Kingdom of Tonga v Havea [2001] TOCA 14; CA 05 & 06 2000 (27 July 2001)

IN THE COURT OF APPEAL OF TONGA
ON APPEAL FROM THE SUPREME COURT OF TONGA

Appeal No. 05/2000
Appeal No. 06/2000
CA 5/2000

BETWEEN:

KINGDOM OF TONGA
Appellant

AND

LOTO'A HAVEA
Respondent

CA 6/2000

BETWEEN:

LOTO'A HAVEA
Cross-Appellant

AND

KINGDOM OF TONGA
Cross-Respondent

Coram:
Burchett J Tompkins J Spender J

Counsel:
Mr Taumoepeau, Solicitor-General, for the Kingdom of Tonga
Ms Tonga for Loto'a Havea

Date of hearing: 17 July 2001
Date of judgment: 27 July 2001

JUDGMENT OF THE COURT DELIVERED BY SPENDER J

[1] This is an appeal and cross-appeal from the judgment and orders of Finnigan J of 31 March 2000, in respect of a claim by a landholder against the government for damage to his land. Finnigan J ordered damages of $9,526 in respect of lost surface of the land as the result of removal of road-building material, and damages of $17,500 for what the trial judge called "Damages at large, including trespass onto the land, tree loss and the loss of amenity." Finnigan J also ordered the Kingdom of Tonga to pay the costs of the plaintiff, to be agreed or taxed.

[2] The appeal by the Kingdom of Tonga challenges the liability to pay damages in the sum of $27,026, and the order that the Kingdom pay the whole of the costs of the plaintiff. The cross-appeal by the landholder seeks that the quantum of damages awarded be increased in conformity with a valuation report prepared by a land valuer Siope Lomu, who assessed compensation in the order of $112,000.

[3] The facts are not seriously in dispute. What follows is taken largely^- from the trial judge's reasons:

[4] The plaintiff, who lives in New Zealand, is the registered holder of a tax allotment situated at 'Afinemata, Vava'u.

"He has been the landholder since 1983, but has not made any specific use of the land other than to allow the trees and vegetables on it to grow and he had rented it out for stock grazing at $100 per year. The land shares a common boundary with land owned by Sione Tu'i 'Ofa ('Sione Tu'i'). Sione Tu'i had a contract with the defendant to supply quarried coral rock for roading. In the course of quarrying the land of Sione Tu'i, the defendant crossed the boundary into the plaintiff's land and took away the topsoil and sub-structure to a depth of 5 metres, over an area of 147 meters by 40 metres, i.e. 5,880 square meters. As well, it had stockpiled some of the quarried rock on an adjoining part of his land.

As soon as the plaintiff was told of this he came to Tonga. That was in August 1998. The defendant (the Ministry of Works) stopped the work and the plaintiff visited the land with the Minister of Works, who happened to be in Vava'u. There were meetings, at which the plaintiff and/or his lawyer were present, as was Sione Tu'i. The Ministry had paid the latter for all the quarried coral so far delivered. It was suggested by the Minister and generally agreed that Sione Tu'i would pay to the plaintiff half of what he had received. It is accepted that Sione had been paid $16,000. During their discussions, Sione Tu'i told the plaintiff that they were relatives. The plaintiff accepted that, and resolved to do something to help him. So on 4 September 1998, the day the plaintiff left for New Zealand, the two of them entered a written agreement. They had agreed that Sione had paid $3,000 to the plaintiff, and would give the plaintiff the remaining stockpiled rock, so that he could sell it and keep the proceeds. In the agreement the plaintiff allowed that Sione had full authority to remove (and sell) stock from the stockpile on the plaintiffs land, and the money was to be given to the plaintiff's family. They agreed that this arrangement extinguished any liability that Sione might have to the plaintiff from the conversion of the plaintiffs coral rock and the damage to the land, and they promised each other to live in harmony. Sione paid the plaintiff another $500, and the plaintiff was satisfied, because he wanted to help Sione's family in their money difficulties.

In addition, the Ministry of Works was anxious to complete about 2 kilometres of partially constructed road. The Minister explained to the plaintiff and his lawyer at a meeting about the problem that early completion of those 2 kilometres was necessary in order to avoid paying penalties to the Asian Development Bank, which was financing the road. The plaintiff agreed to supply the Ministry with 663 loads of coral rock from the stockpile on his land so the 2 kilometres could be completed. He was paid $3,779.10 for these 663 loads before he left for New Zealand on 4 September 1998."

[5] The trial judge found that there were two meetings at which the plaintiff and his lawyer discussed with the Minister and his advisers resolutions of all the issues that had arisen, but that after the meetings, "any issue of liability of the defendant to the plaintiff was left unresolved."

[6] It is convenient to consider the cross-claim first. The cross claimant says that his valuer's evidence with regard to the damaged area was unchallenged; it was supported by the evidence of the valuer called by the cross respondent; and the valuation method adopted by the cross-appellant's valuer, Mr Siope Lomu, was "common practice" in Tonga.

[7] Mr Lomu has reached his assessment by a "before and after" method. The "before" value he calculated on the basis that he regarded the highest and best use of the subject allotment was as a subdivision of the property into "commercial accommodation units or smaller residential lots of at least 30 perches (758m²) per lot." He effected a notional subdivision into 35 lots, applied what he called an "exchange of land to money value" for each lot, being $5000 for 4 lots, $4,500 for 16 lots, $4,000 for 12 lots, and $3,500 for 3 lots, giving what was asserted to be "fair market value" of $147,000, and "total value to the landholder" of $150,000.

[8] Mr Lomu valued the residue of 5.779 acres after the damage to the property, by applying his "exchange of land to money value" to 4 parcels: 1 acre at $10,000, 1 acre at 8,000, 1 acre at $6,000, and the fourth, 2.779 acres, at $5,000 per acre, giving an after value of $37,895.00, rounded up to $38,000.

[9] The answer to the cross appeal is that the valuation evidence for the cross-appellant was the subject of vigorous challenge, and the trial judge did not accept it, as he was entitled to do.

[10] Mr Lomu agreed in cross examination that "in Tonga, you cannot purchase land," and it was put to him that a method of valuation based on an open market for land could not be used in Tonga. Yet in fact this is what he did. It was further suggested to Mr Lomu, and he agreed, that if the government wished to effect a subdivision on the subject property, it would value the crops and the trees on the allotment, and offer the owner a similar size tax allotment: "the government wouldn't actually pay $150,000" to the owner.

[11] The trial judge declined to accept that land in Tonga can appropriately be valued in a similar way to the valuation of freehold lands as a tradable commodity in an open market.

[12] His Honour said, "Concepts such as market value that assumes a willing but not anxious vendor and purchaser, and free exposure to the market do not fit readily into Tongan land tenure, and it is beyond the mandate of the Court to introduce them." Apart from the question of the theoretical validity of the valuer's approach, on the evidentiary level His Honour noted:

"There was no evidence that this piece of land 3 kilometres from Neiafu, elevated though it is and with pleasant views, would have attracted in the reasonable future the 35 residential purchases that he postulated."

In this respect, it is relevant that subsequent to the trespass and conversion by the appellant, the respondent authorised the quarrying of further material from his allotment by a contractor, Tomu Fa Paea. The cross-appeal should be dismissed with costs to be agreed or taxed.

[13] The trial judge arrived at his conclusions by following the approach adopted by Webster J in the unreported judgment of 13 June 1989 in Mokofisi v The Kingdom of-Tonga C111/88. His Honour was not in error in following that approach, but in the process permitted a degree of double compensation, as will be shown below.

[14] On the appeal, the Solicitor-General submitted that the trial judge should have accepted the primary defence of the Kingdom at trial, that the agreement with Sione Tu'i was a three-way agreement which was made in settlement of all that he could claim for the damage caused and that there was no further or other liability of the defendant to the plaintiff.

[15] The trial judge held that the payment by Sione Tu'i was no more than payment from the proceeds of what he had wrongfully received for selling the substance of the plaintiffs land to the defendant, and that the defendant was still liable for the encroachment and the destruction. His Honour ruled that this liability had not been compromised.

[16] The agreement said to constitute a compromise, while having been initiated and encouraged by the Minister, is signed only by the plaintiff and Sione Tu'i. It deals only with the material that was wrongfully removed from the plaintiff's land. The plaintiff denied in evidence that the liability of the defendant in respect of trespass and damage to his property had been compromised by his agreement with Sione Tu'i. For these reasons, the trial judge was right to conclude that the defendant was liable in trespass and loss of amenity to the property of the plaintiff.

[17] The Solicitor General sought to distinguish Mokofisi, on the basis that Mokofisi related to a town allotment while Havea's was a tax allotment, and that Mokofisi related to land located at Nuku'alofa, while the tax allotment in the present case was in the middle of bushland, some 3km from Neiafu in Vava'u.

[18] While those differences may be accepted, as well as the further difference that Havea had been compensated before trial for the loss of road-building material from his allotment, the principles followed in Mokofisi were both relevant and appropriate in the present case.

[19] In Mokofisi, the Ministry of Works had quarried on the land adjacent to the plaintiff and had encroached on his allotment. The evidence established that 251 cubic metres of rock had been removed from the plaintiff's allotment, as well as 300 cubic metres of topsoil. The surface of the allotment lost to the plaintiff by reason of the encroachment was 150 square metres.

[20] Webster J held:

"It has according by been proved and accepted that employees of the Defendant did seriously encroach onto the Plaintiff's town allotment by quarrying and removing rock and topsoil. The Defendant is therefore liable to the Plaintiff in damages for the torts of trespass to land and conversion. The measure of damages is the sum necessary to put the Plaintiff in the same position as though the damage had not happened: Darbishire v Warran [1963] EWCA Civ 2; [1963] 3 All ER 310 (CA).

For trespass to land where there is permanent deprivation of land, as is the case here in the case of the actual rocks quarried away at the boundary, the measure is the value of the land. This was land with a surface area of 150 square metres which was lost, and based on a market value of $15.25 per square metre for land in that area of Ma'ufanga, Mr Lemoto valued this at $2,287.50."

[21] His Honour also held that "the trespass to the plaintiff's land also caused a considerable loss of amenity to the Plaintiff's town allotment", including loss of natural terrain, as well as "the loss of privacy, a better view and outlook and the natural environment due to the loss of rocks." For loss of amenity, His Honour awarded $5000. He awarded $5000 as the defendant's contribution to the cost of a fence to protect his family from the sheer drop created by the removal of the coral, a factor that is not relevant in the present cases. His Honour allowed $925 for the conversion of topsoil from the remaining land, and $2000 for "damage at large", to reflect that damages are not limited to provable specific pecuniary loss, and should recognise the affront caused by the torts of trespass to land and unlawful conversion, as well as the defendant's conduct right up to the conclusion of the trial.

[22] Webster J held that the value of the coral and topsoil, converted from the area whose surface area was the 150 square metres lost, was $1896. In a passage important for present purposes, His Honour said:

"Next come the damage for unlawful conversion of the coral rock and topsoil removed. The measure of these damages is the value of the thing converted at the date of conversion. This was a separate tort and so separate damages are due. However I accept the submission of Mrs Taumoepeau for the Defendant that there should not be any overlap of these damages with the damages for trespass. In this respect it appears to the Court that it would be unfair to award damages for the conversion of the coral rock in addition to the damages for trespass of $2287.50 for loss of the 150 square meters of land on the south-east boundary. This is because those damages were based on the value of that land and therefore if that is being fully compensated that must be held to include compensation for the things in or on that land. So it would be wrong to give additional compensation for the rocks which made up that land."

[23] Darbishire v Warran, on which Webster J relied, was concerned with the measure of damages for a motor vehicle damaged as a result of the defendant's negligence. The vehicle had been repaired by the plaintiff at a cost of $192, and there was evidence that the market value of the car was $85. It was held that the plaintiff was entitled as against the defendant only to the lower figure.

[24] In the present case, Finnigan J assessed the value of that part of the allotment damaged, or indeed destroyed, by the trespass and conversion by the defendant at $9526. We take it that the cost of restoring the allotment to its earlier state (an option not realistically open in any event) is not less than the value of the coral removed, and the trees lost. Because of the way the appellant conducted its case, there was no challenge to the number and value of the trees claimed by the respondent. He claimed at least 48 coconut trees at $100 each, 24 Nonu trees at $80, 10 Loupata trees at $50, and 8 orange trees at $80. Finnigan J did not dissect the amount of $17,500, but it is likely that at least $9000 was attributed to "tree-loss".

[25] In our opinion, it would be wrong to allow both the value of that part of the allotment lost, and the value of the trees lost, for the reasons outlined by Webster J in Mokofisi in the passage set out above. An amount of $8,500 for loss of amenity and for those factors which Webster J subsumed under the heading "Damages at Large" might be regarded as generous, but the loss of amenity in this case was really quite serious. The amended amount awarded under that heading should not be disturbed.

[26] The amount for the value of the lost surface of the allotment is less than the value of the coral taken and the trees lost, but that value is based on the figures given by the respondent's valuer, and consistently with Darbishire v Warren, there is no reason why a sum greater than the value of what was damaged should be awarded. It is also to be borne in mind that an allowance of the full value of the trees would risk double compensation in a case in which some amount has already been received in respect of the severed value of the coral the severance of which required the removal of the trees.

[27] The appellant argued that Mr Lomu’s valuation constituted a contravention of s.24 of the Constitution (Cap 2), and should not have been received and acted upon by Finnigan J. Mr Lomu gave evidence that he “was directed buy the Minister’s Secretary to attend the Court on behalf of the Ministry.” Even if there was a contravention of s.24, a matter it is not necessary to decide, Finnigan J was entitled to have regard to that evidence.

[28] The appellant also argued that the respondent having been awarded below a very much smaller sum than he claimed, the appellant should not have been ordered to pay the whole of his costs. In the absence of any offer before judgement higher than what was awarded, or of payment into court of such an amount, no basis exists to interfere with the costs order made by Finnigan J.

[29] For these reasons, we would allow the appellant’s appeal and vary the order made below by ordering that the appellant pay to the respondent the sum of $18,026, made up of damages for the lost surface of the part removed of $9526, and $8,500 for loss of amenity and damages at large. The respondent should pay the costs of the appellant of the appeal, to be agreed or taxed.

Burchett J
Tompkins J
Spender J