IN THE SUPREME COURT OF TONGA

FC Nichols (Proprietary) Ltd

v

Bloomfield

Supreme Court, Nuku'alofa
Webster CJ 
CV 514/2003

12, 13, 16, and 17 August 2004; 4 January 2005 

Contract law – money allegedly owing for goods – not proved to be owing personally – claim dismissed 
Practice and procedure – issue raised – should not be excluded because of technicality of pleadings 

The claim arose out of a business relationship between the plaintiff, a meat importer, and the defendant, a senior officer in Customs.  The plaintiff claimed $14,120.14 alleged to be owing for meat sold to the defendant in January and February 2003 and shipped to Vava'u.  The meat was for a store operated by the defendant's parents.  The plaintiff had also claimed $2000 in respect of money it had allegedly spent on repairs and upkeep of a motor vehicle belonging to the defendant's wife.  The defendant disputed the quantity of meat purchased and counterclaimed for hire charges in respect of the vehicle at the rate of $60 per day for three months, $10,000 for services he allegedly gave to the plaintiff and $2000 for damages to his reputation.  The plaintiff denied the counterclaims.  The plaintiff accepted that the defendant had been acting as agent for an undisclosed principal, namely his mother, but submitted that the agency arrangement had never been pleaded. 

Held: 

1. If, despite inadequate pleadings, an issue was clearly raised and was understood by the opposing party to be raised and then dealt with, it should not be excluded because of technicality of pleadings -- Prasad v Morris Hedstrom (Tonga) Ltd (No 2) [1993] Tonga LR 69 (CA) at 73.  The court could not make any order or a decree against the defendants disclosed principals as they were not parties to the case but as it had not been established that the amount claimed in respect of the meat supplied was owing by the defendant personally, that part of the claim was dismissed. 

2. In relation to the claim for money spent on the motor vehicle, it was held that the wrong defendant had been sued and it should have been the owner of the car, i.e. the defendant's wife.  That claim was dismissed. 

3. In relation to the counterclaim for alleged damage to the defendant's reputation, the court held that a long established form of liability in tort was damage to reputation but judicial proceedings were absolutely privileged.  Therefore, as the alleged damage to reputation counterclaim related only to the allegations made in the plaintiff's claim, it could not succeed and it, along with the other counterclaims, was accordingly dismissed. 

4. The final result was that both claims by the plaintiff were dismissed and all four counterclaims by the defendant were also dismissed. 

Case considered: 
Prasad v Morris Hedstrom (Tonga) Ltd (No 2) [1993] Tonga LR 69 (CA) 

Rules considered: 
Supreme Court Rules 1991 

Counsel for plaintiff: Mr Kaufusi 
Counsel for defendant: Mr Fakahua 

Judgment

Preliminary 

This case arises out of a business relationship between the Plaintiff, which trades in Tonga in imported meat from the Small Industries Centre at Ma'ufanga, under the name of Ozy Quality Meat, and the Defendant, a senior officer in Customs, and General Manager of Customs Freight Management Ltd [CFM], which provided clearance services for importers. 

The basic claim in this case by the Plaintiff was for the balance of $14,120.14 alleged to be owing for meat sold in January and February 2003 to the Defendant and shipped to Vava'u. The Defendant admitted that some meat had been sold and shipped to Vava'u, but claimed that the quantity of meat alleged by the Plaintiff had not been sold and shipped and that more payments for it had been made than accepted by the Plaintiff. It also emerged in the course of evidence that the Plaintiff knew that the meat was for the store of the Defendant's parents in Vava'u. 

The Plaintiff also claimed $2,000 from the Defendant in respect of money allegedly spent on the repair and upkeep of the Defendant's wife's car when it was lent to the Plaintiff's General Manager Mr Kevin Hunt. That followed the Defendant taking back the car on 22 August 2003, which the Plaintiff said was in breach of a 'gentleman's agreement' that it would retain the car in security for the Defendant's debt for the meat. The Defendant denied that claim, saying that the car had been hired to the Plaintiff (for Mr Hunt) at a rate of $40 per day from the last week of January 2003 to 20 August 2003; and counterclaimed for the hire charges, against which he accepted that there should be set off appropriate elements of the sums expended on the car by Mr Hunt. 

The Defendant also counterclaimed for the charges for the hire of his truck to the Plaintiff at $60 per day from 18 January to 20 April 2003. The Plaintiff denied that counterclaim. 

The Defendant further counterclaimed for $10,000 for the services he allegedly gave to the Plaintiff in preparing all documents for customs entries, including setting up a computer program. The Plaintiff also denied that counterclaim and said that the Defendant was paid $500 for every container released.

Finally the Defendant said that he was a person of good character and he also counterclaimed for $2,000 for damages to his good reputation, which he said had been ruined by the claim, so that public believes that he is a bad, irresponsible & unreliable person. The Plaintiff also denied that counterclaim. 

Evidence and submissions 

The Plaintiff led evidence from Mr Kevin P J Hunt, its General Manager in Tonga; Mr Fred C Nichols, its Managing Director and part owner (along with his brother); Ms Moala Fifita, Supervisor at Sitani Mafi Co Ltd; Mr Viliami 'Alipate Tupou, Operations Manager of CFM; and Miss Diana 'Eseta 'Ofa, now the Plaintiff's Secretary and Accounts Clerk. The Defendant gave evidence himself; and led evidence from Mr Takitui Fine, Supervisor Electrician with Kooline Bayside Services. Both parties also submitted productions. After conclusion of the evidence written submissions were submitted in the following days for each party in support of their case. 

I very much regretted that I was unable to accept the Defendant as an entirely credible and reliable witness, principally because in cross-examination he repeatedly avoided answering the question and denied apparently obvious matters. While Mr Hunt was somewhat didactic and given to exaggeration, I considered that he was telling the truth as he saw it, and so was generally a credible witness, if not always reliable. I found Mr Nichols a good, credible and reliable witness, as was Miss 'Ofa, who had obtained school certificates in accounting. I had no reason to doubt the credibility and reliability of the other witnesses. 

Claim for the meat sent to Vava'u 

During the period in question from January to April 2003 the Defendant installed the Plaintiff's computer, showed them how to use it, and did their bookwork by either making the various bookkeeping and accounting entries, or giving the information to Miss 'Ofa for her to do so. Mr Hunt accepted that he would sign to authorise an entry, but he could not use the computer and the Defendant would make out the sheet. There was an entry in one of the Plaintiff's productions showing the purchase of a PC on 14 February for $1,759.14, which Mr Hunt accepted was all done by the Defendant. 

The detailed evidence of the records and accounts for this matter was muddled and confusing. The Plaintiff's accounting and bookkeeping system at the relevant time appeared to leave something to be desired, as both Mr Hunt and Mr Nichols are butchers who readily admitted to not understanding accounting. It was difficult to know what records the Plaintiff did have on computer before they were allegedly deleted by the Defendant, or before the Defendant allegedly removed the book in which the entries were when he went back to his own company [CFM]. There was no acceptable evidence that the Plaintiff kept a separate stock book record of any kind, as Mr Hunt's evidence on the matter was contradictory; and Miss 'Ofa said that when a container arrived the contents were simply noted on the stock on the computer and the Customs entry forms and shipping documents were added to a big file or folder in the office. Mr Hunt was also unsure whether any individual debtor cards were kept, even in computer files, but Miss 'Ofa said they used an accounting system on the computer and produced a debtor list every week. But Mr Hunt had to approve all receipts. 

The Defendant said that the Plaintiff had no stock book or debtor records, although it proposed to use Mind Your Own Business software for that. But he had always had a disagreement with Mr Hunt about how the system worked and it had been he who had entered the stock and the credits. There had been a lady recording all the sales, and a book used for recording salaries because of the requirement of the Inland Revenue. 

The Defendant said that after he had prepared the weekly sheets of income and expenditure, Mr Hunt checked them before signing them, and they were then sent to Mr Nichols in Australia. 

Mr Nichols visited Tonga every 3 months, but Mr Hunt reported to him what was happening on a daily basis. Mr Nichols said he relied on the daily sales sheets, records of banking (cash and cheques), and records of expenses. He said the stock book had been removed, but he did not know who by (although he said he knew that Mr Hunt could not turn on the computer); and the main documents the Plaintiff would rely on had been removed from the computer, so it had to rely on the information they could find. 

In relation to the weekly statements of income and expenditure, the Defendant acknowledged that he prepared those documents on the computer, or that Miss 'Ofa did so under information provided by him. But in relation to other documents among the productions, the Defendant virtually refused to acknowledge any faxes or notes, as he said he usually signed faxes, but I regret that I was unable to accept that denial and found that they were duly sent by or to him. 

However I accepted that after the Defendant left the Plaintiff in April 2003, some or all of that information and the documents were found to be missing. Miss 'Ofa said that when she had gone to work for the Plaintiff, the information on its computer was not complete as bits and pieces were missing, such as the records for weeks 1 & 2. On the balance of probabilities I accepted the evidence for the Plaintiff that Mr Hunt believed that the Defendant himself, as the principal person with access to the computer, removed the information. 

The Defendant said a relationship between his mother and the Plaintiff had begun when Mr Nichols had still been dealing with Mr Maka'afi Fainga before Ozy Quality Meats was started and Mr Hunt had said it was OK to continue it. But I was unable to accept that evidence of the Defendant that the Plaintiff had been trading with his mother even before it set up business in Tonga, as that was never put to the Plaintiff's witnesses. 

The Defendant had asked Mr Hunt if he would be interested in sending some meat to Vava'u as his mother and father had a shop there and Mr Hunt said he had readily accepted the opportunity as a chance to grow a bit. However he said the Defendant was always in touch with his parents from his home. Mr Nichols knew of that situation from Mr Hunt, and that the Defendant had made the arrangements and had given a purchase order from his parents. Mr Nichols had considered the Defendant to be in a position of trust and had taken his word that the order would be paid for. 

Therefore, essentially at the Defendant's request, 2 consignments of meat, prepared by the Defendant (and I did not accept his evidence that he did not order the products to be sent to Vava'u), were sent on credit to Bloomfield Retail Store, Vava'u as follows: 

29 January 74 cartons 	$14,360.50 	
13 February 22 cartons 	$2,259.64	
	$16,620.14	

I accepted Mr Hunt's evidence that he himself had seen the 74 cartons loaded in the first consignment; and that he believed that the Defendant had taken away the documents about the Vava'u consignments. 

I was unable to accept the Defendant's evidence that only a lesser quantity of 36 cartons at a cost of $3,365.96 was sent in the first consignment, he said as other goods had been loaded into the container (particularly as he later said that the container had not been loaded under his direction), which had been consigned to his mother Nau Bloomfield; nor that the cost of the second consignment of 22 cartons was only $2,048.10. Although the Defendant's evidence tallied with entries in his diary for 30 January and 13 February, there was no other evidence to corroborate these and in view of my assessment of his credibility I was unable to accept that evidence or those entries. 

Although that might appear to be a large order to provide on credit on first dealings with a party, I accepted the evidence of Mr Hunt that it was not a large amount of credit in their business. The Defendant said, and I accepted, that at the start of the Plaintiff's venture in Tonga it had been desperate to sell its products, which were very expensive to sell, and at that time it had been very keen to market its meat and open up a new market in Vava'u, as at that stage it did not have a cool room to store them and the cost of power for reefers [refrigerated containers] was going up. 

Miss 'Ofa said that as far as she knew the account kept for the meat sent to Vava'u was in the Defendant's name, and not in the name of his mother, Mrs Nau Bloomfield. 

The oral evidence for the Plaintiff was that payments totalling $2,500 ($400 in cash shown to Mr Hunt (who said he never touched money), $400 in cash given to Mr Nichols, and a further $1,700 in cash) were made by the Defendant to it fairly soon after the first shipment, on or around 30 January and, in accordance with the Plaintiff's normal practice, banked as soon as possible. However the Plaintiff's own productions showed that a cash payment of $2,760 was made on 30 January and recorded on a sheet signed by Mr Hunt at the time. 

The problem for both the Plaintiff and the Court was that the bookkeeping entries were written by the Defendant. According to the records made by the Defendant, the Plaintiff's expenditure on 31 January 2003 had been $2,354.93. The Plaintiff's bank deposit book showed no record of any substantial payment of cash around that time, except for a cash pay-in of $3,144.16 on 7 February, which Mr Nichols accepted might or might not include the payment of $2,700: again according to the records made by the Defendant, the Plaintiff's expenditure on 7 February had been $1,380.88. 

Miss 'Ofa had worked for CFM, doing bookkeeping and looking after the accounts until the 2nd week in April 2003, when she had moved to work full-time for the Plaintiff doing the same job. Prior to that under the Defendant's instructions she had also done the banking for the Plaintiff at the same time as she did the banking for CFM, using the bank deposit book already referred to, the entries in which were in her handwriting. Miss 'Ofa said that as far as she knew no cash had been given to her to bank on 30 January (the date when $2,760 from Vava'u had allegedly been paid in); nor did she think a cash pay-in of $3,144 on 7 February related to the $2,760, as normally she did not hold cash and paid it in daily. 

The Defendant himself accepted that it was the normal practice to lodge cash if possible on the day it was received, but said that would also depend on the operating expenditure, which could be taken from cash received. So he said the $2,760 could have been used for the payment of expenditure, though as already mentioned there was really no accounting evidence to support that. 

Overall on the evidence, on the balance of probabilities, there was simply insufficient evidence to draw any conclusions about whether 2 large payments had been made. I was thus unable to accept the Defendant's evidence that further cash payments had been made around the same time, but slightly later. I therefore accepted the contemporaneous written record signed by Mr Hunt as the best evidence before the Court, in face of all the other confused oral and written evidence. 

The Defendant said he had never received any invoices for the meat sent to Vava'u, and none were produced to the Court. 

The Defendant said that his mother had had problems selling the meat at Vava'u; and he admitted having a discussion with Mr Nichols and arranging to have returned from Vava'u whatever cartons of meat were left over, ie 29 cartons. Mr Hunt said that the Defendant had said to him that his mother and father had a problem and had had trouble selling the meat. On 14 May the Defendant faxed to Mr Nichols from CFM: 

"Good Morning Fred, 

This is to update you with the Meat with were shipped to Vava'u, currently my mother is still working on collecting credits, and working on the STOCK, which she still have in the Freezer today. This is not an easy job for her cos she have to get boys to do the shifting of stock for stocktaking, plus that she was sick during the past few days. 

She has stated that she will try her best to send all related information as soon as she finish with the work, secondly she has to hire a Blast Freezer to freeze whatever shock she has on hand before she shipped the leftover stock to Tongatapu. 

Apologize for any inconvenient that this may have caused. I will keep you up date. 

Thanks & Regards 
Kulu [the Defendant]" 

Although the Defendant for a variety of reasons denied sending that fax, I was unable to accept his denial and found that he had sent it. 

In response, by fax also dated 14 May 2003 Mr Nichols had asked the Defendant to arrange for all unopened cartons to be sent back from Vava'u, and that had been done: 

"Good morning 

Thank you for your update 

Could you please arrange for all unopened cartons to be sent back to sic asap this will make the stock take for your mother much easier. 

Could you also advise the arrival time at the wharf so as my truck can be on hand to bring it back to the factory. 

When I last spoke to you you said your mother had banked some of the money owing to us into the wrong account. Have you sorted this problem out and when will that money be paid to me. This account is long overdue and I need it fixed up immediately 

Regards 
Fred" 

The Defendant did accept that that fax from Mr Nichols of 14 May to him referred to his arrangement with Mr Nichols to arrange for the unopened cartons to be sent back from Vava'u, but denied discussing with Mr Nichols that his mother had banked some of the money in the wrong account. Again I was unable to accept the Defendant's evidence denying that. 

The witnesses accepted that 29 unsold cartons of meat were eventually returned by the Defendant's mother from Vava'u to the Plaintiff in Nuku'alofa around 16 May, but I preferred the evidence of Mr Hunt and Mr Nichols (who had been in Tongatapu at the time) as experienced butchers of 50 years standing with Quality Assurance certification, to that of the Defendant that when the Plaintiff received the cartons they were defrosted and unfit for human consumption, so that no credit could be given for them. I was unable to accept the Defendant's evidence that the cartons could have become defrosted at a later date. 

The Defendant had also told Mr Nichols in the middle of May that his figures for the Vava'u debt were wrong, but despite Mr Nichols asking for what the Defendant considered to be the correct figures, the Defendant had never provided these and had made no further attempt to make any payments. Prior to that, as already mentioned, the Defendant had told Mr Nichols that his mother had banked some of the money owing to the Plaintiff into the wrong account under the family's control, but the Defendant had never sorted out that alleged problem, although Mr Nichols felt all the Defendant had to do was to take it out and pay it into the Plaintiff's account, nor had he or his parents paid the Plaintiff any more money. 

Later on 30 May Mr Nichols again faxed the Defendant: 

"It is now more than 2 weeks since you told me that our account was wrong and you would fax me the correction. 

If you recall your mother sent back 29 cartons of meat out of the total order of 96 cartons and when we received it, it was all defrosted. Some we had to dump as it was to far gone and bacteria was starting to show. 

We have been paid 3 payments off the original total leaving a substantial amount owing. You told me some money had been banked into the wrong account under your family's control. 

I want to get this matter cleared up so we can both get on with our respective business. Could you please pay the outstanding amount of $10,049.51. 

Please respond by Wednesday the 4/6/03 as after this date it will be about 4 months since the order was delivered and it will be placed in the hands of our debt collection solicitor. 

As you know our terms are not more than 28 days for accounts that have been operating for some time and we have had a pattern of regular payments. 

Yours faithfully 
Fred Nichols" 

There was no reference at all in evidence to the figure of $10,049.51 claimed by Mr Nichols in that fax to be outstanding, though he does mention the 3 payments made through the Defendant. Perhaps the figure took into account some credit for the returned meat. But as this was a document produced by the Plaintiff and was the only one specifically referring to the amount outstanding, I believe, in view of the very confused oral evidence, it is proper to take that figure as the amount outstanding by Bloomfield Retail Store. 

No further payments were made to the Plaintiff for those 2 consignments. I therefore found that the debt outstanding in respect of them was $10,049.51. 

As already mentioned the evidence showed that the Defendant was not acting for himself in ordering the meat to be sent to Vava'u, but that he was ordering for the Bloomfield Retail Store there, which was run by his mother and father, and that both Mr Hunt and Mr Nichols were fully aware of that, although they had not met the Defendant's parents. The Defendant had said that his mother was going to pay, but she did not do so, beyond the payments already mentioned. As a result the Defendant's name had appeared on the Plaintiff's list of debtors for a substantial amount of money. Mr Hunt said that the Defendant was the organiser of the arrangement and it was the Defendant who received payments from his mother. 

Mr Nichols very fairly accepted in evidence that the Defendant was in the position of an agent acting for a disclosed principal and therefore would not normally be personally liable for debts incurred for the disclosed principal, but considered the circumstances special as at that time the Defendant himself was in a close business relationship with the Plaintiff, which was the reason for granting the credit.

Although the Plaintiff correctly submitted that the Defendant had never pled as a defence (in terms of Order 8 Rule 2(2) of the Supreme Court Rules) that the Defendant was not personally liable as he was acting for a disclosed principal, it would be absurd for the court to grant a decree against the Defendant where the evidence had established on the balance of probabilities that that was the case. If, despite inadequate pleadings, an issue is clearly raised and is understood by the opposing party to be raised and then dealt with, it should not be excluded because of technicality of pleadings: Prasad v Morris Hedstrom (Tonga) Ltd (No 2) [1993] Tonga LR 69, 73 (CA). While the Court cannot make any order or a decree against the Defendant's disclosed principals in this action as they are not parties to the case, it clearly has not been established on the balance of probabilities that the sum of $10,049.51 was owing by the Defendant personally to the Plaintiff, so no order is made in that respect and this claim is dismissed. 

Claim for money spent on car 

In relation to this claim I accepted that the car in question, C6626 which the Plaintiff accepted as being a car belonging to the Defendant's wife, Mrs Bloomfield, who was in a post at Vava'u, was offered by the Defendant to Mr Hunt for use (to employ a neutral term at this stage) for his time in Tonga to help him out, provided he paid for having it resprayed to allow him to use it. Mr Hunt did use the car from around 21 February (when he got an advance on personal account from the Plaintiff of $1,100 to pay for the respray of the car, which he later repaid to the Plaintiff) to 20 August 2003. But while in loose terms the arrangement may have come about because of the then business relationship between the parties, on the evidence I did not consider that the arrangement was part of any contractual consideration for a business deal. I accepted Mr Hunt's evidence that there was never any mention of the car being hired to him. Nor was there any evidence that the car was eventually to become Mr Hunt's property. 

Mr Nichols said he had not liked the idea of the car right from the start, but it had been a deal between Mr Hunt and the Defendant. He said it had been nothing to do with him as Mr Hunt had been managing the business and had wanted a vehicle. Mr Nichols understanding had been that it had been agreed that Mr Hunt would pay for the car to be painted, and if there were breakdowns when Mr Hunt was driving it Mr Hunt would pay for them. Mr Nichols said the payments had been made out of the Plaintiff's account and then paid back to it by Mr Hunt, though that conflicted with Mr Hunt's own evidence, which was that the Plaintiff paid for the repairs. I preferred Mr Nichol's evidence on that. 

Once again the paperwork purporting to establish the claim was muddled and unsatisfactory, but I accepted on the evidence that, as Mr Hunt was using the car, he paid $1000 for the respray; but it was the Plaintiff who paid for the repairs, made up as follows:

20.3.03	$510.65	
21.3.03	$335.65	
21.4.03	$858.00	
23.4.03	$57.45	
20.5.03	$90.60	
16.6.03	$1,988.25	

I could not accept on the balance of probabilities 3 other repair bills, which appeared to me to be more likely to be attributable to the accident which occurred to the car (referred to below) and were met in an insurance claim.

Mr Hunt said in evidence that the car never stopped breaking down and the Defendant asked him to have it fixed as he did not have the money himself. Mr Hunt paid those sums, and he said more than $3,000 in all, which must have made the car a most expensive gratuitous lending, but that was the arrangement I found that the parties had come to. 

The Defendant's evidence was that he had told Mr Hunt that the car was available if he wanted to use it, and that whatever he paid for the respray would be deducted until Mr Hunt had his own car, which was the reason why the Defendant had never asked Mr Hunt to pay any money until he found his own transport. He felt that as Mr Hunt was using the vehicle he should pay for the wear and tear on it.

I accepted that the accident to the car (with damage to the front mudguard) had not been the fault of the Plaintiff or Mr Hunt as a truck had backed into it and broken the driver's side headlight and mudguard (not the driver hitting an electric post, as claimed by the Defendant). I also accepted that the repairs following that had been covered by insurance and were not being claimed by the Plaintiff in this action. I also accepted Mr Hunt's evidence that the Defendant had seen and been aware of the accident shortly after it happened; and I was unable to accept the Defendant's evidence that he had been disappointed because he had been unaware of it and Mr Hunt had not advised him of it. I accepted that Mr Hunt had thus had all the damage to the car fixed.

But it must also be recorded that there was no evidence that either the Plaintiff or Mr Hunt took any steps at all to recover any of these amounts until the Defendant took back the car on or around 20 August 2003; and Mr Hunt said he had never seen the Defendant from the time he left the Plaintiff until he had come to pick up the car. I therefore concluded that, whatever other arrangement there was between the parties, in exchange for use of the car Mr Hunt (who must have been aware of the condition of the car when he entered into the arrangement) was to be responsible for its upkeep and cannot now sue to recover sums so expended. 

Mr Hunt's evidence that the car was eventually sold by the Defendant for $3,000 was unchallenged.

Mr Hunt and Mr Nichols also gave evidence that there was a "gentleman's agreement", made when the Defendant left the Plaintiff in April 2003, that Mr Hunt would keep the car as some kind of security for the Vava'u debt to the Plaintiff, which I accepted, although the Defendant denied that also. The question therefore was what the legal effect of any such agreement was. First, there was no evidence that the Defendant was authorised to pledge his wife's car in this way, especially for a debt which was not his but his parents'. Secondly, a gentleman's agreement is defined in Curzon's Dictionary of Law (and in Chambers Dictionary) as a colloquial term used to describe an agreement resting on the honour of the parties, not law, and not usually enforceable at law. But thirdly, I cannot see that any such agreement is relevant to the Plaintiff's claim of $2,000, which is a claim for the money expended on the car, not for the value of the car or the car itself to set against the sum still owed for the meat, nor indeed for the return of the car. So I cannot see that any such gentleman's agreement is relevant to this part of the Plaintiff's claim, except of course that the evidence for the Plaintiff about it, which I accepted, cast further doubt on the probity of the Defendant. 

Once again in this claim therefore, I consider that the wrong Defendant (who should have been the owner of the car, i.e. Mrs Bloomfield) has been sued; and in addition the Plaintiff is also the wrong party to make this claim, so while I sympathise with Mr Hunt, I find this claim has not been established on the balance of probabilities and it is dismissed. 

Counterclaim for alleged hire of car 

I had no hesitation in rejecting the Defendant's evidence that a hire charge of $40 per day had been agreed, as there had been no mention at all of such a charge from the time the car was originally given to Mr Hunt in January 2003 right up until the Defendant very belatedly lodged his statement of defence and counterclaim in November 2003. However Mr Hunt did agree in evidence that EM Jones would have charged a hire rate of $40 per day. Nor was there any other evidence substantiating a hire or ongoing rental payments; and Mr Hunt said there was never any talk of hiring the car, he had never agreed to any renting arrangement and no hire invoices whatsoever were given to him by the Defendant. 

As I have already found, whatever other arrangement there was between the parties, the principal arrangement about the car was that in exchange for its use Mr Hunt (who must have been aware of the condition of the car when he entered into the arrangement) was to be responsible for its upkeep, without any additional hire charge. 

The Defendant accepted that, although he had said in evidence that he had told Mr Hunt that he understood he was paying $75 per day for the taxi with a driver he was hiring, that figure had never been put to Mr Hunt. The Defendant accepted in evidence that in his affidavit dated 23 March 2004 he had stated: 

"That I do not intend to claim the hire of my wife's car which was used by the Plaintiff and not only that but my services rendered to the Plaintiff but because they claim to me various matters which is completely untrue I therefore propose to file a Counterclaim against the Plaintiff." 

but said he changed his mind after Mr Hunt said he had to leave the company. 

The Defendant said that in August 2003 he had found out that the car had been in an accident but Mr Hunt should have informed him of the damage and it had had not been reported to him and he knew he would not be able to sell the car. 

The Defendant accepted that the cost of expenditure by Mr Hunt on the car would have to be set against any hire charges, he said except for the repairs following the accident (which have been excluded from the list above). 

Mr Hunt acknowledged that, as the car was still registered in name of the Defendant's wife, the Defendant had every right to take it. I also have to say that in legal terms (not taking into account the gentleman's agreement) I cannot see that the Defendant, presumably as his wife's agent, was in the wrong in taking back the car. 

The Defendant therefore failed to establish this head of the counterclaim in terms of the arrangement between him and Mr Hunt which I found established. 

Again in this counterclaim, in any event, both parties are the wrong parties. The Defendant was not the owner of the car, and the arrangement he had, presumably on behalf of his wife, was with Mr Hunt, not the Plaintiff.

Counterclaim for alleged hire of truck 

In relation to this claim, I accepted that the Defendant's truck (although in cross-examination he admitted that the truck belonged to CFM, of which he was 1 of the major shareholders, with a 30-35% shareholding) had been used gratuitously by the Plaintiff on occasion, but also Mr Hunt's denial that the truck had been formally hired to the Plaintiff. I accepted Mr Hunt's evidence that the Defendant had filled the truck with petrol (until Mr Hunt instructed the petrol station to the contrary) and had had fitted a new battery and new tyres, all on the Plaintiff's account and all without asking Mr Hunt: the Defendant accepted that the Plaintiff would fill up the 4-ton truck with petrol, but pointed out that even with a hire car the hirer had to fill it up with petrol and pay the hire rate. Mr Hunt said that the Defendant used the truck to travel to and from work, which Miss 'Ofa confirmed, but she did not know whether the Defendant's truck had been used by the Plaintiff before she worked for the Plaintiff, but said that by the time she moved the Plaintiff had its own truck for delivering meat to its customers. Once again there was no evidence, apart from the Defendant's oral evidence, which I was unable to accept, substantiating a hire or ongoing rental payments. Mr Hunt said he had never seen any such invoice. Once again, there was no evidence that hire charges for the truck were either mentioned or claimed until the Defendant lodged his belated statement of defence and counterclaim in November 2003.

The Defendant said that because the Plaintiff had no transport his truck was used by it to deliver meat, from the time he started working for the Plaintiff until he had been told by Mr Hunt in April that his services were no longer required. He claimed $5,400 for that. 

Once again, I therefore found that on the balance of probabilities this head of the counterclaim was not established. 

Counterclaim for Defendant's services to Plaintiff 

Mr Nichols said that he had met the Defendant at CFM when the latter was its General Manager and had spoken to him a few times. CFM had been doing the work to release the Plaintiff's 20' refrigerated containers (reefers) and presented it with a bill each time. The Defendant said that a relationship had started to develop and Mr Nichols said that on one occasion when the Defendant had been there he had offered to do the release of the containers, but had also established with Mr Nichols the opportunity to have someone in Tonga who knew what he was doing with computer work, as they had no support. The Defendant had told Mr Nichols that he had previously been in Customs (where he is now No 2). Mr Nichols had offered the Defendant a job to do the work in the Plaintiff's office and the Defendant had offered to get it a computer; Mr Nichols accepted in evidence that as the boss of the Plaintiff he had employed the Defendant to do the work on the computer for the Plaintiff, based on a payment per container, and so based on the number of containers released.

Mr Nichols said that the Defendant was to be paid an agreed figure of $500 on the release of each container. The Defendant said that $500 had been the figure proposed by Mr Nichols, but he had told him that was not enough as his salary at CFM was $450 and so the figure per container had risen to $850 and Mr Nichols had said on the phone that he would have a look at it and at the last discussion with him Mr Nichols had said yes to that. Both agreed that whatever was arranged had been between them and not with Mr Hunt, and there had been no written agreement about a figure. The Defendant accepted that during Mr Nichols' evidence his figure of $500 had never been contested in cross-examination, which was the case. 

I accepted Mr Nichols' evidence that the Defendant was to be paid $500 per container cleared from the wharf; and Mr Hunt agreed that was the basis of the Defendant's work for the Plaintiff. Mr Hunt said the Defendant took $500 in cash every time a container was cleared by CFM, and denied that the figure was $850 per container. Miss 'Ofa confirmed the figure of $500, which was taken by the Defendant from cash. The Customs entries were prepared separately for the Plaintiff by CFM Ltd. Although Mr Hunt had signed some statements of expenditure which were produced by the Plaintiff and which included at least 1 entry of $500 as "Part Payment of Commission for 'Anisi Bloomfield", on the evidence overall I considered that that entry was probably put in by the Defendant himself and not picked up by Mr Hunt, who appeared not to have been greatly interested in the financial and accounting side of the business and claimed that he could not remember such details. 

The Defendant said that when the Plaintiff started at the Small Industries Centre there had been no freezer to store the meat and no transport to deliver it, so it was like starting from scratch and there was a lot of work to be done locally, which was why he thought he had been asked to assist. The Defendant said he had been doing the marketing for the Plaintiff, arranged for their computer to be set up, and arranged for the renovation of the building; and that he normally worked after hours. But he said that the payment of $500 or $850 related to the selling of the products in the container and was a commission on how they sold. Mr Fine confirmed that when he had been working for Kooline it had been the Defendant who had made the arrangements for the installation of 2 freezer rooms for the Plaintiff. On this matter I preferred the evidence for the Plaintiff and did not accept the Defendant's evidence that the agreed rate was $850 per container. 

The Defendant said that when he was working for the Plaintiff CFM were still clearing containers for it. There was also evidence from Mr 'Alipate Tupou said that at CFM he had handled customs matters for the Plaintiff in 2003, filling in forms and preparing customs documents. The service CFM offered was a whole service up to delivery to the customer's premises. When Mr Tupou worked there he had worked under the instructions of the Defendant, who had been General Manager of CFM. To Mr Tupou's recollection the rate charged by CFM was a fixed rate (which was confirmed by Miss 'Ofa although she did not recollect the amounts) of $150 for the paperwork and $20 for services, paid by the Plaintiff, and he did not know about any charges to the Plaintiff beyond that, apart from the Customs fees themselves. Mr Tupou and Miss 'Ofa confirmed that for a time the Defendant had left CFM and had gone to work for the Plaintiff (while remaining General Manager of CFM), helping out with its computer work according to Miss 'Ofa, during which time Mr Tupou thought maybe 5 containers had been cleared for the Plaintiff (or maybe 2 per month). 

Mr Hunt said that 3 containers were cleared while the Defendant was helping him, but accepted that others were cleared by CFM, though he could not put a number on that. But he denied that the Defendant had cleared 8 or more containers.

The Defendant's claim for the money he was due for working for the Plaintiff was $10,000, as it had only paid him $500. He also said he had a salary from the Plaintiff, but was not able to produce any documents about that. He believed that approximately 8 containers had been cleared in the time he worked (after he had entered into his arrangement with Mr Nichols) - ie 10 weeks, which even at $850 per container would only come to $6,800, ie much short of his claim for $10,000. The Defendant admitted that he had not made out any invoice to the Plaintiff for that sum and that there was no reason for that. Later in his evidence he said that the claim was for 11 containers at $850, plus other after hours duties. 

In light of my view on the defendant's general credibility and reliability as a witness, I was unable to accept his evidence that any money was due by the Plaintiff to him under this head of the counterclaim, particularly as (a) there was evidence that he had taken at least 1 payment of $500 from cash and if other payments had been due to him it is probable that he would have done likewise; (b) he had never submitted any invoice or bill to the Plaintiff for the amounts claimed, and was unable to give a reason for that in evidence; (c) perhaps most forcefully, he had never until the filing of the statement of defence and counterclaim in November 2003 mentioned that the plaintiff owed him money, not even in April/May 2003 when he personally was being pressed by Mr Nichols for payment for the meat sent to Vava'u. 

I therefore did not accept that this head of counterclaim was established on the balance of probabilities and it is dismissed. 

Counterclaim for alleged damage to Defendant's reputation 

Finally the Defendant said that he was a person of good character and he also counterclaimed for $2,000 for damages to his good reputation, which he said had been ruined by the claim, so that the public believes that he is a bad, irresponsible & unreliable person. 

The only evidence about this head of the counterclaim was given very briefly by the defendant himself, and in light of my view of his credibility and reliability as a witness I found it unconvincing. However, due to the law on the matter, that is not really relevant.

While a long established form of liability in tort is damage to reputation (Clerk & Lindsell on Torts (16th Ed) Para 1-47), judicial proceedings are absolutely privileged (Clerk & Lindsell Para 21-68 - 70). Therefore as this head of the counterclaim related only to the allegations in the Plaintiff's claim, it cannot succeed and is dismissed. 

While the evidence and submissions on this head were scanty, they did not raise that aspect of the law. I found it very surprising that neither Counsel appeared to have taken the trouble to look up the law on this subject before the hearing commenced. 

Conclusion 

The final result is thus that:

(1) both claims by the Plaintiff are dismissed; and 

(2) all 4 counterclaims by the Defendant are also dismissed. 

Costs 

As neither side has been entirely successful, but each side has been partially successful in their claims, defences and counterclaims respectively, I shall meantime make no order as to costs, but I shall leave it open to the parties to make further submissions on costs if they wish, either orally or in writing. 

Delay in giving judgment 

This was the first case which I heard on my return to Tonga and I very much regret that it has taken so long to give this written decision. As the parties and Counsel are aware, I have been very much occupied in my early months here with other litigation, which unfortunately has had to be given priority.