Kui Valley Business Group Inc v Kerry Wamugl trading as Simjay Limited (2009) N3667

• Jurisdiction: Papua New Guinea
• Judge: Makail J
• Judgment Date: 06 March 2009
• Court: National Court
• Citation: (2009) N3667
• Docket Number: WS NO 925 OF 1997
• Year: 2009
• Judgement Number: N3667

Full Title: WS NO 925 OF 1997; Kui Valley Business Group Inc v Kerry Wamugl trading as Simjay Limited (2009) N3667

National Court: Makail J

Judgment Delivered: 6 March 2009

N3667

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 925 OF 1997

KUI VALLEY BUSINESS GROUP INC

Plaintiff

AND

KERRY WAMUGL trading as SIMJAY LIMITED

Defendant

Mount Hagen: Makail J

2008: 16th June

2009: 06th March

CONTRACT LAW - Breach of contract - Oral contract - Supply of goods on credit basis - Unpaid costs of supply of goods - Parties to contract

LAW OF AGENCY - Liability of principal and agent - Whether agent entering into contract has ostensible authority

EVIDENCE - Proof of debt - Onus on party claiming damages - Based on the balance of probabilities - Defendant denies existence of debt - Whether there is evidence establishing debt - Reason for failure to produce invoices and outstanding account unsatisfactory - Debt not proven - Entire action dismissed.

Cases cited

Papua New Guinean Cases:

Toplis & Harding Pty Ltd -v- Dadi Toka & Grandsen (Third Party) [1982] PNGLR 321

Sangara (Holdings) Limited -v- Hamac Holdings Limited (In Liquidation) [1973] PNGLR 504

AGC (Pacific) Limited -v- Woo Textile International Pty Limited [1992] PNGLR 100

Yange Lagan -v- The State (1995) N1369

Jonathan Mangope Paraia -v- The State (1995) N1343

Overseas Cases:

Royal British Bank -v- Turquand (1856) 6 E and B 327; (1856) 119 ER 886

Lakeman -v- Mountstephen (1874) L.R. 7 H.L. 17

HL Bolton (Engineering) Co Ltd -v- T.J. Graham and Sons Limited [1956] 3All ER 624

Mahony -v- East Holyford Mining Co (1875) LR 7 H.L. 869

Bonham Carter -v- Hyden Park Hotel Ltd [1948] 64 TLR 177

Ashcroft -v- Curtin [1971] 1WLR 1731; [1971] 3 AKER 1208

Counsel:

Mr. P. Kopunye, for the Plaintiff

Mr. K. Sino, for the Defendant

JUDGMENT

6 March, 2009

1. MAKAIL J: This case is about unpaid supply of goods (building materials) by the Plaintiff to the Defendant dating back to 30th January 1997. The Plaintiff is a business group and carried on business as a supplier of building materials through its wholesaling and retailing stores in the town of Kundiawa in the Chimbu Province of Papua New Guinea. The Defendant is a company and inter alia carried on business in the building and construction industry and also based in Kundiawa.

2. The Plaintiff alleged on or around 1996, the Defendant entered into an oral credit facility contract with the Plaintiff where it obtained building materials from the Plaintiff on credit and paid the Plaintiff whenever money became available. The Defendant used the building materials to build and construct buildings and also to maintain and repair buildings for its customers. The contract ran for a period of time until the Plaintiff claimed that the Defendant failed to pay a sum of K11,611.57 on 30th January 1997 after it collected building materials consisting of timbers, cement and roofing irons etc.. to build a house for a customer. As a result, the Plaintiff terminated the credit facility contract with the Defendant and demanded the Defendant to pay up. Despite numerous requests, the Defendant failed to pay up, hence it issued this proceeding.

3. Sometimes after it issued this proceeding, it went into liquidation and a liquidator was appointed by the Court to run its affairs until the liquidation was terminated by the Court on 14th March 2008.

EVIDENCE

4. Trial was conducted on both the question of liability and quantum. A Mr. Kuri Arimba gave brief oral evidence on behalf of the Plaintiff and his Affidavit sworn on 11th November 2005 and filed on 14th November 2005 was also admitted into evidence and marked as Exhibit “P1”. Mr. Arimba is the Managing Director of the Plaintiff. Briefly, he said that Messrs Kerry Wamugl and Wala Gama used to come to his office to get building materials on credit. The Plaintiff would supply the building materials to Messrs Wamugl and Gama and after completion of a contract for building and construction or maintenance and repair of buildings, they would pay the Plaintiff. In this case, he said after completion of a building and construction contract, they had not returned to pay for the building materials supplied to them on credit. This is the debt of K11,611.57. He also attached a letter written by Mr. Wamugl under the letter head of Kaiange Builders & Contractors dated 27th March 2000 to the Plaintiff where Mr. Wamugl said that the debt incurred by the Defendant would be paid.

5. A witness by the name of James Wai also gave brief oral evidence for the Plaintiff and his Affidavit sworn on 11th November 2005 and filed on 15th November 2005 was also admitted into evidence and marked as Exhibit “P4”. This witness is the Manager of the Plaintiff. He said that he is aware that building materials were supplied to the Defendant upon request and Mr. Gama used to come and collect them. The building materials were obtained on credit basis and the amount owing would be paid upon completion of a building and construction or maintenance and repairs contract. He said that Messrs Wamugl and Gama were partners who split up sometimes later and left a debt of K11,611.57.

6. Although objections were raised by counsel for the Defendant as to the tendering of a letter from the Internal Revenue Commission to the Liquidator dated 15th June 2007 and another letter from the Plaintiff to Kopunye Lawyers dated 19th December 2000, the objections were overruled and these two documents were admitted into evidence and marked as Exhibits “P2” and “P3” respectively.

7. For the Defendant, a Mr. Kerry Wamugl gave brief oral evidence and his Affidavit sworn on 01st May 2006 and filed on 04th May 2006 was admitted into evidence and marked as Exhibit “D1”. He is the Managing Director of the Defendant. He is also a shareholder of the Defendant and the other shareholder is his wife, Mrs. Monica Wamugl. He said that the Defendant is not liable for the debt because first, the building materials allegedly supplied by the Plaintiff were not received by the Defendant. Secondly, the Defendant was awarded a contract to construct a building and it engaged Wala Gama to assist in the construction of a building, but Mr. Gama had no authority to enter into the credit facility contract.

8. Thirdly, he also said that the Defendant had not entered into any credit facility contract with the Plaintiff. This is because the Defendant had sufficient funds to pay for the building materials from the Plaintiff and it paid for all of them either in cash or by cheque. He attached copies of cheque butts and a Bank Statement to verify payments it made to the Plaintiff. Fourthly, he said that if there was a credit facility contract with the Plaintiff, it was Mr. Gama who had entered into it but it was not authorized by the Defendant. If Mr. Gama obtained building materials on credit, he had not used them for the benefit of the Defendant but for his personal benefit by building himself a house in Mt Hagen. Further, he said that the Defendant had paid K36,000.00 to Mr. Gama on 29th November 1997 and he believed Mr. Gama may have used the money to buy the building materials.

9. Finally, he said in no uncertain terms that the letter of 27th March 2000 which he wrote to the Plaintiff was written on condition that if the Plaintiff entered into a credit facility contract with his new company called Kaiange Builders & Contractors, he would settled the debt incurred by Mr. Gama. This he said was to renew relationship with the Plaintiff that had eroded away when Mr. Gama had failed to pay the debt to the Plaintiff.

10. The second witness for the Defendant was Mrs. Monica Wamugl who also gave brief oral evidence and her Affidavit sworn on 01st May 2006 and filed on 04th May 2006 was also admitted into evidence and marked as Exhibit “D2”. She is also a shareholder of the Defendant and wife of Mr. Kerry Wamugl. Under the banner of the Defendant, she said she and her husband had operated a kai bar and a second hand clothing shop in Kundiawa. She said that Mr. Gama had approached her and her husband and asked them to go into building and construction business which they agreed. She said that Mr. Gama used the name of the Defendant to bid for contracts in the Chimbu Province and where the Defendant was awarded contract to build or carry out maintenance and repair of buildings and got paid, the proceeds were shared between the Defendant and Mr. Gama.

11. Like her husband, she also said that the Defendant had not entered into a credit facility contract with the Plaintiff. This is because the Defendant had sufficient funds to pay for the building materials obtained from the Plaintiff and it had paid for all its buildings materials either in cash or by cheque. She attached a copy of the Bank Statement to verify payments it made. Next she said that if there was a credit facility contract with the Plaintiff, it was Mr. Gama who had entered into it but it was not authorized by the Defendant. If Mr. Gama obtained building materials on credit, he had not used them for the benefit of the Defendant but for his own personal benefit because he had used them to build a house in Mt Hagen. Further, she said that the Defendant had paid K36,000.00 to Mr. Gama on 29th November 1997 and she believed that Mr. Gama may have used the money to buy the building materials.

12. Jonathan Gariame was the final...