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Shanaya and Jayesh Holdings Ltd v D Gokal Company Ltd [2012] FJHC 6; HBC060.2008 (6 January 2012)

IN THE HIGH COURT OF FIJI
(CENTRAL DIVISION) AT SUVA

No. HBC 060 of 2008

BETWEEN

SHANAYA AND JAYESH HOLDINGS LIMITED,
a limited liability company having it registered office at Junction of Nadi Back Road, Meigunyah, Nadi in the Republic of Fiji Islands.
FIRST PLAINTIFF

AND:

CORNERPOINT (FIJI) LIMITED
a limited liability company having it registered office at Junction of Nadi Back Road, Meigunyah, Nadi in the Republic of Fiji Islands.
SECOND PLAINTIFF

AND:

D. GOKAL & COMPANY LIMITED
a limited liability company having it registered office at 60-62 Amy Street, Toorak, P.O. Box 501, Suva, Fiji.
FIRST DEFENDANT

AND:

BOB GOKAL & SONS LIMITED
a limited liability company having it registered office at 60-62 Amy Street, Toorak, P.O. Box 501, Suva, Fiji.
SECOND DEFENDANT

AND:

HOMELCO LIMITED
a limited liability company having it registered office at 60-62 Amy Street, Toorak, P.O. Box 501, Suva, Fiji.
THIRD DEFENDANT

BEFORE : Master Deepthi Amaratunga

COUNSEL : Ms. Kenelorea Pamela L for the Plaintiff
Ms. B.Narayan for the Defendant

Date of Ruling: 6th January, 2012

RULING

1. INTRODUCTION
   

1. The Plaintiff filled this action against the Defendants for damages for breach of contract for supply of air-conditioning units. The Defendants have filled a statement of defence where they had admitted noncompliance with the specification in the units that were requested by the Plaintiffs, but stated that it was a trivial breach and Plaintiff could not have rescinded the contract due to that and has also counterclaimed the full payment of the price for the all air-conditioning units that they supplied, but was rejected by the Plaintiff. After more than 2 ½ years after filing the statement of defence, on 5th October, 2010 the Defendants filled a summons seeking orders that 1st and 2nd Defendants cease to be parties to this action on the basis that they have been improperly or unnecessarily made parties and also seeking strike out of 1st and 2nd Defendants from the action. The Defendants summons to strike out is made under Order 15 Rule 6 (2) and 18 (1) (a) and (d) of the High Court Rules. The Defendants have objected to this summons. The documents filled by the Defendants in support of this summons clearly indicate that all three Defendants names appear on relevant documents and on the admissions of the Defendants also shows that the three Defendants jointly and or severally contracted with the Plaintiffs and the application for strike out should be refused and also there is no clear evidence of misjoinder.
   

2. FACTS
   

2. The Plaintiffs have contracted with the Defendants for the delivery of 48 air conditioning units of certain specifications as requested by the Plaintiffs.
   
3. There are three Defendants and all have filled a joint statement of defence and has also admitted the contract between them and the Plaintiffs.
   
4. The quotation was accepted, hence a contract was entered into for the supply of the 48 air conditioning units with some specifications as described in the documents, and the Plaintiffs paid the initial payment of 30% of the quoted price as requested by the Defendants.
   
5. The Plaintiff alleges that Defendants did not comply with the said specifications and also delay in supplying the air conditioning units and unilaterally rescinded the contract and refused to accept the delivered units due to the non-conformity with their specifications and or delay in the delivery.
   
6. The Plaintiff sought to recover the initial payment and also damages incurred for the alleged breach of contract by the Defendants.
   
7. The Defendant not only admitted the contract with the said supply of the items specified in the statement of claim, but also admitted the delay as well as the alleged non conformity, namely the piping size of the units, but state that it can be adjusted and the refusal to accept the units by the Plaintiff was a breach of contract and has also counterclaimed.
   

100. LAW AND ANALYSIS
     

8. Order 15 Rule 6 (2) relates to mis-joinder or non-joinder of parties. Order 18 Rule 18 deals with striking out. Order 18 Rule 18 (1) (a) and (d) under which the application to strike out reads as follows:-
   
   1. The claim discloses no reasonable cause of action;
   2. ........
   3. ........
   4. It is otherwise an abuse of process of the Court.
      
9. There is an affidavit of Rakesh Gokal filed on the 5th of October 2010 in support of the summons. There is affidavit evidence used in support of the application. Though affidavit evidence is not allowed for an application made in terms of Order 18 rule 18(1)(a) it is noted that this does not apply to Order 18 rule 18 (1)(d) and the affidavit evidence can be admitted. In Order 18 Rule 18 (2) of the High Court Rules 1988 which states that:-"(2) No evidence shall be admissible on an application under paragraph 1(a)." but this does not apply to Order 18 rule 18(1)(d) and since the summons contain both provisions of law the Defendants contention that the affidavit should be rejected in limine is clearly without any merit.
   
10. The over-riding principle is that applications for strike out, are only granted in the clearest of cases so that a Plaintiff is not deprived of its cause of action or relief without a proper and full hearing at trial when it gets the chance to adduce its evidence.
    
11. 18/19/3 of the 1988 Supreme Court Practice where the following is stated in respect of applications such as the present:-
    

'It is only in plain and obvious cases that resource should be had to the summary process under this rule, per Lindley MR. in Hubbuck v. Wilinson [1898] UKLawRpKQB 176; (1899) 1 Q.B. 86, p. 91 (Mayor, etc., of the City of London v. Homer (1914) 111 L.T. 512, CA. affirmed (1952) ac. 345, H.L. The summary procedure under this rule can only be adopted when it can be clearly seen that a claim or answer is on the face of it obviously unsustainable' (Att-Gen. of Duchy of Lanchester v. L. &N.W.Ry. Co. [1892] UKLawRpCh 134; (1892) 3 Ch. 274, CA.).The summary remedy under this rule is only to be applied in plain and obvious cases when the action is one which cannot succeed or is in some way an abuse of the process or the case unarguable (see per Danckwerts and Salmon L. JJ. In Nagle V. Feilden (1966) 2 Q.B. 633, pp. 648, 651, applied in DrummondJackson v. British Medical Association (1970) 1 W.L.R. 688; (1970) 1 All ER. 1094, CA.)."

18/19/2 of1988 Supreme Court Practice which state as follows:-

"Although the rule expressly states that the order may be made "at any stage of the proceeding," still the application should always be made promptly, and as a rule before the close of pleadings......

The application may be made even after the pleadings are closed (per Brett M.R. in Tucker v Collinson (1886) 34 W.R.354, but was refused after the action had been set down for trial....."

12. The pleadings have closed when the Reply to Statement of Defence and Defence to Counter-Claim was filed on the 30th of April 2008. That is over two and half years ago. The Defendants affidavit of Rakesh Gokal says in paragraph 3 that this issue came up at Pre-Trial Conference minutes which the Plaintiff had sent. If that is a late discovery, as alleged by the Defendant, this application being late can be justified. So, again the objection of the Plaintiffs that this application cannot be made after the close of pleadings is without merit and should be rejected in limine.
    
13. The Statement of Defence where the Defendant admits paragraph 1, 2, 3, and 4 of the Statement of Claim which reads as follows:-
    

"1. The Plaintiffs had received a quotation from the Defendants for the supply of 48 air conditioner units. The price quoted was $1,550.00 (One Thousand Five Hundred Fifty Dollars) per unit totaling $74,400.00 (Seventy Four Thousand Four Hundred Dollars) for the 48 Units.

2. The quotation was obtained for 22,000 BTU Cassette type air conditioners and was dated either 14th or 17h day of September 2007.

3. Certain details were provided by a letter signed by one Mr. Rakesh Gokal with the heading "GOKALS HOMELCO LIMITED" dated 16th day of October, 2007 details or which are as follows:-

(a) It specifically stated certain warranties as to the piping sizes of 5/8 of an inch and 3/8 of an inch.

(b) The delivery time of 6 to 8 weeks from the confirmation of order / deposit.

4. (a) The Plaintiffs gave an order for the 48 air conditioners for 22000 BTU Cassette type air conditioners on the 18th day of October 2007 and paid a deposit of $22,320.00 (Twenty Two Thousand Three Hundred Twenty Dollars) on the 22nd day of October, 2007.

(b) The balance was to be paid upon delivery."

14. The Defendants have admitted providing a quotation and have filed one statement of defence and a single counter-claim as well, but now seeks to strike out the 1st and 2nd Defendants from this action for misjoinder. This is in contradiction to the statement of defence that is already filed in this action, as the Defendants have unconditionally admitted the alleged contract and also the alleged breaches by them. Their defence is those breaches are trivial in nature and cannot be used to terminate the contract. So, the contention of the Defendants are very clear and other issues should be left to trial as on the materials available all three Defendants are involved in this contract. Without adducing oral evidence it is hard to exclude one or more Defendants with certainty.
    
15. 18/19/3 of the 1988 Supreme Court Practice where the following is stated in relation to the exercise of the Court's power to strike out under this rule:-
    

"It cannot be is only in plain and obvious cases that recourse should be had to the summary process under this rule, per Lindley M.R in Hubbuck v Wilkingson [1898] UKLawRpKQB 176; [1899] 1 Q.B. 86, p91 (Mayor, etc., of the City of London v Horner (1914) 111L.T. 512, ......... It cannot be exercise by a minute and protracted examination of the documents and facts of the case, in order to see whether the plaintiff really has a cause of action (Wenlock v. Moloney (1965) 1 W.L.R. 1238; (1965) 2 All ER. 871, CA.)............. The Court must be satisfied that there is no reasonable cause of action (as in South Hetton Coal Co v Haswell, etc., Co.[1898]1CH 456"

16. It is clear that looking at the documents submitted it is not possible to exclude 1st and 2nd Defendants from this action. The Documents annexed to the affidavit in support clearly indicate inconsistency as regards to usage of the Defendants names in the documents.
    
17. The three Defendants cannot counter-claim when they allege that they have been added incorrectly. Three of the Defendants are claiming from the plaintiffs 52,080.00 for 48 air conditioners. It is to be noted that the main contract document that quoted the prices of the items sent by the Defendants were under all three defendants names. The three names appear not only at the top of the quotation, but also at the bottom, indicating the quotation is from all three companies who are named as the Defendants in this action.
    
18. The Defendants point to the boxes in front of the names only found at the top, which has been marked, but this cannot be applies to the bottom of the document where again three names appear. If the quotation is only from one company the other names at the bottom should have been struck out, but that has not been done.
    
19. 18/19/4 of the 1988 Supreme Court Practice the following is stated in relation to striking out applications:-
    

"On an application to strike out the statement of claim and to dismiss the action, it is not permissible to try the action on affidavits when the facts and issues are in dispute.(Wenlock v Moloney [1965] 1 W.L.R. 1238; [1965] 1 All E.R. 87, C.A.)

It has been said that the Court will not permit a plaintiff to be 'driven from the judgment seat' except where the cause of action is obviously bad and almost incontestably bad (per Fletcher Moulton L.J. in Dyson V. Att.-Gen. [1910] UKLawRpKQB 203; [1911] 1 K.B. 410, p.419)." (the underlining is ours)

20. The Fiji Court of Appeal has applied similar principles in National MBF Finance (Fiji) Ltd v Buli. Fiji Court of Appeal Civil Appeal No. ABU 0057 of 1998S (6 July 2000) at page 2 of 4, second paragraph, where it stated as follows;-
    

"The law with regard to striking out pleadings is not in dispute. Apart from truly exceptional cases the approach basis on which the allegations contained in the pleadings are raised will be proved. If a legal issue can be raised on the facts as pleading then the courts will not strike out a pleading and will certainly not do so on a contention that the facts cannot be proved unless the situation is so strong that judicial notice can be taken of the falsity of a factual contention. It follows that an application of this kind must be determined on the pleadings as they appear before the court..."

21. On perusal of the pleadings there are further admissions and the Defendants own admissions and counter-claim has admitted that supplied units specifications deviated from initial specifications of the air conditioning units and state those changes could have been adjusted. The Defendant also admitted that the delivery of the units were delayed. The said admissions contained in paragraphs 6,8 and 10 are verbartim reproduced here
    

"6.The Defendants admit the contents of paragraph 6 of the claim to the extent that the air conditioning units were made available for inspection on or about the 8th day of January 2008 and further say that the Defendant had informed one Mr. Rajneel employed by the Plaintiffs in early December 2007 that the shipment was delayed and that the Defendants expected the shipment to arrive on 6th January 2008 and that the goods were expected to be cleared by 8th or 9th January 2008."

"8.The defendants admit the contents of paragraph 9 of the claim to the extent that they had agreed to supply air conditioning units containing piping of 5/8 of an inch and 3/8 of inch and further state that the Plaintiffs pre-empted the normal practice of the pipe fitting being adjusted during the installation of the air conditioning unit. The size of the pipes can easily be modified as was explained to the Plaintiffs by the defendant."

"10.The Defendants state the Plaintiffs cannot rescind the contract for a minor breach which can be easily rectified."

22. It is clear that the that the Plaintiff has established a breach of contract by the Defendants, by their own admission and the defence was that it was a minor breach, which has to be decided after the conclusion of the hearing of this action.
    
23. The affidavit of Rakesh Gopal filed on the 5th of October 2010 that the quotation which is annexure "B" given to the Plaintiff has all three names of the Defendants in one Document No. 07699 not only at the top but more fully at the end of the quotation .The contention is that in that quotation, only the box in front of Homelco Limited was marked indicating that the quotation is only from Homelco Ltd. This is not a satisfactory explanation. If that is so why does again at the bottom of the quotation also states all three companies as follows
    

Yours faithfully,

D. Gokal & Co Ltd.

Bob Gokal & Sons Ltd.

Homelco Limited.

This indicates that the quotation is not only from Homelco Ltd as alleged by the Defendants.

24. This alone will be enough to cause confusion in the mind of the customer as to the name of the supplier where even at the top of the document also has identical three names of companies. So, by merely marking in front of the name at the top of the quotation would not affect as the three names of the same identical companies appear at the end of the document who has 'faithfully' submitted the quotation. The above quotation was dated 17/09/2007 and there was clearly no consistency in the usage of only the name of Homelco Ltd as alleged by the Defendants in this application.
    
25. It is to be noted that though annexed 'c' of the affidavit in support shows Gokals, Homelco Ltd (please note that there is no Defendant by the name of Gokals, Homelco Ltd) again the annexed 'D' in the affidavit in support of the Defendant indicates D. Gocal & Companies, and these are all submitted by the Defendants in support of this application annexed to the affidavit in support and clearly indicating that on their own evidence there is no certainty as to the three Defendants and both parties have used the names loosely, but that cannot be a reason for the striking out of 1st and 2nd Defendants at this stage as the documents submitted by the Defendants shows inconsistency as regards to the names of the companies by both parties, I cannot at this juncture decide on this issue on the documentary evidence alone.
    

4. CONCLUSION
   

26. This summons is made in terms of Order 15 rule 6(2) read with Order 18 rule 18(1) (a) and (d). The discretion is granted in terms of Order 15 rule 6(2) (a) where a person is improperly or unnecessarily made a party. It is clear that the quotation for the air-conditioning units ends with 'yours faithfully' with all three names of the Defendants indicating (annexed B of the affidavit in support of this summons) the annexed 'c' contains a letter with names 'Gokals' and 'Homelco Ltd' printed at the top and at the bottom of the letter there is no designation or company name but a signature and the name of the signatory and the annexed 'c' indicate the name of 'D. Gokal and Company' and though the payment was made by a cheque to Gokal (Homelco) it was endorsed by Homelco Limited but the delivery note indicated 2nd Defendant (Bob Gokal& Sons Ltd) and on the materials submitted to me at this moment it is not clear enough to strike out 1st and 2ndDefendants from this action at this moment. The application for strike out is dismissed and the Plaintiffs are also granted a cost of $1000 as the cost of this applications assessed summarily. The cost is to be paid within 14 days.
    

5. FINAL ORDERS
   

27. The summons dated 13th October, 2010 is struck off.
    
28. The Defendants are ordered to pay cost of $1,000 to the plaintiffs within 14 days.
    
29. The matter is to take normal cause.
    

Dated at Suva this 6th day of January, 2012.

.................................................
Mr. Deepthi Amaratunga
Master of the High Court
Suva