DC174

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 33 OF 2004

Gerson Aiwok

V

Mark Blount
First Defendant

Courts (PNG) Ltd
Second Defendant

Mt. Hagen: M.M. Pupaka
2004: 20th September

Civil Claim – Contractual relationship – Chattel mortgage – Default in repayment – Repossession under Chattel Mortgage agreement – Sale of chattel – Proceedings to recover monies paid toward lay buy and for loss of chance of owing items.

Civil Claim – Chattel mortgage – Consensual repossession on the bases that complainant would be allowed time to pay arrears and redeem items – Hasty sale of repossessed items unfair and contrary to terms of consensual repossession – Duty to sell chattel at fair price – Defendants obliged to account to complainant over proceeds of sale of reposed items when he had an interest in the residual value of the items.

COUNSEL
Mrs. Gerson Aiwok (wife) for the Complainant
No appearance for the Defendant

20th September 2004

M. M. PUPAKA: This was for hearing today. Only the complainant, or rather his wife appeared, as she had in fact done on previous occasions in place of her husband (the complainant). No one appeared for the defendants today even though one of their employees, a Mr. Joe Loi, had been appearing previously. As I mentioned afore, this is for hearing today, after it was duly fixed for hearing on 8th August, in the presence of all parties, including the defendants’ Joe Loi, so they cannot be excused for their absence for the reason alone that they are not aware of today’s fixture.

The parties were specifically directed to file affidavit evidence so that there would be a fairly quick hearing. They were directed to disclose any records they had in their respective possession, which showed the dates and times and manner of payments, as well as records of non payment. In the end the verdict of the Court would go to the party who showed proof; i.e., to the complainant upon reasonable proof of full payment or to the defendant upon production of proof of non payment. This direction was practical. It is a convenient way of ascertaining and arriving at the truth; as to whether the complainant fully paid for the lay by item or not. It must be noted that this direction was in no way derogation from the lawful onus on the complainant in the first instance, for he is obliged to prove his case first.

I also should state up front that both parties have only filed scant evidence in compliance of the Court directive.

The Complainant’s Case

The complainant has filed only one good affidavit, which is dated 2nd August 2004. He had previously filed other set of materials, which whilst being quite unclear, are in any case not unacceptable and not proper evidence. I refer particularly to the complainant’s so called ‘Statement’ dated 4th July 2003. He has also failed to file copy of receipts and invoices or other documents. He may not have any such materials, and then again he may have them but may have simply failed to file them. Nevertheless he has not disclosed whether he has any such paper works or not. Consequently I can only just scarcely make out what may have happened. The pleadings are not altogether telling of the full story either.

As far as I am able to make out, on 22nd June 2000, the complainant purchased on lay buy two items from the 2nd defendant, namely one ‘Akita’ 14-inch TV screen and one ‘Kenwood’ VCD Stereo. Later the ‘Kenwood’ VCD Stereo was found to be faulty and it was returned and a ‘Sony Hi fi’ was given as a substitute.

By and by the complainant paid by in installments a total of K3597.00. He says, by the time of repossession he had only K855.25 to settle with the defendants. It is not clear but the complainant may have had trouble making regular payments and ran into arrears. Consequently the two items were allowed to be repossessed. I say ‘allowed to be repossessed’, because this is what the complainant says in paragraph 6 of his affidavit sworn on 2nd August: 

"I voluntarily return all the item in good order and the first defendant personally collected the item at my door step with out no force use, and in front of several eye witnesses with no official document presented to me he personally gave me a verbal explanation when ever you come and settle your outstanding arrears, you will get back the item. The item was repossessed around January 2002." (Sic)

When the complainant went to pay off the arrears after a week he was told the items had been auctioned off to recover the arrears.

Consequently, being aggrieved, the complainant issued this proceeding to recover K3184.69, which incidentally is quite short of the total of K3597.00 that he says he paid the defendants, but the difference is left unexplained so it shall rest as it is. He further sued for certain other disbursements; the nature of which is also unclear and unsubstantiated and so consequently these shall not be further mentioned again herein.

The Defendants’ Case

The defendants have failed completely to file anything, other than an affidavit (of one Peter Kiap dated 21st May 2004), which was filed specifically in aid of an application to set aside an ex parte order initially obtained herein by the complainant. That grant of ex parte order and subsequent application and set aside of the order is another story, but it would suffice now to say the defendants’ failure gave rise to it. Still, to this day, they have failed to file and serve any formal defence to the claim.

Quite significantly the defendants have failed altogether to disclose what items were sold to the complainant, the aggregate value of them, how much was paid via installments, and how much really the complainant owed them at the time of repossession. It is quite imperative for the defendants to take a stance on these issues, even if they agreed with the complainant. They cannot afford to keep silent. Yet they have failed to adduce affidavit evidence when they were directed to do so by the Court.

There is a blank Chattel Mortgage pro forma containing the usual standard clauses, with the applicable terms highlighted, attached to the affidavit of Peter Kiap. I do take note of this instrument. However this document does not and cannot assist the defendants here. They have to have produced the book copy or a carbon copy or photocopy of the Chattel Mortgage agreement with this complainant. More importantly they have failed to, in any way at all, justify their conduct toward this complainant. They may have left it open for the Court to presume in their favor, but that, with due respect to the defendants, is arrogant presumption indeed! How can anyone know how much the defendants’ thought was owed to them by the complainant, on the bases of which they proceeded to repossess? The defendants’ conduct toward the complaint really stands out as unfair and cavalier behavior.

After repossession the defendants should have retained the items and allowed the complainant sufficient time to pay the arrears. After all he had paid most of the value of the items anyway. In fact I note the complainant took only a week to bring in the arrears in full, by which time the items were sold off, which clearly indicates unfair conduct on the part of the defendants.

On Liability

I must find the defendants liable to the complainant for their unfair treatment of him. They failed to allow him adequate time to settle the arrears. Further, they in fact disposed off the reposed items in a real hurry and thereby deprived the complainant a realistic chance to redeem his property, for these were, by then, his property for all intents and purposes. He practically owned them after paying most of its value. That is not all, the defendants have, quite significantly, failed to disclose whether they sold the repossessed items at fair value. They always owed a duty to explain and account to the complainant as to whether there was money left, in residual value that should be paid back to him. For all we know the defendants may have made a further windfall on the auction sale, if ever that took place as asserted by the defendants. Their silence on this aspect is evidence against them.

On Quantum

A just result or outcome to be adjudicated by the Court would be to order the return of the items and order the complainant to pay up the arrears. But of course that is not possible, after the items were disposed off to unknown third parties. Other similar or same items of equal (used) value may not be available to the defendants. On the other hand the complainant is not entitled to a refund of the installments paid to the defendants, nor is he entitled to new or unused items. Therefore his only relieve lies in a suitable assessment of money for the loss of the residual value of the items and of course for the loss of ownership or an eminent chance at owning the items.

I do not think K3184.69 or K3597.00 is a fair assessment of the residual value and loss of a chance of ownership. In (just under) two years of use by the complainant the items can only have depreciated in value, not to mention consequential damages as a result of ‘wear and tear’. I note that the complainant made no alternative claim for the value of the items seized. Had he done so that would have provided a base from which to begin the process of assessment of a fair value of his losses.

In any case what would be the fair value of a used (two year old) Sony Hi Fi Stereo and an Akita 14-inch TV? To compound the problem it is not clear what the individual unused price of each of the items was, which of the items was cheaper or vice versa. These are the critical issues. However I am not assisted in any way at all here by both parties on these aspects so I must do the best I can. Whatever value is placed must be accepted by the parties as they have failed to do their part in assisting the Court in this regard, especially more so the complainant. He should have submitted evidences of comparable used values of these items, instead of suing for a relief of refund (return of the K3184.69), which he was never entitled to.

Therefore I would, in all fairness, assess K600.00 each in residual value for the two items. I consider this assessment to be on the safer side, an exercise of caution. I would also make a global award of K500.00 for the loss of ownership and depravation caused unfairly to the complainant. The circumstances warrant such an award as fair compensation. 

Ergo I direct that judgment be entered for the complainant in the sum of K1700.00 plus interests at 8% from the date of summons to be paid by the 2nd defendant. The complainant shall also have his nominal costs, incidental only to the registration and prosecution of this claim.

In Person: Complainant
In Person: Defendant