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National Bank of Fiji v Batiratu [1994] FJHC 14; Hba0009j.93s (28 January 1994)

IN THE HIGH COURT OF FIJI
CIVIL JURISDICTION

CIVIL APPEAL NO. 9 OF 1993

Between:

NATIONAL BANK OF FIJI
Appellant
(Original Defendant)

- and -

VILIAME BATIRATU
Respondent
(Original Plaintiff)

Mr. V. Kapadia for the Appellant
Mr. S. Lateef for the Respondent

JUDGMENT

This is an appeal against the decision of the learned trial Magistrate S M Shah Esq. sitting in the Suva Magistrates' Court on the 16th October, 1992 when the Plaintiff's (hereinafter referred to as the Respondent) claim was allowed (partly) against the Defendant (hereinafter referred to as the Appellant). The original Plaintiff was Viliame Batiratu and the original defendant was the National Bank of Fiji (now the appellant).

The appellant argued five grounds of appeal as under:

"1. THAT the learned trial Magistrate erred in law and in fact in granting a permanent injunction against the Appellant.

2. THAT the learned trial Magistrate erred in law and in fact in holding that the Respondent was an innocent and bona fide purchaser for the value without notice.

3. THE learned trial Magistrate erred in law and in fact in holding that the Respondent had acquired a good and unencumbered title to Motor Vehicle Registration No. BF612.

4. THE learned trial Magistrate erred in law and in fact in holding that a proper search for a Bill of Sale over Motor Vehicle Registered No. BF612 was done by the Respondent's Agents.

5. THE learned trial Magistrate erred in law and in fact in finding that the Respondent had given a Valid first Bill of Sale to ANZ Bank."

Briefly, the facts of the case in so far as they are not in dispute are as follows which I have adopted from the "Legal Submission by the Appellant":

"1. Pauliasi Mate of Ba gave a bill of sale over a Toyota liteace light goods vehicle no. BF612 Chassis No. KN20V-016684 and Engine No. 4K-5138360 to the National Bank of Fiji on or about the 20th July, 1988. This Bill of Sale was registered by the Bank's solicitors on or about 2nd August, 1988 registration being Folio 1699/88.

2. In 1991 Pauliasi Mate fell in arrears in the payment of his instalment in settlement of the loan that he had obtained on the security of the van and the bank issued a demand under bill of sale dated 23rd August, 1991 claiming the sum of $1,904.80.

3. Subsequently Bank's bailiff Mr. Bhan Pratap made enquiries and searches of the whereabouts of the vehicle and located it at the Nasese Police Compound in the possession of one Viliame Batiratu the Respondent herein. Mr. Batiratu refused to deliver up possession of the van.

4. Mr. Batiratu allegedly bought the van sometimes in June 1991 from one Pauliasi Mateboto ....... In his evidence Mr. Batiratu admits that he bought the vehicle from his cousin (see page 113). He says his cousin was also called "Pau". He obtained a loan of $3,000.00 from ANZ Bank to help in the purchase of the van (see page 70 of the record for ANZ letter). The registration no. and chassis no. of the vehicle are the same as those mentioned in the NBF bill of sale but it appears that the engine of the vehicle has been changed. It does not of course affect the identification of the vehicle.

5. Solicitors for ANZ Bank gave the certificate to the Bank that the bill of sale given by Viliame Batiratu on vehicle no. BF612 was a valid security (see page 71 of the record).

6. There is evidence that the Respondent bought from his cousin. The identity of the vehicle is not in dispute, it is the same vehicle. The Respondent says that his cousin did not tell him that the vehicle was encumbered. There is also evidence that the Respondent paid Pauliasi Mateboto the sum of $2,000.00.

7. There is evidence from Yallapa Reddy, Manager of National Bank of Fiji in Ba that Pauliasi Mate obtained a loan from the Bank in July, 1988 in the sum of $2,500.00 and signed the bill of sale under the name of Pauliasi Mate Qoroya.

APPELLANT'S ARGUMENT

The appellant argues that this is not a case of a bona fide purchaser for value without notice. It says that the Respondent bought the vehicle subject to a prior bill of sale, registered in favour of the Appellant, and given by one Pauliasi Mate alias Mateboto. In such circumstances a subsequent Bill of Sale given by the Respondent in favour of the ANZ Bank will rank after the 1st Bill of Sale to the Appellant.

It says that the 'nemo dat' rule is only applicable if a third party acquires chattels from a person who has a voidable title. In this case, it says, the Respondent bought the motor vehicle from Pauliasi Mate (alias Mateboto) and he bought it subject to the rights of the NBF (the Appellant) under the FIRST registered Bill of Sale. His title was therefore voidable because of the prior registered mortgage. The subsequent bill of sale in favour of ANZ Bank ranks after the NBF's prior bill of sale.

The Appellant submits:

"that there is sufficient evidence in the Record to form the opinion that the Respondent knew Pauliasi Mate as Pauliasi Mateboto and that he was aware of the prior bill of sale by National Bank of Fiji. The slight difference in the registration of the name is not a defect that is sufficient to void the bill of sale of the National Bank of Fiji. A search at the Deeds register under the name of Pauliasi Mate would have revealed that there is a prior bill of sale or it should have at least put the Respondent and or his agents on notice that there is a name very similar to that they are searching in the register."

The Appellant's arguments on each of the five grounds are as follows:-

With regard to ground 1 of the appeal we submit that the Magistrate erred in law and in fact in granting a permanent injunction against National Bank of Fiji. We rely on the case of Karim Buksh and Hazra Bibi Civil Appeal No. 1 of 1992. Injunctions against financial institutions are very rarely granted. If the Respondent suffers any damage as a result of his vehicle being seized than those damages can be compensated in any subsequent proceedings by him against the Bank.

With regard to ground 2 of the appeal we respectfully submit that there is sufficient evidence in the record to indicate that the Respondent knew Pauliasi Mate and therefore he was not an innocent purchaser for value without any notice.

With regard to ground 3 of the appeal the security of National Bank of Fiji was valid and subsisting and was in relation to the same motor vehicle and therefore it cannot be said that the Respondent had acquired a good and unencumbered title to the van.

With regard to ground 4 of the appeal we respectfully submit that a proper search had not been conducted by the agents of the Respondent as they would have seen the name of Pauliasi Mate in the register at its registry and a further search of the bill of sale would have clearly reveal that there was in fact a charge on motor vehicle no. BF612.

With regard to ground 5 of the appeal we submit that the ANZ charge is second in ranking to the NBF bill of sale as it is prior in time.

The Appellant submits that the said order for permanent injunction granted by the lower court be set aside and that the Court make an Order under the Appellant's Counterclaim (at page 51 of the Record) that the Respondent forthwith deliver up possession of the said motor vehicle to the Appellant.

RESPONDENT'S SUBMISSION

The Respondent's counsel Mr. Lateef submitted that the Respondent did not know that there was a bill of sale already in existence when he purchased the said vehicle from his cousin PAULIASI MATEBOTO. He only went to Sherani & Company's office to discuss payment because it was his cousin's vehicle.

He said every action was taken to ensure that the respondent bought an unencumbered motor vehicle. Search at the Transport Control Board revealed that the said vehicle was under the name of Pauliasi Mateboto; also at the Deeds Office under the name of Pauliasi Mateboto it was found that there were no encumbrances under his name (vide Affidavit of Peni Navu sworn the 9th March 1993 at p.9 of the Record). He said that a proper search was done and no one is expected to search name which looks similar as search was done under the name given, namely, PAULIASI MATE.

Mr. Lateef submitted that since the learned Magistrate gave judgment for the Respondent it would be assumed that he believed the Respondent's witnesses. He had the advantage of hearing and seeing witnesses and observing their demeanour.

Mr. Lateef says that the Respondent is a bona fide purchaser for value without notice. He does not agree with Mr. Kapadia on his exposition of the 'nemo dat' principle.

On the granting of permanent injunction he agrees with the learned magistrate, and in answer to Court he said that the NBF Bill of Sale is invalid and for that he relies on s.24 of the Sale of Goods Act Cap.230. That section provides:

"Where the seller of goods has a voidable title thereto but his title has not been avoided at the time of sale, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of the seller's defect of title."

THE ISSUE

The sole issue before me is whether the learned Magistrate was right in holding that "a valid Bill of Sale was executed by the Respondent (Plaintiff) in favour of ANZ Bank" when in fact there was already in existence a Bill of Sale in favour of NBF (Appellant) given by one Pauliasi Mate (the Respondent's cousin) over the same vehicle and from whom the Respondent purchased the said vehicle AND whether consequently the learned Magistrate was correct in granting "a permanent injunction restraining the defendant from repossessing the Plaintiff's vehicle number BF612" which tantamounts to declaring the first bill of sale to NBF as null and void.

DETERMINATION OF ISSUE

All five grounds of appeal can conveniently be considered together.

The principles governing the position of an appellate Court where findings of fact by an inferior court are challenged are fully stated in the well-known case of BENMAX v AUSTIN MOTOR CO. LTD. (1955 1 AER. p.326). The headnote to BENMAX reads as follws:-

"An appellate court, on an appeal from a case tried before a judge alone, should not lightly differ from a finding of the trial judge on a question of fact, but a distinction in this respect must be drawn between the perception of facts and the evaluation of facts. Where there is no question of the credibility of witnesses, but the sole question is the proper inference to be drawn from specific facts, an appellate court is in as good a position to evaluate the evidence as the trial judge, and should form its own independent opinion, though it will give weight to the opinion of the trial judge."

The Court must accept material findings of fact by the learned magistrate.

The learned Magistrate's judgment consists of an outline of facts in four paragraphs on page 1 (Record p.125), counsel's argument in the next three paragraphs (Record p.125 -126) and the next three paragraphs deal with his findings and order.

In a nutshell all that the learned magistrate says is that the solicitors for the Respondent made searches under the name of Pauliasi Mate but could not find any bill of sale registered under his name in respect of the said vehicle; he says that that is all Messrs. Lateef & Lateef were required to do and then proceed to the preparation and execution of Bill of Sale in favour of the ANZ Bank. Therefore he says that when the Bill of Sale was executed by the Respondent, it was (quoting from the Judgment), a 'valid' Bill of Sale in favour of ANZ Bank. He says "accordingly the plaintiff succeeds in his action."

With the greatest of respect to the learned Magistrate, apart from stating briefly as to how the Appellant presented its case by calling 6 witnesses, he has failed to analyze their evidence and come out with any findings of fact. One would have expected this to have been done to show what part of the Respondent's evidence he believed and which he disbelieved; he could have done the same thing with the Appellant's evidence and that of its witnesses. Hence the appellate court is unable to deduce the reasoning behind the learned Magistrate's judgment.

The learned Magistrate is actually saying that since the search did not reveal a prior bill of sale over the said vehicle, it was in order to prepare the Bill of Sale in favour of the ANZ Bank. Therefore, he says it was a "valid" bill of sale. I shall come to this later.

In the Statement of Claim the Plaintiff prayed for (a) injunction, (b) declaration that the seizure is illegal and that the NBF Bill of Sale is null and void as against the Plaintiff's vehicle, (c) special damages, (d) general damages, (e) costs and (f) any other relief.

All the Grounds of Appeal aver that the learned trial Magistrate "erred in law and in fact". Hence it is clear that the learned Magistrate's findings based on the evidence before him are challenged. Therefore it is necessary for me to look at and consider, to use the words of the headnote to BENMAX (supra), "the proper inference to be drawn from specific facts."

The Appellate Court therefore has to form its own independent opinion on the evidence as in the Record.

At the outset I would like to deal with the status of the bill of sale over the said vehicle given by the Respondent in favour of the ANZ Bank. It is in fact I hold a second bill of sale over the same said vehicle. As such it will rank second in order of priority.

The learned Magistrate is quite correct when he said in his judgment that a "valid Bill of Sale was executed by the Plaintiff in favour of ANZ Bank" (p.127 Record). But when he goes ahead and states in the next sentence that "I now grant a permanent injunction restraining the defendant from repossessing the Plaintiff's vehicle number BF612" he impliedly means that the Appellant's Bill of Sale (which is prior to this second Bill of Sale) is of no validity and in effect it is null and void. If he had stopped after saying that the Bill of Sale is 'valid' then there would not have been any complaint because this bill of sale would have ranked second in order of priority. If what I imply is correct then he is definitely wrong in granting a permanent injunction and shutting the Appellant out completely from exercising its powers under the said first Bill of Sale.

In my view, the situation therefore is, that the Appellant's Bill of Sale which is prior in time to one given by the Respondent is definitely still valid and ranks first in order of priority and I do so hold. It cannot in law be, in the circumstances of this case, be declared null and void. It is one of the Respondent's prayers that it be declared null and void and that is what the learned Magistrate has done as borne out by his words in his judgment that "the plaintiff succeeds in his action".

This was a simple case of Respondent wanting to give a bill of sale over the said vehicle (which he purchased from his cousin Pauliasi Mate alias Pauliasi Mateboto) to ANZ Bank. In the normal way a search is done particularly at the Titles Office to see if there are any encumbrances and if there are none then Messrs. Lateef & Lateef would proceed to the preparation and execution of the Bill of Sale.

I see no point in traversing the evidence given in connection with the search suffice it to say that there was no Bill of Sale against the name of Pauliasi Mate but other names like Pauliasi Mateboto etc were there. Pauliasi Mate was also known as "Pau". Although, as alleged by the Respondent that his cousin Pauliasi Mateboto alias "Pau" did not tell him about the existence of a Bill of Sale over the said vehicle, it was the duty of the solicitors concerned to do a proper search. What more should they have done apart from what they say they did, it was for them to decide.

The PW2 PENI NAVU, Law Clerk to Messrs. Lateef & Lateef said that he searched under P. Mateboto because P. Mateboto was the owner and he found a bill of sale under him. Although he was looking for Pauliasi Mate and not Mateboto, he in my view should have looked at the Bill of Sale under Mateboto because of some similarity in the names and this will have revealed which vehicle is involved.

The fact that the search by the solicitors failed to locate a prior bill of sale could be because of any number of reasons both good and bad. It is common knowledge that people are known by so many different names. Does this mean that because a particular registered Bill of Sale is not picked up during a search can one say that there is no Bill of Sale when in fact there is one as in this case. Can one say that in such circumstances this bill of sale is null and void if another bill of sale is registered in ignorance of it. Far from it I must say.

The learned Magistrate formed his opinion about the search by the solicitors and held that they did all that they were required to do and that they could not have done anymore. In fact he went to great lengths stating what the solicitors did. This is what perhaps persuaded him to come to the conclusion to which he did for he gives no other reasons for doing so. On this view of the learned Magistrate, can one say therefore that the prior bill of sale is null and void and that the second bill of sale is the only valid Bill of Sale over the said vehicle. In my respectful opinion it cannot be so and I so hold despite the learned Magistrate's view to the contrary.

Under s.12 of Bills of Sale Act Cap.225 Laws of Fiji Vol XIII it is provided:

"12. In case two or more bills of sale are given comprising in whole or in part the same chattels, they shall have priority in the order of their registration."

The learned counsel for the Respondent relied on s.24 of the Sale of Goods (referred to hereabove) in support of his argument that the NBF bill of sale is invalid. This section has no relevance to the facts of this case. The respondent has bought the said vehicle from his cousin which turned out to be subject to the Bill of Sale to the Appellant. How can he debar the Appellant from its rights under the Bill of Sale in its favour?

On the facts of this case the question of whether the Respondent is a bona fide purchaser for value without notice does not arise. I have already mentioned what is normal procedure for registering a bill of sale. It was necessary that a proper and thorough search is done at the Titles Office; the responsibility is greater on the person in whose favour the bill of sale is given (and take all necessary steps in that regard and to ascertain that the said vehicle is not encumbered) and not as much on the grantor of the bill of sale.

I uphold the Appellant's submissions on each of its Grounds of Appeal and reject the submissions of the Respondent.

To conclude, I find and I do so hold that the Bill of Sale in favour of the Appellant in respect of the said vehicle is still a valid security and ranks in priority to the said second Bill of Sale. The Appellant is therefore at liberty to exercise its powers of seizure under its Bill of Sale.

The judgment of the learned trial magistrate is therefore set aside.

The Respondent is ordered to pay the costs of the Appeal which is to be taxed unless agreed upon.

D. Pathik
Acting Puisne Judge

Suva
28th January, 1994

HBA0009J.93S