Pacific Royale Hotel v Vakalahi [2007] TOCA 1; AC 04-2007 (20 July 2007)

IN THE COURT OF APPEAL OF TONGA
CIVIL JURISDICTION
NUKU’ALOFA

AC 04/2007

BETWEEN:

PACIFIC ROYALE HOTEL
Appellant

AND:

TALAFEKAU VAKALAHI
First Respondent

TEVITA SIALE TRADING AS SIALE TYRE SHOP
Second Respondent

Coram: Burchett J
Salmon J
Moore J

Counsel: Mr Fifita for the Appellant
Mr Fakahua for the First Respondent

Date of hearing: 18 July 2007.
Date of judgment: 20 July 2007.

JUDGMENT OF THE COURT

[1] This is an appeal by Pacific Royale Hotel (the Hotel) against a judgment of Laurenson J in the Supreme Court on 14 May 2007. His Honour ordered that the Hotel pay the respondent $4130 being the costs of repairing a van belonging to the Hotel.

Background Facts and the conflicting evidence

[2] What appears to be the uncontroversial general factual background giving rise to this appeal is as follows. The Hotel employed the first defendant, Vakalahi. On Saturday 15 July 2006 Vakalahi used the van to drop some Hotel employees home. The van was damaged later that night when being driven by Vakalahi. At this time, the use of the van was not authorised by the Hotel. The van was repaired by Tevita Siale. Siale had, at the time, very recently repaired the van following an earlier accident. Siale presented the Hotel with an invoice on 15 August 2006 for $4130 for the repairs following the damage caused by Vakalahi. The Hotel refused to pay the cost of repairing the van on the basis that Vakalahi was responsible for the cost of the repairs.

[3] The fundamental issue between the parties was this. The manager of the Hotel, Ane ‘Ali, claimed that Vakalahi, who was dismissed shortly after the accident, had agreed to have the van repaired at his own cost. It had been agreed between Ane and Vakalahi that if this was done, Vakalahi could get his job back. Ane did not know where it would be repaired until she received an invoice from Siale. The Hotel claimed there was no contract between it and Siale to carry out the repairs. Siale, on the other hand, claimed that he had no dealings with Vakalahi and that all his dealings had been with employees of the Hotel who had ostensible authority to engage him to carry out the repairs.

[4] At the hearing before the trial judge, there was conflicting evidence about what precisely had occurred and, in particular, what the circumstances were that resulted in Siale repairing the van.

[5] Siale gave evidence that he had been told by Hema Taufa (who was an employee of Siale) to contact the Hotel because a van he had previously repaired had been damaged again. His evidence was that he had gone to the hotel with Hema. They were met by Siua Maka, an employee of the Hotel, and two other security guards and Siale’s evidence was that Maka had asked if he could repair the van. On returning from the bush that afternoon he had found the van parked in front of his shop but he did not know who had delivered it. He had no further contact with the Hotel until the repairs were finished.

[6] Hema gave evidence that he went with Siale to the hotel to view the van. Maka had asked if they would be able to fix it and they had said yes. Maka said they would deliver the van. There were two other men present. He and Siale had then gone to the bush and on their return had found the van outside the workshop. He said he was not aware of any contacts made from the Hotel.

[7] Siale called Maka to give evidence. On Maka’s evidence, he took care of the Hotel vehicles. His evidence was that Siale and Hema had attended the hotel in respect of the damaged van. He did not know they were coming. He had been called in to work that day by Ane (he was not on duty at that time) to come and look at the van before it was taken away. Ane had told him that the van needed to be taken away from the hotel. Ane did not say Siale was coming. Ane had told him to remove the vehicle away from the hotel. Vakalahi took the van away from the hotel by giving directions to a tow truck driver. Generally, Ane denied authorising anyone to request Siale to repair the vehicle on behalf of the Hotel.

Decision of the Trial Judge

[8] His Honour accepted the evidence of Siale and Hema, finding them credible witnesses. His Honour did not find Ane’s evidence credible in important respects. Namely, his Honour found that it had been the Hotel which had initiated contact with Siale and more than likely, Ane had been involved. His Honour placed significant weight on what he described as Maka’s evidence that Ane had requested him to return to the Hotel to await the arrival of Siale. His Honour found that this indicated that she had prior knowledge of a request to Siale to come and view the van. His Honour found that Siale understood that he had been engaged to repair the vehicle by the Hotel and that all that had been required to confirm the engagement was the delivering of the van to the premises.

[9] His Honour found that Ane had contrived to induce Siale into repairing the van thinking that the Hotel would pay for it knowing that she would resist paying it on the basis that only she could enter into a contract for repair. His Honour cited Pole v Leask [1863] 33 LJ CL 155 (at 161-162) and Law of Contract (Cheshire Fifoot & Furmstons, 7th New Zealand Edition).

[10] His Honour found that nobody with the requisite authority from the Hotel had contracted with Siale for the repair of the van but that, by a combination of acts of persons from the Hotel, Siale was entitled to conclude that the Hotel employees appeared to be agents of the Hotel. He relied on that appearance in entering into the contract. His Honour said that the Hotel was estopped from denying the existence of the contract.

[11] The trial judge gave judgment against the Hotel and awarded damages to Siale in the amount of $4130 plus interest and various costs. His Honour also ordered that if the judgment was not met by 25 May 2007 that tn be returneturned to Siale who will be entitled to sell it and recover the amounts stipulated by the Court’s orders.

Grounds of A

[12] The appellant raised eight grounds ofds of appeal. These were contained in an amended notice of appeal filed on 3 July 2007. In summary, the grounds were:

1. The trial judge erred in assessing of the evidence of the case. The defendants’ evidence was not "to the balance of probabilities."

2. The trial judge failed to make the decision in accordance with "the principle of principal and agency." The plaintiff was not aware from the beginning that it would pay for the repair.

3. No reasonable tribunal would make such a finding. The trial judge did find that there was nobody with the requisite authority but still found against the Hotel.

4. Estoppel was not pleaded and did not form part of the respondents’ submissions.

5. The trial judge erred in his assessment of the manager’s evidence. There was no evidence adduced about who made the initial call.

6. Maka’s evidence did not support the appellant’s case. His evidence was hearsay and therefore inadmissible. The court did not declare he was a hostile witness.

7. The trial judge failed to consider that Siale had not contacted the Hotel to confirm that it wanted him to repair the van.

8. His Honour failed to make an order against Vakalahi who was jointly and severally liable.

At the hearing, Mr Fifita said that the Hotel no longer sought to rely on ground 8. Ground 3 was amended, the third sentence to read "The learned trial judge did find that there was nobody with the requisite authority.......".

Consideration

[13] It is convenient to deal with one of the grounds of appeal at the outset, ground 4. It is true that the trial judge said in his reasons for judgment that the Hotel was "estopped" from denying the existence of the contract. However it is unlikely that his Honour was using the word "estopped" in any technical legal sense. Rather, his Honour was saying that, on the evidence, the Hotel could not escape the conclusion, and therefore could not deny, that there was a contract between it and Siale for the repair of the van.

[14] The real issue in this appeal, raised by the other grounds, is whether the trial judge was correct in accepting the evidence of Siale and Hema and rejecting the evidence of Ane. As counsel for the Hotel has pointed out, several of the findings or observations of the trial judge are not supported by the evidence.

[15] The trial judge said that Maka gave evidence that "the guy who had the accident would deliver the van and Siale was [to] repair it". Maka did not give this evidence. The trial judge also said that Maka gave evidence that he was not on duty and had been asked by Ane to come back before Siale arrived. This description of the evidence is misleading. It is true that Maka gave evidence that he was asked to come to work when he was not on duty. It is also true that his evidence was that Ane made this request before Siale arrived at the hotel. However he did not give evidence that Ane linked this request to the arrival of Siale. That is, he did not give evidence that Ane asked him to return to work to be there before Siale arrived. His evidence was that when he returned to work he did not know that Siale was going to come. This misleading description of the evidence of Maka casts doubt on the subsequent conclusion of the trial judge (which he described as significant) that Ane had asked Maka to come back to the hotel to wait for Siale and that this indicated Ane had prior knowledge of a request to Siale to come and view the van.

[16] Counsel for the Hotel also submitted that it was significant that the evidence of Siale was that Hema had told him to contact the Hotel about repairing the van yet Hema did not give direct evidence about this matter. Indeed Hema's evidence was that he was not aware of any contacts made from the Hotel.

[17] However these considerations have to be balanced with other evidence. Ane gave evidence that the usual procedure for securing repairs to vehicles was by written directions and, in relation to the repair of the van by Siale, no written direction had been given. Yet evidence was given by Sipiliano Mafi, another vehicle repairer, that he had repaired vehicles including the van many times for the Hotel and the import of his evidence was that written orders had not been given for those repairs. This evidence casts doubt on the veracity of the evidence of Ane. More generally, the evidence of Siale and Hema has a ring of truth to it. It is true that Maka did not accept that he asked Siale and Hema to repair the van notwithstanding that Siale and Hema gave evidence that he did make that request. But the evidence clearly establishes that Siale and Hema went to the hotel to look at the van that had been damaged. They were obviously not doing this as a matter of academic interest and were doing it to assess what repairs might be necessary.

[18] The critical question is why they came to the hotel to look at the van. One obvious explanation is that they had been requested to go there by someone representing the Hotel particularly given that they had recently repaired the van after an earlier accident. What is another explanation? It is conceivable that either directly or indirectly through Vakalahi, they were made aware that the van had been damaged again and they were opportunistically, and on their own initiative, going to the hotel to see if they could secure the business of repairing the van again or were going there because Vakalahi had requested them to repair the van on the basis that he would pay for the repairs. However neither of these versions of events was put to either Siale or Hema in cross examination except a suggestion that Siale had an agreement with Vakalahi and that he had a deceitful intention that he would send the invoice to the Hotel.

[19] In addition, the trial judge had the benefit of observing the witnesses giving evidence and in particular observing Ane, Siale and Hema. It is an advantage we do not have. While this Court is bound to rehear the matter (though having regard to the issues presented for consideration by the notices of appeal) there are limitations on what an appellate court might do in such circumstances. They were recently restated by the High Court of Australia in CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 224 ALR 1. As Kirby J noted at [17]:

"The ‘limitations’ introduced into the rehearing based on the record of the trial are those necessarily involved in that form of appellate procedure. Such limitations include those occasioned by the resolution of any conflicts of trial about witness credibility based on factors such as the demeanour or impression of witnesses; any disadvantages that may derive from considerations not adequately reflected in the recorded transcript of the trial; and matters arising from the advantages that the primary judge may enjoy in the opportunity to consider, and reflect upon, the entirety of the evidence as it is received at trial and to draw conclusions from that evidence, viewed as a whole."

[20] While some of the reasoning of the trial judge is not entirely satisfactory, we nonetheless are satisfied that on the balance of probabilities the version of events given by Siale and Hema should be accepted. In addition, we agree with the trial judge's observation that had Ane intended that Vakalahi be responsible for the cost of the repairs, that should have been made known to Siale but was not.

[21] The appeal should be dismissed with costs.

Burchett J
Salmon J
Moore J