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Bafino v Tibiro [1992] PGNC 76; [1992] PNGLR 168; N1065 (22 May 1992)

N1065

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

PAUL BAFINO

V

AUNO TIBIRO

Mount Hagen
Woods J

4 March 1992
22 May 1992

CONFLICT OF LAWS - Internal - Test of applicable law.

CUSTOMARY LAW - When applicable - Objective test.

PARTNERSHIP - Oral agreement - Parties established joint bank account - Modern commercial reality - Applicable law - Partnership on equal terms.

Facts

Plaintiff operated a trade store in Mount Hagen and, due to financial difficulties, approached the defendant, who paid off the outstanding debts and helped with restocking the store. A passbook account was opened in their joint names with themselves as co-signatories. The defendant kept the passbook in which various deposits were made from the business. The parties disagreed over the ownership of the balance in the account. The Court was requested to determine the rights of the parties in the joint account.

Held

1. The Court should determine the transaction from the objective facts.

2. The agreement resembled more a modern commercial arrangement than a customary transaction.

3. The objective facts pointed to a partnership on equal terms.

4. The balance of the joint account was to be divided equally between the parties.

Counsel:

D Poka, for the plaintiff.
S Norum, for the defendant.

22 May 1992

WOODS J: This is a claim over a bank passbook account held with the ANZ Bank in Mount Hagen in the joint names of the plaintiff and defendant.

The undisputed history of this matter is that the plaintiff operated a trade store known as Rantino Trading at Section 90 Lot 1 Mount Hagen. Late in 1989, he was having financial difficulties. He approached the defendant for financial assistance. The defendant after some reluctance agreed to help and some agreement was reached between the parties. The defendant helped to pay off an outstanding account and helped with the restocking of the store. The subject passbook account was opened in February 1990 in the joint names of the plaintiff and defendant as joint signatories. During 1990, the defendant had possession of the passbook and various deposits were made. In January 1991, a withdrawal was made of K4000 apparently for the defendant to buy a vehicle. After that, a dispute arose over the balance of K8000 in the account and there has been a claim and cross-claim over the right to the balance of the account.

So what was the agreement when the account was opened and when the defendant came in to help with the operation of the business. Unfortunately, as too often happens with such situations, there was no written agreement. It was all done orally.

When parties open a joint bank account in their joint names with both to be co-signatories, the law is entitled to assume in the absence of any other agreement that the account is owned jointly or equally by the signatories. So that should be the initial view here.

However, the defendant says that monies in the account were from his efforts in running the business for the plaintiff and that the oral agreement was for him to run the store for a year and get the profits. The plaintiff denies that he promised to share the profits but he does refer to an intention to have a joint business.

So I have to go back to what appears to be the facts. The plaintiff owns a business, he has troubles, and the defendant comes into the business to help out. It is not clear from the evidence as to who was putting all the efforts into the business during the year, but it appears that the defendant may have been doing most of the day to day running of the business. So from that we have the clear suggestion of a partnership: the plaintiff set up and owned the original business, the defendant helped with the running of the business.

In the absence of any clear written agreement it must be seen as a partnership with equal sharing of the benefits of the business. There is no suggestion of anything here other than a modern commercial arrangement for a modern commercial situation. The fact that the parties may not be conversant with the strict form of business partnership contracts does not mean that the court cannot find the parties bound by modern partnership obligations. The court is entitled to, and must, find some agreement and in doing so look at the objective situation - namely the ownership of the store, the coming in of the defendant to help with the running of the store, the existence of the joint account. Those objective facts point to a partnership on equal terms.

There is nothing here to suggest any different arrangement that may be covered by any customary or traditional principles which are at variance to modern commercial realities. Whilst the parties may never have considered at the time the oral arrangement was made that they would have to enforce it using legal machinery, this does not mean they have not brought themselves within the ambit of the modern law of contract. This was not a traditional transaction or arrangement relevant to the economic growth of a village community, it was a town commercial venture.

I, therefore, find a partnership arrangement and upon the dissolution of the partnership the assets of the partnership, namely the money in the account, belong jointly to the holders of the account. I, therefore, order that the account be closed and the balance in the account be apportioned equally to the plaintiff and the defendant.

___________________________

Lawyer for the plaintiff: Kopunye Lawyers.
Lawyer for the defendant: Joe Mek Teine.