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Good Wan Ltd (trading as Le Guest House) v Wesley [2021] PGNC 202; N8919 (16 July 2021)

N8919

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1087 OF 2018

BETWEEN
GOOD WAN LIMITED trading as LE GUEST HOUSE
Plaintiff

AND
DONALD WESLEY
Defendant

Waigani: Thompson J
2021: 7^th & 16^th July

CIVIL CLAIM - EVIDENCE - debt - monies owing for accommodation provided - whether third party is liable for charges incurred - hearsay evidence of alleged third-party agreements - need for corroboration

Counsel:
Mr. L Kari, for the Plaintiff
Wesley Donald, the Defendant in person

16^th July, 2021

1. THOMPSON J: This is a claim by the plaintiff for monies owing to it as a debt, for accommodation provided to the defendant by the plaintiff from January 2016 to February 2017, totalling K131,700.00. There is no dispute that the charges were incurred when the defendant and another lawyer engaged by him, occupied rooms in the plaintiffs’ guest house on the dates stated and at the daily room rate stated in the amended statement of claim. The defendant denies liability on the ground that the plaintiff entered into an agreement with a third party, whereby the third party would pay for those charges.

2. The plaintiff gave evidence that it was in the business of providing guest-house rooms for reward. It produced evidence showing the dates on which the rooms were occupied, the names of the defendant and his lawyer as the occupants, and the amounts charged for their total period of occupation. It produced a receipt showing payment of K1,000.00 from the defendant or his lawyer, to the plaintiff, in April 2016, shortly after the lawyer began occupying a room. It produced invoices from the plaintiff addressed to the defendant and his lawyer in 2016 and 2017, as well as statements issued to the defendant, and letters of demand issued by the plaintiff in 2016 and by the plaintiffs’ lawyers in 2016 and 2017, to the defendant. The plaintiff’s Managing Director (“the MD”) gave evidence that he had repeatedly verbally asked the defendant for payment, and that the defendant had told him that he had several big cases going, for which he expected payment, and that he would pay the plaintiff when he had the money. The MD said that he would not have ordinarily allowed the amounts owing to build up to such an amount, but he treated the defendant as a special case, because he knew him, he was a lawyer, and he trusted the defendant to keep his promises to make the payments.

3. The defendant produced no documentary evidence. He gave evidence that he was acting for a client named Alois Kingsley Golu (AKG) who had been charged with fraud and misappropriation. He said AKG brought him to the plaintiff’s guest house, went inside and then came out with a room key, and gave it to him. He said that AKG told him that AKG would pay for his use of the room. The defendant said he had no direct contact with the plaintiff.

4. He said that he had attended meetings with the MD and AKG, when MD asked for payment, and AKG said that he would pay.

5. It may well be that AKG said he would pay the charges for the defendant. However, that is not evidence of a prior agreement for payment made between the plaintiff and AKG. It is consistent with the plaintiff’s evidence that when the MD demanded payment, the defendant said that he would pay when he was paid by his clients. AKG was one of his clients, and the defendant asked AKG to pay. The plaintiff would not have minded if AKG or anyone else had paid the charges incurred by the defendant, but it would not show that AKG or anyone else was liable. In any event, AKG did not pay.

6. The defendant denied receiving any demands for payment from the plaintiff, and denied telling the MD that he would pay the charges as soon as he had been paid by his clients in the big cases which he was handling. The defendant did not explain why he or his lawyer made a payment of K1,000.00 to the plaintiff in April 2016.

7. The defendant’s evidence that AKG had told him that AKG had told the MD that AKG would pay and that this was agreed by the MD, was hearsay. The defendant did not call AKG to give that evidence. It was unequivocally denied by the MD. The defendant was not present at this alleged conversation. If AKG had gone inside and returned with a room key as stated by the defendant, AKG could just as easily have told the MD that the defendant would be paying for the room charges. None of the documentary evidence supported the existence of an agreement between the plaintiff and AKG. The defendant’s evidence of what someone told him that he had told someone else, was hearsay. As it was relied upon by the defendant as being true, it was also inadmissible.

8. The defendant gave evidence that in 2012, when he was first instructed to act for AKG, he stayed at the guest house which was then called the Flying Fox Inn and later the Family Friends Inn Ltd (“FF”). He said that AKG told him that the guest house was owned or managed by his wife. The property was in fact owned by Progress Auto Machinery Ltd, and as rental payments of nearly K600,000.00 were unpaid, the owner issued summary ejectment proceedings against FF in the District Court. The defendant acted on behalf of FF in those proceedings, but ejectment was granted, and in March or April 2015, FF was evicted from the property. The MD said that AKG was also evicted from the property at this time.

9. The MD said that he was the brother of the owner, and that he took over the business and began trading as the plaintiff, in 2016. In those circumstances, when AKG and/ or his wife owed nearly K600,000.00 in unpaid rent, the defendant’s assertion that the plaintiff accepted a promise from AKG to pay charges on behalf of the defendant, does not seem credible. On this point, the defendant said that AKG was still occupying a room when the defendant was there, but this was denied by the plaintiff, and it does not seem credible that the plaintiff would provide AKG with a room after the eviction orders had been obtained. The defendant also queried why the plaintiff did not evict him, if he was responsible for the charges. He may equally as well have queried why the plaintiff did not evict him if AKG was responsible for the charges. In fact, the MD said that he did not evict the defendant until February 2017, because he was a lawyer whom he trusted to keep his promises to pay.

10. The defendant initially denied receiving any demands for payment or any invoices from the plaintiff. This was contradicted by the MD, who produced the invoices, statements and letters, and gave evidence that the invoices were delivered to the defendant’s rooms and were also sent to him. The MD said that when he verbally requested payment on many occasions, the defendant continually assured him that he would pay the monies as soon as he had been paid by his clients. The MD said that he trusted the defendants’ promises to pay, because he was a lawyer. The MD explicitly denied that either he or any of the plaintiff’s staff had entered into any agreement with AKG that AKG would be responsible for the defendant’s charges.

11. The defendant’s evidence that he did not receive demands for payment, is not credible and is contradicted by the invoices, statements and letters of demand sent to him by the plaintiff. In particular, there is a letter from the plaintiff’s lawyers to the defendant dated 25 November 2016, while the defendant was still occupying rooms, demanding payment. The defendant did not respond to either the plaintiff or its lawyers by denying that he was responsible. He did not claim that there was an agreement between the plaintiff and AKG that AKG would pay.

12. On this point, the defendants’ evidence was not entirely unambiguous when he referred to what AKG had said to him. It was not entirely clear if the defendant was saying that AKG had said that AKG had entered into an agreement with the plaintiff whereby the plaintiff would provide rooms to the defendant for which AKG would pay, or if the defendant was saying merely that the defendant had an agreement with AKG that AKG would pay.

13. If it was the latter, the plaintiff was not a party to the agreement, which was not binding on the plaintiff, and the defendant would have to cross-claim against AKG for breach of that agreement. This was not done.

14. The most favorable interpretation of the defendant’s evidence was that he was told by AKG that there was an agreement between AKG and the plaintiff. This was denied by the plaintiff, and it is unsupported by any evidence. When the defendant was made aware that the plaintiff was holding him personally liable by the invoices and other demands, he did not explain why he nevertheless continued to incur room charges in the knowledge that the plaintiff was holding him personally liable for payment, and not AKG.

15. The defendant did not dispute that the plaintiff was in the business of providing guest house rooms, for reward. By accepting and using the rooms, the defendant incurred a prima facie obligation to pay for them. The defendant did not plead that in accepting and using the rooms, he was acting as an agent for a disclosed principal. He did not plead that he entered into an agreement with the plaintiff that AKG would pay for the rooms. He pleaded only that the plaintiff agreed directly with AKG that AKG would pay.

16. This was not corroborated by AKG, it was denied by the plaintiff, and was wholly unsupported by evidence. Furthermore, evidence by a person that he was told that a verbal agreement was made between two other persons, is hearsay. As it is also relied on for its truth, it is inadmissible (Jack Gopave v Francis Kugame & anor (2003) PGNC 34). The defendant did not call the obvious person, AKG, to give evidence of the alleged verbal agreement. The defendant’s hearsay evidence of the alleged verbal agreement made between the plaintiff and AKG, is not accepted.

17. The position is therefore that the plaintiff has proven by uncontradicted evidence that it provided accommodation for reward to the defendant and his lawyer between January 2016 and February 2017, at a cost of K131,700.00. The defendant does not dispute that these charges were incurred when he accepted and used the accommodation, but asserts that someone else was responsible for the payment. The defendant’s uncorroborated assertion was not sufficient to prove on the balance of probabilities, that someone else was responsible.

18. I therefore make the following orders:

(1) Judgment is entered for the plaintiff against the defendant in the sum of K131,700.00.

(2) Interest at the rate of 8% per annum pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act is payable from the date of judgment, on such amounts as remain outstanding from time to time.

(3) The defendant is to pay the plaintiff’s costs on a party/party basis, to be taxed if not agreed.
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PNG Legal Services: Lawyers for the Plaintiff
Lawyers for the defendant: The Defendant In person