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Autolink Cars Ltd v Blakelock [2002] WSSC 14 (17 July 2002)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

AUTOLINK CARS LIMITED
a duly incorporated company having its registered office at
1 Brisbane Street, Grey Lynn, Auckland, New Zealand.
Plaintiff

AND

ALFONSO BLAKELOCK
of Ululoloa, Businessman.
Defendant

Counsel: M Leung Wai for plaintiff
MV Peteru for defendant

Hearing: 6 February 2002; 28 March 2002
Judgment: 17 July 2002

JUDGMENT OF SAPOLU CJ

For clarity and convenience, I will first set out the evidence which is relevant to the claim by the plaintiff and the conclusions which have been reached on that claim, and then deal with the counterclaim by the defendant. The reason I have to set out the evidence which is relevant to the claim by the plaintiff notwithstanding that the parties have agreed in the course of the trial on the amount and items of claim for which judgment is to be entered for the plaintiff, is to provide a clear perspective as to how the counterclaim by the defendant came about. It will not be possible to have a clear picture of the basis for the counterclaim without having to go through the same evidence relating to the claim by the plaintiff.

Plaintiff’s claim

The plaintiff is a company that carries on business in Auckland, New Zealand. Its business was described as a wholesaler of second-hand cars and other vehicles. The plaintiff would purchase second-hand cars mainly from overseas and then sells them to dealers in New Zealand who, in turn, on-sell them to the public. The practice of the plaintiff when it purchases a second-hand car is to recondition it in Auckland by repainting, repairing and re-servicing it if that is necessary. The car is then sold to a dealer who is first given the opportunity to check the car. If after checking the car the dealer is happy with the car, then the sale is sealed. Any later repairs to the car will be the responsibility of the dealer. A period of thirty days credit is then given to the dealer to pay up the price of the car.

The plaintiff claims that its business relationship with the defendant was also that of wholesaler and dealer, with the plaintiff as wholesaler selling second-hand cars by exporting them to the defendant in Samoa as a dealer. Given such claim by the plaintiff, this case should have been approached as one of contract of sale of goods to which the Sale of Goods Act 1975 applies. The plaintiff will be the seller and the defendant will be the purchaser. The sales of second-hand cars by the plaintiff and their purchases by the defendant will be sale of goods transactions. In that way, the issues in this case would have been placed in a clear legal perspective. I accept that this case is essentially on contract, but it is a special kind of contract; it is a contract of sale of goods, always dealt with as “sale of goods” in textbooks on commercial law. A “contract of sale” is defined in s.2 of the Sale of Goods Act 1975 as including an agreement to sell as well as a sale.

Now Mr Harry Schmidt, the chief executive officer of the plaintiff company, is an uncle of the defendant whilst Mr Philipp Moore who looks after the Samoa side of the plaintiff’s business is a first cousin of the defendant. About November 1999, the plaintiff started exporting second-hand cars to the defendant in Samoa. According to the evidence of Mr Moore, the cars were export sales made by the plaintiff in Auckland, New Zealand, to the defendant in Samoa as a dealer who will then on-sell the cars. The defendant was granted thirty days credit to pay the full price of most of the cars sold to him. At first the relationship between the plaintiff and the defendant ran smoothly. Then problems started to arise in September 2000 when the defendant failed to meet the payments on some of the cars sold to him. Mr Moore made a number of phone calls from New Zealand to the defendant in Samoa for payments on the cars sold to him, but he was unsuccessful in obtaining any money from the defendant. So he came to Apia in January 2001 to rectify the problem. He managed to obtain NZ$37,000 from the defendant but there was still money outstanding. Sales to the defendant were then discontinued.

I cannot accept the evidence given by the defendant that the arrangement that was made was a three-way partnership between himself, his uncle Mr Schmidt and his first cousin Mr Moore. He said that under that partnership, second-hand cars were sent to him from Auckland to sell and the profits from the sales were to be split equally between the three partners. Not only did Mr Moore deny that such a partnership arrangement was ever made, but the dealings between the parties do not appear to bear out such an arrangement between the defendant, Mr Schmidt and Mr Moore. I would also have expected the defendant to move to strike out the plaintiff’s action on the basis of no standing to sue, if the arrangement was in fact as stated by the defendant and not an arrangement with the plaintiff company.

After the relationship between the plaintiff and the defendant was discontinued by the plaintiff, the defendant, according to the evidence of Mr Schmidt and Mr Moore, came over to Auckland two or three days later and apologized to Mr Schmidt and begged him to continue the business relationship with the plaintiff. At the end of the week Mr Schmidt relented as he felt sorry for the defendant who is his nephew. The business relationship between the plaintiff and the defendant was therefore resumed. The defendant in his evidence agreed that he went to New Zealand and met with Mr Schmidt but he denied that he apologized to Mr Schmidt or begged him for forgiveness. I accept the evidence given by Mr Schmidt and Mr Moore as more realistic. For why should the defendant go over to New Zealand soon after termination of his business relationship with the plaintiff other than to seek resumption of their business relationship. Any other explanation of the defendants visit to New Zealand would seem unreal given the surrounding circumstances.

After the business relationship between the plaintiff and the defendant was resumed, the plaintiff testified that the plaintiff exported a 1990 BMW car to the defendant in Samoa and the defendant was given thirty days credit to pay the price of that car which was NZ$21,500 or $29,600 tala. According to Mr Moore, a written agreement was made between the plaintiff and the defendant regarding the sale of that car. That was in May 2001. The defendant made no payment for that car. Mr Moore made a number of phone calls from New Zealand to the defendant for payment of the price of that car, but his phone calls met with no success. This car is one of the vehicles for which the plaintiff has sued the defendant for the price.

Apart from the 1990 BMW car, the plaintiff also sent two freezer trucks to the defendant. One was a 1990 Mitsubishi Canter freezer truck and the other was a 1993 Mitsubishi Canter freezer truck. It appears from the evidence of Mr Schmidt that when he visited Samoa in November 2000, he discussed with the defendant the idea of exporting freezer trucks to Samoa to be rented out. So when the business relationship between the plaintiff and the defendant was resumed, two freezer trucks were sent over to the defendant in Samoa to be rented out. However, the plaintiff later found out that the defendant had sold the 1990 Mitsubishi Canter freezer truck for $30,000 without the knowledge or consent of the plaintiff. A deposit of $8,000 was paid by the buyer of the truck to the defendant. Mr Moore testified he came to Samoa and went to the buyer and collected the balance of $22,000 from him. The plaintiff’s claim for the price of this truck was later abandoned during the hearing of this case as it had already recovered $22,000 on this truck.

As for the 1993 Mitsubishi Canter freezer truck, Mr Moore testified that the plaintiff decided to sell that truck to the defendant when it was discovered that the defendant had sold the other freezer truck. He said the 1993 freezer truck was sold to the defendant at the discounted price of $28,800 to take into account repairs that the defendant had done to the truck. A written agreement alleged by Mr Moore to have been made for the sale of that truck was produced at the hearing by Mr Moore. However, the defendant made no payment for the price of that truck. The plaintiff has also claimed for the price of that truck.

The claim by the plaintiff against the defendant is therefore for $29,600 for the price of the 1990 BMW car and $28,800 for the price of the 1993 Mitsubishi Canter freezer truck. At a later stage of the hearing, the defendant conceded that he owes the plaintiff the sums claimed by the plaintiff for those two vehicles.

Defendant’s counterclaim

I will deal with the counterclaim by the defendant under each of the separate heads of claim in the counterclaim but not in the order they are set out in the statement of defence and counterclaim.

(a) Defendant’s trips to New Zealand

The defendant claims from the plaintiff the sum of $9,000 for air fares for three trips he made to New Zealand and for hotel accommodation. The reasons given by the defendant for those trips to New Zealand were that Mr Schmidt and Mr Moore asked him to fly over to New Zealand and because of lack of communication by the plaintiff regarding their business dealings.

Both Mr Schmidt and Mr Moore in their evidence denied that they ever invited the defendant to fly over to New Zealand. They said the trip by the defendant to New Zealand two or three days after the plaintiff discontinued its business relationship with the defendant in January 2001 was a trip by the defendant, himself, to apologise to Mr Schmidt for the non-payment of monies owing on cars exported to the defendant and to resume their business relationship. Mr Moore further testified that on another occasion the defendant appeared at the plaintiff’s office in Auckland and he expressed concern to the defendant about the lack of any payment for the 1990 BMW car that had been exported to him. The defendant told Mr Moore that his wife would pay the following day, but no payment was ever made. On both occasions, Mr Schmidt and Mr Moore said they did not ask the defendant to come over to New Zealand. I accept the evidence given by Mr Schmidt and Mr Moore as more credible.

It is also difficult to accept that there was any lack of communication by the plaintiff regarding its business dealings with the defendant given the evidence by Mr Moore that he made a number of regular phone calls from New Zealand without success to the defendant in Samoa for payment of the monies owed by the defendant on cars and other vehicles exported to him. Mr Moore also testified that when he came to Samoa in January 2001 to collect monies from the defendant he had to wait a whole day for the defendant. In the circumstances, I have decided to accept all of this evidence for the plaintiff which is certainly not evidence that shows any lack of communication by the plaintiff over its dealings with the defendant. In practice, it is only natural to expect an unpaid seller to follow up with a buyer for any outstanding balance on the price of goods sold to the buyer, especially where substantial sums of money are involved. So it will be unrealistic to accept that there was any lack of communication by the plaintiff over its business dealings with the defendant when the plaintiff had to follow up the defendant for payment of the cars sold to him. The defendant’s admission to the claim by the plaintiff tends to support Mr Moore’s evidence that the defendant owed monies to the plaintiff and he made a number of phone calls to the defendant.

When the defendant gave evidence, he referred to some trips he made to New Zealand in the year 2000 which were before the plaintiff said it discontinued its business relationship with the defendant in January 2001. Those trips which the defendant alleged he made in 2000 were not put to Mr Schmidt and Mr Moore under cross-examination so that they had no opportunity to comment on those trips. The evidence regarding those trips only came up in the defendant’s evidence which was given on 28 March after Mr Schmidt and Mr Moore had given their evidence on 6 February and had returned to New Zealand.

I have decided to accept the evidence given by Mr Schmidt and Mr Moore that they never invited the defendant to fly over to New Zealand. I also do not accept that there was any lack of communication by the plaintiff over its business dealings with the defendant. Accordingly this part of the defendant’s counterclaim is dismissed.

(b) Mr Schmidt’s expenses on trip to Samoa

In his statement of defence and counterclaim the defendant claims the sum of $5,100 alleged to be his money that was spent on Mr Schmidt when Mr Schmidt came to Samoa in November 2000. At the hearing this claim was reduced to $4980. The claim is made up as follows: two sums of $1000 and $800 the defendant said he gave to Mr Schmidt on the understanding that he will be reimbursed in New Zealand by Mr Schmidt with New Zealand money; $600 being Mr Schmidt’s fifty per cent share in the cost of the rental car that both the defendant and Mr Schmidt used; $300 for the petrol of the rental car; $380 for one night’s hotel accommodation at Manase in Savaii when the defendant and Mr Schmidt went over to Savaii for a family funeral; $400 for meals and bar drinks that were provided at the hotel for relatives from the neighbouring village of Safotu; and $300 for the monies that were given out to relatives.

Mr Schmidt in his evidence testified that when he came to Samoa, the defendant gave him $1000 when they went to the National Bank in Apia for Mr Schmidt to open an account and that money was in part payment of the sum of $5000 that the defendant owed the plaintiff company on previous car sales to the defendant. Mr Schmidt could not recall being given a separate $800 by the defendant. He said that if the defendant did give him $800, that money must also have been in reduction of monies owed by the defendant to the plaintiff on previous car sales.

As for the rental car, Mr Schmidt testified that he had a car waiting for him to be used but the defendant came to him in a car and asked him to go in his car. He was not aware that the car the defendant came in was a rental car. So they went in the defendant’s car and also used it to go to Savaii for a family funeral. Mr Schmidt said it did not occur to him that he had to pay for the use of the car.

As for the claim for one night hotel accommodation at Manase in Savaii, Mr Schmidt testified that the defendant offered to pay for their hotel expenses and the defendant being his nephew he allowed him to pay, but he did not instruct the defendant to pay for their hotel expenses.

On this part of the counter-claim, I accept the submission by counsel for the plaintiff that on the evidence of the defendant himself, this claim relates to the personal and family relationship between the defendant and Mr Schmidt as nephew and uncle and should have been brought against Mr Schmidt in his personal capacity. On the defendant’s evidence, it is clear that the monies claimed in this part of his counterclaim were spent on Mr Schmidt personally, as a member of his family and uncle, and not on Mr Schmidt as a representative of the plaintiff company. That being so, the defendant should have claimed against Mr Schmidt in his personal capacity. The Court will then decide which evidence, that given by the defendant or that given by Schmidt, should be accepted. But this part of the counter-claim cannot be maintained against the plaintiff company which is a different legal entity from Mr Schmidt. It is therefore dismissed.

(c) Volvo vehicle

This is a difficult part of the defendant’s counter-claim. Not only is the evidence somewhat conflicting, but the issues of contract of sale or sale goods which are involved in this part of the case were not addressed with clarity. If that had been done, the legal issues would have been highlighted and there would have been greater opportunity for the evidence to fall more clearly into place for the purpose of establishing the relevant legal elements of the counter-claim and of any defence.

What the defendant is claiming in this part of his counter-claim is that he purchased a Volvo car from the plaintiff at a certain price. Before he paid the full price on the car, he instructed the plaintiff to resell the car at a certain price in order for the plaintiff to recover its outstanding balance on the purchase price and for the defendant to recover the full amount of the payments he had made towards the purchase price. However, the plaintiff resold the car at a lesser value. As a consequence, the defendant is not able to recover the full amount of the part payments he had made towards the price of the car. In order to have a full picture of this part of the counter-claim by the defendant, it is necessary to refer to the history of the transaction as disclosed by the evidence adduced by both parties.

I need not refer to all the evidence on this part of the case which is rather conflicting and not a little confusing. I accept that on 26 September 2000 the plaintiff sold a Volvo car to the defendant in Auckland, as neither counsel contended that the sale was to anyone but the defendant. However, the parties are not in agreement as to the selling price of the car. Mr Moore for the plaintiff testified that it was NZ$11,500. On the other hand, the defendant testified that he discussed the price of the car with Mr Schmidt in the plaintiff’s office in Auckland and the original price set by Mr Schmidt was NZ$9800 but Mr Schmidt later changed the price to NZ$11,700 so that the actual selling price of the car to him was NZ$11,700. This part of the defendant’s evidence was not put to Mr Schmidt in cross-examination so that Mr Schmidt did not have the opportunity to comment on it. In all the circumstances, I have decided to accept Mr Moore’s evidence that the selling price of the car was NZ$11,500.

Mr Moore also testified that the defendant paid a deposit of NZ$4000 for the price of the car. The defendant on the other hand testified that he paid an initial deposit of NZ$4000 and then he later made another payment of NZ$3000. I have decided that the defendant paid only NZ$4000 towards the price of the car.

According to Mr Moore’s evidence, when the Volvo was sold to the defendant, he was given three months to come up with the full price. The car was given to the defendant’s brother who lives in Auckland. During that three months period, the plaintiff sold another two cars to the defendant in Samoa. After the three months period had expired, Mr Moore said he came to Samoa to collect from the defendant the monies for the other two cars which had been sold to the defendant and the outstanding balance on the price of the Volvo which was NZ$7,500. He managed to collect only NZ$3,252 on the price of the Volvo thus leaving a balance of NZ$4,248. That may be the second payment of NZ$3,000 that the defendant said he paid towards the price of the Volvo. Mr Moore also said that prior to the collection of NZ$3,252, the defendant had given instructions to him to sell the Volvo in order for the plaintiff to recover its balance of the price. The car was later resold in Auckland by the plaintiff for NZ$7000. Mr Moore said that was the market value of the car at that time as there was an influx of cars for sale in Auckland at that time.

The defendant on the other hand is claiming from the plaintiff $9,800 being the equivalent of NZ$7000. He said he told Mr Moore to sell the Volvo for NZ$11,700 so that he could recover back the NZ$7000 he had already paid for the car with the plaintiff taking the other NZ$4700 which was the outstanding balance on the price of the car. The defendant did not mention having given NZ$3252 to Mr Moore in Samoa as a further part-payment of the price of the car. Again the difficulty here is that this part of the defendant’s evidence that he instructed Mr Moore to sell the car at NZ$11,700 was not put to Mr Moore who had also testified that the car was resold by the plaintiff whilst he was in Samoa. Again, I prefer the evidence given for the plaintiff as opposed to the evidence given by the defendant on this part of the case, even though the difference between the price for which this car was sold to the defendant and the price for which it was resold by the plaintiff is not insignificant. I may have taken a different view of this part of the defendant’s counter-claim if there was evidence to show that the correct market value for the Volve at the time of the resale should have been more than NZ$7000. The onus is on the defendant to show that was so especially given the evidence by Mr Moore regarding the market value of this car at the time of the resale.

The evidence that I accept thus shows that the plaintiff sold the Volvo to the defendant in Auckland for NZ$11,500 in September 2000 and gave three months to the defendant to pay up the full price. The defendant then made a part-payment of NZ$4000. The car was given to the defendant’s brother in Auckland. After the three months period had expired, Mr Moore came from Auckland to Samoa to collect the monies on two other cars the plaintiff had sold to the defendant and on the outstanding balance on the price of the Volvo. The defendant paid only NZ$3252 on the balance of the price of the Volvo. Prior to that payment being made, the defendant had already instructed Mr Moore to sell the Volvo so that the plaintiff could recover the outstanding balance on the price. As there was an influx of cars for sale in Auckland at that time, the market value of the Volvo was NZ$7000 and that was the price for which it was resold in June 2001, which was about nine months after the Volvo was first sold to the defendant in September 2000. The outstanding balance on the price of the Volvo was NZ$4248 and the plaintiff is entitled to deduct and keep that amount from the price for which the car was sold. After that deduction is made, the plaintiff stands indebted to the defendant for the balance of NZ$2752 of the price for which the car was resold. The plaintiff agreed that it owes the defendant that amount.

I am not able to accept that the defendant instructed Mr Moore or the plaintiff to resell the car at NZ$11,700 or that there was an agreement between the parties to that effect. There is also no evidence that the plaintiff did not resell the car at its correct market value or resold it at an undervalue which would have raised other considerations. Mr Moore’s evidence was that there was an influx of cars for sale in Auckland at the time and the correct market value of the Volvo was NZ$7000. The defendant also did not raise or adduce evidence to show that the car was resold at an undervalue which did not represent its correct market value at the time. The onus is on the defendant as counter-claimant to prove any counter-claim he makes. I am of the view, he has not discharged such onus.

(d) Repairs to cars and trucks

In his counter-claim the defendant also claims a total sum of $17,042 for repairs he alleges to have paid for on four vehicles he purchased from the plaintiff. These were a 1990 BMW car, a 1991 Mercedes Benz 260E car, a 1991 Chrysler Cherokee jeep, and a 1993 Mitsubishi Canter freezer truck.

I regret that I have decided that this part of the defendant’s counter-claim should be retried for these reasons: (a) there are obscurities in the evidence which have arisen because both sides did not approach this case with the relevant provisions of the Sale of Goods Act 1975 in mind, and (b) the evidence given by Mr Moore for the plaintiff did not address some of the issues raised by the evidence given by the defendant as parts of the evidence, including documentary evidence, adduced by the defendant were not put to Mr Moore during cross-examination. Further, the submission for the plaintiff that this part of the defendant’s counter-claim discloses no cause of action and should therefore be dismissed is inapt. If the plaintiff was mindful of making such a submission, it should have been done by way of a separate motion to strike out this part of the counter-claim as disclosing no cause of action. Such a motion would then have been heard and determined before the actual hearing of the case started. It is too late now to seek to strike out this part, or any other part, of the counter-claim as disclosing no cause of action after the hearing had been closed. I am confident that both counsel involved in this case are more than capable of addressing the matters I have mentioned.

Counsel will have to decide on a suitable date to rehear this part of the case and advise the Registrar. I realize that Mr Moore will have to come back from New Zealand for the rehearing, but it is clear from the hearing of this case that he visits Samoa from time to time as he is the head of the Samoa side of the plaintiff’s business. A hearing date can be set to coincide with Mr Moore’s next trip to Samoa.

Conclusions

The defendant conceded that he owes the plaintiff $29,600 for the 1990 BMW car and $28,800 for the 1993 Mitsubishi Canter freezer truck. That is a total of $58,400. The plaintiff conceded that it owes the defendant NZ$2752 on the resale of the Volvo car. Judgment is therefore given for the plaintiff in the total sum of $58,400 less NZ$2752. Counsel to ascertain the equivalent of NZ$2752 in Samoan tala as of June 2001 and advise the Registrar accordingly. I will then give in Samoan tala the actual amount for which judgment should be given for the plaintiff in Samoan tala.

Except for the defendant’s counter-claim for repairs to the cars and truck which is to be reheard, all other parts of the counterclaim are dismissed.

Question of costs is reserved until the part of the defendant’s counter-claim to be reheard has been resolved.

CHIEF JUSTICE

Solicitors:
Leung Wai Law Firm for plaintiff
MV Peteru for defendant