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Kapapa v Joseph [2003] VUCA 8; Civil Appeal Case 14 of 2003 (9 May 2003)

IN THE COURT OF APPEAL
OF THE REPUBLIC OF VANUATU
(Appellate Jurisdiction)

Civil Appeal Case No. 14 of 2003

BETWEEN:

TOM KAPAPA
Appellant

AND:

NAKOU JOSEPH
First Respondent

AND:

JACK NIKIAU
Second Respondent

Coram: Justice Bruce Robertson
Justice John von Doussa
Justice Daniel Fatiaki

Counsels: Mr. George Nako for the Appellants
Mr. Daniel Yawah for the Respondent

Date of Hearing: 8th May 2003
Date of Judgment: 9th May 2003

JUDGMENT

The brief facts of the case are that the appellant Tom Kapapa and the first named respondent Nakou Joseph (the ‘lessors’) were appointed as representatives of two indigenous land owning tribes to facilitate the issuance of a lease of land claimed by both tribes, to Pacific Waters Limited for the erection of the Tanna Beach Resort on the land. The minimum annual rental payable under the original lease was VT100,000 plus 3.5% gross turnover. The lease No. 14/2412/001 was for a term of 50 years commencing on 1^st June 1984.

By a variation of the conditions of the lease dated 25^th September 1998 the minimum annual rental payable under the lease was substantially increased to VT1,020,000 payable in equal monthly instalments of VT85,000 and commencing on 1^st June 1997.

The variation of conditions also recorded in Clause (a) that:-

“The lessors acknowledge that all rental payable under the subject lease for the period ending 31^st May 1997 has been paid”.

It appears that from fairly early in the life of the lease the first respondent Nakou Joseph was excluded from various dealings with it and the rental proceeds paid under it.

For instance the above-mentioned variation of the terms of the lease was not signed by Nakou Joseph as it should have been, instead, his son the second respondent was invited to sign presumably on the first respondent’s behalf.

The trial judge has also found that despite the initial arrangement that the lease proceeds was meant to benefit the two tribal communities, only the appellant and second respondent derived any benefits from it.

By letter dated 3^rd December 1996 solicitors acting for the lessors demanded from Pacific Waters Limited the payment of the sum of VT4,090,872 being rental arrears for the period 1991 - 1996. This claim was eventually settled by a cheque for VT4,107,104 drawn in September 1997 which was deposited into the first appellants Westpac Bank account in Port Vila.

The next significant event touching the lease was the registration of a transfer of the lease from Pacific Waters Limited to Weilian Investments (Vanuatu) Ltd. (‘Weilian’) on 15^th December 1997. Again the first respondent Nakou Joseph was either by-passed by the appellant or left in the dark.

Unfortunately the transfer of the lease to Weilian did not lead to any improvement in the regularity of payments of the lease rental to the lessors or their appointed agents and indeed by order dated 7^th August 2002 Weilian was ordered to be wound-up by the Supreme Court.

By this time the respondent had issued the present proceedings claiming a sum of VT4,320,000 being lease payments allegedly received and used by the appellant for the period 1996 - 2001.

On 20^th December 2002 the learned Chief Justice pronounced an oral judgment upholding the entirety of the first respondent’s claim. Written reasons were later issued on 29^th April 2003.

In his written reasons the learned Chief Justice in assessing the quantum of damages said:-

“On the basis of original lease of 1984 the annual rental payment was VT100,000 and a turnover rent of 3 ½ % of gross turnover of the proceeding 12 calendar months. In 1984 to 1996, the proceeds were not distributed to the plaintiffs. They were used by the defendant, Tom Kapapa.

From 1996 to 2002 (which is the subject years of the plaintiff’s claim) the evidence show that the defendant Tom Kapapa, used money for the lease proceeds and purchased 2 trucks. I assess them at VT3,000,000 for both ... The evidence show also payment received by the defendant Tom Kapapa of VT500,000 and other expenses. There is enough evidence as to quantum to justify the amount claimed. On the balance of the evidence, the Court makes judgment in favour of the plaintiffs in the sum of VT4,320,000 and costs.”

The appellant filed a Notice of Appeal in which he complained inter alia that the sum awarded by the learned Chief Justice was excessive and without any proper evidential foundation. At the hearing of the appeal counsel for the appellant sought leave to adduce further and additional documentary evidence which counsel claims was neither discovered or produced at the trial and which had a particular relevance to the lease payments for the years claimed in the plaintiffs’ Writ and for which the award of damages was made.

The Court with the agreement of counsel for the respondents allowed the application. We were mindful that at the trial which took place on Tanna, no documentary evidence was produced to the Court.

The fresh documentary evidence which the appellant’s counsel referred to as the second category of documents and which comprised various letters from a firm of accountants based in Port Vila who were acting for the appellant at the relevant time discloses that Weilian which was the lessee from 1997 until it was wound up on 7^th August 2002, had outstanding rental payments totaling VT1.7 million. This figure, respondent’s counsel very properly accepted, ought to be deducted from the judgment sum and this is reflected in the orders of the Court.

Additionally the Court granted leave to the appellant to file and serve (at his expense) an affidavit of account from the accountants at the relevant time, BDO, detailing any and all payments received from Weilian pursuant to the lease and showing whatever outgoings or payments were made by BDO from the account and to whom. To enable this to happen the parties agreed that the further hearing of the appeal should be stood over until the September/October 2003 sittings of this Court.

The following orders are made at this stage.

1. By way of Interim Order, appeal allowed to the extent necessary to reduce the judgment sum from VT4,320,000 to VT2,620,000.
   
2. Leave to the parties to adduce further evidence by affidavit from BDO, Vanuatu as to rental and other moneys received by it and payments made by it to the parties in respect of the period from 1^st January 1997 to 31^st December 2001.
   
3. Adjourn further consideration of the appeal to the September/October 2003 sittings of this Court.
   
4. Reserve the question of costs.
   

Dated at Port Vila, this 9^th day of May 2003.

BY ORDER OF THE COURT

Hon. J. Bruce Robertson J.
Hon. John von Doussa J.
Hon. Daniel Fatiaki J.