Soalo v Berry [2007] VUCA 2; Civil Appeal Case 03 of 2007 (5 April 2007)

IN THE COURT OF APPEAL
OF THE REPUBLIC OF VANUATU
(Civil Appellate Jurisdiction)

Civil Appeal Case No. 03 of 2007

BETWEEN:

ALICK SOALO
Appellant

AND:

NOEL BERRY
Respondent

Coram: Hon. Chief Justice Vincent Lunabek
Hon. Justice Bruce Robertson
Hon. Justice Oliver Saksak
Hon. Justice Hamlison Bulu
Hon. Justice John Mansfield

Counsels: Mr Jack Kilu for the Appellant
Mr Hillary Toa for Respondent

Date of Hearing: 29 March 2007
Date of Decision: 5 April 2007

JUDGMENT

INTRODUCTION

There are two matters before the Court.

The First is an ‘appeal’ from a decision of Treston J. given on 1 February 2006. By that judgment, his Lordship assessed the Respondent’s damages in his claim for damages for breach of contract against the Appellant at VT66,808,016. The status of that ‘appeal’ is dependent upon the second matter.

The second matter before the Court is a cross appeal by the Respondent against the decision of Tuohy J. giving leave to the Appellant to appeal from the decision of Treston J. of 1 August 2006 refusing the Appellant leave to appeal from his assessment judgment given on 1 February 2006. Procedurally, that sounds quite complex, but it is the result of a complex history to the proceedings at first instance generally.

THE PROCEEDINGS AT FIRST INSTANCE

On 2 June 2000 the Respondent claimed against the Appellant damages for breach of an oral agreement alleged to have been made in May 1987 and varied during 1988 under which, under various terms, the Respondent settled on land owned by the Appellant in 1989. Until October 1989 he lived on the land and improved it by various forms of cropping, fencing and other activities. However, as appears below, the precise terms of the alleged verbal agreement were not clearly spelled out in the Statement of Claim. Judgment for damages to be assessed for the breach of the oral agreement was entered in default of a defence on 7 August 2000.

When damages were subsequently assessed, the basis upon which the Respondent asked for damages to be assessed did not bear any clear relationship to the terms of the oral agreement as pleaded. Consequently, it is necessary to provide the parties with an opportunity to revisit more precisely the terms of the oral agreement in due course for the reasons set out below.

On 7 August 2000 the Respondent obtained Judgment against the Appellant for damages to be assessed for failure to file any defence to the Statement of Claim. That Judgment stands. The Appellant has at no time applied to set it aside. He accepts that he is liable to pay to the Respondent some damages for breach of contract. Precisely what the contact was, and so how those damages had to be assessed, is a matter which will be subject of the Court Orders on this appeal. The damages were first assessed by Marum J on 12 April 2001 in the sum of VT66,808,016. The hearing of the proposed assessment of damages was adjourned from time to time because the Appellant was not ready to proceed. However, when the matter came on for hearing finally on 19 March 2001 he did not appear at all. The matter proceeded in his absence. The affidavit evidence upon which the Respondent relied indicated that he claimed damages based on the number of crops which he claimed to have planted on the Appellant’s land during the course of his occupation of the land, and their value. The value was confirmed by an independent witness (Napuat) at the figure at which the damages were assessed.

At the end of 2006 Napuat has valued the loss at VT131,860, a dramatically different figure and he says his first value is incorrect. It is not presently explained precisely how the difference has come about.

For some considerable time after the damages were assessed, steps were taken by the respondent to recover the amount of his Judgment from the Appellant but apparently unsuccessfully.

Then, by motion of 9 July 2002, the Appellant applied for the first time to set aside the Judgment given on 12 April 2001 assessing the damages. He did not then, nor does he now dispute that there was some form of agreement under which the Respondent occupied some part of his land and carried out cropping improvements on some part of his land. Nor does the Appellant dispute that he removed the Respondent from the land in about October 1999, and that he did so in breach of the oral arrangement between him and the Respondent.

The Appellant’s application to set aside that Judgment was adjourned from time to time, partly whilst the Respondent’s costs of the proceedings to that date were taxed. On 6 June 2003 the Judgment of 12 April 2001 assessing the damages at VT66,808,016 was set aside upon the Appellant having paid into Court VT93,225, the amount being the amount of, or an approximation of, the costs incurred by the Respondent to that date.

Upon that judgment having being set aside, the Judge then having the conduct of the matter also ordered the parties to conduct a mutual inspection and to explore whether the issues between them could be resolved or confined in some ways. That proved to be fruitless. There is clearly an ongoing dispute between them, at least as to the area of land which the Respondent was permitted to use. Directions were also given with the view to the damages being reassessed in accordance with exchanged sworn statements. The new hearing of the assessment of damages was to take place on 1 February 2006. On that date, the Appellant again did not appear. There is some evidence to indicate that he did not appear because he had not been able at that time to pay the Court fees which were required to be paid and because, by arrangement with his counsel, he expected his counsel to attend for the hearing to secure the further adjournment of the hearing. That did not happen.

On 01 February 2006, Treston J. proceeded to rehear the assessment of damages in the absence of the Appellant. His Lordship did so in the following manner:

"In addition, as neither the Defendant (the Appellant) nor his counsel attended the trial, I rule that the Judgment for the Claimant (the Respondent) of Justice Marum of 12 April 2001 be reinstated as to the assessment of damages and I reset the assessment judgment figure in the sum of VT66,808,016 in favour of the Claimant against the Defendant."

His Lordship also awarded costs in favour of the Respondent.

THE SUBSEQUENT STEPS TAKEN BY THE PARTIES

The Appellant applied promptly to set aside that Judgment by application of 16 February 2006. Subsequently (in case it was not a final judgment), on 15 March 2006 he also applied for leave to appeal from that judgment out of time. On 1 August 2006 Treston J. refused both applications. It is not necessary at present to further consider His Lordship’s reasons for that ruling. In the course of so doing, however, His Lordship said that the Judgment of 1 February 2006 had been entered against the Appellant first because he failed to pay the trial fee by the date of the hearing and so was ordered not to participate in the trial, and secondly because neither the Appellant nor his counsel attended the Court for the trial.

On 15 November 2006, the Appellant applied to suspend enforcement proceeding in respect of that judgment and for leave to appeal out of time from that judgment. Justice Tuohy on 12 March 2007 ruled that he had no power to rehear the application determined by Treston J. on 1 August 2006 to set aside the judgment of 1 February 2006, but that it was appropriate in the circumstances to grant leave to appeal out of time against the decision of Treston J. on 1 August 2006 in which His Lordship declined to rehear the assessment of damages which he assessed on 1 February 2006.

Consequently, the proceedings before the Court of Appeal involve:-

1. The Respondent’s cross-appeal against the decision of Tuohy J. granting leave to appeal from the decision of Treston J. of 1 August 2006 refusing to set aside the judgment of 1 February 2006, and

2. Subject to that appeal being unsuccessful, so that the leave to appeal granted by Tuohy J. stands, the ‘appeal’ of the Appellant which is really an application for leave to appeal out of time against the decision of Justice Treston of 1 February 2006 and if that leave to appeal be given the hearing of the appeal against the assessment of damages of 1 February 2006.

CONSIDERATION

The Respondent’s cross-appeal against the decision of Tuohy J. can be dealt with briefly.

It appears to be based upon a misconception that Tuohy J. granted leave to appeal from the decision of Treston J. of 1 February 2006. Tuohy J. did not do so. He concluded that he did not have power to rehear an application for leave to appeal from the judgment of 1 February 2006, as a decision to refuse that leave had been made by Treston J. on 1 August 2006.

Counsel for the Respondent acknowledged that, upon the proper identification of the decision of Tuohy J., he did not make any submission that Tuohy J. did not have power to grant leave to appeal from the decision of Treston J. refusing him leave to appeal from the decision of 1 February 2006. As that was not further argued, it is not necessary to say anymore about the cross-appeal. In our view, in the circumstances, the cross-appeal of the Respondent should be dismissed. It took a very short part of the hearing time.

We turn to the application/appeal of the Appellant. Clearly, the significance of the issues to the parties, and the prospects of success on the proposed appeal, are relevant to the question of whether leave to appeal out of time should be given from the judgment of 1 February 2006. There are different other factors which may be relevant in different cases. They are the two matters which attracted the attention of the parties in their submissions to Treston J. leading to His Lordship’s decision of 1 August 2006.

As the merits of the proposed appeal are significant factors, it is convenient to deal first with them.

If leave to appeal from the decision of 1 February 2006 were to be given, that appeal would be successful. Our reasons for that view are capable of being stated quite shortly. Once the assessment judgment of 12 April 2001 was set aside, there was no assessment of damages in place. The hearing which ultimately took place 1 February 2006 required the damages to be assessed again, following the default judgment for damages to be assessed made on 7 August 2000. It is apparent from Treston J’s reasons (quoted above) that he misapprehended his function. He seems to have thought that, because neither the Appellant nor counsel on his behalf attended the trial to assess the damages, his function was simply to reinstate the original assessment of damages. Treston J accordingly reset the judgment in the same amount as had been originally assessed.

Reinstating the earlier judgment was not appropriate simply because the Appellant did not attend the hearing of this assessment of damages. The Court’s function was still to assess the damages. That would have required an analysis of the claim, and of the damages flowing from the breaches of the oral agreement. That would have required reference to the evidence. Even if the evidence to be relied upon by the Respondent was only the same evidence as he had previously relied upon when the first assessment of damages was made, the Judge was required himself to consider that evidence. He had to decide how much of that evidence he would accept and what weight he would place upon it, so as to reach a view about the appropriate amount of damages which should be awarded for the breaches of oral agreement.

In addition to the evidence filed before the hearing of the first assessment of damages, further affidavits had been filed by and on behalf of the Appellant, and by the Respondent, prior to the hearing of the assessment of damages on 1 February 2006. That material also was not referred to by Treston J. It may be that he was not required to refer to material filed by the Appellant, because the Appellant was not there to formally present it in evidence, but that does not explain why there is no reference at all to the Respondent’s further evidence. Unfortunately, he appears to have taken the view that he did not need to consider any of the evidence himself, but simply to reinstate the original assessment of damages.

In our judgment, that approach was in error.

The other considerations mentioned by the parties also give strong reasons why the application to give leave to appeal from the judgment of Treston J. on 1 February 2006 should be granted. It is plain that the amount of the assessment of damages was a very large amount. There is some evidence that the consequences to the Appellant of that Judgment standing would be very dramatic, potentially involving him in the loss of his land altogether.

It is also clear that the basis upon which the damages were originally assessed, and reinstated on 1 February 2006, did not relate in any direct way to the allegations of breach of contract in the original statement of claim.

In those circumstances, in our view, the grounds upon which Leave to Appeal from the decision of 1 February 2006 as advanced are very strong. There are also steps available to minimize prejudice to the Respondent when granting such leave. Those steps include an appropriate order for costs in his favour, and an order that in any event the Appellant should pay to the Respondent the amount in respect of which the Appellant accepts liability to the Respondent.

The position is clear that leave to appeal from the Judgment of 1 February 2006 should be given.

For reasons already given, the Appeal itself should be allowed and the Judgment of 1 February 2006 be set aside. As we have indicated, that should be conditional on the Appellant paying certain sums in any event, so that the Respondent does not suffer significant prejudice by setting aside the judgment, and directing that the damages for admitted breach of the contract be re-assessed.

The orders of the Court are:

(1) The Appellant pays to the Respondent by 30 June 2007 VT131,860, being the amount which upon the Appellant’s own evidence, is the minimum amount of his liability to the Respondent for breach of contract, that amount being paid on account of the damages to be assessed;

(2) If the Appellant does not pay the said amount of VT131,860 to the Respondent within the time specified or such further time as the Court or a judge may allow, the application for leave to appeal from the judgment of 1 February 2006 be dismissed;

(3) If the Appellant pays to the Respondent the amount of VT131,860 within the time specified in order (1) or such further time as the Court or a judge may allow, leave be given to the Appellant to appeal from the judgment of Treston J. of 1 February 2006, and the Notice of Appeal filed in this matter on 16 March 2007 do stand as the Notice of Appeal.

(4) If leave to appeal is given in accordance with order (3), the Appeal be allowed and the judgment of 1 February 2006 be set aside, and the matter remitted for re-hearing of the assessment of damages.

(5) The Appellant pays to the Respondent his costs of the proceeding to date in any event.

(6) The Respondent’s costs of the proceeding to date be taxed, if not agreed, and to the extent that they can be satisfied by paying out from the Court the amount presently held by the Registrar in accordance with the payment made by the Appellant to the Court pursuant to the order of the Court on 22 April 2003 and extended by Order of 4 June 2003.

It is appropriate to make some further observations about the reasons for the order for costs. Counsel for the Appellant accepted that the Respondent had paid considerable sums for costs to date simply because the claims are so complex. However, for whatever reason, the Appellant permitted judgment in default of defence to be entered against him on 7 August 2000, and although he attended from time to time when the damages were first to be assessed, he did not do so on 19 March 2001 when hearing of those damages to be assessed took place. The Appellant moreover, for whatever reason, did not attend when the damages were reassessed, for more accurately reinstated, by Treston J. on 1 February 2006.

It is his failure to attend on those occasions, leading to the large assessment of damages at the figure of which he now complains. His conduct has led to the necessity for the proceeding being conducted in the way that has occurred to date. That is not to say that the Appellant personally is responsible for all those events. That is a matter between him and his advisers from time to time. However, it is plain that his defaults, for whatever reason, have been the cause of substantial costs being incurred to date. The Respondent, for his part, has done nothing but attempt to prosecute his proceeding in an appropriate manner.

We make some remarks about the future conduct of the assessment of damages.

As is apparent from our earlier remarks, there is no clear relationship between the alleged oral agreement and its alleged breaches in the Statement of Claim, and the basis upon which the damages were originally assessed. When the matter is re-heard, (assuming the Appellant pays the sum referred to in Order (1) above within the time allowed) the Respondent should more clearly spell out the terms of the oral agreement which he claims and the way he says it has been breached, and the consequences of those alleged breaches.

The documents filed to date indicate that both the Appellant and the Respondent have proceeded on the basis that his claim for damages should be assessed by reference to the value of the crops which the Respondent cultivated on the Appellant’s land. There appears to be a dispute about whether that related only to the particular piece of land which the Appellant allocated to the Respondent, or whether it related to cultivation over the whole of the Appellant’s land, beyond that particular piece of land which he allocated to the Respondent.

The Appellant’s claim also appears simply to list the number of crops which he sowed and cultivated, and their value. He does not indicate whether he is claiming costs actually incurred by him (that is crops which he personally paid for, and the amount he paid or the value of the crops at some later time). That is obviously an important matter. It is difficult to see how the Appellant could maintain a claim for the value of the crops at the present time, as that value may have varied from time to time, and some of the crops may have matured and been harvested and may no longer have real value. The crops on the land now, in 2007, may not provide a reliable basis for determining what crops were on the land or what crop had been planted and cultivated by the Respondent on the Appellant’s land (or the relevant portion of it) at the time of the breach of oral agreement, which appears to be in October 1999 when the Appellant required the Respondent to leave the land.

It may be that the Appellant intended to claim only for the value of the labour which he provided and any direct expenses he incurred in improving the Appellant’s land from time to time.

It will also be important to clearly identify whether the relevant land is all of the Appellant’s land on which the Respondent carried out work, or only that part of the Appellant’s land which the Appellant specifically designated for occupation and use by the Respondent.

It may be that the terms of the oral agreement between the Respondent and the Appellant are not clear enough to be enforced. If that was the case, then the Respondent may have an alternative claim to be entitled to a payment by way of quantum meruit in respect of the labour he provided to improve the Appellant’s land and for the actual expense he paid in improving that land.

Those matters all need to be clarified by appropriate exchange of pleadings prior to the next assessment of damages.

However, for the reasons given, we make the six orders as set out at pages 8 and 9 of this judgment.

DATED at Port Vila, this 5th day of April, 2007.

BY THE COURT

Hon. Vincent Lunabek CJ
Hon. Bruce Robertson J.
Hon. Oliver A. Saksak J.
Hon. Hamlison Bulu J.
Hon. John Mansfield J.