BROKEN PROMISES : “Cheated Kava Dealer”

In the February 9th issue of the Daily Post at Page 17, an article appeared under the title “Cheated Kava Dealer in Port Vila.”In the article the young man Samuel Paul of Mavun Village in the Northern Town of Luganville, Santo, a kava dealer, relayed why he was in Port Vila. He said that he came to collect VT2 million owed to him by a customer for 16 bags of kava sold to that customer.

He said he and the customer had an agreement and that the customer “has not kept his business promise to settle his side of the bargain.”The young man went on to say that his last resort was to go to the police and that he would be looking for new customers to replace the old. 

This type of case has been covered in previous articles under Starting a Claimand Enforcement of Judgmentsbut this scenario is a specific case study that will be used to show the law in action.

This article will focus on:

  1. How this young man can have this customer pay the money owed, and
  2. Steps he can take to prevent the same thing happening with new customers.

How can Samuel have this customer pay the money owed?

First off, Samuel has said that he will go to the police. While this might seem like a possible solution there is little to nothing that the police can do except help the parties to come to some compromise or solution but this will not be binding on either party. The police deal with criminal actions and a civil matter, which this is, would be outside the authority of the police. Without a court order saying that this money is in fact owed to Samuel and the court directing the police, if necessary, to offer assistance in the enforcement of that order they have no power to do more.

Samuel’s only solution if he wants this money paid is to file a case in the Supreme Court. These are the steps he should take:

  1. Write a letter to the customer demanding payment and letting him know that if he does not pay by a certain date that he will start a claim in the court against him immediately.
  2. If the customer does not pay by the deadline then Samuel should file his claim in the Supreme Court stating that he had a verbal contract with the customer for him to sell and the customer to buy kava at a certain price to be paid upon delivery and the customer has failed to pay. In his claim he must say how much he is owed and how much interest he is asking for on the money.  
  3. Once he has filed the document he needs to serve it on the customer and the customer will have time to put in a defence.
  4. If a defence is filed the court will then give a date to start the case management conference in order to bring the case to trial. If no defence is filed Samuel can make an application to enter judgement against the customer and then have that judgment enforced, that is, the court will call the customer before it and find out how he will pay and make him do so. 
  5. If a defence is filed Samuel can make a request to the court for the matter to go straight to mediation. If both he and the customer agree then the court will send the matter to the Master of the Court for mediation [See article “Mediators do it out of court” on our website to understand how this process works].
  6. If the mediation is successful that should settle the case for Samuel and arrangements for his money to be paid will be made.
  7. If the mediation is not successful then the court will proceed to case manage the matter immediately to get it ready for trial. 

Steps Samuel can take to prevent the same thing happening with new customers.

Since this is clearly a business venture that Samuel has undertaken he wants to make sure that his time, money and effort are not in vain and that he will receive payment once he has delivered the goods to his customers and that if there is a disagreement there is a quick and efficient way of resolving it. In business things may not always go smoothly and situations will arise which will cause conflict. To protect himself from too many such incidences these are some of the things Samuel can do:

  1. Know and understand his customers business practices. Ask this new customer about other businesses that he deals with for the purpose of finding out whether this customer always keeps his promises by delivering and paying on time. Samuel can speak with the owners of those other businesses to find out if this customer always pays on time etc. That way Samuel will have a good idea whether this new customer will keep his promises to him. It is not enough to just have customers but to have good and reliable customers or else you will end up wasting more time and paying more money than is necessary. 
  • Once Samuel is happy with the new relationship it is important to have a written contract with the customer. This contract need not be something very formal. It can be a simple letter outlining what the agreement is; that is, what and how much of the kava Samuel is to deliver to the customer, when and where he is to deliver and how much he is to be paid upon delivery. The contract letter should be signed by both Samuel and the customer and dated. It would also be a good idea to have someone witness the signing if possible. Samuel should do this with every customer. A contract letter will make the process of filing a case or settling a case in the court much easier if a dispute arises between the two. 
  • Samuel should consider including in his contract that a deposit of a certain amount should be paid when the order is placed and this deposit will be forfeited or lost if the order is cancelled a week before delivery. This deposit will act as a guarantee for Samuel that the customer will pay the balance upon delivery and Samuel must ensure that once he delivers there is immediate exchange of goods for money. 

While two persons can agree to anything(once legal) it is usual for customers to pay immediately upon delivery of perishable or consumable products as those products cannot be taken back once used. 

  • Samuel should keep a written record in a specific book of all his orders with all the details for that order as well as a receipt book so once money is paid in full or in part he will be able to keep track of what is owed and if balances go unpaid he will be able to use those records as evidence before the court. 

REMEMBER:it is a normal part of business that promises will be broken and disagreements will arise. Samuel just needs to make sure that he is clear about what should happen in such instances but he must try as much as possible to avoid them by setting up his business dealings well enough to avoid too many disputes.  

DISCLAIMER – This is a legal column to provide basic information on the law and court procedure. It is not to be used as a substitute for legal advice but to be used only as a starting point in understanding what you might need and what you might need to do.      

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