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Aroito v Lieven [2025] KIHC 7; Civil Case 10 of 2022 (13 March 2025)

IN THE HIGH COURT OF KIRIBATI

HIGH COURT CIVIL CASE 10 of 2022

BETWEEN: Tetuai Aroito
Plaintiff

AND: Joyce Lieven

Defendant

Date of Hearing: 29 January, 3 February, 7 Feb (w/sub) 2025
Date of Judgment: 13 March 2025

Appearances: Ms. Taaira Timeon for the Plaintiff
Mr. Banuera Berina for the Defendant

JUDGMENT

Brief background

1. By writ, the plaintiff sues the defendant for breaching a purchase agreement for one minibus for the price of $60,000. Sometime in April 2019, the plaintiff paid the $60,000 price of the minibus to the defendant.
   
2. On August 2, 2022, a default judgment was entered against the defendant for failing to enter her appearance. On 23 December 2022, a Writ of Fieri Facias was issued against the defendant. On May 4, 2023, the default judgment was set aside in case number Miscellaneous Application 55 of 2022.
   
3. The defence was entered on 24 May 2023, and it was based on the claim that the defendant was involved in the purchase agreement because she was the director of the company, Tarawa Motors Ltd; therefore, the deal was not made in her personal capacity.
   

Evidence, Submission and Analysis

4. It was not disputed that the plaintiff had paid $60,000 for the purchase price of the minibus he ordered. Also not disputed is the fact that the defendant received the money. What is disputed is whether the defendant received the payment not in her personal capacity but on behalf of the company.
   
5. The plaintiff was called to give evidence and tendered his affidavit at the trial. The plaintiff’s lawyer’s letter dated 12 January 2022, addressed to the defendant and demanding reimbursement of the price paid for the minibus, was also tendered as part of the plaintiff’s evidence.
   
6. The defendant did not call any witnesses. On cross-examination of the plaintiff, the defendant, through Counsel, put their defence to the plaintiff that the plaintiff went to the office of Tarawa Motors Ltd to order a minibus. The staff referred him to the defendant as the boss of the Company. He continued to deal with the defendant several times regarding this order.
   
7. In response to those questions, the plaintiff did not challenge the defendant’s evidence. The following is what I have on my record;
   

Question; The receipt was from Tarawa Motors?

Answer: I have the receipt from them.

Question: Did you go to their office to pay?

Answer: Only a few staff so they said to see the plaintiff.

Question: So you went to their office?

Answer: Yes, I was referred to Nei Joyce at the office.

Question: You have not shown me a copy of the agreement.

Answer: Verbal agreement and she knew about it.

Question: You have another affidavit sworn on 13 April 2023?

Answer: Yes, it is my affidavit.

Question: You told the court that you went to the Commerce Office and took out particulars of Bairiki Holdings.

Answer: Yes, everything is with my lawyer.

Question: You found out that Joyce was the director of Tarawa Motors?

Answer: Yes, but she is responsible because she told me seven times to come back for my order.

Question: Director?

Answer: Yes. I don't understand the director or what; I only know she is the owner of that company.

Question: But you used ‘director’ in your affidavit?

Answer: Can’t answer.

Question: Joyce said that Tarawa Motors owned the company but yet you sued her personally?

Answer: That’s different. I spoke with her all the time. She told me to wait because of COVID-19, then said the shipment went to Korea and then told me to come back in December. She’s fully responsible. All the staff there said that everything was Nei Joyce. She did not tell me that issue. She is the director but is responsible.

........

8. The evidence above clearly shows that the plaintiff went to the Tarawa Motors Company office. He did not go to the defendant’s residence. He went to the Tarawa Motors Office with the intention of purchasing the minibus. When he reached that Office, he did not ask for the defendant; the staff referred him to the defendant. He also did not deny that he was issued with the receipt from the company.
   
9. The defendant referred this Court to the relevant provisions of the Companies Act 2021. Section 10 reads as follows;
   

“10. Separate legal personality with full capacity

(1) A company is a legal entity in its own right separate from its shareholders and continues in existence until it is removed from the Kiribati register.
(2) A company-

• (a) Has full capacity to carry on or undertake any business or activity, do any act, or enter into any transaction;
• (b) May do anything authorised by this Act or the company’s constitution; and
• (c) May do anything that a natural person of full age and capacity may do.
  

(3) Subsection (2) is subject to this Act, any other enactment and the general law.”

10. Section 85(1) and (2) of the Companies Act 2021 deals with the company's management. It states as follows;

“85. Management of company

(1) The business and affairs of a company must be managed by, or under the direction or supervision of, the directors of the company.

(2) The directors of a company have all the powers necessary for and for directing and supervising the management of the business and affairs of the company.”

11. I agree that these provisions are relevant to the case at hand. The first is clear: a company is a legal entity capable of doing anything or entering into any business or agreement with other companies or persons. The second provision clarifies that the company's management falls upon its directors. The defendant argues that she entered a sales agreement with the plaintiff as a director.
    
12. The plaintiff invokes the principle of equitable estoppel and submits that the defendant could not back out from her responsibility to order the minibus and her refusal to take on the blame was inequitable and unconscionable. In their submission, Counsel for the plaintiff states that the defendant did not disclose that she was acting on behalf of the Tarawa Motors Company and that the plaintiff acted in reliance upon the defendant’s apparent assurance and representation that it was her, not Bairiki Holdings or Tarawa Motors Co, that he entered into a contract with.
    
13. The case authority used by the plaintiff for estoppel is the case of Attorney General v Ngatau [2010] KICA 6; Civil Appeal 08 of 2010 (18 August 2010). Paragraph 31 was cited by the plaintiff and is quoted below;
    

“[31] The principles applicable to equitable estoppel are now well established in common law jurisdictions generally. Equitable estoppel confers on the Court the jurisdiction to grant a remedy to a claimant who has acted in reliance upon the defendant’s apparent assurance or representation in circumstances where it would be unconscionable to allow the defendant to resile from the understanding that resulted. The assurance or representation may be expressed or implied and may be inferred from mere conduct. There is a broad discretion as to the nature and extent of the remedy. It may take the form of money or an award of all or part of the property in dispute: see, for example, Gillies v Keogh [1989] NZCA 168; [1989] 2 NZLR 327 (CA); Commonwealth v Verwayen (1990) 95 ALR 321 (HC of A).

14. I do not accept this argument. Clearly, the principle of equitable estoppel is not irrelevant and not applicable to this case. There is no evidence that the defendant made an assurance or representation that she acted in her personal capacity. There is also no requirement or need for the defendant to mention that she acted on behalf of the company because the plaintiff went to the Company’s office and did not ask to see the defendant but was referred to the defendant.
    

Conclusion

15. The plaintiff could not sue the defendant in her personal capacity as the defendant was dealing with him on behalf of Tarawa Motors Company in her capacity as the director.
16. I find that the defendant is not personally liable for the above deal.
17. Cost to the defendant, to be agreed or taxed.
    

Order accordingly.

THE HON TETIRO SEMILOTA MAATE MOANIBA
Chief Justice