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\widowctrl\ftnbj\aenddoc\noxlattoyen\expshrtn\noultrlspc\dntblnsbdb\nospaceforul\formshade\horzdoc\dghspace180\dgvspace180\dghorigin1701\dgvorigin1984\dghshow0\dgvshow0\jexpand\viewkind4\viewscale100\pgbrdrhead\pgbrdrfoot\nolnhtadjtbl\rsidroot15366735 \fet0\sectd \linex0\endnhere\titlepg\sectdefaultcl\sftnbj {\header \pard\plain \s17\ql \li0\ri0\widctlpar\tqc\tx4320\tqr\tx8640\pvpara\phmrg\posxc\posy0\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\field{\*\fldinst {\cs18\insrsid3018008 PAGE }}{\fldrslt {\cs18\lang1024\langfe1024\noproof\insrsid3018008 9}}}{\cs18\insrsid3018008 \par }\pard \s17\ql \li0\ri0\widctlpar\tqc\tx4320\tqr\tx8640\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0 {\insrsid3018008 \par }}{\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}} {\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 \f1\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 IN THE HIGH COURT OF FIJI \par AT SUVA \par CIVIL JURISDICTION \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11630704 CIVIL ACTIONS NO.: HBC0}{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 175 OF 2001 \par AND }{\f0\lang2057\langfe1033\langnp2057\insrsid11630704 0}{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 535 OF 2000 (Consolidated) \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 BETWEEN:}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 HABIB BANK LIMITED \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 PLAINTIFF \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 AND:}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 THE CHARCOAL CHICKEN LIMITED \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 1ST DEFENDANT \par }{\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 MARY MARAIA PETERSON HEWITT \par JOHN THOMAS LOW \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 2ND DEFENDANT \par }\pard \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms B. Narayan}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 -}{ \f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 For the Plaintiff \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 Mr. S. Valenitabua}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 -}{ \f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 For the first named 2nd Defendant \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 AND BETWEEN:}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 MARY MARAIA PETERSON HEWITT \par ARTHUR LORD \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 PLAINTIFFS \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 AND:}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qj \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 HABIB BANK LIMITED \par JOHN LOW \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 DEFENDANTS \par }\pard \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par Mr. S. Valenitabua}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 -}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 }{ \f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 For Plaintiffs \par Ms B. Narayan}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 -}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735\charrsid11630704 }{ \f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 For 1st Defendant \par \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 JUDGMENT \par }\pard \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par }\pard \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The above two actions were consolidated and heard together.}{ \f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It was agreed by counsels on the day of hearing that Ms Hewitt who is the plaintiff in Civil Action 535 of 2000 would present her case first.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Certain documents by both parties were put in by consent. \par }\pard\plain \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par At the outset I must say I fail to understand why Arthur Lord was joined as a plaintiff in Civil Action 535 of 2000.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 His involvement in the case is only as a donee of power of attorney from Ms Hewitt the first named plaintiff but has no beneficial interest in the reliefs sought. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 FACTS: \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt is one of the directors of Charcoal Chicken Limited.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 John Low was the other director.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 In 1992 she appointed John Low as her agent under a power of attorney.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She lived in Papua New Guinea. \par \par In 1996 they started a business of Charcoal Chicken in partnership.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The partnership business operated till 1998 when it was incorporated into a limited liability company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Memorandum and Articles of Association were signed by John Low on his own behalf and on behalf of Ms. Hewitt. \par \par John Low managed the business of Charcoal Chicken in Suva. \par \par On 26th April 1998 John Low applied for a loan on behalf of the partnership called Charcoal Chicken.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 On 13th May 1998 a loan of $130,000.00 was approved.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The securities for this loan were liens over two term deposits in the name of Ms Hewitt.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The two term deposits were for $60,000.00 and $46,000.00 a total of $106,000.00.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The other security was a third party mortgage over Certificate of Title 14498 in the name of Ms Hewitt. \par \par On 21st September 1998 John Low applied for further advances and the facility was increased to $150,000.00.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The securities remained unaltered. \par \par On 28th July 1999 John Low applied for further advances and on 2nd August 1999 the Bank agreed to give a total of $250,000.00 to Charcoal Chicken Limited which had by now been incorporated.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The securities were liens over the two term deposits, third party mortgage and bill of sale over three motor vehicles and bill of sale over equipment belonging to Island Grill. \par \par By August 1999 Ms Hewitt had returned to Fiji from Papua New Guinea.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 On 17th August 1999 Ms Hewitt and John Low signed a debenture over the assets of Charcoal Chicken Limited and bill of sale over motor vehicles.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt also signed a mortgage over her land comprised in Certificate of Title 14498 and gave a personal guarantee. \par \par There were defaults in payment to the Bank.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank took steps to enforce the securities and on 27th November 2000 issued demand notice to Ms Hewitt under the mortgage and the guarantee.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt in response filed civil action 535 of 2000 wherein I note the court has ordered that legal and equitable effects of security documents have been suspended till the finalisation of the action.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank in turn filed Civil Action 175 of 2001 claiming moneys owing under the documents from the two directors.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It could easily have counterclaimed in the other action. \par \par I have perused the minutes of pre-trial conference and noted the issues in dispute which can real}{\fs24\lang2057\langfe1033\langnp2057\insrsid11630704 ly be reduced to three, that is}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 : \par \par {\pntext\pard\plain\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \hich\af0\dbch\af0\loch\f0 (1)\tab}}\pard \ql \fi-720\li1440\ri0\widctlpar{\*\pn \pnlvlbody\ilvl0\ls1\pnrnot0\pndec\pnstart1\pnindent360\pnsp120\pnhang {\pntxtb (}{\pntxta )}}\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin1440\itap0\pararsid11630704 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 whether Ms Hewitt at the time of execution of security knew they were security documents that is the nature of documents or did she think they were business documents. \par }\pard \ql \li0\ri0\widctlpar{\*\pn \pnlvlcont\ilvl0\ls0\pnrnot0\pndec }\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par {\pntext\pard\plain\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \hich\af0\dbch\af0\loch\f0 (2)\tab}}\pard \ql \fi-720\li1440\ri0\widctlpar{\*\pn \pnlvlbody\ilvl0\ls1\pnrnot0\pndec\pnstart1\pnindent360\pnsp120\pnhang {\pntxtb (}{\pntxta )}}\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin1440\itap0\pararsid11630704 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 did she have independent legal advice? \par }\pard \ql \li0\ri0\widctlpar{\*\pn \pnlvlcont\ilvl0\ls0\pnrnot0\pndec }\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11630704 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par {\pntext\pard\plain\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \hich\af0\dbch\af0\loch\f0 (3)\tab}}\pard \ql \fi-720\li1440\ri0\widctlpar{\*\pn \pnlvlbody\ilvl0\ls1\pnrnot0\pndec\pnstart1\pnindent360\pnsp120\pnhang {\pntxtb (}{\pntxta )}}\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin1440\itap0\pararsid11630704 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Was the Bank negligent and in breach of its fiduciary duty. \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par PW1 MARY HEWITT is one of the parties in these actions, that is, plaintiff in Civil Action 535 of 2000 and second defendant in Civil Action 175 of 2001.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She told the court that she had two term deposits in her name in the Bank.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The first one is for $46,000.00 dated 26th April 1998 and the second is for $60,000.00 dated 30th April 1998.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She said she purchased a property in 1987 and gave John Low, who was a close family friend, power of attorney to manage the property.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 That power of attorney is contained in the bundle of documents.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She had business of Charcoal Chicken with John Low.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She signed the business registration form.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 John Low operated the business and she had nothing to do with operations of the business. \par \par She told the court that she was not aware of various loan applications made to the Bank nor aware of approval of those loans.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 They were all done by John Low.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She did not sign the Memorandum or Articles of Association when Charcoal Chicken Limited was incorporated. \par \par She recalled going to the offices of Khan & Company solicitors.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She was taken there by John Low who asked her to sign certain papers.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She did not know what those documents were nor did anyone explain their effect to her. \par \par She admitted that the signature on the guarantee dated 17th August 1998 is hers but she did not know that she was signing a guarantee.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She admitted signing the debenture and bill of Sale on the same date but again said no one explained her the contents.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She further admitted executing particulars of charges but no one told her what they were.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She said she had no independent legal advice. \par \par In cross-examination she said she was a housewife and educated to Form 4.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She trusted John Low.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She did not know why she signed the Business Registration form.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 All she knew it was for business and to enable her to come back into something on her return to Fiji.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She sent money to John Low for operations of business.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She did not know what he did with the money.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She allowed John Low to run the business on her behalf. \par \par She admitted signing the power of attorney and reading and understanding it. \par \par At Khan & Co. she was asked to execute some documents.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She said she did not know what a mortgage was.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She signed because John Low asked her to sign.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She does not understand what is a guarantee. \par \par PW2 ARTHUR LORD is the brother of Ms Hewitt.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He assisted his sister in carrying out investigation about the business.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He went to Bank asking for information.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank still did not give him information.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 His sister did not know that her house had been mortgaged. \par \par DW1 ZAHIRU DIN is employed by the Bank and is in charge of credit department.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He gave history of transactions between Charcoal Chicken and the defendant\rquote s Bank.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He said the Bank had sighted the power of attorney.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He said Ms Hewitt had given liens to the Bank over her term deposit.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The liens were signed by John Low.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The mortgage had been prepared by the Bank\rquote s solicitors.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 In the application for loans John Low had signed on his own behalf and as power of attorney holder. \par \par The final increase was given in August 1999 to the company.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 John Low had made the application.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The security documents were prepared by Bank\rquote s solicitors Messrs Khan & Co.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The security documents were tendered as exhibits. \par \par Under normal circumstances the Bank sends monthly statement of accounts to the customer at the end of each month unless the statement gets full earlier.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Charcoal Chicken fell behind in payments and the Bank wrote to it about the arrears.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The arrears were not paid. \par \par Accordingly the term deposits were appropriated on 29th September 2000 to reduce liability on the overdraft account.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The appropriated amount also includes interest due on term deposits.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The appropriation did not clear the debt so a writ was issued. \par \par The Bank had sent demand notices to John Low, Charcoal Chicken and Ms Hewitt. \par \par Ms Hewitt had visited the Bank after the appropriation of the term deposits.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She was informed that the Bank had the right to encash the term deposits. \par \par He said Ms Hewitt had arranged insurance on her property and Bank\rquote s name is shown on the policy. \par \par In cross-examination he said he came to Fiji from Pakistan on 24th September 2001.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 His testimony is based on the records.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He could not say who processed the loan or circumstances leading to the loans. \par \par He has not seen any deed of partnership regarding Charcoal Chicken on the Bank\rquote s file but it has registration certificate.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He could not say when the Bank obtained the registration certificate. \par \par The Bank had no signature of Ms Hewitt as signatory to the account but only of John Low as Power of Attorney holder.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank did not have Ms Hewitt\rquote s signature itself.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He had no knowledge if Ms Hewitt was contacted before approval of loan. \par \par He could not find any record of assets and liabilities of Charcoal Chicken Ltd in the Bank\rquote s file. \par \par There is a Westpac Bank cheque for $30,000.00 payable to Merchant Bank which has been deposited into the overdraft account.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It is dated 28th September 1999. \par \par Ms Hewitt was recalled by consent of parties.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She said she bought the house in 1987.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She bought it cash and had not insured the house till today.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She made no application to insure the house or the vehicles. \par \par In cross-examination she said her husband bought the house for her.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The commencement date shown an insurance policy as 5th August 1999 and she was in Fiji then.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Vehicle DO 402 is with her.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Her husband had given $30,000.00 to John Low for the vehicle.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The cheque was made to Merchant Bank. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 NON EST FACTUM: \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11630704 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 I shall deal with the issue of non est factum first.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Non est factum is commonly pleaded in situations where it is sought to invoke the equitable jurisdiction to set aside a transaction on grounds that it was an unconscionable bargain.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 However non est factum is a common law rule and generally applies to \endash \par \par }\pard \ql \li720\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid11630704 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \'93comparatively rare class in which a man\rquote s faculties whether from age or natural infirmity or drink or any other cause, are so defective that he really does not know what he is doing \endash that his mind does not go with the deed.}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 In such a case his instrument is void even at law \endash non est factum\'94}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 .}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Blomley v. Ryan}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 (1954) 99 CLR 362 at p. 401 Fullager J. \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par }\pard\plain \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 \f1\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Because non est factum renders a contract void, third parties cannot derive any rights under it.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt alleges that she was acting on advice of John Low who told her that she had to sign certain business documents and that the solicitors told her nothing and she was not explained the contents of the documents.}{ \f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 In short she did not know what the documents were. \par }\pard\plain \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid11630704 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 On 17th August 1999 she signed not only one document but a series of documents with initials too.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 These were a debenture with an accompanying charge certificate, two bills of sale with accompanying charge certificates; a personal guarantee, a mortgage and a resolution of Board of Directors to obtain loan and to give securities. \par \par When Ms Hewitt commenced her examination in chief, it was a plea in ignorance not knowing how many accounts she had at the Bank; how much money she had or who deposited the money in her name.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 However, she produced two term deposit slips.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She tried to distance herself from the business of Charcoal Chicken saying she had nothing to do with the operations of the business. \par \par In cross-examination it transpired though with great deal of reluctance on her part that she was aware of the partnership business and it wa s set up for her to return to something financially viable after her husband and she returned to Fiji from Papua New Guinea.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It was a platform for future financial security.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She was sending money from Papua New Guinea for the operations of the business to ensure that she had something tangible to come back to.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 John Low was the person in charge.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He may have had the technical know how.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Partners very often complement each other \endash one a financial source and the other the brain.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Sleeping partners are not an unusual phenomenon. \par \par She trusted John Low.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She let John Low run the show.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She must have considered that what John Low did was for their mutual benefit.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She after all had half interest in both the partnership and the company. \par \par I do not believe that Ms Hewitt was totally ignorant of the nature of documents she was signing.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She had signed a power of attorney in Papua New Guinea which she said she read herself and understood.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She was shown the guarantee during cross-examination and she conceded that the lawyer might have explained but she did not understand.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She admits therefore that the solicitor witnessing the documents was present; the plaintiff may be a puppet on a string of John Low but there is no suggestion that the solicitor too was being dictated to by John Low.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 I find that the documents were signed by Ms Hewitt after they were explained to her and she knew they related to the business of Charcoal Chicken Limited in which she had a vested interest.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 This is not a case of non est factum. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 PARTNERSHIP: \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11630704 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The plaintiff submits that in law there was no partnership between Ms Hewitt and John Low as the latter was solely running the business and he made all the decisions.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 I am of the view that a partnership business existed between Ms Hewitt and John Low. \par \par First, there is the documentary evidence under the Registration of Business Names Act (document 22) in defendant\rquote s bundle of documents.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt has signed on the form as an incoming partner.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She herself testified that she sent money to finance the business.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She co uld not have done this if she had no interest in the business.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She also wanted a business to return to once she returned from Fiji. \par \par As John Low was a partner, his acts done in the ordinary course of business of the partnership would bind the firm and Ms Hewitt \endash Section 6 of the Partnership Act.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The common law also takes the same view.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Alliance Bank v.}{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 }{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Kearsley}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 1871 LR 6 CP 433}{\fs24\lang2057\langfe1033\langnp2057\insrsid11630704 states the position as follows}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 : \par \par }\pard\plain \s16\ql \li720\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid11630704 \b\i\f1\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\i0\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \'93 The partner has authority to do what is usual in the ordinary course of business.}{\i0\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\i0\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It is establis hed that in trade partnerships one partner may borrow money for the partnership and will bind his co-partner by so doing..}{\i0\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\i0\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 That is held to be within an implied authority of a partner \'85\'94 \par }\pard\plain \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par The sums borrowed were for the purposes of Charcoal Chicken the partnership.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Mr. Valenitabua submits that Section 6 and 7 of the Partnership require express authority before an act binds other partners.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 This interpretation is impossible to sustain.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Section 6 says the firm is liable unless it can show that a partner had no a uthority to act and the person who is dealing with him knows he has no authority to act.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 There is no evidence that the Bank knew John Low had no authority to act on behalf of Charcoal Chicken to obtain advances.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt\rquote s pleadings do not suggest that either.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The onus is on Ms Hewitt to show on balance of probability that John Low had no authority to act for her.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt cannot now undo decisions already reached or contracts already entered into by John Low on behalf of the partnership. \par \par The account at the Bank was in the name of Charcoal Chicken.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The offer for advances was made to Charcoal Chicken.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt has not discharged that onus of proof cast on her. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 POWER OF ATTORNEY: \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11630704 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Powers of attorney vary infinitely.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 There is no standard form.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Powers of attorney are construed strictly \endash }{ \fs24\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Bryant, Powis and Bryant Ltd. v. La Banque du}{\fs24\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 }{ \fs24\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Peuple}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 [1893] AC 170.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The authority conferred by the power of attorney must be strictly followed.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 If the donee of power acts beyond the scope of his powers, the third party will not be able to make the donor of power liable. \par \par Ms Hewitt asserts that she had given power of attorney to John Low for the purpose of collecting rent and looking after the residential property.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The power of attorney does not say that.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 There is no mention of 12 Woodward Place in the deed.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It is a general power of attorney with a clause saying that the }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \'93foregoing powers are}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 to be construed not strictly but in their widest sense\'94}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The power of attorney contradicts her assertions. \par \par A power of attorney is given to the donee so he can act on behalf of the donor.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It is not what the donor intended but what is expressed in the deed that is material.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It is on the strength of the power of attorney that third parties transact business with the donee.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank was quite entitled to act on the basis of the power of attorney and recognize John Low as such.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 This power of attorney gave John Low powers to }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \'93manage carry on and superintend any business in undertaking}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 which I may carry \'85\'94}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 [Clause 10]. \par \par The Bank acted on the basis of the power of attorney and advanced moneys to the partnership.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 John Low had express authority to act on her behalf to borrow money.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank would be prejudiced if Ms Hewitt were able to circumvent the financial obligations created by John Low.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It would be absurd to allow the plaintiff to renege from her obligations simply because the person she trusted to act in her interests let her down. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 FIDUCIARY DUTY/INDEPENDENT LEGAL ADVICE: \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11630704 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Mr. Valenitabua submitted that the Bank breached its fiduciary duty to M s Hewitt because the term deposits were in her personal name, the mortgaged property was hers and the debt was somebody else\rquote s.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He submits that she had not signed the Memorandum or Articles of Association or the Application for advances.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The debt was increasing.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 He says the Bank ought to have been put on enquiry and sought clarifications from Ms Hewitt. \par \par Ms Narayan submitted that the Bank acted bona fides and without negligence.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank knew that Ms Hewitt was a partner in the business and loans were to the business.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 John Low she said had clear authority under the power of attorney and the Bank need to go no further.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 There was no evidence to suggest that John Low was misappropriating the funds for his own use. \par \par There is no general rule on a banker to disclose everything within a bank\rquote s knowledge which is material to the formation of a judgment as to whether it is prudent to enter into a guarantee.}{\fs24\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \fs24\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Lord Campbell in Hamilton v. Watson}{\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 8 ER 1339 at 1343, said: \par \par }\pard\plain \s16\ql \li720\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid11630704 \b\i\f1\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\i0\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \'93 if there were such a rule, it would be indispensa bly necessary for the bankers to whom the security is to be given, to state how the account is being kept, whether the debtor was in the habit of overdrawing; whether he was punctual in his dealings; whether he performed his promises in an honourable mann er;}{\i0\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\i0\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 for all these things are extremely material for the surety to know.}{ \i0\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\i0\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 But unless questions be particularly put by the surety to gain this information, I hold that it is quite unnecessary for the creditor to whom the suretyship is to be given to make any such disclosure.\'94 \par }\pard\plain \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11630704 \par }\pard\plain \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 \f1\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 A contract of guarantee is not a contract of utmost good faith like insurance and therefore the creditor would be under no general duty to disclose material facts which would influence the mind of a prospective surety or guarantee in deci ding whether to undertake the liability \endash }{\f0\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Behan v. Obelon Pty Ltd}{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 . 1984 NSWLR 637 at 639. \par \par In the present case Ms Hewitt had more than a nominal interest in the borrower }{\f0\ul\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Charcoal Chicken Ltd.}{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 and the Bank could safely presume that she would have received benefit from the advances made by the Bank.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The transactions therefore on their face appear to be of some financial advantage to Ms Hewitt.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It is not a transaction from which she derived no financial advantage.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 She was a shareholder in the company.}{ \f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It was money which was advanced for Ms Hewitt\rquote s and John Low\rquote s joint purposes and enterprise and not to him alone.}{ \f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It is not the usual case of a guarantor receiving no financial benefit. \par \par Further the Bank could also consider the nature of the relationship between John Low and Ms Hewitt.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 It was a commercial relationship and the Bank could fairly conclude that the surety was capable of looking after herself and capable of understanding the extent of risks involved in giving the guarantee and the mortgage.}{ \f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 If the rela tionship between debtor and surety was non commercial like husband and wife then the Bank would be put on enquiry as to undue influence and need for independent legal advice imperative.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{ \f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The circumstances in the present case do not require the Bank to advise Ms Hewitt of the need for independent legal advice. \par \par I conclude therefore that Ms Hewitt had financial stake in the business of Charcoal Chicken.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 As such she could be expected by the Bank to derive benefits from the loans it was making to the entity.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank was not duty bound to investigate how John Low applied the funds.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Ms Hewitt cannot now extricate herself from the arrangements and contracts put in place by her holder of Power of Attorney from her and who was also her partner. \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11630704 \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 Accordingly, I dismiss her claim in civil action 535 of 2000 against the Bank. \par \par The civil action 175 of 2001 is a claim by the Bank against the Charcoal Chicken Limited and Ms Hewitt for $215,238.02 being amount due as at 18th April 2001 and interest at $82.56 per day from 18th April 2001. \par \par Ms Hewitt\rquote s claim having effectively been disposed off, she is left with no defence in this action.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 The Bank statements have been filed in this action.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 No issue is taken as to the accuracy of accounts.}{ \f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 There is already a default judgment entered against John Low. \par \par I find that Ms Hewitt and Charcoal Chicken Limited do owe the Bank the sum of $215,238.02 and interest as prayed. \par \par Accordingly I enter judgment for the sum of $215,238.02.}{\f0\lang2057\langfe1033\langnp2057\insrsid15366735 }{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 There shall be interest allowed on the said sum at the rate of $82.56 from 8th April 2001 to the date of judgment after which the interest shall be at the rate of four percent per annum. \par \par }{\f0\lang2057\langfe1033\langnp2057\insrsid11630704 The final orders therefore are}{\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 : \par \par {\pntext\pard\plain\s15 \lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \hich\af0\dbch\af0\loch\f0 (1)\tab}}\pard \s15\ql \fi-720\li1440\ri0\widctlpar{\*\pn \pnlvlbody\ilvl0\ls2\pnrnot0\pndec\pnstart1\pnindent360\pnsp120\pnhang {\pntxtb (}{\pntxta )}}\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1440\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 that plaintiff\rquote s claim against the Bank in civil action 535 of 2000 is dismissed with costs to be taxed if not agreed. \par }\pard \s15\ql \li0\ri0\widctlpar{\*\pn \pnlvlcont\ilvl0\ls0\pnrnot0\pndec }\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par {\pntext\pard\plain\s15 \lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \hich\af0\dbch\af0\loch\f0 (2)\tab}}\pard \s15\ql \fi-720\li1440\ri0\widctlpar{\*\pn \pnlvlbody\ilvl0\ls2\pnrnot0\pndec\pnstart1\pnindent360\pnsp120\pnhang {\pntxtb (}{\pntxta )}}\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1440\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 that the order made by Justice Byrne on 2nd July 2001 that the legal and equitable effects of all security documents signed by Ms Hewitt be suspended is now vacated. \par }\pard \s15\ql \li0\ri0\widctlpar{\*\pn \pnlvlcont\ilvl0\ls0\pnrnot0\pndec }\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par {\pntext\pard\plain\s15 \lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \hich\af0\dbch\af0\loch\f0 (3)\tab}}\pard \s15\ql \fi-720\li1440\ri0\widctlpar{\*\pn \pnlvlbody\ilvl0\ls2\pnrnot0\pndec\pnstart1\pnindent360\pnsp120\pnhang {\pntxtb (}{\pntxta )}}\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1440\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 that there shall be a judgment for the Bank in Civil Action 175 of 2001 against Ms Hewitt and Charcoal Chicken Limited jointly and severally in the sum of $215,238.02 together with interest at the rate of $82.56 per day as from 8th April 2001 to date of judgment. \par }\pard \s15\ql \li0\ri0\widctlpar{\*\pn \pnlvlcont\ilvl0\ls0\pnrnot0\pndec }\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par {\pntext\pard\plain\s15 \lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \hich\af0\dbch\af0\loch\f0 (4)\tab}}\pard \s15\ql \fi-720\li1440\ri0\widctlpar{\*\pn \pnlvlbody\ilvl0\ls2\pnrnot0\pndec\pnstart1\pnindent360\pnsp120\pnhang {\pntxtb (}{\pntxta )}}\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1440\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 further interest shall accrue at the rate of four perce nt per annum on the judgment sum. \par }\pard \s15\ql \li0\ri0\widctlpar{\*\pn \pnlvlcont\ilvl0\ls0\pnrnot0\pndec }\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par {\pntext\pard\plain\s15 \lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \hich\af0\dbch\af0\loch\f0 (5)\tab}}\pard \s15\ql \fi-720\li1440\ri0\widctlpar{\*\pn \pnlvlbody\ilvl0\ls2\pnrnot0\pndec\pnstart1\pnindent360\pnsp120\pnhang {\pntxtb (}{\pntxta )}}\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1440\itap0\pararsid11630704 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 That Ms Hewitt and Charcoal Chicken Limited shall pay costs of civil action 175 of 2001 to be taxed if not agreed. \par }\pard \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par }\pard \s15\qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11273328 {\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid11273328 [ Jiten Singh ] \par JUDGE \par }\pard \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15366735 {\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par At Suva \par 30th January 2004}{\b\f0\lang2057\langfe1033\langnp2057\insrsid11273328\charrsid15366735 \par }}