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Kurulo v NBF Asset Management Bank [2003] FJHC 13; Hbc0162d.2000s (18 June 2003)

IN THE HIGH COURT OF FIJI
(AT SUVA)

CIVIL ACTION NO. HBC 162 OF 2000S

Between:

THE REVEREND SULIASI KURULO & OTHERS
Plaintiffs

and

NBF ASSET MANAGEMENT BANK
Defendant

I. Fa for the Plaintiffs
Bale for the Defendant

DECISION

The background to this application is explained in my judgment herein delivered on 22 May 2002.

The Plaintiffs are now, by Notice of Motion filed on 5 February 02, seeking the return of $11,700 paid by them to the Defendant Bank.

As a preliminary objection Mr. Bale questioned the mode of the Plaintiffs’ application. He pointed out that the Originating Summons did not seek return of sums paid by the Plaintiffs to the Bank. He submitted that the Plaintiffs should commence fresh proceedings if they wish to pursue the matter.

In my view Mr. Bale’s point was technically sound. However given the Courts powers to authorise amendments (which could extend to the Originating Summons) the relatively small amount involved and the straightforward nature of the application it seems to me to be convenient and sensible that I should deal with it now, and determine the application in its present form. Nothing useful would be gained and only further expenses would be incurred by requiring fresh proceedings to be commenced.

As can be seen from the affidavits filed, the $11,700 can be divided into two categories. One hundred dollars was a tender deposit which was specified to be non refundable to a successful tenderer (see Exhibit UFT 1). The original settlement date was 27 November 1999 (UFT 4). On 10 November the Plaintiffs sought a thirty day extension to complete (UFT 5). On 30 November the Bank agreed to extend the settlement date to the end of December 1999:

“Provided you forward us a non refundable deposit of $3,000 by 10/12/99” (UFT 6).

On 14 December 1999 the Bank confirmed receiving payment of the $3,000 “non refundable deposit” (UFT7).

According to paragraph 12 of Mr. Seeto’s affidavit:

“Unbeknown to the Bank the Plaintiff’s made further payments of $7,000, $600 and $1,000 directly to bank tellers without any reference of consultation with the Defendant.”

The two sums stated to be deposits together with the further three payments total altogether $11,700.

Mr. Fa’s submission was that the entire sum of $11,700 should be refunded to the Plaintiffs as being money had and received or alternatively as being a penalty in respect of which equity should intervene.

Mr. Bale’s submission was that the payments made by the Plaintiffs were consideration for variation of the original contract and as such are not refundable.

In my opinion it cannot be argued that the sums paid by the Plaintiffs direct to the tellers were anything other than part payments of a negotiated purchase price. Therefore, following Dies v. British and International Mining and Finance Corporation [1939] 1 KB 724 I would hold that they are recoverable.

While equity will grant relief from the payment of a penalty it will not generally interfere with contracts unless there is fraud, undue influence or a breach of a fiduciary relationship (see Stockloser v. Johnson [1954] 1 QB 476).

The question here is whether the sum of $3,000 should properly be regarded as a penalty. In my view it should not. In the first place a sum payable upon performance of the claimant’s contractual obligations cannot be a penalty (White and Carter Councils Ltd v. McGregor [1961] UKHL 5; [1962] AC 413. In this case the $3,000 was part of the payment which the Plaintiffs was obliged to make in order to secure the extension of the contract settlement period. Secondly, the sum was clearly paid on the basis that it was a non refundable deposit. Thirdly, I do not find that the sum of $3,000 is out of proportion to the inconvenience which the Bank would obviously have suffered as the result of the Plaintiffs prevarication.

In my view it is not unconsionable for the Defendant Bank to retain the sum paid to it on the clear understanding that it was non refundable. On the contrary, it seems to me that it would be quite wrong for this court in effect to sanction the payment of money under a false pretence by holding that after all that had been agreed the money should be repaid.

In the circumstances I order that the Defendant Bank repay the Plaintiffs the sum of $7,600 forthwith.

M.D. Scott
Judge

18 June 2003