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Pillai v Khan [2021] FJHC 105; HBC376.2020 (19 February 2021)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 376 of 2020

BETWEEN: HANSEL NEALESH PILLAI as Beneficiary of the Estate of Gopal Pillay, 34 Matanitobua Street, Suva, Director.
FIRST PLAINTIFF

AND: VIJAI WATI as administratix of the Estate of Gopal Pillay, 34 Matanitobua Street, Suva, Domestic Duties.
SECOND PLAINTIFF

AND: WASTE MANAGEMENT SOLUTIONS LINITED, a limited liability company having its registered office at Lot 22 Wailada, Lami.

THIRD PLAINTIFF

AND: SOPHIA KHAN of 84 Ragg Avenue, Suva, Businesswoman.

FIRST DEFENDANT

AND: ORCHID FLAT INVESTMENT PTE LIMITED a limited liability company having its registered office at Level 1, Nina House, Robertson Road in Fiji

SECOND DEFENDANT

Counsel : Plaintiffs: Ms Prasad. L
: Defendants: Mr Savou. J
Date of Hearing : 17.2.2021
Date of Judgment : 19.2.2021

JUDGMENT

INTRODUCTION

1. Plaintiff filed this action by way of originating summons seeking orders for specific performance in terms of Terms of Distribution entered on 8.8.2018 and also subsequently amended. The signatories to TOD were first and second Plaintiffs and first Defendant. First and second Plaintiffs are son and mother, respectively. Both of them and First Defendant inherited and or obtained some properties and shares of entities owned and or managed by a deceased. So first and second Plaintiff and first Defendant had mutually consented to transfer of certain interest of said properties of deceased. First Defendant held some shares in third Plaintiff. She had promised to transfer the same for ‘love and affection’ as consideration. First Defendant also promised to transfer a property belonging to Second Defendant for consideration under said TOD to third Plaintiff. There is a dispute over the consideration due to vastly different valuations given by two valuation reports and TOD had not stated how a dispute as to valuation to be resolved. Through mutual agreement to obtain a third valuation by an entity agreeable to parties to TOD or through suitable alternate remedy it can be solved. There is no issue as to compliance of first relief sought in the originating summons, but the second relief cannot be granted due to parties being loggerhead regarding consideration. This is a fact that cannot be determined though originating summons.
   

FACTS AND ANALYSIS

2. Plaintiffs are seeking following orders in the originating summons;
   
   1. That the First Defendant perform her obligations under Clause 4.11 of the Terms of Distribution dated 08 August 2018 by forever renouncing and relinquishing her interest and transferring all her shares in Waste Management Solutions Limited, the Third Plaintiff for the sole and absolute benefit of the First Plaintiff.
   2. That the First and Second Defendants perform their obligations under Clause 1.0 of the Amended Terms of Distribution dated 16 December 2019 and transfer Certificate of Title No. 43301 from Orchid Flat Investment Limited to the Third Plaintiff- Waste Management Solutions Limited.
   3. ....”.
      
3. First and second Plaintiffs and second Defendant had entered in to TOD regarding certain properties and transfer of shares of entities.
   
4. The said TOD involved properties belonging to an estate of deceased and legal entities where deceased held shares and or controlled by him.
   
5. This TOD includes initial TOD dated 8.8.2018 and amendments made subsequently through an amendment.
   
6. A dispute had arisen with regard to transfer of minority shares held by first Defendant in third Plaintiff.
   
7. All the parties to this originating summons admit execution of TOD for the distribution of estate and interest inter alia relating said deceased estate and issues incidental to that.
   
8. Clauses 4.11 of TOD which referred to third Plaintiff state in clause 4.11.3 that first Defendant ‘irrevocably agrees, consents and lawfully binds herself to transfer all her shares’ in third Plaintiff to first Plaintiff and the number of such personally held shares stated as 2000.
   
9. The consideration for the above transfer was stated as ‘love and affection’ in the following clause 4.11.4 of TOP.
   
10. In the circumstances Plaintiffs are entitled for specific performance of said clause 4.11 of TOD by first Defendant though transfer of her 2000 shares held with third Plaintiff to first Plaintiff for love and affection.
    
11. Plaintiffs are claiming specific performance of Clause 1.0 of the Amended Terms of Distribution dated 16.12.2019.
    
12. The amendment only dealt with clause 1.0.1 which required CT 43301 which is held by second Defendant to be transferred to third Plaintiff. This amendment to TOD, only affected clause 4.16.2 of TOD, so other clauses needed to be considered along with that.
    
13. It is admitted fact that clauses 4.16.5 is not affected from the said amendment which only sought to change the transferee from one entity to another entity namely to substitute third Plaintiff as transferee.
    
14. Hence , this transfer was for a consideration that was not specified and stated that ‘after the consideration value for the transfer of certificate of title no 43301 is determined together with the value of stamp duty and capital gains payable the parties will then decide of the duties payable’.(see Clause 4.16.5 of TOD).
    
15. So, unlike the transfer of shares of third Plaintiff, which was to be transferred for love and affection, the transfer of CT43301, was for an undetermined value. So parties need to determine it and since there are two vastly different valuations a third valuation report agreeable to all the parties to TOD can resolve the issue.
    
16. Plaintiffs cannot compel Defendants to transfer CT43301 on a lower valuation when the consideration value of the said property was in dispute between the parties.
    
17. Both parties rely on two valuations which are vastly different, and first and second Plaintiffs rely on earlier valuation done in 2017 and first Defendant rely on valuation done in 2020.
    
18. Generally a more recent valuation is preferred, but considering the two values which are vastly different, it is preferred to obtain a third valuation.
    
19. It needs to be ascertained from mutual agreement if such agreement cannot be reached a suitable remedy can be sought to determine consideration.
    
20. So second relief sought by Plaintiff cannot be granted due to consideration is unascertained as of this action.
    

CONCLUSION

21. Plaintiff is granted relief sought in the order one of the originating summons. First Defendant is ordered to transfer her shared in third Plaintiff to first Plaintiff for love and affection. Transfer of CT 43301 to third Plaintiff is possible only if consideration for the said transfer is determined between the parties though consent or if not possible through appropriate civil action for determination that fact. This originating summons only sought specific performance which cannot be converted to a writ of summons. First Defendant cannot refuse to transfer CT 43301 to third Defendant, but the issue of consideration needs to be resolved amicably or otherwise, and without that second order in the originating summons is refused. Considering circumstances of the case no cost is ordered.

FINAL ORDERS

1. First Defendant is ordered perform her obligation in terms of Clause 4.11 of Terms of Distribution of 8.8.2018 by forever renouncing and relinquishing her interest by transferring her remaining shares (2000 shares) in third Plaintiff ( Waste Management Solutions Ltd) to first Plaintiff (Hansel Nealesh Pillai) for love and affection.
2. No costs.
   

Dated at Suva this 19^th day of February, 2021.

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

Justice Deepthi Amaratunga

High Court, Suva