Court dismisses Peseta’s civil claim against La’auli

A civil claim brought by the Associate Minister of Cabinet and Prime Minister, Peseta Vaifou Tevaga, against former Cabinet Minister, La’aulilemalietoa Polataivao Schmidt and others, in relation to a dispute about a nonu company, has been dismissed. 

The decision was delivered by Supreme Court Justice, Tafaoimalo Leilani Tuala-Warren, yesterday.

In doing so, she has ordered the management of L.P.A. (Nonu Company) to be put back in the hands of Apulu Lance Polu, Martin Jonathan Schwalger and Danny Schwenke, Peseta’s son.  

According to the Court ruling, Peseta’s claim was filed against Apulu, Schwalger, La’aulilemalietoa and Maota Samoa Convention Complex Limited, Local Partners and Associates Limited and Aldan Civil Engineering Construction Company Limited. 

Peseta is represented by defence Counsel, Leulua’iali’i Olinda Woodroffe, while the defendants were represented by Semi Leung Wai. 

According to the Court ruling, Peseta’s cause of action was prompted by what he claimed to be a breach of director’s duties.

He accused them of preventing him from participating in the decisions or activities of the L.P.A. or from entering L.P.A. premises. 

He accused La’auli of taking and having in his possession property of the plaintiff, including nonu juice and vehicles.

Peseta also accused his former business associates of  breaching their contract by putting secured land at risk and for the conversion of vehicles that belong to L.P.A. to another company known as Maota o Samoa. 

In Court, Justice Tafaoimalo pointed out the land in question was used as collateral to secure the loan which belongs to Aldan Company Limited where Peseta is a Director. 

The loan was from the Samoa National Provident Fund (S.N.P.F.) 

 “The arguments advanced therefore that the land is his (Peseta) land, is not technically correct,” Justice Tafaoimalo. 

“Peseta claims that the defendants breached a contract.  

“There is no contract, written or oral between Aldan and the defendants which is before me and from which I can ascertain its terms with any certainty.

“There was no evidence that Peseta, as director of Aldan, unwillingly offered his land as security. 

“The only evidence before me from Peseta himself, Polu and Laauli is that Peseta gave it willingly provided his overdraft was paid. 

“Even when the possibility came up for the security to be replaced, he did not want the land to be released. The defendants on the other hand, took active steps to find a replacement security. 

“The agreement for sale and purchase of the nonu farm and the valuation report shows real progress in finding a replacement security.” 

Regarding the leasehold documents, Justice Tafaoimalo noted the valuation report and evidence heard at the hearing the purpose of the leasehold being for a nonu farm to grow the nonu and to replace Peseta’s land. 

“Before the acquisition of Nonu Farm, the nonu was collected from around Samoa.

“In any event, Polu and Schwalger have operated L.P.A. in a way that loan payments have been maintained, despite the challenges of a legal battle and the Court appointment of an interim manager. 

“In December 2016, there were no arrears to the S.N.P.F. loan. The arrears have accumulated this year with the management of L.P.A. being out of the hands of its directors.  

 “L.P.A. sales were increasing as evident in its financial statements from 2013 to 2015. 

“The noticeable drop was the expected sales for 2016, after these court proceedings commenced.

“Any attempts by the defendants at reconciliation were thwarted by Peseta. 

“I accept the evidence of Laauli and Polu that Peseta would not consider reconciliation. 

“Peseta cannot now put the blame on the defendants. 

“His part to play in continuing to cause and sustain the division between himself and the defendants is not insignificant. 

“Peseta had derived some benefit from L.P.A. in having his overdraft paid off and in the cash payments which I accept he received from L.P.A. of at least $20,000 according to Polu.” 

According to Justice Tafaoimalo, it’s evident that Peseta’s agreement to use Aldan land is conditional on how it benefits him. 

“He used it for the loan initially to clear his overdraft, he then agreed for it to be released for a replacement asset. 

“He is now saying that he does not want it released until Court proceedings have been determined as L.P.A. is receiving millions and he is not receiving any part of that money.

“The directors Polu and Schwalger are entitled to make decisions that they consider to be in the best interests of the company. 

“Polu and Schwalger sanctioned the use of the trading name Samoa Nonu Delights, the opening of the bank account with Samoa Commercial Bank, the accepting of cash payments and the purchase of the leasehold for a nonu farm, all by way of resolutions passed at meetings of shareholders, (Polu and Schwalger holding 65 per cent of the shares), in an effort to keep L.P.A. operational and to attract revenue to maintain loan repayments.

“The fact that Polu submitted the trading name in the business licence renewal forms in 2014 and 2015 to M.O.R. shows that Polu and Schwalger were upfront about the use of the trading name ‘Samoa Nonu Delights’.” 

Justice Tafaoimalo says there is no breach of contact “as there was no contract or agreement between Aldan and the defendants with certain terms before me. 

“This cause of action fails.

“In any event, loan payments were current as of December 2016. 

“This is due largely to the fact that Polu and Schwalger found ways for L.P.A. to continue to operate. 

“They created a trading name, opened another bank account, accepted cash payments and purchased leasehold for a nonu farm.” 

Justice Tafaoimalo ordered that all causes of action be dismissed. 

“Any change therefore to the share register made on the basis of the notice must be rectified accordingly under section 42 of the Act, if it has been changed, to reflect the directors and shareholders as follows.

“The directors of L.P.A. are Leiataua Danny Schwenke of Vaitele, Martin J. Schwalger of Aleisa and Apulu Lance Polu of Saleimoa. 

“The shareholders are Leiataua Danny Schwenke with 35 percent (35,000 shares), Martin J. Schwalger with 32.5 percent (32,500 shares) and Apulu Lance Polu with 32.5 percent (32,500 shares);

“All interim orders and injunctions granted by the Court in favour of the plaintiffs are discharged immediately. 

“The Court appointed manager is discharged and the management and regulation of L.P.A. is put back in the hands of Polu, Schwalger and Schwenke. 

“And having defended this case successfully, counsel for the defendants is invited to file and serve a memorandum as to costs within 21 days of the release of this decision. 

“Counsel for the plaintiffs may respond to that memorandum within a further 14 days.

“She also ordered that Aldan’s land is still subject to the mortgage with S.N.P.F. 

“In moving forward, the parties need to either negotiate a replacement asset or agree to work together if this business venture is beneficial to Samoa.”

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