Chapman v Ake [2004] WSDC 2 (23 January 2004)

IN THE DISTRICT COURT OF SAMOA
HELD AT APIA

BETWEEN:

GREG CHAPMAN and
NANCY CHAPMAN of Apia
Plaintiffs

AND:

PEPE AKE and SULU MALIFA
Defendants

Counsels: A. Roma for plaintiffs
R. Drake for defendants

Hearing: 14 April 2003
Decision: 23 January 2004

DECISION OF NELSON, DCJ.

The Plaintiffs are an expatriate couple, working and residing in Samoa having been here since January 2001. On or about 01st February 2001, they rented from the defendants a house property situated at Vailima. The rental terms and conditions were set out in a tenancy agreement dated 01st February 2001, (“the agreement”) signed by the plaintiffs and the second named defendant on behalf of the defendant owners, a copy of the said agreement being produced to the court as Exhibit “A” for the plaintiffs. The agreement provided for the tenancy to commence on 10th February 2001 and to run for a period of one year with a rite of renewal for a further two years.

It is common ground between the parties and is not in dispute that the agreement expired on 10th February 2002 without being formally renewed or extended, but the parties continued to operate on the basis that the agreement remained in full force and effect. The plaintiffs paid the same rent and the defendants accepted the same; and the parties have presented their case to the court on the basis that their contractual relationship remained governed by the terms and conditions of the agreement. What this means in effect is the agreement in law by and large continued in full force and effect and continued to govern the relationship between the parties and was in operation at all material times. Nothing further need be said on that aspect

Clause 6 of the agreement provided for the pre-commencement payment of a bond of one months rent, being the sum of SAT$3,500, to be held “to safeguard towards deliberate or wilful damage of property caused by the Tenant”. Clause 7 went on to provide however that should the agreement “be determined by act of God and the premises become untenantable, the tenant shall be entitled to refund of any rent and bond paid in advance immediately”

There is no dispute the bond payment was made by the plaintiffs and that they paid their rent monthly in advance. Neither is there any dispute that on or about 04th April 2002, while the plaintiffs were overseas and the property was uninhabited, the premises caught fire and as a result became untenantable resulting in the plaintiffs vacating the premises on 08th April 2002. The plaintiffs requested a refund of their bond but the defendants have refused. The plaintiffs also requested a refund of the unused portion of the rental paid in advance for April 2002, being the sum of $2,450 for the period 09 - 30th April 2002 but the defendants also refused such refund. The plaintiffs have accordingly brought these proceedings to recover their bond and unutilised rental. The plaintiffs maintain they lost properties in the fire as well but they have not claimed for same and no further consideration need be given to that issue.

The defendants’ defence to this claim is based on clause 10 of the agreement. That clause provides that the “tenant shall leave the property in the care of the owner each and every time he is out of Apia during the entire term of the tenancy”. The defendants maintain that on two previous overseas trips, the plaintiffs left the premises keys in the defendants' possession, so that the defendants could provide security for the premises because the area where the property is located is not a “safe area” and a lot of young juveniles “hang around the property”. According to the second named defendant, who was the only witness called by the defence, before the plaintiff’s April 2002 trip, she was informed of the trip by Mrs Chapman who also told her she was retaining the premises keys as the trip was only for a few days. It was during this trip that the fire occurred on 04th April 2002. Significantly, Mrs Ake also testified that she and her husband were likewise overseas when the fire occurred. She said they were in American Samoa on business and it was their children who called and advised them of the fire. She gave and called no evidence as to whether, given her concerns about security for the premises, the defendants made any arrangements for security of the property before leaving, knowing the tenants were also going to be overseas; and if so, what such arrangements were. One would think that if there were genuine security concerns, the defendants would have done something prior to their departure for American Samoa rather than leave their property uninhabited and without security.

The essence of the defendants defence is that pursuant to clause 10, the plaintiffs were obligated to leave the premises keys in their possession while they were absent overseas. Their failure to do so in this instance meant the property was left uninhabited and unsecured. They argue that if the keys had been left as required by clause 10, the fire could have been avoided or quickly detected and the damage avoided or at least minimised. The plaintiffs' failure to keep their contractual obligation has led to substantial loss to them. They accordingly filed a counter claim against the plaintiffs for three months rental to cover some albeit not all of these losses.

The plaintiffs agree that on their previous two overseas trips, they left the premises keys with the defendants but say that they became unhappy with this arrangement because on their return, they noted some of their properties were missing and in particular on the second of their two trips, they returned to find someone had tried to break into their car and some coins and other properties had been stolen from the house. They also found evidence that the defendants' son Michael had incurred unauthorised international call charges on their telephone. As a result, they refused on this trip to hand over the keys to the defendants. Mrs Chapman’s evidence was that Mrs Ake agreed to this and the arrangement was that the defendants would however provide some form of external security for the property.

I shall deal firstly with the plaintiffs claim. The bond is covered by clause 6 of the agreement. Although the agreement follows an unsophisticated home-style format, the meaning of clause 6 is clear and unequivocal. A bond of one month's rent was required to be paid and this was done. The bond was to be held as a safeguard against any deliberate or wilful damage by the tenant to the property. This is a common precaution taken by landlords as a protection from malicious or abusive tenants who cause damage to their property and then run away. The intention of the parties is clearly expressed by the words used and is in keeping with the custom of the trade.

There is not a scintilla of evidence that the plaintiffs were in any way responsible for the fire which damaged the premises. The evidence did not disclose or establish the cause of the fire, but the witnesses did express their suspicions as to the cause. Mrs Chapman said she had hearsay evidence that it was a case of arson. Mr Chapman through his Counsel requested the Fire Brigade report on the fire but this did not disclose any cause. Mrs Ake on behalf of the defendants’, testified the matter was referred to the Police but they were unable to establish what caused the fire. Clearly, the evidence as to the actual cause of the fire is inconclusive. But what is clear is that nothing points to the plaintiffs as being responsible.

I reject the defendants’ suggestion that the plaintiffs retention of the keys amounts to a “deliberate damage” to the property. It is not supported by the evidence and is far too remote a possibility in the chain of causation to be realistically considered. There being no evidence justifying retention of the bond money, I hold these must be repaid in the terms of Clause 7 “immediately” to the plaintiffs.

In relation to the unused rental of $2,450 for April 2002, as noted, there is a clear absence of any evidence as to the cause of the fire. What is however established by the evidence is the fire did render the premises untenantable. See the evidence of the plaintiffs as well as Mrs. Ake who agreed the premises were left untenantable and that her and her husband have been trying to repair same. I have looked carefully at the terms of clause 7 of the agreement, in particular the phrase “act of God” and how this should be interpreted. Clause 7 is an express term of the rental contract and it provides that if the agreement is determined “by an act of God and the premises thereby becomes untenantable,” rent paid in advance should be refunded. The first question that arises is what the parties meant by the phrase “act of God”?

The phrase is not defined by the agreement. And its ordinary and natural meaning would be a reference to a storm, earthquake, flood, etc. - i.e. it would normally refer to natural, generally weather related phenomena. Would it include fire from an unknown cause? I am not entirely certain that the parties intended that the phrase would extend to such a scenario.

I have considered whether to imply a term to the effect that if the situation of fire from an unknown cause was put to the parties beforehand, their answer would be “oh, of course rent would be refundable” - this of course is the often enunciated officious bystander test of Shirlaw v. Southern Foundries Ltd. [1939] 2 KB 206 at 227. I have come to the conclusion that the parties use of the words “act of God” meant that the only rent refundable situation within the contemplation of the parties, was a situation where the untenantable condition of the premises was the result of pure acts of God - i.e. natural/weather related acts of God which operate and occur independently of any human action. I am not satisfied a fire from an unknown cause was contemplated by the parties to be properly described as an “act of God” and neither am I satisfied such an implied term meets the “so obvious that it goes without saying” and other criteria laid down by the Privy Council in the leading (and well accepted) case of BP Refinery Pty Ltd. v. Shire of Hastings [1910] ArgusLawRp 71; (1977) 16 ALR 363 at 376; or that it meets the “capable of clear expression” test applied subsequently in Dovey v. BNZ [1999] NZCA 328; [2000] 3 NZLR 641 at 654 by Tipping, J. as he then was, who stated that the requirement of clear expression follows from the “obviousness” criteria and it means the implied term must be capable of clear and uncontroversial expression.

The tests are stringent and the case-law makes it apparent that the term will only be implied in clear cases - the device is not an invitation to the courts to rewrite contracts or insert into them words and meanings that are not there. In my view such a term cannot and should not be implied here. In these circumstances there is no basis in the agreement itself upon which the plaintiffs are entitled to a refund of the unused portion of the April rent.

The matter however is put beyond doubt by the proviso to s.106(a) of the Property Law Act 1952, which still applies in Samoa. Section 106 implies by law into leases of land certain covenants on the part of a lessee. Section 106 is applicable here since the evidence establishes that what the defendant’s leased to the plaintiffs was their entire property. “Land” of course includes all permanent fixtures situated thereon and appurtenant thereto. S.106(a) implies a covenant for the lessee to pay to the lessor the agreed rental but the proviso thereto provides: (see proviso to s.106(a) PLAct)

As noted earlier, the defendants agreed the premises were rendered untenantable and therefore unfit for occupation because of the fire. The proviso, being a covenant implied by law, must be applied to this case so that the unused rental of $2,450 must accordingly also be refunded immediately to the plaintiffs.

The plaintiffs claim then succeeds in its entirety. As to the defendants counter claim this cannot succeed. Having listened carefully to the evidence and observed the witnesses appearance and demeanour, I generally prefer the evidence of the plaintiffs to the defendants. It seems very strange to me that a defendant so concerned about security would leave the country leaving their property unsecured. I accept the plaintiffs’ account of the facts on this aspect and find that the defendants, as plaintiffs counsel submitted, on this occasion waived compliance with clause 10 of the agreement. This is an agreement that had not been formally renewed. It is therefore open to the parties to modify it expressly or by their conduct/behaviour to the contrary and I find that is what occurred in relation to the April 2002 trip. The plaintiffs are therefore not in breach of any contractual obligations under the agreement.

But even if they were, the defendants’ argument must still fail because there is no evidence that even if the defendants had been given the keys, that this would have changed anything and would have meant the fire could have been avoided or quickly detected. There is not a shred of evidence upon which such a conclusion could be based. The evidence was in fact that at the relevant time, the defendants themselves were in American Samoa and had made no effort to try and secure or otherwise provide for their vacant property. There is no evidence any one was charged by the defendants with the responsibility of looking after their property or if so, that such person was so close that they could have or would have intervened to save the house or could have put out the fire or quickly alerted the Fire Brigade, or that the Fire Service would have speedily arrived and successfully doused and/or contained the fire There is nothing upon which the court could base such findings as sought by paragraph 6 of the counter claim and without paragraph 6, the defendants’ chain of action and argument is irreparably severed. For these reasons, the counter claim must fail and must be dismissed.

Costs normally follow the event but counsels did not address this in their submissions. If however they wish to pursue the matter, plaintiffs counsel to put it in writing and serve on the defendants’ counsel.

DISTRICT COURT JUDGE