Kamal's Variety Ltd v Wisynco Trading Ltd
K 7 of 2002
Mr. Garth McBean instructed by Garth McBean & Co. for the claimant.
Mr. Andre Earle and Miss Anna Gracie instructed by Rattray Patterson, Rattray for the defendant.
Contract - Sale and delivery of goods — Breach — Defendant employee forged signatures on invoices so as to falsely represent that goods contracted were delivered to claimant — Judgment granted only in respect of those invoices where forgery proven.
Between January 1998 and July 2000 Kamal's Variety Store ordered goods (food stuffs) from Wisynco Trading Limited to sell and deliver same to its various business outlets for prices specified in various invoices. Invoices show delivery to various locations.
The claimant carried on business under the following business names; Kamal's Supermarket & Wholesale; G & L Wholesale; Kamal's Suprette & Cambio; Kamal's Shoppers Fair and Kamal's Super Centre.
Mr. Sinclair, the Managing Director of Kamal's Variety Limited testified that Kamal's Shoppers Fair replaced Kamal's Supermarket and Wholesale; and Kamal's Shoppers Fair has ceased business and he now has Kamal's Variety Limited.
The claimant's case is that Kamal's Variety Limited has paid $5,443,744.71 to Wisynco for the value of goods it did not receive. In breach of the said agreement the defendant has failed, refused or neglected to deliver these goods. Consideration for the payment of $5,443,744.71 by the claimant to the defendant has wholly failed and the defendant has received the said sum to the use of the claimant.
The claimant seeks restitution recovery of the money paid out with interest.
The claimant contends that the defendant's servants/agents acting in the course of his or their employment forged or caused to be forged the signatures of Kamal's agent/servant who were responsible for receiving goods from Wisynco in order to falsely represent that the said goods sold to Kamal's by Wisynco were delivered, when in fact no such goods were delivered to Kamal's its servants or agents.
The said forgery by agents or servants of Wisynco came to the knowledge of Wisynco, its servants/agents and as a consequence Wisynco terminated the employment of one of its servants or agents.
There is no dispute that Kamal's contracted with Wisynco for Wisynco to sell and deliver goods to Kamal's. The delivery of goods was to be to Kamal's various business locations. This can be inferred from the course of dealing between the parties because Wisynco loaded trucks with goods and sent them to the claimant's various business locations.
Mr. Sinclair testified that there was a special young lady employed to the claimant who did the ordering of goods from Wisynco but who no longer works there.
He said that during the period January 1998 — July 2001 Nola McKenzie was the only person assigned to receive goods. She was the one who would sign on a regular basis for goods for Kamal's Variety Limited.
The attorneys agreed that Noline McKenzie who gave a witness statement and testified at the trial is one and the same person as Nola McKenzie.
Mr. Sinclair said that the system in place between 1998 and 2001 was that the claimant employed persons to check the invoices. They would check back invoices on a daily basis to see which company they had received goods from to see if goods were really in stock, and they would normally check back the warehouse to see “what and what we receive.”
Kamal's would get statements on a monthly basis from Wisynco showing outstanding balances from Wisynco. Mr. Sinclair said if they did not get a statement they would call the office to find out why and request them to send it. He said once they had received the statement they would go for the file for Wisynco where they keep all invoices for Wisynco, and then they would check to see exactly whatever the statement says, if they had invoices to match whatever amount of money was in the statement.
He said they would use the invoice to match it back to see if it came back to the amount. They would also look at write off of bad goods. They would put that together with the invoice to see how they came to that amount.
Credit notes would be given where for example there were bad goods or something returned.
Wisynco would send back credit notes.
The basis upon which payments were made to Wisynco was the presentation of a statement from them showing an amount of money.
Payment was made by cheque to Wisynco after the claimant had investigated each statement and having done necessary queries were satisfied as to the amount due.
If the claimant did not get a statement they would request one from Wisynco.
He said that over the period Kamal's received monthly statements from Wisynco, and they did not complain to Wisynco about goods not being received. They did however complain to Mr. Mahfood after receipt of the Auditors findings.
The claimant's case is that goods reflected in 77 invoices were not delivered to them by Wisynco.
Mr. Sinclair said that he did not personally check any of the 77 invoices prior to payment. Mrs. Sinclair his wife and other members of staff would be the ones to check these 77 invoices. He does not know which of the 77 invoices Mrs. Sinclair checked or if she checked all 77.
She is still employed at Kamal's and gave no witness statement.
Mr. Sinclair's evidence is that each time a payment was made out of 77 payments to Wisynco, the payment was made based on Wisynco's statement showing the amount due and after they had done investigation of each statement.
When asked in cross-examination why the claimant made payments if the goods were not delivered, he said ‘because of what is on the statement and that is what we use to pay out the money’.
At paragraph 13 of his witness statement, Mr. Sinclair gave the background to the claimant's discovery of non delivery of goods and fraud on the part of Wisynco's servants and/or agents.
He said that in June 2000, the claimant was unable to locate 4 invoices which were listed on the May statement.
Mr. Ryan Wilson, the Sales Representative for the defendant was asked by Mrs. Sinclair to provide copies. He only brought 3 copies.
It was then that the claimant discovered the signatures on the copies were irregular. They did not match the signatures of the persons responsible for receiving goods.
Mr. Sinclair said that his investigations revealed that those signatures were forged.
After the discovery of the forged signatures Mr. Sinclair called Mr. Wilson and enquired about the irregularities. Mr. Wilson asserted that he knew nothing about the situation and would have a talk with his driver about it. He also wrote down the missing invoice numbers and said he would get back to him with information. He has not been seen since.
Subsequently, Mr. Sinclair said that he called the internal auditors and asked that the defendant's statements be audited from January to June 2000.
He asked the Auditors to check back on the 1999 statements as well because he discovered missing invoices some of which had irregular signatures.
The defendant's agents or servants informed them that the statements for July 2000 were given to Mr. Wilson who had delivered them to the claimant.
Mr. Sinclair asked the defendant to send copies. When they were received 2 invoices on that statement could not be located and those invoices had irregular and forged signatures and the goods were never delivered.
Mr. Sinclair said the management of the defendant Company including Mr. Andrew Mahfood were notified of the irregularities and asked to assist in the investigations. Mr. Wilson is no longer in their employment.
The fraud squad was called in by the defendant's Company to investigate the case, and police came to the claimant's office several times making enquires in the matter. Mr. Wilson was arrested and later released on bail. There is no evidence before the court as to what he was charged for.
Mr. Sinclair said that by looking at the signatures on the invoices and looking at the signatures of the person who was employed to receive the goods he knew the signature on the invoice was forged.
Miss Noline McKenzie gave evidence for the claimant. She told the court that between 2000 and 2003 she was employed to Kamal's Variety Limited in the capacity of receival clerk at its outlet at Kamal's Supermarket. She ceased working with defendant in mid 2003.
When receiving goods she would sign a copy of the invoice as receiving the goods itemized on the invoice and affix the date.
Miss McKenzie stated that the signatures which appear on the 9 invoices listed on her witness statement were not made by her. Eight (8) invoices indicate goods shipped to Kamal's Shoppers Fair and one (1) invoice to Kamal's Supermarket.
Mr. Sinclair's evidence is that Miss McKenzie was employed to Kamal's Supermarket. She did not work at Kamal's Shoppers Fair.
Miss McKenzie said that she cannot say who signed the invoices and she knows of no other McKenzie working at Kamal's Variety Limited.
Miss Stephanie Minnott testified that she had never received any goods from the defendant while working at Kamal's Super Centre.
She worked at G & L Wholesale from 1995 – 1999 and at Kamal's Supermarket until she left in April 2000. She stated that the signatures appearing on the 11 invoices listed at paragraph 5 of her witness statement and contained in the agreed bundle were not made by her.
All the invoices indicate shipment/delivery to G & L Wholesale.
She did not recognize any of the signatures on the invoices and during her working life at Kamal's Super Centre there was no other Minott working there.
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