Foote v Rolls [1983] CKHC 15; Plaint 16.1982 (5 December 1983)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
(CIVIL DIVISION)

PLAINT NO.16/82

BETWEEN

R.T. FOOTE
Plaintiff

AND

J.E. ROLLS
First Defendant

AND

HIBISCUS HOUSE LIMITED
Second Defendant

AND

K.J. ROLLS
Third Defendant

Dates of hearing: 14th May, 30 & 31 May 1983
1, 2, 3, & 4 June 1983
19 August 1983

Counsel: MacFadzien for Plaintiff
Arnold for defendants

Date of Judgment: 5 December 1983

DECISION OF SPEIGHT C.J.

Since the interim judgment of the 9th August last and the further interim judgment of the 26th August, counsel have, as I requested, given further consideration to the items raised and have put in written submissions. I have considered these - both the material submitted by Mr MacFadzien together with some supporting schedules prepared by Mr Foote and submission prepared in reply by Mr Arnold. I have also received verbal submissions and explanations in support of the written matter. Since then I have gone through the evidence and the various vouchers and have allowed and disallowed various items according as the evidence appears to me to support the payments made or otherwise. Before these are listed I think I should make some reference to different groupings:-

1. There were certain items challenged on page 4 of Mr Arnold's submission on the ground that were incurred prior to 7th June 1981 when arrangements were made for Mr Foote to advance money for equipment and for work. Of itself, the fact that the items had already been purchased or the money spent would not disqualify them from being claimed, if it was impliedly agreed in June that material already in hand be applied in the new business. For example, there was a typewriter and a dishwasher totalling over $300.00 bought at an auction, and if these were then taken over by Hibiscus House they would have to be paid for. But it appears that these articles either never went to Hibiscus House, or if they did they have finished up in Mr Foote's place. So they are disallowed but only for that reason. Two very substantial articles were the gas stove and the refrigerator bought in early 1981 and the freight for them. These were brought from the States by Mr Foote and taken to Hibiscus House and had they been suitable and utilised then he would have a claim for them. But the evidence is that they are not suitable for use with the gas/and power which is available here in Rarotonga and consequently have not been accepted into Hibiscus House equipment. Even though they are at the premises they have not been adopted by the/company. Therefore Mr Foote may remove them if he wishes. There are a few minor items such as petrol, car cleaning and the meal at the Jade prior to 6th July but those cannot be treated as incorporation expenses and are disallowed.

2. In the next category there are some items which Mr Arnold disputed amongst the invoices for painting and similar work done at Hibiscus House but I have allowed these as fairly chargeable where the invoices appear genuine. There are other items however which are ambiguous - groceries and the like from Moneysaver and I am not satisfied that these are proved as properly charged to the restaurant - they could as easily be for home consumption.

3. Then there are some further items of substance such as the stereo, the food blender, a toaster oven and a micro wave oven which have now finished up in Mr Foote's place, even though they may have initially been purchased for the restaurant. They are disallowed. In this category there are some tools most of which have been allowed in the accounts but one or two seem to have returned to Mr Foote - a Black and Decker sander and a drill.

4. The major item was an account for $1,139.93 for meat purchase from Hawaii. It is true that this was not released from customs until 30th July which is the day after business opened, but it was obviously ordered and consigned from Hawaii and therefore the debt was incurred prior to that date. On the question of date therefore it is allowable but the question arises - who paid for it? It was purchased by the South Seas Enterprises Limited (Hawaiian Company) which I have ruled was owned equally by the parties. Because of this I have ordered Mr Rolls to pay U.S. $500. That being so the meat was purchased by the company which was owned equally between the two parties and obviously ordered for and consumed by the restaurant. That being so Hibiscus House Limited must pay half the price of the meat which it received, to Mr Foote.

5. In schedules C, D, E and F most of the expenditures are incurred after 29th July but there are four items prior to that date. They are C5/3, C6/1, C11/1, C12/1. I have also given consideration to items claimed in para. 6/1, 6/2 and 6/3 of Mr MacFadzien's submissions. On 6/1, I do not accept that the expenses to Hawaii were agreed as being in the business interests until some date after the crucial cut off time. There is no satisfactory evidence that it was agreed to earlier. As to item 6/2, bank charges, if Mr Foote was forced to pay interest on overdraft in respect of the bits and pieces money that would be chargeable but examination of this bank statements does not reveal any significant overdraft charges for this period. A few dollars in September, spread over the July-September period. In respect of item 6/3, I have already ruled against the claim for wages for reasons set out in some detail. Here is a schedule of bits and pieces claims with my decisions.

BITS AND PIECES INCURRED AND DELIVERED TO THE COMPANY BETWEEN 7TH JUNE 1981 – 29th JULY 1981
CODE NO.	DATE	DETAILS	AMT.	ALLOW	DISALLOW
A03/03	10.6.81	File, Rake etc	14.15	14.15
A03/04	12.6.81	Kikau broom	2.50	2.50
A05/01	15.6.81	Rake	13.00	13.00
A05/02	16.6.81	Bolts	2.40	2.40
A06/01	16.6.81	Cleaning supplies	20.75	20.75
A06/03	18.6.81	Drawing materials	4.20	4.20
A09/03	30.6.81	Painters wages	128.20	98.20	30.00
A10/02	3.7.81	Toilet paper	2.00	2.00
A10/04	6.7.81	Rubbish removal	36.00	36.00
A11/01	8.7.81	Saw, nails	21.25	2.35	18.90
A11/02	8.7.81	Polyfiller	55	55
A11/03	9.7.81	Rubbish	5.00	5.00
A12/01	9.7.81	Sandpaper	1.50	1.50
A12/02	9.7.81	Timber	10.73	10.73
A13/02	9.7.81	Office supplies	9.00	9.44
A13/03	11.7.81	Polyfiller	1.10	1.10
A13/04	13.7.81	Cotton	3.60	3.60
A14/01	13.7.81	Varnish	2.25	2.25
A14/03	13.7.81	Timber	80.48	80.48
A15/01	13.7.81	Sander, plane	105.85	13.70	90.20
A15/02	13.7.81	Building supplies	4.02	4.02
A16/01	14.7.81	Mastic gun	18.80	18.80
A16/02	14.7.81	Primer etc	8.40		8.40
A16/03	14.7.81	Drill etc.	173.25	22.00	151.25
A17/01	14.7.81	Sanding disc etc	25.23	25.23
A17/02	14.7.81	Screws etc	7.00		7.00
A17/03	15.7.81	Timber	56.46	56.46
A18/01	15.7.81	Sanding Discs	20.60	20.60
A18/02	16.7.81	Sealant	4.43	4.43
A18/03	16.7.81	Metal Plates	7.00	7.00
A19/01	16.7.81	Brush	7.55	7.55
A19/04	17.7.81	Water hose	35.75	35.75
A20/01	17.7.81	Sugar soap	1.35	1.35
A20/03	18.7.81	File	3.65	3.65
A20/04	20.7.81	Sanding discs	7.95	7.95
B01/01	20.7.81	Paint brushes	26.60	26.60
B01/02	20.7.81	Hose fittings	18.24	18.24
B01/03	20.7.81	Drill bits	19.30	19.30
B01/04	20.7.81	Drill brush	9.40	9.40
B02/01	20.7.81	Cleaning supplies	37.32	37.32
B02/02	20.7.81	Advertising	7.40	7.40
B02/03	20.7.81	Signs	83.69	83.69
B03/01	21.7.81	Broom and Pan	8.55	8.55
B03/02	21.7.81	Gloves	17.30	17.30
B03/03	22.7.81	Sanding pads	6.75	6.75
B04/01	22.7.81	Toilet goods	63.30	63.30
B04/02	22.7.81	Toilet holders	23.24	23.24
B05/01	22.7.81	Glass	207.74	207.74
B05/02	23.7.81	Pins, Screws	2.25	2.25
B06/01	23.7.81	Drill pits	15.90	15.90
B06/03	23.7.81	Food	375.62	375.62
B07/01	23.7.81	Laundry	21.85	21.85
B07/02	24.7.81	Stereo	260.00		260.00
B07/02	28.7.81	Kitchen equipment	240.00		240.00
B08/01	24.7.81	Microwave oven	512.00		512.00
B08/02	24.7.81	Hinges	99	99
B08/03	24.7.81	Laundry	66.69	66.69
B09/01	26.7.81	Cleaning equipment	182.53		182.53
B09/02	26.7.81	Gas stove	553.73		553.73
B09/03	26.7.81	Fridge	1031.83		1031.83
B09/04	26.7.81	Toaster	71.66		71.66
B09/05	8.4.81	Customs	78.28		78.28
B10/01	26.7.81	Kitchenware	180.55		180.55
B10/02	4.2.81	Frieght/Raro	778.63		778.63
B11/01	27.7.81	Paint etc	28.89	28.89
B11/02	27.7.81	Glass	10.89	10.89
B12/01	27.7.81	Saw blades	11.20	11.20
B12/02	27.7.81	Rubber discs	3.40	3.40
B12/03	27.7.81	Cash	300.00	300.00
B13/01	27.7.81	Food	721.89	721.89
B13/02	27.7.81	Food	40.11		40.11
B14/01	27.7.81	Laundry	3.50	3.50
B14/02	27.7.81	Juice	40.00	40.00
B15/01	27.7.81	Staff wages	182.77	182.77
B15/02	27.7.81	Wages	51.60	51.60
B16/01	30.8.81	Meat	1139.93	569.97
B16/02	27.7.81	Telephone	7.50		7.50
B17/01	28.7.81	Kitchen Equipment	122.54	122.54
B17/02	28.7.81	Bolts	31.20	31.20
B17/03	28.7.81	Fish	16.50	16.50
B18/01	28.7.81	Kitchen equipment	30.05	30.05
B18/02	28.7.81	Painters	525.00	525.00
B19/01	28.7.81	Display case	454.81	454.81
B19/02	28.7.81	Paint	5.79	5.79
B19/02	28.7.81	Food	1.98	1.98
B20/01	28.7.81	Food	5.91	5.91
B20/02	28.7.81	Cigarettes	26.97		26.97
		Cable Wireless	202.95	202.95
		Cook Is. Gas	166.00	166.00
			5,037.66

LIVING EXPENSES INCURRED BETWEEN 7TH JUNE-29TH JULY 1981
CODE NO.	DATE	DETAILS	AMT.	ALLOW	DISALLOW
A03/02	9.6.81	Petrol	12.92	12.92
A04/01	12.6.81	Cleaners wage	20.00	20.00
A04/02	13.6.81	Cleaner wage	42.00	10.00	32.00
A06/02	17.6.81	Cleaner wage	36.00	36.00
A07/01	20.6.81	Petrol	20.00	20.00
A07/02	21.6.81	Cleaners	7.00	7.00
A07/03	22.6.81	Immigration fees	35.00	35.00
A07/04	22.6.81	Petrol	12.36	12.36
A08/01	25.6.81	Cleaners	23.00	23.00
A08/02	27.6.81	Petrol	17.64	17.64
A09/01	29.6.81	Cleaner	4.50	4.50
A09/02	29.6.81	Mower hire	2.50	2.50
A10/02	30.6.81	Dinner	26.10	26.10
A10/03	3.7.81	Petrol	17.79	17.79
A13/01	8.7.81	Petrol	17.64	17.64
A14/02	13.7.81	Petrol	22.67	22.67
A19/02	16.7.81	Dinner	24.60	24.60
A19/03	17.7.81	Petrol	15.60	15.60
A20/02	17.7.81	Cigarettes	1.52	1.52
B06/02	23.7.81	Petrol	18.54	18.54
B14/03	27.7.81	Dinner	33. 45	33.45
		Private power	156.39	156.39
				535.22	32.00

Hence Judgment is as follows:

		N.Z. $
1.	Advances of $16,500 repayable upon demand	16,500.00
2.	Living allowances and expenditure Laundry, petrol, E.P.S. as incurred between 7th June 1981 to 29 July 1981	535.22
3.	Bits and pieces incurred and delivered to the Company between the 7th June 1981 and 29 July 1981	5,037.66
4.	U.S. Company share of equity U.S. $500 say	780.00
	Sub total	22,852.88
5.	Deduct funds already uplifted by R.T. Foote as agreed	1,078.66
	Total	21,774.22
6.	Interest @ 8% for the period of 18.3.82 to 18.11.83 (20 mths)	2,911,18
	Judgement	24,685.40
7.	Costs @ 6% of judgement	1,481.12
	Judgment of costs	$26,166.52

On the basis that the three defendants are participating with a common interest a Judgment could be entered against them jointly for $26,166.52 made up as above. However if it is of significance it could be divided up with different amounts to different defendants i.e., $16500 against Mrs Rolls, $780 against Mr Rolls and the balance against Hibiscus House Limited. I invite counsel to confer if they wish separate judgment to be entered against each.

Chief Justice