Ken v AGC Finance (Vanuatu) Ltd [2001] VUSC 44; Civil Case 111 of 1998 (2 May 2001)

IN THE SUPREME COURT

OF THE REPUBLIC OF VANUATU

(Civil Jurisdiction)

Civil Case No.111 of 1998

BETWEEN:

DON KEN

Plaintiff

AND:

AGC FINANCE (VANUATU) LIMITED

Defendant

Mr. Jack Kilu for the Plaintiff

Mr. Nigel Morrison for the Defendant

JUDGMENT

lass="MsoNoMsoNormal" style="text-align: justify; margin-top: 1; margin-bottom: 1"> Action

class="MsoNoMsoNormal" style="text-align: justify; margin-top: 1; margin-bottom: 1"> Breach of contract.

class="MsoNoMsoNormal" style="text-align: justify; margin-top: 1; margin-bottom: 1"> Nature

class="MsoNoMsoNormal" style="margin-right: 43.2pt; margin-top: 1; margin-bottom: 1"> The plaintiff alleges that he entered into a leaseement by contract on aboutabout the 4^th of January 1996 for the lease of a Toyota Hilux 4 x 4 leased to Salma Malites and at completion of payment of loan the vehicle ownership will be transferred to him. Salma Malites fail to honour lease agreement for non payment of which the said vehicle was repossess and put on sale by tender.

class="MsoNoMsoNormal" style="margin-right: 43.2pt; margin-top: 1; margin-bottom: 1"> The plaintiff alleges that he entered an agreement with the defendant to pay off off the balance of VT 700,000 and the ownership of the vehicle will be transferred to him. He alleges that this was a verbal agreement between the plaintiff and May for the plaintiff to pay off the unpaid lease loan and there after continue to make repayment. The plaintiff was making repayment until April 1998 when the defendant repudiated the contract.

Issuan>

class="Mss="MsoBodyText" align="left" style="text-align: left; margin-top: 1; margin-bottom: 1"> The real issue is whether there was an agreement between the plaintiff and the defendant for the plaintiff to pay of the out standing amount of VT 700.000 and the ownership will be transferred to him.

Evidence

class="MsoNoMsoNormal" style="margin-right: 43.2pt; margin-top: 1; margin-bottom: 1"> The vehicle was leased out to Malites. While on lease, it was repossessed by the defendant due to non payment of loan and was kept at the Police custody at Lakatoro. When this occurred then Malites had some discussion with the plaintiff to pay off the outstanding loans and the vehicle will be for the plaintiff. The amount outstanding as mentioned by the plaintiff was VT700,000 and this was the amount alleged as the remaining amount. In their discussion A.G.C. was not a party. However, May's evidence was on the contrary. That is Malites deposited VT1,300,000 with a monthly repayment of about VT95,000. When the vehicle was repossessed the amount outstanding was VT2,406,344. I find this amount of VT700,000 was not the amount outstanding in the lease agreement but VT2,406,344 and accept the defendant’s evidence that this was outstanding. This means that if the plaintiff was to pay VT700,000 then this did not represent the outstanding amount with A.G.C., but will only represent the amount agreed between Malites and the plaintiff. On this arrangement the plaintiff came and saw May who at that time was the business officer who interview customer and make recommendation for loans to the manager. The plaintiff informed May of his arrangement with Malites for him to pay off the VT700, 000. May told him to go and make arrangement with Malites, which they did. The letter (D.5) dated the 15^th September 1997 will confirm what A.G.C. requires Malites consent for some form of agreement between the plaintiff and Malites. The intention of the lessee in that letter was that, he was authorizing Don Ken to full fill the loan repayment on his behalf. In that letter (D.5) the amount was not mentioned but refer to the outstanding loan. However, it was for Malites to honestly tell Don Ken of what he owes to the defendant as outstanding up and until the vehicle was repossess and that was still outstanding under the loan to continue to be repaid pursuant to the lease agreement. As the outstanding loan was VT2, 406,344 and not VT700, 000 as agreed between Malites and the plaintiff.

What I understand from the plaintiff’s evidence was that the VT700 will represent a paymentyment of VT200, 000 as a penalty in addition to VT500, 000 as the outstanding loan to give the total of VT700, 000 that was the total outstanding against Malites.

Maied her making any arrangement with the plaintiff of VT700, 000 as representing the tthe total amount of VT700, 000 as the balance to be repaid; but she explain to him that the lease agreement was between Malites and A.G.C. The agreement she insisted for the plaintiff and Malites to agreed upon was purely to protect A.G.C. and to allow Don Ken to operate the vehicle but at the same time to pay loan repayment on behalf of Malites.

The plaintiff on payment of VT697,000, to him was that h complied with the agreemeneement for him to have the vehicle.

The question : Was there an agreement between the plaintiff andf and the A.G.C.? May's responsibility was by interviewing customers and making recommendation to the manager, as the manager approves loans. For these reasons she was not capable to enter any agreement between the plaintiff and on behalf of the defendant. In her evidence she was maintaining the present lease agreement between the defendant and Malites and for the 3^rd person to continue to make repayment on behalf of Malites. The letter by the plaintiff (D. 5) will confirm that. With the view of this arrangement the plaintiff was to pay off the loan completely and the vehicle will be transferred to him on completion of the loan repayment in accordance with their own agreement. I accept that the practices that occurred between Malites and Don Ken was accepted practice by the defendant done in the past to other customers with similar arrangements, with the view that the lease agreement still remain between the lessor and the lessee with a third person fulfilling the lease agreement. This also happened in the case of Malites and Don Ken as accepted by the defendant and I find to be a proper practice so long as the third person fully complied with the lease agreement.

I find there were no contract entered between the plaintiff and the defendant apart from the the existing lease agreement with Malites. The role of the plaintiff was purely as a third person and nothing to do with the lease agreement between the defendant and Malites.

Kilu submitted that if there were no agreement en the plaintiff and the dehe defendant then his money will have to be refunded. On his submission Nigel submitted that there were no agreement between A.G.C., Don Ken and Malites. He advances that in this case is whether Malites can assign his liabilities to Don Ken without getting the consent from A.G.C. and advance that this is not possible. If it has to be possible then A.G.C. must be a party to their assignment of liabilities.

lass="MsoNoMsoNormal" style="margin-right: 43.2pt; margin-top: 1; margin-bottom: 1"> I accept the submission of Nigel as representing the right position of assignment aent and liabilities in law which is the case A.G.C. was not a party to that contract between Malites and Don Ken and continue to maintain the lease agreement with the loan repayment was to be paid by Don Ken and this was proper.

May referred to was that such arrangement are not unusual as she has experience in thin the past of such arrangement with other lessees.

If this is so then what occurred, then was a matter puretween Don Ken and Malites ites and A.G.C. was only maintaining the lease obligation between A.G.C. and Malites with the performance by Don Ken on his agreement with Malites. And if he completes paying off the loan the vehicle will be his in accordance with their own understanding.

I find that it was a perfect arrangement. But if failure of repayment then only Malites ites will be responsible and not Don Ken. The letter of 23^rd September 1998 written to Barak Sope and Malites that the lessor incurred losses on the sale of the said vehicle will confirm that the lease agreement was still between Malites and A.G.C. and did not involve Don Ken. Therefore, in this case I will treat Don Ken repayment was repayment on behalf of Malites and cannot be refunded by A.G.C.

p class="MsoNoMsoNormal" style="margin-right: 43.2pt; margin-top: 1; margin-bottom: 1"> Kilu advance that at least the plaintiff should be advised of the disadvantage. On this advancement May maintain in her evidence that the agreement was between A.G.C. and Malites and no information can be passed on to a 3^rd person. This I agree as proper and to protect the lessee of what occur between the lessor and the lessee as the plaintiff was not a party to the lease agreement between Malites and A.G.C. and I can refer to the plaintiff as a stranger. By this relationship A.G.C. had no obligation to advise Don Ken as A.G.C. was not a party to their arrangement and Don Ken should at that time should take independent advise.

By Malites' letter of 4^th October 1997 he still maintain tain that the loan was his and he made arrangement with someone to keep paying off loan repayment which in my view the plaintiff was the person and the receipt will confirm my view to be Don Ken. This confirms the fact that even though Don Ken was paying of the loan, Malites still remain the lessee. I can not find that such arrangement was a mistake but well agreed upon to be done that way and A.G.C. has correctly collected the loan repayment as belonging to Malites from Don Ken. What is left now is a matter between Don and Malites.

I find that Don Ken has been dragged into thelem of Malites to save Mali Malites from the loan repayment. The vehicle has been repossessed and sold with a cost of VT1,133,544 lost to A.G.C. He has lost money in this process at the same time he has used the vehicle too. The loss suffered should remain between him and Malites in accordance with their own agreement as evidence in Malites letter (D. 5) of the 15^th September 1998 and not with A.G.C.

I thereford that the plaintiff has failed to prove his case on e on the balance of probabilities and case is dismissed with costs to the defendant to be taxed if not agreed.

R. MARUM MBE

JUDGE