The Supreme Court has handed down a ruling on a dispute over the ownership of body building equipment after the collapse of a business partnership.
Talaiasi Nau and Tonga Bodybuilding Federation Inc were in dispute with Masanao Onodera.
Nau is the president of the Federation.
Nau claimed that he and Onodera had a 50/50 partnership in a business called Omega Gym, which was located in Queen Salote Memorial Hall at Nuku’alofa.
He said Onodera had terminated the partnership by taking over the management of the gym.
Nau asked the court to order Onodera to provide documents and a full accounting of the partnership and to appoint a receiver to wind up the affairs of the partnership.
The Tonga Bodybuilding Federation claimed it owned the equipment used in the gym and wanted it to be returned to its possession and control.
Onodera disputed both claims, saying the equipment was his own property and that the partnership with Nau was on an 80/20 basis, with himself having the majority share.
He said the partnership was terminated by consent and that the gym was solely his own business.
The court was told Nau and Onodera were friends and had known each other for many years. Nau was president of TBBF and Onodera was president of the Tonga Body Building Association, an incorporated body in New Zealand.
In August 2016, Nau and a team from TBBF attended and competed in the South Pacific Natural Physique and Fitness Championship in Auckland.
Onodera advised Nau to ask Paul Graham to donate specialised body building equipment necessary for body building to be made to TBBF so that TBBF would have the proper equipment for its members.
Graham was the vice-president of the South Pacific and Oceania for the International Federation of Body Building.
Nau and Onodera met with representatives of the IFBB for the purpose of having TBBF as its affiliate. Graham agreed to donate the equipment to the TBBF. TBBF received full recognition from the IFBB in November 2016.
Onodera paid for the cost of having the equipment shipped to Tonga from Sydney where he went to collect it.
Onodera said that because of his investment the Grahams agreed that the equipment would be in his name and sent him a letter confirming this.
He later sent another letter saying that the equipment was in fact being consigned to the TBBF instead of himself such as the shipping documents showed.
He told the court this was done on the advice of Nau who told him it would save custom charges.
However, he then said: “Now I realise it was all to create a way to claim the equipment was owned by TBBF without having spent a penny on getting it to Tonga.”
Nau argued that Onodera was aware that the duty exemption would not have been available on the equipment if the equipment had belonged to Ondera personally.
“[Onodera] signed the letter confirming that the equipment belonged to TBBF freely and willingly in order for duty exemption to be obtained and for the equipment to be released to TBBF,” Nau said.
Judge Niu said he accepted Nau’s evidence. He said the equipment that Onodera sent from Sydney became vested in TBBF by way of gift from Mr. and Mrs. Graham to TBBF, because Onodera was at that moment the agent of TBBF.
“He was there to take delivery of the gift of the equipment from the Grahams for the TBBF,” the judge aid.
“It is the law that a gift is complete upon the delivery and hand over of the thing gifted.”
A similar set of claims was made about a second set of equipment which Onodera claimed was his, even though it had also been passed through customs as the property of the TBBF. This claim was also rejected by the judge.
However, the judge said he believed Onodera’s claim that the business was divided 80/20 rather than 50/50.
Judge Niu ruled that all the equipment shipped to Tonga was the property of the Tonga Body Building Federation and should be returned to it.
The parties in the dispute were to agree on an accountant to prepare a final account of the business and to provide all relevant documents related to the operation and costs the business.
The main points
- The Supreme Court has handed down a ruling on a dispute over the ownership of body building equipment after the collapse of a business partnership.
- Talaiasi Nau and Tonga Bodybuilding Federation Inc were in dispute with Masanao Onodera.
- The Tonga Bodybuilding Federation claimed it owned the equipment used in the gym and wanted it to be returned to its possession and control.