| Fiji Islands - Native Land Trust Board v Merit Timber Product Ltd - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction
CIVIL ACTION NO. 0474 OF 1996
BETWEEN:
NATIVE LAND TRUST BOARD
Plaintiff
AND:
MERIT TIMBER PRODUCT LIMITED
Defendant
Mr. E. Leung and Ms. S. Cevelawa for the Plaintiff
Mr. V. Kapadia for the Defendant
JUDGMENT
This is an application for summary judgment under 'Order 14' of the High Court Rules. The application was made by summons dated 15th November 1996 but had to abide the outcome of an earlier interlocutory summons filed by the defendant company which sought to strike out of the
plaintiff's writ and/or stay it pending the referral to arbitration of the matters in dispute between the parties.
Suffice it to say that the defendant's application was dismissed in a judgment delivered by the Court on 27th August 1997. Subsequently on 17th October 1997 the Court for reasons which were delivered a week later, refused the defendant's further application for leave to appeal against
the above-mentioned judgment. There have been no further steps taken to advance the defendant's appeal.
The 'Order 14' application was finally argued before me on 4th August 1998. In brief, the plaintiff's claim is for the sum of $472,500 being payment arrears that had accumulated over fifteen (15) years and is said to be payable in terms of Clause 6 of Schedule F of a Timber Concession Agreement entered into between the parties in March 1980 (See: paras 1 to 5 of the plaintiff's Amended Pleadings filed on 15th September 1997).
The defendant in its Statement of Defence artfully avoids paragraph 2 of the claim by latching on to an obvious typographical error and as to paragraph 3 alleges various breaches on the plaintiff's part of the Concession Agreement including its failure 'to provide unimpeded access to the forest areas to fell and remove timber and obtain the consent of the Fijian owners to such operations'. There has been no attempt to plead to the plaintiff's Amended Pleading.
No particular clauses of the Concession Agreement are referred to in its defence nor are any particulars of obstruction provided, and whilst accepting having received a demand notice,
the defendant denies that it 'is liable to make any payment to the plaintiff'. On the basis of the alleged breaches the defendant counterclaims against the plaintiff for loss of profits for seventeen (17) years at $2 million per annum.
As an alternative cause of action, the defendant also claims that the plaintiff Board had agreed, in correspondence, to allow the defendant company to sell the Concession Agreement to an interested buyer Vusena Forest Corporation Limited, and could not now resile from that agreement and an order is sought from the Court in that regard.
By way of defence to the counterclaim the plaintiff denies breaching any of the terms or spirit of the Concession Agreement and says:
"... that the defendant's responsibility as the concessionaire includes finding and constructing its own access into and out
of the concession area."
and furthermore it is averred that the defendant failed:
"to seek redress against those who hindered or obstructed its access in 1981 in order to protect its rights pursuant to the terms
of the agreement of the said Concession."
The affidavits before me are:
(1) An affidavit deposed by the Secretary of the plaintiff Board dated 12th November 1996;
and
(2) An affidavit in reply deposed by the General Manager of the defendant company dated 11th December 1996;
In his affidavit the Secretary of the Board annexed a copy of the Concession Agreement and deposed that 'the defendant company had failed to comply with the terms and conditions enshrined in 'the Agreement' in not paying the annual rental
of $35,000 per year'.
This latter statement clearly refers to Clause 6 of Schedule F to the Concession Agreement which reads:
"The Company shall pay to the Board an annual sum of $35,000 the first payment to be made on the date of the execution of the
Agreement. The annual sum shall be subject to review at the end of each fifth year during the currency of the Agreement to ensure
that current value remains; the reviewed sum to be established by mutual agreement or, failing agreement, by Arbitration."
The Secretary further deposed that the defendant owes the plaintiff Board the sum of $472,500 which amount is equivalent to 15 years arrears of the 'annual sum' up to 30th June 1996.
In this latter regard, by letter dated 16th January 1996 the plaintiff Board wrote to the defendant company drawing its attention to Clause 6 Schedule F of the Concession Agreement and notifying it of its breach, and demanding payment of $472,500 within 30 days from the date of the notice.
It is common ground that no payment has been made by the defendant company as demanded in the notice which would have expired on or
about the 16th of February 1996.
In reply to the above the general manager of the defendant company deposed:
"That there is a dispute concerning the payment of $35,000 per annum as the defendant has been unable to enter the Concession
area and fell and remove any native indigenous trees as set out in the Concession Agreement because of the objections by the land
owners which the plaintiff was unable to resolve at the relevant time. Furthermore, the sum of $35,000 was classified as an annual
premium being an amount that the defendant would pay out of the profits generated from the Concession area."
He also deposed that an application to stay proceedings and/or strike out the plaintiff's claim had been made on the grounds that
the dispute ought firstly, to be referred to Arbitration as agreed between the parties.
In disposing of the above matters raised by the general manager of the defendant company presumably as 'triable issues', I reiterate what I said in my judgment delivered on 27th August 1997 at pp.9 to 12 where after a close analysis of the meaning and effect of Clause 6 of Schedule F of the Concession Agreement, this court said at p.10:
"... in my considered view, ... Clause 6 of Schedule F is crystal-clear in its intent and wording and there is no justification whatsoever for implying terms or reading into
the Clause words that would render the defendant company's obligation to pay the 'annual sum' conditional upon either access to the concession
area or on the defendant company making a profit ..."
As for the referral to arbitration point, in refusing the defendant's application to stay the plaintiff's claim in favour of arbitration,
this Court said at p.14:
"Bearing in mind that both the narrow (i.e. the meaning of Clause 6 Schedule F) and broader questions (i.e. access to the concession area and profitability) are clearly 'questions of law', is that a sufficient reason for the Court ... to refuse a stay (under Section 5 of the Arbitration Act)? I have ... reluctantly come to the conclusion that the answer to the question posed ... herein is affirmative."
At the hearing of the 'Order 14' application defence counsel orally raised, for the first time, the provisions of Section 4 of the Limitation Act (Cap. 35) and submitted that the plaintiff's claim for 15 years of accumulated arrears is statute-barred since the 'annual sum' would have been due and owing on an annual basis and may be likened to a debt payable every year. Counsel was constrained to accept
however that the limitation has no application to the six (6) years of arrears immediately preceding the issuance of the plaintiff's writ which amounts to $210,000.
At the outset I make the observation that Order 18 r.7(1) of the High Court Rules 1988 expressly states:
"... a party must ... in any pleading subsequent to a Statement of Claim plead specifically any matter, for example, ... any
relevant statute of limitation ... -
(a) which he alleges makes any claim ... of the opposite party not maintainable;
or
(b) which, if not specifically pleaded, might take the opposite party by surprise;"
Quite plainly the defendant's pleadings do not even attempt to comply with the mandatory terms of the above Order which has been described as enforcing 'one of the cardinal principles of the present system of pleading' and, were this a trial, no evidence of such matters would have been allowed to be led. The submission was entertained however and
I reject it as being without merit.
Section 4 of the Limitation Act (Cap. 35) provides (so far as relevant):
"The following actions shall not be brought after the expiration of six years from the date when the cause of action accrued
that is to say -
(a) actions founded on simple contract or on tort;"
Even accepting that the plaintiff's claim for $472,500 is one 'founded on simple contract' I am firmly of the opinion that the plaintiff's 'cause of action' did not 'accrue' on an annual basis as defence counsel submits, but only after a demand for payment had been made and was rejected or remained unmet.
Needless to say the defendant's non-payment of the 'annual sum' for over 15 years lends some support to the view that it required a demand to be made for the same, notwithstanding, as counsel correctly points out,
that Clause 6 does not expressly provide for either a notice or demand to be given.
I am satisfied in the present case that the amount shown to be due or owing under Clause 6 of Schedule F by the defendant company at any given date is not recoverable by the plaintiff Board in the absence of a prior demand for payment of such debt as might be shown to be due. A fortiori where the demand is made during the subsistence of the agreement.
As for the 'estoppel' argument, in the absence of the plaintiff's letter of 20th March 1997 to Vusena Forest Corporation Limited, having carefully perused the various correspondence which passed between the parties in 1995 and summarised in the defendant company's solicitor's letter of 2nd February 1996, and bearing in mind the terms of paragraph 3 of the plaintiff's defence to counterclaim, there is not the slightest doubt in my mind that the defence or cause of action based
on 'estoppel' as pleaded raises no triable issues or arguable defence.
Even if I could be persuaded that such paucity of evidence and pleadings could support an 'estoppel' against the exercise by the plaintiff Board of its statutory functions, it is difficult to accept that the same could or does apply to the debt being pursued in this 'Order 14' application. Indeed the Agreement For Purchase of Shares annexed to the defendant general manager's affidavit appears to suggest otherwise.
The application is granted and judgment is entered in favour of the plaintiff in the sum of $472,500. I also award the plaintiff Board costs of the application which I fix at $500 payable within 14 days. By way of further direction the defendant is ordered to file and serve an amended pleading to the plaintiff's amended pleading of
15th September 1997 if it so desires within 7 days of the date hereof.
D.V. Fatiaki
JUDGE
At Suva,
2nd October, 1998
Hbc047s.96s
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