1. In or about May 1971 the Second Plaintiff entered into a contract with the Third Defendant, a limited liability company jointly
owned by the Second Plaintiff and Ernst Gunter Eggers one of the First Defendants, for the construction of a steel hull or a yacht
at a cost of $15,000.00.
2. The said contract was for labour only, with the Second Plaintiff providing and/or paying for all materials required.
3. The said steel hull was constructed in a shed owned by the Second Plaintiff on land adjacent to the Tamavua River at Lami leased
by the Second Plaintiff from the Director of Lands.
4. The Third Defendant commenced construction of the said steel hull on or about November 1972 and ceased work on the construction
of the said hull on or about November 1974.
5. Since November 1974 the Second Plaintiff has proceeded with the further construction of the yacht of which the said steel hull
forms a part.
6. To date the Second Plaintiff has paid to the Third Defendant the sum of $31,773.69 or thereabouts being the contract sum of $15,000
together with sums for materials and extras.
7. At all material times the Second Plaintiff was the owner and in possession of the said steel hull.
8. By an agreement in writing dated the 30th day of July 1976 the Second Plaintiff sold the said yacht to the First Plaintiff and
it was a term of the said agreement that property in the said yacht immediately passed to the First Plaintiff.
9. On or about the 3rd day of February 1976 the First Defendants herein issued Writs of Fieri Facias against the Third Defendant to
enforce judgments by default that they had obtained against the Third Defendant.
10. In execution of the said Writs of Fieri Facias and at the request and direction of the First Defendants, the Second Defendant
wrongfully took possession of the said yacht whereby the First Plaintiff or the Second Plaintiff has suffered loss and damage.
AND the First Plaintiff and the Second Plaintiffs claim-
(1) against the First, Second and Third Defendants
(a) a declaration that the said yacht is the property of the First Plaintiff or alternatively of the Second Plaintiff
(b) an injunction to prevent the sale of the said yacht
(2) against the First and Second Defendants the return of the said yacht and damages for its detention."
The first and third defendants (the second defendant being a nominal defendant in this case) deny any claim to ownership by either
of the plaintiffs and allege that the property in the said steel hull for a yacht is vested in the third defendant by reason of an
arrangement entered into between the third defendant and second plaintiff whereby the property in the said steel hull would remain
with the third defendant until its eventual sale to the second plaintiff on certain terms and conditions.
However, no evidence was called on behalf of the third defendant to support its contention in regard to the ownership of the yacht.
The Court was therefore left with only the evidence of the second plaintiff himself and one other material witness, Brian Donovan
(P.W.3) together with the documentary evidence from which to consider and resolve the dispute as to ownership of the yacht concerned.
The third defendant has also pleaded in addition a counterclaim against the second plaintiff and this states:
"2. THAT the Third Defendant Company says (in the alternative) that if this Honourable Court finds that the said Steel Hull or the incomplete
Vessel is the property of the Second Plaintiff, or that the contract to construct the vessel is unenforceable. The Third Defendant
Company is entitled to and claims the said sum of $46,471 (plus profit costs) or such sum as this Honourable Court thinks fit, based
on the 2nd Plaintiffs implied undertaking to pay tantum quantum meruit or reasonable sum for work done and material supplied for the construction of the said Steel Hull or the incomplete Vessel.
3. THAT the Third Defendant Company (in the alternative) says that the Second Plaintiff would be unjustly enriched to the extent of $46,471
or more if the Second Plaintiff is not called upon to pay the said moneys. The Third Defendant Company therefore claims from the
Second Plaintiff the said sum of $46.471 or more as this Honourable Court thinks fit.
4. THAT the Third Defendant Company says that the particulars of the amount charged and payments made by the Second Plaintiff appear in the
paper marked "All annexed hereto.
5. THAT the sum of $46,471 and profit costs are still due and owing.
WHEREFORE the Third Defendant Company claims against the Second Plaintiff:
(a) the said sum of $46,471 and profit costs or such sum as this Honourable Court thinks fit;
(b) further or other relief as this Honourable Court seems just;
(c) Costs."
The pleading of a counterclaim by the third defendant in this action has somewhat complicated the adjudication of the entire case
in as much as the counterclaim would by its very character be likely to embroil the Court in a laborious and lengthy inquiry regarding
costs and expenditure on the construction of the steel hull. However, following a suggestion from the Court both counsel agreed that
the issues raised by the counterclaim should be deferred to a subsequent hearing in order that the adjudication on the ownership
of the yacht may not be unduly or unnecessarily delayed. A consent order to that effect was therefore made. However, in view of the
conclusions to which I have been drawn in this judgment such a hearing may after all not be necessary.
From the evidence adduced before me in relation to the plaintiffs' action I find the following facts sufficiently proved:
(1) On or about the 19th January, 1971 the second plaintiff and the first defendant Ernst Gunter Eggers formed a company known as
Structural Steel (Pacific) Limited, the third defendant herein, in which each of them holds one share of $1.00 each and in which
the first defendant, Ernst Gunter Eggers, occupied the position of managing director and the second plaintiff an ordinary director.
(2) There are no other shareholders in the third defendant company.
(3) One of the objects of the third defendant company was "to build, equip, charter, purchase or otherwise acquire and maintain
ships, steamers, launches and vessels of every description and to convey, carry and transmit passengers, merchandise and goods therein
between such places as the company may from time to time determine."
(4) On the 29th April, 1971 the first defendant Ernst Gunter Eggers, wrote on behalf of the third defendant company to the second
plaintiff in these terms:-
"With reference to our last telephone call we herewith have pleasure in confirming our verbal quotation for the fabricating,
erecting and welding of one (1) only steel hull for centre board round bilge Yacht as per plans supplied by you.
It is understood that all material required should be supplied by you, whilst we shall be responsible for all machinery and equipment
necessary for the construction of this vessel, Our price as quoted is $15,000 Fijian.
Thank you for your verbal acceptance and to keep the Company's records in order would you kindly confirm your acceptance in writing."
(5) On the 11th May. 1971 the second plaintiff wrote back (Ex.3) in reply to (4) above in these terms:-
"In answer to your letter dated 29th April, 1971, I have pleasure in accepting your quotation of $15,000 Fijian for the building
in Suva, of a steel hull 94' O.A. as per my plan. I agree to supply all materials necessary for the construction.
We will have to get together on the details but I do not foresee any problems. Although the deckhouse is not shown in the body plan
I presume you have allowed for labour on this and the deck openings etc. I will of course be responsible for all woodwork. At the
moment I have an idea that I might like the deckhouse in alloy - should this involve additional work over and above that required
for steel we can adjust this accordingly.
It is understood that the steelwork will be finished to recognised yacht standards and although no time limit is expected priority
will be given to this work and it will proceed with all reasonable speed consistent with good workmanship."
(6) In or about November 1972 the third defendant company commenced work on the steel hull for the yacht in a shed on Crown land adjacent
to the Tamavua River.
(7) The steel and plating used for the construction of the steel hull were purchased from overseas by the second plaintiff.
(8) The shed in which construction work on the Steel hull was carried out by the third defendant company belonged to the second plaintiff
and the land on which work was done was leased to the second plaintiff.
(9) The second plaintiff has paid to the third defendant company for the construction of the steel hull upwards of $30,000 of which
$15,000 was for labour cost and the balance for materials and extras.
(10) The second plaintiff is a retired farmer and a trained scientist. His father who was wealthy left the bulk of his estate to him.
(11) Boat-building and yachting has been a long standing hobby with the second plaintiff who has in the past had several wooden and
two steel yachts built for his use.
(12) The second plaintiff had engaged naval architect, Brian Donovan, (P.W.3) of Auckland, New Zealand, to design the subject yacht
an well as to supervise the early stages of the work on the yacht.
(13) The third defendant company ceased construction work on the steel hull in November 1974 and since then the second plaintiff has
been working on the yacht on his own and in this connection expended quite a large amount of his own money.
The main submission put forward on behalf of the first and third defendants by their counsel is that the alleged labour contract between
the second plaintiff and the third defendant company whereby the latter would build a steel hull for a yacht for the second plaintiff
was void and unenforceable because of the essential elements for a valid contract were lacking. It is claimed that there was no proper
acceptance in the accepted legal sense of the offer made by the third defendant company as to create a valid contract between the
parties for the construction of a steel hull for a yacht as alleged by the second plaintiff. According to counsel the terms of the
purported acceptance of the offer by the second plaintiff merely amounted to a counter-offer and could not give a concluded valid
contract between the parties.
Whilst the argument against the existence of a valid contract may seem plausible enough I am afraid the proved facts could not support
such a contention. It seems to me fairly clear that the construction of the steel hull as actually performed by the third defendant
company between November 1972 and November 1974 presupposed an existing contractual arrangement between the parties concerned. In
my opinion such a contractual arrangement came into legal existence after the two letters referred to in (4) and (5) above were exchanged.
I am satisfied that the offer made by the third defendant company in its letter (Ex.1) for the construction of a steel hull for a
yacht in the terms therein was unequivocally accepted by the second plaintiff in his letter (Ex.3). I can find no grounds upon which
to hold that the letter (Ex.3) does not amount to an unequivocal acceptance by the second plaintiff of the terms of the letter (Ex.1).
In my view ample support for this conclusion is afforded by the subsequent conduct of the parties themselves which clearly confirmed
the existence of such a contract. The evidence shows that in accordance with their mutual agreement the third defendant company in
November 1972 proceeded to build a steel hull for the second plaintiff who for his part had to furnish $15.000 to meet the labour
cost and to purchase and supply the materials to be used for the construction of the steel hull. The particular relationship between
the parties with regard to the work on the yacht was such and was sufficiently clear as to leave no doubt as to whom was the dominant
and controlling party. I am quite satisfied that at all material times there has always been a clear understanding between the parties
that the steel hull concerned was being built for the second plaintiff as owner thereof and for nobody else. Indeed I feel the whole
tenor of the documentary evidence before me is consistent with this opinion. I am satisfied that a valid labour contract was concluded
by the parties and under which work on the steel hull was performed by the third defendant company for the second plaintiff between
November 1972 and November 1974. In these circumstances I am clearly of the opinion that the second plaintiff had at the relevant
period a superior and better claim to possession of the steel hull concerned than the third defendant company whose claim thereto
must be rejected. In my judgment the second plaintiff was in law the rightful owner of the yacht with all that such proprietorship
implies.
In the course of the trial counsel for the defendants asked the Court to inquire into and rule upon the validity of an alleged agreement
between the two plaintiffs (Ex.20) for the sale of the yacht and which counsel characterised as a sham and a fraud on the creditors
of the third defendant company. From the nature of the pleadings and the evidence led at the trial it is clear that such a course
would not be proper. The reason is simple. The Issue is not strictly or properly before the Court. Adjudication on the alleged sale
agreement could only arise if there was an existing dispute as to ownership of the yacht between the two plaintiffs. There is no
evidence of any such dispute. Apart from this there are serious procedural difficulties in the way of such adjudication.
From the foregoing and for the reasons I have given the plaintiffs are entitled to succeed in this action against the defendants.
It will be noted that the declaration sought in the statement of claim is in the alternative. However, from the nature of the case
proved it is only necessary for this Court to make a declaration In terms that as between the second plaintiff and the third defendant
company the yacht concerned was at all material times the property of the: second plaintiff.
As I have earlier indicated in view of the conclusions I have reached in this judgment it would now seem unnecessary for this Court
to go on at a subsequent hearing to adjudicate on the counterclaim. It would seem that my finding of the existence of a valid labour
contract concluded between the parties renders the counterclaim which is based on the doctrine of quantum meruit untenable and is
inconsistent with such finding.
The records show that the yacht was seized by the Sheriff of Fiji, the second defendant, by an order of this Court at the instigation
of the first defendants, the alleged creditors of the third defendant company and of course upon the assumption that the third defendant
company was the rightful owner of the yacht. This assumption has now been shown to be quite erroneous and untenable. The third defendant
company at no time as against the second plaintiff had any proprietary right or interest in the yacht. That being so, and under the
present circumstances a consequential order is called for and in the terms that the second defendant, the Sheriff of Fiji, release
forthwith the custody and control of the yacht and that the existing order previously made herein for seizure of the yacht is hereby
discharged.
It is noted that the first defendants have by separate actions obtained judgments in default of appearance against the third defendant
company for substantial sums, namely $34,695 and $26,000 respectively. The obtaining of these judgments must have been done through
the instrumentality of the first defendant, Ernst Gunter Eggers, and in such a way as to raise grave doubts about his bona fides
in those actions as well as in the present one. It is in evidence that he is the managing director of the third defendant company
which obviously could not without his consent and personal actions have entered an appearance to dispute the adverse claims thus
brought by the first defendants. The circumstances disclosed could not very well have endeared the first defendants to this Court.
In this connection and so far as the second plaintiff was concerned, though he was also a director of the third defendant company
I accept that he was not directly involved with the running of the company. He was merely a nominal or passive entity therein. I
also accept that the second plaintiff was not aware of the proceedings, which resulted in the Judgments by default being obtained
against the third defendant company until a long time afterwards.
The plaintiff's claim for damages for detention of the yacht is not supported by any of the evidence adduced in Court. Accordingly
this head of claim must fall and is dismissed.
The plaintiffs will have their costs of this action against the first defendants only, no costs being awarded against the second defendant
or third defendant company.
T.U. Tuivaga
JUDGE
Suva,
24th March, 1977.
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/fj/cases/FJSC/1977/13.html
