A SELF-MADE multi-millionaire was ordered by the National Court to repay the National Broadcasting Commission (NBC) more than K3 million, with eight per cent in interest, for failing to honour contractual obligations to deliver 27 Toyota Hilux vehicles.
NBC had sued Sam Tasion and his company, Freeway Motors, for failing to supply, initially 27 of the Toyota branded motor vehicles and later another three such vehicles, within a year (12 months) after the signing of a Sale and Purchase Agreement.
In his 22-page written judgment on Oct 28, Justice Ambeng Kandakasi found that Tasion and Freeway Motors had unjustly enriched at the expense of NBC.
NBC, Papua New Guinea’s state-owned broadcaster, sued Tasion and Freeway Motors to recover K4,626,845 it paid to T.G. Holding Ltd trading as Freeway Motors.
Payment was made long before a meeting of the requirements of the Public Finances (Management) Act 1995 (PFMA) and signing of a formal contract.
Of the amounts paid, K3,126,845 was the original contract price.
The balance of K1.5 million was caused to be paid at the request of Freeway Motors with the approval of the then chairman of the Central Supply and Tenders Board (CSTB).
That was allegedly for demurrage and storage costs.
Tasion was named as first defendant and Freeway Motors the second in the suit.
Then, contrary to the contract, Freeway Motors delivered only four vehicles, one 10-seater Landcruiser Trooper, two 15-seater Hiace buses and a panel van.
That left an outstanding 23 fully kitted four-wheel drive, 5th Element Toyota Hilux from the initial contract yet to be delivered to the locations specified in the contract within the agreed period of 12 months.
That was despite having received the payments more than a year ago.
Consequently, NBC’s board varied the contract by adding a further three vehicles and increased the total vehicles yet to be delivered to 26.
According to the agreed facts, Freeway Motors accepted this requirement.
That brought the total vehicles to 30 of which only four were delivered leaving 26 yet to be delivered.
By August 2016, which was nine years after Freeway Motors had received the K4 million plus payment, it delivered:
- 13 Wingles (China-made vehicles), which according to the NBC’s submissions, were not fit for the purpose as the cars broke down within six months of delivery; and,
- Another 10 vehicles comprising six Toyota Hilux 5th Element, two 5-door Toyota Landcruiser and one Honda CRV.
After considering submissions from the plaintiff, defendents parties and the relevant law, Justice Kandakasi said: “In the present case, the payment of the initial contract price and the additional K1.5 million represented a substantial amount of money going out of the public purse well before an awarding of the original contract.
“These payments were made when Freeway Motors was in no position to supply the agreed vehicles within the agreed period and at agreed locations.
“The original contract was facilitated and arrived at by fraud, misrepresentation, dishonesty and illegality for breach of the requirements, the intents and the whole purpose of the
Public Finances Management Act (PFMA) by Freeway Motors through its managing director and sole shareholder Tasion with the help of the then chairman of the Central Supplies and Tenders Board (CSTB).
“These actions constitute a serious and clear corrupt deal at its worst that falls nothing short of a fraud on the statute, namely the PFMA and its intention and purpose, the NBC, the State and the people of PNG.
“I also find that, those who purported to represent the NBC at the relevant time facilitated the commission of these illegal and corrupt acts by making the payments instead of refusing to pay.
“They had more reason than not, to refuse to make the payments, when there was no evidence of a written contract at the relevant time and lack of evidence of the parties’ agreement in terms of the original contract and the subsequent alleged variation requiring the NBC to pay the additional K1.5 million.”
But, NBC in its submissions asked the court for a reimbursement of a total of K3,095,295.
“This consists of K1,595,295 being for the equivalent of the value of 13 Hilux not supplied and the K1.5 million in demurrage and storage that has no contractual or factual foundation.
Accordingly, Justice Kandakasi ordered judgment against the defendants in the sum of K3,095,295 by way of reimbursement to NBC, and interest at eight per cent, from the date of the issue of the writ.
“Costs will follow the event in favour of the plaintiff to be taxed, if not agreed. Judgment in the above terms is not the end of the matter. It is only part of what the NBC is claiming in its statement of claim. The statement of facts and issues do not say anything about what becomes of the remaining parts of the claim.
“The parties are therefore, required to address the Court on what becomes of the remaining parts of NBC’s claims,” Justice Kandakasi ruled.
He then ordered the parties to return to Court on Dec 5 at 9.30am for the remaining parts of NBC’s claims.