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Lee v Briggs [1994] FJHC 8; Hbc0067j.87s (17 January 1994)

IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction

CIVIL ACTION NO. 67 OF 1987

BETWEEN:

JOE LEE
Plaintiff

- AND -

DAVID BRIGGS
Defendant

Mr. H. Lateef for Plaintiff
Mr. M. Johnson for Defendant

JUDGMENT

In this case both the plaintiff and defendant claim ownership of 2 pieces of heavy earthmoving machinery, which are variously described as:

"One used 1975 Case Loader, Body Type W26B, Serial No. 9121130" and

"One used Terex 82-40 Crawler Tractor Serial No. 45318 with attachments."

(hereafter referred to collectively as 'the machines')

The plaintiff for his part claims ownership of 'the machines' through a Bill of Sale (Ex. P10) dated the 23rd of April 1984 executed between himself and The Benj Franklin Leasing Company Inc. evidencing the sale and transfer to him of 'the machines' for a combined total sum of $140,000.

The defendant for his part relies on 2 Bills of Sale (Exs. D4 and D5) both dated the 28th April 1980 (i.e. almost 4 years before Ex.P10) in which 'the machines' were sold to Merit Timber Products Ltd. by Glenn D. Cook and Dolly D. Cook for the total sum of ($93,500 + 98,000 = $191,500).

To complicate matters further both parties have produced in their agreed list of documents 2 further Bills of Sale (See: Exs. P8 and P9 and D8 and D9) in which 'the machines' were allegedly sold on the 28th of October 1980 by Merit U.S.A. Inc. to Grantree Leasing Corp. the predecessor of Benj Franklin Leasing Company Inc. for the total sum of $140,000. The machines were then leased back to Merit U.S.A. Inc. under a 'Master Leasing Agreement' between Grantree Leasing and Merit U.S.A. Inc. [See: Exs. P6, P7 and D15 annexure (D)].

The earliest document evidencing a dealing with 'the machines' however and which again is common to both 'Lists of Documents' is an undated Bill of Sale in which 'the machines' were sold by Redmond Roof Structures Inc. to Glenn D. Cook and Dolly D. Cook sometime in late 1979 for the sum of $285,561.87 (See: Exs. D1 and P3).

In chronological order the plaintiff's 'chain of title' may be set out in ascending date as follows:

Date

(1) Redmond Roof Structures Inc. ) Late 1979

(2) Glenn D. Cook and Dolly D. Cook )

(3) Merit Timber Products Limited ) 28th April 1980

(4) Merit U.S.A. Inc. )

(5) Grantree Leasing Corp. ) 28th October 1980

(6) Benj Franklin Leasing Company )

(7) Joe Yee Lee (plaintiff) ) 23rd April 1986

The defendant's claim on the other hand may be set out as follows:

Date

(1) Redmond Roof Structures Inc. ) Late 1979

(2) Glenn D. Cook and Dolly D. Cook )

(3) Merit Timber Products Limited ) 28th April 1980

(of which the defendant

David Briggs is the

company secretary and a director)

It is immediately clear from the evidence of the parties that the defendant's claim to ownership of 'the machines' is based on pre-April '80 documents whereas the plaintiff's claim has as its earliest starting point October '80.

Furthermore the missing 'link' between the plaintiff's claim and the defendant's would appear to be the sale or transfer of 'the machines' to Merit U.S.A. Inc. by Merit Timber Products Limited. I say 'missing' because the plaintiff has not been able to produce an 'unbroken' chain of documentation tracing the ownership of 'the machines' from himself to its earliest accepted owner Redmond Roofing Structures Inc.

Needless to say the defendant for his part denies any knowledge of any dealings with 'the machines' after they were transferred to Merit Timber Products Limited in April 1980 by the Cooks as part of their contribution (in kind) towards the capital of Merit Timber Products Limited.

On the other hand, in the absence of any document evidencing the sale and transfer of 'the machines' from Merit Timber Products Ltd. to Merit U.S.A. Inc., the plaintiff relies upon the letter of Wilmer Briggs (aka Bill Briggs) dated December 7, 1992 (Ex.P1) and his affidavit of December 8, 1992 (Ex.P2). Both documents were included and produced without objection in the plaintiff's list of documents.

Particular reliance was placed on the terms of paragraph 3 of the affidavit which reads:

"3. After the title to the equipment was transferred to MPTL Glenn and I agreed to transfer the title to Merit U.S.A. which was a company I owned which had established a line of credit with Grantree Leasing so that I could then transfer the title to Grantree. This was a way to borrow $140,000 from Grantree. The money was then sent to Fiji as part of Glenn's Investments in MPTL."

The defence witnesses David and John Briggs on being questioned about the above paragraph both denied any knowledge of any dealings with Grantree Leasing or the particular transaction deposed therein.

In particular, David Briggs the company secretary and managing director of Merit Timber Products Ltd. denied any knowledge of or being told about the 'agreement' between Glenn Cook and Bill Briggs to transfer the title of 'the machines' from Merit Timber Products to Merit U.S.A. Inc. nor is the transaction recorded anywhere in the books or minutes of Merit Timber Products Ltd. as it should have been.

Both witnesses also expressed surprise at the transaction which was described by John Briggs in the first instance as being "inconsistent with my recollection" and "as having occurred (if at all) after the equipment had been shipped to Fiji" and latterly, by David Briggs as "contrary to all my belief and knowledge. It is false."

Reference was also made in this context to the terms of an unsigned letter of Glenn Cook's dated 10th August 1981 in which he set out the nature and values of his investment in Merit Timber Products Limited (See: Ex.D12) and which was subsequently confirmed in the signed letter dated 28th September 1981 from Merit Timber Products Ltd. to its accountants Messrs. Price Waterhouse (See: Ex. D13).

In particular the witnesses pointed to an entry in Ex.D12 which reads: "Plant and machinery $163,622." This they claim confirms that as late as August 1981 Glenn Cook was claiming that 'the machines' formed part and parcel of his contribution towards the assets of Merit Timber Products Ltd. I note also that there is an entry in the letter "Plant not transferred to Fiji" which suggests by inference that the earlier listed plant and machinery WAS transferred to Fiji.

Mr. Johnson for the defendant put it more bluntly in his closing submission when he said:

"D8 and D9 Bills of Sale (in which 'the machines' are sold by Merit U.S.A. Inc. to Grantree Leasing) are 'phoney' because of all people involved, Mr. Cook must have known at 28.10.80 what the plan was regarding the equipment. At that date he was managing director of Merit Timber Products Ltd. also Bill Briggs was a director of Merit Timber at the time. D8 and D9 involve falsification of a high degree and are reflected in D6 and D7 Schedules adding the 2 machines and the Merit U.S.A. Inc. master lease (which are) also tainted documents because signed by Bill Briggs as president and Bill Briggs as an individual."

He also questioned the correctness of the $140,000.00 figure in the plaintiff's documents which it was claimed did not have a 'legitimate origin' and was quite unrelated to the true value of 'the machines' as exemplified by a comparison with the defendant's documents. It was in counsel's words: "merely derived from the books of Grantree Leasing (Benj Franklin) which in turn was derived from Exs. P6 and P7."

I must confess that I too have grave doubts about the accuracy and authenticity of the figure when one considers that repayments were made on the initial loan of $140,000 reducing it to some $80,000 odd and furthermore considering the role and manner in which the plaintiff first became involved in trying to recover 'the machines' from the defendant (See: Exs. D10, D11 and D15 annexures (A) and (I)).

Whatsmore Ex.P10 which forms the principal foundation for the plaintiff's claim to ownership of 'the machines' incorrectly records that 'the machines' at the date of the exhibit, namely 23rd April 1986, were located in the U.S.A. when they clearly were not to the personal knowledge of the plaintiff.

Counsel for the plaintiff on the other hand denies that there was anything 'sinister' in the agreement or transfer of 'the machines' to Merit U.S.A. Inc. which he claims was well within the power and authority of a majority of the directors (i.e. Wilmer Briggs and Glenn Cook as against John Briggs) to decide and effect. I cannot agree.

I can well understand the desire to use the pre-existing line of credit already available to Merit U.S.A. Inc. through Grantree Leasing, but there does not appear to be any sound commercial reason for not documenting the transfer either by an appropriate Bill of Sale of 'the machines' from Merit Timber Products Ltd. to Merit U.S.A. Inc. or an appropriate entry in the minutes or the books of Merit Timber Products Ltd. Certainly no explanation has been advanced for this glaring lacuna.

Having carefully considered the evidence in support of the competing claims and mindful that the plaintiff bears the burden of proving his claim, I can confidently say that I am not satisfied on balance that the plaintiff has discharged his burden.

Needless to say in so far as there is a 'conflict' between the sworn evidence of the defendant and his witness and the contents of Exs. P1 and P2 I have little hesitation in preferring the defendant's version which is supported by an unbroken documented chain of ownership.

Furthermore the sworn oral testimony of the defendant and his uncle had a clearer 'ring of truth' to it than the written unsupported albeit sworn assertion of Wilmer Briggs which was not only untested by cross-examination but is also inconsistent with the letter of G. Cook (Ex.D12) and the clear express provisions of the 'Master Leasing Agreement' between Grantree Leasing and Merit U.S.A. Inc. and Wilmer Briggs as to the removal of 'the machines' out of the U.S.A. (See: Clause 5 of Ex. 15 annexure (E)).

In this latter regard the assertion by Wilmer Briggs in paragraph 3 of his letter (Ex.P1) "... (that) Grantree was aware that their funds and equipment would then be used in Fiji" sits uncomfortably with two factual stipulations made by Grantree's successor in title and Merit U.S.A. Inc. in the Bankruptcy Proceedings of Merit U.S.A. Inc. wherein is stated:

"5. Debtor (i.e. Merit U.S.A. Inc.) breached the Lease Agreement and is in default pursuant to the terms thereof by reason of the following:

(b) Contrary to the provisions of the Lease Agreement, the Equipment has been removed from the State of Oregon to Fiji;

(c) Contrary to the provisions of the Lease Agreement, Debtor has transferred possession of the Equipment to a third party in Fiji who is using the Equipment while refusing to make lease payments."

(See: Ex. P13(B) pp. 2 and 3)

Finally I am grateful to Mr. Johnson for his analysis of the 'true' nature of the transaction and in particular the paper entries that would have passed between Merit U.S.A. Inc. and Grantree Leasing under the 'Master Leasing Agreement' insofar as they purported to deal with 'the machines'.

In the result and for the foregoing reasons this action is dismissed with costs to the defendant to be taxed if not agreed.

D.V. Fatiaki
JUDGE

At Suva,
17th January, 1994.

HBC0067J.87S