AST Industries Ltd v Lauano [2011] WSSC 135 (25 November 2011)

IN THE SUPREME COURT OF SAMOA

HELD AT MULINUU

BETWEEN:

AST INDUSTRIES LTD, a body corporate having its registered office in Apia
Plaintiff

AND:

TO'IAIVAO FILI LAUANO trading as LAUANO CONSTRUCTION, Lotopa, Businessman.
Defendant

Counsel: Siaki Tuala for plaintiff
Sarona Ponifasio for defendant

Hearing: 6 October 2011

Submissions: 21 October 2011

Decision: 25 November 2011

DECISION OF THE COURT

1. The defendant Toia Fili Lauano filed a motion to strike out the Statement of Claim which he says should be leveled at his company called Lauano Enterprises Limited. He does not deny the amount claimed to be owing for the building materials supplied by the plaintiff in February 2003.
   
2. Lauano Enterprises Limited was incorporated in March 1993. The defendant in his affidavit supporting the motion to strike out stated at paragraph 3:
   

"3. The Company used to trade in the style of Lauano Construction and Enterprises which is sometimes shortened by Lauano Construction."

3. He also exhibited an undated letter which he said he gave to the plaintiff at the time he requested the credit facility with the plaintiff. The letter confirmed that Lauano Construction and Enterprises has won bids for several Maintenance and Repair Works to commence no later than the end of May 2003.
   
4. He also exhibited copies of receipts for goods he purchased from the plaintiff in 2001 and in January and February 2003. Those receipts are made out to Lauano Construction, Toia, Lauano Construction and Fili Toia Construction.
   
5. He also stated at paragraphs 7 and 8 and 9 of his supplementary affidavit:
   

"(7) That SMI has also recently sued the company for its debt in the case of Salafai Metal Industries trading as SMI Hardware v. Lauano Construction Ltd referenced CP58/11 to which a judgment by confession was entered against the company sometimes in June 2011.

(8) That I am not trying to avoid paying the company's debt by bringing this proceeding but want to correct the party that should logically and properly be sued by the plaintiff.

(9) That if the correct party is sued, being Lauano Enterprises Ltd trading as Lauano Construction and Enterprises or Lauano Construction, the company will file a confession to the claim.

Defendant's Submissions

6. The essence of the defendant's submission is that it was the plaintiff's responsibility to verify and check the identity of customers requesting credit facilities given the risks associated with supplying goods on credit, so that it was incumbent on the plaintiff to check if Lauano Construction was a registered company.
   

Discussion

7. Before the defendant obtained credit facility with the plaintiff in February 2003, he purchased building materials from the plaintiff since 2001 using his first name Fili, his matai name Toia, and Lauano Construction. Lauano Enterprises Limited was never used.
   
8. When he fell into arrears with his repayment schedules and was seen by Mr Tevita of the plaintiff, the defendant did not at any time indicate that the credit facility was not his personally but that of his company Lauano Enterprises Limited. Reliance he placed on the undated letter referred to in 3 above cannot assist him as Lauano Construction and Enterprises mentioned in the letter does not in any way indicate that the defendant was acting on behalf of a company. By raising the affirmative evidence that the plaintiff knew it was dealing with Lauano Enterprises Limited the burden is on the defendant to prove on the balance of probabilities that he is under no liability. McBride v. Brown (1960) NZLR 782; LT Erdermann & Co. v Roebeck (1980 – 1993) WSLR 471.
   
9. The defendant, as well as his counsel unfortunately either mistakenly or intentionally, are of the belief that as long as the company was registered the defendant can trade under any name resembling the registered name without being obligated to tell any contracting party of its registered company name, and without being personally liable for any liability which may arise from the breach of any contract or undertaking.
   
10. The defendant is personally liable. The existence of Lauano Enterprises Limited as a limited liability company is of no relevance. He admitted in testimony that his annual business licences were under the names Lauano Construction. He deliberately chose not to engage his company in his construction work and in his dealings with the plaintiff.
    

Result

1. The application to strike out is dismissed.
   
2. As the defendant does not dispute the amount owing, judgment is entered for the plaintiff in the sum of $11,018.70
   
3. Costs to be fixed by the Registrar in accordance with scale.
   

JUSTICE VAAI