Auto Holdings Ltd v Silk & Boyd Ltd [1983] CKHC 4; 003.1982 (1 June 1983)

IN THE HIGH COURT OF THE COOK ISLANDS
HELD AT RAROTONGA
(CIVIL DIVISION)
PLAINT NO. 3/82

BETWEEN

AUTO HOLDINGS LIMITED
Plaintiff

AND

SILK & BOYD LIMITED
Defendant

Counsel: Clarke for the Plaintiff
MacFadzien for the Defendant

Hearing: 22 February 1983
Judgment: 1 June 1983

JUDGMENT OF SPEIGHT, C.J.

This action arises out of a misadventure on the wharf at Avatiu. The Plaintiff was consigning a vehicle on one of the Defendant’s ships to the Island of Mangaia when it inadvertently fell into the harbour prior to being loaded.

The Plaintiff originally sued in 1981 on a Statement of Claim which was based on an allegation that the vehicle had been negligently driven by one of the Defendant’s employees in the course of his employment and had thereby finished up in the harbour. Apparently there was some lack of proof as to what had just happened and the then Chief Justice, Sir Gaven Donne, thought it proper to non-suit the Plaintiff and, this was, the appropriate course for him to have followed in the circumstances as will emerge from the discussion that follows.

The pleadings have been redrawn and the matter comes before this Court with somewhat different allegations. It is alleged that as the vehicle had passed into the control of the Defendant company and as the vehicle fell into the harbour as a result of some unascertained conduct by one of the Defendant’s employees, Henry Okirua, the matter is one in which the doctrine of res ipsa loquitur applies. Alternatively, the plea of negligence on the part of the employee in interfering with or manipulating the controls in some way denoted negligence, and again as a further alternative cause, that the same employee was known to his employers to have a propensity for interfering with motor vehicles and that the employer was negligent in either employing Okirua at all, or, in any event, failing to exercise proper supervision and control over him.

The facts are quite simply stated. Mr Preston, the director of the company, had sold this new Suzuki jeep worth $7,500 to a customer in Mangaia together with a portable McCullough generator which, at the relevant time, was being carried on the tray of the jeep. Mr Preston arranged with the Defendant for the vehicle to be shipped on the 1^st or 2^nd November, 1980 and was told to deliver it to the wharf. This he did and he saw a Mr Lindsay, an employee of the Defendant company who is apparently in charge of receiving cargo, and as directed he parked it next to the pie cart on the wharf some distance away from the edge of the water. The vessel was due to leave the following day and it was anticipated that it would probably be loaded that afternoon. As was the accepted practice - for Mr Preston had shipped vehicles with the Defendant before, he left the keys in it and, as I find, had passed effective control of the vehicle to the Defendant. It was necessary for Mr Preston to return to his place of business to complete a bill of lading and other documents, and he returned to the wharf at about 4.20p.m. The vehicle was not then in sight having obviously been moved from the place where he had been told to park it. Nor was it anywhere on the wharf, and Mr Preston saw to his surprise that the ship had been moved from its previous position alongside the wharf to a distance of some feet out and the shipping people had a crane with its hook down into the water and some men were swimming round obviously attempting to salvage the jeep which had, in the meantime, somehow fallen into the water.

Evidence disclosed that the employee whose name has already been mentioned, Henry Okirua, had been with the Defendant company for some years and was apparently a hard working wharf labourer. He had no real knowledge of the operation of motor vehicles but unfortunately they had a fatal attraction for him and he had, from time to time, evidenced his wish to improve his acquaintance with their workings. The evidence shows that on at least three occasions he had climbed upon the company’s front-end loader and had apparently attempted to work it and on another occasion had been, albeit unsuccessful, attempting to ride a motor cycle on the wharf. He had been frequently told that he was not to drive vehicles and it seems that his propensity was well known to his employers and in particular to Mr Upoko, who was the company’s stevedore supervisor and who was in charge of the loading of the vessel on that day. Mr Upoko had seen the vehicle parked near the pie cart as Mr Preston had been directed, but he was at the relevant time working inside the hold of the vessel supervising stowage.

At the hearing of this case the Plaintiff’s Counsel called Henry Okirua as a witness. He was somewhat naturally a little shy at confessing to the role he had played and indeed, I fancy that he did not tell us the whole story. He said that he had first seen the jeep when it was close by the edge of the wharf - not in the position where it had originally been placed. Whether this is true and the jeep had been moved there by some other person or whether Okirua had moved it there himself but will not confess, I am certain. At any rate, he said he was in the cab of the jeep sitting in the driver’s seat and he said that he stepped on the clutch and the vehicle moved forward and fell into the sea. This seems unlikely. I have inspected the site on the wharf but have gained little assistance from that, for there have been alterations. But I gather from the evidence that there was no particular incline at the time as would suggest that the vehicle had been parked by someone with no hand brake on but merely placed in gear. It seems to me more likely either that Okirua had started and driven the vehicle himself from its original position, or alternatively, tried to start it or take the hand brake off from the close-up place where he speaks of having entered it. In any event, this is conjecture and is not a matter of importance for it is clear the vehicle fell into the sea because Okirua, despite that he was not employed for this purpose, indeed, had been forbidden to do so, had entered the vehicle and interfered with the controls.

The question then arises as to whether the company is liable for his actions which were outside the course of his normal duties but nevertheless which occurred as a result of his misconduct during the time and at the place where he was employed and indeed, in a matter closely allied to his normal duties, viz.: cargo handling. In my view, the correct answer to this question is that although he had gone outside the course of his duty and indeed contrary to an express prohibition, his propensity for interfering with motor vehicles was well known and the fact that he had been warned on a number of occasions by responsible employees of the Defendant company, make it inescapable that it was as negligent to leave an unsupervised vehicle within immediate area of temptation to him as it would be to leave a small child unsupervised with a box of matches. Legal authorities which sustain such conclusions are to be found in all text books covering vicarious liability of the matter for the tort of the servant. Cases such as Ilkiw v Samuels 1963 1 WLR. 991 and Kay v I.T.W Ltd [1968] 1 QB 140 do not extend as far as to cover this case which is one where the employee not only was forbidden to drive, bur expressly told not to have anything to do with vehicles - it was a prank of his own. But there is a different basis for liability. This is a failure of supervision case, and by analogy with Dorset Yacht Co. Ltd v Home Office [1970] UKHL 2; [1970] AC 1004 it can be seen that liability arises from failure to supervise irresponsible persons under one’s control.

I conclude therefore that liability rests upon the Defendant company. That, however, is not the end of the matter because there is also a dispute as to the extent of damage. Although the Plaintiff company, through Mr. Preston, initially said that they did not want to have anything more to do with it and would hold the Defendant liable for the damage suffered to the jeep and the generator, nevertheless by some means which are not quite clear, the Plaintiff company took the jeep off the wharf, back to its garage, and from time to time attempted to overhaul it. Eventually, but after a very long period of time, the vehicle was sold to a panelbeater for the sum of $3,000 after approximately $960 in labour and materials had been expended on it. The claim in respect of the jeep therefore is put on this basis:-

Original value	$7,550
Subsequent sale	$3,000
Net loss	$4,550
Plus value of repairs	$960
Total	$5,510

The Defendant contests these figures. In particular it is claimed that the vehicle in fact was put into working order later that day and was driven on the wharf before it eventually went back to the Plaintiff company. Mr. Preston does not agree that this took place and I am in two minds as to whether this is so. Nevertheless, I was impressed by the evidence of Mr. Nicholson, a very experienced motor mechanic, who was called as a defence witness. It appears that the Plaintiff, although it assumed responsibility by taking possession of the vehicle again and doing some work on it, was less than vigorous in its attempts to minimise the loss. It seems that it had been left parked under a tree for quite a long time without any very real work done on it, and I accept Mr. Nicholson’s evidence when he saw it at a somewhat later period it was in a derelict condition and that it probably could have been made a much more saleable proposition had it been given more vigorous attention at an earlier stage. He thought that an expenditure of 500 dollars on it, possibly a little more, would have produced a sale price of $4,500 as a second hand vehicle. If one takes $500 as legitimate expenditure then its pre-repaired value would be $4,000 and the loss would be $3,550. He acknowledged, however, that the repairs might have required upwards of $1,000 of work so that the net amount realised would be $3,500, leaving a loss of $4,050. It must be a matter of informed estimate between the fairly comparable views put forward by the Plaintiff and the Defendant, and in the circumstances I fix the loss at the round figure of $4,000 for the jeep.

In addition there is the question of the generator. When new it was worth $1,099. The Plaintiff did not attempt to recondition it, but stripped it down and sold some of the parts as spares for which a total of $100 only was realised, so that a figure of $999 is claimed under this head. Again the defence called an expert witness, Mr. Harrison, an experienced electrician. His view was that not a great deal of loss would have been sustained had the Plaintiff acted vigorously in stripping the equipment down, washing it out thoroughly and treating it with de-watering agents and re-assembling. He did not put an exact figure on an estimated resale value so I cannot act with too much confidence on the claim that it would be almost as good as new. Indeed, that seems an exaggeration because the vendor would have to disclose its immersion in seawater which would make any electrical equipment suspect in the minds of a buyer. I make an estimate and I fix the loss as being approximately half the value and I therefore award $550 under this item, making a total judgment in favour of the Plaintiff of $4,550 with costs according to scale.

SPEIGHT C.J