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Leignkon v Lowenbu [2004] VUSC 8; Civil Case 163 of 2002 (13 February 2004)

IN THE SUPREME COURT
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 163 of 2002

BETWEEN:

MATHEW LEINGKON
Claimant

AND:

VITAL LOWENBU, RICHARD RAHBUBAN and
MOISE ATINGTING trading as
ATINGTING CONSTRUCTION
Defendants

Coram: Justice Treston

Mr. Boar for Claimant
Mr. Kilu for Defendants

Date of Hearing: 02 February 2004
Date of Judgment: 13 February 2004

JUDGMENT

CLAIM & DEFENCE

The Claimant Mathew Leingkon also known as Mathew Leingkon Saksak has claimed for an order that he remain a partner with the Defendants trading as Atingting Construction and that the Defendants pay him the sum of VT4, 200, 000 and such other amounts remaining outstanding at the conclusion of the case, for outstanding salaries due to him by the partnership for the period January 1996 to December 2002 and to the date of hearing. The Claimant has also claimed interest of 10% per annum on the amounts outstanding and contends in an amended claim dated 6 February 2003 that at all material times he was a business partner with the Defendants and together with the Defendants "donated" monies towards the purchase of the business license and trading name, and that in or about 1994, the Claimant and the Defendants agreed between themselves to receive salaries among which salaries he was to receive VT5 000 per month. The Claimant has contended that he received such salaries from 1994 to 1995 when the payments ceased. He has also contended that in about 2001 the Defendants or one of them acknowledged that he should be paid as outstanding salaries.

In an amended defence and counterclaim, the Defendants have alleged that the Claimant never paid share towards the business when requested to, and that the Defendants agreed to pay the Claimant daily rated wages as opposed to an allowance or salary and that such wages were stopped due to the Claimant's own request and actions in disassociated himself with the firm in his letter of 17 July 1995. The Defendants have alleged that the Claimant was never a partner because he never paid his share towards the firm and was not an employee entitled to the salaries but that if he was employed, he had disassociated himself with the firm by his letter of 17 July 1995 and was not entitled to the relief because it was statute barred.

The full letter is as follows:-

" Monday 17 July 1995

FROM: SAKSAK MATHIEU

I GO: LONG OL PATNERS ATINGTING CONSTRUCTION

MOISE Atingting, LOWONBU Vital, RICHARD Yeo

Mi SAKSAK MATHIEU Di LEIGNKONE TEDEI 17 JULY 1995 MI ASKEM OL RIGHT BLONG MI BLONG FINISH LONG Atingting Construction FOLED CANCULATION YA:

(A) OLGETA ASSETS : Car: 1. 400. 000VT

Generator: 300. 000VT

Mixer: 250. 000VT

Cleaner Machine: 270. 000VT

Garden: 100. 000VT

----------------------

2. 320. 000

NARAFALA TOOLS MI FORGETTEM.

(B) CASH DISPONIBLE

Net Cash 1. 600. 000

Retention Hospital 1. 500. 000
Amount payable by end July 600. 000

400. 000
Deposit 900. 000
-----------------------
TOTAL 5. 000. 000

SUB TOTAL 7. 320. 000VT

(A) + (B): 4 partners 7. 320. 000: 4 = 1.830.000

MI WANDEM RICIVIM AMOUNT YA BY 2 PARTS BLONG NO AFFECTEM ATINGTING CONSTRUCTION

First lot 630, 000VT Tursday 20 July 1995

Second lot 500, 000 3 August 1995

Third lot 500, 000 15 August 1995

AMOUNT YA 1. 630, 000VT MI GAT RIGHT LONG HEM. SAPOS MI NO RICIVIM FIRST LOT BY 20 JULY 1995 BY MI PUTUM WETEM LAWYER BLONG MI LONG FRIDAY 21 JULY 1995 MO GO LONG KOT LONG NEXT WEEK NOMO.

(Sign) SAKSAK MATHIEU Di LEINGKONE"

In a counterclaim, the Defendants again denied that the Claimant was a partner in Atingting Construction and denied that he was an employee and alleged that in addition to receiving daily rated wages from 1994 to 1995, the Claimant also received certain advances from Atingting construction totalling VT872, 330 which had not been repaid. The Defendants have claimed that the advances should be repaid to them by the Claimant.

In response to the counterclaim, the Claimant said that as the Defendants refused or failed to respond to his "ceasing from being a shareholder" that his receipt of monthly salary should continue. The Claimant contended that the advances to him should be deducted from his monthly shareholding salary, and he denied certain of the advances.

FACTS

It seems from the evidence that the Defendants, Mr. Vital Lowenbu, Mr. Richard Rahuban and Mr. Moise Atingting had with another person Mr. Serge Mague set up a building firm entity known as L.Y.M.A.HIM Enterprise. The Claimant Mathew Leingkon Saksak was not involved in the original setup but in or about 1993 requested to join the partnership and the name was then changed to Atingting Construction.

It seems that the Claimant was then employed by the Government, and although he took no active part in the construction company, he was paid the sum of VT50, 000 per month between 15 March 1994 and 2 February 1996 according to the Defendants and their evidence for doing nothing. He did not, the Defendants contended, become a partner because he was required to make a payment of VT50 000 for his share of the partnership but failed to do so. VT12, 500 may have been advance by the Claimant as his share of a business license fee but although the money was paid to the Claimant, he terminated the arrangement, the Defendants say, by his letter of 17 July 1995 when he disassociated himself from the partnership.

The Claimant said that it was he who had formulated the name Atingting Construction for the partnership, and that as he was still employed by the Government, he negotiated with the Minister of Public Works for the partnership to obtain certain construction work. On the other hand, the Defendants contended that tenders had been above board and without any input from the Claimant, although they all said that he was being paid by the partnership. The Claimant said that from his position in the Government, he was very aware of projects, particularly in building primary schools and he negotiated with the Minister of Trade and Commerce, the Council of Ministers and the tender board, of which he was a member, to approve the partnership to carry out certain contracts.

He said that the arrangement was that he would be the President of the partnership, Mr. Lowenbu would be the Manager, Mr. Atingting would be the foreman and Mr. Rahuban would be the architect, at the salaries which included his salary of VT50 000 per month. He said that as his letter of terminating his involvement with the partnership was ignored, he considered that he still remained a partner and ought to receive the VT50 000 salary/payment/ wage per month in accordance with the agreement of the parties. He said that in November 2001, Mr. Lowenbu had accepted that the payment of VT50 000 per month should be made to him.

The Claimant said that he terminated his position with the Government in 1995.

LAW

This is a civil case where the parties must prove their claim on the balance of probabilities.

Section 26 (1) of the Partnership Act CAP 92, which deals with retirement from partnerships at will, provides as follows: -

"Where no fixed term has been agreed upon for the duration of the partnership, any partner may determine the partnership at any time on giving notice of his intention so to do to all the other partners".

In addition Section 32 of the Act provides that subject to any agreement between the parties, a partnership is dissolved, if entered into for an undefined time, by any partner giving notice to the other or others of his intention to dissolve the partnership. In this instance the partnership is dissolved as from the date mentioned in the notice as the date of dissolution.

Section 3 (1) (a) of the Limitation Act 1991 provides that actions founded on simple contract or on tort shall not be brought after the expiration 6 years from the date on which the cause of action accrued.

FINDINGS

There are various issues that must be determined in relation to the partnership of Atingting Construction. The Claimant contends that he was a business partner with the three Defendants in 1994. The Defendants refute that allegation on the basis that the Claimant made no payment of his share towards the partnership and thus never became a partner. The claim by the Claimant that he was such a partner involved matters of facts occurring in 1993. The claim was filed on 20 September 2002, that claim for the declaration sought that the Claimant was one of the proprietors and owners of the partnership is statute barred by virtue of Section 3 of the Limitation Act (above)..

Even if the Claimant was successful in satisfying the Court that he was a partner of this partnership at will with no fixed term, he clearly terminated his involvement with the partnership by the notice, which he gave in his letter of 17 July 1995. That termination under Partnership Act (above) does not require the consent of the other partners. The Claimant may well have had a claim for his share in the partnership, should he have been found to have been a partner in accordance with his letter. However, he did not choose to issue proceedings as he suggested he would in that letter for a declaration that he was a partner and for his partnership share. Such an action, had it been pursued, had to have been filed or before 17 July 2001 according to the period of limitation. Any action in that regard is also now statute barred.

Having heard the evidence and assessing the witnesses I find that there was no acknowledgement and acceptance of payment by Vital Lowonbu in November 2001 that might serve to reactivate any claim by the Claimant which was out of time.

The Claimant has elected to treat the partnership as subsisting to claim his payments of VT50 000 per month from the date of the last of such payments in January 1996. It is my view that such action is misconstrued. If there was a partnership, he clearly terminated it by his letter. His action must relate to an order that he was a partner and for his share in the partnership assets as at the time of termination not for continued payment of the VT50, 000 per month upon whatever basis it was being paid. If he were not a partner it defies commonsense to conclude that he should have continued to receive the VT50 000 per month because from the time of termination, and even probably prior to that, he took no active part in the running of the partnership. He ceased his Government employment in 1995 and there is simply no consideration offered by him to justify continued payment of VT50 000 per month from the beginning of 1996 to the present time.

The Claimant must establish his claim on the balance of probabilities. I find that he has failed to do so. He no longer has any right to claim against the Defendants in relation to the partnership because such claims would be statute barred. Accordingly judgment must be given to the Defendants against the Claimant in relation to that claim.

As to the counterclaim, the Defendants sought to recover advances made to the Claimant between 16 April 1994 and 15 April 1996, in accordance with their counterclaim. The counterclaim was not filed until 20 March 2003. Such a counterclaim was clearly statute barred under the provisions of the Limitation Act 1991. Counsel for the Defendants quite properly conceded that during the course of the hearing. Accordingly, the claim cannot succeed and there will be judgment for the Claimant against the Defendants in relation to their counterclaim.

COSTS

As neither the claim nor the counterclaim has succeeded, I am of the view that the costs should lie where they fall.

Dated at Port Vila, this 13th day of February 2004

BY THE COURT

P. I. TRESTON

Judge