Home | Databases | WorldLII | Search | Feedback High Court of Solomon Islands

Mola v Philip [2012] SBHC 96; HCSI CC 465 of 2011 (28 August 2012)

IN THE HIGH COURT OF SOLOMON ISLANDS.
(Faukona J).

Civil Case No. 465 of 2011.

BETWEEN:

FRANCIS MOLA, RANCES SAWANE JUNIOR,
DOMINIC WALEBALIA, JOHN WALETOFEA
AND GERENA SAWANE.
(Trading under Waletofea Shipping Services).
Claimants.

AND:

THE MV FRANCIS GERENA (THE SHIP).

AND:

HARRY PHILIP
First Defendant.
(Trading under HP Shipping Service.)

AND:

FRANCIS SAWANE
Second Defendant.

Date of Hearing: 17th August, 2012.
Date of Ruling: 28th August, 2012.

Mr. P. Tegavota for the Claimants
Mr. J Iroga for the First Defendant
Mrs M. Bird for the Second Defendant.

RULING.

Faukona J: This application was filed by the first Defendant on 22nd May, 2012, for summary judgment. The Orders sought are;

1. An order for specific performance of the agreement dated November, 4th 2011, between the parties;
   
2. An Order the Claimants and the second Defendant pay damages to the first Defendant to be assessed;
   
3. An Order that the costs of the first Defendant be paid by the Claimant and second Defendant on indemnity basis; and.
   
4. Any further or other order the Court deems fair and just.
   

Background facts:

2. The boat MV Francis Gerena was built by the second Defendant. After completion it was registered on 22nd March, 2005, under the ownership of Waletofea Shipping Services. On 9th August, 2007, a business entity called Waletofea Shipping Services was registered. All of the Claimants are partners in that business entity, and they are all the children of second Defendant. Mrs Gerena Sawane the wife of second Defendant is one of the partners as well.

On 25th February, 2011, a declaration was made confirming the Claimant's ownership of the ship MV Francis Gerena, including Mrs Gerena Sawane.

3. In or around July 2011, the first Claimant made arrangement to charter the vessel MV Francis Gerena for the sum of $35,000-00 to make a cargo run to South Malaita. The charter did not eventuate because the vessel encountered mechanical problems and it needed urgent repair.

4. At that material time the first Defendant assisted the Claimants with further amount of $14,000.00 to help the repair work so that the first Defendant could execute the charter arrangement. The repair was not carried out so the charter arrangement was not done.

5. Towards the end of October 2011, the second Defendant approached the first Defendant with the view of selling the vessel to him. The first Defendant agreed to the offer for purchasing the vessel on the condition that the second Defendant should discuss the sale with the Claimants and those who have interest in the vessel.

6. After discussion amongst the Claimants and the second Defendant, an amount of $699,000.00 was concluded as the price of the vessel.

7. The first Defendant agreed on the price and as a result the Claimants and the first Defendant entered into a Memorandum of Agreement dated 4th November, 2011.

8. At the execution of the MOA Francis Sawane (Junior), Dominic Walebalia, Francis Molaisuva and Mrs Gerena Sawane and the second Defendant were present. On that date of execution the first installation of $200,000-00 was paid by the first Defendant to the Claimants. For unknown reasons the Claimants commenced this proceedings for the return of the vessel.

The application of English Partnership Act 1890 (the Act).

9. The Counsel for the first Defendant argues that section 4 and 5 of the above Act state that any agreement made by a partner is binding on the partnership or firm. These sections apply in Solomon Islands by virtue of schedule 3 to the constitution.

10. There can be no doubt that schedule 3 to the Constitution allows English laws of general application in force on 1st January, 1961 shall have effect as part of the law of in Solomon Islands. The significant point to this submission is not the general application of the law, but the practical aspect of it. One has to perceive the application of the law in different dimensions. A more literal reading of the law does not conclude its true interpretation. One has to discover the other side of the coin as well. To do so, research and constructive reasoning is absolutely necessary.

11. My opinion is that one partner in a business undertaking, unless authorise, cannot act on behalf of the other business partnership without the consent of that partner. For instance, a partner who is appointed as managing director of the partnership firm is authorised to act on behalf of the other partner. In full aspect of business incorporation the positions of a Managing director or chairman of the Board of Directors or Secretary to the Board are positions with define job descriptions by the memorandums. In this case there is no evidence that one of the Claimants held any or a senior position so as to acquire the status of acting on behalf of other partners. It appears there is no dispute that all the Claimants are partners in the business entity of Waletofea Shipping Services which operates MV Francis Gerena engages in general transportation of passengers and cargoes to various provinces.

12. Lead on from paragraph (ii) is an agreed fact that the Claimants being partners also have equal shares in the entity. The question pose is can a partner sells the share of another partner without his consent? If logic and law answer no then it is a real issue which require to be tried before the Court.

13. In this case what position has Mr Dominic Walebalia in the entity which authorise him to act on behalf of other partners in an important matter as selling of the vessel. There is no evidence in the material before me to affirm any such responsibility undertaking by Mr Walebalia. The issue is a core issues which the Court must hear submissions from Counsels and make determination.

The signing of the MOA by the Claimants.

14. Evidence show that only one of the Claimants signed the MOA. That evidence is not disputed. However, the second Defendant who also was one of the signatories representing the Claimants, unfortunately, was not a partner in the business entity. He has no share at all in the business and there is no evidence to suggest that he is authorized to act on behalf of the Claimants to sign the MOA. The validity of the MOA as parties argued is a real issue requiring the Court to determine. To enter summary judgment at this stage on those two issues alone is not in the best interest of justice.

Other issues.

15. Counsel for the first Defendant raise issues pertaining to the fact that at the time of execution of the agreement the majority of the Claimants were present. Whether by implication affirms their consent for the sale or not is an issue. Mr Tegavota argues that they were present because the MOA was signed in their residential home. That being so, were they aware of execution and signing of the sales agreement; they denied it and that is an issue to reckon.

16. The other issue relates to the fact that Mr Walebalia signed the MOA under duress. He was forced by the second Defendant to do so. Sworn statement of Constance filed on 24th April, 2011 indicated. The statement further says that the second Defendant went further and applies physical force by slapping Mr Walebalia to sign. The allegation was confirmed by the second Defendant himself who accept applying force and duress on Mr Walebalia to sign. It appears fizzy why the second Defendant admitted his wrong, without Mr Walebalia making any sworn statement at all, instead the evidences is coming from Mrs Constance in her sworn statement. Is this not a plan case to defraud the first Defendant of his money? Again this is a real issue which the Court has to determine at trial. There has to be evidence available.

17. With the issues at stake shall we say that the defence and counter claim filed on 16th April, 2012 has no real prospect of any part of the Claimant's claim succeeding? In my respectful view there is real prospect that part of the Claimant's claim will succeed. To dismiss the claim summarily while the issues are yet to be addressed and determine at this stage, is indeed justice denied. I therefore dismiss the application with costs.

Orders.

1. Application for summary judgment dismissed, matter to proceed through proper trial.

2. Cost of this application is borne by the first Defendant and payable to the Claimants and the second Defendant to be taxed if not agreed.

The Court.