Retailquip NZ Ltd v Vaifale [2011] WSSC 40 (4 March 2011)

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

BETWEEN:

RETAILQUIP NZ LIMITED
a duly incorporated company having its registered office at Walker Wayland Auckland Limited, Level 7, 53 Fort Street, Auckland, New Zealand and carrying on the business as a supplier of retail hardware.
Plaintiff

AND:

SIO VAIFALE and MATALENA VAIFALE
Catechist of the Roman Catholic Church and his wife of Siusega and Togafuafua, Samoa
Defendants

Counsel: T J Ponifasio for plaintiff
P Fepuleai for defendants

Hearing : 21 May 2010
Decision : 4 March 2011

DECISION OF THE COURT

1. The plaintiff, a duly incorporated company with its registered office at Auckland New Zealand carries on business as a supplier of equipments and hardware to the retail outlets throughout New Zealand. In November 2008 it supplied merchandise valued at NZ$129,195 to Bunnings of Manukau, Auckland which Bunnings paid for by crediting the plaintiff's bank account noted on its invoice with Westpac Bank (Westpac) at New Lynn, Auckland.
   
2. An error in the account number given by the plaintiff to Bunnings resulted in the payment being credited to the joint account of Sio Vaifale (Vaifale) and Fa'amu Leleiga (Leleiga) with the same branch of Westpac. Vaifale is the son of the defendants. Leleiga is the partner of Vaifale.
   
3. When the mistake was discovered by the plaintiff the amount of NZ$100,000 had already been transferred to Leleiga's personal account with the same bank before it was electronically transferred to her account with Westpac, Apia, Samoa which was credited with ST$161,080.00.
   
4. Vaifale and Leleiga then travelled to Samoa. The first named defendant a Catechist of the Roman Catholic Church and his wife the second named defendant discussed with Vaifale and Leleiga the desire of the defendants to purchase a house as they were approaching and contemplating retirement from pastoral work. A property at Siusega was purchased for $200,000 under the names of the defendants. Purchase price was provided by Leleiga transferring $160,000 from her account to the vender's account with Westpac and a loan of $40,000 secured by mortgage over the property was obtained by the defendants from Samoa Commercial Bank.
   
5. Several months after the purchase was completed the defendants were put on notice of the tainted nature of the $160,000.
   

Unjust Enrichment

6. It is common ground that the three requirements for the principle of unjust enrichment are:
   
   • (a) the defendants have been enriched by the receipt of a benefit,
   • (b) the enrichment was at the expense of the plaintiff, and
   • (c) it would be unjust to allow the defendants to retain the benefit
     

Both counsels in their written submissions have cited and summarized the same authorities in which this court dealt with the issue of unjust enrichment and the function of the law of restitution which is to restore to the plaintiff unjust benefits and ill gotten gains received by a defendant at the expense of the plaintiff. See for example Public Trustee v Foketi Brown (1995 unreported); Hini Tofilau Stanley v Vito (2010 unreported).

7. Neither counsel however referred to the decision of Ryan CJ in ANZ Banking Group v Ale (1980 – 1993) WSLR which has a similar resemblance of facts to the present case. The brief facts of that case are:
   
   • (a) The defendant's daughter who resides in New South Wales, Australia purchased a bank draft for AUD$800.00 from one of the plaintiff's branch in New South Wales.
     
   • (b) In return for her AUD$800, the daughter received a bank draft for SAT$17,506.
     
   • (c) Using the correct exchange range the bank draft should have been SAT$1,496 not $17,506.
     
   • (d) The defendant who was ignorant of the mistake on receipt of the bank draft presented it to the plaintiff bank and received $17,506.
     
   • (e) When the mistake was discovered the defendant had used the money to renovate his house.
     

The court adopted the three requirements for unjust enrichment and gave judgment for the plaintiff against the defendant corresponding to the overpayment.

8. The contention by the defendant's counsel that the defendants were not enriched by the $160,000 lacks sense and logic. The $160,000 unjustly received by Leleiga was laundered when dispersed by her to purchase a property for the defendants. Prior the transaction, the defendants had nothing. As a result of the unjust enrichment they currently possess property worth over $200,000.
   

Bona Fide Purchaser

9. Counsel for the defendants in his written submissions also raised the defence of bona fide purchaser. But that defence has no relevance here as the defendants' title to the property is not being challenged as they have obtained legal estate to the land. What is being challenged is the legality of the $160,000 provided for the purchase of the property.
   

Mortgage to Samoa Commercial Bank

10. Contention by the defendants' counsel that this action is complicated by the mortgage registered against the title is rejected. The validity of that mortgage is not in jeopardy and the need to cite the bank as a party did not arise. Despite part of the prayers in the Statement of Claim which sought that the defendants hold the property in trust for the plaintiff, or to declare the transfer of title as void ab initio, those prayers were unsupported by the pleadings and the plaintiff's principal claim was to recover the plaintiff's money used in the purchase price.
    

Statement of Defence

11. The Statement of Defence discloses no defence at all and the plaintiff should have moved for a strike out. Similarly the testimony of the defendant did not provide any defence and the plaintiff should not have bothered to cross examine. Full indemnity costs would have been considered if the plaintiff's claim was pursued diligently.
    

Result

(1) Judgment for the plaintiff in the sum of $160,000.

(2) Defendants to pay costs of $2,000 together with travel and accommodation expenses for the plaintiff's overseas witness as approved by the registrar.

__________________

JUSTICE VAAI