Chan Chui v Chan Tong [2009] WSSC 104 (14 August 2009)

1. The plaintiff, a businessman for some twenty years, secured a lease over vacant land at Saleufi with a desire to construct a warehouse thereon. His claim against the defendant Mr Chan Tong is premised on the breach of the agreement for the construction of that building. It is claimed that the defendant and his partner (who has disappeared overseas) breached the agreement by failing to take delivery of the pre-fabricated warehouse and erecting it on the leasehold.

2. The first stage of the construction was the laying of the foundation of which the defendant was paid fifteen thousand tala ($15,000) labour costs. All the materials were purchased by the plaintiff. Then the defendant asked for forty five thousand tala. ($45,000) as the supplier in the United States of America required the purchase price of US$18,000 for the warehouse before it will supply and deliver the warehouse to Los Angeles where the plaintiff through his shipping agents would arrange for freight to Samoa.

3. Forty-five thousand tala ($45,000) was duly paid to the defendant in August 2006. Thirty five thousand ($35,000) was for the warehouse and $10,000 was a downpayment for the defendant’s costs of $20,000 to install the warehouse onto the foundation.

4. Upon arrival at Los Angeles, the plaintiff found no warehouse. He telephoned and talked to the defendant’s wife who was at the time employed by the plaintiff. The wife was requested to ask the defendant as to the whereabout of the warehouse. After two weeks in the United States and with no response from the defendant, the plaintiff returned to Samoa. He went looking for the defendant. He left messages, as well as requesting the wife to tell the defendant to get in touch. No response was forthcoming from the defendant.

5. The plaintiff then instructed his lawyer. He wanted to recover the $45,000 he paid to the defendant. Damages of $20,000 and costs are also sought.

6. The defendant, a cousin of the plaintiff, is an electrician by trade. He and an expatriate Dwayne Patton, a builder, were partners in a construction business called DNA Construction. The defendant knew through his wife, who was then an employee of the plaintiff that the plaintiff was planning to construct a warehouse. He and his partner approached the plaintiff. As a result of discussions with the plaintiff they submitted a quote dated 31st July 2006 to supply and install the warehouse at a cost of $155,629.20. The quote was produced by the defendant as an exhibit but the plaintiff denied seeing this document before. I will return to this quote later.

7. According to paragraphs 13, 14 and 15 of the Statement of Defence and Counterclaim the defendant said that the plaintiff failed to pay US$11,000 being the balance of the purchase price of the warehouse, as a result of which he breached a term of the agreement and as a consequence the defendant was unable to procure and take delivery of the warehouse. In his testimony he told the court he remitted US$10,000 to the supplier in the United States. He also produced an invoice dated 1st October 2006 issued by DNA Construction showing a balance of US$9,380 owing to complete the purchase of the warehouse.

8. As a result of the breach by the plaintiff the defendant was unable to complete the contract. He counterclaimed for loss of profit of $25,000 and electrical labour costs of $4,700 he was entitled to under the contract. He also seeks general damages of $20,000 and costs.

9. Both counsels agree that there was an agreement between the plaintiff and defendants. The defendants were to erect a prefabricated warehouse from the United States of America on the plaintiffs leasehold at Fugalei. Construction of the foundation for the warehouse was completed and the defendants requested $45,000 from the plaintiff. The plaintiff paid $45,000.

10. The total cost of the prefabricated warehouse was USD$18,000 which has to be paid in full before delivery. Arrangement and cost of freight from the United States to Samoa were the responsibilities of the plaintiff. The plaintiff travelled to Los Angeles to arrange and to pay for delivery.

11. On his return to Samoa the plaintiff went looking for the defendant. It was conceded by the defendant during his testimony that his wife did tell him the plaintiff wanted to speak with him about the warehouse.

12. As to the cost of construction to be paid by the plaintiff to the defendant, the defendant alleged that the written quote of $155,629.20 was agreed to by the plaintiff. The cost of the prefabricated warehouse is included in the quote. Payment of $45,000 by the plaintiff was part payment of the contract price. According to the quote, costings for materials and labour were given for five identified areas:

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(i) Building		$80,295.20

(ii) Foundation:

Materials	35,414
Labour	18,000	$53,414

(iii) Plumbing: Materials:	2,435

Labour	1300	3,735

(iv) Security:

Fencing Materials	3,185
Labour	1800	4985

(v) Electrical:

Materials	8500
Labour	4,700	13,200
		$155,629.20

13. As earlier stated the plaintiff told the court he has never before seen the written quote. In other words the quote was manufactured by the defendant for purpose of the trial. There is some truth in the plaintiffs assertion. In the first place the defendant told the court that the cost of the warehouse was USD$18,000. Freight and duties were the responsibilities of the plaintiff. It would therefore be ludicrous for the plaintiff to accept a quote of $80,295.20 tala for a building worth USD$18,000 exclusive of freight and duties. In the second place the $45,000 requested by the defendant and paid by the plaintiff was done after the foundation for the warehouse was laid. The foundation materials were supplied and paid for by the plaintiff and the defendant’s costs of $15,000 were paid before the $45,000 was requested and paid. If the contract costing were in accordance with the quote the defendants should have supplied the materials for the foundation which they did not. The contention by the plaintiff is therefore cemented that the agreement with the defendants was that the plaintiff would provide and pay for all the materials. The defendant would only charge for their costs which therefore meant the written quote produced by the defendant did not exist and was not agreed to by the plaintiff.

14. When the plaintiff paid the $45,000 to the defendants the only obligations for the defendants remaining under the agreement was to pay US$18,000 to the warehouse manufacturer and to erect the warehouse upon arrival in Samoa. But there was no warehouse to erect. The defendant told the court he paid USD$10,000 to the supplier. I am not prepared to accept his statement. According to the Statement of Defence and Counterclaim the sum US$11,000 is alleged by the defendant to be owing by the plaintiff. But if US$10,000 was paid then according to his own testimony only US$8,000 should be owing.

15. The plain truth is that after $45,000 was given to the defendant no remittance for the warehouse was sent to the supplier and the defendant avoided the plaintiff. If he was serious about his written quotation and his willingness to complete the contract and get his costs he should have been chasing the plaintiff instead of hiding.

(a) The plaintiff is entitled to be reimbursed by the defendant Mr Chang Tong for the sum of $45,000. Judgement for the plaintiff accordingly in the sum of $45,000.

(b) The plaintiffs claim for general damages was not substantiated by the pleadings and the evidence and is accordingly dismissed.

Supreme Court of Samoa

Chan Chui v Chan Tong [2009] WSSC 104 (14 August 2009)