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Canform Industries Ltd v Sisters Aircool & Electrical Services [2013] FJMC 52; Civil Action 473.2012 (31 January 2013)

IN THE MAGISTRATE'S COURT
AT SUVA
CENTRAL DIVISION
REPUBLIC OF FIJI ISLANDS
CIVIL JURISDICTION

Civil Action No. 473 of 2012

Canform Industries Limited
Plaintiff

v.

Sisters Aircool & Electrical Services
1st Defendant

ANZ Banking Group Services
2nd Defendant

For Plaintiff : Mr. Irshad Samad (Samad Law)
For 1st Defendant : No appearances
For 2nd Defendant : Ms. Bhavna Narayan (Lateef & Lateef)

Judgment

Introduction

In this matter the Plaintiff has filed a Writ seeking an injunction restraining the 2nd Defendant whether by themselves, their servants and/or agents from seizing or taking away the vehicle registration Number FL408/RSL 508 from the Plaintiffs premises, a declaration that the said vehicle is the property of the plaintiff, that the vehicle registered number FL 408/RSL 508 reaminas registered in the name of the Plaintiff Canform Industries Limited, costs of the action and such further and/or other relief as the court may deem just.

The Plaintiffs had also filed a Ex-parte Notice of Motion seeking an injunction restraining the 2nd Defendant whether by themselves, their servants and/or agents from seizing or taking away the vehicle registration Number FL408/RSL 508 from the Plaintiffs premises until the hearing and determination of the matter. This Court on 1st November 2012 granted the Orders as sought by the Plaintiff per the Ex-Parte Motion. On 29th November 2012 the 2nd Defendants filed a motion to discharge the Ex-parte Order.

The Parties appeared in Court on 29th November 2012 and wishing to expedite the matter and deal with all the issues canvassed sought that the substantive matter be dealt with by way of an early hearing. Hearing was set for 17th January 2013.

The Plaintiffs Submission

The Plaintiffs made written submission which can be basically be summarized as follows:

The Plaintiff bought the truck after doing a search with the Land Transport Authority and all due diligence as required and transferred ownership of the vehicle in the Plaintiff's name. No encumbrance at the time of transfer of ownership of vehicle. Plaintiff made insurance payments. Notice was given to Plaintiff by the 2nd Defendant. The Plaintiffs rely on the LTA Act. Plaintiff did a search and there was no financial interest registered and then paid $40,000.00 to the 1st Defendant. The Plaintiffs rely on Merchant Finance and Investment Company Limited v. Popular Investments Ltd [2009] FJHC 244.

The agreement was between ANZ and Sisters Aircool, Plaintiff not party to agreement. Privity of contract.

The 2nd Defendant's Submission

The Defendants written submission is summarized follows:

1st Defendant had sought finance facility, not a normal arrangement. 1st Defendant bought vehicle from Carpenters sought finance from ANZ. Bank was owner of the vehicle. Lessee – the 1st Defendant was paying monthly to the bank. MD-1 letter of offer, purpose to facilitate acquisition of vehicle. Was not a Bill of Sale. Any Bill of Sale to be registered. Was a Master Lease – not required to be registered by LTA. Rely on ANZ v. Koi (similar circumstances). The crux of the matter is whether debtor had ownership of the goods to pass title of goods. In master lease debtor does not own the vehicle. The purpose of LTA is to regulate use of vehicle. Purchaser has to face consequences. Plaintiff can claim from 1st Defendant.

Analysis

In this case the 2nd Defendant, ANZ Bank had entered into an agreement (referred to as Master Lease) with the 1st Defendant for the vehicle. The 1st Defendant sold the vehicle to the Plaintiff. The Plaintiffs had conducted a search of the vehicle and paid the 1st Defendant after finding that the 1st Defendants owned the vehicle.

From the facts and the submissions made by both the counsels in this case it is clear that the Plaintiff took all steps within it means to verify the ownership of the vehicle before it bought the vehicle. The 1st Defendant's have not been present in this case and from what the Court can note from the materials before it that the 1st Defendants did not notify the Plaintiffs that the Bank had legal interest over the vehicle.

This Court has noted that the Master lease agreement was between the 1st and the 2nd Defendants, quiet clearly the Plaintiff was not a party to it. The Master Lease Agreement which was a binding agreement between the 1st and the 2nd Defendant. The lessee in the agreement which was the 1st Defendant had agreed with the 2nd Defendant, the Bank that it will not without the prior written consent of the Bank to sell, agree to sell or encumber the vehicle. This did not take place before the vehicle was sold by the 1st Defendant.

The Plaintiff's have relied upon the LTA Act and the due diligence that it carried out and checked on the notifications with respect to the financial interests. They state that Plaintiffs had no way of knowing the financial interest of the 2nd Defendant in absence of the notification with LTA. The 2nd Defendant is correct for its part when it states that they were under no obligation to record the notification with LTA as it was a Master Lease Agreement. This Court notes that the LTA Act is a bit different from the previous Traffic Act and includes notification of financial interests now as previously it only dealt with ownership of vehicles. This Court however accepts that the basic purpose of the LTA Act is to record and register particulars of ownerships and transfers of the vehicles thereafter as is provided by the Short Title of the LTA Act which is to "establish the Land Transport Authority, to regulate the Registration and use of vehicle, the licensing of Drivers of Vehicles and the enforcement of traffic laws ...". The other details sought with regards to the vehicle are additional and supplementary details and the LTA records are primarily records and details for the vehicle and not essentially a register of other interests, for instance the financial interests of the vehicle or a bill of sale.

The Plaintiff who is aggrieved in this case has a genuine cause against the 1st Defendant for failing to notify that it had an agreement with the 2nd Defendant over the vehicle. The actions of the 1st defendant might also be criminal as well. The 1st Defendant did not have to right to have the vehicle transferred to the Plaintiff without the prior written consent of the 2nd Defendant. This Court has noted the decision in ANZ v. Koi where the Court in reference to the Master Lease Agreement stated "Under such an agreement no property passes to the 'hirer' and nemo dat none can pass from him." In essence in this case, the 1st Defendant did not have absolute title or authority over the vehicle which he could pass on to the Plaintiff.

This Court would like to state that in ANZ v. Koi, His Lordship cited and the decision of Lord Wilberforce in Moorgate Ltd. v. Twitchings (1977) A.C. 890 at p. 902ff and this Court would like to restate that for ease of reference and relies on it:

"English law has generally taken the robust line that a man who owns property is not under any general duty to safeguard it and that he may sue for its recovery from any person into whose hands it has come ... He is not estopped from asserting his title by mere inaction or silence, because inaction or silence, by contrast with positive conduct or statement is colourless: it cannot influence a person to act to his detriment unless it acquires a positive content such that that person is entitled to rely on it. In order that silence or inaction may acquire a positive content it is usually said that there must be a duty to speak or to act in a particular way, owed to the person prejudiced, or to the public or to a class of the public of which he in the event turns out to be one."

and later at p.904 his lordship said:

"... there could be no doubt that, in the absence of special circumstances, for example some express representation, the finance company could not be prevented, by estoppel or otherwise, from reclaiming its property ..."

For the above-mentioned reasons this Court Orders as follows:

(a) Dissolve the interim injunction granted on 1st November restraining the 2nd Defendant whether by themselves, their servants and/or agents from seizing or taking away the vehicle registration Number FL408/RSL508 from the Plaintiffs premises or its current location.

(b) No order as to costs.

28 days to appeal.

Chaitanya Lakshman
Resident Magistrate

31st January 2013