Chow v Attorney General [2003] SBHC 94; HC-CC 127 of 2000 (29 April 2003)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 127 of 2000

MARY CHOW (trading as Amy’s Snack Bar)

-V-

ATTORNEY-GENERAL

HIGH COURT OF SOLOMON ISLANDS
(KABUI, J.)

Hearing: 16^th April 2003
Judgment: 29^th April 2003

Mr A Nori for the Plaintiff
Mr F. Waleanisia for the Defendant

JUDGMENT

Kabui, J. By an Amended Statement of Claim filed on 10^th September 2002, the Plaintiff claims general damages against the Defendant plus special damages, interest and costs. Special damages are described as loss of revenue, particularized as follow-

(a) February to November 2000 - 40 weeks x 43, 51

=$1, 7440,680;

(b) December 2000 to January 2001-12 weeks x 43,517

=$522, 204;

(c) Loss of revenue from 1^st of January to date of judgment:

68 weeks x 22,350 =$1,788.000;

(d) Accrued interest on loan from DBSI amounting to

$103,120.

General damages.

Although the amended Statement of Claim was meant to plead special damages only, the Plaintiff saw it fit to include a claim for general damages also. In fact, the Plaintiff had taken the opportunity to recast her Statement of Claim by the amendment that I had ordered in my judgment delivered on 6^th September 2002. As I said in that judgment, there was no evidence upon which I could assess general damages in this case. I said also in that judgment that the Plaintiff’s premises nor her stock in trade had been damaged or destroyed by the negligence of the Defendant. If this claim for general damages is based on the notion that the Plaintiff had suffered mental distress and nervous shock, which I suspect is the case here, then that should be discounted for the same reasons I stated in my earlier judgment on 7^th May 2002. That is to say, any claim for damages based on grief, distress etc. would not do in this case. I make no assessment as to general damages. There is no evidence upon which I can award such damages to the Plaintiff. In the case of a claim for damages of goods or chattels or premises etc., damages would normally be the amount by which the goods, chattel or premises had been diminished whilst in the case of a claim for damages for the destruction of the same would be the market value of them at the time and place of destruction. This is the kind of claim for damages one would expect in this case, not for general damages as in this case.

Special Damages.

(a) Consequential pecuniary loss.

What really the Plaintiff is claiming are what she considered as her gains prevented by the negligent conduct of the Defendant. In real terms, it means claiming the loss of use, loss of profit or interest where goods chattels or property had been damaged or destroyed. (See McGregor on Damages by Harvey McGregor, 5th Edition 1988 at pp 67-68 and pp 796-803). Unfortunately, there is no evidence to show that any goods or anything owned by the Plaintiff had been damaged or destroyed through the negligence of the Defendant. In fact, the Plaintiff acted only on the receipt of the letter by the Commissioner of Lands dated 20^th December 1999 asking her to commence scaling down her operation at the Kai Bar and to close down by the end of January 2000. In terms of days, the time period given for closing down amounted to 42 days including weekends and public holidays. The Plaintiff did exactly what the Commissioner of Lands had asked her to do. She stopped ordering large stocks of food etc. for her kitchen for the purpose of closing down. Towards the end of January 2000, she made a verbal agreement with one Ruby Lee for the sale of her kitchen equipment and other items. The verbal agreement was later reduced to writing. Ruby Lee commenced operating at the Kai Bar kitchen on a gratuitous basis as a prelude to starting her business at Lena Cinema in anticipation of the agreement between them. The agreement was deemed to have commenced on 1^st February 2000. This was the date upon which Ruby Lee would take possession of the assets under the agreement. The assets as set out in the Schedule to the agreement were-

1. All cooking and kitchen equipment and cutleries, including stoves, gas cylinders, coolers and freezers;
2. Furniture;
3. Stock in trade.
   

Detailed inventory was to be provided by the Plaintiff at a later date. Ruby Lee would have the option of employing the Plaintiff’s former employees with the same terms and conditions of service. The sale price was $220,000.00. The sum of $120,000.00 was to be paid on or before 15^th March 2000 and the balance to be paid over a period of 24 months from the date of possession of the assets by the Ruby Lee. Under the agreement, the Plaintiff was to abstain from operating any fast food bar or restaurant in the Point Cruz area for 3 years or until the redevelopment work by the Government had been completed. In or about March or April 2000, the Plaintiff told Ruby Lee that the Government had dropped its plan to acquire the Snack Bar site and gave Ruby Lee the option to rent the premises if she wanted to do business at the Snack Bar. Ruby Lee decided to vacate the Snack Bar premises and carried on business at the Lena Cinema premises. The agreement between the Plaintiff and Ruby Lee was later terminated after August 2000. In early February 2001, the Plaintiff’s brother, Peter Chow took over the business at the Kai Bar as the Plaintiff had lost interest in the meantime. Clearly, the agreement between the Plaintiff and Ruby Lee had been aborted as early as March or April 2000. In her evidence in chief at the trial, she said Ruby Lee gave the key to her on 17^th April 2000. She said she demanded some payment from Ruby Lee. She said Ruby took whatever she was able to take from the Kai Bar. She said Ruby Lee took electric items and the fridge. She said she was not able to restart because she had no staff and stock. She said she had no money to be able to restart her business. She said her brother had taken over the repayment of her loan from the DBSI and everything. She said she had brought over a Chinese cook for 3 years and yet she had been told to close down by the Commissioner of Lands. This was her evidence in Court.

(b) Expenses caused by the negligence of the Defendant.

It is not disputed that the items set out in the Schedule to the agreement between the Plaintiff and Ruby Lee had not been sold because that agreement had been aborted except for some items which Ruby Lee wanted and paid for them. Apart from that, all other items remained up until her brother took over the running of the business in 2001. There is no evidence to show that she had replaced those items she sold to Ruby Lee at her own expense or such had been paid for by her brother... Nor is there evidence that she or her brother had replaced any items due to wear and tear due to lying idle caused by the negligence of the Defendant. There is also no evidence to say whether or not Ruby Lee continued doing business at the Kai Bar until the Plaintiff’s brother took over the operation in early February 2001. The only evidence to this effect is that Ruby Lee had returned the key to the premises as early as 17^th April 2000. One assumes that the business was lying idle until the Plaintiff’s brother took over in February 2001. Particulars (a) and (b) of the amended Statement of Claim filed by the Plaintiff on 10^th September 2002 would seem to confirm that view. As a matter of fact, the Plaintiff did not plead this head of damages in her amended Statement of Claim filed on 10^th September 2002 above apart from there being also no evidence to prove items of expenses caused by the negligence of the Defendant. Even items of expenses, if any, made useless by the negligence of the Defendant had not been pleaded. I had given the Plaintiff the opportunity to plead special damages and had done so. It is pertinent to note that the Plaintiff’s claim is for loss of revenue rather than for loss of profits. However, it is clear from her affidavit evidence filed on 31^st July 2002 that what she is claiming is her profit after expenses which she said she had lost. Her weekly revenue amounted to $61,957.00 whilst her weekly expenses were $18,440. Her weekly profit therefore stood at $43,517 per week. She said her business closed down for 40 weeks. Added to this period was a period of 12 weeks during which refitting of equipment and reordering of kitchen tools would have been necessary. She is receiving $25,000.00 rental from her brother, which she says is below what she would have received if she had operated the business herself. She also claims loss of revenue from January 2001 to the date of judgment. She further claims the sum of $103,120.00 as accrued interest on the loan from the DBSI.

Can loss of profit be recovered in this case as a consequential loss arising from damage or destruction of property?

This can be a consequential loss provided it is consequential upon damage or destruction of property being the subject matter of the Plaintiff’s claim.

As already been said in this judgment, the Plaintiff does not claim the heads of damages as consequential loss mentioned above and so no evidence had been adduced to prove them. In the first place, the Plaintiff did not plead them in her amended Statement of Claim. So those heads of damages can be discounted for the purpose of this judgment. I have found there is no evidence of damage or destruction of the Plaintiff’s premises or any property owned by her. Claim for damages for loss of property in terms of her business premises and its contents does not therefore arise here. The Plaintiff’s claim is simply a claim for loss of revenue in terms of loss of profit arising from the idleness of the Plaintiff’s business for 40 weeks. The evidence is that the Plaintiff’s business seemed to have been lying idle for 40 weeks before the Plaintiff’s brother took over the running of the business. There is no evidence as to the condition of the business premises and its contents during that period of time apart from saying that some renovation work, refitting of equipment and reordering of kitchen tools were necessary and would have taken 9 weeks to be done. There is no evidence to say that such steps were necessary because of the negligence of the Defendant. There is also no evidence to say who would have taken those steps and who would have paid for the implementation of those steps. Such steps might have been necessary to facilitate the coming in of the Plaintiff’s brother to operate the business in February 2001. There is no evidence of the lease arrangement between the Plaintiff and her brother as to the details of that arrangement. Without that evidence, it is difficult to see inside that arrangement and to assess its impact, if any, on the assessment of damages. There is no evidence of actual calculated monetary loss to the Plaintiff directly arising from the negligence of the Defendant apart from loss of revenue due to the non-operation of the business by the Plaintiff for 40 weeks. If there had been any monetary loss it would have been incurred from 1^st February 2000 to 17^th April 2000 when Ruby Lee handed back the key to the Plaintiff. If there was such a loss for that period, there is no evidence of it apart from the claim for loss of profit. The destiny of her business for the remaining 38 weeks was in the hands of the Plaintiff. According to her evidence, Ruby Lee eventually terminated her agreement with the Plaintiff on or about 27^th November 2000. The length of time taken to terminate that agreement was a matter under the control of the Plaintiff after 17^th April 2000. Ruby Lee was not called as a witness to say how much money, if any, she had paid the Plaintiff before she handed back the key or after she handed back the key. There seemed to have been a period of waiting by the Plaintiff for Ruby Lee to terminate the agreement between them. This period of waiting on her part was more a result of her perception that Ruby Lee should formally terminate the agreement first before she could do anything to her business than anything else. Ruby Lee had not been called to say why she was unable to terminate the agreement soon after she had given the key back to the Plaintiff. The Plaintiff must therefore accept part of the blame for this period of delay to restart the business. She could have terminated the agreement after the key was handed back to her on 17^th April 2000. The Plaintiff however said she had no money to restart the business apart from the fact that her interest in the business had been well and truly switched off by the conduct of the Government in terms of dealing with her since the start of contact with her about the acquisition of her land. Whilst I can accept that explanation, the fact still remains that no damage or destruction had been caused to any of her property or if indeed there was damage or destruction, such had not been pleaded and so there is no evidence of that fact. What appears however to be the case is that the Plaintiff had been deprived of the use of her business assets for the duration of 40 weeks alleged by the Plaintiff. Again, the Plaintiff did not plead this head of damages in her amended Statement of Claim. As much as her business had been disrupted, her claim for loss of profit for the duration of 40 weeks without the pleading of the loss of assets through damage or destruction and evidence to prove such loss cannot be sustained. The reason is that a claim for loss of profits cannot be made without proof of damage of destruction to property belonging to the Plaintiff because such a loss would be a consequential loss. As has been said in this judgment, this situation does not arise in this case. It is difficult to claim loss of profit where no damage or destruction had been done to the Plaintiff’s property in this case. I cannot assess loss of profit in a vacuum. In summary, the Plaintiff has failed to provide evidence of general damages upon which I can assess her claim for general damages. As to the claim for loss of revenue/profit, no assessment is possible without proof of damage or destruction to property upon which the claim for loss of revenue/profit arises. There might have been costs associated with loss of some business items or stock in trade but such have not been pleaded and claimed as special damages by the Plaintiff. The Plaintiff’s claim is not one within the scope of economic torts where the claim for damages is often loss of profits and other expenses. I am therefore unable to award and assess the Plaintiff’s claim for loss of revenue/profit. The Plaintiff’s claim for loss of revenue/profit for 40 weeks is dismissed. The same claim for loss of revenue/profit for 12 weeks inclusive of the period up to the date of judgment is also dismissed for the same reason. The Plaintiff’s claim for accrued interest on her loan though pleaded cannot be allowed also for the same reason. That claim is also dismissed. The parties will meet their own costs.

F.O. Kabui
Judge