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Rao v Rao [2015] FJHC 314; HBC120.2013 (24 April 2015)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC 120 of 2013

BETWEEN:

SHIRI RAM MURTHI RAO aka SHREE RAM MURTHI

RAO
Plaintiff

AND:

SHIRI CHANDRA MURTHI RAO aka SHREE CHANDRA MURTHI RAO
1st Defendant

AND:

VIVEK NADAN MUDALIAR
2nd Defendant

Counsel : Mr. M. Rakai for the Plaintiff
Mr. R. Naidu for the 1st Defendant
Mr. S. Chandra for the 2nd Defendant

Date of Hearing : 5th March, 2014
Date of Judgment : 24th April, 2015

JUDGMENT

[1]. Before me is an originating summons seeking the following orders:-

• (1) An Order that the Defendants do forthwith provide proper accounts of the Estate of David Angtes since the date of his death to-date;
  

That the Defendants do provide proper accounts of rental generated from the Estate's property situated at 25 Sawani Street, Suva from the time of death of

late David Angtes till to date which is deposited in the First Defendant's account at Bank of Baroda, Mark Street branch, Suva;

(3) An Order that the Defendants pay to the Plaintiff his one sixth share from the rental income generated from the property since the death of late David Angtes;

(4) An Order that the Defendants pay the costs of and incidental to this action on an indemnity basis out of the Defendants' share in the Estate of Dvaid Angtes;

(5) An Order that the Second Defendant be removed as a Trustee of the Estate;

(6) Such further or other reliefs as this Honourable Court deems just.

Background

[2]. The second defendant is the trustee of the will of late David Angtes who died in 1979. He had six children and left 1/6 of shares of his estate to each child. The Plaintiff and the first defendant are sons of the deceased and the second defendant had taken Probate in 2005 and in 2009 he had distributed the estate.

[3]. The estate property had a building consisting several flats. In 2005 the first defendant has undertaken to look after the property. The plaintiff alleges that even though the land was distributed whatever the rent money had not been distributed and further alleges that the accounts has not been submitted and or the accounts submitted are not correct as its not certified by an Accountant or not substantiated by receipts.

Plaintiff's Case

[4]. The plaintiff filed his affidavit in support of the summons and deposed among other things that he is the biological brother of the first defendant and the brother-in-law of the second defendant. The defendant has annexed the Certificate of Title marked "A" the last

Will marked as "B" and the Probate obtained by the second defendant marked "C". The testator had appointed two Trustee to his Will one of his sons named Parshotam Rao and another the first defendant. As per the Will, all siblings have been given 1/6 of share in his property.

[5]. After the death of the testator one of the named trustees Parshotam Rao had looked after the property with his mother who was the deceased's wife. In 2004 the said Parshotam Rao had died. As per annexure "C" the first defendant had obtained the Probate as the surviving Trustee. It is pertinent to note that the Testator had died in 1979 however the Probate had been obtained only in 2005.

[6]. The plaintiff had served Letters D1 – D5 asking whether any other beneficiary was interested in purchasing the plaintiff's share. It was submitted that the plaintiff's wife subsequently has sent two more reminders marked E and F. The plaintiff had served another letter in 2009 marked G. It is submitted that as per annexure H, the solicitor of the plaintiff had requested the defendant to submit the accounts of the estate and has requested to sell the defendant's share.

[7]. The second defendant submitted that in August 2009 he had administered the estate and registered beneficiary's names as tenants in common. The plaintiff further deposes that his solicitors had requested the second defendant to submit the market value of the premises and has alleged that the rentals of $650 and $1500 were being deposited in the first defendants' bank account. The first defendant has not disclosed any proper accounts.

[8]. The plaintiff's challenged the accuracy of the accounts submitted in annexure 1-1 to 1-7. The Plaintiff deposes that he intends to sell his share to the first defendant but alleges that he has not been given proper accounts.

First Defendant's Case

[9]. The first defendant has disputed the circumstance and facts deposed in the plaintiff's affidavit and had deposed that he had been 17 when his father had died.

[10]. He had deposed that another brother of his, Shri Vishnu Murthi Rao had built the flat, down stairs in the premises and had occupied it. Subsequently it had been rented out and the finance had been handled by his mother and another sibling, Parshotam Rao. The said Parshotam Rao had built a flat after his retirement in 2001 – 2002. In 2009 this sibling had passed away. Thereafter various siblings at various stages had occupied the premises.

[11]. It is further deposed that in 2005 the deponent had undertaken to look after the property with the consent of the other beneficiaries as the trustee was living out of the country.

[12]. It is also deposed that even if he was not responsible he had maintained accounts from 2005 to 2009 till the properties were divided among the beneficiaries.

[13]. It was submitted that the first defendant had to renovate the premises spending his money. To substantiate this, Photographs marked SCMR 4 were submitted. The photographs show the state of the house before and after renovation and the document SCMR 5 depicts the income and expenditure summary for the period 2005 to 2012. However the defendant deposes that he does not have any accounts prior to 2005. He further deposes that his solicitors have sent copies of his bank statement SCMR 6 and SCMR 7 to the plaintiff. The deponent alleges that he had not been informed that they should keep accounts certified by a professional accountant firm.

[14]. Defendant had submitted SCMR 8 and 9. SCMR8 being a purported declaration from another brother acknowledging that the first defendant was looking after the property, and corroborating the version of the first defendant about the time period of occupancy of the flats. The documents SCMR 9 are the bills which were submitted to substantiate the accounts submitted.

[15]. The defendant submitted SCMR 10, 11, 12 to show the correspondence between himself and the plaintiff about purchasing the plaintiff's share.

[16]. The first defendant also raised several objections pertaining to maintainability of this action.

Second Defendant's Case

[17]. Second defendant had deposed that he had taken probate in 2005. That till then the testator's eldest son Parshotam Rao and the deceased wife were living in the property and that he had got the request from the plaintiff to get the estate accounts and the request to sell his share. The defendant had provided the accounts of the estate from 2005 to 2009 to all the beneficiaries and no beneficiary was interested in buying the plaintiff's share but the defendant had transferred the property shares in 2009 to all beneficiaries.

[18]. The deponent had also deposed to state that after 2009 each beneficiary was responsible for his share and they should have collected the rentals and has further deposed that he had submitted accounts from the date he obtained probate in 2005 to the date the shares were distributed in 2009 to all beneficiaries.

Plaintiff's Reply

[19]. The plaintiff filed his reply and has deposed that he had assisted Shiri Vishnu Murthi Rao to build the two bedroom flats, it was subsequently occupied by the other siblings. In 1982 it had been rented to one Parmend Kumar for 8 years and the rent had been collected by Parshotam Rao and the testator's wife.

Determination

[20]. As per the evidence before this court it appears that though the testator died in 1979 the probate had been taken by the second defendant only in 2005.

[21]. Till 2004 the estate had been handled and managed by the plaintiff's elder sibling. Mr.Parshotam Rao and the mother. In 2004 the elder sibling had passed away. With the materials submitted to court the court observes that collection of rent and maintenance of the estate had been done by the elder sibling till his death in 2004.There had been no opposition from the other siblings. Incidentally the elder sibling was also one of the trustees in the Will but had not taken probate. No evidence was tendered as to the rentals collected or as to whether it was distributed during this period of time.

[22]. The first defendant raised several objections to the maintainability of the action. Now this court will proceed to examine the said opposition.

[23]. The first defendant submitted that the plaintiff has invoked the jurisdiction of this court in the case under a wrong provision of the High Court rules and that it's fatal to this application. The originating summons has been filed pursuant to Order 28 Rule 7 of the High Court Rules of 1988 and the inherent jurisdiction seeking among other things for orders to obtain accounts of estate, to get the plaintiff's share of the rental income from the estate and for removal of the trustees.

[24]. I find Order 28 deals with the originating summons procedures and Rule 7 is for applications affecting a party who has not acknowledged service. The present application before me does not fall under the situation contemplated in the rule. Accordingly it is my view that the plaintiff has invoked the jurisdiction of this court under the wrong provision. The first defendant succeeds in this opposition. The plaintiff's counsel too conceded on this objection.

[25]. The second objection raised was that the plaintiff's claim for accounts and rental income is statute barred under the Limitation Act. The plaintiff's claim, for an order against the defendant to provide for accounts from the date of testator's death. The testator had died in 1979, this case has been filed in 2013 after more than three decades.

[26]. As per the Limitation Act section 4(2) which states " An action for an account shall not be brought in respect of any matter which arose more than six years before the commencement of the action."

[27]. However there is an exemption to the application for this section of the Act.

The Application of Section 9 to the first defendant

[28]. For Section 9 to apply the two defendants have to be trustees. The first defendant is not a trustee. It was submitted that in 2005 he has undertaken to look after the property but giving an undertaking to look after the property and being a trustee is different. Section 50 of the Trustee's Act deals with delegation of power of a Trustee. The delegation has to be done according to the provision of the Trustee Act. It has to be done by way of a valid power of Attorney. At the submissions all parties agreed that there was no such valid power of attorney given by the second defendant who is the appointed trustee to the first defendant. In the absence of such power of attorney the first defendant does not become a trustee under the Trustee Act and the duty to submit accounts under the Trustee Act will have no effect on him. The plaintiff failed to address court on this opposition. He has failed to explain to court as to how this action seeking accounts of the estate for more than three decades can overcome the bar imposed by the Limitations Act. In the absence of any explanation to overcome this obstacle the court is inclined to accept the opposition of the first defendant. Namely that orders 1, 2 sought in this originating summons are time barred against the first defendant under the Limitations Act.

[29]. However the second defendant is the appointed trustee. I find that there is no allegation of fraud or fraudulent breach of trust against the second defendant. There is no allegation that the second defendant had converted the proceeds of the property to his use. The plaintiff has failed to submit any evidence to show that the proceeds of the trust has been in actual possession of the trustee or that he has misused the same. There is no allegation to such an effect in the pleadings as well.

[30]. The second defendant is the trustee of the estate. Under the Succession, Probate and Administration Act he is duty bound to submit the accounts of the estate. However it was submitted that this provision is subject to the Limitation Act. As I have discussed earlier under Section 4(2) of the Limitation Act this action becomes prescribed. The plaintiff submitted that under section 9, the trustee cannot take the cover of the Limitations Act. The said section 9(1)(b) states:-

" .......to recover from the trustee, trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use........"

[31]. However I find that the provision is also subject to Section 9(2) which again imposes a time bar after the lapse of six years. 9(2) states:-

" Subject as aforesaid and to the provisions of the Trustee Act, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued:

Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property, until the interest fell into possession."

[32]. This section imposes a bar to institute action after the expiration of six years from the date on which the right of action accrued.

[33]. Neither the plaintiff's counsel nor the defendant's counsel address this court as to the date the right of action accrued to the plaintiff. However second defendant's counsel submitted that his liability commenced from the date of the death of the testator. In the absence of any explanation by the plaintiff the Limitation Act becomes a bar to the plaintiff's action.

[34]. As per Section 9 of the Succession, Probate and Administration Act, upon the grant of the probate all properties of the testator vests in the executor from the date of the death of the Testator. The Probate has been granted in 2005 and the plaintiff has filed this action in 2013.Accordingly I hold that there is a statutory bar for the plaintiff to proceed in this action against both defendants as it is constituted. The plaintiff has failed to give any explanation to overcome this obstacle.

[35]. The third opposition raised by the first defendant was non compliance with Order 7 Rule 3 of the High Court Rules. The said rules states:-

3.-(1) Every originating summons must include a statement of the questions on which the plaintiff seeks the determination or direction of the High Court or, as the case may be, a concise statement of the relief or remedy claimed in the proceedings begun by the originating summons with sufficient particulars to identify the cause or causes of action in respect of which the plaintiff claims that relief for remedy.

(2) Order 6, rules 3, 4 and 7 shall apply in relation to an originating summons as they apply in relation to a writ.

[36]. The first defendant strenuously argued that the originating summons filed has failed to satisfy the requirement of the above rule in Order 7. Counsel further argued that "not only there was no cause of action, the plaintiff's originating summons is not clear as to whether it is even a claim for breach of trust and its associate remedies."

[37]. The first defendant heavily relied on Ram Reddy and Others –v- the Then India Sanmarga Ikya Sangam and Other, Lautoka H.C Civil Action No 163 of 2012 to substantiate his opposition.

[38]. In the said case court had held Order 7 Rule 3 is a mandatory provision "I am of the view that it was mandatory under Order 7 Rule 3 for the originating summons to have included a statement of questions upon which determination from court was sought or sufficient particulars to identify the cause or causes of action against each defendant upon which relief or remedy was sought."

[39]. The first defendant also relied on Venkatamma –v-Fermier Watson CBV 0002 of 1992 and submitted that rules are there to be obeyed and must be obeyed. He further submitted that non-compliance of the mandatory section is fatal to the application.

[40]. In answer to this opposition the plaintiff urged the court to use its discretionary power. However I find the plaintiff has failed to submit any good and valid reasons for court to use its discretionary power in this instance. This court is inclined to accept the submission of the first defendant that "Rules are there to be obeyed and must be obeyed". The legislator in its wisdom has drafted the rules with a reason. In my view unless exceptional circumstances are shown the court should not use its discretion to deviate from the rules.

[41]. In this instance I think the first defendant has correctly submitted that he is entitled to know the cause of action against him, and the specific remedy which is sought against him. In the absence of any exceptional circumstances submitted, this court will be reluctant to use its discretionary power and is inclined to uphold the first defendant's objection. Even though the plaintiff's counsel half concedingly sought court to use its discretion to overcome the opposition this court thinks this is not an instance the court should use its discretion or act under Order 2. It is my view that in the absence of any explanation by the plaintiff a court should not use Order 2 to cover the laches of a Solicitor.

[42]. The 3rd opposition the first defendant had raised was that the mode of institution of this case is erroneous. Namely, the procedure should not be originating summons. In view of the allegations leveled against the defendant this court find that there are significant disputes pertaining to pertinent issues, where the parties are at odds, to adjudicate these issues parties have to lead evidence. As per the affidavits as well as at the submission stage it was evident that there is a significant dispute pertaining to factual matters that are relevant for the complete adjudication of this case.

[43]. As per the affidavit evidence placed before this court the parties have disputed the facts about administration of estate about the first defendant's role in looking after the property and whether the first defendant had consent of all beneficiaries to do that. Further the accounts that had been submitted from 2005 to 2009 were disputed. These are all factual matters that the court has to adjudicate upon not by affidavit. The first defendant had relied on Sea Island Paper and Stationery Ltd –v- Dominion Insurance Ltd High Court Lautoka 0028 of 1994 where it was held:-

"It is trite Law and Practice that under general principles matters which do not involve disputes as to facts but only questions of law and construction of act, etc usually proceed by way of originating summons. Any matter which involves disputes as to facts and which will require oral examination of witness should be proceeded with by way of a writ of summons with full pleadings. This is so in order that the court may adjudicate on facts which are in dispute between the parties."

[44]. The first defendant also relied on Re Sir Lindsay Parkinson & Co Trusts ......-v-Smith & Anr (1965) 1 ALLER 609 where the court held:

"Proceedings by beneficiaries against trustees of a contentious nature, charging the trustee with breach of trust or with default in the proper performance of their duties. Whether the matter with which the trustees are charged are matters of commission or omission, ought normally to be command by writ and not originating summons for in which proceedings it is most desirable that the trustee should know before trial precisely what is alleged against them?"

[45]. The first defendant on this issue submitted that as the facts are in dispute the originating summons procedure is wrong and for that reason the originating summons should be dismissed.

[46]. The plaintiff in reply conceded that the facts are in dispute but submitted they still can maintain the action under originating summons procedure. The court observers that the court can convert this action to a writ of summons.

[47]. The court considered this opposition that had been raised. As I have stated earlier in this judgment it's abundantly clear the parties are at dispute on important factual evidence. However Order 28 Rule 9 empowers the court in such circumstance to continue the case as begin by a writ of summons. There is an array of Judicial decisions on this. Accordingly I decline to accept this opposition raised by the first defendant.

[48]. The second defendant had raised a preliminary opposition that as the first defendant had undertaken to look after the property there cannot be a cause of action against the second defendant and has pleaded section 50(8) of the Trustee Act and submits that it will be a bar to this action. However, as I have earlier dealt with this matter in this judgment, it is sufficient to say that the second defendant has failed to produce a valid power of attorney under Section 50(1) of the Trustee Act. Further even in 2009 it is the second defendant who as the trustee has transferred the shares of the estate to the beneficiaries.

[49]. In view of non compliance with section 50(1) of trustee Act I decline to accept this preliminary objection of the second defendant.

[50]. The second objection raised against the maintainability of this case by the 2nd defendant was, that it had been instituted against the 2nd defendant in his personal capacity and not as a Trustee.

[51]. The second defendant also raised a preliminary objection to the Limitation Act and submitted that this case cannot be maintained due to the bar imposed under the Limitation Act.

[52]. In this case the testator had died in 1979. He had named two trustees to his Will. Till 2004 one of the named trustees the elder sibling of the plaintiff had looked after the property with his mother. He had not applied for probate and after his death the second

Defendant had applied for probate in 2005 and it is admitted by all parties that in the absence of the beneficiaries and the trustee from the country, the first defendant had voluntary looked after the property. It is also agreed by all parties that in 2009 the second defendant had distributed the property. It is also agreed by all parties that in 2009 the second defendant had distributed the property to the beneficiaries. After nearly three decades the plaintiff had got up from his slumber and invoked the jurisdiction of the court to get accounts and get his share of the rental money. Till 2004 there were two joint trustees and the mother of the plaintiff was alive. There is no evidence as to what happened to the rentals collected during that period nor did the parties contest on this issue. From 2009 the Estate had been administered. The plaintiff had tenancy in common. There is no evidence to show whether during this period he had collected the rentals or if not why he did not collect.

[53]. Both defendants has taken preliminary objections for this application under the Limitation Act. In deciding the issue the most crucial aspects was the date the cause of action accrued to the plaintiff. The plaintiff has failed to establish this factor. As dealt elsewhere in this judgment the second defendant submits that his responsibility commenced from the date of the Testator's death.

[54]. In the absence of the plaintiff establishing the date of the accrual of the cause of action, as to whether, the date is considered as the date of death of the testator or the date the probate was granted, the evidence before this court is the second defendant's admission that his liability commenced from the date of the death of the testator. Accordingly this action is barred under the Limitation Act. The plaintiff has failed to establish any grounds to satisfy court that they can plead under the exceptions to the Limitation Act to overcome this bar. Accordingly I am inclined to accept the objection by both defendants under the Limitation Act which is fatal to this case.

[55]. I also hold that the plaintiff has invoked the jurisdiction of the court under a wrong provision of the High Court Rules. This court also wishes to place on record that High Court Rules are there to comply and this court is not inclined to deviate from the rules especially in the absences of any exceptional circumstance and explanation submitted by the plaintiff.

[56]. For the reasons set out earlier in this judgment this court is inclined to accept the preliminary objection raised by the defendant under Order 7 Rule 3(1).

Conclusion

[57]. For the above stated reasons this court upholds the above stated preliminary objections of the defendants and accordingly this case stand dismissed.

[58]. As the defendants are successful in this case. I award a cost of $750 to each defendant summarily assessed.

.................................

Mayadunne Corea

JUDGE