Fagasi v Anita [1998] SBHC 111; HCSI-CC 72 of 1996 (21 August 1998)

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 72 of 1996

BENJAMIN FAGASI

-v-

MICHAEL ANITA

HIGH COURT OF SOLOMON ISLANDS
(PALMER J.)

Civil Case No. 72 of 1996

Hearing: 19the May 1998
Judgement: 21st August 1998

A. Radclyffe for the Plaintiff
C. Ashley for the Defendant

PALMER J.: This is a claim inter alia, for an account to be taken and of a half share in the net profits of the business enterprise (“Sholomo Enterprises”) which the parties entered into in or around 1994. The parties were partners together in a timber export business. The Plaintiff was responsible for cutting timber whilst the Defendant all the paper work necessary for the export of the said timber to overseas buyers.

The Plaintiff alleges that a total of $43,824.19 had been received by the Defendant but that he had failed to account for the same and to share any of the profits of the business. The Defendant on the other hand denies that he had kept back any of the proceeds or that he had failed to account for them properly. He denies that any profit should be shared because the business never made any at the end of the day. If anything, it is their debts that should be shared. It should be noted too that the business had never been wound up properly or audited and parties given an opportunity to inspect the accounts.

The Plaintiff has simply decided to come straight to court to rule on his entitlements (if any, .I might add).

THE EVIDENCE:

(a) Proceeds of sale of timber.

The Plaintiff alleges that the amount of $43,824.19 was received for the timber exported. He relies on exhibit “A” attached to his affidavit filed 4th June, 1996. This is a copy of a Shipping Bill which records inter alia, the value of the timber exported at $43,824.19.

In his evidence however, the Respondent explained that the figures used in that Shipping Bill were an estimate of what was expected to be shipped for purposes of complying with Customs Regulations. There were in fact two shipments as follows:

(i) through Papuan Chief, Voyage No. 37 for 25.020 cubic metres @ USD300/cubic metre; valued at AUD10,571.53;

(ii) through Coral Chief, Voyage No. 57 for 10.956 cubic metres @ AUD430.00 per cubic metre; valued at AUD4,711.08. (see exhibit “A1” filed 4th July, 1996)

The total amount actually received was AUD15, 282.91 and not SBD43, 824.19. This explanation of the Defendant has not been challenged in any way. I accept his explanation accordingly as correctly stating the total amount of proceeds received on the timber exports.

(b) Account for the sale proceeds.

One of the orders sought by the Plaintiff was for an account of the sale proceeds of the timber exported. In his evidence to this Court, basically the Defendant has sought to account for the said sums by filing a statement which purports to show as best as he could recall, the expenses of the business. What has transpired in evidence is that the Plaintiff does not agree with some of the expenses of the business. It is unfortunate that the parties were not able to come together prior to coming to court to try and iron out some of their differences and disagreements. Mismanagement, misspending or mishandling of business funds are risks in any business operations that the parties must be prepared to front up to and try and resolve in as best a way they could. Sometimes misunderstandings can occur through lack of communication. Once these are addressed a better understanding sometimes can be reached.

The expenses admitted to by the Defendant are contained in “Exhibit A2” filed 4th July, 1996. I accept this list as more accurately reflecting the incomes and expenses of the business rather than the very generalised and vague list submitted by the Plaintiff.

That list has been put in evidence to the Plaintiff and apart from a few items agrees with the majority of expenses. It is also basically not in dispute, that the amount of moneys advanced from Moxon & Company Pty. Ltd. came to SBD39, 000.00.

The crucial matters in this case accordingly will revolve around the items in dispute whether these should be excluded or not. So to these I will now turn.

The first item disagreed with is item no. (6) headed “ration”. It is described as coming from various stores and amounting to $500.00. The Plaintiff says this should only come to $200.00. It is unfortunate no receipts have been produced to assist this court come to a fair decision as between the parties where they were not able to agree in the circumstances. The Defendant however does concede that the figure given was an estimate. The Plaintiff in his evidence acknowledged receiving food items from the Defendant and money on a number of occasions. On the balance of probability, I am not satisfied that the figure of $500.00 should be reduced. I accept it as the best estimate in the circumstances.

The second item objected to was item no. (8) in the list, a boat charter of LC Vitu for $3,000.00. The Plaintiff claims that this was not a charter but a diversion of the ship to collect some timber. Unfortunately, what the Plaintiff fails to realise is that whether it is a charter or not, makes no difference to the charges that may be imposed for the diversion of the vessel. The charges are fixed by whoever is entitled to do so at the said time. The Defendant does not deny that it was a diversion. He has given clear evidence that the charge for that charter or diversion was $3,000.00. It was the charge required by the person responsible for that vessel. He says this has not been paid to date. No other evidence to show otherwise has been adduced by the Plaintiff. I dismiss his objection.

The third item objected to was item no. (9), truck hire from Budget Hire Company for $2,520.00. In his evidence the Defendant explained what these were for. Apart from the view of the Plaintiff that this was not necessary, no other evidence has been adduced to convince me otherwise on the balance of probabilities. This objection must also be dismissed.

The next item objected to was item no. (16), miscellaneous items (paint, petrol, chalk, crayons, administration expenses) for $500.00. Respectfully I fail to see how these could not be justified in the circumstances. In any business activity, such expenses are but normal. I accept that the concern arises from a lack of receipts to substantiate the item. Unfortunately it is not denied that these are proper expenses. The only concern pertains to quantum. That respectfully is not always easy in such situations to dispute. I am not satisfied on the balance of probabilities that this item should be excluded.

Item no. 17 was also objected to as unnecessary in the circumstances. Unfortunately, in his explanations, the Defendant clarified their use. I am also not satisfied that it should be excluded.

Items (21 and 22) were payments which the Plaintiff says he was not aware of. Regarding item 21, the Defendant pointed out that the Plaintiff had received the same amount. The only difference is that the Plaintiff claims the payment of $5,000.00 was for labour charges. Respectfully these are matters for the parties themselves to sort out. The Defendant denies that labour charges were ever paid because the very persons the Plaintiff claims had been paid told the Defendant that they had not been paid and in fact demanded payment to be made in Honiara. It is possible that other labour charges were entailed, but this has not been made out in evidence.

Regarding item no. 22, the Defendant had provided satisfactory explanation as to what it was for. I reject the objections.

I am satisfied on the balance of probabilities, that the Defendant had properly accounted for the proceeds and expenses of the business and that it is not necessary for this court to issue any further orders that would require him to do so

The Plaintiff has failed to make out his case and that the only appropriate order would be to have this claim dismissed. It would have been more appropriate perhaps for the parties to have the accounts of the partnership audited first before coming to court. A much more thorough job perhaps would have been done then.

ORDER OF THE COURT:

Claim dismissed with costs.

THE COURT.