Autoworld Trading (FIJI) Limited v. Suriya Narayan

• Jurisdiction: Fiji
• Judgment Date: 21 March 2019
• Date: 21 March 2019
• Docket Number: Civil Action No.: HBC 234 of 2011
• Counsel: Plaintiff: Mr. Shelvin Singh,Defendant: Mr. Niko Nawaikula for the Defendant,Third Party: No appearance
• Court: High Court (Fiji)

IN THE HIGH COURT OF FIJI

AT SUVA

CIVIL JURISDICTION

Civil Action No.: HBC 234 of 2011

Between:

Autoworld Trading (FIJI) Limited

Plaintiff

v.

Suriya Narayan

First Defendant

And

Rajendra Naraya

Second Defendant

And

Land Transport Authority

Third Party

Date of Judgment: 21^st March 2019

Appearance:

Plaintiff: Mr. Shelvin Singh

Defendant: Mr. Niko Nawaikula for the Defendant

Third Party: No appearance

JUDGEMENT

INTRODUCTION

1. This an action filed by the Plaintiff, an importer and dealer of used vehicles against the two defendants, the purchaser of a low truck and a car and purported guarantor of the said purchase. I used the word purported as the signature on the guarantee is denied, and stated that on the date of the execution of guarantee 2^nd Defendant was not present in Suva and much emphasis was made on that with an that, Second Defendant was engaged in a towing and taxi business, and had requested to import a tow truck for his business. Accordingly, a used tow truck was imported and was sold along with another used car. The vehicles were sold to 1^st Defendant who was the father of the 2^nd Defendant. At the time of sale Bill of Sale was entered for two vehicles and the sale was considered as one transaction. Both vehicles were sold at a combine price of $75,000). No evidence to distinguish value of the two. From that only $300 was paid at the time of sale for both vehicles and rest was paid through instalments with interest, us per the conditions of the Bill of Sale. It is admitted that chassis of the tow truck was cracked at the time of sale. The official of Land Transport Authority (LTA) said that he had informed the Plaintiff, that chassis of the tow truck needs to be replaced within 12 months. He said registration of vehicles with broken chassis is rare and there were no equipment to test the strength of chassis with LTA. The first registration was refused without wielding the broken parts of chassis, and once it was done conditional registration was granted This wielding was done at a private local garage and 1^st Defendant, was not informed about this and LTA officer could not state the material or gauge of metal part used an wielding. There is no evidence of Plaintiff informing the condition of the chassis at the time of sale or that conditional registration of tow trick. LTA subsequently within 2 years, issued a defect order against the tow truck, and refused to register the tow truck, without replacing entire chassis. The tow truck could not be used for its purpose without registration. The Plaintiff was informed of the issue of defect order. Since there were defaults on the Bill of Sale, both tow truck and car were repossessed by Plaintiff and they were re-sold. There is evidence that even when tow truck was re-sold the defect on the cassis was not informed and refusal to register by LTA without replacement of chassis, was also not informed. Strangely, despite defect order to replace chassis, a registration was obtained in 2007 without replacement of chassis. The Plaintiff state that tow truck was sold “As is where is” basis hence there was no warranty on the condition of the chassis. The chassis of a tow truck absorbs an immense force on the truck as a heavy duty vehicle, depending on the weight of towing object and also speed, the manner of towing, road condition etc. and it is essential for chassis to be in perfect condition for towing, to withstand any insertion of force and broken chassis in a tow truck is not suitable lor its purpose. There was no scientific method utilized to test the suitability of chassis after wielding and LTA official said it is a rare thing for LTA to register vehicles with cracked ur broken chassis. Plaintiff admits that it was aware of the defective chassis. In the defence, Sections 54, 55 and 56 of Fair Trading Act, 19921 are pleaded. The said provisions prohibits Misleading and deceptive conduct, unconscionable conduct, and False and Misleading representation, respectively, in relation to trade and commerce. According to the statement of defence Plaintiff's conduct of sale of a heavy duty vehicle with a broken chassis to be used in towing business is unconscionable, misleading and deceptive.

FACTS

2. The Plantiff and Defendant filed minutes of pre-trial conference, between them where the following facts were agreed between them. Third party neither participated in pre-trial conference nor at the hearing. There are no pleadings filed by third party.

• 1. The Plaintiff is a company duly incorporated in the Fiji Islands and is engaged in the sale of new and second hand imported motor vechicles and financing of purchase of molar vehicles to approved customers.

• 2. On 18 October 2006, the Plaintiff, at the request of the first Defendant agreed to sell motor vehicles having registration numbers FB917 and FB119 to the first Defendant for the sum of $ 75,000.00.

• 3. On 18 October 2006, the first Defendant entered into and executed a Bill of Sale over motor vehicles having registration numbers FB917 and FB119 in favour of

  ¹ See Section 3 of Interpretation Act, 1967, the word ‘Decree’ in fair Trading Decree, 1992 is replaced with word ‘Act’

  In terms of Section 160, of Fijian Competition and Consumer Commission Act, 2010 Fair Trading Act, 1992 and its amendments are repeated from 1.17.2010

  The comparable provisions are contained in Sections 75-85 in Fijian Competition and Consume Commission Act, 2010 and more exhaustively dealt. Some of more common forms of deceptive and misleading acts such as Pyramid selling schemes[Section 87A]. Bait Advertising Section 86). Referral selling[Section 87] etc are specifically dealt more exhaustively.

  the Plaintiff to inter alia, secure the payment of all the monies due and owing by the first Defendant to the Plaintiff together with agreed interest and other charges

3. The Bill of Sale entered between the parties stated,

• (i) The sum advanced to the first Defendant was $ 75,000.00

• (ii) Interest was payable on the said sum at the rate of 10% per annum at a flat rate

• (iii) The sum advanced plus interest and charges were to be paid in 60 months time

• (iv) The total sum secured amounted to $112,500 plus charges

• (v) The first Defendant was required to make a payment of a minimum of $1,875.00 per month until full payment

4. The Plaintiff in the statement of claim stated.

• a. On 18 October 206, it sold motor vehicle registration numbers FB917 and FB119 to the first Defendant for the sum $75,000.00

• b. Both vehicles were fully financed by the Plaintiff

• c. The agreed interest charge was 10% over 5 years time totalling $37,500.00

• d. The loan was personally guaranteed by the second Defendant and he executed a guarantee document which was dated 18.10.06

• e. The first defendant defaulted on his payments as a result of which the vehicles were repossessed, advertised and sold by the Plaintiff.

• f. The residual debt as at 20 July 2011 was $39,244.09 and the Plaintiff claimed this sum from both defendants.

• g. The claim against the 1^st Defendant is based on the Bill of Sale and far 2^nd Defendant denies.

• h. Plaintiff is also claiming interest at the rate of 1.5% per month from 20 July 2011.

5. The Defendants in the statement of defence stated:

• (a) They admit that the first defendant purchased the vehicles for the price.

• (b) Admit the purchase was financed by the Plaintiff and paid instalments till June 2008,

• (c) Deny that the second Defendant signed a personal guarantee.

• (d) They claim that motor vehicle FB917 had a cracked chassis and Plaintiff was given 1 year from first registration to replace it

• (e) Plaintiff did not disclose the defective chassis to the Defendants.

• (f) On 09 October 2008 a defect order issued by LTA Third Party to the Defendants and could not get the registration for tow truck and Plaintiff was notified of it.

• (g) Plaintiff promised to change the chassis at no cost. Despite this, Plaintiff took possession of both vehicles under Bill of Sale from the Defendants compound on 10 December 2008.

• (h) On 11 December 2008 on request Defendants were advised that it was on a joint account so both needed to be taken and both will be released once the chassis was fixed.

• (i) Both vehicles were sold and money recovered by Plaintiff,

• (j) The Defendants had also included wanted claim

6. In counter claim, inter alia pleaded,

• (a) That sale of vehicles under Bill of Sale was unconscionable misleading hence in violation of Section 54,55 and 56 of Fair Trading Act, 1992.

• (b) The defects tn the chassis of tow truck was known and Plaintiff had mislead the buyer, when they were fully aware that the said vehicle cannot be registered or used for long period of time without replacement of entire chassis.

• (c) The sale of the vehicles was unlawful and the Plaintiff is precluded from claiming under said transaction

7. In reply to the counter claim, Plaintiff stated

• (a) The vehicles were sold to the defendants on an as is where is basis.

• (b) The Defendants had inspected the vehicles prior to purchase and knew or ought to have known the condition of the motor vehicles

• (c) The Defendants themselves obtained a certificate of mad worthiness from the Land Transport Authority in 2007

• (d) Payments stopped from 04 June 2008

8. The defendants also stated that Plantiff failed to notify them of the defects whereas LTA had advised them on that. The LTA officer had overlooked the cracked chassis on the second time that they inspected the vehicle. Chassis had been welded and the Plantiff knew that the said chassis needed to be changed before the vehicle came into the Defendants.

9. The Defendants filed its third party notice on 24 July 2012. The Defentants also filed its claim againts the Third Party and claimed as follows;

• a. A declaration that the Defendants are entitled to be indemnified by the Third Party against the whole of the Plaintiff's claim.

• b. Judgment against the Third Party for any and all amounts which the Defendant's may be adjudged to pay the...