IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA REGISTRY

NO.C.21/99

BETWEEN:

KARL A. FISCHER
Plaintiff

AND:

REISEDIENST QUICK TOURS LIMITED
First Defendant

AND:

SVEN QUICK
Second Defendant

AND:

WALLTRAUD QUICK
Third Defendant

BEFORE THE HON. CHIEF JUSTICE WARD

Counsel: Mr Tu'utafaiva for plaintiffs
Mr Niu for defendants

Hearing: 2, 3, 6 & 7 November 2000.
Judgment: 20 November, 2000.

JUDGMENT

The defendant company was formed here in 1993 with the second and third defendants as two of the four directors. The following year they opened a guesthouse known as the Heilala Guest House in Tofoa. The second defendant is the son of the third defendant and he is the managing director of the company.

The plaintiff is an experienced cook who has worked in hotels in various countries but whose family has owned a hotel in Germany for more than 150 years and, in 1997, he was managing the family hotel. He read an article in a newspaper that mentioned the Heilala Guest House and suggested that investors would be welcome in Tonga. As it happened, his personal circumstances had changed considerably that year and so, some months after the article appeared, he contacted the defendants on the telephone and spoke to the third defendant. There followed an exchange of facsimiles and, in March the following year, the plaintiff met the second defendant when the latter was attending the ITB in Berlin.

During that meeting, the second defendant explained that they wanted to build a restaurant and were looking for a substantial investment. The plaintiff says that the sum of 220,000 - 250,000DM was mentioned and that he expressed interest although he did not think he wanted to invest quite such a high figure. The second defendant sensibly suggested that, before they went any further, the plaintiff ought to visit Tonga to see whether he wanted to go ahead.

The principal events that followed are not disputed but there is deep dispute over the promises and expectations of the two sides, which clearly led to the misunderstandings from which this case grew.

The plaintiff came out in June 1998 for two to three weeks and was accommodated at the guesthouse. There was no talk of payment for the accommodation and he told the court that they treated him well. Whilst here it became clear that an agreement was possible and much of the later part of his visit was spent in discussion of that. The plaintiff told the court that, even at that time, he felt they were trying to stop him meeting anybody else who may tell him what was going on in Tonga. I have no doubt the plaintiff now believes that but I am also satisfied that he has thought of it as the result of subsequent events and transposed those thoughts to the early stage. One of the witnesses called for the defence was Paul Karalus who was, at that time, the president of the Chamber of Commerce. He recounted how the plaintiff had come to his office twice during that period to ask questions about the business scene in Tonga generally. I am satisfied that his recollection on this is accurate and it belies the suggested attempts to isolate the plaintiff by his hosts at the time.

As he has given evidence, the plaintiff's case has swung between making clear and forceful allegations of fraud on the one hand and acknowledging misunderstandings that have arisen as much from his aspirations as from representations by the defendants on the other. I shall return to this aspect of the case later.

The plaintiff told the court that, by the end of the first visit, he was interested but had not agreed to anything. He was interested in investing a sum of up to 220,000DM but he needed to return to Germany to see if he could find some one to take over the running of his family hotel for ten years and generally to assess his position.

The defendants case is that, on the day he left, he signed an agreement to pay a total of TOP$200,000 which was, at that time, worth approximately 147,000DM - only slightly under, it should be noted, the maximum sum of 250,000DM originally sought by the defendants. That document was signed in Mr Karalus' office and he countersigned as a witness. Referred to in the document but not attached at the time was a drawing of the proposed restaurant and bar. The second defendant told of how they were in a rush because the plaintiff still had to pack and, as they reached the car, he remembered the drawing. He produced it and he and the plaintiff signed it in the car outside the office.

The plaintiff denies that agreement. He says he never saw it until after the present court proceedings had commenced. He denies the signature is his and points to the undoubted difference between that signature and the many other examples of his signature made about that time. He admits signing the drawing and there is no doubt that the signature on that is the same as his other acknowledged signatures. He recollects the drawing was signed at the guesthouse on a different occasion. In court he agreed the date must have been the day he left the country although he agreed that, in an earlier affidavit, he denied this and insisted it had only been shown to him when he returned to Tonga for the second time.

The signature on the disputed contract is written in a similar style and hand writing but is shorter and leans to the left whilst the plaintiff's normal signature leans markedly to the right. The other two signatures, those of the second defendant and Mr Karalus, are admitted to be their's. At the end of the hearing, it was pointed out that the signature of the plaintiff on an affidavit sworn by him for his application of 19 January 1999 is the same as the disputed signature except that it does not lean backwards. I accept that is the case.

The document is dated in manuscript by the second defendant, as was the drawing. The document purports to be an agreement between the defendant company and the plaintiff. I set out the terms in full.

"It is hereby agreed that,

1.	Mr. Fischer pay's Reisedienst Quick Tours Limited the amount of T$2000,000.00 being prepayment of 15 years rent for the restaurant extension of Heilala Holiday Lodge including his private residence on the Heilala Holiday Lodge premises according to 3 dimensional architectural drawing as attached.

2.	Reisedienst Quick Tours Limited commits it self to build the under "#1" mentioned restaurant, bar and private residence (according to the 3 dimensional architectural drawing as attached) by the first quarter of 1999.

3.	Mr. Fischer will manage the restaurant & bar facilities for the period of the above mentioned 15 years. A respective management contract will be discussed after the arrival of Mr. Fischer in end August 1998.

4.	Mr. Fischer will transfer T$105,000.00 (approx. DM130,000.00) to the account of Reisedienst Quick Tours Ltd. (ANZ Bank/Nuku'alofa/Tonga/ account no.1028902) before the 30th of July 1998. A 2nd payment of T$57,000.00 (approx. DM 70,000.00) will be paid before the 30th of August 1998. A 3rd payment of T$15,000.00 (approx. DM18,500.00) will be made before 30th of July 1999. The remaining T$23,000.00 (approx. DM 28,500.00) will be paid in two steps with the final payment before 30th July, 2001.

5.	This agreement cannot be transferred to other parties and cannot be passed on to heirs."

The question of the authenticity of this document is critical because it includes evidence of apparent agreement at that time on three of the major areas of dispute between the parties now, namely, the length of the agreement, the fact the money he put in it was to be advance rent and that the total amount was TOP$200,000 rather than Deutsche Marks.

As I have stated, the defendants' case is that it is genuine and the plaintiff was handed and took a copy. The plaintiff denies any such thing. It can only be, on the case he has pleaded, a fake deliberately produced by the defendants to support their false claim. As the plaintiff gave evidence, his position changed from the out and out allegation of deceit to a repeated statement that he did not remember seeing such an agreement and it is certainly not signed by him.

During his first visit to Tonga, the defendants had taken the plaintiff to a Rotary lunch at the Good Samaritan and the plaintiff had met Mr Karalus there. The plaintiff's account was that he did not really speak to him but it is clear that when later agreements were signed, it was the plaintiff's wish that Mr Karalus should witness the signatures. Mr Karalus was a careful and, I have no doubt, credible and accurate witness. I am satisfied he is correct in his recollection of the earlier visits of the plaintiff and also of the plaintiff and the second defendant when the agreement was signed. He recalled that they signed in his presence and he countersigned. He was sure the drawing was not attached and he did not see it at the time.

I have no doubt that document was signed by the plaintiff and the second defendant in the presence of Mr Karalus. Why the plaintiff wrote his signature in the way it is on that document, I do not know, but I am satisfied it was written by the plaintiff from the surrounding evidence and from the writing itself. If the plaintiff's case is right, by the time the defendants drew up the forged document, they had at least, on the court documents, one signature of the plaintiff on a letter and another on the drawing. It defies common sense that, if they intended to produce a fraudulent document, they would forge a signature different from a known signature already in their possession.

I pass now to the events after the short visit of the plaintiff in June 1998.

It is undisputed that, once back in Germany, the plaintiff sent the sum of 200,000DM by telegraphic transfer to a Deutsche Mark account set up by the defendants at the ANZ bank in Nuku'alofa and it was credited to the account on 21 August 1998.

The plaintiff then returned to Tonga at the beginning of September and again stayed in the guesthouse. Before he left Germany, there had been correspondence between the defendants and the immigration authorities here about obtaining a work permit for the plaintiff. When he arrived a "Contract of Service" was signed on 11 September 1998 which was effectively a sham for the purpose only of obtaining such a permit. On 1 October 1998 two more agreements were signed, a fresh "Contract of Service" and a "Memorandum of Agreement of Tenancy".

In November that year the plaintiff and the second defendant went to Indonesia together to purchase materials for the new venture but on that trip, apart from very minor items of equipment for the restaurant, only building materials were purchased.

It is clear that well before the trip to Indonesia, relations between the parties had begun to sour, particularly between the plaintiff and the third defendant. During or just before the trip, the second defendant had suggested the plaintiff should live elsewhere and, on his return late at night, the plaintiff found that he had been moved from his room for that night. The next day he moved into the Captain Cook apartments and, a few days later into a small house.

By the end of December 1998, there had been an exchange of letters between the lawyers for the plaintiff and the defendants and, on 8 January 1999, the writ was filed in this case accompanied by an application for an interim order to freeze the ANZ bank account.

Subsequent events have led to a counterclaim by the defendants, which I shall deal with separately.

The plaintiff's case in essence is that he has been misled by the defendants into paying this large sum of money. He understood the money was to be used exclusively for the construction of the proposed restaurant, bar, kitchen and living quarters for the plaintiff. In return for such an investment he expected to have a say in the manner in which the money was used either as a partner in the company or as a shareholder. Instead he was persuaded to sign agreements he did not understand and certainly believed were not to be binding. He was told that it was necessary to do things that way in Tonga but his understanding was that they were not a true expression of their agreement. It was, he says, on that basis that he signed them.

The defendants deny all of this. The money was for the company and was to be paid as rent in advance for the restaurant, bar, kitchen and accommodation. As rent in advance it was the company's money to be applied as they wished. They never intended any other arrangement and certainly had never expressed any intention to give the plaintiff a position in the company either as a partner or shareholder.

It is not necessary to state the evidence in detail. The breakdown in the relationship is evidence of the states of mind of the parties and led to this action and subsequent events but the critical factors for the court are the agreements alleged by each side.

The plaintiff's belief that he was to have a stake in the company itself can be dealt with shortly. The plaintiff has pleaded that the money was advanced to the defendants on the understanding that the plaintiff would have shares in the company and that it would be used solely for the restaurant and associated buildings. He complains in his statement of claim, that he is not being informed about and has no control over "the spending of his money". He has been unable to produce any document or evidence beyond the fact of his belief to support such a suggestion. I am satisfied that he did hope for such an arrangement but it was his hope only and was never part of any understanding between the parties.

There is no doubt that the principal purpose of this money was to build the restaurant and other facilities. If they were not built the agreement would be frustrated. I accept that the plaintiff had considered that the whole sum would be needed for that purpose and he did not expect it to be used for anything else. When the defendant started to build four accommodation units he felt they were, in effect, misusing the money he was still describing in his claim as "his money".

The agreement signed on 23 June 1998 aimed to have the restaurant operating by the first quarter of 1999 and the subsequent agreements were for a period of 15 years staring on 21 January 1999. That operating date was not achieved but I am satisfied on the evidence that the intention was to be able to open the restaurant in time for the Heilala festival in late June or early July 1999 and, thereafter, be able to take advantage of the much anticipated bonanza from the Millennium celebrations.

The three agreements subsequent to that of 23 June 1998 have been exhibited. The plaintiff agrees he signed them all but pleaded that he protested each in turn and only signed because he was told that this was the way such things had to be done in Tonga.

The first was quite clearly done on that basis. It is headed "Contract of Service" and was done to facilitate the issue of a permit for the plaintiff to enter and work but it does set out the bones of the subsequent agreements. That it was not intended to be the final agreement is plainly seen. It was signed by the parties again in the presence of Mr Karalus on the 11th October 1998. At the same time another short agreement was signed by the same people. It simply states:

"It is hereby agreed that the contract of service signed today (copy attached) is not in any way kind or form related to any financial contract. It is a standard employment contract only for the visa application purposes. The final Contract of Service will be agreed upon during the next four weeks".

That date was adhered to as the next two agreements were signed on 1 October 1999. The plaintiff's contention that he only signed them under protest and because he was told that is how things were done in Tonga is hard to reconcile with two undisputed facts. First is the fact that he discussed the details in relation to the period of the contract, the amount of salary and his percentage take of the profit and prevailed upon the defendants to change them to figures he wanted. The second is that Angela Parzifal, who was helping the defendants with their accounts at that time and was and is, it must be said, a close personal friend of the defendants, had been part of the discussion of the agreements and had explained them to the plaintiff. The agreements were in English but the discussions were all in German as were her explanations.

She was called by the defence and recalled that the second defendant had referred to the way things had to be done in Tonga in relation to the agreements of 11 September 1999 but insisted that there was no such statement about those signed on 1 October. She recalled the plaintiff asking about a shareholding or similar position in the company and she explained to him that it was never their intention and that his money was rent in advance. She recalled the plaintiff asking about what would happen to his money and so she explained again that it was rent in advance and therefore it was no longer his money but that of the company. After that, he understood and accepted it.

These discussions were around a table and each of the three of them had their own drafts of the agreement. At the end, the second defendant drew up a copy with the various amendments they had discussed.

I cannot accept that the plaintiff signed such an agreement involving this substantial sum of money without understanding it. He was a man with some years experience of managing a hotel in Germany and of working as an expatriate in countries other than Germany, no doubt, under contracts of employment. I am satisfied that he did know the terms of the agreements he signed on 1 October 1999. I have already found that he did sign the agreement of 23 June 1999 and these matters were clearly adverted to then. Having done so, he returned to Germany, put his hotel under the management of another person, transferred a substantial sum of money to Tonga and then returned here himself. I accept that he had hoped that he would be more involved in the structure of the company but accepted he would not before he entered into the agreements and that he did so knowingly. The sum transferred was 200,000DM and accorded with the sum due to be paid by the end of August 1998 under the agreement. The plaintiff has maintained throughout that was the total sum he agreed to advance. I do not accept that is the case. It is clear from the agreements and the sum advanced at this time, that the sum agreed was TOP$200,00

What the evidence suggests is that, as the personal relationships deteriorated and after the trip to Indonesia had not gone as he anticipated, he began to regret the deal.

Under the agreements, he could withdraw from the contracts. The true "Contract of Service" included the following termination provisions:

"12. The Manager may terminate this agreement by giving the Company not less than six months notice in writing of the date upon which he proposes to terminate this agreement. The Manager will not have the right to claim any of his prepaid rent until a new manager (to be agreed by the Company) has been found, who will then take over his responsibilities.

13. The Company has the right to terminate this contract immediately only if the Manager violates this agreement. The Manager will not be able to claim any of the prepaid rent until a new manager has been found by The Company, who will then take over his responsibilities. Any damages occurred due to the violation will be deducted from the rent prepayment."

A similar termination provision appears in the tenancy agreement:

"7. Termination

The Landlord hereby agrees not to terminate this agreement unless for default under this agreement. The Tenant may terminate this agreement provided he gives written notice thereof 6 month in advance. The Tenant does not have any right to claim any of the prepaid rent until a new tenant has been found."

Those clauses allowed him to withdraw from the agreement and he could have done so without too great a loss by giving six months notice when he first felt the arrangements were not satisfactory. At that stage, the company would have had to make other arrangements to finance their venture and to find a replacement manager.

However, what the plaintiff did was to take the action to court and attempt more than once to freeze the account. Whilst the statement of claim prays for his 200,000 DM to be returned to him, it also claims in paragraph 24 that "it will be impossible for the defendants to build a professionally run restaurant properly equipped by July 1999."

Later, in paragraph 29 the claim is that "the defendants breached the contracts they entered into with the plaintiff by not giving him a restaurant to operate and also for failing to give the plaintiff the accommodation promised in the contract and also no work permit for the plaintiff"

On the one hand the claim to have his money returned to him would suggest an intention to terminate the contract; on the other, the statement that they would not be able to complete the restaurant by the time agreed suggests an intention to continue with the agreements. At the time the writ was filed, he was claiming such a completion date was clearly going to be impossible and so the defendants would default.

In fact, the restaurant and accommodation for the manager were completed and the plaintiff was invited to attend and inspect it on 2 July 1999. The court was told that the defendants and their lawyer were there but the plaintiff did not appear. The plaintiff said he went and took photographs earlier and the place was still in an unsatisfactory state to open as a restaurant. The court has not seen those photographs and neither has it heard evidence to support the assertion by the plaintiff that the premises were not built to the agreed international standard.

On the evidence as a whole, I am satisfied that the plaintiff has failed to prove that the agreements were anything but valid and proper contracts entered into by him with full understanding and intent. I am satisfied that they were binding agreements and that the money advanced by him was rent in advance in accordance with them. I am not satisfied that he has proved a breach of the agreement in relation to either the completion date or the standard of the premises.

That being so, the agreement to rent should have started on 1st July 1998. However, on 14 June 1999, his solicitor sent a letter to the defendants' solicitor which, although couched in terms that are far from clear or consistent does appear to be giving notice of his intention to terminate the agreement. The failure of the plaintiff to respond to the invitation to inspect was a clear indication that, whatever ambiguity was in the letter of 14 June, he was not intending to continue with the agreement. I shall take it that there was sufficiently clear notice given on 1st July 1999 and the six months period ran from then. I do not accept that the filing of the writ and statement of claim was a sufficient notice of his intention to terminate the agreements. It pleaded alternative claims of which only one could be taken to suggest notice of termination. That was perfectly proper pleading but it was not sufficient to constitute notice. It is clear that the steps taken by the defendants to engage a replacement manager were started as a result of that failure to appear and not on the basis of an earlier notice.

On the terms of the agreement, rent would be payable for the six months period of notice. Even thereafter, the rent already advanced could not b claimed until a replacement manager was found. The agreement is not clear who is to be responsible for finding the replacement but, as the defendants would be working with him and as he had to be agreed by the Company, I accept it was the company's responsibility. The first defendant told the court that they advertised in Germany and a replacement manger was found. That manager only worked here from 21 October to 20 December 1999.

That leaves the plaintiff liable to pay rent for the period of four months from July to October inclusive less the 10 days there was a manager here. Once the new manager was found, the plaintiff's obligation ended. The fact the new arrangement failed cannot limit the plaintiff's right to claim his prepaid rent. The rent agreed was TOP$200,000 for 15 years so the rent for that period is $408.60 which must be deducted from any repayment. The plaintiff is entitled to refund of the remaining sum.

There is a claim for 10% interest. There was no agreement that any interest should be paid but I shall apply the present normal judgment interest of 10%. However, it is clearly not reasonable for the defendants who have proceeded on the basis of having this money available for the overall development of their resort to return the money immediately. On the other hand they have known since the agreement was terminated that they would have to refund at least a substantial portion of the prepaid rent.

That the company expected to have the use of the money even if the agreement failed is shown in paragraph 2 of the tenancy agreement which provides that:

"If immigration denies the Tenants working visa, this agreement will automatically be terminated. The Landlord will then be responsible to repay the balance of the prepaid rent within 5 years from the day of visa denial."

No similar provision was made for termination by notice presumably because the new manager would be expected to take over the responsibility to pay the rent in advance. However, the plaintiff terminated this agreement and he has not proved that he had to do so because of any default of the defendants. In those circumstances I shall order that the outstanding sum of prepaid rent shall be paid over a period of five years at a minimum rate of one fifth per year on the last working day of each year. However, interest shall be paid at the rate of 10% from the date of this judgment.

The plaintiff also claims US$4,000 for his expenses on the trip to Indonesia. I am not satisfied he has proved that the company was to pay those and I prefer the second defendant's evidence that he had no intention of taking the plaintiff. As he was clearly intending principally to purchase building materials as he did, there was no reason why the plaintiff should go. That part of the claim is denied.

The plaintiff also claims the cost of his accommodation at the Captain Cook Apartments. Although it was clear that the plaintiff was accommodated without charge at the guesthouse prior to this, I can find no evidence that this was an agreed obligation on the company and this claim fails.

Similarly, the plaintiff claims $50 for the cost of herbs and spices he planted in anticipation of the restaurant opening. They were, of course, not used in the event but, as the defendants kept to the final agreed completion date and the plaintiff then terminated the agreement, he must bear that loss.

These orders are, of course subject to my finding on the counter claim to which I now pass.

As has been mentioned before, when the plaintiff filed the writ in this case, he also sought an order freezing the defendants' Deutche Mark account. The various applications of the parties resulted in the court allowing the money to be used for the defendants work but, finally, when there was only a little under $16,000 left in the account the plaintiff sought an order that it be paid into court because the guesthouse had closed with no date set for reopening. He was concerned that the defendants might be leaving the country.

The court granted that application and the sums of TOP$3789.18, 10,300DM and US$1.042.49 were paid into court.

The main thrust of the counterclaim is that, as a direct result o the plaintiff's actions, the defendants were prevented form using the money as they intended and so the resort as a whole was unable to be run as planned. The final freezing of the account put an end to the last part of the building of the accommodation bungalows thus preventing them from opening that part of the resort. At that stage, the builders were owed money in wages and they still need some more money to pay the workman needed to complete that part of venture. The materials needed for the construction had already been obtained and have deteriorated since.

The aim throughout the scheme was to be ready to operate as a resort for the Heilala Festival in 1999 and, thereafter, the millennium.

The plaintiff's defence is based on the suggestion that the money was his and that, from the latter part of 1998 he was no longer interested in the building of the restaurant, bar and private accommodation. I have already ruled that the money was no longer his. He also did not give effective notice of his wish to terminate the agreements until July 1999. That establishes his liability to any losses attributable to his action in freezing the account.

I do not think it is necessary to set out the evidence again. I shall take each part of the claim in turn and only refer to any evidence that is additional to that heard in the main claim.

The first part of the claim is for damage to the timbers and other materials which have had to be stored since the building work ceased. I accept that the plaintiff's action in freezing the final part of the account stopped the building work but had the defendant taken reasonable steps to preserve those materials, they would not have deteriorated. The plaintiff cannot be liable for that and that part of the counter claim fails.

It is claimed that the outstanding wages for the work already done could not be paid and would have come out of the remaining money in that account. Similarly, they were not able to continue with the construction because the money frozen was to have been used to pay the wages for the new work. I accept that was the defendants' plan but that does not mean that the plaintiff should pay that money now. The defendants remedy is in damages for the consequent loss with which I shall deal below. The claim for the unpaid and anticipated wages is refused.

The next part of the claim is for the cost of running the restaurant until they were able to employ a new manager. I have found that the plaintiff gave effective notice on the 1st July 1999. Once he had done so, he should have ensured the running of the restaurant for the time until other arrangement were in place or the six months had expired. Had he done so, the defendants would not have had to incur those costs and the plaintiff must be liable. The sum claimed is set at $3813.23 and I award that sum.

I have already found that the responsibility for finding a new manager lay on the defendants. They claim for the costs of advertising and interviewing for the post in Germany. The plaintiff suggests it was unnecessary to go to Germany. I disagree. On the evidence, attempts to recruit a suitable replacement here was fruitless. The original arrangement with the plaintiff was for a German chef to work in the German owned resort. It was reasonable that they should aim for a similar person to replace the plaintiff. The need to do so arose from the plaintiff's termination of the agreement and I consider the claim for the recruitment expenses is reasonable. They amount to $1525.26 and should be paid by the plaintiff.

The major part of the counter claim is for the loss of income arising form the inability to complete the bungalows because of the freezing of the remaining funds. The sum is considerable and is based on the suggested loss of income for the period from 1st July 1999 to 31 March 2001. I accept that the plaintiff must pay some of the loss arising from the failure to complete the bungalows caused by his freezing o the account. However, the defendants cannot simply sit on their hands and claim money for each passing day that that they would otherwise have had the accommodation complete. They are a commercial operation and should have looked elsewhere for alternative funding if they had no reserves upon which to draw.

The first defendant told the court that he and his mother had always set their faces against borrowing money but, when the account was frozen, he approached one commercial bank and was told he could not use the lease as security and therefore he was unable to obtain a loan. There was no other evidence of other attempts to make good the situation.

The account was finally frozen in February 1999. It would have been expedient to start looking for alternative funding at that time. The defendants were up against a schedule, not just to complete the restaurant and related buildings but also to open the extra accommodation. Until they received notice that the plaintiff wished to terminate the agreements, it was reasonable to assume that, if the building was complete for 1st July, he would open the restaurant and the money would be released. A short-term loan or supply of funds from other sources would have covered it. I accept that until he gave notice on 14 June 1999, they could assume the funds would be available as soon as he took over the restaurant.

Once the notice was given it was too late to be ready for the Heilala Festival or the following months. That was the direct result of the freezing of the account and the plaintiff is liable for that loss. However, after that, they should have been able to make alternative arrangements. They did not and the court has been given no evidence of their attempts apart from the single approach to the bank.

I find that the plaintiff's freezing of the bank account caused a loss and I award the defendants damages for the loss of the four months following 1st July 1999.

The assessment of the amount is largely speculative. Miss Parzifal told the court that the bungalows were of two grades. Two were graded as Honeymoon fales and two as superior. The rate at which they were already being advertised was $95 per day per honeymoon fale and $75 per day per superior fale. The occupancy rate for the fales at the guesthouse of the period 1999/2000 averaged 32%. She suggested that might reasonably be increased by 15% because the improved quality of the new accommodation would be more attractive. I accept those figures.

The period 1st July to 31 October is 122 days. Two honeymoon fales for that period would produce, on full occupancy, $23,180 and the two superior fales would produce $18,300. I would accept that for the first two weeks of July they would be likely to be fully booked as a result of the Heilala festival.

The income from the honeymoon fales for the remaining period is therefore 47% of $20520 which is $9644.40 and that of the superior fales is the same percentage of $16200 which is $7614.

The total for the four months therefore is $22018.40. The company would have to pay 2.5% room tax on gross receipts which would reduce it by $550.45 and the expenses were suggested by Miss Parzifal to be 25 - 30 %. As the guesthouse already had the staff for much of the expenses I shall take the additional expenses for these rooms to be 20%.

Deduction of those sums leaves a total of $17174.36 which the plaintiff shall pay.

The final part of the counter claim is for loss of income from the loss of tours that could reasonably be expected to be taken by the extra customers. I accept there would have been some loss. The total claimed is for the same two year period and amounts to $14,224. The figures are vague and extremely speculative. However, I accept they are reasonable and so, for the same period of four months, the loss would have been $2370.66. That would have been subject to 5% tax leaving a figure of $2252.13 and I award that to the defendants also.

Thus, in summary and all in TOP, the plaintiff is entitled to a total sum of $161,592 refund on his claim. From that must be taken the sums awarded to the defendants on the counterclaim which total $27,765. That leaves a total due to the plaintiff from the defendants of $136,827 which will be paid over the period of five years at one fifth per year. The outstanding sums will attract interest at the rate of 5%

The money paid into court will be converted at today's rates and paid to the plaintiff as part of the first repayment by the defendants.

Nuku'alofa: 20 November, 2000.

CHIEF JUSTICE