IN THE SOLOMON ISLANDS COURT OF APPEAL

Case name: 	Lau Hui Kwong v Treasury Timber Ltd 	
		
Citation:		
		
Decision date: 	11 April 2025	
		
Nature of Jurisdiction	Appeal from Judgment of The High Court of Solomon Islands, Bird J) 	
		
Court File Number(s):	56 of 2023	
		
Parties: 	Lau Hui Kwong, Global (SI) Limited v Treasury Timber Limited 	
		
Hearing date(s): 	1 April 2025	
		
Place of delivery: 		
		
Judge(s): 	Muria P
Gavara-Nanu JA
Lawry JA	
		
Representation: 	D Nimepo for the Appellant 
D Marahare for Respondent 	
		
Catchwords: 		
		
Words and phrases:		
		
Legislation cited:		
		
Cases cited:	Ammar v Deoki [1969] 15 FLP 29 and De Lassalle v Guilford, Tang v Lo (No 2) [1982] SBHC 18; [1982] SILR 78, Edwards v Skyways Ltd [1964] 1 WLR 349, Vasivapada Trading Company Ltd v Attorney General [1999] SBCA 8	
		
ExTempore/Reserved:	Reserved 	
		
Allowed/Dismissed:	Dismissed 	
		
Pages:	1-7	

JUDGMENT OF THE COURT
Introduction 
1. 	In the Court below, the respondent brought a Category B Claim, claiming repayment of the sum of $500,000.00 which was paid to the first appellant as an advance. The appellant on the other hand, countered that the payment was not an advance, rather it was a business undertaking between the respondent and the second appellant through the first appellant made in exchange for the services or benefits set out in the Technology, Management and Marketing Agreement (TMMA).
Factual background of the case
2. 	The Learned trial judge, Bird J, set out the factual background circumstances of the case as agreed, which are as follows:
i.	the Claimant is a company duly incorporated under the Companies Act 2009 and conducts business in the forestry sector;
ii.	The First Defendant owns the Second Defendant;
iii.	Southern Forest Industry is the holder of felling license No. A101114;
iv.	The Claimant executed a Technology, Management and Marketing Agreement (TMMA) on 21 September 2019 with Southern Forest Industry;
v.	The Claimant paid the First and Second Defendants a total of $500,000.00 over the period from 19 to 26 September 2019.
vi.	The Claimant filed for reimbursement of $ 500,000.00. The proceeding is a debt recovery case.
Issues 
3. 	The Learned trial judge also set out the issues which she identified for the Court to consider. The issues are:
i.	Whether or not the $500,000.00 paid to the First and Second Defendants was a cash advance or funds in exchange of the TMMA;
ii.	Was there an oral contract existed between the Claimant and the Defendants? If so what are the terms? If so is the oral contract enforceable?
iii.	Were the Defendants privy to the contract existed between the Claimant and the Defendants;
iv.	If not, then the Claimant is entitled to the reliefs sought.
Case for Claimant/respondent
4. 	The Case for the respondent in the Court below was that the $500,000.00 was an advance to the appellants who were in financial difficulties. The $500,000.00 was paid to the appellants in four instalments, that is, $40,000.00 and $100,000.00 were paid on 19 September 2019, $160,000.00 was paid on 23 September 2019 and $200,000.00 was paid on 26 September 2019. These payments were confirmed in the Sworn Statement of Wen Yee Yew who was the sole witness for the Claimant/respondent in the Court below.
5. 	Mr. Yew’s evidence also shows that the first appellant undertook to repay the cash advances but the first appellant never did. As a result, the respondent brought this case to Court Claiming reimbursement of the $500,000.00. As far as the respondent is concerned, the four separate advances made to the appellants in the various amounts, were never intended to be payments as consideration for the Maka Logging concession under the TMMA.
6. 	At the trial, Mr. Yew was cross-examined and he denied that the $500,000.00 was a payment in consideration for the logging concession. He stated that the Maka concession was a separate matter altogether and that it was a matter dealt with under the Memorandum of Understanding (MOU) signed between the respondent and second appellant. It was contended for the respondent at the trial that the incentive or consideration for the Maka concession was for the payment of USD 5.00 per cubie metre on FOB price of the logs from the Maka concession. The advances totalling $500,000.00 were funds advanced separately to the appellants who were in financial difficulties and in respect of which the first appellant undertook to repay but failed to do so.
Case for the appellants
7. 	The appellants’ case is that the $500,000.00 was a payment made by the respondent as a consideration for the Maka Logging concession under the Felling Licence No. A101114. The first appellant gave evidence and agreed to receiving the $500,000.00 from the respondent but said that, it was “a deposit” as an incentive in return for the Maka concession area.
8. 	In cross-examination, the first appellant maintained that the $500,000.00 was an incentive for the Maka Logging concession area. He, however, agreed that there is nothing in the MOU about the incentive payment of $500,000.00. Being an incentive payment, the first appellant said that neither of the appellants should be compelled to reimburse the respondent.
Analysis and determination 
9. 	On the first issues, that court below examined the nature of the payments made by the respondent to the appellants. The first appellant requested financial assistance from the respondent because he and the second appellant were experiencing financial difficulties. The first appellant is the owner of the second appellant. The payments were made in four instalments and there was undertaking by the first appellant to repay the cash advances but failed to do so.
10. 	The purpose of the cash advances was also set out in paragraph 7 of the Sworn Statement of Mr. Yew where he states as follows:
	“I understand that when the First Defendant requested for a cash advance from the Claimant, he noted that he needed finance because the Second Defendant was facing financial difficulties I was the one responsible for facilitating the payment of the cash advances. I therefore understood the request for financial assistance to have been made on behalf of himself and the Second Defendant”
11. 	The evidence of Mr. Yew in paragraph 7 of his Sworn Statement was uncontroverted. In her judgment, Bird J expressed her concern that Counsel for the appellants chose not to cross-examine Mr. Yew on his evidence contained in paragraph 7 of his Sworn Statement. Consequently, the learned trial Judge found that the evidence contained in paragraph 7 of Mr. Yew’s Sworn Statement was unchallenged as to the purpose of the advances paid to the appellant.
12. 	In addition to the unchallenged evidence of Mr. Yew in paragraph 7 of his Sworn Statement, there is also no evidence produced by the appellant linking the payment of the $500,000.00 to the MOU or the TMMA. There is however evidence under the MOU that TTL (respondent) “shall pay Global (SI) Ltd (second appellant) an incentive of USD 5.00 per cubie metre for FOB price of Logs exported under Licence A101114.” There is no nexus whatsoever between the $500,000.00 and the incentive under the MOU or TMMA.
13. 	The appellant, further suggests that the first advance of $140,000 made on 19 September 2019 goes to show that there was a collateral agreement between the parties that the advances totally $500,000.00 were consideration for the Maka Logging concession, the subject of the TMMA signed between the respondent (Contractor) and Southern Forest Industry (Licence). In our view, there is simply no evidence to support the argument advanced by the appellants.
14. 	The case of Ammar v Deoki [1969] 15 FLP 29 and De Lassalle v Guilford cited by Mr. Nimepo do not help the appellants. In Ammar, the Court stressed the need for strict proof of collateral agreement. In the present case the trial judge found that there is simply no evidence of a collateral contract. On the facts of this case, we entirely agree with the learned trial judge.
15. 	In De Lassalle, there was evidence of a collateral contract in the form of a warranty. In the present case, these was none. Further still, the appellants’ case is further weakened by the fact that they forgot or omitted to plead their claim of collateral agreement in their defence. The trial judge rejected, and in our view, rightly so the suggestion that there was a collateral agreement existed between the appellants and respondent in this case.
16. 	We must point out that a party who failed to plead its claim cannot expect the court to permit him to rely on it subsequently: Tang v LO (No2) [1982] SILR 78. Paragraph 7 of the Sworn Statement of Mr. Yew had not been challenged by the appellant. It must be taken as admitted by the appellants: Vasivapada Trading Company Ltd v Attorney General [1999] SBCA 8; CA-CAC 5 of 1998 (21 January 1999).
17. 	On the facts of this case, we agree with the learned trial judge that the $500,000.00 paid to the appellants was an advance with an expectation that it would be repaid as undertaken by the first appellant. It was not paid to the appellant as consideration for a logging concession under the TMMA or the MOU. That is a repayable advance or loan.
18. 	The oral agreement between the first appellant and the respondent in this case was for the respondent to advance or lend $500,000.00 to the appellants because they were experiencing financial difficulties. The respondent paid the money over to the appellants and the first appellant undertook to repay it. They intended to honour their agreement and the presumption is that they also intended to be legally bound by it. Edwards v Skyways Ltd [1964] 1 WLR 349
19. 	The appeal is dismissed with costs to the respondent to be taxed if not agreed.
Muria P
Gavara-Nanu JA
Lawry JA