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John Beater Enterprises Pty Ltd v Goundar [2003] FJHC 101; HBA0004.2003S (30 April 2003)

IN THE HIGH COURT OF FIJI
AT SUVA
APPELLATE JURISDICTION

CIVIL APPEAL NO.: HBA0004 OF 2003

BETWEEN:

JOHN BEATER ENTERPRISES PTY LIMITED
APPELLANT

AND:

NARAYAN SAMI GOUNDAR T/A
LUCKY SUPERMARKET
RESPONDENT

Mr. Apaitia Seru- Counsel for the Appellant
Ms Makarita Mua- Counsel for the Respondent

JUDGMENT

This appeal deals with a matter that is of great practical significance for the Magistrate Courts. The issue at hand is the one of proper forum or proper place of trial. It deals with interpretation of Order 13 rule 1 of the Magistrates Court Rules. The relevant provisions are provisions of Rule 1(a)(b) and (c) that read as follows:

“1. Subject to the law respecting transfer, the place for the trial and institution of any suit or matter shall be regulated as follows:-

Suits upon contract

(a) All suits arising out of the breach of any contract may be commenced and determined in the court nearest to the place in which such contract ought to have been performed, or in which the defendant, or one of the defendants, resides or carries on business.

Suits other than suits upon contract

(b) Any suit other than a suit founded on contract, may be commenced and determined in the court nearest to the place in that the defendant, or one of the defendants, resides or carries on business.

Suits commenced in wrong court

(c) Where any suit shall have been commenced in the wrong court, and whether or not the defendant shall plead specially in objection to the jurisdiction, the court may:-

• (i) if the suit should have been commenced in some other court in the same Division in which it was commenced, transfer the suit to the court in which it ought to have been commenced; or
  
• (ii) order that the suit shall continue in the court in which it was commenced; or
  
• (iii) order the proceedings to be struck out; or
  
• (iv) report to the Supreme Court pursuant to section 32 of the Act the pendency of the action.”
  

FACTS

The appellant is a limited liability company having its registered office in Suva. The respondent resides in Nadi and carries on business at Nakavu, Nadi. In its particulars of claim the appellant is claiming for costs of goods supplied which were paid for by cheques that were dishonoured by the Bank on presentation. The claim is for sale of goods and therefore one arising under a contract. The respondent filed a motion under Order 13 for striking out of appellant’s claim on the grounds that the action was commenced in the wrong court. It should have been commenced in Nadi Court said the defendant.

There was only one affidavit filed and that was of the respondent. It alleged that orders for goods were placed at Nadi. Goods were sent from Suva to Nadi. Delivery was made in Nadi. He resides in Nadi and carries on business there. These facts are not in dispute. The learned Magistrate concluded that on the basis of above facts the contract was to be performed in Nadi. Nadi was the proper forum and the matter was struck out with costs.

The appellant filed four grounds of appeal. The fourth ground is really not a ground of appeal but a prayer. The grounds are:

“1. The decision of the learned Magistrate that the contract was performed in Nadi was wrong in law and in fact.

2. The learned Magistrate erred in law and in fact in concluding that the proper court for this matter should be Nadi Magistrate’s Court.
   
3. The learned Magistrate erred in law and in fact in the exercise of the Court’s powers under Order XIII Rule 1 (c) (iii) in striking out the proceedings and fixing the costs at $150.00.”
   

The first ground relates to performance of contract. Mr. Seru submitted that delivery of goods in Nadi is not performance. In Osborn’s Concise Law Dictionary 9th edition the word performance is defined as “the doing of that which is required by a contract or condition. A contract is discharged by performance”.

In the present case according to the affidavit delivery was made in Nadi and payment was made in Nadi. Merely getting goods ready in Suva for delivery is not performance of the contract. It is merely a preparation or a first step in the performance of the contract. If the plaintiff had merely got the goods all packed up in Suva and put them on a truck and left the truck parked in Suva, could any one say that was performance of the contract. Performance came about only when goods were physically delivered into the possession of the defendant.

In this regard section 28 and section 29 of the Sale of Goods Act Cap 230 are relevant. Section 28 of the Act reads:

“It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them in accordance with the terms of contract of sale.”

Section 29 reads:

“Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price and the buyer must be ready and willing to pay the price in exchange for possession of the goods.”

In the present case the invoices show terms of payment were “strictly nett 30 days” so payment need not have occurred at time of delivery.

The place of performance is not necessarily the same place where contract is made after offer and acceptance of offer. As an example, A a timber merchant from Labasa meets B a landlord, who has land in Nadi, in Suva. The landlord wants to build a house in Nadi. They enter into a contract for supply of timber in Nadi at the work site. Clearly even though the agreement is made in Suva, the timber is supplied from Labasa but the performance is in Nadi.

Under Order 13 Rule 1(a) the plaintiff has a choice of forum. He may commence proceedings based on breach of contract either –

(a) where contract was to be performed or
(b) where the defendant resides or
(c) where the defendant carries on his business.

In the present proceedings, all three namely place of performance, residence of respondent and the business place happily coincide to be Nadi. So the proper Court is Nadi.

The learned Magistrate was therefore correct in concluding the proper forum was Nadi Magistrate’s Court.

Once the court had decided the action had been wrongly commenced in Suva instead of Nadi, the learned Magistrate had three options available to her namely:

(a) let the proceedings continue in Suva
(b) order proceedings to be struck out
(c) report to the High Court about the pending action pursuant to Section 32 of the Magistrates Court Act.

It is a matter of discretion. Unless the appellant can show that the discretion was exercised on wrong principles, the appellate court is restricted in substituting its discretion for that of the learned Magistrate. The appellant had filed no affidavit as to why balance of convenience favoured a particular course of action.

The respondent’s counsel had written to the appellant’s counsel on 17th June 2002 indicating they would be objecting to continued hearing of the case in Suva. Given this situation the appellant should have carefully considered the wisdom of continuing the action in Suva. The appellant could have made an application for transfer of proceedings to Nadi instead of forcing the respondent to file motion and have it argued in court and incurring costs in the process.

The rules of court are there for a reason. Courts insist on compliance with the rules. If every instance of non-compliance were excused then one would be relegating the rules to the status of non binding guidelines to be more respected in the breach than in their obedience.

The consequence of not commencing a suit in the court as provided by the rules is that the ordinary citizens of this country are put to unnecessary and burdensome expense in defending such claims. It is common knowledge in Suva Magistrate’s Civil Court that Order 13 is frequently by passed to suit the convenience of the plaintiffs and their counsels. In the present case, the respondent incurred unnecessary costs in his efforts to have the issue of correct forum litigated. While the learned Magistrate could have invoked Section 32 of the Magistrate’s Court Act for transfer of action to Nadi I am not persuaded that the fact that she struck out the action with costs is wrong in principle.

Since the action has not been decided on merits, the plaintiff may file a fresh action in Nadi Court.

The appeal is therefore dismissed with costs that I summarily fix at $150.00. Hence the total costs the appellant would pay is $300.00.

[ Jiten Singh ]
JUDGE

At Suva
30th April 2003