The High Court in Suva has delivered a significant ruling in favor of K Naidu Investment Proprietary Limited, a company based in Labasa, which will receive over $1.4 million in damages due to the unlawful seizure and sale of 13 vehicles and machines by Merchant Finance & Investment Company Limited. Justice Vishwa Datt Sharma, who oversaw the case, stated that Merchant Finance acted with “contumelious disregard” for the plaintiff’s rights by seizing more assets than allowed and failing to issue a lawful demand notice before enforcement actions were taken.
The court’s decision, issued on October 2, highlights the legal safeguards available for businesses to protect their properties. K Naidu Investment had taken out a loan of $744,416.54 from Merchant Finance by means of a Bill of Sale but struggled to meet repayment obligations after catastrophic flooding in Labasa in 2008 disrupted its operations. Despite efforts to renegotiate the loan terms, Merchant Finance proceeded unilaterally, repossessing and auctioning 13 assets—eight more than permitted—without allowing K Naidu Investment to remedy the situation first.
The High Court deemed the seizure of assets as both premature and unlawful, leading to a detailed breakdown of the damages awarded to K Naidu Investment: $322,430 for conversion, $150,000 under the Fair Trading Decree, $190,000 for breach of contract, $50,000 in exemplary damages, $60,000 for humiliation and distress, and $600,000 for loss of future profits, in addition to $50,000 in indemnity costs plus accrued interest since 2009. The court also completely rejected the counterclaim presented by Merchant Finance & Investment.
This ruling not only emphasizes the judiciary’s role in holding financial institutions accountable but also reaffirms the necessity for lawful conduct in asset management and recovery practices. The outcome sends a constructive message regarding the legal protections accessible to businesses, particularly those grappling with challenges due to unforeseen events. This case could potentially set a precedent, encouraging others who feel wronged by financial mismanagement or violations of rights to pursue justice.