Ou v Milikada [2013] SBHC 78; HCSI-CC 247 of 2011 (9 July 2013)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Mwanesalua J)

Civil Case No. 247 of 2011

BETWEEN:

GEORGE MOFFAT OU
(Trading as Makali Development Enterprises)
Claimant

AND:

SILAS MILIKADA
(Trading as J.P. Enterprises Limited)
Defendant

Date of Ruling: 9 July 2013

Mr. Hou for Claimant
Mr. Etomea for Defendant

RULING

1. CLAIM. Mr. George Moffat Ou, the Claimant, filed his claim against Mr. Silas Milikada, the Defendant (Trading as JP Enterprises Limited on 11 July 2011. The Claim against the Defendant are for: (1) An order for judgment against the Defendant for breach of contract to be assessed up to judgment; (2) An order that the Defendant pay statutory interest on the sum to be assessed at the rate of 5% per annum from 19 December 1996 until Judgment; (3) An order that the Defendant pay the Claimant's costs of and incidental to this action; and (4) further and other orders the court thinks fit to make in the circumstances.
   
2. AGREEMENT. The Claimant entered into an agreement with the Defendant on 19 December 1996 on the request of the Defendant. Its terms inter alia are: (i) The Claimant was to lend the sum of $40,000.00 to the Defendant by way of borrowing to assist him meet his logging operational costs during a shipment of logs he was to make then per a vessel known as MV John N; (ii) By way of repayment, the Defendant was to repay the principal sum of $40,000.00 herein together with a further sum of $10,000.00 thereon to the Claimant from the proceeds of the shipment; (iii) The Defendant shall give priority for repayment of the said principal sum of $40,000.00 plus the further sum of $10,000.00 to the Claimant upon receipt of the proceeds of the shipment; and in the case the Defendant failed to pay the respective sums herein to the Claimant, the later shall pursue legal action against the Defendant to recover the sum.
   
3. CLAIMANT. The Claimant is a business man trading as Makali Development Enterprises duly registered under number BN420 of 2006 pursuant to the provisions of the Registration of Business Names Act 1971. The Claimant exhibited a copy of the agreement to the court as "Exhibit GMO 3" to his sworn statement filed and dated 20 October 2011. The Claimant affirmed that the Defendant upon receipt of the proceeds of the shipment of the logs referred to herein failed to pay the said sums of $40,000.00 and $10,000.00 to the Defendant. However, on 23 September 1997, Mr. Andrew Nori paid the sum of $10,000.00 to the Claimant per ANZ Cheque No. 037837, from trust funds held on behalf of the Defendant, leaving a balance of $40,000.00. After several follow up reminders by the Claimant, the Defendant finally paid the sum of $10,000.00 in cash to the Claimant on 16 December 1997 leaving a balance of $30,000.00 still outstanding. On 1 April 1996, the Defendant and the Claimant after reaching some understanding between them entered into another Agreement superseding the original agreement of 19 December 1996, inter alia on the following terms: (i) The Defendant was to pay the outstanding balance of $30,000.00 to the Claimant immediately and (ii) in breach of the agreement the Defendant to immediately repay the balance $30,000.00 to the Claimant at the interest of 25% per annum until full payment. The agreement was signed between the Claimant and Defendant on 1 April 1999 in the presence of two witnesses. A copy of this agreement of 1 April 1999 is annexed as "Exhibit 9" to the Claimant's sworn statement filed on 20 October 2011. The Defendant failed to make any payment to the Claimant as agreed under the agreement dated 1 April 1999. In other words, the Defendant was in breach of this agreement as well. On 12 April 2011, after the Claimant held discussions with the Defendant on the payment under the agreement of 1 April 1999, they both agreed on the following terms: (i) The Defendant reaffirmed his commitment to pay the Claimant pursuant to the previous agreement dated 1 April 1999; (ii) in reaffirming his commitment, the Defendant shall sell one of his properties and the proceeds thereof would then be used to pay the Claimant; and (iii) in the event that the Claimant assist the Defendant sell the property, the Defendant shall in addition to the sum he still owes to the Claimant pay commission thereon. The Defendant had failed to make any further payments to the Claimant since his last payment was made on 16 December 1997, and filed this claim on 11 July 2011 and application for default judgment on 23 May 2012.
   
4. DEFENDANT. Mr. Silas Milikada was served with the claim in mid July 2011 and filed an application for leave of the court to file defence and counterclaim out of time. An application by the Defendant to file defence out of time and an application by the Claimant were heard together by the court. The court read the counter claim and the defence and noted that the events which gave rise to the claim occurred eight years ago. The counter claim by the Defendant is made on the basis that the Claimant had removed two of his chair saws, blades and chains which are still in the possession of the Claimant.
   
5. DISCUSSION. The events leading up to the claim by the Claimant as stated herein commenced in 1996. This is the payment of the sum of $40,000.00 by the Claimant to enable the Defendant to export his shipment of logs overseas. Even though the logs were sold the repayment of that sum with interest is yet to be completed. All attempts taken by the Claimant for the Defendant to pay his debt had not been successful to date. These attempts clearly demonstrate that the Defendant was evasive and very uncooperative with the Claimant to settle his debt. It is therefore obvious that the Defendant was utilising the agreements and the undertakings he made with the Claimant as delaying tactics to frustrate repayment of the debt. The Claimant admitted his debt to the Claimant, but he sought leave to file defence and counter claim on the basis that two of his Chainsaws were in the custody of the Claimant. The saws, chains and blades in the possession of the Claimant were not valued for the purposes of this case. However, the Defendant estimated their total value to be around $35,000.00. The Defendant prays that the value of the said Chain saws, blades and Chains be ordered to offset the value of the claim. Further, the Defendant claims lost earnings for the use of the saws, the blades and chains, which he valued at $100,000.00 while they are retained by the Claimant. The Defendant had not provided any facts in arriving at this amount and therefore the court will not accept this figure. The Claimant seeks interest of 5% on the $30,000.00 still owing to him by the Defendant.
   
6. RULING. The application by the Defendant for leave to file counter-claim and defence is refused in that there has been delay in filing the same and any defence filed by the Defendant is unlikely to succeed. The Chainsaws, the blades and the chains can be sold to satisfy part of the Claimant's claim in the event the Defendant fails to settle the same. The default judgment sought by the Claimant against the Defendant is granted. The Defendant is to repay the principal debt of $30,000.00 to the Claimant with the interest of 5% per annum commencing from 19 December 1996 to date. That is a period of approximately 16 ½ years.
   
7. DAMAGES. The Claimant also claims unliquidated damages against the Defendant for breach of contract. This breach occurred when the Defendant failed to repay the sum of $40,000.00 which the Claimant lend to him and the sum of $10,000.00 which he promised to pay to the Claimant when he received the proceeds of the log shipment. The Claimant is also businessman like the Defendant himself. It would seem that the money which the Claimant lent to the Defendant came from his business. The Defendant had persistently ignored, made failed undertakings and agreements to settle his debts with the Claimant. The Claimant waited for no less than sixteen years to date to recover his money. The Defendant had caused the Claimant enormous cost in terms legal costs to get his case to this stage. In these circumstances, the court will award damages to the Claimant for breach of contract. Damages are accordingly assessed in the sum of $20,000.00.
   
8. ORDER:

1. Application for leave to file defence and counter-claim by the Defendant are refused and are therefore dismissed.

2. Judgment is entered against the Defendant by default judgment.

3. The Defendant is to pay the Claimant's debt of $30,000.00 together with the interest of $25,500.00.

4. The Defendant is to pay $20,000.00 for breach of contract with the Claimant.

5. The Defendant is to pay the Claimant's costs of this claim.

6. The chain Saws, the blades and the chains which are currently in the custody of the Claimant are to be sold by the Claimant to cover the balance of any short falls in the payment by the Defendant in relation to the total sum of the amounts of money in orders 3, 4 and paragraph 7 herein and the Claimant's costs within one month from the date of this order.

THE COURT