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Supreme Court of Samoa |
IN THE SUPREME COURT OF SAMOA
HELD AT APIA
BETWEEN:
MAKERITA AH FAR
of Tanumalala, Businesswoman
Plaintiff
AND:
BEN STEFFANY
of Lotopa, Businessman
Defendant
Counsel: Mr. R.S. Toailoa for the Plaintiff
Mr. S. Leung Wai for the Defendant
Dates of Hearing: 14 and 16 April 1999
Date of Decision: 9 August 2000
REASONS FOR JUDGMENT OF WILSON J.
THE NATURE OF THE CASE AND THE MAIN ISSUES
This is an action arising out of a dispute between two former partners in a business that was conducted in a shop at the Fugalei Market. The main matter in dispute relates to whether, upon dissolution of the partnership, the plaintiff had received all or less than she was entitled to.
This is a case in which the outcome turns on the Court’s assessment of the credibility and reliability of the witnesses (the two parties themselves). I hasten therefore to indicate that I formed an unfavourable view of the defendant as a witness, who I thought, was often evasive; and I could find nothing in the plaintiff’s demeanour or the evidence that she gave to lead me to distrust her or do other than rely upon her testimony. I will return to a further consideration of the issues of credibility when I discuss the witnesses later.
THE PLEADINGS
In the amended statement of claim the plaintiff alleged that the plaintiff and the defendant had been in business together as a partnership operating a shop at the Fugalei Market. She further alleged that it was an express term of the partnership that the parties would share equally in the profits from the business. She further alleged that the partnership lasted from about mid-January 1998 till about 15 July 1998 when the partnership was dissolved (terminated) by the parties.
It was further alleged in the plaintiff’s amended statement of claim that, in consideration of her having obtained a 50% share in the partnership arrangement, she had contributed funds to the partnership as follows:
(1) Initial cash contribution = $ 5,000.00
(2) Further contribution for the purchase
of a pick-up for the partnership = $ 10,600.00
(3) Further cash contribution for the
purchase of 100 mats intended to be sold
by the defendant in American Samoa = $ 1,200.00
TOTAL = $16,800.00
The plaintiff went on to allege in the amended statement of claim that, upon the termination of the partnership, the defendant had paid to her the sum of $15,800.00 as refund of her contributions to the partnership, being $1,000.00 short of what the plaintiff had actually contributed.
The plaintiff further went on to allege that, upon termination of the partnership, the business had accumulated a profit of $10,200.00 consisting of $5,200.00 fixed deposit and $5,000.00 cash held in the business cash safe, and that she was entitled to 50% thereof, viz. $5,100.00.
So, it was the plaintiff’s claim that she was entitled to the total sum of $6,100.00, comprising $1,000.00 contribution not refunded and $5,100.00 being her share of the profits.
In his defence and counterclaim the defendant, while admitting that the parties had been in the partnership together, alleged that the parties were also to share equally the profits of a shop the plaintiff had at Tanumalala. By the defendant’s pleading, there was a minor dispute as to the precise period during which the partnership was in operation, he alleging that the partnership was "from or about February 1998 until about July 1998".
By paragraph 4 of the defence, the defendant "denied paragraph 4 of the statement of claim" (and, by implication, denied that the plaintiff had "contributed" the sums of $5,000.00, $10,600.00 and $1,200.00 or any of them) but then went on to allege that the plaintiff "gave $5,000.00 only to help with the shop", that "in or about July 1998 the plaintiff gave $10,000.00 towards the purchase of the pick-up truck which was bought primarily to transport the plaintiff between Fugalei Market and her shop at Tanumalala". The defendant, in the defence, then "denied that this was part of the plaintiff’s contribution towards their partnership" and denied that "the fine mats (which the plaintiff had brought and asked the defendant to on-sell in American Samoa) were a contribution by the plaintiff towards the partnership". However, the defendant then went on to admit having paid to the plaintiff the sum of $16,200.00 being (as he pleaded, but in a different sequence):
"$5,000.00 cash contribution towards the shop" - see (1) supra.
"$10,000.00 reimbursement of the purchase price of the pick-up truck" -
see (2) supra.
"$1,200.00 for the fine mats" - see (3) supra.
The defendant denied "that the sum of $600.00 remains owing to the plaintiff.
There was no specific pleading in answer to paragraph 5 of the amended statement of claim, but the defendant denied each and every of the allegations in paragraphs 6 and 7 of the amended statement of claim, and, thereby, was denying that the plaintiff was entitled to a 50% share of accumulated profits of $10,200.00 or any sum by way of share of accumulated profits.
The defendant then went on, in his defence, to allege that the plaintiff "is not entitled to any profit" upon the grounds that:
By the defendant’s counterclaim, the defendant alleged that "during their partnership the plaintiff used to help herself to stock and cash from the defendant’s shop without paying or accounting for the same", that "the plaintiff took the defendant’s bank book purportedly to deposit the defendant’s share of the profit from the plaintiff’s shop into it", and that, by implication, that she misappropriated the said "share of the profit" because, having advised the defendant "that she had $5,000.00 for (him)" the bank book, when it was returned to him, had no funds deposited in it.
In his prayer for relief the defendant counterclaimed inter alia "the said sum of $5,000.00 being his share of the profit from the plaintiff’s shop or, alternatively, being the value of stock and cash taken by the plaintiff."
It needs to be observed here and now that, whilst the defendant did not alleged in his pleadings that he had anything in the nature of a legal defence to the claim for a 50% share of accumulated profits, he did put forward a serious of justifications for the stance he was taking, such justifications including some very serious allegations against his former partner (the plaintiff) including inter alia misappropriating stock and money from the partnership business (which he called "the defendant’s shop") and breaching the original partnership agreement. He did not counterclaim for breach of the partnership agreement and he did not seek an account of the profits, but he did repeat his allegation against the plaintiff of misappropriation and he made a further serious allegation against the plaintiff of theft or misappropriation of $5,000.00 of the defendant’s money that had been destined to be paid into his bank account.
Because the prayer for relief in the defendant’s counterclaim does not include a counterclaim for damages (or the like) for breach of the partnership agreement and/or a counterclaim for money had and received (or the like), but only counterclaims "the said sum of $5,000.00 being his share of the profit from the plaintiff’s shop or, alternatively, being the value of stock and cash taken by the plaintiff", this court is left to wonder whether the defendant was not, though prepared to wound with the most serious of allegations, reluctant to do more, in the end, than use the counterclaim as a means of avoidance if (and only if) his denials were not accepted. The court is left to wonder why the serious allegations, if they were true, were not proceeded with to their logical conclusion. But, these are matters going to the issues of credibility in this trial.
THE EVIDENCE
The evidence for the plaintiff comprised the oral testimony of the plaintiff herself, a letter of demand from the plaintiff’s lawyer to the defendant dated 20 August 1998 (exhibit P1), and a letter/memorandum in reply from the defendant to the plaintiff’s lawyer dated 7 September 1998 (exhibit P2), a bank schedule showing exchange rates as at 16 July 1998 (exhibit P3), and a VAGST form dated 20 August 1998 (mistakenly recorded as 1988) signed by the defendant (exhibit P5).
The plaintiff, Makerita Ah Far, gave her evidence quite confidently and testified in proof of the allegations in the amended statement of claim. Significantly, she testified to having, after the partnership was dissolved, asked the defendant for her "share of that $10,200.00", to which the defendant replied:
"There is nothing ... there (is) no money and (I will not) give any (more) money."
She was not shaken when under wide-ranging, persistent and sometimes aggressive cross-examination.
She was adamant that there was no agreement between her and the defendant "to share the profits of (her) shop at Tanumalala."
It was put to the plaintiff in cross-examination that the repayments to the plaintiff by way of refund came to the sum total of $10,200.00 plus US$2,000.00, which would be the equivalent (upon an exchange rate of US$1.00 to ST$3.00) of $16,200.00. Upon the reasonable assumption that such questions in cross-examination were based upon instructions from the defendant, it became apparent, at that stage, that the only issue in relation to the claim "for the balance of contributions to be refunded "(or the short-fall) was dependent upon what an implied term of the partnership agreement was and, if to be understood as referring to a repayment in American dollars, whether at the buyer or the seller rate of exchange as far as the plaintiff was concerned. Depending on what exchange rate was to be used, the balance to be refunded was either $1,000.00 (as the plaintiff contended) or almost nil (as the defendant contended).
I accept the plaintiff’s evidence that, at the time of the termination of the partnership, the defendant threw her handbag at her and told her to "get out", and "told" her that the rate of exchange was "US$1.00 to ST$3.00", considerably more than was the true rate and more than the rate that the bank informed her was the current rate.
When it was suggested that it was not true that the defendant threw the plaintiff’s hand bag at her and that she was telling that "false" story because she "was upset", she said (convincingly, I thought):
"It wasn’t me who was angry. It was him who was angry. He was the one who threw the bag and the money."
The plaintiff denied the suggestion put to her during cross-examination that it was the defendant and not she who did the VAGST returns during the partnership period.
She also denied that the $5,000.00 in the safe was gross sales, including VAGST, rather than net profit.
Cross-examining counsel was "skating on thin ice" when he, no doubt when acting on specific instructions, suggested to the plaintiff the relationship was more than a business partnership and that there were sexual aspects to the relationship, including specifically alleged acts of sexual intercourse during the currency of the partnership and an occasion when there was an alleged attempt "to try to reconcile and revive the partnership" and when she allegedly "fondled his private parts." Such line of cross-examination was only admissible as going to a question of credit and as going to establish (if it could be established) that the plaintiff had a motive for lying and was bringing these allegedly false claims out of something akin to revenge or in response to the notion:
"...... Hell hath no fury like a woman scorned ....."
It was a perilous course for counsel to take, and, in my assessment, "the ice broke" and the attempt to discredit the plaintiff failed. Indeed, I found myself accepting the plaintiff as witness of truth in no small measure due to the way she replied to those questions. Far from this part of the cross-examination leading to the plaintiff being discredited, I found myself more and more impressed by the plaintiff as a witness.
In a skilful piece of re-examination, which is a classical example of the right question to ask after it had been suggested to the witness that she had a motive (which was denied by the witness) for giving allegedly false evidence, viz. because she "had been rejected as a lover", the plaintiff was asked by Mr Toailoa:
"Q. Tell the Court the reason why you brought the action?"
and the plaintiff replied (impressively, I thought):
"A. The reason why I brought this action was to claim my 50% share of the partnership, and also to get the balance of what was short-paid to me."
She was not, I think, motivated by anything other than her desire to recover moneys due to her.
The defendant, in examination-in-chief, explained (not very convincingly, in my assessment of him) how "the two businesses" came to be the subject-matter of the partnership, though to be "run separately."
I did not believe him when he said that the $2,000.00 the plaintiff got from the safe, to make up the cost of the pick-up over and above the initial $10,000.00 from the bank, was his money. I preferred the plaintiff’s account of these transactions. It was more probable that the plaintiff was contributing out of her own moneys all of the money necessary for the purchase of the pick-up.
The defendant gave evidence to the effect that the moneys in the safe ($5,000.00) and on fixed deposit ($5,200.00) represented cash sales (gross). In my judgment, the probabilities are that they represented profit, and net profit too.
I found the defendant’s account of the alleged personal and sexual relationship between himself and the plaintiff to be unconvincing. It might have been otherwise if there had been some evidence to confirm or support his testimony on this topic, but there was none. The defendant found himself left with his word against hers. In terms of credibility, I accept her word, and reject his. He left me with the impression that he was often chauvinistic in his attitude to her, and not infrequently was over-bearing and cavalier towards her.
During cross-examination of the defendant, he was led to admit that he was counterclaiming $5,000.00 from "the plaintiff’s shop at Tanumalala" in circumstances in which he had contributed nothing in terms of money to that shop and had played no part in the running of it. While that was not necessarily a surprising state of affairs if there truly was a partnership in respect of the shop at Tanumalala as well as the shop at Fugalei market, it is not without significance that, in the absence of any books of accounts to verify or confirm the sum of $5,000.00, that sum has the appearance of representing an off-set against the plaintiff’s claim - the two sums are approximately the same.
Notwithstanding the serious allegation of theft or misappropriation made against the plaintiff in the defence and counterclaim, the defendant was ambivalent in terms of his allegations made from the witness box. This reflected adversely upon his credibility as a witness. During cross-examination the defendant was shown to be an unreliable witness, and his counterclaim has shown to be, in the end, a series of unsubstantiated (but nonetheless serious) allegations.
Mr Toailoa had success during cross-examination in discrediting the defendant regarding his earlier evidence (in examination-in-chief) to the effect that the $2,000.00 obtained from the safe to finalise the purchase of the pick-up was his money or, at least, not the plaintiff’s money, when the following question was asked and the following answer was given:
"Q. So at that point, when she agreed to obtain the money from the bank, the understanding was that she would pay for the pick-up?
It was evasiveness in the extreme when the defendant gave these answers, in circumstances in which specific questions (on the subject of the sexual relationship) had been put by Mr Leung Wai, the defendant’s counsel to the plaintiff after time for re-consideration had been given:
"Q. You have put up a scenario that the reason that the plaintiff has brought this action against you is because of her unsuccessful attempts to win your love and companionship on a permanent basis, is that correct?
OBJECTION
It was not so much a question of whether the allegations of a sexual relationship were true or not. It was that the questioning (on that topic) of both parties, revealed quite a lot in terms of credibility and, therefore, the reliability (or otherwise) of each of the parties.
The letter/memorandum (exhibit P2) is important, not because it contains any admissions against interest, or because it can amount to proof of the truth of what is contained therein, but because it does not reveal that the defendant has been consistent between his account therein of the events (in certain important respects) and his account of those same matters in his sworn evidence. Exhibit P2 therefore fails to enhance the defendant’s credibility, and it fails to negative the suggestion that the serious allegations of the sexual relationship (and the inference therefrom that the plaintiff was hitting back at the defendant because she was a spurned lover) are matters of recent invention. I so conclude that they are matters of recent invention, and, on that account, are to be seen as lies.
Although the exhibit is full of criticisms of the plaintiff, there is nothing that I can see as being either a direct or an indirect reference to the suggested motive for her bringing false claims.
With reference to the dispute over the sources of the money to purchase the pick-up truck ($12,000.00 subsequently reduced by $1,400.00 to $10,600.00), the exhibit P2 suggests that the plaintiff "open(ed) the safe deposit and gave (him) $2,000.00", words which are more consistent with her having contributed her own money than her having got out of the safe deposit "his $2,000.00". His reference to having "(given back to) Makerita $1,400.00" was more consistent with the original $12,000.00 having been hers than with his suggestion that the $2,000.00 over and above the $10,000.00 (from the bank) was his. It is acknowledged that what I see as an after-thought in the last line on page 1 of exhibit P2: "In my mind the $2,000.00 cash she last gave me was the cash for the stock" shows consistency on the defendant’s part.
The defendant never considered the plaintiff’s stock at Tanumalala to be his stock and he never took an active role in that business. The defendant failed to adduce credible and reliable evidence to substantiate his claim made in the counterclaim for either "$5,000.00 being his (alleged) share of the profit from the plaintiff’s shop or, alternatively, being the value of stock and cash taken by the plaintiff". This alternative claim, in both its aspects, is specious, and is to be seen as an unsuccessful attempt at avoidance of having to pay something to the plaintiff by alternative unmeritorious claims.
THE FINDINGS
I find:
TOTAL = $16,800.00
(5) that, upon the dissolution of the partnership, the defendant repaid to the plaintiff, as a refund of her contributions to the partnership, the sums of $10,200.00 and US$2,000.00 equivalent to ST$15,800.00 leaving a balance owing of $1,000.00.
(6) that, upon the dissolution of the partnership the business had accumulated a profit of $10,200.00 consisting of $5,200.00 fixed deposit and $5,000.00 cash profit held in the business cash safe, out of which sum of $10,200.00 the plaintiff was entitled to 50%, viz. $5,100.00.
(7) that the defendant made no monetary contribution to the business at Tanumalala and so acquired no partnership status in relation to that business.
(8) that the defendant took no active role at Tanumalala.
(9) that the defendant has not discharged the onus of proof resting with him to prove what sum (if any) is payable to him out of the business conducted at Tanumalala as representing his "share of the profit from the plaintiff’s shop" or, alternatively, "the value of stock and cash taken by the plaintiff".
THE ORDERS
For all these reasons there will be judgment for the plaintiff against the defendant on the claim in the sum of $6,100.00. The defendant’s counterclaim is dismissed.
The plaintiff is entitled to an order for costs against the defendant or both the claim and the counterclaim. I am inclined, in the exercise of my discretion, to fix those costs at $3,000.00, but I will first hear counsel on that issue before finalising the quantum of the costs order.
JUSTICE WILSON
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