Veltro Limited and Vicky Vagikapi v Steven Liu Huang and Henry Gorea and John Dako (2006) N4608

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 12 September 2006
• Court: National Court
• Citation: (2006) N4608
• Docket Number: OS NO 478 of 2006
• Year: 2006
• Judgement Number: N4608

Full Title: OS NO 478 of 2006; Veltro Limited and Vicky Vagikapi v Steven Liu Huang and Henry Gorea and John Dako (2006) N4608

National Court: Cannings J

Judgment Delivered: 12 September 2006

N4608

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO 478 OF 2006

VELTRO LIMITED

First Plaintiff

VICKY VAGIKAPI

Second Plaintiff

V

STEVEN LIU HUANG

First Defendant

HENRY GOREA

Second Defendant

JOHN DAKO

Third Defendant

Kimbe: Cannings J

2006: 21 July, 12 September

CONTRACTS – oral agreement – need for proof of existence of agreement – dispute as to existence of contract – need to precisely plead details in originating process.

PRACTICE AND PROCEDURE – pleading a cause of action – originating process must identify cause of action with sufficient particularity to enable court proceedings to be conducted efficiently.

The plaintiffs claimed that they entered into an agreement with the first defendant and gave him money to enable him to purchase sea cucumber for sale and export. They claimed that he did not return the money. Nor did he supply any sea cucumber. They filed an originating summons seeking the return of the money and claiming ownership of the sea cucumber that was in the possession of the first defendant. The agreement between the plaintiffs and the first defendant was not in writing and the plaintiffs presented no written evidence as to the transfer of the money to the first defendant.

Held:

(1) Though the originating process was vague and poorly pleaded, the cause of action is breach of contract.

(2) Therefore the plaintiffs bore the onus of establishing the existence of a contract between them and the first defendant.

(3) The standard of proof in civil proceedings is on the balance of probabilities. However, the plaintiffs were unable to meet that standard.

(4) There was no evidence of any written or oral agreement. There was no written record, memorandum or notes of any agreement. Nor was there any evidence to verify the central claim that money was given by the plaintiffs to the first defendant. The plaintiffs failed to prove their case and all claims for relief were refused.

(5) When a party invokes the jurisdiction of the National Court to enforce a commercial agreement the Court will expect to be presented with evidence showing the trappings of normal, legitimate business operations. In the circumstances, the almost total absence of business records and the involvement of an apparently unlicensed financial institution gave the appearance of illegitimate or irregular business; and the National Court should not allow its processes to be used to legitimate something that appears illegitimate.

Cases cited

The following cases are cited in the judgment:

Graham Mappa v PNG Electricity Commission [1995] PNGLR 170

Putput Logging Pty Ltd v Phillip Ambalis [1992] PNGLR 159

The State v Keboki Business Group Incorporated and Morobe Provinsel Gavman [1985] PNGLR 369

Terminology

Beche-de-mer is a large sea cucumber. A sea cucumber, or holothurian, is an echinoderm having a thick worm-like body with tentacles around the mouth. An echinoderm is a marine invertebrate (an animal lacking a backbone) of the phylum (species group) Echinodermata, which also includes starfishes, sea urchins, brittlestars and crinoids (Concise Oxford English Dictionary, Oxford University Press © 2004).

ORIGINATING SUMMONS

This was an application for enforcement of a contract.

Counsel

C A Rihatta, for the plaintiffs

S L Huang, the first defendant, in person

12 September, 2006

1. CANNINGS J: This is a case about beche-de-mer or sea cucumber, a sea animal that grows well in the waters of West New Britain. It is a valuable export commodity, eaten as a delicacy especially in China and Japan. The plaintiffs, based in Port Moresby, claim that they entered into an agreement with the first defendant, a businessman based in Kimbe, West New Britain, to help him buy sea cucumber from local operators and export it through Port Moresby to Asian markets. They say that they gave the first defendant K50,000.00 pursuant to the agreement but in return they have got nothing. No money and no sea cucumber. They want either or both and have come to the National Court to pursue their grievance.

2. The first plaintiff, Veltro Ltd, is a company incorporated under the Companies Act 1997, based in Port Moresby. Its main areas of business are claimed to be distributing stationery supplies to business houses and schools in Port Moresby and trading in sea products. The second plaintiff, Vicky Vagikapi, is a PNG citizen and is the principal shareholder and a director of the first plaintiff. The first defendant, Steven Liu Huang, is non-citizen, a Taiwanese national, involved in the fisheries and marine products industry in Kimbe. The second defendant, Henry Gorea, is a PNG citizen, and is the majority shareholder of PNG Corporate Ltd, a company that specialises in buying and exporting sea cucumber, trochus shells and shark fins, based in Kimbe. The third defendant, John Dako, is a resident of Kimbe and is said to be a ‘supporter’ of the first defendant. The main dispute is between the plaintiffs and the first defendant.

PROCEDURAL HISTORY

3. The plaintiffs filed an originating summons and supporting documents on 5 July 2006 by which the following relief is sought:

· an injunction restraining the defendants from selling, exporting or otherwise dealing with all the sea cucumber stored at Section 61, Allotment 21, Kimbe;

· a declaration that the sea cucumber bought by the first defendant is the property of the plaintiffs;

· an order that the defendants reimburse the money lent to them by the plaintiffs;

· an order that the defendants be restrained from moving any of the sea cucumber except by court order;

· a declaration that the first defendant had misrepresented the real state of affairs causing the plaintiffs to enter into financial arrangements that caused them losses.

4. On the same day, 5 July 2006, the plaintiff filed a notice of motion, seeking interim relief. I granted an injunction restraining the defendants from selling, exporting or otherwise dealing with the sea cucumber in their custody at Kimbe, and restraining its movement away from its then location until further orders of the court. That injunction has been in place until today.

PLAINTIFFS’ EVIDENCE

5. The plaintiffs based their case on affidavit evidence. They tendered five affidavits, the contents of which are summarised in the table below.

TABLE 1: SUMMARY OF PLAINTIFFS’ AFFIDAVITS

No	Deponent	Content
1	Vicky Vagikapi, 2nd plaintiff, 02.07.06	She is the manager and a director of the 1st plaintiff, Veltro Ltd – she met the 1st defendant, Mr Huang, in May 2006 in Port Moresby – he was trying to source funds to finance shipment of seven tonnes of sea cucumber from Kimbe to POM for sale in POM or export to Singapore – he eventually convinced her to source funds, which she did by negotiating a loan with a financial institution, Secure Securities Holdings Ltd of POM, which provided a loan of K100,000.00 repayable within six weeks on 30% interest – as collateral, she proposed her Pajero valued at K90,000.00 and the first defendant contributed K30,000.00 in cash – she gave the first defendant K50,000.00 and he then went back to Kimbe – said he would return in 10 days with sea cucumber – but that did not happen – the first defendant asked for an extra K50,000.00 but that request was refused.
2	Noah Taia, Fisheries Enforcement Officer, 05.07.06	States that he is a Fisheries Enforcement Officer, an officer of the National Fisheries Authority, based in Kimbe – has been instructed to monitor activities of the first defendant in view of concerns about illegal, unlicensed operations – believes that the first defendant may be using a fisheries licence issued to John Dako and Kove Enterprises Ltd.
3	Raphael Kora, employee of 1st plaintiff, 05.07.06	States that he is the husband of 2nd plaintiff – came to Kimbe in early July 2006 to see the first defendant about concerns that the 1st defendant had misused the K50,000.00 given to him to transport sea cucumber from Kimbe to POM for sale or export – the first defendant avoided him – the first plaintiff needs either the money or the sea cucumber in order to repay the loan that was obtained to finance the purchase of sea cucumber.
4	Noah Pepe, employee of 1st plaintiff, 07.07.06	States that he was sent by the 1st plaintiff to travel from POM to Kimbe with the 1st defendant to purchase and pack sea cucumber – the 1st defendant was carrying K50,000.00 and proceeded to buy sea cucumber from local operators – the first defendant gave him K15,000.00 to buy sea cucumber in the Kombe area – he spent K9,000.00 and returned K6,000.00 to the 1st defendant.
5	Vicky Vagikapi, 2nd plaintiff, 20.07.06	States that the sea cucumber the subject of the court’s order of 05.07.06 was moved from Section 61, Allotment 3, Kimbe without authority to another location in Kimbe – some of it was freighted on an Air Niugini flight to POM, destined for export to Taipei and Hong Kong.

DEFENDANTS’ EVIDENCE

6. The defendants did not present any evidence.

THE...