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Home Finance Company Ltd v Nand [2022] FJHC 98; HBC153.2021 (10 February 2022)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

HBC. 153 of 2021

BETWEEN:

HOME FINANCE COMPANY LIMITED registered office at 371 Victoria Parade, Suva.

PLAINTIFF

AND:

RONAL RAKESH NAND aka RONALD RAKESH NAND t/a WESTWOOD SAWMILL having

its office located at Wairabetia, Lautoka.

FIRST DEFENDANT

AND:

RON’S WOOD SHAVING PTE LIMITED a limited liability company having its registered office

Wairabetia Road, Lautoka.

SECOND DEFENDANT

Appearances:Mr. R. Singh with Ms. Swamy for the Plaintiff

Mr. D. S. Naidu for the Defendants
Date of Hearing: 07 December 2021
Date of Sentence: 10 February 2022

SENTENCE – COMMITTAL PROCEEDINGS

INTRODUCTION

1. The first defendant, Ronal Rakesh Nand (“Nand”), pleaded guilty on 05 October 2021, to the allegations in these committal proceedings.
   
2. The plaintiff, Home Finance Company Ltd (“HFCL”), had applied for leave to issue committal proceedings on 10 August 2021. I granted leave on 11 August 2021. HFCL instituted contempt proceedings proper on 12 August 2021.
   
3. The contempt proceedings have been instituted on the ground that Nand had failed to fully comply with certain orders of this Court given on 22 July 2021 (“22 July Orders”).
   
4. The 22 July Orders were as follows:
   
   1. THAT the Defendants are to inform the Plaintiffs Solicitors of the exact location of the following vehicles by Friday 4.00 p.m.
      

(FD 409, JU 677, CP 185, FW 785, HD 695, FE 514, JJ 420, HF 024, FX 923 (RD KING), and FJ 222 (personalized as ILOADU)

2. THAT the plaintiff is at liberty to take possession of all the above vehicles with the exception of Vehicle Registration FX 923
3. THAT the Plaintiff may uplift the vehicles after the Defendants have confirmed to the Plaintiffs Solicitors the location of the vehicles and, if the Plaintiff so decided to uplift the vehicles in question, the Plaintiff must transport the said vehicles to the yard of Export Freight Services which is located in Velovelo, Lautoka.
4. THAT the vehicles are then to be kept at Export Freight Services in Velovelo, Lautoka at the Plaintiff’s expenses and risk, pending the determination of the issues in this case.
5. THAT the Defendants and/or their servants/agents are not to interfere with the removal of the vehicles from their current location, or in their transportation to Export Fregight Services’yard in Velovelo, Lautoka, or whilst the vehicles are being impounded at the said yard in Velovelo.
6. THAT the Defendants, in the meantime, are to maintain possession of FX 923 (RD KING) and must maintain it in roadworthy condition and must not dispose it and/or encumber it in any manner whatsoever so as to prejudice or defeat the Plaintiff’s alleged interest in the said vehicle until the determination of this matter.
7. THAT the Defendants are to file and serve their Affidavit in Opposition in 21 days and 14 days for Plaintiff to respond.
8. THAT the matter is adjourned to 25 August 2021 for hearing.
   
5. Nand, it is not in dispute, had delivered all vehicles which are the subject of the 22 July Orders, save for vehicle registration FJ 222 and vehicle registration JJ420.
   
6. The particulars of breach are explained in paragraphs 6.1 to 6.8 of the Plaintiff/Applicant’s Statement under Order 52. I shall not set these out here. Suffice it to say that both Mr. Naidu and Nand confirmed in Court on o5 October 2021 that Nand understood the particulars of breach alleged and that Nand was pleading guilty to these.
   
7. It is on account of Nand’s failure to deliver up the above two vehicles that the contempt proceedings have been instituted.
   

BACKGROUND

8. At the heart of the substantive case, is a General Lien executed by Nand on 19 July 2011 in favour of HFCL. The said General Lien was given by Nand as part of security for the sum of $4,334,480.00 (four million three hundred thirty-four thousand four hundred and eighty dollars) which Nand had borrowed from HFCL.
   
9. Nand had agreed to a monthly repayment of $37,516.61 inclusive of interest. However, he began to default in his repayment. It would appear that his struggles began in 2020 due to the adverse effects of the Covid-19 pandemic on his business. There is no suggestion in the evidence that he had had any difficulty at any time prior to the onset of the pandemic.
   
10. HFCL did grant a repayment holiday to Nand from March 2020 to December 2020 on account of the COVID-19 pandemic. However, Nand would not make any repayment after December 2020.

Demand Notice

11. On 20 April 2021, Patel & Sharma Lawyers issued a Demand Notice to Nand and seeking repayment of the arrears failing which the entire debt of $3,576,499.65 shall become payable immediately. When Nand failed to settle the arrears, HFCL then instructed Patel & Sharma to institute various recovery proceedings. This action is, but one of the many recovery proceedings which are on foot.
    

Ten Vehicles

12. At the time HFCL issued the Demand Notice to Nand, the following ten (10) vehicles were registered in Nand’s name. The said vehicles are, namely, FD 409, JU 677, CP 185, FW 785, HD 695, FE 514, JJ 420, HF 024, FX 923, and FJ 222.
    

Chand Transfers Vehicles To Ron’s Wood Shaving Pte Limited (“RWSPL”)

13. However, at some point shortly after the issuance of the said Demand Notice, Chand would transfer all ten (10) vehicles to RWSPL. He (Nand) is the majority shareholder of RWSPL. The other shareholder is his spouse.
    

Court Action

14. HCFL’s position is that the General Lien in question created a floating charge over all the assets of Nand at the time of execution. However, upon the issuance of the Demand Notice, the General Lien crystalized and became a fixed charge over all assets and properties of Nand, including the ten vehicles in question. Nand, therefore, was in breach of the General Lien when he transferred the ten vehicles to RWSPL after the Demand Notice because the General Lien had, at that point, become enforceable against all the assets and properties of Nand.
    
15. On 14 July 2021, Messrs Patel & Sharma filed an Originating Summons against Nand and RWSPEL seeking a declaration that the General Lien in question is valid security over the above-named ten vehicles and that, as such, HFCL has a right to seize and take possession of the said vehicles. HFCL also seeks an Order to restrain Nand and RWSPEL and/or their employees, agents or servants from dealing with the said vehicles in any manner whatsoever or from engaging in any conduct which may interfere with HFCL’s rights under the General Lien.
    

Arrears

16. At the time HFCL filed this action, Chand was in arrears of $94,289.77 with a total balance of $3,576,499.65 owing.
    

Ex-Parte Summons

17. On the same day that they filed the Originating Summons (14 July 2021), Patel & Sharma also filed an ex-parte summons seeking an Order that the Nand and RWSPL and their agents or employees be restrained from disposing off the ten (10) vehicles in question and that Nand do serve on Patel & Sharma an affidavit disclosing the full value of his every asset in Fiji with particulars as to their nature and whereabouts and whether each asset is owned in Nand’s name or jointly or by nominees or companies on his behalf.
    
18. The said summons is supplement by an Affidavit of Vandhana Sharma sworn on 13 July 2021. Patel & Sharma would file an amended ex-parte summons on 15 July 2021.
    
19. I heard the ex-parte application on 15 July 2021 and granted order in terms. A copy of the sealed order together with Originating Summons and Amended Originating Summons were served on the defendants on 19 July 2021.
    
20. On 22 July 2021, I granted the Orders (see above) which became the subject of the committal proceedings.
    

Nand’s Response

21. On 17 August 2021, Nand swore an Affidavit in Reply which he filed on the same day. He also filed a summons under Order 4 Rule 1 and sections 68, 70 and 71 of the Fiji Consumer Credit Act 1999. The said summons was returnable 25 August 2021.
    
22. On 25 August 2021, in Court, Mr. D. S. Naidu raised the issue as to whether the securities in question are void or voidable. He submitted that the committal proceedings cannot proceed whilst these issues remain (I reserve the determination of this issue to my Judgement on the substantive matter in this case).
    
23. On 25 August 2021, I also extended time to Nand to file Affidavit in Opposition to the committal proceedings and then adjourned the case to 16 September 2021 for hearing. In between that time, an affidavit of Vandhana Sharma in Reply was filed on 23 August 2021 for the applicant, an affidavit of Chand sworn on 08 September 2021, in Opposition to Vandhana’s earlier affidavit filed on 10 August 2021, and affidavit in reply of Vandhana Sharma filed on 14 September 2021.
    

MITIGATION

24. In mitigation, Pillay Naidu and Associates submit as follows:
    
    1. this is first contempt proceedings against Nand.
    2. Nand had returned eight vehicles in compliance with the order of 22 July 2021 except the two in question.
    100. Nand has since purged contempt by returning the two vehicles.
    4. he has given another vehicle in place of one of the vehicles which was in bad condition.
    5. Nand had no appreciation of the potential consequences of his actions, but acted quickly to purge contempt once explained.
    6. his early guilty plea saves Court time.
    7. he is remorseful.
    8. his reactions were a “kneejerk” response as the vehicles are not covered by a specific security.
    9. he is separated from his partner. He has a 16 year old son and 15 year old daughter who he looks after.
       
25. Generally, the power under Order 52 to punish for disobedience of a lawful court order is based on the duty to guard against and prevent any attempt to interfere with the administration of justice (Attorney-General v Times Newspapers Ltd [1991] 2 W.L.R 994 H.L).
    
26. The Court has power to commit a contemnor to prison. The court also has jurisdiction to fine or take security for good behavior (see White Book at paragraph 52/16).
27. In this case, after taking into account the mitigation offered by the defendant, and the fact that he has never before been held in contempt of court, I am of the view that a non-custodial sentence is warranted. Rather, an appropriate fine is warranted to reflect the Court’s disapproval of the defendant’s actions in interfering with the administration of justice.
    
28. In the final, I fine the defendant the sum of $3,000-00 (three thousand dollars) only, out of which amount the sum of $1,500-00 (one thousand five hundred dollars) is to be deducted and paid to the Plaintiff as costs summarily assessed for these committal proceedings.
    
29. This fine must be settled within 14 days, that is, by 24 February 2022, failing which, Nand will be liable to committal for a period of one month.
    
30. Case adjourned to 24 February 2022 at 10.30 a.m.to check on compliance and also for Judgement on the Originating Summons.
    

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

Anare Tuilevuka

JUDGE

Lautoka