ANZ Bank (Samoa) Ltd v Le Lamepa Press Company Ltd [2002] WSSC 39 (19 April 2002)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

THE ANZ BANK (SAMOA) LIMITED,
a duly incorporated Company having its registered office in Apia.
PLAINTIFF

LE LAMEPA PRESS COMPANY LIMITED,
a duly incorporated Company having its registered Office at Apia.
FIRST DEFENDANT

AND:

LE TAGALOA PITA,
businessman of Alafua.
SECOND DEFENDANT

Counsel: Mr G. Latu for Plaintiff
Mr T.S. Apa for Defendant

Date of Hearing: 26 March 2002
Date of Decision: 19 April 2002

DECISION OF JUSTICE VAAI

The plaintiff bank claims from the first and second defendants monies advanced by the plaintiff to the defendants pursuant to a loan agreement in 1995. The second defendant is one of the directors of the first defendant and a guarantor for the advance to the first defendant. Although both defendants in their statements of defences deny the loan account as well the amount of the balance owing, they both admit by the very same statements of defences that the indebtedness of the first defendant with the plaintiff bank was to be settled by a third party who had sufficient funds with the plaintiff to meet the indebtedness of the first defendant. In fact the second defendant himself in his evidence confirmed that a $200,000 overdraft facility was provided for the first defendant by the plaintiff thus confirming the plaintiff’s allegations that $200,000 was allocated to the first defendant. The second defendant also did sign a personal guarantee dated 5th January 1996 as a security for the $200,000 advance to the first defendant. Repayments for the loan were made from the second defendant’s personal cheque account with the plaintiff. Initially the repayments were to be $4,448 per month but often fell into arrears as there were insufficient funds in the personal cheque account of the second defendant. By January 2000 the loan account was categorised as a high risk account due to the inability of the defendants to meet the repayments and as a result of a meeting between an officer of the plaintiff and the second defendant, the loan account was restructured with repayments reduced to $2,600 per month. The repayments however continued to be in arrears and in February 2001 the plaintiff issued on both defendants demand notices.

The second defendant says he did not receive $200,000 from the plaintiff; it was a $200,000 overdraft facility provided by the plaintiff for the first defendant. Mr Burr for the plaintiff says it was a loan. I have no reason to doubt Mr Burr’s evidence and I accept it was a loan granted on request by the second defendant. The second defendant denies in his statement of defence that he signed a personal guarantee as security for the loan. The plaintiff has produced that personal guarantee and the second defendant admits his personal guarantee for a loan of $200,000 to the first defendant.

The second defendant also says that he disputes the amount owing to the plaintiff on the grounds that there was a fix deposit of $100,000 as well as a credit balance of $60,000 in the first defendant’s cheque account and since both accounts were closed by the plaintiff without consulting the defendants the balance owing in the loan account should be substantially reduced by $160,000.

I am obliged without any hesitation to disbelieve the evidence of the second defendant for several reasons. In the first place the alleged fix deposit and credit balance were never put to the officers of the plaintiff under cross-examination. Secondly the statement of defences does not specifically or by implication pleads the existence of such account and neither did the defendants take steps to file for discovery nor interrogatories to establish the alleged accounts. Thirdly the loan account was restructured in January 2000 and the debit balance of $199,657.41 was assented to by the second defendant as owing by the first defendant apart from the $55,176.47 owing by the second defendant himself. And fourthly both defendants say in their statements of defences as well as in the evidence of the second defendant that the amounts owing by both defendants to the plaintiff and for which the plaintiff issued demand notices were to be settled in full by transferring funds from the account of one Mr William H. Cravens to pay for the indebted of the defendants. It is not disputed that Mr Cravens is a customer of the plaintiff and has sufficient funds to pay for the amount claimed by the plaintiffs against the defendants and by faxed letter dated the 27th February 2001 Mr Cravens did instruct the plaintiff to transfer sufficient funds from his account to pay the amounts owing by the defendants. Unfortunately for the defendants the plaintiffs were not able to transfer funds out of Mr Cravens account for several reasons; and one of those reasons was that all the funds in the account of Mr Cravens were frozen by an Order of this court. But for the purposes of these proceedings the significance of Mr Cravens involvement and his subsequent instructions signifies the acceptance by the defendants of the amount of their indebtedness to the plaintiff.

For the above reasons judgment is accordingly entered for the plaintiff against both defendants in the sum of $225,828.14 together with costs to be fixed by the Registrar.

JUSTICE VAAI