Polo v Koge [2003] PGDC 42; DC381 (19 September 2003)

DC381

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 1680 OF 2003

Jenny Polo
Complainant

V

Joseph Koge
Defendant

Port Moresby: D. Wakikura
2003: September 19

District Court Act Ch. No 40 - Summons upon Complaint - Repayment of money owing from sale of vehicle - Breach of a promise to pay under contract - Defendant found liable.

Law of Contract - Essential elements of a contract - Failure to comply with obligation under contract - Complainant entitle to a remedy.

Statutes
No statutes cited

Cases Cited
No cases cited.

Appearance
Complainant appears in person. Defendant appears in person.

September 19, 2003

DECISION

D.Wakikura: This matter came before me as a complaint by Jenny Polo as the complainant against Joseph Koge as the defendant for monies owing which were allegedly made for a vehicle. The complainant paid a sum of K1,000.00 for the defendant's vehicle sold to her by a mechanic and a relative of the defendant. The complainant is basically seeking a repayment as the defendant as the owner repossessed the vehicle saying that the vehicle was sold without his 'consent. In essence this complainant is for a breach of an undertaking that the defendant made to the complainant to repay the money owing within a specific time.

The complaint was pleaded in the following manner as addressed to the defendant; "You are indebted to the complainant in the sum of K1,000.00 which you have promised to repay to the complainant but failed to repay the said amount in full. Therefore the complainant is seeking court to order the defendant to pay the said complainant said amount in full forthwith." The cause of action therefore is for a breach of contract in which the defendant failed to fulfil an obligation he promised to undertake.

The defendant initially denied liability and the matter proceeded to trial and this court will basically determine whether the defendant is obliged to repay the money allegedly owed to the complainant. It is for this court to be satisfied that the defendant did promise to repay the amount owing and that he did fail to repay.

Both parties called both affidavit and oral evidence and the parties with the deponents of the affidavits put through the examinations. Some affidavit evidence was not admitted as the deponents were not produced for the examinations. For the complainant's case the complainant gave evidence and called the evidence of Kiap Teiko and Pit Nende. The defendant relied on his affidavit evidence which was not subjected to cross-examinations although those rights were explained to the parties in court.

The complainant deposed in her affidavit that she bought the vehicle, a white Hyundai Registration No. BBH.448 for K1,000.00 on the 12th day of April 2003. It was his son Bonny Kiapa who knew about the vehicle at Murray Barracks and upon that information they went over to buy the vehicle. The vehicle was damaged on the front light, bonnet and windscreen but otherwise the vehicle was in good condition when it was first bought.

She insisted to see the original papers of the vehicle and when she was shown the papers she bought the vehicle. It was after some days on the 19th day of April 2003 that the defendant went with some policemen to her house enquiring about the vehicle.

The policemen went to her premises fully armed and in an aggressive and hostile manner demanding that the vehicle should be returned to the defendant. The vehicle was released and the defendant towed it to Hohola Police Station which was not locked at the police station. When she followed up on the following days, the vehicle was still not at the police station and she insisted that her money should be repaid.

Eventually when the police towed the vehicle back to the police station, the defendant also turned up at the police station. At the police station in front of the policemen, the defendant promised to repay all the money in two weeks and his vehicle was released back to him. After the two weeks, no money was repaid and after sometime this case was initiated.

The complainant's first witness Kiapa Teiko being the husband of the complainant testified to corroborate the complainant's evidence. He went to say that they bought the vehicle in good faith from the person selling it when the registration papers and the keys of the vehicle were readily produced. They did not think that the vehicle was stolen and sold to them as the papers and the keys of the vehicle were easily produced.

The second witness for the complainant Pit Nende is the person who sold the vehicle and is a relative of the defendant. He stated that the defendant brought him into Port Moresby from his home and he lived with the defendant doing odd jobs for the defendant.

He got a mechanic to fix the vehicle which was not working at the time. It took some time for the mechanic and himself to properly fix the vehicle. When it was fixed the defendant did not attempt to pay the mechanic and himself. It was out of frustration that he and the mechanic sold the vehicle to the complainant.

Pit Nende confirmed that the defendant undertook at the police station in front of the policemen that he was going to repay the K1,000.00 in two weeks. That commitment was made so that the vehicle could be released back to him and it has not being honoured which gave rise to this case.

The defendant opened his case and relied on his own affidavit and called no other evidence. He stated in his evidence that he gave the vehicle to his mechanic to fix it. When the mechanic took the vehicle out for road test, some criminals held him up and the vehicle was stolen from him. He came home and heard the story and d reported it to the police at Hohola Police Station.

With the assistance of the police and members of his family they located the vehicle in the complainant's premises at Morata. The police informed the complainant and the vehicle was taken back. He knows that the vehicle is his and the complainant should have brought to court Pit Nende with whom she entered into the transaction.

It would seem in this case that it is the complainant and her witnesses against the evidence of the defendant. There is no dispute about the ownership of the vehicle and even the transaction that took place of selling the vehicle. In this case the evidence given by Pit Nende would appear to be neutral as he comes in from both sides of the case. He was the one who was involved in the selling of the vehicle and for whatever reason he sold the vehicle is not a matter for this court to deliberate upon. I have been mindful of the fact that Pit Nende had his own differences with the defendant prior to the incident.

The defendant called no other evidence to corroborate his version and he did not even state that he did make an undertaking to repay. His version of what happened appears to be very different from the version from the complainant. In any case this is common and it is now for me to decide which version I should believe. In the circumstances I believe the defendant did undertake to repay the money upon the vehicle being released to his custody. The defendant initially had not settled with Pit Nende and the mechanic for their labors in working on the vehicle so he had to take it upon himself to settle the payment.

The facts as it appears to me are that the vehicle in question was sold to the complainant and she bought the vehicle in good faith. She bought the vehicle from Pit Nende and the others who were not the owners of the vehicle. The defendant repossessed the vehicle as it was sold without his approval and consent as the owner. When he took custody of the vehicle he promised or made an undertaking to repay the complainant's money being the initial purchase price she paid. That undertaking by the defendant to repay was not fulfilled which resulted in this proceeding where the complainant rightly sued.

Given this scenario the law of a simple contract applies in which the defendant failed to fulfil his end of the bargain. In any contract in law the basic ingredients of valid contract should be evident and in place in any dealing between the concerned parties. All contracts consist of several essential elements and if anyone of them is missing, then it cannot provide a basis for enforcing rights and obligations imposed by that contract.

In the Law of Contracts there must be an offer made by the person who wants certain goods or services rendered. That offer has to be accepted in certain terms and in this process when an offer is made and that offer is accepted, there must be a meeting of the minds. The terms of the contract must be certain between the parties. In a valid contract there must also be a consideration that binds both the parties to the contract.

In the Halsbury's Laws of England Vol. 9 at page 81 the elements of a valid contract is defined in the following terms:

To constitute a valid contract (1) there must be two or more separate parties to the contract; (2) those parties must be in agreement, that there must a consensus ad idem; (3) those parties must intend to create legal relations in the sense that the promises of each side are to be enforceable simply because there are contractual promises; (4) the promises of each party must be supported by consideration, or by some other factor which the law considers sufficient; generally speaking the law does not support a bare promise (nudum pactum) but only a bargain.

In simple there must be two or more legal persons who are capable of being sued or to sue who enter into an agreement with an intention to create a legal relationship enforceable at law. The promises in those agreements must be supported by some valuable consideration. This gives us a simple definition of what a contract is or should be under law.

The basic essential elements of a contract are offer, acceptance, certainty of offer and acceptance, intention to create legal obligations and consideration. I will now go on to discuss each of these elements.

An offer may be oral, written or even result from conduct or a gesture by a party. The essential feature of an offer is that there must be an intention by the person making offer to be bound by the terms that are contained in the offer if the offer is accepted. An offer can be made to a single person or to the whole world.

Sometimes an offer is preceded by two-way communications in the form of negotiations. It is important to distinguish an offer from an invitation to treat, which is an indication by a party that he, she or it is in the market to sell goods or services and is prepared to consider offers. A shop that displays goods for sale at an indicated price is inviting a party to make an offer. A party that places an advertisement in a newspaper to sell a vehicle at a: particular price is making an invitation to treat. The person who responds to the invitation to treat may do so by means of an offer.

An offer maybe withdrawn at any time before it is accepted. It does not matter how this is communicated to the person to whom the offer is made. As long as that person has knowledge that the offer has been withdrawn (revoked), then a purported acceptance has no legal significance. The person to whom the offer is made may accept the offer and at the moment the offer is accepted, a contract comes into existence (provided the other essential elements are present). Unless the person who makes an offer stipulates how an acceptance is to be communicated, or a statute (such as the Statute of Frauds and Limitations or Goods Act) imposes certain requirements, an acceptance may take the form of words, writing or conduct. Sometimes it is not necessary for acceptance of an offer to be communicated.

Even where parties exchange offer and acceptance in matching terms, a contract may not be enforceable if there is uncertainty about what is agreed to or if the parties have left too much to be decided at a later date. In order for a contract to exist, the parties must have intended to bind themselves in a legally enforceable way. This is seldom stated explicitly but may be inferred from the circumstances. On the other hand, it may be possible to infer from circumstances that, although there is an agreement, there is no intention to make it legally binding.

In order for a contract to exist, there must be consideration. Consideration is what one party gives or promises in exchange for what the other party is giving or promising. Without consideration flowing in both directions, there is no contract. Courts do not look at the adequacy of consideration or judge whether a contract makes good business sense.

Consideration can sometimes take the form of an agreement not to do something. For instance, an employee might agree not to enter into competition with his or her employer. This type of consideration might be in either express or implied terms. Consideration can take the form of a promise to do or not do something at some time in the future. This is known as executory consideration. When both sides give consideration in the form of promises to do something in the future, the contract is known as an executory contract.

Simple contracts do not depend for their validity on any particular formality in their execution, but rather on the existence of a consideration. A simple contract may be written or verbal, or may even be implied from the acts and conduct of the parties manifesting their intentions. It usually comes into existence as the consequence of an offer and acceptance.

Having discussed these concepts of the law in contract I will now consider the application of these principles in this case. It has to be noted here that the complainant took out this action against the defendant for his failure to fulfil an obligation which he undertook. It was at the Hohola Police Station that the defendant in the presence of the policemen and the parties stated that he was going to repay the money in two weeks. Based on that undertaking the complainant through the police released the vehicle back to the defendant.

Clearly the defendant offered to repay the money in two weeks which the complainant accepted and allowed the vehicle to go back to the defendant. Only when the defendant failed to keep and honour part of the bargain, then the complainant is entitled to a remedy for a breach. Both parties were certain at the time that they were entering into a relationship that was legally binding based on a promise to do something. The defendant and the complainant in this matter entered into a simple verbal or oral contract which also can be implied from their conduct at the time.

I note from all these that there was a valid contract in place and the defendant breached his obligation under that contract to pay the money within the time that he promised. In the circumstances the defendant is liable for such a breach and likewise the complainant is now entitling to a remedy under law. When a contract is breached, a complainant is entitled to a remedy. The general objective is to put a complainant in the position he or she would have been in if the contract in question had been performed.

Based on these finding that the defendant breached what he had undertaken to do and accordingly I find him to be liable. Having said that, I will proceed to order that the defendant repay to the complainant the money that was paid for the vehicle. The parties are in court for a specific amount which is not subject to argument and so I will go on to make orders for payment in the specific amounts as claimed. The complainant is now entitled to the principal amount of K1,100.00 with an interest of K88.00 and a reasonable cost of this proceeding at K50.00. Accordingly I order that the defendant pay forthwith the total sum of K1,238.00 to the complainant.

Orders accordingly.