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Teem (trading as Tropical Electronics) v Attorney General iro Kiribati Audit Office [2024] KICA 6; Civil Appeal 10 of 2024 (13 December 2024)

IN THE COURT OF APPEAL OF KIRIBATI
CIVIL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

CIVIL APPEAL NO. 10 OF 2024

BETWEEN
RONALD TEEM T/A TROPICAL ELECTRONCS
Appellant

AND
ATTORNEY GENERAL IRO KAO
Respondent

Before: Sir Salika, JA
Nelson, JA
Khan, JA

Date of Hearing: 5 December 2024
Date of Judgement: 13 December 2024

Civil Appeal - Breach of contract - Contract between Kiribati Audit Office and Tropical Electronics - Offer and acceptance - Supply of five laptops - Considerations paid - five laptops not delivered.

Principle of Frustration raised - principle explained - principle of frustration does not apply.

Cases referred to:
Davis Contractors Limited v Fareham UDC [1956] UKHL 3; (1956) AC 696 and
Etuati Corrie v Captain Cook Hotel Limited [2010] KIHC, Civil Case 208 of 2010

APPEARANCES:
Counsel for the Appellant: Ms. T Timeon
Counsel for the Respondent: Mr. M Kakiarerei

JUDGEMENT OF THE COURT

INTRODUCTION

1. This appeal arose first from a decision of a Magistrate sitting alone on 6 March 2023. The appellant aggrieved by the decision appealed to the High Court. The High Court upheld the decision of the single Magistrate and dismissed the appeal. The appellant still aggrieved by the decision of the High Court appealed to the Court of Appeal.
2. The Court of Appeal heard the appeal on 5 December 2024 and reserved its decision. This is the decision of the Court of Appeal.

FACTS

3. The Plaintiff's original claim was based on a breach of contract. The factual circumstances are outlined in an affidavit filed by Taukoriri Meita, the Acting Principal IT Auditor of Kiribati attached to the Bairiki Kiribati Audit Office at Bairiki. He deposed to being the Officer responsible for arranging the 5 laptops for the Kiribati Audit Office (KAO). He recorded all the discussions on this matter with the team from Tropical Electronics.
4. Mr Meita's affidavit is reproduced here showing facts of the matter: -

ORIGINAL PLAINTIFF'S CASE

5. On those facts the KAO sued for compensation for the return of its money in the sum of $4,950.00 for breach of contract.
   

GROUNDS OF APPEAL

The High Court erred in law in finding the contract of sale for the supply of the 5 laptops was not frustrated when there was strong and compelling evidence that the contract was frustrated.

APPELLANT CASE

6. The appellant argued that there was no breach of contract but that the contract could not be completed in that the laptops could not be delivered because it was frustrated by the outbreak of the Covid-19 pandemic.
7. The defendant is now the appellant before the Court of Appeal. The same argument before the Magistrate Court and the High Court were advanced before the Court of Appeal.
8. The appellant's main contention is that it performed its part of the contract in that it sent the $4,950.00 to the supplier company in the United States of America (US) for the supply of the 5 laptops computers.
9. It further contends that it was the responsibility of the laptop supplier and the transport company to deliver the laptops to Kiribati.
10. The KAO contracted with the Appellant to supply 5 laptops and paid the full purchase price for the laptops. The KAO did not contract with the supplier in the US. The Appellant contracted with its supplier in the US. The supplier in the US contracted with the transport company to deliver the goods to Kiribati.
11. The Supplier in the US supplied the 5 laptops to the transport company for transportation to Kiribati. The Covid-19 epidemic virus caused closure of borders in the US and in Kiribati and the 5 laptops could not be delivered They were instead stored in the stock yard of the Transport Company. The storage cost at the Transport Company was $20.00 per day per laptop attracting a storage fee of $100.00 per day. The supply company in the US was informed by the Transport company that it would auction the laptops if the laptops were not removed to recover their storage cost. After some time, the transport company auctioned the laptops resulting in no laptops to deliver to KAO.
12. The appellant contends that on those facts it is not responsible for the 5 laptops not reaching the KAO. Instead, it blames the supplier in the US and the Transport Company. Moreover, it argued that the delivery of the laptops was frustrated by the outbreak of the Covid-19 pandemic which led to the closure of all borders worldwide including the US and Kiribati. The reason for the loss of the 5 laptops was not the closure of the borders, rather they were auctioned off after the appellant and the computer supplier in the US failed to remove the laptops from the transport company storage yard.
13. The appellant relied on the two authorities in support of its case namely:
    • 1) Davis Contractors Limited v Fareham UDC [1956] UKHL 3; (1956) AC 696 and
    • 2) Etuati Corrie v Captain Cook Hotel Limited (2010) KIHC, Civil Case 208 of 2010
    • These two cases define the principle of frustration.
14. The Davis Contractors Limited case (supra) says:-
    • "Frustration occurs whenever the law recognizes that without the default of either party, a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract."
15. The local case of Etuati Corrie (supra) discussed where the principle of frustration was successfully argued in relation to supply of electricity. A generator was purchased for the supply of electricity. The generator broke down and the supply of electricity stopped. The breaking down of the generator affected the supply of electricity and the Court there ruled the contract was frustrated by the generator breaking down.
16. The factual circumstances are different in this case. The evidence from the KAO is that upon repeated requests from KAO for updates of the arrival of the laptops in Kiribati the appellant misled and lied to them that the laptops were on the way to Kiribati. Even after the laptops had been auctioned, the appellant kept informing the KAO that the laptops would be delivered.
17. The Magistrate ruled that the contract was never frustrated by the advent of Covid-19 or for the border closures. The Magistrate found not enough was done by the appellant to stop the auction. The High Court of Kiribati made the same finding. This court makes the same finding.
18. The other ground of appeal was that the decision of the High Court was against the weight of the evidence. We beg to differ, in that, the decision is consistent with the evidence.
19. In these circumstances we dismiss civil appeal No. 10 of 2024 in its entirety and affirm the decision of the High Court given on 20 June 2024.
20. Costs are awarded to the respondent to be taxed if not agreed.
21. The formal Orders of the Court are:
    • i) Civil Appeal No 10 of 2024 is dismissed in its entirety
    • ii) Costs are awarded to the respondent to be taxed if not agreed.
22. Orders accordingly.

Lawyer for the appellant - Patili Lawyer Firm
Lawyer for the respondent - Attorney General

DATED this 13 day of December 2024