Gounder v Murr [2011] FJSC 12; CBV0009.2010 (12 August 2011)

IN THE SUPREME COURT OF FIJI ISLANDS
AT SUVA

CIVIL APPEAL NO. CBV0009 of 2010
(Fiji Court of Appeal No. ABU003 of 2009)

BETWEEN:

GANGA GOUNDER
Petitioner

AND:

PETER MURR
Respondent

Coram: The Hon Justice Anthony Gates, Chief Justice
The Hon Justice Saleem Marsoof, Judge of Supreme Court
The Hon Justice Sathyaa Hettige, Judge of Supreme Court

Hearing: Thursday, 4th August 2011, Suva

Counsel: Mr. D.S. Naidu for Petitioner
Mr. Q.B. Bale for Respondent

Date of Judgment: Friday, 12th August 2011, Suva

JUDGMENT

1. This is an application for special leave to appeal against the decision of the Court of Appeal dated 21st October 2010 (Byrne AP, Inoke JA, and Calanchini JA) which reversed the judgment of the High Court sitting in Lautoka (Finnigan J.) that the action instituted by the Respondent, Peter Murr, against his landlord, Ganga Gounder, claiming damages for negligence, should stand dismissed. The Court of Appeal found that the Petitioner had acted in breach of the non-delegable duty of care he owed his tenant and had also been in breach of his statutory obligations, for the enforcement of which the Respondent had a private right of action, and awarded the Respondent an aggregate sum of $77,571.12 by way of damages, which included $73,636.00 being the value of the property and personal effects of the Respondent and his family which had been lost in the fire that gutted the premises on 18th August 2006, and $3,935.12 as special damages, being the cost of the temporary alternative accommodation for the Respondent and his family immediately after the fire.
   

The Claim and its factual background

2. The Respondent, who was the nominated-tenant of the premises let to his employer Downer Construction (Fiji) Ltd., (hereinafter referred to as "Downer Corporation") by the Petitioner, claimed on three causes of action based on the alleged negligent failure of the Petitioner to discharge his contractual obligations undertaken by clauses 10, 12 and 13 of the Agreements dated 3rd November 2004 (B2) and 16th March 2006 (B4) entered between the Petitioner and the employer of the Respondent. These agreements were couched in similar language, with identical obligations, except that the first of these was for the period 15th November 2004 to 14th March 2006 at a monthly rental of $2100.00 ("first Tenancy Agreement") and the second was for the period 15th March 2006 to 14th March 2008 at a monthly rental of $2400.00 ("second Tenancy Agreement").
   
3. Both Agreements had been signed respectively by the Petitioner's Landlord and the Respondent as Tenant, and although the latter had placed his signature "for Downer Corporation", the purpose of the agreement was to provide residential facilities for the Respondent, who was entitled to the same in terms of his contract of employment with Downer Corporation. There was no dispute that as the beneficiary of the said agreements, the Respondent was entitled to sue on the Agreements.
   
4. Apart from clauses 10, 12 and 13 which formed the basis for the three causes of action on which the Respondent sued, another clause that was referred to in the original court and in appellate proceedings was clause 11 that dealt with the obligation to insure the premises. The said clauses provided as follows:-
   

"(10) The tenant, paying the rent hereby reserved and performing and covenants and provisions herein expressed or implied and on the part of the tenant to be observed and performed the tenant shall have quiet enjoyment of the said premises throughout the term hereby created without any interruption or disturbance by the landlord or any one lawfully claiming by through under or in trust of the landlord.

(11) The Landlord agrees to keep insured to the full insurable value at all times during the term of tenancy of the building and shall punctually pay all premium for keeping the insurance current.

(12) To comply with the lawful requirements in respect of the said premises of the Nadi Rural Local Authority or the Public Health or Local Authorities save in as much as such compliance may be imposed by the said Authorities on the Tenant.

(13) To keep the said premises in good order and conditions and repair saves in as much such obligation as met be herein imposed upon the Tenant."

The Causes of Action

5. The three causes of action upon which the Respondent instituted action were set out in paragraph 19 of the Statement of Claim, in the following terms:-
   

"That the Defendant (now Appellant) breached his contractual obligations under the Tenancy Agreement in respect of the premises-

First Cause of Action –

a) by negligently failing to ensure that nothing will happen throughout the term of the tenancy to interrupt or disturb the Plaintiff's peaceful occupation of the premises;

Second Cause of Action –

b) by negligently failing to keep the premises in good order and conditions and repair throughout the term of the tenancy;

Third Cause of Action –

c) by negligently failing to comply with the lawful requirements of regulation 47 of the Electricity Regulations made under the Electricity Act, cap 180."

It appeared from paragraph 19 of the Statement of Claim that the aforesaid first cause of action was based on clause 10 of the Second Tenancy Agreement, while the second was based on clause 13 and the third on clause 12 of the said Tenancy Agreement.

The Trial and the Judgment of the High Court

6. It is necessary to note at the outset that the High Court of Fiji held in Lautoka in its judgment dated 8th December 2008, treated the three causes of action on which the Respondent's claim was based as in reality only two. In paragraph 30 of its judgment, the Court observed that the Respondent has not based his claim on the tort of negligence, and went on to analyze his claim into two causes of action, the first of which was the Landlord's breach of duty of care under his tenancy contract (which would encompass the first and second causes of action as spelt out in paragraph 19 of the Statement of Claim) and the second, "negligence proved by breach of statutory duty, into which tort principles are imported."
   
7. At the trial, the Respondent himself, the Respondent's wife Mrs Hinemua Evelyn Murr, the family house girl Titilia Colaiwau and the Fiji Electrical Authority (FEA) Installation Inspection Co-ordinator Kitione Malugulevu testified on behalf of the Respondent, and the Petitioner also gave evidence on his own behalf. Titilia Colaiwau, who was the only occupant of the house at the time of the occurance of the fire, and whose testimony was accepted by Court to be most reliable, stated in evidence that at first she heard an explosion and then she observed that some ash had fallen on to the dining table. She further testified that she then saw that smoke was coming from the bedroom shown as the No. 2 bedroom in the plan of the house produced as Exhibit P1. She noticed thereafter that the air conditioning box for bedroom No. 2 was on fire.
   
8. The FEA Inspection Co-ordinantor Malugulevu stated in his evidence that the premises had been inspected on 10th November 2004 pursuant to a notification and application for a FEA Permit dated 23rd April 2004 made by the Appellant's Electrical Contractor, A.H. Electrical, Nadi, and Permit No. 228044 for 70 lights and 25 power points, had been issued authorizing the connection on the basis that the single-phase wiring carried out on the premises complied with FEA Regulations and Standards and were adequate for the said installations.
   
9. However, it is common ground that after the commencement of the tenancy on 15th November 2004, two air conditioners were installed by the Petitioner on the premises during the term of the first Tenancy Agreement, and two more air conditioners had been added by the Petitioner during second Tenancy Agreement in pursuance of the undertaking given by the Petitioner at the time of entering into the said agreements. From the testimony of the Inspection Co-ordinator it became clear that these additional installations were made without any further notification to, or certification by, the Fiji Electrical Authority (FEA) and in breach of Regulation 47(1) of the Electricity Regulations made under the Electricity Act (Cap. 180).
   
10. The Inspection Co-ordinator has testified that the maximum load permitted by FEA standards for single phase wiring was 55 amps, which load was not exceeded at the time of the initial and only FEA inspection on 10th November 2004 prior to the commencement of the first Tenancy Agreement, but the progressive installation of 4 air conditioners during the tenure of the two Tenancy Agreements had brought the load up to 70 amps without converting the wiring into a three-phase system to absorb the additional electrical load.
    
11. On the basis of the evidence elicited at the trial, the High Court concluded in paragraph 38 of its judgment that the single-phase wiring approved initially for the premises became "inadequate and in danger of overload." The Court also accepted the observation of the National Fire Authority of Fiji contained in its letter dated 21st August 2004 (C9) that "the air conditioning unit was suspected and supposedly is the cause of the fire" and the unchallenged conclusion in the FEA Fire Report of 4th September 2006 (A2) that "the fire may appear to have been caused by an electrical fault in the air conditioning unit in bedroom 2".
    
12. In paragraph 39 of its judgment, the High Court has concluded that the most probable cause of the fire was the air condition unit in bedroom No. 2, and went on to hold that the Respondent had discharged his burden of proving that "the source and cause of the fire was some defects in the electrical system of the premises."
    
13. Despite these findings, the High Court by its aforesaid judgment dismissed the claim of the Respondent for damages, on the basis that the first cause of action based on the negligent breach of the contract, which was conceived by the Court in paragraph 42 of its judgment as the case before it, and which in fact was a combination of the First and Second Causes of Action as pleaded by the Respondent in his Statement of Claim, cannot be sustained as the Landlord's duty of care was limited by law "to the avoidance of defects in the premises at the time the tenants were let into possession". For this proposition, the Court relied on the decision of the High Court of Australia in Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313, and concluded on the basis of the evidence led in the case that the Petitioner had discharged his duty of taking reasonable care to avoid risk of injury "by engaging a qualified contractor" whose competence he had no reason to doubt.
    
14. As for the other cause of action based on breach of statutory duty (the Third Cause of Action as pleaded by the Respondent in his Statement of Claim), the High Court took the view in paragraph 54 of its judgment that the Electricity Regulations made under the Electricity Act (Cap. 180) which were intended to ensure the safety of the "public at large" have not been shown by the Respondents to "impose a duty of care for the protection of a particular class, neither it has been shown that the plaintiff is a member of such a class". Accordingly, the Court concluded that the Electricity Act and Regulations did not give the tenant a private right of action in tort against the Landlord.
    
15. It must be noted that, although the High Court held at paragraph 55 of its judgment that "the principles of law that seem to apply to this case do not impose any liability on the defendant for damage suffered by the plaintiff", for the completion of the judgment it also observed at paragraph 56 of its judgment that it would accept the unchallenged valuation of $73,636.00 placed by the Respondent as the total value of the property and personal effects lost in the fire, and the quantum of special damages claimed at $3,935.12 for the alternative accommodation for the Respondent and his family immediately after the fire.
    
16. On appeal, the Court of Appeal of Fiji Islands at Suva, by its judgment dated 21st October 2010, unanimously reversed the High Court and entered judgment in favour of the Petitioner in a sum of $73,636.00. It held that the High Court had misapplied the relevant principle as held by the majority in Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313, and concluded that the Landlord owed a non-delegable duty of care to his tenant and that the Petitioner was responsible and liable for the negligence of his contractor.
    
17. In regard to the question whether there was liability on the part of the Petitioner on the basis of a breach of statutory duty, the Court of Appeal considered the English decision of the House of Lords in Butler (or Black) v Fife Coal Co Ltd., [1911] UKLawRpAC 74; [1912] AC 149, the unreported decision of the Fiji Court of Appeal in Fero Tabakisuva v Sant Kumar and Eroni Tokailagi Civil Case No. 12 of 1982 (delivered on 30th July 1983) and the decision of the Supreme Court of Vanavatu in Kippion v Attorney General [1994] VUSC 1 Civil Case 120 of 1994, and held that the Respondent did have a private right of action against his Landlord, the Appellant, for breach of statutory duty.
    

Special leave to appeal

18. The Petitioner has sought special leave to appeal from this Court against the said judgment of the Court of Appeal on the following grounds set out in paragraph 3 of the Petition for Special Leave to Appeal: -
    

(a)That the Learned Judges erred in law in holding that the Petitioner (Landlord) owed a non delegable duty of care to the Respondent (tenant) and that the Petitioner was liable for the negligence of his contractor.

(b)That the Learned Judges have erred in law by misconstruing and misinterpreting the application of the relevant principle as held by the majority in Northern Sandblasting Pty Ltd v Harris by holding that the Learned trial Judge was correct.

(c)That the Learned Judges in holding that the Petitioner owed a non delegable duty or care and was liable to the Respondent in damages erred in law by misinterpreting and misconstruing the application of the principle of non-delegable duty of care in cases of landlord and tenant.

(d)Learned Judges erred in law in holding that they disagree with the Trial Judges finding that the Electricity Act and regulations did not give the Respondent (tenant) a private right against his landlord the Petitioner.

(e)That the Learned Judges have erred in law by misinterpreting and misconstruing the effect of the Regulation 47(1) of the Electricity Regulations made under the Electricity Act Cap 180 and case authorities in holding that the Respondent had a private right as a statutory duty on the part of the Petitioner had been established and hence liability.

(f) That the Learned Judges erred in law in holding that the Petitioner was liable to the Respondent in the sum of $73,636.00 as the total value of all property and personal effects lost in the fire though the Trial Judge found the same to be unchallenged because the Learned Judges failed to take into account that the Respondent did not substantiate its claim through any valuation and/or evidence as to purchase price except a bare document stating the value arbitrarily ascertained by the Respondent.

(g) That the Learned Judges should have sent the question of damages back to the trial Court for determination.

19. At the very commencement of the hearing before this Court, Mr. Bale who appears for the Respondent conceded that in the circumstances of this case special leave to appeal may be granted. It is, however, incumbent on this Court in considering whether this is a fit case for the grant of special leave to bear in mind the several criteria set out in Section 7(3) of the Supreme Court Act No. 14 of 1998, which provides that-
    

"In relation to a civil matter (including a matter involving a constitutional question), the Supreme Court must not grant special leave to appeal unless the case raises-

(a) a far reaching question of law;
(b) a matter of great general or public importance;
(c) a matter that is otherwise of substantial general interest to the administration of civil justice. "(emphasis added)

20. We are of the view that any or all of the grounds set out in paragraphs (a) to (f) of the Petition for Special Leave for Appeal, could in the right case, amount to far reaching questions of law which involve matters of great general and public importance, which would have justify the grant of special leave to appeal. However, having taken into consideration the submissions made by learned Counsel in this case, both written and oral, it is difficult to see how these questions could arise in the backdrop of the facts and pleadings in this case.
    

Breach of Contract

21. It is important to observe that the High Court had rightly considered the action filed by the Respondent as one for breach of contract. The Respondent had in paragraph 19 of the Statement of Claim set out three causes of action which were clearly for the alleged breach of respectively clauses 10, 13 and 12 of the relevant Tenancy Agreement, but in doing so, he had brought in to each one of them, the concepts of negligence and duty of care, which was signified by the consistent use of the adverb "negligently". Carrying this further, it appears from the Pre-trial Conference Minutes of 10th September 2008 that the parties agreed to go to trial on 5 issues, the very first and crucial of which was-
    

"1. Does the Landlord / Defendant owe the Tenant / Plaintiff a duty of care in the circumstances relating to their relationship as landlord and tenant?"

22. The introduction of the elements of negligence and duty of care into the causes of action and the agreed issues was very unfortunate, as it resulted in what could be, if uncorrected, a total miscarriage of justice. This in fact prompted the High Court in the opening sentence of its judgment to characterize the action as a "claim by a tenant against a landlord in negligence" and to go in a voyage of discovery in regard to the principles of law applicable to the tort of negligence, while at the same time observing as the High Court did in paragraph 42 of its judgment that the case "must be decided against the construction of the contract itself rather than against common law principles solely."
    
23. However, the decision of the High Court in favour of the Petitioner as well as the decision of the Court of Appeal which reversed the High Court, did not turn on the construction of the contract, but sought to traverse the somewhat uncertain and controversial terrain of the tort of negligence, and in particular, the non-delegable duty of care of the landlord towards his tenant. Since it is a fundamental principle of contact law that negligence is usually not an ingredient that had to be proved in an action for breach of contract, the High Court moved in this process from rock to sand.
    
24. The Respondent had made out a strong case of breach of contract in the High Court, and should have succeeded without any proof of negligence. His first cause of action, as pleaded in paragraph 19 of his Statement of Claim, was that his quiet enjoyment of the premises, which had been guaranteed to him by the Petitioner in clause 10 of the Tenancy Agreement, has been interrupted or disturbed by the acts and omissions of the Petitioner and the contractor of the Petitioner during the tenure of the said agreement.
    
25. The Petitioner has not pleaded in his Statement of Defence that the contract was frustrated by the destruction of the building due to the fire, but had he done so, it is certain that the plea would have been defeated by showing that the frustrating event, namely, the fire that gutted the building had been induced by the Petitioner and / or his contractor by failing to maintain FEA standards of electrical safety, particularly by failing at the time the air conditioners were installed to comply with Regulation 47(1) of the Electricity Regulation made under the Electricity Act (Cap. 180), which expressly made it obligatory to notify the FEA and obtain its certification "before any installation is connected to the Authority's or licensed supplier's supply, or before any alteration or addition or any part of any installation that has been repaired, is connected to the supply." If the Petitioner or his contractor had complied with this simple safety procedure, the fact of the overload adverted to by FEA Inspection Co-ordinantor Malugulevu in his testimony would have been detected, and the remedial measure of switching into three phased wiring would have saved the building from the destructive consequences of such overload.
    
26. Likewise, the evidence produced by the Respondent at the trial established very clearly that the Petitioner breached clause 13 of the Tenancy Agreement by negligently failing to keep the premises in good order, condition and repair throughout the term of the tenancy, while violating clause 12 of the Agreement through the non-compliance with Regulation 47(1) of the Electricity Regulations, which constituted the second and third causes of action pleaded by the Respondent. In the considered opinion of this Court, the Respondent should have succeeded on these causes of action as well.
    
27. It was clearly the unnecessary introduction of the concept of negligence into the pleadings and agreed issues, for which both Counsel and the Court should share the blame, that distorted the picture and took the Court away from a consideration of the construction of the contract to more complex and avoidable questions relating to a non-delegable duty of care and breach of statutory duty. On the facts clearly established at the trial, it is manifest that clauses 10, 12 and 13 of the Tenancy Agreement were violated by the Petitioner, and all the ingredients for liability for breach of contract were made out. Proof of negligence is not necessary for success in an action for breach of contract, and the reference to a duty of care in Agreed Issue 1, imposed on the Respondent a burden he need not discharge under the law. In any event, it is clear from the evidence that the conduct of the Petitioner and his electricity contractor had fallen far short of the standard of the reasonable man, and the negligence of the Petitioner was established.
    

The Non-delegable duty of care

28. At the hearing of this application for special leave to appeal, Learned Counsel for both parties placed before Court voluminous material and made submissions with thoroughness in regard to the nebulous concept of non-delegable duty of care. Though by reason of what have been said in the preceding paragraphs of this judgment it may not strictly be necessary to deal with this question, it may be useful to clarify the law on this subject as the High Court and Court of Appeal had based their decisions on it, and arrived at opposite conclusions.
    
29. The non-delegable duty of care envisages tort liability not only to take care but ensure that care is taken. The concept seeks to in effect fix liability for negligent acts to a particular person, even if that person had delegated responsibility for performance of those acts to a third party, for example the electrical contractor in this case, who acted quite independently from the person who engaged his services. The concept is significant in that it constitutes an exception to the normal rule that a person will not be liable for the acts of independent contractors. Where a duty is held to be non-delegable, it will be deemed to be personal to the defendant who is not permitted by the law to delegate the responsibility to a third person even where in actual fact some work had been entrusted to such third person.
    
30. A non-delegable duty is a special duty which arises in negligence. The original non-delegable duty cases were based on the doctrine of support as in Dalton v Angus & Co (1881) 6 App Cas 740 (HL), where Lord Blackburn held that a duty was owed to an owner of land where an adjoining landowner has contracted with another to excavate the adjoining land. Later, in Wilsons v Clyde Coal [1937] UKHL 2; [1938] AC 57, a non-delegable duty was recognized where an employee was injured in the workplace, and appeared to be based on the existence of an "extra-hazardous activity". The concept of non-delegable duty was extended to other situations of extreme vulnerability such as a patient in a hospital (Royal Prince Alfred Hospital v Allbrighton [1980] 2 NSWLR 542) or a child at school (Commonwealth v Introvigne [1982] HCA 40; (1982) 150 CLR 258), but in what circumstances and subject to what principles the catalogue of non-delegable duty may be extended, and whether such a duty arises in the context of the landlord and tenant relationships, is still a thorny subject.
    
31. In regard to the non-delegable duty of care of the landlord in tort, the decision in Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313 had left behind many unanswered questions, and the only ratio that could be extracted from the case was that the immunity in Cavalier v Pope [1906] AC 428, which as Lord Macnaghten 430 explained at page 430, meant that a landlord "who lets a house in a dangerous state is not liable to the tenant's customers or guests for accidents happening during the term", was no longer good law in Australia.
    
32. More recently, in Jones v Bartlett (2000) 176 ALR 137, the High Court of Australia went some way towards clarifying the nature and content of the landlord's duty of care in the context of residential premises. There have since been several cases that have applied or considered Jones v Bartlett. The most significant is the case of Taber v NSW Land and Housing Corporation [2001] NSWCA 182, as it was a case of an action by a tenant against a landlord in negligence, but we do not consider it necessary to go into details of any of these decisions in the circumstances of this case. Suffice it to say that in none of these decisions did the Court arrive at a clear decision without division that a non-delegable duty of care exists in relationship between the landlord and tenant. All these cases had been instituted to recover damages for personal injury suffered by persons other than the tenant, where in the absence of any privity of contract between the landlord and the person who suffered injury, it became necessary to resort to the tort of negligence. Thus, the circumstances of those cases differed significantly from the present case which involved a tenant who had personally suffered injury to property by reason of the breach of the contract by the landlord.
    

Breach of Statutory Duty

33. Since it is the considered opinion of this Court that the case at hand should have been decided simply on the construction of the Tenancy Agreement, it is also unnecessary for this Court to go into the other question as to whether in the circumstances of this case, the Respondent had a private right of action against the Petitioner for breach of statutory duty.
    

Conclusion

34. For the foregoing reasons, we hold that the application for special leave to appeal has to be refused, as the Petitioner has failed to satisfy Court that the case raises any far reaching question of law, a matter of great general or public importance or a matter that is otherwise of substantial general interest to the administration of civil justice. The application for special leave to appeal is therefore refused, and the decision of the Court of Appeal dated 21st October 2010 is affirmed. In all the circumstances of this case, we do not make any order for costs.
    

___________________________
Hon. Mr. Justice Anthony Gates
President of the Supreme Court

___________________________
Hon. Mr. Justice Saleem Marsoof
Judge of the Supreme Court

___________________________
Hon. Mr. Justice Satyaa Hettige
Judge of the Supreme Court

Solicitors:
Mr. D.S. Naidu for the Petitioner.
Mr. Q.B. Bale for the Respondent.