Development Bank of Kiribati v Bainrebu - Judgment [2006] KIHC 160; 72-05 (10 October 2006)

IN THE HIGH COURT OF KIRIBATI
Civil Jurisdiction
Held at Betio
Republic of Kiribati

High Court Civil Case No. 72 of 2005

Between:

DEVELOPMENT BANK OF KIRIBATI
Plaintiff

And:

RUATARA BAINREBU
1st Defendant

BAINREBU URIAM
2nd Defendant

BANK OF KIRIBATI LTD
Third Party

For the Defendants: Ms Botika Maitinnara
For the Third Party: Mr Tekanene Birimaka

Date of Hearing: 10 October 2006

JUDGMENT

The Development Bank of Kiribati sued the defendants for $9,369.96 plus interest being the balance outstanding on a loan. On 6 September, by consent, I entered judgment for the plaintiff for $10,511 inclusive of interest and costs.

The defendants had by then taken third party proceedings against the Bank of Kiribati claiming an agreement that the BOK would make deductions of $200 each month from the account in the name of the second defendant, Bainrebu Uriam, in favour of the DBK, to satisfy the defendants’ indebtedness to the DBK. An allotment of about $900 per month from a seaman was to be credited to the account. They have sued the BOK for $10,511 alleging breach of agreement because the $200 per month has not been debited and paid to the DBK. The defence of the BOK is that the deductions in favour of the DBK could be made from Bainrebu’s account only if the account were sufficiently in credit: there must have been in the account at least $201 (the debit of $200 in favour of the DBK plus $1 bank commission) before a debit would be made.

It is difficult to see what cause of action, if any, the defendants have against the third party.

It seems that the BOK had agreed to make monthly payments to the DBK by debiting Bainrebu’s account. Apart from that, no agreement between the parties was proved, let alone an agreement under which the BOK was to make a debit whether Bainrebu’s account were sufficiently in funds or not.

Bainrebu’s statement of account from January 2000 was proved by Nei Bubunrenga Anterea, Sales and Marketing Officer of the BOK. The statement shews that on the 21st of any month (the day on which debits were made) there were sufficient funds to cover the debit from the account only on a few occasions. By the 21st of most months withdrawals had been made running the account balance down below $201. Therefore the debit was not made.

Ms Maitinnara argued that nevertheless the debits in favour of the DBK should have been made at a time in the month when there were sufficient funds in the account. Perhaps so, but her clients were no worse off because the debits were not made. Whether the debit was made or not they had the benefit of whatever funds were in the account. If they chose to make withdrawals so that there was not sufficient left for the debit in favour of the DBK the defendants had had the benefit of the money in ways convenient to them. If they left sufficient in the account for the BOK to make the debit the defendants in that way had the benefit of the money by reducing their debt to the DBK.

If Ms Maitinnara’s argument were to succeed and the BOK should have made the debit anyway then her clients would have had the benefit of the money twice over: the BOK would have been paying off the debt to the DBK for them out of its own money. If there were now to be judgment for the defendants against the Third Party then their loan would be paid off for them without their having contributed anything. That does not make sense.

The claim of the defendants against the third party fails. There will be judgment for the third party, the Bank of Kiribati, against the defendants on the third party notice.

Dated the day of October 2006

THE HON ROBIN MILLHOUSE QC
Chief Justice