Ha'amo Growers Company Ltd v Manako [2003] TOSC 33; C 0289 2002 (30 July 2003)

IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA REGISTRY

NO. C. 289/2002

BETWEEN:

HA'AMO GROWERS COMPANY LIMITED
Plaintiff

AND:

KALIOPASI MANAKO
Defendant

BEFORE THE HON CHIEF JUSTICE WARD

COUNSEL: Mr Niu for plaintiff
Mr Veikoso for defendant

Date of Hearing: 16 -19 June and 2 - 3 July 2003
Date of Judgment: 30 July 2003

JUDGMENT

The plaintiff company exports squash pumpkins to Japan, which have been grown by a number of registered growers. Such growers enter an agreement with the plaintiff to grow squash and supply it to the plaintiff to export and sell. The company on its part supplies the grower with seeds, fertiliser and other necessary chemicals on credit and deducts the advance with interest and charges from any receipts due to the grower from sales of his squash.

The defendant was registered with the plaintiff and, in 1997, had a very good season. As a result he increased his acreage for the 1998 season. The plaintiff's claim is that the net profits from the defendant's sales that season left the defendant owing the plaintiff $19,468.83. He did not challenge that sum and, the following year, 1999, again registered with the plaintiff. Again profits were down and he ended up owing the plaintiff a balance for that year of $17,914.61.

Again he did not challenge that sum and registered with the plaintiff for 2000. By the end of that season, he owed the plaintiff for goods received, cash advances, registration and administration fees and interest a total of $202,592.41. The proceeds from sales of the defendant's squash that year amounted to $98,620.45 leaving a shortfall of $103,971.96. The claim for that sum, the previous two years arrears and interest make a total up to 21 November 2001 of $156,904.49.

Nothing was paid at the end of 2000. The managing director of the plaintiff, Mr Nakao, told the court how the defendant came to him and asked to register for the next season. He was not happy with the defendant continuing to grow such as large acreage but the defendant was not willing to reduce it. As a result he was not able to register with the plaintiff for that season.

The debts were not paid and so a written demand was sent. It included a request to the defendant to tell the plaintiff if he disputed any of the sums demanded or if he felt he was not liable for any reason. He never came.

The trial of this case has not been helped by the fact that the statement of defence is a blanket denial of everything followed by a counter claim for a total of $214,500.00 the terms of which show that many of the matters denied in the defence should have been admitted.

When the case came to court, it was equally clear that counsel for the defendant had not taken proper instructions to conduct the defence. In particular he had clearly not taken the trouble to go through the documents filed by the plaintiff. It is regrettable to have to say it in a judgment but it was clear that counsel for the defendant was not prepared for a case of the size or complexity of this case.

Detailed documents had been filed by the plaintiff on 28 May 2003 yet counsel for the defendant, when asked by the court and in apparent disregard of his own pleading, advised the court that he would admit any document that the defendant had signed and deny any that did not bear his signature. Counsel told the court that he had not been through the documents with his client and was content simply to proceed on that basis. He was given a short adjournment to check with his client but maintained his position with regard to the signatures.

Mr Niu for the plaintiff generously took no objection to the defence challenging the documentation on that basis or, indeed, on any of the other bases of challenge by the defence. He could have done so. He came to the trial with no warning of them. The statement of defence filed denied any agreement and any knowledge of every other detail on the statement of claim. Having failed properly to plead his defence, Mr Veikoso for the defendants then raised a series of allegations and challenges. Apart from allegations that a new grading machine had damaged some of the defendant's squash and that the plaintiff had failed to honour a promised price, both of which were part of the counter claim, the plaintiff had no warning in the pleadings of any of the matters raised at the trial.

The burden of proving the debt rests on the plaintiff. The case was clearly pleaded and presented in court. The documentation in support of the sums claimed was produced at the outset. As the nature of the defence was revealed as the trial progressed, more documents were found and, in a number of instances, clearly disproved the allegations being put by the defence. Having relied on the blanket denial of any debt evidenced by a document without the defendant's signature, some of the documents produced to counter the allegations in cross examination clearly showed that the unsigned dockets were true - as the defence had to admit.

I do not intend to go through the plaintiff's evidence. The case presented in court demonstrated well beyond the balance of probabilities that the office procedures of the plaintiff were efficient and accurate. I am satisfied they clearly prove the debt as claimed. I do not accept the defendant's denials.

The defendant produced no documents. He told the court that he always kept the receipts but after the 2000 season he was unhappy with the way the plaintiff had treated him and so he simply "let them go". He had nothing in writing. He did not explain why he had not used the documents to challenge the two earlier years' debts at the time or, indeed, why he had not challenged them at all.

As the trial proceeded other lines of defence were put forward. Through his counsel's cross examination, he challenged the validity of the agreements in the first two years and his liability under them. He denied the sums due for ground preparation and then challenged their accuracy in some respects only. He disputed that cash advances had been made until further documents obliged him to retract and he then challenged the manner in which they were made. He even denied having been informed of the debt at the end of the season by the plaintiff. The defendant told the court that he had instructed his lawyer that the managing director of the company had forgiven the debt for 1998; a suggestion firmly denied by Mr Nakao. He did not explain why he had not challenged its inclusion as arrears on the account admittedly supplied at the end of 1999.

The main basis of his counter claim was that the plaintiff had promised a set price in each season for the squash but had paid out less. The evidence was that, each season, there were a number of growers meetings at which prices were mentioned. It was also decided, on a vote, whether the growers should be paid for each vessel or paid at the end of the season on the basis of the average price for all shipments.

The plaintiff's evidence was that the price achieved on each shipment as the season progressed varied considerably. Frequently the price for the first ship was higher than for later shipments. In 2000 the opposite occurred with the result that no exporter could declare a profit on the first vessel but the next two shipments achieved a good enough price to raise the average considerably.

A considerable amount of evidence was devoted to the question of whether and what price was promised for the squash. The defendant gave evidence and called a number of growers. He claimed that the plaintiff declared a set price for the main varieties of squash but then paid a lower price at the end of the season.

Mr Nakao agreed that a price was sometimes fixed for Ajihei squash but told the court that it was never fixed for Kurijiman. He denied the figures suggested by the defence.

The other basis of the counter claim was that, in the 2000 season, the plaintiff had a new grading machine installed. In order to adjust it, it was necessary to carry out a number of test runs using squash. The defendant supplied squash for that test and some was damaged. The defendant claims the value of the damaged squash. The plaintiff's case is that they had come to an agreement that it would be settled by loading the price of each bin supplied that year to an amount of approximately 5%. Mr Nakao was unsure of the precise figure agreed upon but was sure the allowance had been made. I accept his evidence of this.

I do not consider it is necessary to go into the details of the evidence further. I am satisfied that the managing director of the plaintiff was a truthful and accurate witness. His witnesses were equally credible and supported his evidence.

On the other hand I simply do not believe the defendant. I have absolutely no doubt that he lied on a number of aspects of the case in relation mainly to the procedures for receiving supplies and cash advances from the company. His evidence was simply an automatic denial of every debt without anything to support his denial. I am equally satisfied that he is wrong in his recollection of the nature and result of the growers' meetings. Both sides called growers to give evidence of those matters. Many of those called by the defendant simply did not support the defence case and others were clearly unsure of what occurred at the meetings.

My opinion of the credibility of the witnesses is such that, in any matter of dispute between the evidence of Mr Nakao and his secretary, 'Eseta Tamale, on the one hand and that of the defendant on the other, I have no hesitation in accepting the former against the latter.

I have been through the evidence with great care. It satisfies me well beyond the balance of probabilities that the plaintiff has proved its claim. I am satisfied that the defendant incurred that liability and has simply tried to avoid it. In the 2001 season, he told the court that he made a substantial profit with another exporter. He made no attempt to pay his debts to the plaintiff and I have no doubt he is simply trying to avoid them. I reject the counter claim in its entirety. I am satisfied that the alleged offers of a fixed price were lower than those claimed by the defendant in relation to Ajihei and were indications only of the possible prices for Kurijiman and I have no doubt the defendant knew that perfectly well. I am equally sure that the agreement explained to the court by the managing director of the plaintiff whereby the damage caused by the new machine was to be covered was true.

I give judgment to the plaintiff in the sum of $156,904.49 and interest at 11% from 22 November 2001 until payment. The counterclaim is dismissed.

This was a thoroughly unmeritorious claim. No real attempt was made to provide a defence. The failure of counsel to plead the case properly followed by a series of unsubstantiated defences resulted in a trial of 6 days to prove a debt for which the defendant was all too plainly liable. In such cases the court is entitled to consider awarding costs on a solicitor own client basis. With some hesitation, however, I award costs only on a party to party basis because I feel the defendant, upon whom the liability will rest, was not entirely to blame for the manner in which the case was conducted. His lawyer must bear some of the responsibility and I feel it would be unfair to make the defendant suffer more for the conduct of his lawyer.

NUKU'ALOFA: 30^th July, 2003

CHIEF JUSTICE