Sibia v Naezon [2003] SBHC 85; HC-CC 118 of 2003 (15 December 2003)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Civil Jurisdiction)

Civil Case No. 118 of 2003

BETWEEN:

JACOB SIBIA
1st Plaintiff

VICTOR SOMA
2nd Plaintiff

AND:

WALTON NAEZON
Defendant

SUMMONS AND STATEMENT OF CLAIMS FOR DEBT FOR DISHONOURED CHEQUE

The plaintiffs by their statement of claim recited that the defendant, Walton Naezon is their Member of Parliament for Central Guadalcanal. The plaintiffs sue as representative of a short list of people given “cheques” by the defendant, drawn on his bank account with the National Bank of Solomon Islands Limited. The “cheques” on presentation for payment, were dishonoured, for there were insufficient funds to meet payment.

The Plaintiffs say they had a legitimate expectation to payment, for they had lodged with their member, application for Rural Community Development Fund grants totalling some $35,000. But on trial the pleading related to the dishonoured cheques, and the plaintiffs did not seek to prove any legitimate expectation arising out of contract, on statutory obligation for instance.

Whatever moneys were paid by the Central Government to the Member of Parliament for Rural Community Development, would, it appears on the evidence, be paid at the absolute discretion of the member irrespective of merit so far as development is concerned. Geoffrey Shearer, said, for instance that people who wanted money would approach the member, they may be sick or need to go home, and they would approach Walton Naezon. Other witnesses said they received money because the defendant was a good member.

Clearly the money of the Development Fund, if in fact paid for a purpose by the Government, changed its nature in the hands of the member. Nevertheless, the plaintiffs have not proceeded on the basis for some other cause of action, except that of debt by virtue of the dishonoured cheque. In those circumstances, there is little point in addressing the failure of the defendant to give evidence in his cause, for it was never in issue that none of the “cheques” given to the plaintiffs by the defendant were ever cashed, and the reason, “no funds” in the defendant’s account.

Quite frankly, having heard the witnesses, one would have to say reference to a payment, if it be so, by the Central Government to local members of “Rural Development Funds” is a misnomer.

So these claims effectively arise out of the refusal of the drawee bank to pay cheque forms made out to “cash”.

I am minded to follow the decisions in North and South Insurance Corp. Ltd –v- National Provincial Bank Ltd (1936) 1 K B 328 and Orbit Mining and Trading Co. Ltd –v- Westminister Bank Ltd (1963) 1 QB 794 and find consequently the form of cheque drawn payable to “cash” is not a cheque in terms of the Bills of Exchange Act 1892 (the Code) as affected by the Cheques Act 1957. Both United Kingdom Acts are applicable as law in the Solomon Islands and the plaintiffs concede this fact. I find against the plaintiffs where they impliedly assert the document are cheques within the ambit of the Cheques Act 1957 for no payment was made by the drawee bank and consequently the documents cannot be deemed to be “cheques”.

I agree with the plaintiffs’ assertion, however, that they have indicia as orders for payment of money, and as such, fall within the definition of a bill of exchange and thus subject to the Code.

It should be remembered that a cheque in a form of bill of exchange, normally intended for the immediate discharge of a single debt.

Two things arise from that statement. There was no debt due by the defendant, rather an offer to pay money to the defendant’s constituents who petitioned the defendant, seems to have been commonly understood. Having heard the various plaintiffs and witnesses for the defendant, any terms of the offer are impossible to fix.

Quite frankly, there is no need to enter upon any exhaustive enquiring about terms for nothing has been presented to me. That gives rise to the suggestion of a personal debt or obligation by Walton Naezon to these two plaintiffs. The fact that large sums of money have been given to Walton Naezon by the Government for “rural development”, suggestive as it is when the plaintiffs were seeking funds for that purpose, does not, of itself, create a debt in this individual to these plaintiffs.

The second thing that arises, since the documents relied upon are not cheques, is that, as a bill of exchange, the drawer of the bill, Walton Naezon, may impose conditions on the bill to include the time of payment. Having heard all the witnesses, including those of the plaintiffs, I am not satisfied the plaintiffs had an immediate expectation of payment upon presentation of the bill for payment at the bank. Everybody continually went to the Bank on the off chance some would be lucky. In fact, one witness said his cheque was met on presentation.

In fact, I am satisfied that the plaintiffs may reasonably have expected delay in payment and consequently the defendant argument about meeting the bill at a determinable future time is made out. That time was when further funds would be credited to his account, although no specific period or dates were ever prepared. Rather the evidence supported a vague expectation in future, bearing in mind that the documents were only good for a year from their date. There is evidence that Walton Naezon bought back some bills in that year, supporting my finding they were bills of exchange.

While the determinable future time obviously called for a discount if one fortunately held such a bill, (and the defendant actually bought back bills for far less than their face value), I am unable to find the case for the plaintiffs made out.

In the circumstances of these convocations, (in the absence of debt) the paper document not being a cheque, there cannot attach an enact point in time when the value ascribed on the bill would be met. It may have had some value to someone but not the value which the plaintiff seeks to attribute to it. Since I cannot find a value on the evidence, the plaintiffs must fail.

I order the entry of a verdict for the defendant. Costs should follow the event.

Brown J