Ipata v Wasem [2021] PGNC 179; N9020 (11 August 2021)

N9020
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 112 OF 2020

BETWEEN
MR SAKI J. IPATA
Plaintiff

AND
MR EPHRAIM WASEM, ACTING MANAGING DIRECTOR OF NATIONAL AIRPORTS CORPORATION LIMITED
First Defendant

AND
NATIONAL AIRPORTS CORPORATION LIMITED
Second Defendant

Waigani: Makail, J

2021: 6^th July & 11^th August

CONTRACT – Breach of contract – Contract of employment – Entitlement to motor vehicle – Dispute over purchase price of motor vehicle and sum owed– Whether purchase price paid in full and title should be transferred to plaintiff

Cases cited:

Nil

Counsel:

Mr. M. Mukwesipu, for Plaintiff
No appearance, for First Defendant
Mr. R. David, for Second Defendant

JUDGMENT

11^thAugust, 2021

1. MAKAIL J: By originating summons filed 17^th March 2020, the plaintiff Mr Saki J. Ipata sues the defendants for breach of contract of employment. He alleges that it was agreed that he will own a motor vehicle when he pays in full the purchase price through salary deduction every fortnight. The motor vehicle is described as Toyota Prado bearing registration number BFM: 428. He alleges that he paid in full the purchase price but the defendants failed to transfer the title to him. He seeks declaratory orders that the defendants breached the contract of employment and that he is the legal owner of the motor vehicle. He further seeks an order to compel the defendants to facilitate the transfer of title to him.

2. Much of the facts giving rise to the action are not in dispute. They may be extracted from two affidavits of Mr Ipata, one filed 17^th March 2021 and the other 16^th July 2021 and two affidavits by the defendants, one filed by Mr Leo Kaptigau on 13^th October 2021 and the other by Mr Jeff Manget filed 13^th July 2021. They are as follows:

• Mr Ipata was a former employee of the second defendant holding the position of General Manager, Finance.
  
• He was employed under a contract of employment dated 30^th April 2018. It was for a term of three years with an option to renew.
  
• Pursuant to Clause 7 of the contract his total salary per annum is K500,000.00.
  
• Pursuant to Clauses 7 and 9 of the contract, he was permitted to enter into a novated lease to purchase a motor vehicle through salary deduction each fortnight.
  
• Clause 9 of the contract states:
  

“SALARY SACRIFICE

Up to a maximum or up to 50% of the guaranteed remuneration but not exceeding the total sum of the allowances may be used for Salary Sacrifice. The Employee may elect salary sacrifice to assist him/her to do the following:

(i) to pay rental for accommodation or house mortgage payments;
(ii) to pay school fees for his/her children;
(iii) to purchase a vehicle;
(iv) Annual/ Recreational Leave”.

• He entered into a novated lease and was given a motor vehicle identified as Toyota Prado, registration number BFM: 428.
  
• The motor vehicle was one of the motor vehicles in a fleet purchased by the second defendant from Ela Motors. It was registered in the name of Ela Motors.
  
• The second defendant deducted his salary per fortnight and applied it towards payment of the motor vehicle.
  
• On 7^th October 2019 he was terminated from his employment.
  
• By that date, he had paid a sum of K85,803.73 through salary deductions to settle the purchase price of the motor vehicle.
  
• Following termination, the second defendant calculated his final entitlements and retained a total sum, of K60,295.89 as payment towards the balance due for the motor vehicle.
  
• By letter dated 28^th January 2020 the second defendant gave him one month notice to pay the balance before it could transfer ownership of the motor vehicle to him.
  
• The second defendant on its own calculations advised Mr. Ipata that the amount outstanding was K99,583.00.
  
• On 28^th February 2020 Mr. Ipata raised two separate cheques and delivered them to the second defendant on the same day. The first cheque was for the sum of K99,583.00 to settle the balance for the motor vehicle.
  
• The second cheque was for payment of other liabilities in the sum of K8,992.44.
  
• Despite the delivery of the two cheques, the second defendant refused to transfer the registration of the motor vehicle to Mr. Ipata. The second defendant attempted to retrieve the motor vehicle from him through the police but was not successful.
  
• On 18^th March 2020 Mr Ipata obtained an interim injunction stopping the defendants from removing the motor vehicle from him.
  

3. What is in dispute is the purchase price of the motor vehicle. Mr Ipata says that it is K187,465.50. He produces an invoice from Ela Motors dated 19^th January 2019 to verify this sum.

4. The second defendant says it is more than the sum asserted by Mr Ipata. According to paragraph 15 of his affidavit, Mr. Manget says that the purchase price is K226,940.73. However, he does not produce an invoice or receipt of payment from Ela Motors to verify his assertion. Based on this sum, at paragraph 18 of his affidavit, Mr Manget says that Mr. Ipata paid through salary deductions a total sum of K85,808.73. After deduction of this sum from K226,940.73, the balance which Mr Ipata will pay is K141,132,73.

5. I accept Mr. Ipata’s evidence because it is verified by an invoice from Ela Motors as opposed to Mr. Manget’s because it is unverified. I find that the purchase price is K187,465.50. This is the purchase price of the motor vehicle which Mr Ipata will pay before the title of the motor vehicle will be transferred to him.

6. As found, Mr Ipata made the following payments for the motor vehicle:

(a) The sum of K85,803.73 through salary deductions.

(b) The sum of K60,295.89 from his final entitlements on termination retained by the second defendant; and
(c) The sum of K99,583.00 per cheque number issued by Mr Ipata.

Total sum paid – K245,687.62

7. Mr Ipata delivered another cheque of K8,992.44 for other liabilities to the second defendant but it is not relevant to the repayment of the motor vehicle save to say that both cheques (K99,583.00 and K8,992.44) were not presented by the defendants to the bank for clearance and remittance of funds or returned to him until they were stale.

8. If the cheque in the sum of K99,583.00 is stale, it is of no value and no funds were debited from the account of Mr Ipata to the second defendant’s account as payment towards the motor vehicle. Based on the sum of K187,465.50 and deducting the sum of K85,803.73 and K60,295.89 paid by Mr Ipata from this sum gives K41,365.88. This is the sum due and outstanding, and Mr Ipata will pay to complete the purchase price of K187,465.50 before the second defendant will transfer the title to him.

9. I am satisfied that pursuant to Clause 9 of the contract of employment Mr Ipata agreed to purchase the motor vehicle through salary deductions. I am further satisfied that due to the differing views on the purchase price, he paid in part the purchase price. As there is no disagreement to transfer of title to Mr Ipata save for him to complete the payment of the purchase price there will be a judgment in these terms:

1. A declaration that Mr. Ipata is the legal owner of the motor vehicle described as Toyota Prado bearing registration number, BFM: 428 is refused.
   
2. A declaration that the defendants breached the contract of employment when they failed to effect transfer of the registration of the motor vehicle to Mr. Ipata following payment in full of the purchase price is refused.
   
3. Upon Mr Ipata paying a sum of K41,365.88 to the second defendant, the defendants, their servants and agents shall forthwith take all steps necessary, including execution of all, or any paper work required to effect immediate transfer of registration of ownership of the motor vehicle to Mr Ipata.
   
4. Until the Order No 3 is complied with, the interim injunction of 18^th March 2020 stopping the defendants from removing the motor vehicle from him shall continue.
   
5. The defendants shall pay the costs of the action, on a party/party basis to be taxed, if not agreed.

________________________________________________________________
Mukwesipu Lawyers: Lawyers for Plaintiff
Kalit Legal Consultants: Lawyers for Defendants