SEK 15 Limited v Kiunga Stevedoring Co Limited (2006) N3109

• Jurisdiction: Papua New Guinea
• Judge: Gavara–Nanu, J
• Judgment Date: 15 December 2006
• Court: National Court
• Citation: (2006) N3109
• Docket Number: WS NO 1612 Of 2003
• Year: 2006
• Judgement Number: N3109

Full Title: WS NO 1612 Of 2003 ; SEK 15 Limited v Kiunga Stevedoring Co Limited (2006) N3109

National Court: Gavara–Nanu, J

Judgment Delivered: 15 December 2006

N3109

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1612 OF 2003

BETWEEN:

SEK 15 LIMITED

Plaintiff

AND:

KIUNGA STEVEDORING CO. LIMITED

Defendant

Waigani: Gavara-Nanu, J

2006: 4, 10 August

15 December

CONTRACT – Bailment – Bailor and bailee – Owner and person in possession –Equitable proprietary interest – A motor vehicle – Owner not paying repair costs – Repair costs paid by a director of the company owning the vehicle – Motor vehicle released to another director of the company – Paying director’s own company having interest in the vehicle – Paying director of the owner having proprietary and equitable interest and superior possessory right over the property.

Cases cited:

Papua New Guinea Cases:

Sembi Paikel v. Kawei Pty Ltd [1997]PNGLR 603

Overseas cases .

Biddle v. Bond [1861-73]ALL E.R 477

Ranson v. Platt [1911] 2 K.B 291

Other References:

Bailment by N.E Palmer 2nd ed., Law Book Company, 1991 at pages 164 – 177

Halsbury’s Laws of England Vol.2, 4th ed.Butterworths, London, 1973at page 688

Halsbury’s Laws of England Vol.35, 4th ed.par 1123; 1127 and 1501 at pages 625; 627 and 688 - 689

Osborne’s Concise Law Dictionary, Sweet and Maxwell London, 1993

Counsel:

G. Tamade, for the plaintiff

W. Tekwie, for the defendant

15 December, 2006

1.GAVARA-NANU, J: The plaintiff is claiming K8, 926.48, which it says is the value of a vehicle it claims it bought from Tabubil Automotive Limited (‘TAL’) on or about 7 February, 2003. The vehicle in question was a short wheel base Kia Ceres Registration No. 393 (‘the vehicle’), which was owned by Spearhead Communications Ltd (‘SCL’).

2. The defendant in this case was a stevedoring company based in Kiunga, Western Province. The claim against the defendant is based on the plaintiff’s claim that the defendant to whom the vehicle was bailed by TAL, on behalf of the plaintiff, unlawfully released the vehicle to one Rex Dagi, thus acting in breach of the bailment. The plaintiff also claims for the loss of the economic use of the vehicle.

Background

3. In September, 2001, TAL, which has a workshop in Tabubil, did some repair work on the vehicle. The work was completed on 24 September, 2001, but the owner (SCL) failed to pay for the repair bill of K8, 926.48. This amount included the storage fee of K3, 660.00. On 25 November, 2002, TAL sent a reminder letter to SCL advising it that the amount was still owing. However, instead of sending the letter to SCL, the letter was sent to the plaintiff.

4. Thus, upon becoming aware of the vehicle with its outstanding repair bill, the plaintiff arranged with TAL to pay for the bill. The payment was made to TAL on 7 February, 2003. Following that payment, on 13 March, 2003, the plaintiff wrote and instructed TAL to arrange shipment of the vehicle to Port Moresby. On 3 March, 2003, TAL wrote to the plaintiff and provided details of transportation costs of the vehicle.

5. On 4 March, 2003, TAL delivered the vehicle to the defendant for it to be shipped to the plaintiff in Port Moresby. On 6 March, 2003, the vehicle was containerized for shipment. On 14 March, 2003, Laurabada Shipping Services Ltd, a subsidiary of Steamships Trading Company Ltd, wrote to the plaintiff through a facsimile transmission and provided quotes for its costs to ship the vehicle from Kiunga to Port Moresby. Sometime later, when the plaintiff’s staff attended at the office of Laurabada Shipping Services Ltd in Port Moresby to pay for the freight costs, they were told that the vehicle had not been shipped. Later, the plaintiff learnt that the vehicle was released to Rex Dagi at Kiunga wharf by the Port Manager a Peter Tatanu. Mr. Tatanu opened the container, in which the vehicle was containerized, and allowed Rex Dagi to drive the vehicle away. It was learnt that Peter Tatanu had released the vehicle to Rex Dagi after the latter queried the vehicle’s shipment and claimed that the vehicle had a problem, and should not be shipped. He did not explain what the problem was.

6. It should be noted that one Robert William Bolling, who is the principle witness for the plaintiff, is also a director of SCL together with the said Rex Dagi and a Malcolm Ian James.

7. The plaintiff does not dispute that the vehicle was registered under SCL’s name. However, the plaintiff argued that it had bought the vehicle from TAL. This claim is denied by TAL through one of its employees, one Rawah Gutuma, who said that the plaintiff only settled their outstanding repair and storage costs on behalf of the owner, SCL. For this, TAL placed reliance on the letter it sent to SCL, which is Annexure ‘A’ to Mr. Bolling’s affidavit. This is the letter I adverted to earlier. In the letter, apart from reminding SCL of the outstanding repair and storage costs of K8, 926.48, TAL also advised SCL that the vehicle was governed by the Unclaimed GoodsAct, and if the amount was not paid within 14 days from the date of the letter, it (TAL) would sell the vehicle. The bill was not settled by SCL, so the plaintiff paid it 14 months after it became due for payment.

8. The plaintiff claims that the vehicle was delivered to the defendant for reward to take care and control of the vehicle, and for the shipment of the vehicle from Kiunga to Port Moresby through Laurabada Shipping Services Ltd. The plaintiff claims that the vehicle was released to Rex Dagi on 7 March 2003, without its authority. The plaintiff says it demanded the defendant to recover the vehicle from Rex Dagi and have it delivered to it in Port Moresby, as previously agreed between them, but the defendant failed to heed to this demand.

9. Mr. Bolling is also the owner of the plaintiff company. His evidence is that the plaintiff agreed to buy the vehicle from TAL because the vehicle was being sold by TAL to recover its unpaid repair and storage costs from its owner, SCL. Mr Bolling also says in his affidavit that on 5 February 2003, TAL faxed a letter to the plaintiff, albeit wrongly addressed to SCL, for the plaintiff to organize payment for the vehicle. As a result of which, on 7 February 2003, the plaintiff made a direct payment of K8, 926.48 to TAL’s bank account in Tabubil through telegraphic transfer. TAL, then acting on instruction from the plaintiff, delivered the vehicle to the defendant.

10. It was conceded by Rawa Gutuma that TAL was instructed by the plaintiff to deliver the vehicle to the defendant.

Submissions.

1. Plaintiff’s submissions.

11. The plaintiff referred to and relied upon the principles of bailment given in Halsbury’s Laws of England, Volume 2, 4thed, Butterworths, London, (1973), at page 688, where it states:

“A bailment, properly so called, is a delivery, of personal chattels on trust, usually on a contract, express or implied, that the trust shall be duly executed, and the chattels redelivered in either their original form or an altered form, as soon as the time or use for, or condition on, which they were bailed shall have elapsed or been performed.

The element common to all types of bailment is the imposition of an obligation, because the taking of possession in the circumstances involves an assumption of responsibilities for the safe keeping of the goods.

To constitute a bailment.., the actual or constructive possession of a specific chattel must be transferred by it’s owner or possessor (the bailor) or his agent duly authorized for that purpose, to another person (the bailee) in order that the latter may keep the same or perform some act in connection therewith, for which such actual or constructive possession of the chattel is necessary, thereafter returning the identical subject matter in it’s original or altered form”.

12. The plaintiff also relied on the case of, Sembi Paikel v Kaiwe Pty Ltd (1997) PNGLR 603. In that case, the plaintiff claimed damages for loss of a 25 seater Nissan PMV bus which was deposited with the defendant for repair but was released by the defendant to a third party. The Court held that for the plaintiff to succeed in his claim, he had to prove either, that he was the registered owner or that he was in exclusive possession and control of the vehicle directly or indirectly. On this point, the court cited with approval a passage from; Bailment by N.E. Palmer 2nd ed, Law Book Company, London (1991) at page 112, where the learned author alludes to the relevant common law principles:

“The position is relatively straight forward when the non-owner makes a direct delivery to the alleged bailee. The fact that the possessor has both accepted the goods from him and undertaken to return the goods to him will normally constitute the deliverer a bailor, irrespective of the existence of some ulterior party enjoying a full proprietary interest in the goods. At common law, as we have seen, the bailee is stopped from denying the bailor’s title; there seems no reason to deny the estoppel in a case of this kind, especially since there is authority treating it as an implied term of the possessory relationship, and the relationship under...