Vaitulala v Cook [2010] TOSC 5; CV 751-07 (5 February 2010)

IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA REGISTRY

CV. 751 of 2007

BETWEEN

'ALIFALETI VAITULALA
Plaintiff

AND

1. 'ALIPETI COOK

2. 'IKANI VAITOHI

3. SEMISI FONUA
(President of the Free Church of Tonga)
Defendants

BEFORE THE HON. CHIEF JUSTICE FORD

Counsel: Mr Fa'otusia for the plaintiff and
Mr Kaufusi for the first and second defendants

Dates of hearing: 14, 15, 16 and 17 December 2009.

Dates of written submissions: 8 and 15 January 2010.

Date of judgment: 5 February 2010.

JUDGMENT

The claim

[1] The plaintiff owned a 25 foot fibreglass boat which at all material times was anchored along the foreshore adjacent to Vuna Road on the main Island of Tongatapu. He resided principally in the United States and he had left the boat in the care of Papa Mauala and his son 'Etuate. In this proceeding he claimed that the first defendant unlawfully converted the boat to his own use and on-sold it to the second defendant who in turn sold it to the Free Church of Tonga, which was named as the third defendant. The plaintiff alleged that the first defendant was aware that the boat was in the care of the Maualas; that the second defendant became aware after he purchased the boat that it had belonged to the plaintiff and that the Free Church of Tonga also knew that the boat was in the care of the Maualas for a certain period of time.

[2] At the commencement of the hearing, counsel for the plaintiff withdrew the claim against the third defendant without any order as to costs. In his prayer for relief, the plaintiff seeks the return of the boat which is currently in the possession of the Free Church of Tonga but, by abandoning his claim against the third defendant, he has automatically ruled out any prospect of having the boat returned to him. In his alternative prayer for relief he seeks damages in the sum of $10,000 for the market value of the boat at the time of the alleged conversion together with special damages in the sum of $5,000 for loss of use of the boat.

[3] The first defendant (who for ease of reference I will refer to as "'Alipeti") denies having any knowledge that the boat belonged to the plaintiff or, that at the time he took possession of the boat in May 2003, it was in the care of the Maualas. The second defendant also denies having any knowledge that the boat was owned by the plaintiff when he purchased it from the first defendant and he claims to have been a bonafide purchaser for value.

The case for the plaintiff

[4] The 72-year-old plaintiff told the court that he could not remember when he purchased the boat but he bought it from his wife's cousin for $8,000. It was 25 feet long and was driven by a 60 hp outboard motor. He said that the reason why he purchased the boat was because he was proposing to develop a kava farming venture on Tofua Island in the Ha'apai Group of Islands. Tofua is the Island where Captain Bligh and his 18 loyal crew landed for supplies in their 23 foot open boat on the evening of the infamous mutiny of the Bounty in April 1789.

[5] The plaintiff planned to use the vessel for travelling between Ha'apai and Tofua. However, he told the Court that the kava plantation was not a success because much of the crop was stolen. It appears that the farming venture he described took place in around 1999 and 2000. The plaintiff was, in fact, very vague on dates but he thought that it was about 2001 when he brought the boat back to Tongatapu, moored it at Sopu and allowed it to be used by the Maualas. He then returned to the States.

[6] The key witness for the plaintiff was 42-year-old 'Etuate Mauala ("'Etuate"). He also was very vague on dates and in his examination in chief he gave no indication at all as to when the boat in question was allegedly converted by 'Alipeti. 'Etuate claimed that the boat was moored at Sopu sometime prior to 2002 and he and his father used it for fishing purposes. He said that 'Alipeti would have been aware that he and his father used the boat because his boat and 'Alipeti's boat were moored at Sopu only about 15 or 20 meters apart.

[7] In cross-examination it was put to 'Etuate that 'Alipeti would say that he first became aware that the boat in question was moored at Sopu and that 'Etuate and his father were using it for fishing purposes in 2002 and then in late 2002 'Alipeti noticed 'Etuate and a woman using the boat. 'Etuate agreed with that proposition. He also confirmed that the woman 'Alipeti was referring to was his wife and that she went fishing with him after his father passed away. Mr Kaufusi put it to the witness that his father had passed away towards the end of 2002 but, rather surprisingly, 'Etuate could not recall the year of his father's death.

[8] Without being able to give the Court any indication whatsoever as to dates (not even the year), 'Etuate said that one morning when he was about to go to 'Eua on the ferry, he noticed that the boat was missing from where it was moored. He said that there had been a strong wind the night before. In cross-examination, it was revealed that the boat had gone missing not from its usual mooring at Sopu but from another mooring it had been moved to at Kolomotu'a, approximately a mile from the Sopu site. 'Etuate had moved it to the Kolomotu'a mooring, where it was closer to the plaintiff's Tonga residence, at the request of a third-party. The evidence was that it had been moved to the Kolomotu'a mooring approximately 2 or 3 months beforehand.

[9] 'Etuate did not say what time the ferry had departed for 'Eua on the day in question but he told the court that after he noticed the boat missing from the Kolomotu'a mooring he drove along the foreshore and found that someone had moored it near its old site back at Sopu. In cross-examination he agreed that he had noticed that someone had placed the trunk of a coconut palm under the boat to protect it from damage. He made no inquiries at that point as to who had been responsible for mooring the boat back at Sopu but he proceeded to catch the ferry to the Island of 'Eua where he remained for one month working on a plumbing job.

[10] 'Etuate told the Court that on the day he arrived back from 'Eua he went to check on the boat and it was no longer at Sopu. He said that he was told by some local rugby players that 'Alipeti had taken custody of the boat. His evidence was that he then went to 'Alipeti's house and asked 'Alipeti if he had gone to the police about the boat and 'Alipeti said that that was true and he had already sold the boat to a guy from Puke for $1500. He said he asked 'Alipeti why he did that when he knew very well that the boat belonged to him and his father and 'Alipeti said that he thought he had sold the boat to someone else. When this evidence was later put to 'Alipeti he strongly denied the story and said that 'Etuate had never visited his home.

[11] The next witness called by the plaintiff was 47-year-old Nakita Tu'itavake. He told the Court that he was a good friend of the plaintiff's son and he helped him look for the boat. He said that he had a lot of relatives at Puke and when he went out to that village with the plaintiff's son and made inquiries about the boat his uncle told him that a guy named Puni (son of the second defendant) had the boat. The uncle told him that the story was that the boat had been lost and then found and Puni had purchased it. Nakita visited Puni's home and he was told that the boat had, in fact, been purchased by his father, the second defendant. He then tried to see the second defendant at his office in Nuku'alofa but the latter did not want to see him. In cross-examination Nakita agreed that these events took place in late 2004 or early 2005 but it is difficult to reconcile those dates with other evidence. That, essentially, was the case for the plaintiff on liability.

The case for the defendants

[12] The first defendant, 69-year-old 'Alipeti Cook, told the Court that he had been a fisherman since 1971. He had his own 22 foot fishing boat which he kept moored at Sopu although he lived at Tofoa. He sometimes goes and works on his plantation. He said that in 2002 he had noticed that Papa and 'Etuate Mauala were fishing using the boat in question which was moored not far from his own boat at Sopu but towards the end of 2002 'Etuate would go out fishing with a woman who, the evidence disclosed, was his wife. 'Alipeti's son told him one day that he had heard in the kava club that Papa had passed away. In early 2003 he noticed that the boat was not used during the month up to mid-February and then the boat disappeared altogether for a period of approximately 2 months. 'Alipeti did not know what had happened to it.

[13] 'Alipeti said that he and his two sons continued fishing up until May 2003 but there was a period in early May when there were strong winds and the fishing was not good. At the end of the second week in May they caught nothing and so he decided to leave the nets out and to check upon them the following week. On the following Sunday night he heard a wind warning over the radio and so he and his two sons awoke at 6 a.m. on the Monday and at approximately 7:30 a.m. they set out to check the nets. Although the witness did not mention any specific dates, the evidence indicated that the Monday he was referring to would have been Monday 19 May 2003.

[14] As 'Alipeti and his two sons sailed out to check their nets off the northern coast of Tongatapu, one of the sons sighted a boat stuck on the reef near Polo'a Island. It turned out to be the boat which is now the subject matter of this litigation. It was approximately 1000 meters out from the shoreline and it was stuck fast up against the rocks of the reef. The boat was damaged and full of sea water. Part of the framework that secured the anchor had broken away and there was a hole in the side of the boat. The men secured it by rope and continued out to sea to check their fishing nets.

[15] After collecting their nets, the men returned to the reef and towed the stricken boat back to their mooring at Sopu. Because it was full of sea water, they had to tow it backwards. 'Alipeti estimated that it took about three hours to tow the boat back into shore and that it was approximately 11:30 a.m. when they eventually arrived at Sopu. At Sopu, the three men clambered into the sea and tried to bring the boat in as close to shore as possible. They then tied a coconut trunk under the boat to prevent further damage from contact with the rocky seabed. After securing the boat in position, 'Alipeti returned home to change his clothing and then he travelled into Nuku'alofa to inform the police about the boat the men had found.

[16] 'Alipeti explained to the Court that he had seen a television programme where the police had informed the public that if anyone found lost goods they had to report the finding to the police and if the goods were not claimed within 24 hours then they belonged to the government. 'Alipeti gave a full description of the boat to the police. The police officer told him that the boat could not be brought to the police station and so he asked 'Alipeti to look after it for a month. 'Alipeti agreed to do so. It remained moored at Sopu. 'Alipeti told the court that he did not know who owned the boat. He had recognised it as the one that he had seen 'Etuate using in 2002 but the Maualas had never told him that the boat belonged to them and he had no knowledge of the plaintiff. He had had not seen 'Etuate since early January 2003 and he had no idea where 'Etuate lived.

[17] Almost 1 month later the second defendant, 'Ikani Vaitohi, approached 'Alipeti and enquired about purchasing the boat. 'Ikani had previously purchased two other boats from 'Alipeti and he had apparently heard from someone that 'Alipeti had control of the boat in question. 'Alipeti explained to `Ikani that the boat belonged to the police and he was looking after it for a month but one day after the month was up 'Alipeti went back to the police station as the police had told him to do. The police explained that no one had claimed the boat and so they asked 'Alipeti to sign a document and they indicated to him that he then had custody of the boat. 'Ikani came again to see 'Alipeti about arranging a purchase but 'Alipeti asked to give him one more week just in case someone claimed the boat. `Ikani came again a week later and, as there had been no claimants, 'Alipeti sold him the boat for $1500. 'Ikani then arranged for extensive repair work to be carried out on the boat.

[18] 'Alipeti told the court that approximately 3 weeks later he received a phone call from the police asking him to call at the police station regarding the boat in question. As 'Alipeti did not have a vehicle at the time, the police came and collected him. He said that he travelled in the police van, "with humiliation and disappointment". When he was taken upstairs at the police station he saw 'Etuate and that was the first time he had seen him for some months. 'Alipeti again gave a statement to the police officer recounting all that had happened in relation to the boat in question. 'Alipeti said that the officer then turned to 'Etuate and said, "I don't know what further we can do because 'Alipeti has done everything legally." The officer called a driver to take 'Alipeti home but 'Etuate agreed to run him home in his van. On the way to his home 'Alipeti told 'Etuate the price `Ikani had paid for the boat and he suggested that if 'Etuate could come up with that money he might be able to arrange to get the boat back. Nothing further happened in that regard, however.

[19] The second defendant's son, 46-year-old Sione Vaitohi, told the Court that his father was a United States citizen but in 2003 he came to Tonga and wanted to buy a boat. They heard that 'Alipeti had a boat. They approached 'Alipeti and he told them that he did not have legal title to the boat and he asked them to wait for another week. They did so and then they returned and made the purchase. Sione indicated that the $1500 figure was reasonable considering the condition of the boat and if 'Alipeti had asked for more, they would not have made the purchase. They then arranged for the boat to be taken to KW International, a boat building firm, for an assessment of the repair work required. The estimate given for the repair work was approximately $6,000. The witness recalled 'Etuate and the plaintiff's son approaching them sometime after they had made the purchase asking for the boat to be returned to the plaintiff. He told 'Etuate the price his father had paid for the boat and said that he could have it back if he were to reimburse them for that amount but 'Etuate was not interested in that proposal. The boat was retained by the second defendant and eventually repaired at a cost of approximately $6,000. He also purchased an outboard motor for a further $7,000. The second defendant used the boat for fishing before eventually selling it to the Ha'afeva congregation of the Free Church of Tonga and then he returned to the United States.

[20] The final witness for the defendants was Malu Cook, 'Alipeti's 35-year-old son. He is a taxi driver by occupation but he was with his father on the morning in May 2003 when they went out to check the fishing nets and he gave evidence confirming what 'Alipeti had told the Court regarding the discovery and recovery of the boat from the reef at Polo'a Island. The witness speculated that had they not recovered the boat when they did it was likely that it would have been wrecked because it was stuck on the reef and the waves were rough.

Submissions

[21] Both counsel presented written submissions which dealt at length with the facts and the recognised principles applicable to the tort of conversion. Mr Kaufusi submitted that in order for there to be a conversion, the goods must be unjustifiably detained by the person in possession after a proper demand had been made for their return and he stressed that there was no evidence that the plaintiff had made any such demand prior to when the boat was sold to the second defendant.

[22] Counsel for the plaintiff challenged 'Alipeti's evidence that he had found the boat on the reef near the Island of Polo'a and submitted that it must have been found somewhere else because of "the timing of the alleged towing back of the boat during low tide." This was a complicated factual submission which, it was claimed, revealed a "major weakness" in the defence case but it was not supported by the evidence. Counsel submitted that 'Etuate had told the court that he had seen the boat moored back at Sopu between 9 a.m. and 10 a.m. and at that stage the tide was going out whereas the defendant claimed it had not been moored at Sopu until 12:30 noon. Counsel's point, as I understand it, was that if the tide was on its way out at 10 am. it would have been too shallow for 'Alipeti to have towed the boat into its Sopu mooring at 12:30 noon. The problem with this hypothesis, however, is that 'Etuate did not say in evidence what time he saw the boat at Sopu. The defendants claimed that they moored the boat at 11:30am., not 12:30 noon and there was simply no evidence at all about the tidal movements on the day in question. In any event, the evidence given by the first defendant and his witness as to where the boat was found and how it was brought back to Sopu was quite overwhelming and I accept completely their version of those events.

[23] Mr Kaufusi referred to sub-sections (1) and (2) of section 151 of the Criminal Offences Act. Subsection (1) makes it an offence if a person who finds lost property fails to deliver it to the owner, district officer, town officer or police within 24 hours after taking possession. Subsection (2) then provides for what is to happen to the property if the owner is not discovered within one month. Mr Fa'otusia submitted, quite correctly, that those criminal provisions have no application in civil proceedings such as the present.

[24] The principal submission advanced by Mr Fa'otusia on the law was that 'Alipeti could not be considered an innocent receiver of the boat as he knew that 'Etuate was the one who usually used the boat, "and he should have told 'Etuate to come and take care of his boat. In fact, what 'Alipeti should have done was to inquire as for 'Etuate's whereabouts, as a reasonable person in 'Alipeti's position would have done, instead of reporting it to the police."

The law

[25] Part X of the Shipping Act (Cap. 136) contains a special code dealing with "wreck and salvage". The sections under Part X set out the rules to be observed by any person finding or taking possession of a wreck in waters lying within the limits of Tonga. The definition of "wreck" would include the boat which is the subject matter of the present litigation. The legislation would appear to be based on the (now repealed) English Merchant Shipping Act 1894 the effect of which was considered in The Lusitania [1986] QB 384. Section 168 of the Act requires a finder of any wreck to give notice to the receiver of wreck (the Director of Marine) and subsequent sections set out the rules the receiver is required to act under in disposing of the wreck. Section 171 allows the owner of a wreck to establish his claim within 12 months from the time at which the vessel was wrecked.

[26] The receiver of wreck has taken no interest in the present litigation and the Shipping Act has not been cited or referred to by either counsel. In these circumstances, it appears to me that the appropriate course is for this Court to treat the claim as one to be determined according to the ordinary tortious principles applicable to a cause of action in conversion. As indicated above, that indeed was the approach taken by both counsel in written submissions.

[27] Conversion is an act of deliberate dealing with a chattel in a manner inconsistent with another's right whereby that other is deprived of the use and possession of it. The essence of the wrong is the unauthorised dealing with the claimant's chattel so as to question or deny his title to it - see Clerk & Lindsell on Torts (2006), 19th ed, 17- 06; 17- 07. The rights and obligations of a finder were enunciated in helpful format by Donaldson LJ in Parker v British Airways Board [1982] 1 All ER 834, 843:

"1. The finder of a chattel acquires no rights over it unless (a) it has been abandoned or lost and (b) he takes it into his care and control.

2. The finder of a chattel acquires very limited rights over it if he takes it into his care and control with dishonest intent or in the course of trespassing.

3. Subject to the foregoing and to point 4 below, a finder of a chattel, whilst not acquiring any absolute property or ownership in the chattel, acquires a right to keep it against all but the true owner or those in a position to claim through the true owner or one who can assert a prior right to keep the chattel which was subsisting at the time when the finder took the chattel into his care and control.

4. Unless otherwise agreed, any servant or agent who finds a chattel in the course of his employment or agency and not wholly incidental or collaterally there to and he takes it into his care and control does so on behalf of his employer or principal who acquires a finder's rights to the exclusion of those of the actual finder.

5. A person having a finder's rights has an obligation to take such measures as in all the circumstances are reasonable to acquaint the true owner of the finding and present whereabouts of the chattel and to care for it meanwhile."

[28] There is no obligation on the finder of a chattel to take it to the true owner. As Denning MR said in Capital Finance Co Ltd v Bray [1964] 1 All ER 603, 607:

"There is no obligation on a person who has another person's goods to return them to him, except by contract. The rule is accurately stated in Salmond on the Law of Torts (13th Edn) at p.264:
"No one is bound, save by contract, to take a chattel to the owner of it; his only obligation is not to prevent the owner from getting it when he comes for it."

[29] In the case of a finder of a chattel, the overriding principle is that unless the chattel in question has been abandoned (which usually requires a voluntary act), and I am not satisfied on the facts of the present case that the requisites for abandonment have been met, the finder will only acquire title against third parties -- not against the true owner. In other words, even if the finder behaves in an exemplary fashion, he cannot -- until the expiry of any relevant limitation period -- obtain better title to the goods than that enjoyed by the true owner. Thus, if the true owner turns up (as in the present case) and asks for the return of the item in question, the finder is liable in conversion if he refuses to hand it over, or if he has on-sold it. The position is authoritatively stated in Halsbury's Laws of England (Vol 3 (1) (2005 Reissue) :

"11. Bailment by finding.

"If a finder actually takes a lost chattel into his custody, he constitutes himself a depositary, and assumes the obligations of a depositary to the true owner, including the obligations to take reasonable steps to locate the owner and acquaint him with the finding and the present whereabouts of the chattel, to exercise due care for the safety of the chattel until it's returned to the owner and to return it to him on demand. Further, the finder cannot claim a lien on the chattel for any expense to which he may have been put in keeping or preserving it. Unless the true owner has intentionally abandoned the chattel, his title to it is not lost and he may recover the chattel, provided that his right to bring a claim has not become barred by lapse of time, from anyone in whose hands it may be found."

[30] Clerk and Lindsell on Torts at 17-68 reaffirms the position:

"The general rule is clear: a defendant is liable in conversion whether or not he knew, or had reason to know, that what he was doing infringed the claimant's rights. A claimant who proves (a) a dealing with the goods in a manner inconsistent with his rights and (b) an intention in the defendant to deny his right or to assert a dominion which is in fact inconsistent with such right, has made out the ingredients of the tort, even if the defendant neither knew nor ought to have known that he was acting unlawfully and acted entirely without negligence.... Thus a defendant is always liable if he has taken the goods as his own, or used them as if they were his own. So prima facie anyone who receives property by sale, pledge or gift from a non-owner commits conversion whether or not he knew or had reason to know of the latter's defect in title."

Discussion

[31] At common law, the general area of personal property law is in many respects undeveloped and underanalysed. As Lord Denning noted in R H Willis and Son v British Car Auctions [1978] 2 All ER 392, 395:

"The common law has always acted on the maxim: nemo dat quod non habet. It has protected the property rights of the true owner. It has enforced them strictly as against anyone who deals with the goods inconsistently with the dominion of the true owner. Even though the true owner may have been very negligent and the defendant may have acted in complete innocence, nevertheless the common law held him liable in conversion."

[32] The principle is expressed by Balkin & Davis in the Law of Torts (2nd ed) 76 in these terms:

"Mistake and good faith are irrelevant. Liability is founded upon what has been regarded as a salutary rule for the protection of property, namely, that person's deal with the property in chattels or exercise acts of ownership over them at their peril."

[33] In R H Willis and Son, Lord Denning noted that in some instances the strictness of the law had been mitigated by statute and in that way some protection had been given to innocent handlers or acquirers of the chattel in question. The provisions of part X of the Shipping Act referred to above for example, if complied with, would have provided full protection for the defendants in this case. Unfortunately for them, however, the legislative provisions in question were not invoked.

[34] There are certain conflicts in the evidence but it seems to me that even accepting completely the first defendant's version of events and the fact that he acted in good faith in reliance on the advice given to him by a police officer, under the well-established principles of law referred to above, those findings are insufficient to relieve him from liability in respect of the plaintiff's claim in conversion.

[35] The position regarding the second defendant is also covered by the established legal principles relating to the tort of conversion. As noted in the extract quoted above from Clerk and Lindsell, 17-68, "Prima facie anyone who receives property by sale, pledge or gift from a non-owner commits conversion whether or not he knew or had reason to know of the latter's defect in title." The learned authors go on to state, 17-88:

"Where goods are repeatedly converted, prima facie, each conversion is a separate tort carrying a separate liability."

And, at 17-120:

"The owner of the chattel who has been deprived of his possession may well have a remedy against more than one person. For example, A may have wrongfully taken it and B may afterwards have bought it, sold it or wrongfully detained it. A and B are here not joint tortfeasors; there is a perfectly independent right of action against each."

[36] The doctrine of constructive notice does not normally apply to commercial transactions and there is no general duty on the buyer of goods in an ordinary commercial transaction to make inquiries as to the right of the seller to dispose of the goods - see Benjamin's Sale of Goods (7th ed), 7-047. The transaction in question, however, could hardly be described as an ordinary commercial transaction. The second defendant had notice of the dubious title of the first defendant. The latter had told him that the boat was with the police and he specifically mentioned that he did not have title. In those circumstances, it is axiomatic that the plaintiff must also succeed in his claim against the second defendant.

Damages

[37] At common law the measure of damages to which a claimant is entitled for deprivation of his goods is normally their market value at the date of conversion but the courts have rejected the proposition that there is some universal rule of law governing the assessment of such damages which can be applied by a rule of thumb -- see BBMB Finance Ltd v Eda Holdings Ltd [1991 2 All ER 129.

[38] My finding on the facts is that the sale price negotiated between the first and second defendants of $1500 represented the true market value of the boat at the time of its conversion by each defendant. The plaintiff also claims special damages in the sum of $5,000 for loss of use of the boat but there is simply no evidence before the court in support of that part of the claim. On the contrary, the evidence is that had it not been for the events giving rise to this claim, the boat would have simply remained at its mooring unused and depreciating in value.

Conclusion

[39] The plaintiff succeeds in his action and he is entitled to judgment against the first and second defendants in the sum of $1500 together with costs (one set only) to be agreed or taxed. The plaintiff cannot recover twice over, however, and any damages he actually receives from one defendant will have to be taken into consideration in any assessment of his entitlement against the other.

NUKU'ALOFA: 5 FEBRUARY 2010.

CHIEF JUSTICE