Home | Databases | WorldLII | Search | Feedback Supreme Court of Vanuatu

  Download original PDF

Jong Phil Shin v Republic of Vanuatu [2021] VUSC 216; Civil Case 2053 of 2020 (31 August 2021)

IN THE SUPREME COURT OF Civil

THE REPUBLIC OF VANUATU Case No. 20/2053 SC/CIVL

(Civil Jurisdiction)

BETWEEN: Jong Phil Shin and Jung Yeon Yu

Claimants

AND: Republic of Vanuatu

First Defendant

AND: Vanuatu Investment Promotion Authority

Second Defendant

Date of Hearing: 20 August 2021

Before: Justice V.M. Trief

In Attendance: Claimants – Mrs T. Harrison

First Defendant – Mr H. Tabi

Second Defendant - no appearance (in person)

Date of Decision: 31 August 2021

JUDGMENT AS TO QUANTUM OF DAMAGES

1. Introduction

1. The Defendants the State and the Vanuatu Investment Promotion Authority (‘VIPA’) did not file a defence. Default judgment was entered for an amount to be determined.
2. The State filed sworn statements and submissions contesting the quantum of damages. VIPA has not taken any steps in the proceeding. Having heard counsel and having considered the evidence filed, I now set out my assessment of damages.

2. Background

3. In 2012, the Claimants Mr Jong Phil Shin and his wife Mrs Jung Yeon Yu (also known as Liz Yu) were granted citizenship on the basis of their customary adoptions.
4. By letter dated 16 October 2014, the State gave notice of its intention to revoke the Claimants’ citizenship.
5. Subsequently in 2014, VIPA declined to issue the Claimants an approval certificate because of a letter it had received from the First Defendant.
6. The Claimants had to close their businesses as they could no longer operate them as Vanuatu citizens nor could they do so as foreign investors without VIPA approval. Without a regular income, they could not service their mortgage with the National Bank of Vanuatu.
7. By letter dated 7 June 2017, the State issued formal notice that their citizenship certificates had been revoked on 10 October 2014.
8. As a result, the Claimants lost the following:
   1. Woorin Motors Limited business repairing vehicles, selling second hand buses, cars and spare parts;
   2. Restaurant and takeaway business called “Territory Bar and Family Karaoke” located at Korman/Tassiriki area in Port Vila; and
   100. Leasehold property title no. 11/OE44/022 which was seized by the National Bank of Vanuatu in 2015 pursuant to the mortgage.
9. The Claimant seek orders for general damages, special damages, interest and costs.
10. The State accepts that it revoked the Claimants’ citizenship certificates. It contests the quantum of damages sought. VIPA obviously abides the order of the Court.
11. The issues arising are:
    1. What quantum of damages is payable in relation to the Claimants’ business, Woorin Motors Limited? [Issue 1]
    2. What quantum of damages is payable in relation to the Claimants’ restaurant and takeaway business, Territory Bar and Family Karaoke? [Issue 2]
    3. What quantum of damages is payable in relation to the Claimants’ loss of leasehold title no. 11/OE44/022? [Issue 3]
    4. Are general damages for pain and suffering payable to the Claimants? [Issue 4] >
    5. Are special damages payable to the Claima[Issue 5]
12. I now consider each issue in turn.

100. Issue 1: What quantum of damages is payable in relation to the loss of the Claimants’ business, Woorin Motors Limited?

13. Mr Shin evidenced in his sworn statement filed on 11 August 2020, [“Exhibit C1”], that Woorin Motors Limited was incorporated on 29 August 2008. He stated in his sworn statement filed on 22 April 2021, [“Exhibit C2”], that the Woorin Motors business involved bus sales, spare parts sales and workshop services. The attached Profit and Loss Account dated 31 December 2014 assert sales of 80 buses making a profit of say VT70 million per year.
14. Denny Virahake Gaua, Secretary General of the Citizenship Office by his sworn statement filed on 29 July 2022, [“Exhibit D4”], and Melton Aru, Manager Taxpayer Services of the Department of Customs and Inland Revenue (‘DCIR’) by his sworn statement filed on 3 August 2021, [“Exhibit D5”], adduced into evidence the DCIR’s records in relation to the value added tax (‘VAT’) returns filed for Woorin Motors Limited from July 2009 to March 2016. No VAT returns were filed for Woorin Motors Limited after March 2016. The VAT returns for 2014 show total sales and income for the business of VT1,346,000. It follows, as Mr Tabi submitted, that the business’ profit for 2014 must be less than that figure of VT1,346,000 for sales and income.
15. Further, as pointed out by t by Mr Gaua in his sworn statement filed on 27 July 2021, [“Exhibit D1”], section 126(1)(f) of the Companies Act No. 25 of 2012 provides that a private company with an annual turnover exceeding VT50 million must file an annual audited financial report with the Vanuatu Financial Services Commission (‘VFSC’). The VFSC’s response to the Court order requiring its disclosure is that the company file for Woorin Motors Limited does not contain any audited financial reports. I conclude therefore that Woorin Motors Limited did not ever have annual turnover exceeding VT50 million.
16. The best evidence before the Court is the DCIR’s records of Woorin Motors Limited’s VAT returns disclosing annual total sales and income as follows:
    1. 2009 – VT8,120,000;
    2. 2010 – VT18,420,150;
    3. 2011 – VT18,864,611;
    4. 2012 – VT13,178,628;
    5. 2013 – VT3,480,300;
    6. 2014 – VT1,346,000;
    7. 2015 – VT3,439,755; and
    8. 2016 (Jan-Mar) – VT320,200.
17. Accordingly, I reject the Claimants’ evidence that Woorin Motors Limited’s annual profit was say VT70 million per year. Mr Tabi submitted that the business’ sales and income decreased from 2013, prior to cancellation of the Claimants’ citizenship certificates, and would have been severely hit in 2020 as a result of the Covid-19 pandemic. He submitted that in the circumstances, the Court should allow a maximum of VT1,500,000 per year from January 2015-December 2020 (6 years) for total sales and income, and award VT6,000,000 damages for economic loss in relation to the loss of the Woorin Motors Limited business (as the profit made would have been lower than the total sales and income). I agree. I so order.
18. For past economic loss, interest is payable from the date of the cause of action (October 2014) to the date of judgment at 5% p.a. I calculate that to be VT2,000,000.

4. Issue 2: What quantum of damages is payable in relation to the Claimants’ restaurant and takeaway business, Territory Bar and Family Karaoke?

19. Mr Shin evidenced in [“Exhibit C2”] that the Claimants’ restaurant and takeaway business called ‘Territory Bar and Family Karaoke’ made a profit of VT730,000 per month. That would be VT8,760,000 profit per year. On the other hand, the DCIR was requested to disclose all DCIR records for the Claimants’ businesses. There is no record that VAT was paid in relation to the Territory Bar and Family Karaoke business therefore I must conclude that its annual turnover was less than VT4 million per year (the minimum threshold provided in the Value Added Tax Act [CAP. 247] at which a business must be registered for VAT purposes). Accordingly, I reject the Claimants’ evidence as to the profits made by their Territory Bar and Family Karaoke business.
20. Mr Tabi submitted that the only Certificate of Renewal of a Business Name adduced into evidence for Territory Bar and Family Karaoke expired on 30 September 2014 therefore there is no evidence that such business operated or was entitled to operate after 30 September 2014. I do not accept that submission in light of the Claimants’ citizenship certificates being revoked in October 2014 which was the true cause of the Claimants’ losing their businesses. Accordingly, I will award VT3,000,000 damages for economic loss in relation to the loss of the Territory Bar and Family Karaoke business, again for the six-year period being January 2015-December 2020 for the same reasons given earlier.
21. For past economic loss, interest is payable from the date of the cause of action (October 2014) to the date of judgment at 5% p.a. I calculate that to be VT1,000,000.

5. Issue 3: What quantum of damages is payable in relation to the Claimants’ loss of leasehold title no. 11/OE44/022?

22. Mr Shin evidenced in [“Exhibit C2”] that the Claimants obtained a valuation certificate from registered valuer Levi Tarosa for their leasehold property 11/OE44/022 dated 12 January 2015. That certificate estimated the market value of the property to be VT219,700,000.
23. Mrs Harrisonitted that this vals valuation from Mr Tarosa was the closest in time to the seizure of the property by the National Bank of Vanuatu in 2015 therefore the Court should take into account that the value of the property was VT219,700,000.
24. The valuation certificate stated that the leasehold title number could also be 11/OE44/054 and was to be confirmed. That said, the contents of the valuation report obviously relate to the Claimants’ leasehold property at Korman/Tassiriki area even though the lease term and the lease commencement date were incorrectly stated therefore I will treat it as relating to lease title no. 11/OE44/022. Howev will notl not accept that valuation as an accurate valuation given the several errors made in the lease details and the uncertaas to what the correct lease title number was.
25. The State adduced two other property valuation reports in relation to lease title no. 11/OE44/022 into evide
1. Property Report from Land Logicd 7 January 2021 estimating that the present market value of the property was VT40 million lion (attachment “DVG1” in “Exhibit D1”
2. Report by Jimmy Sano, Valuer General dated 9 July 2021 estimating the market value of the property was VT52 million (attachment “JS2” to the sworn statement of Jimmy Sano, [“Exhibit D2”]).