Under the second head the respondent alleged that he was seriously injured in his character, credit, reputation, brought into public ridicule and suffered considerable distress and embarrassment.

5. The appellant disputed the claim and counterclaimed for damages.
   
6. The High Court, by a judgment delivered on 7th September, 2012, held that:
   
   • (a) The respondent was entitled to be paid the balance of his salary for the month of February,2005, to 30th June,2005, in a sum of $ 17,835.00 together with interest, making a subtotal of $ 30,651.42.
     
   • (b) Under schedule 3 of his employment contract, the respondent was entitled to an equal proportion (50 %) of the excess of the sale price over the fixed price of the lots of land sold, after deduction of the 10% NLTB charge. He was awarded a sum of $ 131,698, as commission on sales.
     
   • (c) There was no wrongful termination, the termination being mutually agreed.
     
   • (d) The action for defamation was not proved.
     
   • (e) The appellant's counterclaim for damages was declined.
     
7. The appellant appeals on the following grounds of appeal:
   
   1. THAT the Learned Trial Judge erred in law and in fact in accepting the Plaintiff's claim that it was entitled to $131,698.00 based on the Plaintiff/Respondent's unsubstantiated claim.
      
   2. THAT the Learned Trial Judge erred in law and in fact in awarding 10% interest to the Plaintiff/Respondent on the sum of $17,835.00 as it is excessive.
      
   3. THAT the Learned Trial Judge erred in law and in fact in failing to consider and give due weight to the fact that the employment contract was backdated and put into effect well after the respondent commenced work.
      
   4. THAT the Learned Trial Judge erred in law and in fact in allowing judgment in favour of the Plaintiff/Respondent's claim for commission.
      
8. At the hearing, Mr D.S.Naidu, counsel for the appellant withdrew the second and third grounds of appeal. The argument was limited to the quantum of commission payable to the respondent, on the lots of land sold during his period of employment, in terms of schedule 3 of the respondent's contract of employment. Schedule 3 reads:
   

The annual remuneration package for the employee shall be $50,000.00 (FIFTY THOUSAND DOLLARS) inclusive of basic tax and PAYE plus all sums for the lots sold in excess of the fixed price after deduction of 10% NLTB charges to be shared equally between the Company and the Employee, fixed price schedule attached as per annexure marked "A"....(underlining mine)

9. The respondent's contention in the lower court was that in terms of schedule 3,the 10% NLTB charge was to be computed on the difference between the sale price and fixed price. The further contention was that the appellant and respondent were then, to share equally, the excess between the sale price and fixed price less the 10 % NLTB charge.
   
10. The respondent's computation was set out in an attachment to his letter dated 30th June,2005, to M/s Babu Singh & Associates, Barristers and Solicitors, produced at the trial. I reproduce an extract. I have highlighted the two transactions, that I propose to examine closely.
    

11. On the first case, a sale of a lot of land to Devendra Prasad, the respondent's contention was that he was entitled to a commission of $ 2025 calculated on the following basis:

Sale price $ 28000

Less fixed price 23500

4500

10% NLTB charge 450

4050

50% share 2025

12. The appellant's case, on the other hand, was that the 10% NLTB charge has to be deducted from the sale price and then, the parties would be given an equal proportion of the difference between that figure and the fixed price.
    
13. The question whether the NLTB charge was to be shared equally between the appellant and respondent under the relevant clause, was considered in the first instance, by the learned trial Judge. He made the preliminary observation that "it is clear that the NLTB charges are not to be shared but it is the sale price in excess over the fixed price that is meant to be shared between the parties".
    
14. The learned trial Judge then, answered the issue whether the Native Land Trust Board charges were to be shared equally between the appellant and respondent as follows:
    

As set out herein before the excess between the Fixed Price and the Sale Price was agreed to be shared, after deduction of the 10% NLTB charge. The amount to be shared is arrived at after deducting the 10% NLTB charge. To that extent and in that context this issue needs to be answered in the negative.(emphasis added)

15. The judgment of the lower court concludes that what the respondent " is entitled to, is not to the entire excess over the Fixed Price, but to share that excess after deduction of the 10% NLTB charges".
    
16. In support of the appeal, Mr Naidu argued that the learned trial Judge, while arriving at a correct construction of the relevant clause, failed to apply that arithmetical formula and calculate the commission on sales payable to the respondent. Instead, he relied on the respondent's claim for $ 131,698.00. This is the only point in this appeal.

The respondent has not appealed against the findings of the lower court.

17. Mr Naidu has attached to his submissions, a table computing the commission payable to the respondent, on his interpretation. An extract of that table runs as follows:

18. According to this computation, the appellant would be entitled to a commission of $ 850, in respect of the sale to Devendra Prasad, calculated as follows:
    

Sale price $ 28000

Less 10 % NLTB charge 2800

25200

Less fixed price 23500

1700

50% 850

On this computation, the respondent is entitled to receive an aggregate sum of $ 52,425.00, as commission, in respect of the lots sold.

19. In my judgment, the calculation adopted in the above table accords with the correct construction of clause 3 and findings of the lower court. In my view, in the first instance, the 10% NLTB charge has to be deducted from the sale price. Then, the parties are entitled to an equal proportion of the difference between the sale price after the 10% deduction and the fixed price. A fortiori, that this is the proper construction of the relevant clause gains support from the sale to Girdhar Raniga, where the sale price was below the fixed price as highlighted in the above table. The NLTB 10% charge was quite correctly deducted from the sale price.
    
20. The raison d'être of the learned trial Judge for accepting the respondent's computation of the commission reads as follows:
    

There is no other acceptable account submitted by the Defendant in respect of such payments due to Plaintiff. ..The Defendant did not submit an amount to be the component of NLTB charges paid in respect of the lots 'sold' by the Plaintiff to challenge the account in the attachment to P5, though the total of NLTB charges paid were submitted. Therefore the amount due to the Plaintiff as accepted by the Plaintiff at paragraph 64 of his written submissions is $131,698/=

21. In my view, this reasoning is flawed and irreconcilable with his earlier findings. In my judgment, the learned trial Judge's task was to quantify the commission. This he failed to do.
    
22. Mr Mishra, counsel for the respondent, submitted that an appellate court will rarely upset findings of fact. The principles, in this regard, are beyond controversy. An appellate court would hardly interfere in a case where there is a question of pure fact and the credibility of witnesses is crucial. But an appellate court is in just as good a position as a trial court, to determine whether a deduction from a finding could reasonably have been reached by a trial court based on the evidence, or whether it is manifestly or unjustly distorted by a misconception of the findings of fact, as in the case before us. As Lord Reid stated in Benmax v. Austin Motor Co., Ltd, [1955] 1 All ER 326 at page 329:
    

...in cases where there is no question of the credibility or reliability of any witness, and in cases where the point in dispute is the proper inference to be drawn from proved facts, an appeal court is generally in as good a position to evaluate the evidence as the trial judge, and ought not to shrink from that task, though it ought, of course, to give weight to his opinion. (emphasis added)

This passage was applied by the FCA in Ali v Ali, (2009) FJCA 66.

23. In consequence, I would allow the appeal and set aside the judgment of the lower court for the respondent on the award of the sum of $ 131,698.00. The respondent is entitled to a sum of $ 52,425.00 as commission, on the sale of land. I award the appellant costs in the sum of $ 3000 to be paid by the respondent.
    

Kotigalage JA

24. I also agree with the reasons and conclusions of Brito-Mutunayagam JA.
    

Orders

1. The appeal is allowed.
2. The Order of the High Court is set aside with respect to the award of $ 131,698 to the respondent.

100. The respondent is entitled to a sum of $ 52,425.00.

4. The respondent shall pay costs of the appeal fixed summarily in the sum of $ 3000 to the appellant within 28 days of this judgment.
   

Hon. Mr Justice W.Calanchini
President

Hon.Mr Justice A.L.B. Brito- Mutunayagam
Justice of Appeal

Hon. Mr Justice C. Kotigalage
Justice of Appeal