IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA REGISTRY

NO CV 217/03

BETWEEN:

F C NICHOLLS LTD
Plaintiff

AND:

L SULLIVAN and AJ AND E LTD
Defendants

BEFORE THE HON JUSTICE THOMAS

Counsel: Mr Kaufusi for Plaintiff and Mr Tu'utafaiva for Defendants

Dates of Hearing: 31 March and 8 June 2005
Date of Judgment: 10th June, 2005.

JUDGMENT

This is a claim for AUD $55,297.42 as payment for meat sold and delivered by the plaintiff to the defendants trading as "Tonga Cold Store". The first defendant denies liability on the basis that she has no personal liability and if there is any liability it is with the company which is the true entity trading as the cold store. The company denies liability on two grounds, firstly that there was never any agreement on price and secondly as a consequence of acknowledged differences in value between invoices the cold store has paid a proper price for all meat delivered.

The plaintiff called three witnesses, Mr Fred Nicholls, Mr Lausi'i and a Mr Hunt and the first defendant gave evidence for the defendants. The documents had previously been lodged in terms of the usual order. In addition the plaintiff produced through Mr Lausi'i the certified copies of the articles and memorandum of association of three Australia and the plaintiff company, Mr Lausi'i having confirmed document three on page 2 of the plaintiff's documents as the certificate of incorporation of the Tongan company. I will refer to the evidence as and when necessary during the course of my judgment.

There is no evidence to support any finding of personal liability on the part of the first defendant although she plainly acted as the agent for the company throughout all dealings with the plaintiff. Mr Nichols accepted that Mrs Sullivan acted as the representative of her company A J & E Limited just as he acted as the representative of the plaintiff companies. The claim against her is dismissed.

There is no dispute that the quantities of meat alleged to be sold and delivered were sold and delivered by the plaintiff to the cold store and indeed that was conceded on the pleadings and not challenged in cross-examination.

So far as payment is concerned there were three deliveries by the plaintiff to the cold store. The first delivery was in October 2002 for a total cost of AUD $38,746.76. This was paid for in full by two payments in November and December 2002. The second delivery in November 2002 had a cost of AUD $52,715.24. Two payments in February 2003 amounted to AUD $41,111.89 leaving a balance claimed of AUD $11,603.35. The third delivery in December 2002 was for a discounted and compromised cost figure of AUD $61,108.32 (see plaintiff’s documents pages 20 and 21). A payment of AUD $17,408.35 was made on 15 March 2003 leaving a balance claimed of AUD $43,694.08. The two balances make up the total claim. I add that some payments were made in Tongan pa'anga and the figures therefore relate to conversions at the times of payments. These costs and payments have all been properly proved. The defendant company has had the meat and disposed of it. The plaintiff says it has not been paid in full and seeks the balance owing.

There is a preliminary point which needs to be dealt with. This was the first submission of Mr Tu'utafaiva at the conclusion of the evidence. This relates to proper proof of the incorporation of the Australian company and whether or not it is a legal entity. The plaintiff relies on document one which is plainly a photocopy of the certificate of incorporation and certified on page 2 as a true copy of the original by a Justice of the Peace who happens to be an accountant with the plaintiff. Mr Tu'utafaiva objects to its admission on the basis that the certificate is not in accordance with Section 94 of the Evidence Act (Cap 15) either subsection (f) or (i). The certification by the justice of the peace may comply but the requirement of an accompanying certificate under the seal of a notary public is lacking. On that basis the objection to the production of the certificate of incorporation must be upheld and I rule that it is inadmissible.

That is not the end of it. Obviously the certificate is the primary evidence that the plaintiff Australian company is a legal entity. The defendants put the plaintiff to the proof of that fact and Mr Tu'utafaiva does not concede the point. Is there other evidence that satisfies me on a balance of probabilities that the company is a legal entity. There is the obvious notoriety in terms of the oral evidence of both Mr Nichols and Mr Hunt and Mrs Sullivan. There are the letters and copy e-mails with company head notes. There is also the additional evidence of Mr Lausi'i the registrar of companies. It is clear that to register the Tongan company the registrar had to be satisfied of the registration of the company in New South Wales. He plainly was. Part of the proof he had were certified copies of the articles and memorandum of association of the Australian company which were produced as an additional Exhibit 1. In the absence of any evidence to the contrary and on the basis of all this material I am satisfied on a balance of probabilities that the plaintiff Australian company is a legal entity and able to pursue its case.

In light of that ruling and the previous summary of the evidence it is clear that the plaintiff has established its case against the second defendant trading as Tonga Cold Store. There were contracts between the parties which have been completed and for which there have been payments in full or in part.

The defence's cross examination was to the effect that there was no agreement on prices and in addition on discovery of a sample of an invoice presented to Tongan customs for the assessment of duty compared to the invoice presented to the company for payment the difference in figures was such that the defendant believes it has paid sufficient for the meat supplied. The short answer to each point by Mr Nicholls was that there was an agreement to pay the prices in accordance with the price lists, there were payments made, the customs invoice was for customs and the commercial invoice to the customer represented all costs and a profit margin. The first contract was complete, the second contract had been paid except for a balance which may have reflected payment in Tongan pa'anga and not Australian dollars, and the third contract had been varied by an agreed compromise at a 25% reduction in respect of which there had been a part payment. On that basis these were all binding contracts.

As indicated Mrs Sullivan gave evidence for the defendants. I am bound to say she appeared somewhat general and a little vague with some of her answers. That may simply reflect the effluxion of time and also that other employees of her company attended to the details of the contracts. However it also indicates to me that the correspondence and documents made at the time are likely to be more reliable than memory two and a half years after the events.

It became apparent during the course of her evidence that the main problem she had with the plaintiff related to the third container of meat. It seems clear that although she has disputed payment of the balance for the second container that this was a mistaken payment in Tongan pa'anga when it should have been paid in Australian dollars. On that basis the claim by the plaintiff for that balance is established without question.

The third container is a different matter. Mrs Sullivan accepted that the meat had been delivered to and sold by her company. Her evidence was that on receipt of the invoice for $81,131.39 she was concerned about the total charge. Although previous contracts and this contract appear to have been on the basis of delivery to the cold store with the plaintiff meeting all charges her preference was to take delivery at the wharf and be responsible from there on for the various duties, charges and taxes. She accepted that after some discussion and correspondence she agreed on behalf of the company to pay $61,108.32 for the shipment of meat. This by letter dated the 14th of February 2003 and produced as page 21 of the plaintiff’s documents. There was some debate about the extent of her knowledge of the customs invoice in the amount of $22,630.86 at the time of that acceptance. She said her concern was with the double invoicing of the plaintiff and that Mr Nicholls should "revisit what he was doing". She accepted that the payment she made of $22,630.86 was made in Tongan pa'anga and not Australian dollars and was the figure set out in the customs invoice. Although it was not specifically stated presumably she believes that is all the company needed to pay even though that figure does not include all of the duties, charges and taxes. Essentially she had the view that her acceptance of the $61,108.32 figure was something of a mistake because of the systems adopted by Mr Nicholls. She referred to variances in the containers but there is no claim for under supply nor any counterclaim for loss of any sort. At one stage she indicated that she had paid Customs 22,000 pa'anga but there was no proof of that and it seems unlikely. As I indicated earlier she was somewhat vague with much of the detail and all that one could say of her evidence is that she believes that the company should not pay any more than it has.

There are two areas of dispute. The first relates to when the third container of meat was actually delivered. Mrs Sullivan could not actually say when that occurred. The correspondence indicates that on the second of December 2002 she indicated that the container was on the wharf and she would like it delivered to the factory. By letter of the 30th of December which refers to a possible further shipment there is no suggestion that the meat had not been delivered by then. These letters are pages 13 and 15 of the documents. In my view then it is likely that the meat was delivered sometime in December 2002.

The second dispute relates to the knowledge of Mrs Sullivan when she agreed to pay the $61,108.32 on the 14th of February 2003. This is page 21 of the documents. Her belief was that she did not know about nor had seen a copy of the customs invoice referring to a figure of $22,630.86. However document 18 which is a letter of the sixth of February refers to a meeting with Customs and a suggestion that the plaintiff is double invoicing. The defendants produced as number three in their exhibits a copy of the customs invoice referring to that figure of $22,630.86. Her complaint was that the invoice was in the name of Tongan Cold Store when in fact it was the plaintiff who was clearing the container. This complaint is amplified in the letter number 18. However it seems to me that the only reasonable inference from that letter is that she knew about the lesser figure in the customs invoice when she agreed to pay the $61,108.32. That particular invoice is the only customs invoice she appears to have discovered. She would not concede that when I questioned her but it appears to me logical that that is the case. She is an experienced businesswoman having been involved with the company as the director and general manager for some period of time and having attended to the purchase of meat both here and in New Zealand. On that basis I am satisfied that when she agreed to pay $61,108.32 she knew about the figure in the customs invoice and she still believed that that was a proper price for the container of meat the company had already disposed of.

Mr Tu'utafaiva nonetheless submitted that the company was not bound by the letter of agreement (number 21) because this was a CIF contract which had not been completed because the appropriate documentation had not been provided to the second defendant. To support that argument he relied upon document number 3 which clearly states that all prices are CIF and is in the name of Tongan Cold Stores. However that was not an invoice prepared for the defendant company. Mr Nicholls had explained the difference between the customs invoice and the commercial invoice. The price lists produced indicate a charge for delivery to the store and that was the basis for the contract with the defendant company. In my view this is not a CIF contract.

In the circumstances therefore there is no reason to go behind Mrs Sullivan's acknowledgement of the compromise in respect of the third container wherein she agreed to pay $61,102.38 on behalf of the company. On that basis I am satisfied on a balance of probabilities that the plaintiff has established its claim against the second defendant in full.

There will therefore be judgment for the plaintiff against the second defendant for the sum of AUD $55,297.42. The plaintiff is also entitled to interest on the judgment sum at a rate of 10% per annum from the 1st of March 2003 to the date of payment. There will be costs to the plaintiff to be paid by the second defendant and to be agreed or taxed.

Mr Kaufusi for the plaintiff sought travelling expenses for Mr Nicholls for each of the three occasions that he was required to attend at the court in Tonga. Mr Tu'utafaiva objected to such claim on the basis of a real need to travel. However I am satisfied that it is an appropriate claim and I do allow such travelling expenses provided they are supported by appropriate invoices and/or vouchers.

There will be judgment accordingly.

Ian Thomas
JUDGE

NUKU'ALOFA: 10 June, 2005.