IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 30 of 2003

BETWEEN:

MARIE TIOME
Claimant

AND:

WESTPAC BANKING CORPORATION
Defendant

Coram: Mr Justice Oliver A. Saksak
Mrs Anita Vinabit – Clerk

Counsel: Mr Saling Stephens for the Claimant
Mr Nigel Morrison for the Defendants

Date of Hearing: 3rd August 2005
Date of Judgment: 1st March 2006

JUDGMENT

Introduction

This is a reserved judgment. The Claimant bases her claims on a Hire-Purchase Agreement dated 17th March 2000 seeking orders for:-

(a)	Damages to be assessed;
(b)	Exemplary damages;
(c)	Alternatively, for specific performance; and
(d)	Costs.

Facts

On 17th March 2000 the Claimant signed a Hire-Purchase Agreement (the Agreement) with the Defendant. Under the Agreement the Defendant was to let a motor vehicle to the Claimant. The total price was VT 1,971,625. The Claimant paid VT 900,000 on the date of signing the Agreement. The balance was to be paid over a period of 42 months at a monthly instalment of VT 69,000. Payment was to be made at the end of each month.

However, on the 16th July 2003, the Claimant alleged that the Defendant had without any notice in writing to the Claimant unduly terminated the Agreement.

The Claimant therefore sues the Defendant for damages for loss of income at VT 25,000 per month, and for exemplary damages in the sum of VT 2,000,000.

Issue

The issue for determination is whether or not the Defendant had breached the Agreement by not issuing a notice in writing as required by Clause 7.15.

Defence

The Defendant deny there was a breach. They contend that the Claimant had breached the Agreement.

Standard and Burden of Proof

In this case the Claimant has the burden of proof on the balance of probabilities.

Evidence by Claimant

The Claimant gave oral evidence in addition to her sworn statements dated 25th November 2003; 13th December 2004; 28th February 2005; 16th May 2005; 31st May 2005 and 26th July 2005.
The relevant parts of her evidence were that on 16th July 2003 Tom Wells as agent of the Defendant had repossessed the vehicle. Upon repossession he showed her a letter dated 26th June 2003 which she alleges was never served on her and that the first time she saw the letter was on 16th July 2003. The letter reads as follows:-

'26th June, 2003

To Whom it May Concern

Dear Sir/Madame

This letter authorize the bearer to collect the full outstanding amount of debt as listed below, failing, to repossesses the vehicle mentioned below.

Account Number:	2000012787
Customer:			Mrs Marie Tiome
Type of vehicle:		Toyota Hilux 4x2
Registration No.:		T5145
Colour:			White

Arrears			Vatu
05 March 2003:		19,000
05 April 2003:		69,000
05 May 2003:		69,000
Other expenses:		10,000
Total 			 167,000

Yours Faithfully,

				Lettis Napat (Signed)
				Personal Business Officer'

Mrs Tiome’s evidence about repossession on 16th July 2003 was confirmed by her brother Edmond Tiome.

Evidence by Defendants

Two witnesses testified orally and by sworn statements for and on behalf of the Defendants. Mrs May Boe in her position as Manager of Loans Management Unit confirmed the Agreement entered into by the Parties on 17th March 2000. She confirmed the amount borrowed and the amount to be paid by 42 monthly installments. She gave evidence of arrears on 20th February 2003 for which a letter of reminder and demand was sent. The Claimant responded on 27th February 2003 undertaking to make good that default by 28th February 2003. (See Annex B – M1 – 25/11/03). She further testified that as at March 2003 the arrears of the Claimant had been VT138,000. As at 20th May 2003 the arrears had not been made good by the Claimant and it had increased to VT157,000. It was directed that a Notice of Breach be issued which reads as follows:-

'NOTICE OF BREACH OF ESSENTIAL CONDITIONS OF ASSET PURCHASE (Clause 7.1(a) 7.1(b) and 7. 1(c))

To:	Mrs Marie Tione
Of:	C/- Airport Vanuatu
P O Box 100
Santo.

TAKE NOTICE that you are in breach of an essential condition of the Asset purchase Agreement made between Westpac Banking Corporation and yourself dated 17th March 2000 (The 'Asset Purchase').

The details of the breach are as follows:

1.	Condition breached: Clause 7.1 (a)
2.	Particulars of breach: Asset Purchase rental unpaid.

AS A RESULT of that breach of the Asset Purchase Agreement (Pursuant to clause 7.2 of the Agreement) Westpac Banking Corporation is entitled to terminate the Asset Purchase forthwith and to sue you for damages for it’s losses.

NOTWITHSTANDING the right to terminate the Asset Purchase (and without prejudice to that right or to any other remedy that maybe available to Westpac Banking Corporation) you are hereby notified to prevent further recovery action being taken, you may do either of two(2) things:

1.	Rectify the breach by doing the following:

Payment of VT 157,000 on or before 22.05.2003.
or

2.	Deliver the goods (together with any keys or operational devices) to the officers of Westpac Banking Corporation during normal business hours on or before 27.05.2003.

Should you decide to ignore this notice and not either rectify the breach nor deliver the goods to Westpac Banking Corporation then further recovery action will be taken against you without further warning.

Dated this twentieth day of May 2003

(Signed) ____________________________
  PERSONAL BUSINESS OFFICER
  REF: A/C No. 2000012787

Mrs Boe testified to the Claimant’s defaults in payments of instalments in August 2000 which defaults were never remedied by the Claimant. (See Annexure MBS – 14/3/2005).

Mrs Boe further testified as to a custody notice issued by the Defendants to the Claimant on 23rd July 2003 which she annexed as MB6. It reads as follows:

'23rd July 2003

Mrs Marie Tiome
C/- Airports Vanuatu Ltd
PO Box 100
Luganville, Santo

CUSTODY NOTICE

Dear Sir/Madam,

Asset Purchase Account Number 2000012787 
Toyota Hilux 4x2 Pickup Registration No. T5145

The above vehicle was repossessed on 16/07/03 and will be held for twenty one (21) days from that date during which time you may redeem the vehicle, subject to payment of the amount stated below plus any interest accrued subsequent to the issue of this notice.

STATEMENT OF ACCOUNT

Total arrears outstanding as at 23/07/03 	VT176,000
Other expenses				VT 10,000
Total amount due to WBC to redeem the 
Vehicle by 06/08/03				VT186,000

Any extra costs as may be charged by the business acting on behalf of the Bank, storing and arranging sale of said vehicle.

Failure to comply with the conditions of this letter will result in the vehicle being sold directly after the expiration of this letter, namely 6th August, 2003.

Please advise us of your intentions.

Yours Sincerely,

(Signed)
Lettis NAPAT
PERSONAL BUSINESS MANAGER'

Mrs Boe said in her evidence that the Claimant had failed to redeem the vehicle.

Mrs Naomi Sailas, the Defendants Officer-In-Charge of Santo Branch gave oral evidence in addition to her sworn statement dated 14th March 2005 which was tendered into evidence. She personally delivered correspondences to the Claimant over the counter at the Bank. These correspondences included those which related to the Asset Purchase Loan and the defaults made by the Claimant. The Claimant normally came to the Bank to withdraw money on pay days which is twice per month.

The Law

The relevant provision to be considered in relation to the issue in this case is Clause 7.15 of the Asset Purchase Agreement dated 17th March 2000. It states as follows:

'Notices

All notices, requests, demands, consents, approvals, agreements or other communications to or by a party to this Agreement must be in writing, signed by a Manager of Westpac (if given or made by Westpac) or signed by the Hirer or a director, secretary, manager or executive of the Hirer (if given or made by the Hirer) and will be deemed to be duly given or made:

(a)	(in the case of delivery in person or by post, facsimile transmission or cable) when delivered, received or left at the address of the recipients shown in this Agreement or any other address which it may have notified the sender; or

(b)	(in the case of telex) on receipt by the sender of the answerback code of the recipient at the end of the transmission.'

Submissions By Claimant

It was submitted by Mr Stephens that:-

(1)	There was no proper service of the letter of 26th June 2003.

(2)	The letter was defective in that –

(i)	it did not provide a time limit to the Claimant to pay up her debt, failing which repossession would take effect,
(ii)	it was never shown to or personally served on the Claimant before repossession took place; and
(iii)	the Claimant was never given the opportunity to pay up her debt in full, failing which repossession would take place.

In short Mr Stephens argued that repossession had taken place before the Claimant was shown the letter.

Submissions by Defendants

Mr Morrison argued and submitted that:-

(1)	There was a repudiation of Agreement by the Claimant breaching an essential term of Clause 7.1 of the Agreement which states:

'7.1. Essential terms.

The Hirer acknowledges and agrees that the following one essential terms of this Agreement going to the foot of this Agreement:

(a)	that the Hirer will pay punctually when due all moneys payable by it under this Agreement;

(b)	that the Hirer will duly and punctually comply with its obligations under Clauses 5.2; 5.3; 5.4; 5.5; 5.7; 5.8; 5.9 and 7.9; and

(c)	that if the Hirer fails to comply with any of its obligations under this Agreement (other than an obligation to pay moneys or an obligation referred to in paragraph (b), the Hirer will comply with that obligation or remedy that failure to Westpac’s satisfaction within 7 days of notice from Westpac requiring it to comply with or remedy the same.'

(2)	The Claimant had regularly and continuously been committing a breach of an essential term by non-payment of loans in accordance with the Agreement.

(3)	As at 20th May 2003 the Agreement continued repudiated and the Hirer elected to act upon that repudiation by issuing the Notice of Breach of Essential Term of Asset Purchase.

(4)	There was an offer to the Claimant in that Notice for her to rectify by 27th May 2003. That did not happen therefore the Agreement was terminated and the Hirer was entitled to recovery of its goods.

(5)	The Notice was delivered by Mrs Naomi Sailas.

(6)	The Agreement was not terminated on 16th July 2003 but on or about 27th May 2003, that being the date all rights came to an end.

Response by Claimant

Mr Stephens responded to the above submissions arguing that the repudiation raised by the Defendants was not in issue because it was not and never pleaded in the pleadings nor was it raised in their evidence. Mr Stephens submitted that the principle laid down in the English Case of Heyman v. Darwin Ltd [1942] AC 356 as applied by the Court of Appeal in Banque Indosuez Vanuatu v. Ferrieux [1980-1994] Van LR 490 was applicable in and to this case. At p. 361 Viscount Simon LC said this –

'repudiation by one party standing alone does not terminate the contract. It takes two to end it by repudiation on the one side, and acceptance of the repudiation on the other.'

In Ferrieux’s case the Court of Appeal held that the purported repudiation by the Bank on her employment contract could not stand since the repudiation was not accepted by Miss Ferrieux (as she was then).

Findings And Rulings By Court

As for the issue of Notice and whether or not it was served on the Claimant, I find from the evidence that:-

1.	There was clear notice issued by the Defendant by letter dated 20th May 2003.

2.	I am satisfied on the balance of probabilities that the letter was served on the Claimant she being a regular customer of the Defendants.

3.	The letter dated 20th May 2003 was properly issued in accordance with Clause 7.15 of the Agreement.

4.	The Claimant had provided a fixed postal address on the Agreement to which all previous correspondences were posted and which correspondences the Claimant confirmed in her evidence receiving.

5.	The Claimant contradicted herself when she was asked in cross-examination by Mr Morrison as follows – when referring to Annexure MB4 'Notice of Breach of Essential Condition of Asset Purchase' dated 20th May 2003:

Q:	'Did you see this letter before?'
A:	'No'
Q:	'When was the first time you saw it?'
A:	'Mi luk first taem long ples ia.'
Q:	'Wanem ples ia?'
A:	'Long ofis blong loya.'

I find that evidence contradictory which casts doubt on the credibility of her evidence.

6.	From the demeanour of Edmond Tiome in the witness box I find that his evidence lacks credibility and cannot be reliable. 

7.	I find Mrs May Boe’s evidence as regards arrears and default reliable and accept them.

8.	I find Mrs Naomi Sailas’ evidence regarding delivery of letters to the Claimant reliable although she had difficulties remembering dates and could not identify which letter contained the Notice of Breach of Essential Term as this was sent down from the Vila Office.

9.	As to the submissions made by Mr Stephens –

(i)	I am satisfied from the evidence there was service of the letter of 26th June 2003.
(ii)	The letter of 26th June 2003 was an authorization to recover debt in full or failing which repossession of goods. It was not a Notice of Breach.
(iii)	The Claimant was given a time limit to pay up the debt in the Notice of Breach Letter dated 20th May 2003 to 27th May 2003.
(iv)	The Defendants gave the Claimant further time to pay and/or redeem the goods on or before 6th August 2003 by letter dated 23rd July 2003.
(v)	The Claimant did neither of those two options although she had received the letter dated 23rd July 2003 on the same date from Tom Wells.
(vi)	I accept Mr Morrison’s submission that the Agreement was repudiated by breach on the part of the Claimant.
(vii)	Termination was clearly pleaded at paragraph 5 of the Claimant’s claims to which the Defendants admitted in their defence.
(viii)	The Cases of Heyman and Ferrieux are applicable, however they must be distinguished from the present case in that after seven days had expired on 27th May 2003, a further 21 days was given to the Claimant to either pay up the outstanding arrears or redeem the vehicle. The 21 days expired on 6th August 2003. The Claimant did not take any action. She remained silent. That silence and omission in the view of the Court tantamounts to an acceptance of repudiation of the Agreement by breach on the part of the Claimant. She therefore accepted that the Agreement was terminated on 6th August 2003. She showed nothing in evidence that she responded to that letter of 23rd July 2003.

10.	I therefore accept Mr Morrison’s submissions that the Claimant had, through non-payments, repudiated the Agreement entitling the Defendant to termination of the Agreement.

11.	I therefore find in favour of the Defendants.

Conclusion

The Claimant’s claims fail in their entirety.

Orders

Accordingly, I order that:-

(1)	The Claimant’s claims be hereby struck out in its entirety.

(2)	The Claimant will pay the Defendant’s costs of and incidental to this proceeding within 28 days after a Bill of Costs has been submitted, failing which the matter be brought for determination by the Court.

DATED at Luganville this 1st day of March, 2006.

BY THE COURT

OLIVER A. SAKSAK
Judge