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Prasad v Amazon Industries Limited [2010] FJHC 186; HBC061.2008 (31 May 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No. HBC 61 of 2008

Between:

VIJAY RAJNESH PRASAD and SUNIL PRASAD
sons of Vijay Prasad both of Drasa Vitogo, Lautoka, Company Directors
Plaintiffs

And:

AMAZON INDUSTRIES LIMITED
a limited liability company having its registered office at
Bouwalu Street, Lautoka (In Receivership)
1st Defendant

PEACE INDUSTRIES LIMITED
(In Receivership)
2nd Defendant

Vijay Naidu & Associates for the Plaintiff
Sahu Khan & Sahu Khan for the Defendants

Date of hearing: 13th May 2010
Date of ruling: 31st May 2010

RULING

BACKGROUND

[1] This is an application under section 169 of the Land Transfer Act (Cap. 131 – "the Act"). By the originating summons filed on 25th March 2009, the plaintiff seeks an order for immediate vacant possession of the property comprised in Native Lease No. 23511 ("property"). The plaintiff also seeks damages.

[2] The plaintiffs are the registered proprietors of CL 26990 known as CT 6841 Allotment 15, Section 17, Lautoka township. The property is situated at 27 Namoli Avenue and there is a building erected on it which was rented out to the 1st defendant at a monthly rental of $8,630.60 payable in advance. From September 2006 to February 2008, the 1st defendant had been in arrears.

[3] It appears that the 1st defendant was not doing well in its business in Fiji. On 17th April 2007, the 1st defendant advised its employees by letter that it was wrapping up its operations in Fiji and will close down its factory on 27th April 2007 "due to a significant reduction in the volume of business, which makes it totally uneconomical to carry on".

[4] The plaintiffs somehow were put on alert of the 1st defendant’s plans. They distrained the property and impounded the goods therein on 27th April 2007. Meanwhile, the second defendant, which is the New Zealand-parent company of the 1st defendant, was under receivership in New Zealand.

[5] In the months that followed, the 1st defendant was to dispute the amount claimed under the distress notice. Also, letters were written to the plaintiffs solicitors threatening legal action if they did not allow the 1st defendant to enter the premises and remove the goods.

[6] An allegation was also to emerge that some of the goods being impounded are secured by a charge in favour of ANZ Bank for whom Receivers had been appointed. In due course, vide a letter dated 15th June 2007, the Receivers were to invite the plaintiffs to make an offer to purchase the impounded goods. Suffice it to say that for a long time thereafter, the plaintiffs and the receivers have been exploring settlement.

[7] The court records will show that between 13th of August 2008 on first call, and 20th January 2010, this case was called over in Court thirteen times. On those occasions, the plaintiffs’ lawyers kept advising the Court that the case was being "settled".

PRELIMINARY POINT

[8] Dr. Sahu Khan stressed that the process of distress for rent consists of entry into premises, seizure of goods or the securing or impounding of the goods and the taking of an inventory and sale. He submits that the various documents annexed to the affidavit of Vijay Rajneesh Prasad filed by the plaintiffs suggest that the plaintiffs had locked up the premises and had impounded the goods therein. Therefore, the defendants were no longer in possession.

[9] I observe that the documentation annexed to Prasad’s affidavit do back up Dr. Sahu Khan’s argument. A letter dated 2nd May 2007 (annexure "D") by Young & Associates, the 1st defendants then solicitors states the following:

"Your unlawful act of distraint has already caused our client loss and damages. We therefore request that you immediately allow our client entry into the premises to collect all goods and items belonging to it and/or under their custody or control.

Please advise us immediately if you are willing to withdraw the distress and allow our client access to uplift their goods"

[10] The response by the plaintiffs’ lawyers (annexure "E") stated inter alia as follows:

"....your client had already laid off its staff at the premises when our client exercised its right to secure its premises and claim for overdue rent and the arrears.

We are informed by our clients that before giving possession to your client of the said premises they would require an agreement, security bond as well as advance rental"

[11] Quite noticeably, Mr. Naidu did try to tiptoe around that issue so to speak. Eventually, he had to concede that it was his clients who had caused the bailiff to lock up the property and who are now in possession of the keys. As Dr. Sahu Khan submits, that must mean, that the 1st defendant has not been in possession of the property since April 2007.

[12] Interestingly, I note also that the section 169 proceedings now before me were filed a year later in April 2008. The file records will show that since the first call of this matter on 13th August 2008, the parties had been trying to "settle". Reading between the lines, it appears that, the plaintiffs are unable to sell the impounded goods because the owner, the 2nd defendant, was never a tenant of the plaintiffs and also because the goods, in any event, are charged under a mortgage/debenture to ANZ Bank.

DETERMINATION

[13] The opening lines of section 169 of the Land Transfer Act (Cap 131) says as follows:

"The following persons may summon any person in possession of land to appear before a judge in chambers to show cause why the person summoned should not give up possession to the applicant:-

(a) ............

(b) ............

(c) ............

[14] Clearly, the defendant anticipated by section 169 is one who is in possession of land and whose possession the plaintiff seeks to be given up. Under section 172, the defendants have to ‘show cause’ why they should not give up vacant possession.

[15] In this case, the 1st defendant has nothing to show cause for as it ceased to be in possession in Aril 2007 a year before proceedings were filed in April 2008. The second defendant also has nothing to show cause for as it never was in possession. It appears that the proceedings were filed in order to facilitate settlement.

ORDERS

[16] The section 169 summons is hereby struck out with costs to the defendants which I summarily assess at $500-00 to be paid within 21 days of the date of this ruling.

Anare Tuilevuka
Master

At Lautoka
31st May 2010.