Veamatahau v Tulikifanga [2015] TOSC 32; CV7.2015 (28 April 2015)

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

CV 7 of 2015

BETWEEN:

PONIFASIA VEAMATAHAU

Plaintiff

AND:

LAVINIA TULIKIFANGA
First Defendant

FINAU TULIKIFANGA
Second Defendant

BEFORE LORD CHIEF JUSTICE PAULSEN

Date of Hearing: 17 April 2015
Date of Ruling: 28 April 2015
Appearances: Mr. 'O. Pouono for the plaintiff
Mr. S. T. Fakahua for the defendants.

RULING

The claim and counterclaim

[1] The plaintiff is the owner of a house at Houmakelikao but for many years he has been living overseas. He is the second defendant's brother and the first defendant's uncle. The defendants are living in the house but the plaintiff has asked them to move out so that he can live there with his family. The defendants do not dispute the plaintiff's ownership of the house but say that whilst he was overseas he gave them permission to live in the house and said he would not be returning to Tonga.

[2] In this action the plaintiff is seeking an order that the defendants vacate and return the house and pay compensation for their unlawful occupation of it. The defendants contend that the plaintiff is estopped from denying that he would not return to Tonga. The defendants have also counterclaimed for T$40,000 for 'services rendered' in maintaining the house (and the surrounding allotment upon which it is built) during their period of occupation. The issues that arise are:

[2.1] Does an estoppel arise which prevents the plaintiff from obtaining an order requiring the defendants to vacate the house.

[2.2] If not, is the plaintiff entitled to an order that the defendants vacate the house.

[2.3] Is the plaintiff entitled to damages in the event that the defendants are in unlawful occupation of the house and, if so, in what sum.

[2.4] Are the defendants entitled to payment for services rendered in the maintenance of the house and, if so, in what sum.

The facts

[3] The plaintiff built the house in around 1984 on the allotment of Talau Fakatava in the expectation that he would at some time in the future be granted the land as his own. I understand that he still does not own the land. The cost of the house was about T$20,000. He lived there for 4 or 5 years before going overseas and he left his father and, upon his father's death in around 1994, his elder brother to look after the house. Between 1990 and 2001 the house was occupied by a non-Tongan, then by the plaintiff's first cousin and husband and then by a man called Selisi Mataele. Some rent was received by the plaintiff over this period.

[4] How the defendants came to occupy the house was the focus of much of the evidence. The plaintiff's evidence was that in around 2004 his sister, Moana Finau, asked him if he would allow the defendants to live in the house so that they could look after her adopted children. He said that Moana Finau agreed to pay rent of T$100 per month which she did until 2007 when she stopped paying after a disagreement with the defendants. Moana Finau's evidence was that she had initially allowed the defendants to live in the house in around 2001 without telling the plaintiff and it was a few years later that she made an arrangement with the plaintiff to pay rent. Moana Finau confirmed that she had a disagreement with the defendants and stopped paying the rent in around 2007/2008.

[5] The second defendant's recollection was quite different. She said that the defendants had been living with a clergyman in crowded conditions. In around 2001 the plaintiff's house became vacant and she asked him if she (and her daughter) could live there. The second defendant said that the plaintiff told her that he did not intend to return to Tonga and that she should go and live in the house and that she should take care of it, an obligation she must have assumed when she moved in with her daughter. There was no evidence of any discussion about the period that the defendants would live in the house and the defendants never paid rent.

[6] Whilst I believe that both the plaintiff and Moana Finau to be honest their recollection of events was poor and changed in the telling. It seems unlikely that Moana Finau, who is very close to her brother, would give permission to the defendants to live in his house without telling him, or that the defendants would occupy the house without having some contact with the plaintiff. There was also no corroborating evidence of the payment of rent by Moana Finau. I therefore accept the second defendant's evidence about how the defendants came to live in the house.

[7] When the defendants moved into the house in 2001 there was no furniture in it and the water had been disconnected. The second defendant said that they did work and incurred expenses to maintain the house in the following ways:

[7.1] They mowed the lawns and kept the house clean.

[7.2] They painted the interior of the house. The paint cost T$135. No invoices or receipts were produced.

[7.3] They put in carpet at a cost of $T142. No invoices or receipts were produced.

[74] A water meter, electricity meter and telephone line were installed although the water and electricity supply remained in the plaintiff's name. The cost of this was not disclosed and no invoices or receipts were produced.

[7.5] In his written submissions Mr. Fakahua states that the defendants had also renovated the bathroom but I heard no evidence about that.

[8] What is apparent is that that taken at its highest the work done and expenses incurred by the defendants in the maintenance of the house are modest, particularly when one considers the period of their occupation and also that they benefitted directly from all that they did or spent.

[9] According to the plaintiff, when the rent stopped being paid in around 2007/2008 he phoned the second defendant and asked her to move out of the house but the second defendant hung up on him. The second defendant denied this. There was nothing to suggest that the plaintiff took any steps to remove the defendants from the house in 2008 as one would expect if had been rebuffed in the manner he described. Also the plaintiff acknowledged that in 2011 the second defendant travelled to Australia and there met with the plaintiff and Moana Finau but nothing was said to her about moving out of the house. For these reasons I again accept the evidence of the second defendant that no demand was made that the defendants leave the house in 2008.

[10] In June 2013 the plaintiff travelled to Tonga and it is acknowledged by the second defendant (although denied in both the statement of defense and in an affidavit sworn by her in the action) that on that visit the plaintiff asked the defendants to move out of the house. The plaintiff says he gave the defendants until January 2015 to be out but the second defendant says no date was mentioned.

[11] The plaintiff returned to Tonga in February 2015 and the defendants were still living in the house. The plaintiff was eager for them to leave. He gave them three further days to move out of the house which resulted in the first defendant calling the Police. The defendants also sought legal advice and on 12 February 2015 their lawyer, Mr. Fakahua, sent the plaintiff a letter which reads as follows:

I hereby respectfully state that I am acting for Finau Tulikafanga. Finau has complained about you coming for them to vacate and moved away from the house and the land that they are currently occupying.

It is now 15 years of their occupation and her child Lavinia Tulikifanga and you have no appreciation of their state of affairs of living like orphaned and I know the connection between your sister and niece and I submit to you to give them 6 months so that they can look for a place to move there. Sorry but the three days that you have given them is unreasonable.

I believe that a lawyer should have advised you for they have been staying on the land for more than 15 years by keeping and taking care of the allotment without any contribution from you to the keeping and maintaining the house and I believe that you are happy when you look at the house that it is in good condition as kept by Finau and Lavinia.

I believe this letter will be of assistance to you.

[12] The plaintiff then filed these proceedings. The claim was accompanied by an application for an urgent eviction order which I dismissed after a defended hearing for reasons set out in a written ruling dated 20 March 2015.

Does an estoppel arise against the plaintiff

[13] The defence of estoppel was not raised in the statement of defence and Mr Pouono urged that I do not consider it. As there was no suggestion of prejudice I have decided to consider the defence but this is not to be taken as a precedent in other cases.

[14] The submission for the defendants on estoppel was as follows:

Refer paragraph 9 of Finau's brief of evidence she stated that she thought that the plaintiff would honour his words as previously that he would not come again to Tonga and he is estopped from denying his promise as on the telephone conversation in 2000/2001

[15] Paragraph 9 of the second defendant's brief of evidence was similarly pithy and read:
In 2013 when the plaintiff came to Tonga and asked me to vacate the land and I was surprised and not only that but I thought that he would honoured his words previously that he would not come again to Tonga and he is estopped from denying his promise

[16] Estoppel arises in a variety of guises and I am left guessing what form the defendants are relying upon. As best as I can determine it is promissory estoppel. The equitable defence of estoppel has been recognised in Tonga. O.G Sanft & Sons v Tonga Tourist and Development Co Ltd [1981-1988] Tonga LR 26; Veikune v To'a [1981-1988] Tonga LR 138. The elements necessary to establish promissory estoppel are:

[16.1] A belief or expectation which was created or encouraged through a clear and unequivocal representation of fact or promise by the party against whom the estoppel is alleged. Goldstar Insurance Co Ltd v Gaunt [1998] 3 NZLR 80 (CA). Mafile'o v Muhupeatau and others [2001] TOLC 4 at [30].

[16.2] The belief or expectation has been reasonably relied on by the claimant.

[16.3] Detriment would be suffered if the belief or expectation is departed from.

[16.4] It would be unconscionable for the party against whom the estoppel is alleged to depart from the promise or representation.

[17] Promissory estoppel was traditionally applied where a promise was made to refrain from exercising pre-existing contractual rights but it has wider application today. Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387; The Commonwealth of Australia v Verwayen (1990) 170 CLR 394. The broad rationale of all types of estoppel is to prevent a party from going back on his word (whether express or implied) when it would be unconscionable to do so. Unconscionability has been described as the element which both attracts the jurisdiction of a court of equity and moulds the appropriate remedy. But importantly the departure from a voluntary promise is not unconscionable in itself, even if detriment results. What equity responds to is one party creating or encouraging an assumption in the other party, and its knowledge that the other party will rely on the assumption to its detriment. The aim of the court in granting a remedy is not to satisfy the claimant's expectation (although that may be done in appropriate cases) but to satisfy the equity that has arisen in the claimant's favour. Wilson Parking New Zealand Limited v Fanshawe 136 Limited [2014] NZCA 407. Applying these principles I find that no estoppel arises in this case.

[18] The plaintiff told the second defendant that he was not intending to return to Tonga. That is not a representation of fact nor is it a promise. It is no more than a statement of future intention. The words contain no element of assurance that the defendants would be allowed to remain in the house for any period of time, let alone indefinitely, as they now contend. Furthermore, even if regarded as a promise (which I do not accept) the words could not reasonably be understood to mean that the defendants would not be asked to vacate the house at some stage. The defence of estoppel fails on this ground alone but I will go on and consider the other elements.

[19] The plaintiff's words were never relied upon by the defendants. They are not mentioned in the statement of defence. In Mr Fakahua's letter of 12 February 2015 they are not referred to at all. In that letter the defendants acknowledge (at least implicitly) that they had to leave the house but wanted six months to do so. I also note, and have recorded in my ruling of 20 March 2015 at [12], that Mr Fakahua previously accepted that the plaintiff was entitled to possession of the house, subject only to the payment of a sum for maintenance and the giving of a reasonable period of notice. This is all quite inconsistent with the position the defendants now adopt. It is telling too that in her evidence the second defendant raised a number of justifications for her stance that are unrelated to what the plaintiff told her about his intentions. She was upset that the plaintiff did not show her sufficient respect when asking her to move out of the house. She thought that he should have thanked her for looking after the house. She also said she was the only one of her siblings who resided in Tonga and took care of their late father. She then asserted that her father had asked the plaintiff to leave the house to a younger brother. All of this leads me to the firm view that the defendants' reasons for refusing to leave the house have nothing to do with their reliance upon the plaintiff's words.

[20] In considering whether it would be reasonable for the defendants to have placed any reliance upon the plaintiff's words they must be considered in the context in which they were spoken. The second defendant did not have a suitable place to live or a home of her own. She called upon her brother for assistance. Out of his natural love and affection for the defendants he agreed to let them live in his house. In those circumstances the defendants cannot legitimately contend that they would not have moved into the house (or would not have done any of the maintenance work) if they had known the plaintiff might one day return to Tonga.

[21] Having provided the defendants with a place to live on a rent free basis for 14 years there is nothing unconscionable in the plaintiff now asserting his right of ownership and requiring them to move out of the house however unwelcome that may be from the defendants' perspective.

[22] Although I was not referred to it by Counsel, I have had regard to section 103 of the Evidence Act. Section 103(2) states as follows:

If a person, either in express terms or by conduct, makes a representation to another of the existence of a certain state of facts which he intends to be acted upon in a certain way, and it is acted upon in that way in the belief of the existence of such a state of facts to the damage of him who so believes and acts, the first is estopped from denying the existence of such a state of facts.

[23] Section 103(2) does not assists the defendants. The plaintiff's words were not a representation of an existing fact. In the circumstances under which they were spoken the plaintiff did not intended that the defendants would act on his words and they did not do so. In any event they have suffered no damage.

[24] For the foregoing reason the defense of estoppel fails.

Is the plaintiff entitled to an order that the defendants vacate the house.

[25] It is an idiosyncrasy of Tongan law that generally speaking a house is personal property and does not form part of the land. Buildings are treated as chattels detachable from the land upon which they stand. Cowley v Tourist Services Ha'apai Ltd and Fund Management Limited [2001] Tonga LR 183 (CA). Possession, but not ownership of the house, was given to the defendants in 2001 for no fixed term and on the understanding that they would look after the house. In those circumstances a bailment arose and the defendants possessed the house at the will of the plaintiff and subject to his revocation on reasonable notice. (Palmer 'Bailment' The Law Book Company, 1979 at 348) The plaintiff was, upon giving reasonable notice, to have the house returned to him. He asked the defendants to move out in June 2013, giving them until February 2015 to do so. On any view of the facts they have had reasonable notice. By continuing to occupy the house the defendants are intentionally retaining possession of the house in defiance of the rights of the plaintiff.

[26] The plaintiff seeks an order for the return of the house and whilst granting such a remedy (as opposed to damages representing the value of the house) is discretionary no injustice will arise in this case should I do so. Nash v Barnes [1921] NZGazLawRp 153; [1922] NZLR 303, General and Finance Facilities Ltd v Cooks Cars (Romford) Ltd [1963] 1 WLR 644 (CA). The plaintiff is entitled to judgment for the return of the house.

Is the plaintiff entitled to damages

[27] The defendant's occupation of the house from February 2015 was unlawful. The plaintiff would ordinarily be entitled to damages for the period of unlawful detention and use of his house. The usual measure would be represented by a reasonable remuneration for the defendants' use of the house. Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246; Esera v Westbrook [2002] WSCA 5 (CA of Samoa). The plaintiff called no evidence as to what is a reasonable rental and I am unwilling to speculate about that. In any event the amount involved would most likely be no more than a few hundred pa'anga. I make no award on the basis that no loss was proved.

Are the defendants entitled to payment for services rendered

[28] The defendants seek T$40,000 by way of counterclaim. This is how the claim is pleaded in the statement of defense:

The defendants submit that they maintained the town allotment since 200-2015 which is 15 years and all services rendered such as mowing, cleaning, renovation, painting, new installation of water meter and other in the sum of $40,000.

[29] Mr. Fakahua's written submissions gave me no more information. I was not told on what the basis this claim is made. It cannot be based on contract as it was never suggested that the plaintiff agreed to pay the defendants to maintain the property. For reasons I have given it cannot be estoppel (used as a sword rather than a shield). There can be no possible claim in restitution either when the second defendant agreed to look after the house as the basis upon which the plaintiff allowed them to move in. Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221, 256; Lumbers v W Cook Builders Pty Ltd [2008] HCA 27.

[30] The defendants have obtained the full benefit of their work and expense by enjoying the house on a rent free basis for 14 years. Whilst the defendants' paradigm is that the plaintiff derived benefit from having his house maintained the correct view is that if he had been able to rent the house he could have expected it to have been maintained and earned 14 years of rent.

[31] Furthermore, the T$40,000 claimed bears no relationship to the value of the work done or costs actually incurred by the defendants. In her evidence the second defendant said that the amount claimed was what she thought was required to buy land and a house. The plaintiff is not obliged to put her in funds to buy a house.

[32] I can see no basis in law or fact for the defendants counterclaim for payment of T$40,000 or any other sum from the plaintiff. The counterclaim is dismissed.

The result

[33] I make the following orders:

[33.1] The defendants are to vacate and return possession of the house to the plaintiff within 21 days.

[33.2] The defendants' counterclaim is dismissed.

[33.3] The plaintiff is entitled to his costs of the action which are to be taxed if not agreed.

CHIEF JUSTICE
NUKU'ALOFA: 28 April, 2015.

N. 'Inafo
28/4/2015.