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Merchant Finance Ltd v Rupeti [2021] FJMC 44; Civil Case 157 of 2018 (16 March 2021)

IN THE MAGISTRATE’S COURT AT SUVA
CIVIL JURISDICTION

Civil Case No. 157 of 2018

BETWEEN:
MERCHANT FINANCE LIMITED
PLAINTIFF

AND:
MAKARITE RITIE RUPETI
FIRST DEFENDANT

AND:
MAKARITE RITIE as the Administratix of the ESTATE of PAULIASI VATANITAWAKE R. BALEIKATUBA
SECOND DEFENDANT

For the Plaintiff: Mr. Wally
For First and Second Defendants: Ms. Kant

RULING

1. This is a ruling on a civil claim for breach of loan agreement filed by the Plaintiff, a financial institution based in Suva, against the First Defendant who is the customer and the Second Defendant, Pauliasi Baleikatuba, as the guarantor of the said agreement. The Second Defendant has passed on and so the Plaintiff is bringing the claim against his estate of which the First Defendant is the purported Administratix.

The Claim

2. The Plaintiff filed a Writ and Statement of Claim dated 23^rd July 2018.

3. The Plaintiff alleges that the First Defendant had signed a loan agreement and the Second Defendant the late Pauliasi Baleikatuba had guaranteed the same. The First Defendant then breached the loan agreement by defaulting in payments.
4. The Plaintiff claims for inter alia judgment in the sum of $22,992.17, post judgment interest of 5% and costs.
   

The Defence

5. The Defendant filed its Defence on 5th October 2018 and states that the Defendant was never advised nor given an opportunity to seek legal advice prior to executing the said agreement. The Defendant denies the other claims put forward.

6. The Defendant seeks for the Claim to be dismissed and costs on an indemnity basis.

7. The matter proceeded to Trial on 3^rd December 2020, the Court noted that the Plaintiff relied on a Bundle of Documents, contents of which will be covered in the evidence below.

The Plaintiff’s case

8. Plaintiff Witness 1 (PW1) is Seema Devi, Manager Asset Manager for the Plaintiff Company of Raiwai, Suva. She stated that by loan agreement dated 26 March 2015, they (Plaintiff) lent the First Defendant a total sum of $38,000.00 to buy motor vehicle registration EU 902. The Second Defendant by personal guarantee dated 26^th March 2015 guaranteed inter alia the due and punctual payment by the First Defendant of all monies owed. Both defendants have had legal advice or the opportunity to seek legal advice. Also, both defendants appear to understand that the personal guarantee continues to the personal representatives of the estate of the guarantor in the event the guarantor personally passes away. The First Defendant defaulted in repayments so she surrendered the vehicle to the Plaintiff on or about 20^th May 2016, which was auctioned and sold at the sum of $9,010.00. This sum was then credited into the defendants account.
9. PW1 confirmed that the total amount repayable by the defendants came to a sum of $49,399.92. Further, associated costs and charges came to the sum of $14,045.50. The amount therefore came to $63,385.52. A total of $40,453.35 comprising of the sale of the vehicle, repayments by the First Defendant and rebate. This sum was then deducted from the amount of $63,385.52 leaving a total due and owing sum of $22,992.17.

10. The Plaintiff tendered the following exhibits as follows:

• Plaintiff Exhibit 1 - Loan Agreement dated 26^th day of March, 2015.
• Plaintiff Exhibit 2 - Guarantee Indemnity dated 26^th day of March, 2015.
• Plaintiff Exhibit 3 - Borrower’s & Guarantor’s Acknowledgment dated 26^th day of March, 2015.
• Plaintiff Exhibit 4 - Guarantee & Indemnity (Undated)
• Plaintiff Exhibit 5 - Default Notice dated 16^th November, 2016
• Plaintiff Exhibit 6 - Voluntary Return Form dated 20^th May 2016
• Plaintiff Exhibit 7 - Letter of Offer dated 26^th March, 2015
• Plaintiff Exhibit 8 - Compulsory Third Party Notice 20/05/2016 to 20/05/2017
• Plaintiff Exhibit 9 - Euro Cars Tax Invoice (Undated).
• Plaintiff Exhibit 10 - LTA Payment Receipts dated 23/05/2016
• Plaintiff Exhibit 11 – Advertisements June 25, 2016.

June 28, 2016.

September 3, 2016

September 6, 2016

October 15, 2016

October 18, 2016

• Plaintiff Exhibit 12 - Bill of Sale dated 2^nd April, 2015
• Plaintiff Exhibit 13 – Tax Invoice dated 25/10/16
• Plaintiff Exhibit 14 - Statement of Account dated 15/09/20
• Plaintiff Exhibit 15 - Enforcement Clause (Undated)

11. That was the Plaintiff’s case.

The Defence Case

12. Defense Witness 1 (DW1) is Makarite Ritie Rupeti, Unemployed of 115 Nailuva Road. She is the First Defendant. Her husband Pauliasi Vatanitawake Baleikatuba passed away. She is a former flight attendant with Fiji Airways and she recalls being a customer of the Plaintiff Company when she purchased a vehicle through her husband. She confirms signing the documents shown by the Plaintiff but she states that the contents of the documents were never explained to her. She also did not obtain legal advice or representation before signing the documents. She was never explained of the consequences of the agreement. She confirms that the documents were counter signed by a representative of the Plaintiff Company and her husband. She recalls not receiving any demand notices but she recalls being contacted by a Bailiff about the vehicle. At that time, the said vehicle was under her husband’s care. Her husband owed her $20,000 and he had signed a Promissory Note, which he did not have in Court and he had her sign a Voluntary Form. She stated that her husband’s friend was the then CEO of the Plaintiff Company and through their arrangement, she was just helping him out purchase the vehicle.
13. After the hearing both parties filed helpful written submissions to assist the Court. The Court has considered the content of all submissions and moves to analyse and determine the salient features of the matter.

Analysis

14. In any civil proceedings the standard of proof is always one which is established on a balance of probabilities which has been aptly described in Miller v. Minister of Pensions 1947 2 All E.R. 372 where Lord Denning stated that the standard of proof regarding balance of probabilities as:

"That degree is well settled. It must carry a reasonable degree of probability, not so high as is required in a criminal case. If the evidence is such that the tribunal can say: 'we think it more probable than not', the burden is discharged, but if the probabilities are equal it is not."

15. There was a written agreement between the parties for a certain sum to be lent to the First Defendant and guaranteed by her husband. As shown by the Plaintiff Company had carried out its duty as the lender. The Plaintiff has proved that the First Defendant breached the agreement by defaulting in repayments. Therefore, the Plaintiff is entitled to its dues.
16. The Plaintiff sued the estate of the First Defendant’s husband because it was the husband who guaranteed the loan. Although the First Defendant did not show evidence that the First Defendant was the Administratix of the estate of her late husband, the defendants did not make it an issue nor actively object to this preposition during the Trial. Therefore, the Court accepts that the First Defendant is the Administratix of her late husband.
17. The defendants raise the defence of non est factum. In Singh v Singh [2012] FJHC 957; BC250.2007 (19 March 2012) the High Court recognised that a plea of non est factum was originally available only to the blind and to the illiterate as held in Thoroughgood v Cole ([1582] [1582] EngR 40; 2 Co. Rep. 9a). Its scope of application was, however, expanded by Byles J. in 1869 in the case of Foster v Mackinnon [1869] LR 4 CP 704 at 711 as follows:

“It seems plain, on principle and on authority, that, if a blind man, or a man who cannot read, or who for some reason (not implying negligence) forbears to read, has a written contract falsely read over to him, the reader misreading to such a degree that the written contract is of a nature altogether different from the contract pretended to be read from the paper which the blind or illiterate man afterwards signs; then, at least there be no negligence, the signature so obtained is of no force. And [,] it is invalid not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signer did not accompany the signature; in other words, that he never intended to sign, and therefore in contemplation of law never did sign, the contract to which his name is appended.

(emphasis added)

18. Lord Viscount Dilhorne in his speech before the House of Lords Saunders v Anglia Building Society [1970] 3 All ER 961, having agreed with Lord Denning MR's exposition that a man of full age and understanding who can read and write cannot be allowed to repudiate his signature to a document, which he knows will have legal consequences if he signs it without reading it, held that:

“... with greatest respect I think that [that was] more an example of a case where the plea will fail than a rule of general application...”

12. Whilst this Court sees no reason not to agree with Counsel for the Plaintiff on the point that the First Defendant being a former flight attendant was in a position to understand the content, it also considers the next issue. The issue is that when applying the above mentioned principles of non est factum to the facts, it appears that the defendants have adduced no relevant evidence to show that there a fundamental difference between what the defendants were signing as a customer and guarantor and to what was actually presented or explained to them by the Plaintiff Company as to what was being signed.
13. After factoring all the evidence and the above issues, the Court proceeds to determination.
    

Determination

14. I therefore determine that the Plaintiff has proved its Claim and that the Defendant is liable to pay the Plaintiff the sum of $22,992.17 with post judgment interest of 5%.
15. Costs is summarily assessed to the Plaintiff in the sum of $500.

16. 28 days to appeal.

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J. Daurewa
Resident Magistrate

16^th March 2021