Khan v Vinod Patel & Company Ltd [2008] FJHC 102; HBC141.2006 (30 April 2008)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No.: HBC 141 of 2006

BETWEEN:

MOHAMMED HANIF KHAN (father’s name
Mohammed Yasin Khan) T/A Raiwai Builders,
74 Waimanu Road, Suva.
Plaintiff

AND:

VINOD PATEL & COMPANY LIMITED a
limited liability company having its registered office at Ba.
Defendant

Mr. S. Parshotam with
Mr. S. Singh for Plaintiff
Mr. S. Chand for Defendant

Date of Hearing: 9th and 10th April 2008
Date of Submissions: 14th April 2008
Date of Judgment: 30th April 2008

JUDGMENT

BACKGROUND:

[1] The plaintiff is 59 years old and has been a building contractor for 35 years. In the year 2004 he undertook to build apartments for one Ali Hassan at Extension Street, Suva, opposite the CWM Hospital. The building was 125 feet long and 27 feet wide. The height of the building was 22 feet to 24 feet. Painting the building was part of his contract.

[2] The colour of paint was chosen by the owner from a colour chart sent by the owner’s daughter from New Zealand. It was not a chart produced by any manufacturer in Fiji. The plaintiff says he took the chart to the defendant company and saw one of its employees there. The employee promised that he could match paint to the colour in the sample. He says the defendant was able to produce 73 gallons of paint matching that colour. Then the problems arose. This action concerns claims by the plaintiff that the defendant failed to produce a uniform shade of blue paint resulting in him having to buy additional paint, suffer additional labour costs for painters, having to put scaffolding twice and having to pay a penalty of $250.00 per day for not being able to provide possession of the building to the owner on the due date.

DEFENCE:

[3] The defendant’s defence is two fold: First that it provided paint to the plaintiff according to the sample of the colour he required but the plaintiff did not apply the paint according to the recommended system of applying it as displayed on the containers. The recommended method is to apply one cost of Resene quick dry undercoat plus two coats of finish paint. Secondly, it says that the defendant did not complain immediately on finding that the shade of paint was not what he required but after he had completed painting. The defendant has also counterclaimed for the sum of $7662.67 for unpaid goods sold together with 1.25% per month interest from 1st May 2005.

[4] There are four persons who gave evidence: the plaintiff, the owner’s brother, defendant’s credit controller and a sales representative from the firm of Resene paints.

CONSEQUENCES OF SALE BY SAMPLE:

[5] This was a sale by sample. A colour chart had been given to the defendant. The defendant admits it was a sale or series of sales by sample. The Sale of Goods Act contains provisions which deal with sale by sample. Section 17(2) of the Act provides:

"(2) In the case of a contract for sale by sample, there is –

(a) an implied condition that the bulk shall correspond with the sample in quality;

(b) an implied condition that the buyer shall have a reasonable opportunity of comparing the bulk with the sample;

(c) an implied condition that the goods shall be free from any defect rendering them unmerchantable which would not be apparent on reasonable examination of the sample."

Lord Macnaghten in Drummond v. Van Ingen – [1887] UKLawRpAC 15; (1887) 12 A.C. 284 at 297 explained sale by sample as follows:

"The office of a sample is to present to the eye the real meaning and intention of the parties with regard to the subject matter of the contract which, owing to the imperfection of language, it may be difficult or impossible to express in words. The sample speaks for itself."

[6] Since this was a sale by sample, the buyer would only find out if the goods matched the sample once he had reasonable opportunity to examine the goods. In case of paint, he would only know after he had opened each container of paint at the job site and applied it and gave it time to dry, to see if it matched with the paint applied earlier on the surrounding areas of the wall.

When did the problem arise?

[7] According to the plaintiff there was no problem with the first 73 gallons of paint. The problem arose at a time when he had to do touch up. Touch up was done after the wooden scaffolding around the building was taken down. There were places where the scaffolding touched the building, there were scratches caused while scaffolding was taken down and there were some dirt marks. These needed to be touched over. The paint he had bought to touch up did not match in shade with what he applied earlier. He complained to the defendant.

[8] Saiyad Ali, the brother of the owner of the building told the court that he looked after the construction of the building on behalf of his brother. He too confirmed that after touch up paint was applied; he noticed that it did not match with surrounding areas so they complained to the plaintiff who promised to rectify the problem.

[9] The plaintiff’s first written complaint to the defendant was made on 3rd February 2005. In it he tells the defendant that a four litre paint bought by him did not match the old paint. He says that he dealt with one Lakbir who I believe is Lakbir Singh a salesman with the defendant. The plaintiff stated that he was referred to one Raiman of Resene paints but Raiman was not responding. Raiman is DW2 Abdul Rahiman – see document 2 of agreed bundle. He wrote again on 7th February 2005

[10] It is apparent that the defendant then got the paint supplier namely Resene paints to inspect. The inspection was done by Abdul Rahiman and in his letter Rahiman says he inspected the building and discussed with the painter who told him that only one coat of finishing paint was applied at the time.

Analysis of evidence:

[11] The plaintiff is an experienced builder with 35 years experience as a contractor. In his evidence he explained how he prepares the surface before painting and the undercoat and finishing coats he applied. He was not going to take down scaffolding after one coat of paint especially with the owner’s brother Saiyad Ali being at the job site daily. Saiyad Ali too said that he had some experience in building industry.

[12] The plaintiff was not satisfied with the response he was getting from the defendant to his complaint so he again wrote to Rahiman of Resene Paints Ltd. The letter is for attention to Ramesh who I believe is Rameshwar Singh, Credit Controller at the time of the defendant company: document 11 of agreed bundle. The plaintiff threatened action in this letter. This prompted the Credit Controller of defendant to write to Resene Paints on 19th May 2005 seeking early action. Resene Paints Limited responded on 23rd May: Document 13 in agreed bundle. It denied responsibility because the paint was not made on basis of Resene Colour Chart and adding that if the plaintiff was not happy he should have complained early and not after applying the entire quantity. This also forms part of the defence.

[13] It is obvious that Rahiman Dean from Resene Paints did not either know or understand the facts. The plaintiff had no complaint about first 73 gallons so there was no need to complain at the early stage. Between the evidence of the plaintiff and DW2 Abdul Rahiman I prefer the evidence of the plaintiff. The plaintiff was involved with the job day in and day out. Abdul Rahiman paid only two visits to the site with no record of visits except the reports he made. I believe the plaintiff that the problem only arose after he purchased touch up paint to cover up the scratches and marks and not after only applying one coat as the Resene report suggests.

[14] The plaintiff did say that he had purchased 8 gallons of paint from International Paints (Fiji) Limited. The first lot was purchased on 24th January 2005, then on 14th March 2005 and rest in late April and early May. He told the court that he applied the paint he bought from International on the same job site. The suggestion by the defendant is that since paint from two different sources was applied one cannot say which paint was the defective one.

[15] Again I accept the plaintiff’s evidence that he was compelled to go to International as the defendant’s paint had a different shade. His evidence throughout is that the paint purchased from International was proper.

[16] Accordingly I conclude that the plaintiff was forced to purchase 42 extra gallons of paint because the defendant could not supply the shade of paint as per the sample in the colour chart. He is entitled to the value of the forty two gallons of paint namely $1,892.00. Naturally, he would incur expenses in buying some extra brushes and labour to apply the paint. The plaintiff says he incurred $2,417.00 for these items but these claims are subject to proof as mentioned later on in the judgment.

CAUSE OF ACTION: CONTRACT OR TORT:

[17] I agree with the defendant’s submission that the plaintiff’s statement of claim appears somewhat confused. The plaintiff says that the defendant supplied it paint negligently but details of the negligence are not provided. The defendant submits that the plaintiff should have made up his mind whether to sue in contract or tort instead of leaving it to the court to infer what the cause of action is. The defendant submitted that the plaintiff has not pleaded a clear cause of action against the plaintiff in his statement of claim and therefore it should be struck out.

[18] Historically, there had been some confusion as to the concurrent liability in contract and tort borne out of reluctance by courts to allow clients to sue solicitors in tort: Groom v. Crocker – (1938) 2 ALL ER 394; Heywood v. Wellers – [1975] EWCA Civ 11; (1976) 1 ALL ER 300. Even as late as 1985 the Privy Council was of the view that there was no need to look "for liability in tort where the parties are in a contractual relationship" on the grounds that it was the contract which determines their obligations to one another and because different consequences follow depending on whether liability arises from contract or tort. It is Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. – [1963] UKHL 4; (1964) AC 465 which foreshadowed or opened the way for imposition of liability for negligent provision of services arising from a contractual relationship. It is however now clear that where liabilities arise concurrently in tort and contract it was up to the plaintiff to choose the cause of action which was most advantageous to him: Henderson v. Merrett Syndicates Ltd. – (1995) AC 145 (House of Lords) where Lord Goff traces the history of the development of law on this aspect in detail.

WHAT IS THE TEST FOR DAMAGES IN CONTRACT?

[19] As I stated earlier, that this was a sale by sample which is a claim founded on contract. The damages in contract which the plaintiff can claim are those which are within the contemplation of the parties at the time of the making of the contract or such loss as may fairly and reasonably be considered as arising according to the usual course of things: Butler v. Fairclough – [1917] HCA 9; (1917) 23 CLR 78, 89.

[20] The concept of remoteness of damage is a tool used by the common law to limit damages. The object of award of damages is restituo ad integrum that is to restore the party whose rights have been violated in the same position as if his rights were observed or contract performed so far as money can do it. If the principle were relentlessly pursued, it would provide a person with complete indemnity for all resulting loss however remote, unpredictable, unforeseen or improbable. The courts over the years have considered this to be a harsh result and accordingly developed the doctrine of remoteness of damage. The foundation of this doctrine were first laid in Hadley v. Baxendale 156 ER 145 where Alderson J stated that

"where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it".

[21] Knowledge either imputed or actual which the parties possess of any special circumstances at the time of the making of the contract is decisive in determining the extent of damages which a court would grant.

What material facts not told to the Defendant?

[22] What could be within the contemplation of the parties would depend upon what facts are made known by one party to another either before or at the time of the making of the contract. All the plaintiff told the court is that he took a chart with a colour he had chosen and wanted paint of that colour. The defendant was not made aware that it was going to be applied on a double storey building or made aware of the height of the building or that scaffoldings would be mounted for purposes of painting the building. The plaintiff had not told the defendant that he would need to pay penalty to the owner if the paint did not match and there was delay. He did not tell the defendant how much the penalty was. The plaintiff had no written contract with the owner nor was penalty fixed in advance. The plaintiff paid the penalty for delay without even consulting the defendant.

THOSE WHO SEEK SUBSTANTIAL DAMAGES MUST PROVIDE PROPER EVIDENCE:

[23] The plaintiff is seeking substantial damages. He is asking for $2,400.00 for making scaffolding and $2,417.00 for labour and material. No doubt he must have incurred some expenditure in this. He stated that in the process of dismantling the scaffolding, some timber was broken and he had to buy new ones. However, where are the invoices for the timber purchased? He must have paid his workers by the number of hours worked. Where are the details of wages? As early as 17th May 2005 the plaintiff was threatening legal action so the need to keep records would be obvious to him. He had set out the details of his claim in the letter dated 17th May 2005: document 11. He is a builder and he had a number of jobs running so he would have paid his workers by hours worked.

[24] Plaintiffs who bring actions for substantial damages must prove their damage. They cannot simply write down figures and assert that this is their loss and expect the court to grant those damages or loss. They have to prove their loss. The court looks at the circumstances and the nature of the case and if greater details are warranted, the court will insist on that: Bonham Carter v. Hyde Park Hotel – (1938) 6 TLR 177; Ratcliffe v. Evans – (1986) 2 QB 524 at 532.

[25] There are situations where assessment of damages is largely speculative but the court does its best to arrive at a figure if it is satisfied that real damage has been suffered. Loss of chance is an incident of such cases.

[26] This is not a case where I can speculate in the absence of any detail even as to the number of extra hours of work and the hourly rate for the painters. This type of detail should have been provided to the court. The painter who painted the building could easily have been called to give his rate of pay.

Penalty sum:

[27] The plaintiff says the sum of $25,500.00 was deducted from his total contract price of $480,000.00. Progress payments according to him were paid through ANZ Bank. Someone from the Bank could have been called to show how much was paid by progress payments by the Bank. Even the quotation which he gave to the owner setting out the contract price was not produced to the court. Alternatively the plaintiff could have produced his own bank statements to prove the total sum he received from the owner and the shortfall from the quoted sum of $480,000.00.

[28] I am not satisfied on balance of probability given the nature of the case that the plaintiff paid a penalty of $250.00 per day to the owner.

[29] Even if I was satisfied as to proof that he paid the penalty sum, such a damage would be too remote. It is very unlikely that a supplier of building material would agree to pay penalty for delay in execution of works particularly in a building construction where delay could be caused by too many factors: like unavailability of other material, unavailability of skilled labourers, poor workmanship or delay in joinery or plumbing or electrical works. I therefore refuse to grant the plaintiff the penalty sum claimed.

GENERAL DAMAGES:

[30] The plaintiff told the court that he had to make runs to the defendant to complain. He had to bring representatives of the defendant to the job site. He says he was frustrated with the responses he was getting. His frustration is borne out by the letters he wrote. The defendant referred the plaintiff to Resene Paints Ltd. which in turn to sum up stated it had nothing to do with the supply of paint to the plaintiff. The fact that the plaintiff may have bought other material during these journeys to the defendant is really immaterial. The primary purpose of the visits was to complain. Doing the best I can I allow the plaintiff $1,200.00 as general damages. The plaintiff was so disenchanted with the defendant’s response that he forced the issue by holding back moneys due to the defendant for material supplied and which is the subject matter of the counterclaim.

COUNTERCLAIM:

[31] The defendant’s counterclaim is for $7,762.67 plus interest at 1.25% per month from 1st May 2005 till payment. Document 6 in the agreed bundle provides the summary of unpaid invoices. Document 7 contains the actual invoices. In cross examination Mr. Chand showed that not all the invoices were signed by the plaintiff personally or were not signed at all. While it may be advisable to have delivery dockets or invoices to be signed by the client or his authorized agent it is strictly not a statutory legal requirement. The key factor is whether goods were supplied and dockets supplied. The plaintiff himself admitted owing $5,000.00 for goods supplied.

[32] I accept that the defendant supplied the alleged goods worth $7,662.66. The plaintiff in his defence to the counterclaim admitted that interest was agreed to be paid: Clause (b) of defence to counterclaim. Accordingly I grant simple interest at $1.25% on the above sum from 1st May 2005 till date of judgment.

COSTS:

[33] I allow the plaintiff costs summarily fixed in the sum of $2,200.00. I award no costs on the counter claim as it was the defendant’s conduct in not considering the plaintiff’s plight which led the plaintiff to hold onto funds to see if the problem could be resolved.

CONCLUSIONS:

[34] Accordingly I allow the plaintiff $1892.00 for the costs of 42 extra gallons on paint and I allow him $1,200.00 in general damages. His claim for costs of scaffolding, extra labour charges and penalty sum are disallowed for reasons given earlier. The defendant succeeds in his counterclaim for goods sold and delivered and interest at 1.25% per month.

FINAL ORDERS:

[35] There is judgment for the plaintiff in the sum of $3,092.00 and costs summarily fixed in the sum of $2,200.00. There is judgment for the defendant against the plaintiff in the sum of $7,662.62 together with simple interest at the rate of 1.25% per month from 1st May 2005 till the date of judgment. I do not allow the defendant costs.

[Jiten Singh]
JUDGE

At Suva
30th April 2008