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Emkay Import & Export v Fern Trading Co Ltd [2005] KIHC 40; Civil Case 66 of 2004 (21 March 2005)

IN THE HIGH COURT OF KIRIBATI
CIVIL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

High Court Civil Case 66 of 2004

Between:

EMKAY IMPORT & EXPORT
Plaintiff

And:

FERN TRADING CO. LTD
Defendant

For the Plaintiff: Mr Banuera Berina
For the Defendant: Mr Katarake Tebweao

Date of Hearing: 15 February and 3 & 10 March 2005

JUDGMENT

This is an action for the price of goods sold and delivered.

The plaintiff, a Fijian company, is a trader in the Pacific including Kiribati. The defendant company is a merchant in Kiribati including Tarawa.

The goods over which this dispute has arisen were soft drinks. And the total price payable was $17,375.77.

Out of that total price the defendant partly accepted liability for the sum of $10,907.77 and rejected the sum of $6,468 being the price of unsold soft drinks with short expiry date of 19 October 2004.

There were only two witnesses, Mr Mohammed Khateeb for the plaintiff and Mr Aree Redfern for the plaintiff.

Mr Mohammed Khateeb an officer of the plaintiff company testified that sometimes in July/August 2004 the plaintiff and the defendant made a verbal agreement in which the plaintiff agreed to supply and deliver certain goods to the defendant. The goods to be supplied were soft drinks.

Mr Mohammed said in August/September 2004 the goods were shipped from Fiji to Tarawa on MV Nei Matangare on voyage 66 and arrived in Tarawa on 15 September 2004. Mr Mohammed produced in evidence without objection the date and particulars of invoice number of the goods sold and delivered and amount claimed and marked as Exhibit P4 as follows:

2/8/04: Invoice No. 2069 (P1-a) $10,944.00

2/8/04: Invoice No. 2071 (P1-c) 1,518.00

2/8/04: Invoice No. 2068 (P1-d) 4,913.77

Mr Mohammed also said that the due date for payment was in October 2004 and by 18 October 2004 the defendant has not yet paid for any of the above consignments of soft drinks.

Mr Mohammed also said that he had tried to contact Fern Trading Company on a number of occasions by telephone and fax during the month of October and November 2004 but the defendant never answered the telephone calls or faxes. He also said that the number of telephone calls he made to the defendant reminding them about non payment of bills for soft drinks in October were five telephone calls altogether which are shown on Exhibit P4.

Mr Mohammed also said that he also faxed Fern Trading also reminding them about nonpayment of the soft drinks bills on 19 and 21 October 2004.

And despite all the above reminders to the defendant no response or payment has yet been made up to now by the defendant.

In cross-examination Mr Mohammed confirmed that the said goods arrived in Tarawa on 15 September 2004 and denied that it would take two or three weeks before the goods are released by the Kiribati Ports Authority as suggested by counsel for the defendant.

Further in cross-examination Mr Mohammed also denied having received the defendant’s fax message sent to the plaintiff on 19 October 2004 of which same fax message was re-faxed to the plaintiff on 27 October 2004.

Mr Mohammed however admitted in cross-examination having advised the defendant on 10 October 2004 over his telephone conversation with the plaintiff that he would give discount prices to the defendant for soft drinks which could not be sold after the expiry date for sale of 19 October 2004. However he said that he advised the defendant to provide a list of such soft drinks with shorter expiry date for sale than 19 October 2004 or after to the plaintiff. Mr Mohammed also said that the defendant however never provided the plaintiff with such list of soft drinks with shorter expiry date than 19 October 2004 or after such expiry date. Mr Mohammed also said in re-examination that he had never been aware that some of the soft drinks remained unsold after the expiry date of 19 October 2004 except in January 2005 when he was informed that 175 cartons of soft drinks could not be sold after 19 October 2004.

In cross-examination Mr Mohammed said that he did not know that the defendant’s telephone number 26536 was not working in the month of September 2004 but he recalled that he was able to speak to one Tony from the defendant (the Fern Trading Company).

Then Mr Aree Redfern the general manager of the defendant company gave evidence also. He testified that on 10 October 2004 he had a conversation with Mr Mohammed. During that conversation Mr Mohammed raised the point about the defendant having not yet paid its bill on the soft drinks it has received and that it should attend to as soon as possible.

Then Mr Aree raised the issue of some soft drinks having their expiry date for sale falling on 19 October 2004 to Mr Mohammed.

In his reply Mr Mohammed then made an offer and told Mr Aree that he would give discount price for such soft drinks which has short expiry date for sale falling on 19 October 2004 but he (Mr Aree) must provide the list of such soft drinks to the plaintiff. Mr Aree also said that following that conversation with Mr Mohammed on 10 October 2004 on 19 October 2004 he applied for that discount to the plaintiff and provided to the plaintiff a list of soft drinks with expiry date for sale falling on 19 October 2004 by means of a fax message which he himself had prepared and formulated (Mr Aree) and sent to plaintiff as follows:

“FERN TRADING CO. LTD

PO BOX 470, BETIO

TARAWA, KIRIBATI

19 October 2004

Mr Mohammed Khateeb

Emkay Import and Export

PO Box 14645

Suva, Fiji

Fax: 679-3317320

Dear Mr Khateeb

Subject: Outstanding Bills – Soft Drinks

I refer to our phone discussion regarding the expiry date of the soft drinks 390ml shipped to us on MV Matangare from Fiji. Since we have only about a month to sell the soft drinks before they are actually expired, I hereby lodge a claim in the sum of AUD6468.00 to cover for the difference in price of the remaining 175 cartons soft drinks remain unsold after the expiry date of the 19/10/04. Attached is list detailing the above claim. Please look into the above claim and advised our bank to reduce the bill by AUD6468.00 to cover for this claim.

Please note that I will not pay the outstanding bill for the soft drinks until you advise the bank to reduce the bill by the aforementioned amount.

Kind regards

(Sgd) Aree Redfern

A copy of that fax message was produced in evidence and was marked as Exhibit D2. The list of expired soft drinks was also produced in evidence and was marked as Exhibit D1.

Faxed 19/10/04 at 11.45 am

Re-faxed 27/10/04 0900 am. Still no response received from Emkay”.

LIST OF EXPIRED SOFT DRINKS

QTY SUPPLIED RETAIL PRICE

150 CTNS COCA COLA 24/390ML 33.60 5040.00

100 CTNS FANTA 24/390ML 33.60 3360.00

30 CTNS SPRITE 24/390ML 33.60 1008.00

9408.00

LESS QTY UNSOLD AFTER EXPIRY DATE

100 CTNS COCA COLA 24/390ML 16.80 1680.00

60 CTNS FANTA 24/390ML 16.80 1008.00

15 CTNS SPRITE 24/390ML 16.80 252.00

AMOUNT CLAIMED 6468.00

Mr Aree also said that he sent the above mentioned fax messages D2 and D1 to the plaintiff on 19 October 2004 because it was the date upon which the carton of soft drinks totalling 175 in all had their date for sale expired.

Mr Aree also said that he re-faxed the same fax message of 19 October 2004 again on 27 October 2004 as the plaintiff had not yet acknowledged receipt of that fax between 19 and 27 October 2004.

In cross-examination of Mr Aree, Mr Berina counsel for the plaintiff suggested that Mr Aree should obtain from Telecom Services Kiribati Limited (TSKL) confirmation as whether or not his fax message to the plaintiff dated 19 October 2004 was actually sent to the plaintiff by TSKL. The court approved Mr Berina’s suggestion and thus the court adjourned at about 11.30 am on that day to allow Mr Aree to seek confirmation from TSKL whether or not his fax dated 19 October 2004 was actually sent to the plaintiff and TSKL had kept a record of such fax.

At about 3 pm the court reconvened and during cross-examination Mr Aree confirmed that the fax dated 19 October 2004 was in fact sent to the plaintiff and recorded accordingly by TSKL.

Mr Aree also said that during July or August 2004 he met up with Mr Mohammed here in Tarawa and during that meeting Mr Mohammed promised the defendant that the expiry date of the consignment of soft drinks which will arrive in Tarawa in August or September 2004 will be a three-month expiry date and thus would allow the defendant to sell such soft drink consignment over a period of three months. However when such soft drinks consignment arrived in Tarawa on 15 September 2004 the expiry date for sale was 19 October 2004. Thus the plaintiff was forced to sell those soft drink consignment or cargo within a period of one month only instead of a period of three months as promised by Mr Mohammed.

Further Mr Aree said there is a law in Kiribati governing the sale of goods which prohibits the sale of any goods in Kiribati on or after the expiry date for the sale of such goods. And thus after 19 October 2004 the consignment of soft drinks with their expiry date falling on 19 October 2004 or after could not be sold any more.

In cross-examination Mr Aree also said that there were altogether 280 cartons of soft drinks which the plaintiff sold and delivered to the defendant and from these 280 cartons the defendant was able to sell only 105 cartons with the balance of 175 cartons left unsold after the expiry date of 19 October 2004. The bottle containers in which these soft drinks were bottled or held was 390 ml bottles.

Further in cross-examination Mr Aree admitted that no amount of discount was given by Mohammed during the conversation between Mohammed and Aree on 10 October 2004. Further the amount of discount claimed by the defendant of more than $6000 is the defendant’s own figure it considered it is entitled to.

Mr Aree also confirmed that his fax message dated 19 October 2004 was sent to the plaintiff on 19 October 2004 and the same fax message was re-faxed or resent on 27 October 2004. And that Telecom Services Kiribati confirmed that such fax was successfully transmitted to the plaintiff on the same date.

Both parties in the present case agreed that there were nothing in writing about what they have greed upon. It was simply a verbal contract.

And whether or not the plaintiff succeeds in the present case that is the question which I have to decide on the balance of probabilities. But in the end it comes down to whose evidence I accept whether the evidence that of the plaintiff or that of the defendant.

Generally my impression of each witness was that each one was honestly trying to recount what he believes took place. However one of them, though, must be mistaken.

Mr Aree Redfern believed that the plaintiff had received his letter dated 19 October 2004 which he faxed to the plaintiff on the same date and re-faxed it to the plaintiff again on 27 October 2004 but that the plaintiff just did not reply to or acknowledge receipt of such fax. In that letter Mr Aree lodged a claim in the sum of $6468 to the plaintiff to cover for the difference in price of 175 cartons of soft drinks which he could not sell after the expiry date of 19 October 2004 (See D2). He also attached a list detailing his claim (See D1).

Mr Aree’s faxed letter dated 19 October 2004 was an application for discount price for the remaining unsold soft drinks after the expiry date of 19 October 2004. And the discount price has been offered by Mohammed to the defendant on 10 October 2004 during a telephone conversation between Mohammed and Mr Aree.

It seems to me that the dispute in the present case had arisen because of the breakdown in communication between the plaintiff and the defendant. Mr Mohammed an officer of the plaintiff in his evidence said that during the month of October 2004 he tried on five occasions to ring the defendant to remind them of their outstanding bills for the soft drinks but the defendant never answered its telephone on each of those occasions. He (Mr Mohammed) also faxed the defendant in October 2004 reminding them again of the same outstanding soft drinks bill and again the defendant did not reply or pay for the outstanding bill.

Mr Aree, the general manager of the defendant company in his evidence said he too sent a fax message to the plaintiff on 19 October 2004 in which he lodged a discount claim of $6468 for the unsold remaining soft drinks after the expiry date of such soft drinks on 19 October 2004. Mr Aree also attached the list detailing his above claim. Mr Aree re-faxed the same fax of 19 October 2004 on 27 October 2004 to the plaintiff and the plaintiff never replied to such fax at all.

Without the above breakdown in communication between the plaintiff and the defendant it seems to me that the parties would have been able to resolve their differences amicably without the intervention of this court. But be that as it may there is a dispute between the parties and this court nevertheless must resolve it.

My impression of the only two witnesses is that each one was honestly trying to recount what he believes the plaintiff and the defendant did with regard to the consignment of soft drinks from Fiji which the plaintiff sold and delivered to the defendant on 2 August 2004 and arrived in Tarawa on 15 September 2004.

However in process of recounting and remembering what had actually taken place one of the witnesses however must be mistaken.

The central issue in the present case is whether or not the defendant is entitled to a discount price for the unsold soft drinks which remained unsold after the expiry date for sale of 19 October 2004.

Mr Berina, counsel for the plaintiff argued that the defendant is not entitled to the discount price for the unsold soft drinks which were left unsold after the expiry date for sale of 19 October 2004 as according to the agreement the granting of the discount price depends upon defendant providing the plaintiff first with the list of goods which have a short expiry date. And once the plaintiff receives such list of goods the plaintiff would then consider offering the defendant a discount price for the unsold soft drinks. The defendant however had failed to provide that list of soft drinks and so the plaintiff was unable to offer a discount price to the defendant for the unsold soft drinks. Thus the plaintiff never agreed as to the kind or rate of discount to be applied or offered to the unsold goods or items remaining after the expiry date of 19 October 2004.

I reject this point about the failure of the defendant to sent to the plaintiff a list of soft drinks which has a short expiry date for the following reasons:

(a) The defendant did in fact sent such list to the plaintiff by fax on 19 October 2004 but the plaintiff never acknowledged receipt of such fax message even though Telecom Services Kiribati Limited (TSKL) had confirmed that the defendant had successfully sent it to the plaintiff on 19 October 2004 and re-faxed the same again on 27 October 2004.

(b) And with regard to Mr Berina’s point that the plaintiff never agreed as to the kind or rate of interest of discount to be applied because the defendant had failed to comply with the pre condition before such discount was offered by the plaintiff namely that the defendant should have sent first to the plaintiff the list of goods (soft drinks) which have a short expiry date for sale, I also reject this point as the limited amount of time available and the short notice given to the defendant by the plaintiff to provide such information to the plaintiff were such that the only reasonable thing to do that defendant could do under the circumstances was to sell the goods first and then provide the plaintiff with the list of items (soft drinks) which have a short expiry date for sale and had not been sold on 19 October 2004 rather than providing or sending the plaintiff first with such list of goods (soft drinks) which have a short expiry date.

In any case as the exporter of the goods or consignment of the soft drinks which arrive din Tarawa on 15 September 2004, and are the subject matter of the dispute in the present case the plaintiff ought to have known as what goods (soft drinks) have a shorter expiry date for sale than 19 October 2004 which was the expiry date for the goods (soft drinks) involved before such goods are shipped to Tarawa and sold and delivered to the defendant. Further the plaintiff had also promised the defendant that the consignment of goods (soft drinks) which are the subject matter of the dispute in the present case the plaintiff had promised the defendant that the expiry date for sale of such goods shall be at least three months in duration but when the defendant took delivery of these goods which arrived in Tarawa on
15 September 2004 the defendant found that the expiry date for the sale for such goods was less than a month.

On the balance of probabilities I find for the defendant.

I shall give counsel an opportunity to make submission as to the appropriate order.

Dated the 21st day of March 2005

THE HON MR JUSTICE MICHAEL N TAKABWEBWE
Judge