Aldan Construction Company Ltd v Tuiletufuga [2010] WSSC 94 (30 July 2010)

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

CP-183/09

BETWEEN:

ALDAN CONSTRUCTION COMPANY LIMITED a private company registered in Samoa
Plaintiff

AND:

LETAA TAUNESE TUILETUFUGA of Salelologa Savaii, Businesswoman
Defendant

Counsels: Ms T. Toailoa for plaintiff
Mr K. Ainuu for defendant

Hearing: 9 July 2010

Decision: 30 July 2010

JUDGMENT OF NELSON J.

[1] The plaintiffs claim against the defendant was settled and judgment by consent entered on 6 July 2010 in the plaintiffs favour in accordance with a Deed of Settlement of even date. There remained however the defendants counterclaim which proceeded to trial.

[2] In it the defendant alleges that in about July 2006, she sold to the plaintiff a gearbox for a DH9 caterpillar. The purchase price is not pleaded but she says $12,950 remains outstanding. In her evidence she said originally she agreed to sell the DH9 transmission for $30,000 but later amended their agreement to selling the whole caterpillar for $40,000 for parts.

[3] The plaintiff admitted $40,000 was the sale price for the machine but it was a "tigi masini" and was not in working order. Its usefulness was for parts only and the remnants still sit today in the defendants yard at Salelologa. It agreed monies are owing but its owner and managing director Peseta Vaifou said he had made a further payment to the defendant in March 2009 of $3,000 via a wire transfer of funds through Inkpatch Money Transfer. This was uplifted by the defendant so he only owes her $9,250. Neither party was able to produce any documents concerning the sale or the payment of monies or in respect of this transaction, but yes they are business people.

[4] The defendant admitted she had received such a money transfer but said it was money due to her as rental of her Salelologa yard by the plaintiff which she has also counterclaimed for (see below). Again neither party could provide documentary evidence concerning this payment and the court must therefore decide whom to believe.

[5] The onus in a counter claim is on the defendant to prove her case on a balance of probabilities. In the absence of documentary evidence I cannot be certain what the payment was for. The evidence indicated there were a number of other commercial dealings the parties were involved in at the time and I note the defendant only pursued her claim when she was sued by the plaintiff. There is also no evidence as to any letters written by the defendant to the plaintiff regarding this debt which has been outstanding since 2006 or evidence that formal demand was made of the company for payment. The defendant has in my view failed to discharge the necessary onus in this part of her counter claim, she succeeds therefore only to the extent admitted by the plaintiff. Judgment will be entered for her in the sum of $9,250 for this part of the counter claim.

[6] Although the counterclaim is not as it should have been broken down into its various component parts, the second aspect appears to relate to a track roller also allegedly purchased by the plaintiff upon which a balance of $1,600 is alleged to remain owing. Here the defendant was able to produce some documentary evidence, namely a copy of an invoice dated 14 May 2008 showing the purchase price for the roller was $2,000 and that $400 was paid as a deposit leaving a balance of $1,600: see Exhibit "D-1" for the defendant. For reasons unknown to the court the plaintiffs managing director in his evidence did not specifically refer to this part of the counter claim but he did acknowledge several times the presence of a roller stored in the defendants yard. As there is no evidence of any other roller I take it this was a reference to the roller in question and the witness did not refute Exhibit "D-1" or the defendants evidence re the sale of a roller. Accordingly I am satisfied that this part of the counterclaim has been made out, judgment will also be entered in the defendants favour in respect of the remaining balance for the roller.

[7] The third part of the counterclaim relates to arrears allegedly due for rental by the plaintiff of part of the defendants yard at Salelologa. There is no dispute only part of the yard was rented or that the rent was $3,000 per month. The dispute is as to the duration of the rental term and in the absence of a written lease agreement it must be regarded in law as a monthly tenancy. The dispute is also as to payments made and payments still outstanding.

[8] The defendant said that in March 2009 she entered into an oral agreement to lease part of her yard to the plaintiff for $3,000 per month and that this excluded charges for electricity and water. For the period up to and including October 2009, rent in the sum of $24,000 had accumulated of which only $7,000 (including the $3,000 money transfer payment) had been paid. She therefore counterclaims for the remaining balance of $17,000. She produced Exhibit "D-2" for the defence being a copy of a receipt dated 13 March 2009 for the March 2009 rental as evidence of this agreement. That receipt states that this was the "first rental payment" for the yard. She also produced a further receipt dated 8 August 2009 Exhibit "D-3" for the defence evidencing a part payment of $1,000 towards rental due. She said that despite many visits and pursuit of the plaintiff including visits to its Vaitele office asking the plaintiff to show her the money, only promises to pay were received.

[9] The plaintiffs managing director disputed all this evidence. He testified their arrangement was that as and when the yard was to be used for his tar-sealing contract in Savaii, whether it was to be used for one day, one week or one month, rental then was payable at the rate of $3,000 per month. And further that he only used the defendants yard twice, once in December 2008 for one week when he was first awarded a tar-sealing contract in Savaii and for which he paid the necessary $3,000 and again in August 2009 when he received a further tar-sealing contract and for which he paid $1,000 and in respect of which he acknowledged he still owed a balance of $2,000. A balance which he said he tried to pay to the defendant but she refused to take as she was angry at him for allegedly breaking the terms of their arrangement. The witness accepted however that during the relevant period he stored equipment and materials on the defendants site but did not otherwise use the premises. The part of the yard that was rented by the plaintiff included accommodation facilities for his expatriate workers and he further stated that the keys to the yard were retained at all material times by the defendant. In October 2009 their relationship came to an abrupt end and after negotiations by his lawyers, he was allowed to return to the site to remove his properties. In this respect the defendant has also counterclaimed for $2,000 for security costs incurred by her she said to look after the plaintiffs properties that were stored in her yard.

[10] I have difficulties with the evidence of both parties as once again there is a surprising absence of formal documentation. This only shows the casualness of their relationship and the real possibility that their minds were never directed to what would happen if things went sour and they stopped doing business together.

[11] I deal firstly with the counterclaim as to rental of $17,000. In the absence of a written lease or any other form of documentation setting out the terms and conditions of such a rental, as a matter of law and fact the parties relationship in my view was a month to month tenancy. I do not accept the defendants evidence that it was for any particular duration as even on her own evidence no fixed term was agreed upon. But in view of the fact the plaintiff used the property to store his equipment, it seems a bare tenancy of some sort existed and it is more than likely the parties never directed their minds to further defining their relationship and committing it to writing. I think the $3,000 per month to use as and when necessary whether for one day, one week or more was a term of the tenancy and was something that they agreed upon and the exorbitancy of the rent incorporates the fact that for all other times no separate rent would be charged for storage of the plaintiffs equipment and materials on the premises. It was a loose and informal arrangement which suited both parties recognizing that when the plaintiff obtained work, the defendant would also gain from the rental paid. I ascribe no particular emphasis to the words "first rental payment" in Exhibit "D-2" as they are ambiguous. No doubt there was an expectation in the minds of both parties that future work was forthcoming and mutual benefit would result. In hindsite I am sure they agree it would have been prudent to place their arrangement on some sort of formal basis but no doubt they saw no need at the time to incur extra expense in having lawyers draft up the necessary documentation.

[12] The tenancy was a monthly one on an as and when needed basis for $3,000 per month when the premises were used for the plaintiffs tar-sealing contract. This is consistent with the evidence that during the relevant period the defendant rented out the accommodation units and other parts of the yard to other companies when they were not in use by the plaintiff. I am also satisfied that the plaintiff used the premises in March 2009 and that he paid the rental for that month (see Exhibit "D-2" for the defendant). The money transfer payment of $3,000 in March 2009 was not rental for April or any other month and I am satisfied that it was as referred to earlier part payment for the machine monies that were owed by the plaintiff to the defendant. It was the result of the defendants persistent follow-ups and the fact that the plaintiff came into money under its new tar-sealing contract and ties in with the parties commercial arrangement from March 2009 of pay as-and-when you use the premises. No invoices were issued for any subsequent months, no letters of demand were sent requiring rental to be paid for any subsequent months and I am satisfied that in August 2009 the premises were again required and allowed to be used by the plaintiff and for that month the sum of $3,000 in rental as per the parties arrangement had accrued. $1,000 of which has been paid and $2,000 of which remains outstanding for that particular month. I am satisfied that that money is due and owing to the plaintiff and that is the only money that is so due and owing. Accordingly judgment will be entered in respect of this part of the counterclaim for the $2,000 outstanding rental for August 2009.

[13] As to the part of the counterclaim dealing with security expenses this is not supported by any invoices or documents. Neither am I satisfied such costs relate solely to storage of the plaintiffs equipment and materials over which the defendant took a lien in any event to secure the monies owed to her. As plaintiffs counsel has rightly pointed out at common law a lienholder has no right to make an additional charge for the cost of keeping a chattel or for other expenses incurred on the lienholders own behalf: see Marine Steel Ltd v The Ship Steel Navigator [1992] 1 NZLR 77. As explained by Lord Wensleydale in Somes v Directors of the British Empire Shipping Co. (1860) 8 HLC 337, 345:

"I am clearly of opinion that no person has by law a right to add to his lien upon a chattel a charge for keeping it till the debt is paid; that is in truth a charge for keeping it for his own benefit, not for the benefit of the person whose chattel is in his possession."

That part of the counterclaim is therefore dismissed.

[14] The defendant also counterclaimed for electricity and water charges. The former was stated to be $1,240.01 but when the defendant gave evidence she said only approximately $700 was owing, the invoice for which she had not brought to court but was in Savaii. How she thought that in such circumstances the court would uphold that claim is beyond me. But I accept and the plaintiffs witness did not really argue the point that some electricity charges were incurred when the plaintiff used the premises to produce its tar. One of the reasons he was suspicious of the invoice was it was not proven to his satisfaction that it was legitimately incurred for that sole purpose but may have related to the defendants other tenants. Taking all matters into consideration I believe for this element some allowance should be given to the defendant and I fix that in the sum of $350 and I so award the defendant that sum for this part of the counterclaim.

[15] As to water costs of $500 these seem exorbitant and again no documentation was produced to substantiate the claim. But some charge for water used is reasonable and like electricity, a term for payment of reasonable charges for the use of such utilities is easily impliable into this commercial arrangement between the parties. I assess and fix this at $150.

[16] All in all accordingly, judgment for the defendant on the counterclaim will be entered as follows:

(i) in the sum of $9,250 being the balance for the purchase of the caterpillar;

(ii) in the sum of $1,600 being the balance due for the roller purchase;

(iii) in the sum of $2,000 being the balance owed for rental for the month of August 2009;

(iv) in the sum of $350 for electricity charges; and

(v) in the sum of $150 for water charges.

[17] The defendant is also entitled to costs and if the parties cannot agree on costs payable the matter can be referred back to the court for determination.

JUSTICE NELSON