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Ashley v Kosol Corporation Ltd [2015] SBHC 16; HCSI-CC 198 of 2013 (9 March 2015)

IN THE HIGH COURT OF SOLOMON ISLANDS
(Faukona, PJ)

Civil Case No: 198 of 2013

BETWEEN:

CHARLES KAUKUI ASHLEY and PHYLLIS
MAY ASHLEY
Claimants

AND:

KOSOL CORPORATION LIMITED
Defendant

Date of Hearing: 20th February 2015
Date of Judgment: 9th March 2015.

Mr C. Ashley in person for both Claimants
Mr A. Radclyffe for the Defendant

JUDGMENT

Faukona PJ: An amended claim was filed by the Claimants on 2nd July 2013. There are five reliefs sought in the claim. Reliefs (1) – (3) comprise of money claim; relief (4) is normal cost related to cost of proceedings.

2. Before the purchase of vehicle registration number AB5389, the subject of this case, the Claimants had purchased other vehicles previously from the Defendant. Vehicle AB5389 was purchased by the Defendants in July 2008 for a price of one hundred and ninety one thousand dollars ($191,000.00).

3. On 23rd November 2012 the subject vehicle was taken into the Defendant's workshop for general repairs. A bill for $7,841.00 was issue which was accepted by the Claimants. At the same time a valuation report of the vehicle was done based on its current and usages condition, it worth $85,000.00.

4. While the vehicle was undergoing general repairs, the first named Claimant hired a rental car from the Defendant for almost two weeks. Total hire charges footed on $4,500.00. The cost of repairs and hire charges totalled $12,421-00, which the Claimants had failed to pay.

5. On 7th January 2013, the Claimants' vehicle AB5389 involved in a traffic accident with a vehicle owned by Kitano Construction Company. After some discussions and consultations it appears Kitano Company had accepted liability and agreed to pay for the costs of repairs, as well as lending to the Claimants a vehicle to use while their vehicle was undergoing repairs. At the same time Kitano insurer QBE Insurance (Pacific Insurance Brokers) requested for quotations. Two quotations were obtained. The Defendant's quotation of $25,801.35 was finally accepted by QBE Insurance on 1st February 2013 and that they finally paid the cost of repairs of $25,801.35 on 17th April 2013.

6. Whilst vehicle AB5389 was undergoing repairs Mr Kim for the Defendant and the first named Claimant made an oral agreement on 24th January 2013 for the Defendant to purchase the vehicle. Two distinctive views expressed in court as to the price of the vehicle. Mr Kim says an offer was made for $55,000.00 as a reasonable price because the vehicle had involved in two car accidents. And that $12,421 which is still owing be deducted and the balance of $42,579.00 is due payable to the Claimants. In negotiating the price, the first named Claimant persisted $85,000.00 was the real price in accordance with the valuation report.

7. The Claimants' version as to the amount of $55,000.00 is rather in terms of consideration subjective to accepting Mr. Kim's request that the Defendant's quotation be accepted accordingly. And that the $55,000.00 is a deposit for the trade-in value of the Claimant's vehicles AB3604, AB3610 and AB5389, less $12,421.00 towards settling the Claimants outstanding account with the Defendant.

8. In the midst of that uncertainty, the first named Claimant signed the Defendant's payment voucher and received the cheque for $42,470.00 some hours later on 24th January 2013.

9. Despite signing the voucher, it appears the Claimants are alleging being induced by fraudulent behaviour of Mr Kim, that a particular column was not filled to show the first named Claimant as payee to receive the amount and other particulars as well. As a result of Mr Kim's conduct from 24th January 2013 to 17th April 2013 the ownership of the vehicle AB5389 was never passed and the Claimants remain the legal owners of the vehicle. If upon realising there was some kind of fraudulent inducement immediately after signing the voucher then why accepted the cheque some hours later.

10. Assuming that the allegation by the Claimants is true and that the particulars of the payment voucher were not fully completed when it was endorsed. It would be ridiculous and a real let down on the first named Claimant as a reputable lawyer to blindly execute the payment voucher when it's content and particulars were not fully filled. As a lawyer he is expected to ensure that whatever document he signs does not back fire or brought about mischief results on him. Of course, it requires attention and consideration before putting his signature on paper. It would be demeaning on the first named Claimant to come to Court now and try to invalidate what he had done was induced by an act of fraud. He would have avoided if there was a tangible fraud, and not to sign a partially filled document initially. Rather than allowing it takes its course hoping that this Court will rectify in the end. That is an absolute absurd hope and misconception. In reality, there is no proof of any fraud at all.

11. What transpired from cross examinations is that there was an oral agreement for the sale of the car to the Defendant on 24th January 2013. What becomes an issue is the actual selling price, which the Claimant denies as $55,000.00. If so, what is the selling price? It can't be for $85,000.00 because that was the valuation of the vehicle in good condition and without damages.

12. Alternatively, there is argument that the insurance payment for repairs of $25,801.35 be received by the Claimants. That would mean they still own the car. If it was received by the Defendant that will accelerate the figure from $55,000.00 to $80,801.35. The problem with the alternative view is that it was never been part of the oral agreement. There was no inclusion of this issue in the negotiations and there was no consensus as to who will receive the insurance payment. If so, there could have been mention of $80,801.35 in the initial oral negotiations, or even in the pleadings. There was nothing in the pleadings concerning insurance payment and who is eligible and entitled to receive. The common knowledge is that he who does the repair work will receive payment for the repair costs for the work done. This is not a principle but a fact in life that is accepted universally.

13. From the evidence and actions of the parties I could able to ascertain that payment voucher dated 24thth January 2013 in which the parties had endorsed consisted of $42,575.00 which was received by Mr Ashley, concludes all negotiations and oral agreement the parties had engaged in. The payment was not immediately questioned until the original claim was filed on 12th June 2013, five months later. There was no indication of any part payment or deposit for the intended trade in of the vehicles owned by the Claimants. It was a pure payment for the vehicle AB5389 for $55,000.00 less outstanding costs incurred by the Claimant. The balance figure received on payment voucher by the first named Claimant settled the oral agreement.

14. This subsequently reflected that the purchase of the car was done on the principle of "as is where is basis". Simply mean the purchaser which is the Defendant had bought the vehicle on the condition per se at that time. Normally any cost of repair work is estimated as part of the purchase price base on the principle. In this case, the insurance payment was not discussed. There is no evidence to reveal so. The question is whether it is part of the $55,000.00 or an addition to that. If it is part of the purchase price base on the principle, then the cost of the car should be $30,000.00, which is not the price the Defendant offer and that figure could appear as under value which the parties would definitely disagree to. It is appropriate, in this case to accept the repair costs should be in addition to the price offered by the Defendant, which is $55,000.00. The problem encountered here is that the parties had failed to include in their discussion the payment of repairs by the Insurance Company. As I have said the insurance money is for the cost of repairs, which was done by the Defendant, hence, entitled for the money.

15. There is evidence from the inland revenue and note from QBE Insurance implicating the Claimants are still the legal owners of the vehicle even as at 17th April 2013.

16. Where a vehicle has been sold the original owner or the purchaser must as soon as possible inform inland revenue division to rectify their records in relation change of ownership. This is an administrative task. If nothing is done immediately then it does not mean the previous owner still own the vehicle because the records show so. That should have been changed. The risk is that should the vehicle involved in any mischief it would be referred back to the previous owner in terms of liability. To avoid that, an immediate information about the sales transaction be disseminated to the inland revenue forthwith.

17. In respect to the insurance document signed by first named Claimant before the amount for repairs was released, I must accept the Defendants version that it is a formality that needs to be done. It does not mean the Claimants still own the vehicle.

18. The question now is has the ownership of the vehicle AB5389 passed from the Claimants to the Defendant? A simple answer is yes, upon signing of the payment voucher and receiving of $42,579.00 from the Defendant on 24th January 2013. The cost of repairs in the sum of $25,801.35 was rightly received by the Defendant for the repair work done.

19. I guess the current impasse could have been avoided if the parties waited after the repair work had been done before negotiating the sale of the vehicle. So that a price agreed on is a real acceptable price. The rash for immature sale of the vehicle whilst under repair complicates the situation.

20. From the reasoning I have demonstrated in this case, I do not think the amounts claim in the relief sought as $30,000.00 to $50,000.00, $74,000.00 for unauthorized hiring of Claimants vehicle for 74 days could able to stand. I must dismiss them as well. In respect to claim for $500.00 per day from 1st July 2013 until full amount is paid is a calculation based on anticipation should the Claimants win the case which I find not the case here. In all that, I say the Claim should be dismissed in its entirety.

Counter-Claim by the Defendant:

21. The main issue as agreed on by the parties is the ownership of the vehicle registration no AB5389. Since the issue of ownership has finally been determined in favour of the Defendant it is now easy to determine the counter-claim filed by the Defendant on 12th August 2013.

22. After the purchase transaction was done and the repair costs were received the Defendant rented out the vehicle with effect from 20th June 2013 at a rate of $550.00 per day.

23. The Claimants at that time were still in possession of a set of vehicle keys and have refused to hand them over to the Defendant because they thought they still own the vehicle unless the balance of $85,000.00 is paid.

24. On 18th July 2013, the first named Claimant entered the Defendant's premises and attempted to take the vehicle AB5389, knowing the ownership issue is still pending before the Court. Concerned that the Claimant will make further attempt to take the vehicle if it was continued to be used as rental car, the Defendant therefore ceased renting out the car but kept it safe and secure at its Ranadi premises. The Defendant then counter-claim for damages by way of loss of income of $550-00 per day from 18th July 2013 plus interest and cost.

25. The Claimants as seemed so, despite had collected $42,579.00 for the vehicle on 24th January 2013, persisted that they still own the vehicle even as at 17th April 2013, when the claim discharge for repairs was signed by the first named Claimant. I noted a letter written by the first named Claimant on 16th July 2013 and addressed to Mr. Radclyffe. The last paragraph reflected a powerful message. That the Defendant must pay to the Claimants the amounts sought in the amended claim by 4pm on 18th July 2013. Failure to do so will leave the Claimants no other options but to exercise their rights as owners of the vehicle.

26. The reason perhaps for the tone of the paragraph is because the Defendant had been renting out the vehicle without their authority as owners.

27. I have clearly decided the ownership right has been passed when the $43,579.00 was paid, received and accepted. Whatever done to the vehicle by way of rental by the Defendant is its business as an owner.

28. I have noted as well that the rental is at the rate quoted above and for 20 days in one month since 18th July 2013. From all the evidence tendered to Court by the Counsels, I must therefore award the Defendants counter claim for damages. In terms of actual figure calculation based on the rate per day, I have arrived at the final amount as follows:

$550.00 x 20 = 11,000.00 per month.

For 19 months from 18th July 2013 until this decision is 11,000.00 x 19 is $209,000.00.

Orders:

1. Order dismissing the claim by the Claimant

2. Order awarded $209,000.00 in counter claim be paid to the Defendant together with 5% interest per annum.

3. The Claimants deliver the keys to the vehicle to Defendant forthwith.

4. Cost of this case is paid to the Defendant.

The Court.