N5300

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 29 OF 2013

BETWEEN:

JACKLYN ANDREW
First Plaintiff
 
AND:

ROBERT SIMON
Second Plaintiff

AND:

ROSE ELIAS
First Respondent

AND:

TILUA TAI
Second Respondent

AND:

BUDGET RENT A CAR
Third Respondent

Mount Hagen: Poole, J
2013: 23 May & 17 June

CONTRACT - Consideration must pass for contract to be formed – Seller entitled to payment before parting with goods.

SALE OF GOODS – Goods Act a consolidating act and excludes Common Law.

Cases cited

YHA Hauka Coffee Pty Ltd v Kumul Kopi Export Pty Ltd [1991]PNGLR 331
Patterson v NCDC N2145 

Counsel:
Ms. Inia, for Plaintiff
Mr. Tenigi, for Defendant

17th June 2013

1. POOLE, J: Background: The Plaintiffs apply, by Motion filed on the 7th February 2013 for Orders:

(i) A declaration that the Plaintiff has made a cash payment of K7,000.00 for the purchase of Nissan Patrol, registration no. HAK 690 from Budget Rent A Car in Mt. Hagen.

(ii) A declaration that the First Defendant accepted the sum of K7,000.00 as full and final payment for the vehicle registration no. HAK 690 for and on behalf of the Third Defendant.

(iii) A declaration that the First Respondent in her capacity as the port manager, in acceptance of the K7,000.00 released to the Plaintiff the original registration papers and keys upon receipting the Plaintiff.

(iv) A declaration that the Plaintiff is the legal owner of the vehicle registration no. HAK 690.

(v) An order that the Plaintiff is the legal owner of the vehicle, registration no. HAK 690.

(vi) An order that the vehicle registration no. HAK 690 be released to the Plaintiff forthwith.

(vii) An order that the service of the document pertaining to this application be dispensed with pursuant to Order 1, rule 7 of the National Court Rules.

(viii) An order that the First and Third Respondents be restrained releasing the vehicle to the Second Defendant.

(ix) An order that the Second Respondents be restrained from getting anywhere near the vehicle until the substantive issue is determined by this Court.

(x) An order that all defendants be restrained from dealing with the vehicle registration no. HAK 690 until the substantive issue is determined.

2. They Claim that they bought the vehicle from the Third Respondent but, after accepting payment, the Third Respondent then accepted payment from the Second Respondent and delivered the vehicle to him.

3. The Facts of this matter are:

•	The Third Respondent, (Budget Rent a Car) owned a damaged Nissan Station Wagon (HAK-690) which it wished to dispose of by tender.

•	The Plaintiffs submitted a tender in the sum of K5000 to Budget's head office on 11 January 2013 to buy the car. This was not accepted.

•	On about 15 January 2013 the Second Respondent, Tilua Tai, made an offer to buy the vehicle for K7000 which was accepted. Mr Tai paid K3500, and a few days later, a further K3500. Two hand written receipts for K3500 were issued on 22 January 2013. A computer generated receipt was issued on 23 January 2013 for the K7000.

•	On 21st January 2013 the First Respondent, Rose Elias, an employee of Budget Rent a Car, told the Plaintiff, Robert Saimon, that Mr Tai had only paid K3500 and if he paid K7000 the vehicle would be released to him.

•	On 22nd January 2013, the Plaintiff, Jacklyn Andew, paid K7000 to the office of Budget Rent A Car and received the registration papers, keys to the vehicle and a receipt.

•	Before the Plaintiffs took any action to assert their claim of ownership of the vehicle, the Second Respondent, Tilua Tai, gained possession of the vehicle and, on 12 April 2013 had it registered in his name.

3. The Issues for determination are:

 - First, to whom did Budget-Rent A car sell the motor vehicle; and

 - Secondly, who is entitled to be named as the registered owner of the vehicle.

4. The Law relating to the sale of goods in Papua New Guinea is explicitly contained in the Goods Act (Ch 251) which consolidates the law relating to dealings in goods. As it is a consolidation of the law, the Common Law does not apply to questions covered by the Act which, as a consolidation, has the effect of a Code.

5. It is open, however, to the court to accept that, among the reservations which a seller is entitled to reserve unto himself in the absence of an express provision to the contrary, is the right to receive payment of the price agreed for the goods before parting with the goods. In technical terms, property does not pass until the price is paid (unless the parties have specially agreed otherwise). (see YHA Hauka Coffee Pty Ltd v Kumul Kopi Export Pty Ltd [1991]PNGLR 331 and Patterson v NCDC N2145). Consideration has to flow between the parties before there is a contract.

6. In short, a contract must involve consideration passing between certain parties, in an agreed quantum and relate to property (in this case a damaged motor vehicle) the identity, quality and quantity of which is mutually understood. (See section 3 of the Goods Acts.)

7. In this case, I make the following finding of fact.

•	The parties all understood the property which the Third Defendant, Budget-Rent a Car, wished to sell. It was a damaged Nissan motor vehicle (registration no. HAK-690).

•	The parties all knew that the price which the Third Respondent was seeking for the motor vehicle was K7000.00.

•	The Plaintiffs paid the required consideration of K7000 on 22 January 2013 and were given delivery of keys and registration papers. This evidenced an intention to transfer the property within the meaning of section 18 of the Goods Act.

•	Mr Tai, in his affidavit filed on 10 May 2013 states he "paid a sum of K3500 and a few days later another sum of K3500. Receipts were issued." Two of those receipts are hand-written and bear Nos. 08 and 10 and both are dated 22 January 2013. The third receipt for K7000, is dated 23 January 2013. Because Mr Tai states the second of the payments was "a few days later"; I find that the payment made by the Plaintiffs was first in time. The fact that they received the keys and registration papers to the motor vehicle, and those were not delivered to Mr Tai, adds weight to this finding because it is a reasonable finding that they were not available for delivery to Mr Tai when he made his second payment.

8. Applying the law to these findings of fact, accordingly, shows that the Plaintiff's transactions with the Third Respondent resulted in a contract of sale of the motor vehicle before Mr Tai completed his transaction and, accordingly, are the true owners of the motor vehicle. The handing over of the keys and registration papers show that the seller intended to transfer property in the motor vehicle to the Plaintiffs.

9. The Formal Orders of the Court are:
 
1. The Plaintiffs are the true owners of the motor vehicle, registration no. HAK-690 and are entitled to possession of it.

2. The Defendants are to release the motor vehicle to the Plaintiffs forthwith.

3. The Second Respondent, Tilua Tai shall sign all transfer papers and do all things necessary to transfer the registration of the motor vehicle HAK-690 to the Plaintiffs within 7 days of these Orders.

4. The Third Respondent shall refund to the Second Respondent the sum of K7000 it received from him.

5. The Plaintiff's costs of incidental to this action shall be paid by the Defendants, such costs to be taxed if not agreed. 
 
6. Time is abridged.

7. The parties have liberty to apply on 5 days written notice.
 
____________________________________________________
Yobone Lawyers: Lawyers for the Plaintiff
Warner Shand Lawyers: Lawyers for the Defendant