Hoilopo v Attorney General [2016] SBHC 183; HCSI-CC 58 of 2016 (19 October 2016)

IN THE HIGH COURT
OF SOLOMON ISLANDS
Civil Jurisdiction

BETWEEN: JAMES HOILOPO, TRADING AS - Claimant

JH PLUMBING, CONSTRUCTION &
MAINTENANCE SERVICE

AND: ATTORNEY GENERAL - Defendant
( for Ministry of Culture and Tourism)

Date of Hearing: 28 September and 10 October 2016
Date of Judgment: 19 October 2016

Mr. R. Dive for claimant
Mrs. L. Fineanganofo for Attorney General

Claim for moneys due under Service Contract to do work and supply materials

Brown J:
This Claim (Category B) filed on the 23 February sought a balance due and owing in respect of a money claim under various contracts with the Ministry of Culture and Tourism. The sum owing was claimed to be $1,126,250-56.

The claimant James Hoilopo, trading as JH Plumbing, Maintenance & Services was permitted to correct his description in accordance with R. 3.44 since no prejudice was occasioned to the defendant. The proper description of the claimant by the correction was called for in accordance with the Rules.

These claims arose out of work done for the Ministry of Culture and Tourism leading up to and during the Festival of Pacific Arts in 2012.
The claimant’s first contract was made on the 21 December 2011 between the Festival of Pacific Arts National Organizing Committee of Solomon Islands and JH Plumbing Service in the sum of $ 458,374-81 for the installation of Water Supply/Plumbing works for the Festival Village. The contract provided for retention of 10% to be deducted from all the payment until the practical completion Certificate issued, when the moneys retained were to be paid.

By terms in the Appendix to the contract variation may be directed by the “Principal or its representatives” but “such variations shall not be beyond the general scope of the contract”. The Permanent Secretary, Ministry of Culture and Tourism signed for the committee.

The claimant says he was directed to do more work and the variation given by the Organizing Committee was in an amount of $ 372,876-75.

The evidence in support of this variation was by Contract Variation Order under hand of Tropical Architecture Consultancy Service dated 7 February 2012, exhibit JH2 to the 1^st sworn statement of James Hoilopo dated 23 February 2012. The Variation Order on its face named the Ministry Culture and Tourism is client describing, the works as Plumbing to Festival of Art village, the contractor as JH Plumbing as added $ 372,876-75 to the latest contract sum of $458,374-81 making a new contract sum of $ 831,250-56. The variation Order was signed by Osborn Vangana, Supervising Architect for the Consultancy Services.

A further agreement dated 8 June 2012 required the construction of 10 toilets and 25 unit shower blocks at Don Bosco- Henderson. The contract sum was $250,000.
While in proforma, [although similar to the first contract,] this document named the Ministry of Culture and Tourism on behalf of the Organizing Committee of the one part (Principal) and JH Plumbing of other part (contractor) and described the works as “Urgent Construction ete”.

By yet another agreement dated 6 June 2012 the contractor agreed to water operation co-ordination, maintenance and disposal waste during the festival duration, 26 June to 26 July 2012 for $175,000.

Again by contract dated 11 August 2012 the parties agreed the contractor would undertake dismantling of the Water pipes and demolition of plumbing works at a contract sum of $230,000.

The Defence filed on the 5 April 2016 admitted the 1^st contract of the 21 December 2011 and pleads satisfaction for the moneys have been paid.
The variation to that contract was denied for it “was not authorized following the tender process for variation”

The defendant consequently does not admit liability for the variation amount.

Liability is denied in relation to the agreement dated 8 June for that it “did not follow the required MTB process which also required a formal approval of the Permanent Secretary of Ministry of Culture and Tourism, thus the Defendant had no legal obligation to pay for the contract sum itemized in paragraph 6 of the statement of case.”

The Defendant denies paragraph 7 of the case which stated the defendant’s failure to pay the contract sum. (I presume the defendant says it has no liability to pay or perhaps it says it has paid the sum claimed).

Again the claim under the contract of the 26 June is denied for it did not follow the required MTB process and formal approval of the Permanent Secretary. And again, the contract of the 9 August 2012 is denied on the same basis.

Curiously the defendant admits paragraph 11 of the case which pleads the defendant had failed to settle the contract sum to date of claim. The amounts claimed were denied.

To facilitate these reasons, I set out the contract amounts claimed.

1. Contract of 21 December 2011 $ 458,374-81
2. Variation of 7 February 2012 $ 372,876-75
3. Contract of 8 June 2012 $ 250,000-00
4. Contract of 26 June 2012 $ 175,000-00
5. Contact of 11 August 2012 $ 230,000-00

$ 1,486,251-56
There appears no issue that 7.5% withholding tax may be applicable, so that moneys paid would be net that tax.

Although the claimants counsel sought to lead me through various payments by the defendant and attempted to reconcile the amount still due and owing in relation to the Claim, this procedure is flawed for the amounts paid, while apparently net of 7.5% withholding tax, were part payments related to liabilities supposedly due, and need a financial function applied to realize the gross amount in relation to which the payments were made. And if that function is applied, it still is not clear to which contract the part payments may be applied.

An appropriate method, since I shall accept the claimants’ argument as to liability, is to subtract the 7.5% tax from the whole amount owing leaving a balance due.
$ 1,486,251-56
Less 7.5% Tax $ 111,468-87
Balance due $ 1,374,782-69

Now, by his statement of the 10 October, James Hoilopo further confuses the matter, for while referring to the statement of Andrew Nihopara, for the Ministry of Culture and Tourism, [and while accepting that statement as evidencing the total payments he had received] Mr. Hoilopo annexed detail of his ANZ account, marking in red payments admittedly off these contract claims. Those marked payment total $ 1,483,646.90. Yet by his statement in his column “payments received” he admits sums totaling $ 1,762,943-41. None of the payments in his payments column can be related to the ANZ statement. By copy of his ANZ statement, an amount of $1,090,116.20 was admitted to be paid pursuant to the contract. If this amount is grossed up, $1,178,504 is the amount paid by the Ministry [before deducting the 7.5% withholding tax]. Nowhere in the accepted payments by the Ministry is this amount listed. While the contract and variation are proven, clearly the claimant has failed to prove the moneys owing under the contract, rather he relies on the admitted sums due and payments made in accordance with Andrew Nihopara’s statement for the Ministry.

His own claim for $ 1,486,251-56 (less tax) leaves a balance due, of $ 1,374,782-69, yet he admitted being paid $ 1,483,646-90. On these figures he was clearly overpaid.

But in his later statement, he seeks to rely, not on his claim but admissions of the defendant in the statement by Andrew Nihopara, for those admissions go beyond the claim in a material respect.
I summarize the detail in Mr. Nihopara’s statement in relation to approved contracts and payments.

Value of contract Amount paid

21 December 2011 Service Contract $ 458,374-81

22 February 2012 SI Government Cheque $ 130,812-59

(Net withholding tax)

3 May 2012 Service Contract $ 1,473,130-00

22 May 2012 SI Government cheque

for 80% mobilization

payment in sum of

$1,178,504(less tax) $ 1,090,116-20

28 August 2012 SI Government Cheque
(Part payment of approved
Service Contract 3 May)
$ 294,626(less tax) $ 272,529-05

24 December 2012 SI Government

Cheque-part payment

For approved additional variation

Sum of $ 1,473,130

[$ 159,000.82] $ 147,075-76

$ 1,931,504-81

(Less 7.5%) $ 144,862-86
$ 1,786,641-95 $ 1,640,533-60
Amount Due $ 146,108.35
$ 1,786,641-95 $ 1,786,641-95

So while James Hoilopo in his statement, claims $ 168,561-40, on the concession of Andrew Nihopara, by his statement of the 20 July 2016 on which the above Contract Value and Payments made is set out, the amount still due and owing is $ 146,108.35.
I am not prepared to accept the claimants’ various figures which, on his own case, show over-payment.

The concession of Andrew Nihopara based as it, on evidence exhibited to his statement, is sufficient for me to give judgement for the claimant in the sum of
$ 146,108-35.
He shall have interest at 5% in accordance with R. 17.65.
The claimant shall have his costs of the proceedings, to be agreed, assessed or taxed.

__________________
BROWN J