Kikolo v Viulu [2013] SBHC 148; HCSI-CC 279 of 2010 (20 November 2013)

IN THE HIGH COURT OF SOLOMON ISLANDS.
(Faukona J)

Civil Case No. 279 of 2010.

BETWEEN:

PATTERSON KIKOLO
Claimant.
(On behalf of himself and Kefu tribe).

AND:

DESLIKE VIULU
First Defendant.

AND:

SELWYN RIUMANA
Second Defendant.

Date of Hearing: 7th October, 2013.
Date of Judgment: 20th November, 2013

Mr. W. Togamae for the Claimant.
Mr. M. Tagini for the Defendants.

Judgment.

Faukona J: This is a claim in category C and was filed on 26th July, 2010. Dispute germinated in respect of a copra shed built by CEMA (Commodities Export Marketing Authority) at Susubona village, Isabel Province.

Brief background facts:

2. After some understanding with the Claimant, CEMA constructed a Copra shed building at Susubona village, Isabel Province. On 29th April 1996, CEMA signed an agency agreement with the Claimant. CEMA would provide funds and the Claimant would buy copra for CEMA and received agency commission.

3. On 28th August 2002, CEMA terminated the Agency Agreement with the Claimant by a letter of that date. What transpired in the termination letter had prompted variable views from the parties.

The Claimant's Case:

4. There was a general offer made to all agencies in the country, by CEMA's letter of termination dated 28th August, 2002, to purchase CEMA assets. The Claimant was one of such agent. In respond to the offer, the Claimant, on behalf of his tribe, made first instalment payment of $2500.00 on 13th September 2005. The balance will be paid later with further instalment payments by the tribe.

5. Having heard that the First Defendant had paid for the shed, the Claimant on behalf of his tribe offers to reimburse the First Defendant's money by offering first instalment payment of $10,000.00 but was refused.

The First Defendant's Case:

6. By CEMA's letter dated 21st July, 2006, an offer was made to Samson Viulu and Susan Viulu after receiving a deposit payment of $2500-00, which Samson Viulu gave to the Claimant at Zoviri, Honiara, who in turn paid to CEMA, as the first instalment. A further $17,000.00 was paid on 15th September, 2006, and a balance of $500.00 was paid in October, 2006.

7. By subsequent letters from CEMA dated 20th November, 2006 and 30th January 2007, the shed was finally sold to Samson Viulu and Susan Maroe Viulu for a total consideration of $20,000.00. On 9th February 2009, the First Defendant sold the copra shed to the Second Defendant for the sum of $57,000.00.

Is there a valid sale contract between CEMA and the Claimant for the sale of CEMA shed?

8. The document ought to be thoroughly examined is the termination letter of 28th August, 2002. The Claimant relies on this letter as contain an offer for sale of the shed. Paragraph 6 expressly stated that CEMA Board agrees to sell the building to the buying agents. The paragraph ended by stating an offer will be made soon.

9. Having terminated the agency agreement, CEMA Board decided to give first option priority to the agent to buy, following an offer to be made. Despite promise to make an offer there was none. There was nothing from CEMA in terms of a statement made either orally or in writing, or by conduct. The sentence was a mere preliminary negotiation which lack the element of willingness to be bound, see Seafreight V Bishop Sipping (1976) PNGLR 22. An offer must be definite and certain, and must show CEMA intended to be bound by the terms if accepted by the Claimant.

10. The sentence was merely an invitation for the Claimant to express his interest and intention. It was not an invitation to treat either, because it did not invite the Claimant to make an offer. It merely invited the Claimant to express whether he would wish to buy the shed or not. Thereafter, there is no evidence that the Claimant expressed his interest to buy the shed. There was no respond by the Claimant because there was no offer made by CEMA. Henceforth, there was no offer at all made to the Claimant. If there was no offer, there was no acceptance; there was no consideration passed from the offeree to the offeror, and hence, the parties did not intend to create a legal relationship or willing to be bound.

11. A second option was expressed in paragraph 7 of the same letter. It stated that CEMA agreed to lease the buying point to the agent. However, should others wish to lease, the tender process for lease will be arranged with option to buy? Simply, if the Claimant is the only person wish to lease then that can be arranged and eventually would buy. However, if others also expressed interest, then the Claimant has to enter into competition through tender process. There is no evidence to show and establish that the Claimant wish to lease the building. Up until $2500 was paid to CEMA on 13th September, 2005, the Claimant had been mute sitting on his privilege; nothing was expressed or done by him at all.

12. From the tone of the letter, the whole intention of CEMA was to sell or lease the shed with option to buy to the Claimant or any member of kefu tribe. It does not mean, in my view that should any member of kefu tribe purchase the shed that should be done on behalf of kefu tribe. That is a misconception of the true intent of CEMA. However, it would appear that the Claimant's view was to maintain tribal ownership of the property because they own the land. Unfortunately, that is not the case. The land was owned by the Second Defendant pursuant to Chiefs decision on 29th August, 1997, and endorsed by the Paramount Chief of Isabel Province, D. Tuti on 28th July, 1998.

Is there a valid contract between CEMA and First Defendant for sale of the shed:

13. By letter dated 21st July 2006, disclosed an offer made to Samson Viulu and Susan Viulu, the son and wife of the First Defendant. The offer was made after a deposit had been received by CEMA. No particular amount was stated but it clearly indicated $2500.00 paid on 13th September, 2005. Two other payments were made after 21st July 2006. If the Claimant had paid the amount, which had been receipted in his name, why should not CEMA made an offer to him.

14. This prompted me to find a reason, and I find no difficulty when reference is made to paragraph 5 and 6 of the statement of case, which the Claimant had revealed that the amount of $20,000.00 was paid by the First Defendant without obtaining authority from him. Whether authority was sought or not is immaterial, the importance is that there is affirmation by the Claimant that the amount of $20,000-00 was paid by the First Defendant.

15. It cannot be disputed that without formal acceptance of the offer, there is no contract exist. An offer is accepted though not conveyed in the same manner the offer was made, provided the (First Defendant), in this case his son and wife, conducted, by partly performed taking reasonable step to pay part of the consideration, see ''The Satanita case (1895) p.248; and Brinkibon V Staghag Stahl (1982)1 All E.R 293; the offer was accepted and a valid legal contract was created. Two further instalments were paid later to fulfil final performance of the contract, thereby concluding the contract. Letters from CEMA dated 20th November, 2006, and 30th January 2007, had concluded the contract by affirmation and that the ownership of the shed will be transferred in the names of Samson Viulu and Susan Viulu.

16. The reason for involvement of Viulu family to undertake this important step in purchasing the shed is very clear. From the same two letters from CEMA, I noted that both letters indicated that the property was paid under the kefu tribe. It would appear, though not crystalline, that the option to purchase the shed was presumably given to any member of Kefu tribe as a first priority, should the Claimant fail. In this case, it occurred exactly as that, and CEMA had accepted it. The fact that Samson Viulu and Susan Viulu are from kefu tribe which no one would deny. And that was in line with the whole entire intention that members of the tribe be given first priority option to buy the shed.

17. In the end I could confidently adjudged that there was a legal binding contract between CEMA and the First Defendant's wife and son.

18. Having acquired the legal title to the shed, the First Defendant has all the rights to dispose it by way of sale to any person he wishes. In this case, he sold it to the Second Defendant for $57,000.00. A statutory declaration signed on 9th February, 2009, to that effect affirmed the transaction. Whether the sale is to a member of kefu tribe or not is immaterial. The fact is that the First Defendant has the absolute right to dispose it at will. There is evidence, which show he was the one who actually spent money for buying of the shed. He was a retired Public Officer and he used his money from his NPF investment to buy the property. Hence, the sale to the 2nd Defendant is valid.

19. With all that I have said, I am satisfied on the balance of probability, that there was no contract at all made between CEMA and the Claimant. The Claimant cannot claim ownership of the shed, neither on behalf of kefu tribe. I must therefore dismiss his claim with costs.

Order:

1. The claimant's claim is hereby dismissed.

2. Cost be paid to the Defendants.

The Court.