Tai v Mal Limited [2008] PGDC 81; DC828 (29 February 2008)

DC828

PAPUPA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]
Civil Jurisdiction

DC. N0. 2085 & 2086 OF 2007

EGI TAI
Complainant

V

THE MAL LIMITED
[DC. N0. 2085 OF 2007]
Defendant

AND

KUNTILA N0 4 LIMITED
[DC. N0. 2086 OF 2007]
Defendant

Port Moresby: Pupaka, PM

2008: 29th February

Mr. E. P Asigau for the Complainant
Mr. B. Takin for the Defendant

29th February 2008

PUPAKA, PM: This is a joint judgment in relation to two separate cases. The complainant is the same in both cases and the defendant companies are owned by the same people and counsels in both cases are the same. A brief hearing of sorts was jointly conducted and evidence was given by the same witnesses in both cases. Moreover, the evidence indicates that the reasoning process followed in the first case may affect the outcome in the second.

Nevertheless the cases are different from each other. Their respective causes of action are unconnected, in the sense that one cause did not give rise to the other, so separate cases were correctly registered. In fact a joinder of the two causes would have been over this Court’s financial jurisdiction, even though the individual claims, on their own, are within jurisdiction. I wish to deal with the 1st cause of action first. That approach will, I think, provide an appropriate setting for a much better appreciation of issues in the 2nd matter.

Case against Kuntila No. 4 Limited

The complainant sued the defendant for K7, 700.27 plus interests and costs. The complainant said he was entitled to a 10% fee on the K80, 002.70 he recovered for the defendant. The complainant alleged that he was paid only K300.00 for that. Consequently he sues for K7, 700.27 which is presumably the balance a commission of K8, 000.27.

Facts

The defendant engaged the complainant to collect its debts. It is confirmed by an "Authorization Letter" dated 16th February 2005 which read: "This letter is to certify that our company is authorizing Mr. Egi Tai to collect outstanding debts and follow-up dishonoured cheques on our behalf with immediate effect. This authority will go on until such time where we will advise you through black and white of its cancellation. Should you have further queries, please do not hesitate the undersigned" (sic). It was signed by Maria Roxan Cruz as Financial Manager. Wong Tee Tee, the defendant’s General Manager, said in court that Maria Roxan Cruz was their Financial Manager that time. He confirmed that K80, 002.70 was recovered.

Issues

How much effort the complainant extended to recover the money and on what terms he was engaged are disputed, pitting the parties over how much the complainant was entitled to receive and how much he is now owed, if at all. The complainant says there was a verbal agreement that he was to be paid 10% of the money recovered but the defendant denies this.

Evidence

The complainant was engaged as a Debt Collector. This cannot be disputed as the written authority reprinted above says he was. Consequently, to recover one debt of K80, 002.70, the complainant contacted the Public Curator’s office and BSP bank. He held meetings with people and wrote to others. This took him some time, about 4 months. Of course he could not have pursued the debts daily but he did write letters, made calls and had meetings with people. He did these things in order to recover the defendant’s K80, 002.70.

Neither the Public Curator’s Office nor BSP owed the defendant anything. Rather, people who were entitled to receive money from the Public Curator’s Office actually owed the defendant money. The debts were not secured judgments so the defendant needed the Public Curator and BSP to allow it to access the money while it was still in the banking system. This is where the complainant came in. He was engaged to liaise with the Public Curator and BSP and seek their cooperation and assistance.

It is significant to note that the defendant does not deny that the complainant tried to contact or reach people, or that he wrote letters, and met people over a period of 4 months, from February to May 2005. Whether his endeavours, in the end, had any impact at all is, for the moment, not necessary to say. It is sufficient that the complainant did what debt collectors might ordinarily do. He seems to have done what he needed to do to recover the money. The money was of course recovered.

The complainant was paid K300.00 for the role he played in the recovery. Receipt of K300.00 is not disputed. The complainant says he was told he would get the rest of his 10% later. He continued to remind the defendant about it, but there was always no response every time he did. Meanwhile he was still engaged as debt collector for some time and was paid for a few other minor recoveries. This again is not disputed by the defendant.

Events overtook things. The defendant employed the complainant as its Assets Manager starting from the beginning of January 2006 to the beginning of June 2006, but the complainant says he later "walked off the job" in June 2006. He did not elaborate why but the defendant says he was sacked for not being up to the job.

For a year nothing happened between the parties. The complainant says he did try to get the balance of his 10% commission but he was unsuccessful. In June 2007 he was again engaged as a debt collector by the defendant. That engagement is the bases of the second case so it will be discussed fully, in the context of its separate pleadings.

Findings on the Evidence

I find that the complainant was engaged by the defendant to follow up and recover its outstanding K80, 002.70.

The defendant seems to want the Court to accept that it never engaged the complainant to collect its debts, either in person or through his debt collection business. However the fact is it did just that. It did engage the complainant as its debt collector.

I think it is a bad tactical move to deny obvious facts, especially in the face of clear evidence. It can affect credibility. For instance the evidence in this matter shows that the complainant was indeed engaged by the defendant to facilitate recovery of a sum of K80, 002.7; a relatively long standing debt. The complainant was engaged personally. He only registered a business name after he was engaged personally as debt collector.

A good part of the defendant’s final submission is centred on the complainant’s business name – Lestrav Collection. Yet that business name was never an issue because the complainant was engaged in person, as shown by the "Authorization Letter" reprinted above. A business name had nothing to do with his engagement at all. He may have used his business name to act for the defendant, but the latter cannot possibly say that the use of the business name caused it any harm. In fact the use of the business name may have had the extra effect needed to convince people who had to be persuaded.

The defendant’s General Manager, Wong Tee, says the complainant often loitered around the defendant’s premises so he was occasionally engaged to do odd jobs and for that he would be paid something for his living. Wong Tee Tee’s undisguised impression was that the complainant is a jobless hunger on who should be grateful for any small money he was given for running errands.

Unfortunately for Wong Tee Tee and his defendant company I do not share that view. Someone seemed to have valued the complainant’s ability to collect or facilitate recovery of debts which is why he was engaged to do the job. And it does seem, on the evidence available, that at the time of the complainant’s engagement the K80, 002.7 was proving to be a difficult debt. Further, having perused the letters the complainant authored on behalf of the defendant I must say the complainant appears to me to be a highly educated fellow who knew how to request commitment from people who were fully aware of their fiduciary duty to the defendant’s debtors.

It is rather difficult to see why someone whom the defendant’s own CEO considered to be of no consequence was later appointed as its Assets Manager in June 2006. Perhaps employing the complainant may have been another of Wong Tee Tee’s sympathetic acts, but having observed the man in court I somehow do not think he could be easily swayed by charitable intentions when it comes to making decisions in matters of business.

I am also unable to agree with the submission that the complainant was merely given an ‘identification letter’ to go and uplift up a cheque because the defendant’s own officers were too busy for such a simple and routine job. The futility of that submission is put in stark contrast by the "Authorization Letter" which says the complainant’s "...authority will go on until such time when we will advise you through black and white of its cancellation". This was no one off cheque run. Needless to say that there were no cheques for picked up and the liaison job was no easy task for anyone.

So what was the complainant’s remuneration, as agreed between the parties? The complainant expected to be paid for his efforts. The defendant denies his assertion that his fee was verbally settled at 10% of total debt recovered. The defendant simply says the K300.00 paid was adequate consideration. Percentage wise K300.00 works out to 0.0037% of the K80, 002.7.

It took the complainant 4 months to write letters, make phone calls to offices, and hold meetings with people when necessary, towards recovering the defendant’s money. So can it be realistically said that the complainant was adequately recompensed with K300.00, even if there was no specific agreement for payment?

I do not think a sum of K300.00, on the face of it, is adequate by any standard. I would think a fee of 10% on any recoveries made is otherwise reasonable. It certainly is not too much when one considers the time and effort extended in the recovery.

The defendant, for its part, cannot say what the complainant’s consideration was. It must therefore accept and live with the complainant’s contention that there was agreement on a fee of 10% of money recovered. To hold that there was no agreement on the complainant’s payment, for any amount at all, would result in an absurd situation and the complainant gets nothing for his services.

Even if this process of reasoning is inappropriate, the defendant is entitled to be compensated with a suitably assessed consideration on the bases of the principle of quantum meruit. The complainant was engaged to recover the defendant’s debts. He did that to the best of his ability but he was not adequately paid for putting time and effort into the task. Consequently 10% of the money recovered seems be fair consideration. I would also award that in the alternative.

Conclusion

A fee of 10% of K80, 002.70 works out to K8, 000.27. The complainant was of course paid K300.00. The balance due is the sum actually sought in this proceeding.

I therefore grant judgment for the complainant in the sum of K7, 700.27. There shall be interests paid at the statutory 8% on the adjudged sum from the date of summons to the date of settlement.

Case against The Mall Limited

In this suit, as in the first, the complainant sued the defendant for K7, 146.00 plus interests and costs. The complainant says that this time he is entitled to a fee of 8% of the total money he recovered on behalf the defendant. He said he collected K89, 700.00 for the defendant but he was not paid.

Facts

Like in the first case the complainant was engaged as Debt Collector by the defendant to collect its debts. A similar authority letter dated 1st June 2007, now in evidence, confirms that. It reads: "The management of Mall Limited is authorising the Debt Collector, Mr. Egi Tai to collect the rental outstanding for the Doctors at Vaivai Units Section, 9 Lot 4. We will let you know in black and white if changes occur." (sic). The letter was signed by the defendant’s General Manager, Mr. Wong Tee Tee.

In court Mr. Wong Tee Tee began by saying the complainant never collected the cheques, but then he changed the story, because it was clear that the cheques were collected from their source by the complainant. What Mr. Wong Tee Tee may have meant was that the cheques were not immediately delivered to him after collection. The evidence seems to be that the defendant’s property manger got one of the cheques from the complainant a day after it was picked up from its source. However it took a number of pointed questions from the Court to get this concession off Wong Tee Tee. The man certainly did not volunteer the information.

Issues

Like in the first case the issues here are as to how much effort was put in by the complainant in the collection of the second lot of cheques and what were the terms of the his engagement. The parties are in contention over the complainant‘s fees, how much he was paid, and whether he is still owed any money.

Whereas the complainant says there was a verbal agreement that he was to be paid 8% of all monies recovered, the defendant says there was no such agreement and the complainant is owed nothing as he did nothing deserving payment.

Findings on the Evidence

There is evidence that the complainant was engaged as a Debt Collector. However, unlike in the first case, this time the complainant was given a relatively easier task of chasing up on outstanding rental monies. Nevertheless the amount sought to be recovered was relatively big – K89, 700.00. This must have been a debt that was proving difficult to collect because it was overdue rental arrears.

The complainant says he made attendances at the Department of Health, from whom the debt was due, between 1st June and 22nd June 2007, to query and follow up on the arrears. Subsequently he collected the first cheque of K68, 250.00 on 21st June 2007 and took it to the defendant. He collected the second cheque for K21, 450.00 on 17th July 2007 and handed it over to the defendant’s accountant the next day. These are undisputed evidence.

The defendant said it engaged the complainant to pick up the cheques – note it is cheques not money – because its property manager was sick at the time. The defendant says the complainant needed to do an uncomplicated fast pickup. The defendant’s property manger, Kedea Dikana, said in his affidavit:

"4. I can clearly recall back at the end of May and beginning of first week of June, 2007 I was sick for more than 7 days including first of June, 2007.

5. Because of this I could not attend to my work."

This assertion is meant to show that the complainant was engaged to collect the cheques only because the regular collector was sick.

Unfortunately the evidence paints a different picture. The follow up work on the debt – not cheques as yet! – was done over a period of 3 weeks, between 1st June and 22nd June 2007. The follow up work continued even after the defendant’s property manager had resumed work. Cheques were actually printed on 20th June 2007 and 17th July 2007 respectively. In the circumstances it is simply not correct to say that the complainant was asked to do a quick, straight forward pickup of cheques on 1st June 2007.

The first of the two cheques was not even available for collection by anyone until almost three weeks later. In fact, in court, the defendant’s property manager was asked why he did not ensure that the payments were done and pick up the cheques. He replied that the complainant had already been engaged so he thought it fair to allow the complainant to complete his engagement, particularly as they are from the same village.

It is evidence like this that tell the real story, evidence that permits the Court to read in between the lines, as it were. In this case, the evidence attaches credence to the complainant’s contention that he made the effort to start a process that resulted in the payments being made, otherwise the payments would not have been made or would not have been made sooner and the arrears would have piled up. One can understand why the complainant was engaged, even after the parties’ less than amicable parting of the ways in June 2006. The defendant knew the complainant would recover debts.

The complainant seems to have been paid K30.00 for what he did.

I cannot say I actually understand why the defendant thinks the complainant did nothing worthy of payment. So I would allow the defendant benefit of doubt and merely accept that its denial of liability is on the bases of evidence that has not been put before this Court; perhaps evidence that someone in the defendant entity forgot to submit to court. In that case though, the defendant must blame itself. Otherwise on the bases of the evidence now before me the defendant’s liability to the complainant is in no doubt.

The defendant’s property manager may have been unavailable but it would have other employees who could be sent to collect cheques, i.e., if indeed it was only a matter of picking up cheques. Yet it was not just matter of picking up cheques. The defendant consciously engaged the complainant to recover overdue rental debts which none of its employees could. It now cannot deny liability.

I alluded to the belittling assessment of the complainant’s worth by the defendant’s general manager, in the context of the first case, so I shall not repeat it here. However I do record a view that paying someone K30.00, which is no more than ‘cab fare’ really, for facilitating recovery of nearly K90,000.00, after that someone has been formally appointed and specifically tasked accordingly, is manifestation of a level of arrogance that should never be permitted in those in positions of power as employers. If that were allowed there would never be an even playing field for all and the notion of fairness in employment disappears, with the end result that workers are inevitably robbed of their just rewards.

The complainant was engaged to collect a particular set of debts as the evidence shows. He was not paid for successfully executing the task. The complainant’s assertion, that it was agreed that he would be paid 8% of the money recovered, is the only evidence before me. There is no alternative suggestion as to what other fair remuneration was to have been paid to the complainant.

Conclusion

I must therefore uphold the contention that there can only have been agreement on the fee of 8% of money recovered. To not find accordingly would cause an absurd result which may mean that the complainant is not paid for the services he rendered.

Further, it is also fair to reach the same conclusion in another way. Even if it is not possible to conclude that there was agreement on the 8% fee, the complainant is entitled to his payment on the basis of the application of the principle of quantum meruit.

The complainant was allowed to recover 10% in relation to his prior engagement in the first case. I found that 10% was not overly much in light of the efforts put in by the complainant in recovering a long standing debt for the defendant. In fact it ought to be remembered that, in the first case, those whom the complainant needed to convince and persuade, including people in the bank and curator’s office, owed the defendant nothing legally, neither debt nor due. The defendant, (Kuntila No. 4), recovered its money because of the efforts of the complainant. If others were also involved, their identities and the roles they played remain unknown.

By contrast, the complainant had an easier time in this second case, in the recovering K89, 700.00. Yet the money recovered was about the same, just marginally more here of course. Therefore I would think a fee of 8% of the money recovered is about on the mark for the complainant’s efforts. A fee of 8% of K89, 700.00 is K7, 146.00.

Consequently I must order judgment for the complainant, Egi Tai, against the defendant, The Mall Limited, in the sum of K7, 146.00. I further order that interests on the adjust sum be paid from the date of summons to the date of settlement.

Costs of both proceedings shall follow the event, the same to be taxed if not agreed to between the parties.

______________________________

Fairfax Legal, lawyers for the Complainant
B. T. Gobu & Associates Lawyers for the Defendants