Collison v Carpenters Fiji Ltd [1995] FJHC 23; Hbc0155j.91s (26 January 1995)

IN THE HIGH COURT OF FIJI
(AT SUVA)
CIVIL JURISDICTION

CIVIL ACTION NO. 155 OF 1991

BETWEEN:

DAVID HERBERT VALENTINE COLLISON
Plaintiff

AND

CARPENTERS FIJI LIMITED
Defendant

I.C. Akhil for the Plaintiff
S. Lateef for the Defendant

Date of Hearing: 26th July, 1994
Date of Judgment: 26th January, 1995

JUDGMENT

In this case the plaintiff claims to be the owner of a Clark Bobcat Loader Model 974 (hereinafter referred to as "the Bobcat") which he let out on hire to the defendant on the 22nd of March 1990 to unload rice wheat from MV Capitaine Wallis at the Kings Wharf at Suva.

The Statement of claim annexed to the writ which was issued on the 16th of October 1990 claims on or about 31st of March, 1990 while the Bobcat was being lifted out of the Number 2 Hold of the MV Capitaine Wallis by the defendant its agents or servants the Bobcat fell to the bottom of the Hold and was extensively damaged, details being given, and the damage estimated at $11,095.

The plaintiff alleges that the accident occurred as a result of the negligence of the defendant, its agents or servants, details of which are then supplied. I need not mention them here.

In consequence of the foregoing matters the plaintiff claims' also to have suffered loss of income and damage, the loss of income being said to be from the 2nd of April 1990 to 10th August 1990, 19 weeks at $700 per week based on 40 hours per week at the agreed standby rate of $17.50 per hour and continuing at the rate of $700 per week until payment.

The plaintiff also claims interest on the arrears which the Court may find to be due.

The Statement of Defence does not admit that the plaintiff was the owner of the Bobcat nor that it was hired out to the defendant, alternatively that if the Bobcat was hired out to the defendant it was as agents for Sofrana Unilines.

The defendant denies that it caused any damage to the Bobcat but that if the Bobcat was damaged then this was caused by Ports Authority of Fiji's Staff causing the Bobcat to fall when being lifted out of the Hold of Capitaine Wallis.

Finally the defendant says that there was no privity of contract between it and the plaintiff.

The parties gave sworn evidence before me, the plaintiff in person and Harold Aloysius Swann Owners Representative Shipping for the defendant.

The plaintiff in evidence in-chief said that he was now a Project Manager in Hawaii. In 1990 he was in Lautoka and the owner of the Bobcat concerned in these proceedings. Before 1990 it was owned by Collison and Associates of which Mr. Collison was the major shareholder. It was transferred to him in January or February 1990.

He said that the contracting business was not profitable so he transferred some of the company's assets into the names of himself and his wife in an attempt to make some money. When he hired the Bobcat he had been approached by the late Mr. Max Olsson who had told him that Sofrana Unilines wished to hire a Bobcat.

Mr. Collison replied he would prefer not to hire it to Sofrana. He repeated this when Mr. Swann visited him in his Lautoka Office and they discussed the proposed rates.

He said that Mr. Swann then asked if Mr. Collison would hire the machine to Carpenters Shipping and Mr. Collison agreed.

He was then issued with an order from Carpenters Shipping to cover the proposed hire. This is Exhibit P1 and is made out by Carpenters Shipping to Collison Construction Ltd. The order recites that it is for the hire of a Bobcat to be used on a cargo operation Ex Captain Wallis.

Cartage from Navua to Lautoka is stated as $180 and the rate of hire for discharging the Visama Rice Wheat is stated to be $35 per hour.

The defendant then took possession and Mr. Collison stated that on the 31st March 1990 he received a message from Mr. Swann that the Bobcat had been badly damaged and was beyond repair.

Mr. Collison said because he was very busy he asked the defendant to get an assessment of damage from Billet Wright and Associates Ltd but this was not paid for by Mr. Collison.

A copy of the Survey Report was tendered by the plaintiff and is obviously the basis of the statement of claim.

According to Mr. Collison damage was estimated at over $11,000 which was much beyond his financial capacity to pay. He therefore suggested that the defendant should provide the necessary parts and have their Subsidiary Imel Industrial and Marine Engineering Ltd repair the twisted steel frame of the Bobcat. The defendant refused.

The plaintiff then tendered a Telefax message from Imel addressed to Mr. Collison which quoted $6700 to repair the frame only of the Bobcat.

Mr. Collison said that after numerous telephone calls and discussions with the defendant he became annoyed because he was not receiving any cooperation. He therefore wrote two letters to the defendant dated 4th of April and 22nd of May 1990.

In the first letter he pointed out that he had an Order No. 155402 from the defendant being Exhibit P1 and that he held the defendant responsible for the damage suffered by the plaintiff.

He requested that the Bobcat be returned into the plaintiff's possession in at least the condition it was in when the hiring commenced.

It is to be noted here that both these letters were written on the letterhead of Collison Construction Ltd which Mr. Collison explained later in his evidence.

In the second letter he complained of being "given a run around long enough". As at 22nd of May 1990 the plaintiff claimed an estimated $17,430, $16,080 of which was said to be standby charges for the loss of use of the machine.

In cross-examination Mr. Collison stated that before January 1990 Collison Construction Ltd had been a limited liability company of which Mr. Collison was the major shareholder and Managing Director and the other shareholders were his wife and one David Ashby. Mr. Collison said that he just found out that the company had been wound up by Court Order in December 1990 after Mr. Collison had left the country on the 5th of December 1990.

He was referred to the minutes of a pretrial conference held on the 15th of April 1992 and attended by counsel for the parties presently appearing. The agreed facts were stated to be that the defendant issued Order No. 155402 on the 22nd of March 1990 to Collison Construction Ltd and that on or about 31st of March 1990 the Bobcat was damaged whilst on hire to the defendant.

Mr. Collison admitted that before he left Fiji he had received a winding-up petition from Mobil Oil (Fiji) Ltd. He then referred to a document Exhibit P7 which purports to be the minutes of a meeting of the Directors of Collison Construction Ltd on the 17th of January 1990 in the company office in Lautoka. Present were the Managing Director D H V Collison and secretary director Lyn O. Collison. The minutes state:

"It was resolved that in lieu of salary owed and other considerations, the Terberg F2000 truck, plus the Bobcat 974 and all accessories, presently owned by this Company, be transferred to the personal ownership of D H V Collison and Lyn O Collison for the sum of F45,000 (Forty Five thousand dollars in Fijian currency)"

The witness said that the minute was prepared by and at the suggestion of his solicitor Mr. Ram Krishna. The consideration paid was that Mr. Collison was owed salary which he had not been paid for a long time. He therefore transferred the Terberg truck and the Bobcat into his name for $45,000.

He denied that he had no right to transfer the two vehicles to himself and said that when Mr. Swann gave him the order he did not have it put in his name because the truck and the Bobcat were still being hired out by Collison Construction Ltd. The truck still had the name Collison Construction Ltd on its door.

When it was pointed out to him that the writ in this action gives the plaintiff's name on the back as Collison Construction Ltd but on the front of the writ, the name apparently "greyed" out, that of the plaintiff, the witness said that Collison Construction Ltd hired out machinery which is why the plaintiff used Collison Construction Ltd's stationery. He said that the company operated the machines which it hired on behalf of Mr. Collison but he admitted that any person dealing with him would conclude that the Bobcat was owned by the company named on the letterhead.

He denied the suggestion that Mr. Swann had told him that it was company policy not to repair other company's machines. He said that at the time the Bobcat was the only one of its kind in Fiji and that Fiji Machinery could not repair it. He said that the plaintiff had received no offer from the defendant at all and that for six months the plaintiff had done nothing because most of the repairs were beyond the plaintiff's capabilities and he could not afford them. He also said that the defendant knew that the plaintiff could not afford to pay for the repairs although later in evidence the defendant denied this.

In re-examination Mr. Collison said that had the defendant offered to take the Bobcat to a reputable repairer and have it repaired the plaintiff would have agreed. Alternatively had the defendant offered him $11,000 he would have had the machine repaired immediately. He said his only problem was that no one made any attempt to help him.

If the machine had been repaired quickly it would have earned income for the plaintiff whereas this was made impossible partly by the action of the defendant and partly by the fact that the plaintiff could not afford to repair the machine himself.

In answer to some further questions about the company minute of the 17th January 1990, the plaintiff admitted that he had never discovered this document.

The defendant then went into evidence. As Mr. Lateef put it, the defence was two-pronged:

(1) the plaintiff had no right of action against the defendant because the defendant presumed that the Bobcat was owned by Collison Construction Ltd or

(2) if the defendant were to be found liable to the plaintiff the extent of its liability should only be the cost of repair to the machine and not in addition for any loss of use of it because the plaintiff has done nothing to mitigate his loss.

In his evidence Harold Aloysius Swann stated that he represented the owners of the motor vessel Capitaine Wallis, the vessel on which the Bobcat had been used. He said that the machine had been damaged by Ports Authority's employees and Mr. Swann had suggested to Mr. Collison that he make arrangements to take the Bobcat and make necessary repairs and claim on the defendant. Mr. Collison had rejected this suggestion because he said that he had handed the machine to the defendant in good order and condition and the defendant should therefore deliver it back to him in that condition. Mr. Swann said that his attitude at the time was that Mr. Collison was the owner and it was for him to effect any repairs.

On the 20th of July 1990 the defendant through Mr. Swann had written to Collison Construction Ltd setting out the defendant's position towards the plaintiff. Essentially this was that the defendant was prepared to deliver the Bobcat to the plaintiff at its expense whereby the plaintiff should carry out the repairs and then claim the cost of these from the defendant. No standby charges or hire charges would be accepted after the end of discharge on 31st March 1990.

The plaintiff's claim for damage would be re-submitted to Ports Authority of Fiji which were responsible for the discharging operation and that if the Ports Authority refused to make any offer the defendant would consider making an ex-gratia payment to the plaintiff.

On the 1st June 1990, Ports Authority had rejected any responsibility and had required the Bobcat to be removed from the Wharf. The defendant on the plaintiff's instructions had done this.

Any claim by the plaintiff for loss of earnings was refused by the defendant on the ground that as the plaintiff owned the Bobcat it was in his interest to repair it and perform any contract which he had with the Fiji Government.

Mr. Swann said he had always maintained that if proper documentary procedures were followed the Sydney Head Office of the defendant would approve a payment to the plaintiff but so far no payment had been approved.

He said that he believed that at the present time the Bobcat is in Lami and overgrown with grass, not been repaired and had been there since the end of June 1993.

He also said that on the 16th of May 1990 the defendant had written to the Wharf manager of the Ports Authority of Fiji alleging that the Authority's stevedores whilst unloading the Bobcat from Capitaine Wallis had dropped it from the deck into lower Hold No. 4. That at the time the cost of repair of the machine was $15,750 and that the defendant held Ports Authority responsible for this damage.

Subsequently the Authority exercising its statutory rights refused to pay for the cost of damage.

In cross-examination Mr. Swann said that it was normal shipping practice for the defendant to accept responsibility for any damage if the owner of the machine repaired it and this was the practice of the defendant. He agreed that it was fair for the plaintiff to require the defendant to return the machine to him in the condition in which it was when it was hired. He said that the defendant had failed to appreciate the financial position of the plaintiff at the time because it did not know of it.

He also said he did not think it was fair for the plaintiff to pay for the repairs without an undertaking of the defendant to reimburse him and no such undertaking had been given. He finally admitted that it really did not matter to the defendant whether the plaintiff or Collison Construction Ltd owned the Bobcat as long as the defendant had hired the machine from either the plaintiff personally or Collison Construction Ltd. He said the normally the defendant did not ask the person with whom it was dealing who was the owner of a machine.

With that summary of the evidence I now turn to the question of liability. Much was naturally made by counsel for the defendant as to who really owned the Bobcat. It is indeed curious to say the least that on the front page of the writ the name of the Plaintiff should be given as David Herbert Vallentine Collison, yet on the back of the writ the plaintiff's name is given as Collison Construction Limited. It should also be observed, that if the plaintiff were the company and not Mr. Collison in person, one would have expected the Statement of Claim to begin with the frequently-used phrase in such matters, "The Plaintiff is a company duly incorporated in Fiji and carries on the business of a civil engineering contractor" etc.

This has not been done here. Paragraph 1 of the Statement of Claim states that the Plaintiff (presumably Mr. Collison in person) carries on the business of Civil Engineering Contractor and during material times was the owner of one Clark Bobcat Loader Model 974 (hereinafter referred to as "The Bobcat").

In his cross-examination of the plaintiff, Counsel for the Defendant obtained an admission from Mr. Collison that the company Collison Construction Limited was in financial difficulties in 1990 and had been wound up on the 9th of December, 1990.

The writ having been issued on the 16th October, 1990. Counsel for the defendant naturally also asked the Plaintiff whether the petition for the winding-up order could have had anything to do with the apparent contradiction on the first page and the last page of the writ. However Mr. Collison parried this question by simply saying that he did not know whether there was any connection.

Counsel for the defendant also naturally made as much as he could of the alleged Minute of the Meeting of the Directors of Collison Construction Company Limited on the 17th of January 1990 whereby a truck and the Bob Cat presently owned by the company were transferred to the ownership of Mr. Collison and his wife the Secretary Director, Lyn Collison.

I have serious reservations about the authenticity of this document. The original has never been disclosed nor was the copy tendered in evidence or mentioned in the Plaintiff's Affidavit verifying the Plaintiff's list of documents.

According to the Plaintiff the copy in evidence was faxed by the Plaintiff from Hawaii in about January 1993 when his solicitor telephoned him and asked whether he had any such document.

The Plaintiff said he did and faxed Exhibit P.7. The Plaintiff said that the reason why the date of transmission does not appear on the document was because his machine does not state the date of transmission on documents.

This seems to me a very plausible and not entirely convincing answer in the light of the fact that the document was never disclosed in a Supplementary Affidavit of documents by the Plaintiff.

This should have been done and although Mr. Lateef very fairly said that he did not object to the tender of the document because he had asked questions about it, nevertheless I agree with him that the failure by the Plaintiff to disclose it until the trial began must raise serious doubts about the credibility of the Plaintiff on this matter.

All that said however, it seems to me that the solution to the present problem lies in the frankness of the evidence of Harold Aloysius Swann who said in cross-examination that it really did not matter to the defendant who owned the Bobcat as long as the defendant hired the machine from somebody.

Likewise Mr. Swann admitted that it was fair for the Plaintiff to require the defendant to return the machine to him in the condition in which it was taken.

Also Mr. Swann considered that it is not fair for Mr. Collison to pay for repairs to the machine without an undertaking by the defendant to re-imburse him.

The position may well be as the Plaintiff claims and on the balance of probabilities I am prepared to hold that whilst Mr. Collison was the owner of the Bobcat it was always hired by Collison Construction Ltd.

It is to be regretted that there is no document evidencing this situation but, given Mr. Swann's concession, I hold on the balance of probabilities that Mr. Collison was the owner at the relevant time.

There can be no question that the Bobcat was severely damaged and it is to be regretted that the attitude of the defendant was so intransigent on the question of repairs. I am unable to make up my mind as to whether Mr. Collison ever disclosed to the defendant his financial inability to pay for the repairs, but I think there is much merit in his claim in his letter on the 22nd of May 1990 to the defendant that:

"I have been given the run around long enough."

In that letter also he told the defendant that business was difficult at that time and the unavailability of the machine not only was affecting the services the Plaintiff could offer to clients but also seriously affecting his cash flow.

Having been informed of that, in my judgment the least the defendant should have done was to offer to repair the machine in accordance with Mr. Collison's request.

The fact that according to Mr. Swann this was normal shipping business practice, even if true, was no reason to ignore Mr. Collison's request that the machine be returned to him in the condition in which it was hired.

Given the known resources both financial and physical of the defendant I consider the defendant's attitude was unreasonable.

The legal position of the parties is that there was a bailment termed "hire" between the Plaintiff and the defendant as a result of which the defendant received both possession of the Bobcat and the right to use it in return for the agreed rate of hire payable by the defendant namely $35.00 per hour.

The defendant was therefore under an obligation to return the machine to the Plaintiff in the condition in which it was hired at the expiration of the period of the hire and to pay the cost of repairing it - British Crane Hire Corporation Ltd. v Ipswich Plant Hire Ltd. (1975) Q.B. 303, 311, 313.

In law the defendant was obliged to take reasonable care of the Bobcat and the evidence satisfies me that it did not.

It would appear that the defendant had lent the machine to Ports Authority of Fiji, an employee or employees of which were handling it at the time it was damaged.

In these circumstances the Ports Authority therefore became the defendant's servant or agent and as such the defendant must be found liable to the Plaintiff.

As Mr. Swann again admitted the defendant never denied that it was prepared to pay a reasonable amount. The pity is that this was not done much earlier when in my view it could have and should have been done.

There can be no doubt on the question of quantum that the Plaintiff is entitled to recover the sum of $11,095.00 being the cost of repairs. The Defendant must also pay for some loss of income which I am prepared to find he suffered as a result of the actions of the defendant.

Mr. Akhil realistically conceded that the Plaintiff is not entitled to recover any loss of income from the date of damage until the date of hearing of the action. In my judgment, and although no standby charges so are mentioned in the Hiring Agreement, it would be fair to award the Plaintiff some amount for anticipated loss of use of the machine.

In his letter of the 22nd of May 1990 the Plaintiff estimated the total then owing to him as $l7,434.00. This must have been the Plaintiff's most optimistic estimate and because of the reservation I have expressed about certain aspects of the Plaintiff's conduct in this litigation, doing the best I can I consider it would be fair to award the Plaintiff the sum of $16,000 as total damages.

To this there should be awarded interest at the rate of 9% from the date on which the writ was issued for a period of 4 years, namely $5,760.00.

There will therefore be judgment for the Plaintiff against the defendant in the sum of $21,760.00 together with costs to be taxed if not agreed.

As the defendant has instituted Third Party proceedings against Sofrana Unilines Ltd., in the light of my findings I also hold that the defendant should be indemnified by the third party in respect of this judgment.

There will be judgment accordingly.

JOHN E. BYRNE
JUDGE

Cases referred to in judgment:

British Crane Hire Corporation Ltd. v. Ipswich Plant Hire Ltd. (1975) Q.B. 303, 311, 313.

No case mentioned in argument.

HBC0155J.91S