IN THE COURT OF APPEAL OF SAMOA
Princessa Company Limited & Ors v Splendid Company Limited & Anor [2019] WSCA 6

Case name: 	Princessa Company Limited & Ors v Splendid Company Limited & Anor	
		
Citation: 	[2019] WSCA 6	
		
Decision date: 	19 September 2019	
		
Parties: 	PRINCESSA COMPANY LIMITED & ZHU JIAN CHEN, HONG WEI CHEN, XINGAI CHEN, FAASAO FERETI, (Appellants) and SPLENDID COMPANY LIMITED & YOU KAI FANG a.k.a “WILSON FANG” (Respondents)	
		
Hearing date(s): 	10 September 2019	
		
File number(s): 	CA20/19	
		
Jurisdiction: 	CIVIL	
		
Place of delivery: 	Court of Appeal of Samoa, Mulinuu	
		
Judge(s): 	Honourable Justice Fisher
Honourable Justice Harrison
Honourable Justice Tuala-Warren	
		
On appeal from:	Supreme Court of Samoa, Mulinuu	
		
Order:	The appeal is dismissed.
The appellants are ordered to pay costs to the respondents in the sum of WST5000 plus disbursements.	
		
Representation: 	Charlie Vaai for the Appellants
Harry Schuster for the Respondents	
		
Catchwords: 		
		
Words and phrases:	dispute between two businesses – dispute over a debt	
		
Legislation cited:	Value Added Goods and Services Tax Act 1992/1993	
		
Cases cited:	Austin Nicholls & Co Inc v Stitching Lodestar [2007] NZSC 103;
Henderson v Foxsworth Investments Ltd [ 2014] UKSC 41 applied in Hamid v Khalid [2017] EWCA Civ 201;
Splendid Company Limited & Ors v Princessa Company Limited & Ors (Unreported judgment) 06 May 2019 of Tuatagaloa J.	
		
Summary of decision:		

CA20/19

IN THE COURT OF APPEAL OF SAMOA

HELD AT MULINUU

BETWEEN:

PRINCESSA COMPANY LIMITED,
a duly registered company, incorporated in Samoa, having its registered office at Siusega, Apia, Samoa.

A N D:

ZHU JIAN CHEN, HONG WEI CHEN, XINGAI CHEN and FAASAO FERETI, all of Siusega, Apia, Samoa.

Appellants

A N D:

SPLENDID COMPANY LIMITED a duly incorporated company having its registered office at Vaitele and YOU KAI FANG a.k.a “WILSON FANG” of Vaitele.

Respondents

Coram:		Honourable Justice Fisher
		Honourable Justice Harrison
		Honourable Justice Tuala-Warren

Hearing:	10 September 2019

Counsel:	Charlie Vaai for the Appellants
		Harry Schuster for the Respondents

Judgment:	19 September 2019

JUDGMENT OF THE COURT
Introduction
1. 	Princessa Company Ltd and three associated individuals (collectively Princessa)  appeal a decision of Tuatagaloa J entering judgment against them in favour of Splendid Company Ltd and four associated individuals (collectively Splendid) for WST30,181 together with interest at the rate of 8% and costs of WST1000.  The judgment sum represented Princessa’s disputed liability on a debt for goods supplied by Splendid. 
2. 	There were two related factual issues for determination at trial: (1) whether Princessa ordered the goods; and (2) whether Splendid in fact delivered them.
Background
3. 	Splendid is owned by You Kai Fang, known as Wilson Fang, and supplies goods as a wholesaler in and around Apia. Princessa is owned by Zhu Chen and other members of his family and operates supermarkets, a hardware store and a restaurant in and around Apia. Sometime in 2011 Messrs. Fang and Chen on behalf of their respective companies entered into an oral arrangement whereby Splendid agreed to supply goods on credit to Princessa as ordered directly by Mr. Chen from Mr. Wang. This special arrangement apparently existed outside of a conventional rolling overdraft credit facility which Splendid already extended to Princessa for goods ordered and supplied in the ordinary course of business.
4. 	This arrangement operated without apparent difficulty for at least four years until mid to late 2015. Its termination followed a deterioration in the personal relationships between the two principals and preceded a physical altercation which led to Mr. Chen’s conviction for assaulting Mr. Fang who has also brought a. civil claim for damages.
5. 	Splendid claimed that between July and November 2015 Mr. Chen placed 11 separate orders with Mr. Fang for goods to be supplied to Princessa’s outlets at Vaimea, Motootua and Tanugamanono.  All are within a reasonably close physical radius of Splendid’s premises. On each of the 11 occasions. Mr. Fang delegated a trusted employee, Jay Lin, to complete the invoices and deliver the goods personally to Mr. Chen. Mr. Fang directed Mr. Lin to ensure that Mr. Chen acknowledged receipt personally by signing each invoice. While Mr. Fang was not personally involved in completing the order forms or delivering the goods, he recalled one occasion when Mr. Zhen visited Splendid’s warehouse at Vaitele and selected the goods which were the subject of four of the November 2015 invoices. The goods were ordered for the opening of Princessa’s new store in Tanugamanono.
6. 	In accordance with Mr. Fang’s direction Mr. Lin delivered the goods listed in all 11 invoices personally to Mr. Chen who signed his receipt on each in Chinese characters. The invoices bore random numbers, suggesting they were written in date order within Splendid’s master order books along with those placed by other parties. Most were addressed to “Playseesa”. Four others, the first in sequence in July, were simply addressed to “Vaimea.” Messrs. Fang and Lin gave evidence in support of Splendid’s case at trial.
7. 	Princessa denied any liability for the debt evidenced by the invoices. The company’s defence was that it never ordered nor received the goods charged by Splendid. It called three witnesses at trial – Mr. Chen and two supervisors employed at Princessa’s stores.  Mr. Chen asserted that the invoices were false and his signature was forged on each. In the latter respect Mr. Chen denied that he ever signed his name in Chinese on business documents; and that the Chinese signature which was purportedly his was missing a crucial character. He said that all delivery invoices for goods supplied were signed by the supervisor of the particular Princessa store, not by him. 
Supreme Court
8. 	It was common ground between counsel that Splendid’s claim required determination by the trial Judge’s findings of credibility. Tuatagaloa J preferred the evidence of Messrs. Fang and Lin to that of Mr. Chen. The Judge was satisfied that Mr. Lin did in fact deliver all the goods recited in the 11 invoices to Mr. Chen personally and that Mr. Chen signed in front of him She found that the invoices were genuine. She placed particular weight on what she was satisfied was Mr. Chen’s acknowledgement of Princessa’s indebtedness in a voice message left on Mr. Lin’s mobile phone in January 2016. She did not find the evidence of Princessa’s two supervisors factually relevant. She entered judgment accordingly.
Appeal
9. 	Mr. Vaai advanced a number of grounds in support of Princessa’s appeal, qualified however by his realistic acknowledgment that Princessa faced a particular difficulty in challenging the trial judge’s findings of fact, particularly where the result turned on credibility findings on contested evidence. He accepted Mr. Schuster’s submission that this Court could only interfere if it were satisfied that the central findings were plainly wrong in that they had no evidential basis, or were not open on the evidence or could not  be reasonably explained or justified. Whether Mr. Vaai’s concession is correct in the light of the leading New Zealand authority, which postulates a significantly lesser threshold for appellate review, does not require determination here. Whatever test is applied, Princessa must establish that Tuatagaloa J erred when preferring Splendid’s evidence in circumstances where she enjoyed the special benefit of observing the witnesses under challenge in the trial environment.
10. 	Mr. Vaai’s first and primary ground of appeal was that the judgment was against the weight of the evidence. He relied on a number of isolated statements from the evidence of the key witnesses to support a submission that Mr. Chen’s answers to some questions should be accepted as more inherently plausible than the conflicting accounts of Messrs. Fang and Lin on the same subjects. He relied on Mr. Chen’s denials that he ever went to Splendid’s warehouse in November 2015 to place an order; that he ever signed invoices signifying receipt of deliveries; or that he ever signed in Chinese. He submitted that Mr. Chen’s account should be preferred wherever it conflicted with Splendid’s evidence. His general contention was that, given these conflicts, Splendid had failed to discharge its evidential onus of proof.
11. 	In our judgment, Mr. Vaai’s argument fails to recognize the essential nature of Splendid’s claim to recover a debt. To establish liability, the company was required to prove (1) the existence of the special arrangement entered into between Messrs. Fang and Chen for their respective corporate entities in 2011 and its material terms (which were not in dispute); (2) Mr. Chen’s placement of 11 separate orders directly with Mr. Fang for goods to be supplied in accordance with their agreement; and (3) Splendid’s satisfaction of Princessa’s orders by delivering the ordered goods personally to Mr. Chen as agreed. 
12. 	Splendid relied on two sources of evidence.  One was the oral accounts of its two primary witnesses who deposed to taking Mr. Chen’s orders and delivering the goods to him personally. The other was the corroborative documentary material available from its sequentially numbered order book and signed invoices.  This evidence, if accepted, was sufficient to make out Splendid’s claim. There was nothing inherently implausible about it. To the contrary, it was on its face a credible narrative of events within the context of a well settled commercial arrangement. The documentary and oral evidence were essentially consistent. 
13. 	Mr. Vaai’s argument seems to proceed on the premise that one party’s denial of the factual account of another or the existence of a conflict between them is sufficient of itself to answer a claim or show a failure to discharge the evidential burden. It fails to recognize that it is then the trial judge’s critical function to evaluate the relative weight to be given to the competing accounts. Mr. Vaai properly accepted that it was open to Tuatagaloa J on the evidence led at trial to prefer the accounts given by Messrs. Fang and Lin.  He has not persuaded us that her findings were against the weight of evidence or wrong.
14. 	Second, Mr. Vaai submitted that the Judge erred in not giving greater weight to the evidence of Princessa’s two supervisors. He submitted that their accounts corroborated Mr. Chen’s denials of being present at Princessa’s outlets to receive deliveries of goods or of signing invoices. Tuatagaloa J carefully reviewed their evidence  She was  not satisfied that it assisted Princessa’s defence. In particular she found that one of the two witnesses gave an evasive answer under cross examination She found that neither witness was present at Splendid’s shops when Mr. Lin said he made seven of the eleven deliveries, and were thus not in a position to affirmatively assert that Mr. Chen was not present on those dates. We cannot see any error in the Judge’s finding.
15. 	Third, Mr. Vaai submitted that Tuatagaloa J erred in rejecting Mr. Chen’s claims  that his signature was forged and the invoices were falseHe said that she should have accepted Mr. Chen’s evidence that he only signed commercial documents in English and placed an unfair burden on Splendid in requiring expert evidence of forgery. 
16. 	Mr. Vaai accepted that once Princessa alleged fraud by Splendid it assumed an evidential burden shifted to prove that Mr. Chen’s signature was forged on all the documents. As the transcript shows, Mr. Vaai acknowledged the existence of this obligation while leading Mr. Chen’s evidence. Tuatagaloa J correctly dismissed his request to lead such evidence from the translator who was performing the discrete function of translating Mr. Chen’s evidence. Mr. Vaai did not lead evidence from an expert. He was left with Mr. Chen’s assertion which was contradicted by Mr. Lin’s observation that the absence of a character was meaningless because the name in Chinese was indeed that of Zhu Chen. 
17. 	In essence, Splendid failed to discharge its evidential burden relating to the signatures, or to the invoices which the Judge found were genuine. In any event, regardless of the shifting onus, the Judge was independently satisfied on Mr. Lin’s account that Mr. Chen did in fact sign the invoices in his presence
18. 	Fourth, Mr. Vaai submitted that Tuatagaloa J erred in rejecting Mr. Chen’s interpretation of his incriminating voice message left on Mr. Lin’s mobile phone in January 2016. This evidence had particular probative value because if accepted it was open to construction as Mr. Chen’s acknowledgement of Princessa’s indebtedness. The Judge was satisfied that Mr. Chen’s message, which was left in answer to Mr. Fang’s call chasing up Princessa’s debt at Mr. Fang’s direction, could only be construed as admitting Princessa’s liability; namely, that he would pay off the debt if Mr. Fang did not “fight” him but if he did fight him Mr. Chen would only repay at the weekly rate of WST200. 
19. 	We agree with the Judge’s rejection of Mr. Chen’s explanation as nonsensical that his words were a prospective reference to any future orders he might place with Splendid. By January 2016, as she had found, the commercial relationship between the two men had soured. Their fight or physical altercation occurred sometime later.
20. 	Fifth, and finally, Mr. Vaai argued that the invoices did not comply with the relevant provisions of the Value Added Goods and Services Tax Act 1992/1993. They failed to satisfy the requirements for a tax invoice. Thus, he said, the invoices were illegal and Splendid had no legal right to sue on them. Mr. Vaai did not cite binding authority for this novel proposition and we reject it.
21. 	It follows that the appeal must fail.
Result
22. 	The appeal is dismissed.
23. 	The appellants are ordered to pay costs to the respondents in the sum of WST5000 plus disbursements.

HONOURABLE JUSTICE FISHER
HONOURABLE JUSTICE HARRISON
HONOURABLE JUSTICE TUALA-WARREN