The Supreme Court has ordered the Vanuatu Government to pay more than VT9 million to FR8 Logistics Limited for unpaid debts owed to the company from 2016 to 2018.

The company filed proceedings against the government following a failed agreement seeking more than VT6 million relief for unpaid services provided to various government departments at the request of the Prime Minister’s Office over that period.

As reflected in the sworn statement of George Lapi, the Government Liaising Officer during the Vanuatu 2017 Pacific Mini Games, under the Van 2017 agreement between the Vanuatu Government and China, it was agreed that China would be responsible for providing transportation for purpose of the Van 2017.

Around October 2017, China shipped 2 new cars, 25 new buses and automobile spare parts through the vessel Pacific Islander Voyager from Beijing to Port Vila.

The imported goods were shipped in one consignment and were all consigned to the Prime Minister’s Office.

Upon arrival, the imported goods were released by Department of Customs to the Claimant as it was designated to declare goods on behalf of the PMO and or Ministry of Youth and Sports for the Van2017 PMG.

Supreme Court Judge Daniel Fatiaki said this matter is purely about the company’s invoices provided for the clearance costs, wharf charges, storage charges, in the initial importation of the 25 vans, two SUV vehicles and spare parts.

Subsequent Service invoices relate to further services provided in the form of storage for a single van left in FR8 care since October as well as Vehicle Spare Parts which have a cubic measurement of 42.70m3 and which goods have a Vatu value of VT47,697,566;

Further invoices reflect FR8 Logistics Terms and Conditions relating to late payment for services rendered accruing at 4% per month, compounding.

On December 13 2018, the government as the defendant filed a defence but stated that the parties have reached an agreement to have the matter settled out of court.

The government said that it made several payments on diverse dates in 2017 and 2018 in respect of 33 numbered invoices with a total of more than VT4.6 million.

As for the remaining unpaid invoices relating to ‘spare parts’ and ‘storage and interest’ the defendant claimed there was a dispute between the parties on a substantial question of fact, namely, the claimant’s entitlement to charge and claim for storage and interest in respect of the stored items.

According to the background by the Defence, after the imported goods were declared goods for the game, they were then delivered to the Claimant’s logistic warehouse at Nambatri which the government claimed was an error as the logistic area was too small.

The goods were then moved to Korman Stadium except one white Datong motor vehicle and the current spare part in issue which were left at the Claimant’s warehouse in a container.

The understanding at the time was that all goods would be released from the claimant’s warehouse one week prior to the game.

The defense filed claimed that one vehicle and spare parts were left in the Claimant’s warehouse by mistake.

The court affidavits claimed that the organisers were too busy so busy at the time that they did not remove that vehicle and spare parts from the claimant’s warehouse to Korman during the games.

In January 2018 when the games were over, the defendant through the Vanuatu Sports Commission’s officers attempted to remove the goods concerned from the claimant’s warehouse but the claimant refused to release them.

The claimant made it clear that the defendant had yet to settle its duty and stevedoring charges for the consignment, which it had paid on behalf of the defendant.

The government claimed that there was no agreement that the claimant would keep the Datong vehicle and the spare parts nor any goods in its warehouse until the all debts were paid off. There was also the understanding between the parties that all goods which arrived in that one consignment would be released from the claimant’s warehouse and be delivered at Korman with the relevant authorities.

Evidence showed that there was verbal agreement for the company to have the goods declared on behalf of the defendant before releasing it to the government with the invoices accordingly and that was what happened.

FR8 Logistics’ Chris Kernot said that the defendant’s goods delivered in his warehouse were fully custom cleared on October 18, 2017 and were no longer of any interest or concern to Customs and need not have been stored in a Custom Controlled or Bonded Warehouse.

It was accepted that the claimant acted on behalf of the defendant in declaring the goods and obtaining their release from the Customs and such services were satisfactory performed.

Between September 22, 2016 and June 14, 2018, the claimant issued 40 invoices to the Prime Minister’s office for various services provided including for interest charges for overdue accounts as well as for storage charges for 1x21 seater bus and six crates spare parts.

On the face of each Invoice there is a clear statement that payment terms are: “Cash on delivery”; storage fees start five days after arrival for sea freight and late payment will attract an interest fee of 4 percent per month calculated on all outstanding amounts.

Subsequently Justice Fatiaki rejected the defendant’s claim and said the claimant is entitled to retain the left items until after payment of its invoices is made in full including for storage and interest.

The judge then ruled in favour of the claimant, ordering the Government to pay VT9,022,311to FR8 Logistics Ltd within 21 days.

FR8 Logistics also filed for an interest fee of more than VT2 million, and the court decided on an interest of 14% per annum on the sum above with effect from 9 July 2018 until fully paid.

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