E.P.C. ordered to pay $30,000 over contract dispute

The Electric Power Corporation (E.P.C.) has been ordered to pay more than $30,000 tala to a New Zealand company, over a commercial dispute dating back nearly 20 years. 

The civil claim was brought by New Zealand human resources consultants, Morgan and Banks, who alleged they were owed NZ$19,000 (T$33,310 ) for professional services they say they provided the government-owned utility. 

Morgan and Banks provides recruitment services for specialised industries, according to the company's website. 

Former Chief Justice, Patu Tiavaasu’e Falefatu Sapolu, found in favour of the Kiwi company in a ruling earlier this month in a case that delved into the complexities of when a legal contract is formed particularly when one party remains silent in negotiations.

According to Morgan and Banks' evidence, in 1997 its company Manager met with the E.P.C.'s then-General Manager,  Toluono Feti Toluono, who engaged the recruiter to help the company find a Financial Controller.

That engagement was successful but the recruited candidate left in 1999 leading to another meeting between the two companies. 

The recruiters suggested that the E.P.C. place ads in the New Zealand Herald and the Sydney Morning Herald newspapers in New Zealand and Australia.

In correspondence via fax machine at the time, Morgan and Banks say they offered to charge for their services on the basis of either an "exclusive assignment" or "contingency." 

But when Morgan and Banks did not hear back to that January 1999 fax, they proceeded on the basis they had been hired on a contingency basis, meaning its fees were payable upon a candidate's acceptance of the advertised position. 

The E.P.C., by contrast, argued in defence that no contract existed for these services and it was therefore not liable to pay fees. 

“In the first place, the E.P.C. General Manager denied that he made any commitment to the plaintiff Morgan and Banks that its services would be engaged for the recruitment of a financial controller for the E.P.C.," the defence's submission reads.

The E.P.C. said its former general manager simply never responded to two letters from Morgan and Banks, nor accepted their offers thus meaning a contract was not in force. 

“I am of the respectful opinion that, in spite of the very able submissions by counsel for the defendant, the correspondence and the rest of the evidence when viewed as a whole and objectively show a concluded agreement," the former Chief Justice concluded. 

“This agreement related to the use by the E.P.C. of the services of the plaintiff Morgan and Banks to assist with the recruitment of a financial controller for the EPC. 

“As the evidence showed, in 1997 the E.P.C. had engaged the services of Morgan and Banks to recruit a financial controller for the E.P.C."

The former Chief Justice said he decided to accept evidence from Morgan and Banks' manager that, at a second meeting with the E.P.C. in 1999, the government utility's former general manager provided information relating to their search for a candidate and copies of overseas newspaper advertisements. 

“The E.P.C. general manager also requested Mr Doyle to provide a potential advertisement as well as a proposal on how Morgan and Banks would recruit the position," the decision notes. "At the same time, the E.P.C. general manager provided to Mr Doyle for the purpose of contact while in Auckland his hotel address, telephone and fax numbers.” 

The former Chief Justice stated the conduct of the two parties and  the written communications between them from 27 January 1999 to 16 June 1999 showed that a concluded agreement came into existence between the parties.

“This agreement took its shape and form starting from the meeting between the parties in Auckland on 26 January 1999 until the faxed communication of 10 February 1999 from Mr Scott to the EPC general manager and the latter’s request to Morgan and Banks to arrange a meeting with [...a prospective candidate at the...] Koru Club, Auckland Airport.

“The faxed communications that subsequently followed further confirmed the agreement that had already come into existence between the parties.” 

The former Chief Justice concluded the agreement came into existence between the parties and the plaintiff’s claim should therefore be upheld while awarding a sum of NZ$19,000.

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