Tropical Forest Resources Ltd v Maenu [1998] SBHC 141; HCSI-CC 79 of 1997 (24 July 1998)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 79 of 1997

TROPICAL FOREST RESOURCES LIMITED

v

PAUL MAENU AND BEN MAENU

Before: Lungole-Awich, J.

Date of hearing: 24/6/98
Judgment: 24/7/98

Mr. J Khatahanas/S Patrick for Plaintiff
Mr. R Teutao for Defendants

JUDGMENT

(LUNGOLE-AWICH, J):

The plaintiff, Tropical Forest Resources Limited, had writ of summons issued against the defendants, Paul Maenu and Ben Maenu, in which the plaintiff claimed the stated sum of $111,927.63 "for wilful damage to its property." The averment was that the defendants unlawfully demanded that the plaintiff off-load from a barge certain items of heavy equipment intended to be used on Malaita Island in harvesting timber logs, and the defendants unlawfully proceeded to physically damage the equipment, using sticks and clubs. The action of the defendants was intended to prevent the transportation of the heavy equipment to Malaita Island whereat the plaintiff intended to harvest timber logs on customary land claimed by the defendants and rival claimants who the plaintiff had agreement with. The sum of $111,927.63 claimed was made up of sums for, repairs done and parts replaced in the equipment, cancellation of charter fee and contract sum paid in advance to the rival customary land owners.

Irregularities

The writ of summons was duly served on the defendants, but they did not file memoranda of appearance at all. On 6.6.97 the plaintiff filed default judgment to be entered against the defendants for the sum of $111,927.63, interest at 5% and fixed costs in the sum of $180. On 7.6.1997 the court refused to have the default judgment entered, it considered the draft judgement filed to be a final judgement instead of an interlocutory judgement for damages to be assessed, as authorised by 0 13 r 5 of the High Court (Civil Procedure) Rules. The Plaintiff was entitled upon the default of the defendants, only to interlocutory judgment for damages to be assessed. The claim for the sum of $111,927.63 was certainly not a claim for liquidated sum so that final judgment could be entered upon default by authority of 013 r 3. A liquidated sum is a definite sum or a sum to be ascertained by mere arithmetic, and it is in the nature of debt and not damages; it is a sum that is ascertainable without investigation - see Knight v Abbott [1882] UKLawRpKQB 149; 10 QBD 11.

Following the unsuccessful application to enter final judgment, the plaintiff filed interlocutory judgment for damages to be assessed and had it entered on 1997. Then surprisingly, on 15.7.1997, the plaintiff filed praecipe for writ of fieri faciafacias for the same sum of $111,927.63, interests and costs. The application was of course refused on 7.8.1997. A note by the judge, (myself) stated that the next step was assessment of damages not filing praecipe for writ of execution. The plaintiff complied and on 1.9.1997, it filed notice of motion application for the assessment of damages. The application was supported by affidavit to which receipts for payments made were attached as exhibits. At that stage, on 7.5.1998, the defendants applied for order to set aside the default judgment, an application which may be made under 013 r 8. On the same day the Court refused the application mainly on the ground that there was no arguable defence because the affidavit filed on behalf of the defendants contained confession to intentional damaging of the equipment. The affidavit described the confessed act as an act of "self-help". The Court rejected the proposition of self-help as defence in a suit in trespass to chattel. Useful cases on the law about setting aside default judgment are, Kayuken Pacific Limited v. Harper [1987] SILR 54 and Samson Poloso v. Honiara Consumer Co-operative Society [1988/89] SILR 16.

The series of irregular steps taken in the proceeding until the filing of notice of motion for assessment of damages calls for attention of solicitors to the rules of procedure. Even the most frequently used and simple steps must be followed. Disregarding rules of court usually means loss of valuable time.

Defendants Contentions

During the hearing of the assessment of damages case, the defendants accepted most of the 15 items claimed by the plaintiff in the statement of claim. They contested only 4 items. Were they to contest those items they accepted, they would have not succeeded. The items accepted were of damage that was so connected to the wanton act of the defendants, so that the items of damage could not be described as remote from the act. The 4 items contested were:

"

1 Welder on trailer (new)	24,022.00
2. Spare tyre for pick-up truck (stolen)	500.00
3. Charter cancellation fee	8,000.00
16. Advance to landowners	50,000.00"

Items 3 and 16 were contested on the grounds that they were remote and so are not claimable as the result of the acts of the defendants. Put another way, the defendants contended that the fee (penalty) of $8,000, for cancellation of the charter of the barge that was to transport the equipment, and the sum of $50,000 paid by the plaintiff to landowners on a contract to harvest timber on their land, were too far removed and unconnected, to the action of the defendants causing damage to the equipment, to be regarded as consequences of the damage to the equipment, so the plaintiff ought not to be compensated for the two items.

The Law in Determining Damages

The law is that in intentional damage to chattel, the defendant is liable for all the losses suffered as the direct result of his action - Page v Radclyffe (1832) 1 L.T.J 57 and J C Arpad [1934] P. 184. Moreover, the prevalent view is that in intentional torts the defendant is liable for all the consequences which he desired or intended to inflict on the plaintiff-see Quin v Leatham [1901] A.C. 495.

Many writers express the view that the test for determining the scope of damage (loss) arising from trespass to chattel is the "direct consequence" test other than the "foreseeable consequence" test - see for examples, Salmon on the Law of Torts, by R.F.V. Henston, Fifteenth Edition on page 751, The Law of Torts, by John. G. Flemming, Seventh Edition, on page 47 and, The Law of Torts in the Pacific, by Stephen Offei, on pages 127 and 231. The accepted test now in many torts, especially in negligence and nuisance is the foreseeable consequence. Writers do not explain why they consider that the direct consequence test remains the test in damage to chattel. The explanation may well be the mere historical fact that the foreseeable consequence test was developed in a negligence case, The Overseas Tankship (UK) Ltd v Morts Dock Engineering Co. Ltd [1961] UKPC 1; [1961] AC 388, commonly known as The Wagon Mound, a very conspicuous case in the law of torts. The direct consequence" test is of course the test in Re an Arbitration between Polemis and Furness, Witting & Co. [1912] 3 KB 56 or [1921] All ER 40. In the case, the defendant was held liable to pay the value of the ship it hired. The ship got burnt in the port of Casablanca, Morocco, as the result of fire caused by sparks caused by the defendant's employees negligently dropping plank into the hold of the ship where petrol and or benzine had leaked from the ship's cargo of petrol and or benzine cases. The Court of Appeal in England decided that the fire was the direct result of the negligent act of dropping the plank and the damage caused by the fire was a direct consequence of the negligent act. It rejected foresight as a test for determining the scope of damage although it stated that foresight was used to determine whether there has been negligence. Foresight, now the foreseeable test, is the test in The Wagon Mound. In the case, the Privy Council, hearing an appeal from Australia, decided that the defendant was not liable for the consequence of fire caused by smouldering debris igniting low grade oil that had been negligently spilt into Sydney Harbour bay by the defendants' employees. The Judicial Committee of the Council said that it was not foreseeable that the low grade oil spilt in water would cause fire or would come into contact with smouldering debris and cause fire. The smouldering debris dropped from welding work being carried out by the plaintiff's employees on the ship that got burnt. The direct consequence test in Re Polemis was rejected. So courts in Australia are to regard the foreseeable consequence test as having replaced the direct consequence test, and so presumably many jurisdictions, including Solomon Islands, where the Common Law applies. The difficulty is that the difference in the results of the two tests are easier stated than recognised when applied to facts of cases. For example, it is not baseless to suggest that the direct consequence test could have led to the same result that the defendant in the Wagon Mound case was not liable, or that the foreseeable consequence test could have led to the same result that the defendant in the In Re Polemis case was liable. There may of course be facts of cases in which the application of the two tests produce clear different results.

The Law as Applied to the Plaintiffs Claims

In this case, it is my view that the fee of $8,000 lost on the charter agreement between the plaintiff and the barge owner is a direct loss arising from the interference of the defendants with the equipment that were loaded ready to be transported to Malaita. Had it not been for the action of the defendants the barge would have sailed thereby accomplishing the voyage, and the full charter charge other than penalty would have been paid. If one prefers the foreseeable consequence test, one would in my view, arrive at the same conclusion. It was foreseeable that interfering with loaded cargo could result in incidental costs associated with transportation such as charter penalty being incurred and lost of time in transporting the cargo. The submission of learned counsel, Mr Teotao for the defendants, that the land whereat the equipment were to be used in logging was still under dispute and a subject of court case on appeal, does not make any difference. It was not impossible that the equipment could have been kept elsewhere on Malaita Island. If the cargo had not been interfered with, the barge would have sailed to Malaita and the penalty sum would not be payable. I accept and hold that the defendants are liable to pay the cancellation of the charter fee of $8,000.

The plainpursued its clts claim for the sum paid to landowners in advance pursuant to an agreement between the landowners and the plaintiff, on the ground that the sum was lost by the plaintiff to the wners as the result of the the trespass by the defendants to the equipment loaded for shipment to the land upon which logging was to be carried out. According to the plaintiff, the trespassing act of the defendants was the cause of the loss of the money. Learned counsel Mr Khatahanas, for the plaintiff, submitted that the loss of the money was not remote so the court may regard it as having been caused by the trespass. Mr Teotao replied that the money paid to the landowners was "not directly connected" to the act of the defendants, it was remote. The contention that the evidence available was that the sum was $45,000 and not $50,000 was satisfactorily resolved by Mr Khatahanas pointing out that exhibit, MS 4A, was a receipt for the payment of $5,000 in addition to the payment of $45,000 acknowledged by receipt, exhibit MS 4B.

In my view claim for thor the $50,000 down payment to the landowners stands on a completely different plane. As far as the records are concerned, it is an assumptiat the money is now lost. A copy of the contract between then the plaintiff and the landowners, or oral evidence of the contract is not in the record as proof of the terms of the contract between the plaintiff and the landowners. The terms of the contract under which the loss is said to arise are not in evidence. As it is now, it is impossible for the court to tell from the record that events have now occurred to cause the plaintiff to forfeit the down payment to the landowners. Some of the questions that the court may ask are: on what exact ground has the plaintiff lost the $50,000 to the rival landowners? Was the plaintiff required to commence operation on the land by a particular date, if so, was it possible to repair the equipment only after or too near the date to allow enough time to have the equipment transported in time or was it possible to repair well before the date? If the repair was possible only after the date of commencing operation, could there have been difficulty in obtaining another barge for shipping the equipment in time? What would have been the effect of the land dispute between the landowners, the recipients of the $50,000 and the other people who claimed to be the true landowners, had the equipment been transported? Right now there is a case in the Customary Land Appeal Court about the land. The plaintiff needed to present evidence to answer those questions of facts before the question of remoteness could be addressed. The claim of the plaintiff for the $50,000, said to have been paid to landowners in advance, has not been proved. I disallow that claim, item 16, in the claim of the plaintiff.

The claim f00, itemisedmised as, "spare tyre for pick-up truck (stolen)" was contested on the ground that "no mention," of the tyre was madthe affidavit evidence. It is not correct to say that the pick-up tyre was not mentioned ined in the affidavit. Paragraph 7 of the affidavit of Michael Soucaze sworn on 28.8.1997, filed in support of the notice of motion, refers to the losses and expenses enumerated in the writ of summons. The writ of summons, in paragraph 7 of the statement of claim, itemised the claim for the tyre as item 2. The item "spare tyre for pick-up truck (stolen)," was certainly in the affidavit evidence. The claim for $500, being the replacement value of the lost spare tyre is allowed to the plaintiff.

The defendanntested thed the sum of $24,022 on the ground that it did not represent the costs of repair to the item described as, "welder on trailer". Mr Teotao said that tfendants would agree to pay the costs of its repair. That shat submission is based on m miscomprehension of the basic general rule of computation of damages that are regarded in law as adequate compensation for damage to chattel. The rule is that if the plaintiff has been deprived of the chattel all together, the compensation is the value of the chattel in the market - see the case of Darbishire v Warran [1963] EWCA Civ 2; [1963] 3 All ER 310 where the plaintiff's claim was based on the costs of repairing his very old car, being £192, instead of its replacement value of £85, had he bought a similar old car. The court awarded damages based on the replacement value, £85. Another case that illustrates the point is Liesbosch Dredger v SS Edison [1933] UKHL 2; [1933] AC 449. If the chattel was not completely lost, the compensation claimable is the loss actually suffered. That is when the costs of repair comes in. If it is reasonable to repair other than replace the chattel the costs of repair becomes claimable because it represents the actual loss or part of the actual loss. Moreover, it does not matter whether the repair has been carried out. These rules are merely extensions- of the fundamental rule of compensation which is expressed in the Latin phrase, restitutio in integrum. The rule is that: so far as money can do it, the injured person (the person wronged) should be put in the same position as he would have been in if he had not suffered the wrong, that is, if the tort had not been committed. The general rule has been expounded in several cases such as Livingstone v Rawyards Coal [1880] UKHL 3; (1880) 5 App Cas 25, The Argentine [1888] UKLawRpPro 45; (1888) 13 PD 191, Banco de Portugal v Waterloo and Sons Ltd [1932] UKHL 1; [1932] AC 452, British Transport Commission v Gourley [1955] UKHL 4; [1956] AC 185 or [1955] 3All ER 796, Victoria Laundry (Windsor) Ltd. v Newman Industries Ltd. [1949] All ER 997 and Koufos v Carrilow Ltd. [1969] AC 350 or [1967] 3 All ER 686. The general rule is of course modified by the rule of remoteness of damage to the cause, the tort, because some items of damage are regarded as not being connected enough to the wrong so as to be regarded as the result of the wrong. Specific statutory restrictions in particular torts are other modifying factors. The defendants suggested that the cost of the "welder on trailer" in the market was $28,000 and that the plaintiff simply reduced that by about $4,000 to get $24,022 claimed. It must be noted that the plaintiff has presented evidence as to how much it cost it to replace the "welder on trailer". The item states it as, "(new)" which 1 understand to mean a new one bought. There has not been evidence that the plaintiff acted unreasonably by replacing other than repairing the welder. If the market price was $28,000 other than $24,000, the better for the defendants. 1 grant the claim of $24,022 for the "welder on trailer" to the plaintiff.

Aggravated Damages could be Claimed

I shall mention that this is a case in which the defendants deliberately attacked the equipment of the plaintiff with sticks and club. It was wanton action. If they believed that logging was not to commence before the land dispute had been decided by court (they knew it was pending in court), the correct and lawful way to go about it was to apply to court to stop the intended operation or to complain to licensing authorities. The defendants' trespass called for aggravated damages. Luckily for the defendants, the plaintiff did not claim aggravated damages.

In all, the compensation assessed in favour of the plaintiff is $61,927.63 which is $111,927.63 less $50,000 not included in the assessment. It may also be stated as, the sum of all the items claimed excluding the item stated as "advance to landowners". Interest at 5% on the amount assessed and costs are also awarded to the plaintiff.
Delivered this 24th day of July 1998 at the High Court Honiara

SAM LUNGOLE-AWICH
JUDGE