Fiso v Reid [2000] WSSC 51 (14 July 2000)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

ATIIFALE FISO
of Matautu-tai, Matai
Plaintiff

AND

PETER EUGENE REID (JUNIOR)
of Pago Pago American Samoa Businessman for himself
and as Attorney of the Estates of
ERNEST J. REID; RICHARD F. REID; CECIL W. REID and
BLANCHE H. REID
Defendant

Counsel: Mr S. Toailoa for the Plaintiff
Mr K. Enari for the Defendant

Date of Hearing: 7, 8, 9 April 1999, 24 and 26 May 1999.
Date of Reasons for Ruling: 30 June 2000
Date of Judgment: 14 July 2000

REASONS FOR JUDGMENT GIVEN BY WILSON J.

THE PLAINTIFF'S CLAIM

The plaintiffs claim is one arising from the law of restitution and it is a claim for unjust enrichment.

The defendant is the owner and registered proprietor of land at Matautu-tai being land which faces onto Beach Road and overlooks Apia Harbour and upon which has been constructed inter alia a night club called Margrey-Ta's and a store.

The plaintiff and his family have occupied the said land with the consent of the original owners for many years, and the occupation continues up to the present day. I find that over a period of many years the plaintiff has continued to look after the said land without any assistance from the defendant and has spent time and money and has performed labour in reclaiming the said land and constructing improvements thereon.

I further find that the said reclamation and improvements have been done over the years by the plaintiff and his family and without any interference from the defendant.

I find that the said reclamation and improvements included clearing and filling the said land and swampy areas thereon, construction of permanent homes and nightclub facilities and amenities etc.

By the plaintiff's amended statement of claim the plaintiffs claim for unjust enrichment particulars of which are:

Value of fill	ST$1,433,000.00
Buildings, including bar facilities and amenities	ST$ 528.000.00
	ST$1,961,000.00

THE DEFENDANT'S DEFENCE AND COUNTER CLAIM

By the defendant's defence and counterclaim the defendants maintained inter alia that 'any improvements by the plaintiff would be regarded as recompense for rent for the land' and counterclaimed the same sum said to be the value of the unjust enrichment by way of 'general damages' for the rent which 'should have been paid'. This counterclaim was not ultimately pursued.

THE EVIDENCE

The plaintiffs claim was supported by oral evidence given by the plaintiff himself, by Feagaimalii Pili (a long-time resident of Matautu-tai), and by Tuuu John Sio (an employee of H & M Ulberg), and by Vaitoelau Sua Hewson (the plaintiff's daughter) and by Henry Westerlund (the Managing Director of Blue Bird Transport Co. Ltd.). Expert opinion valuation evidence was given by Malaki Tuilulupona, a valuer called to give evidence on the plaintiff's behalf

The plaintiff's documentary evidence comprised a copy of a letter from the defendant's solicitors to the plaintiff dated 1992 (exhibit PI), valuation reports and attachments thereto (exhibits P2, P3 and P4), and a statement signed by Henry Westerlund (exhibit P5).

A view was conducted of the said land for the purpose of enabling me, as the trial judge, to understand the evidence given at the trial.

There was no expert opinion valuation evidence adduced on behalf of the defendant. However, the defendant, Peter Reid Jnr, did give oral evidence. The defendant's documentary evidence comprised the decision of the Supreme Court of Samoa dated 23 August 1995 (exhibit D I) and the decision of the Court of Appeal of Samoa dated 29 August 1996 (exhibit D2)

There was very little in dispute regarding the testimony of the lay witnesses at the end of the evidence in this civil trial. The defendant could not dispute the oral testimony given by the plaintiff: by Feagaimalii Pili or by Vaitoelau Sua Hewson, and he did not purport to dispute it. What he did do was to query the justification for the plaintiff's claim.

Regarding the expert opinion evidence, whilst the defendant did not admit either that the alleged improvements were done or what those improvements included or what the value thereof was, he nonetheless denied each of the allegations made in paragraphs 4, 5 and 6 of the plaintiffs statement of claim.

Importantly, the defendant did not call any expert opinion valuation evidence to challenge in any respect the valuation evidence, both oral and documentary, given by Malaki Tuilulupona, the valuer. Whilst in no sense have I abrogated the responsibility that is mine to assess all of the evidence and whilst it is open to me to reject the only expert opinion evidence (or part thereof) that has been placed before the court, I see no sufficient reason to do other than accept it regarding the cost of the improvements. It was not contended on behalf of the defendant that a wrong approach was adopted by the valuer to his task in that area of the dispute. The main thrust of the cross-examination of Malaki Tuilulupona was to test his evidence with a view to revealing errors, if any were made.

Neither the qualifications nor the experience of Malaki Tuilulupona were challenged although he acknowledged that his instructions were to value the improvements on the subject property and to assess the value of the fill (or the reclamation), both his oral evidence and the written valuations themselves show that he valued the improvements (in the absence of any evidence of the actual cost thereof) upon the basis of replacement cost less depreciation.

I might have been reluctant to accept the only expert opinion valuation evidence placed before me in the form of Malaki Tuilulupona's evidence as to the cost of the improvements on the subject property if the basis of his valuation had been challenged or if expert opinion valuation evidence to different effect had been adduced. On the state of the evidence at the end of this civil trial it is reasonable to infer that the actual market cost of the improvements in question and the expenses incurred by the plaintiff would have borne a relationship to the amount claimed, which amount is based on Malaki Tuiluilipona's evidence.

The plaintiff himself gave a significant amount of oral evidence mostly related to the history of the subject land. He testified as to how he had occurred and lived on the land since 1932 when he was about 4 years of age. He and his parents and grandparents lived on the land of the cousin of his father, Sofia Latapie. Sophia Latapie passed away in 1942. Sophia's daughter, Tina, remained living on the land for a time but she spent most of her time with the Fonoti family at Lalovaea until she finally left to go and live in New Zealand in 1968. Thereafter, the plaintiff lived with his mother and father on the land until the respective deaths of his mother and father in 1962 and 1981.

The plaintiff described the land when he first knew it as

"(It) was all swampy - it was bush land, but trees not chopped. There were no plants like coconuts or bananas or anything like that. We could not walk on the land, and it was very swampy. My father got some workers from his village to cut down the trees and to develop the land and to help to reclaim access pathways (and building sites)"

Regarding where Sofia was living during her occupancy of the land, he said:

"Sofia was living close by the road, that is the main road going towards the wharf. The house she was living in was a two-storey house (built on land she reclaimed) and, just behind that house, there was the swampy area."

This house was subsequently (in 1949) razed to the ground in a fire. Regarding where he and his parents were living, he said:

"I remember that we were living at the back.... It was all swampy area; one of the areas was a bit dry, that was where we were directed to build a house. Rocks were brought from the sea to build up a house site - the foundation."

When he was asked to indicate how much of the land was actually under water at high tide, he said:

".... I estimate 5 acres - only 1 acre was a bit dry"

He said that his father did some preliminary reclamation work to the extent of 'more than 2 acres.'

He went on to say:

"As I became older I controlled the reclamation and I paid the truckloads for the fill."

In the 1960's he was working for the Department of Agriculture and in the 1970's for the Public Works Department and then the Western Samoa Trust Estate Corporation. Between 1982 and 1987 he was a Member of Parliament.

The plaintiff said that neither the defendant nor his father nor his grandmother set root on the subject land. And there was no evidence suggesting that they ever lived on it.

Concerning the reclamation work that he did, the plaintiff said that he started the reclamation work that he did (from the age of 10 years until he was 20 years old) by carrying rocks from the sea wall onto the land. Many members of the family carried rocks. His first job was at the hospital, every evening after work he carried loads of sand and pebbles to level the area where they were staying. He then said in evidence:

"Years went by. The employment I had offered me a higher salary which enabled me to bring in loads of fill to reclaim the pathways to our house and to enable vehicles to drive into where we were..... Lots of loads were brought in from Ulberg Brother's company.......... it occurred many times (in the period 1978 to 1982). The latest period that I can remember was when I was a Member of Parliament............. up to 10 loads per week were brought in."

He explained that about 1 acre of land was filled in by this method. He said:

"Other loads came from S.P.D.C. when I was working for Public Works."

He said that the loads cost ST75.00 per load in the beginning but about ST100.00 per load after 1986. He said that about 250 loads altogether were brought in from S.P.D.C.

The total area of land reclaimed by him and his family was estimated to be more than 3 acres.

I assess the plaintiff to be an honest witness. I thought his lapses of memory were understandable lapses. His credibility and reliability remained intact at the end of quite extensive cross-examination. He was not shaken.

Some support for the plaintiff's evidence was given by Feagaimalii Pili, a long-time resident of Matautu-tai, who had known the plaintiff since they were children. He confirmed the plaintiff's evidence regarding the early collection and depositing of rocks at the end of the land nearest to the beach front (what is now the edge of the Harbour). He also confirmed the plaintiff's evidence regarding the use of coconut tree trunks as access path-ways and the early reclamation work that was done, as well as other aspects of the historical evidence that had been given by the plaintiff.

Pili also gave evidence that he, as a machine operator, loaded a lot of top-soil to be taken to the plaintiff's land on instructions from some New Zealand and Australian palagis in the period 1974-1975.

Vaitoelau Sua Hewson, the plaintiff's daughter, gave some evidence as to the costs of the reclamation and improvements, which evidence I accepted in its entirety. She first described the land when she was growing up. She said:

"The land was entirely swampy, right from the back (where the inspection went) all the way to the front portion. It was all covered in swamp, and it was my family who reclaimed it.... what we did was make a path made of coconut trunks so that we could go from out house to the other side of the land, and we reclaimed the land that was covered by swamp as the years went by"

In the area where the bar is now she said:

"It was my father who carried out the initial reclamation, but when I was old enough to run my business, I continued his reclamation'

She said that her own reclamation started in 1988. She said that most of the fill came from Ulberg Brothers, but other loads were from Blue Bird Transport Company. She described how land where the present bar area was reclaimed and filled in before the concrete was put on it. She marked with a yellow high-lighter the area 'where the bar is' - part of 334/67. She said that 150 loads of coral fill were put in there.

Vaitoelau was asked about the area where the shop is and where the new white concrete building is. She said:

"...The reclamation of that area was initially started by my father and I would not have any idea about the number of loads, but the whole swampy area was reclaimed..... I was the one who elevated the reclamation carried out by my father, and this is by reference to the loads of fill from Ulberg Brothers....."

She said that she was involved in the reclamation of the whole of the front portion of the land which fronts onto Beach Road. She indicated portion of that area which was dry but which still had to be built up.

Tuuu John Sio, a long-standing employee of H. and M. Ulberg, gave evidence regarding the supply of fill to the subject land in the period 1983 to 1988. He recalled that the price of fill then was ST65.00 per load, compared with STI32.00 per load at the time of trial. He could not remember exactly how many loads were supplied, but he could remember that there were 'many loads that were-delivered to this family.' When asked to estimate the number, he said.

'In that period '83 to '88, I think the number of loads were in the vicinity of 250 to 300....... (the cost) was ST65.00 per load - this was a special price, ST15.00 per truck and ST50.00 per load... '

Tuuu could also remember that in the period from 1988 onwards H. and M. Ulberg supplied an estimated 120 loads at ST$95.00 per load to the plaintiff's family 'for the construction of the night -club and the bar.' He said that he was 'personally involved in the transportation of these loads.' He explained how the 250 to 300 loads were used for the area behind where the shop is now

Henry Westerlund, the managing director of Blue Bird Transport Company Limited, gave evidence regarding fill supplied to the subject land in 1979 and 1983. He estimated 600 loads of fill on each occasion and 4 weeks for a loader to spread the fill out. He also testified as to 150 loads of rocks and scoria supplied in 1994 for the stage construction. Exhibit P5 also relates to the subject-matter of Mr Westerlund's evidence.

THE LAW

There is no doubt that the equitable doctrine of unjust enrichment is part of the law of Samoa (see Elisara v Elisara, unreported decision of the Supreme Court of Samoa dated 22 November 1994, Public Trustee v Foketi Brown and Others, unreported decision of the Supreme Court of Samoa dated 24 January 1995, and Misileti Tufuga Fatu v Siaosi Leavasa unreported decision of the Supreme Court of Samoa dated 14 May 1998)

What is in doubt is the basis upon which compensation for unjust enrichment should be assessed. That doubt has been contributed to by the words used in some of the decided cases that have been reviewed when tracing the development of the law of restitution for unjust enrichment. Not the least of those cases is Greenwood v Bennett (1973) QB 195 in which Lord Denning MR said:

"Here we have an innocent purchaser who bought the car in good faith and without notice of any defect in the title to it. He did work to it in the value of 226 pounds. The law is hard enough on him when it makes him give up the car itself. It would be most unjust if the company could not only take the car from him, but also the value of the improvements he has done to it - without paying for them. There is principle at hand to meet the case. It derives from the law of restitution. The plaintiffs should not be allowed unjustly to enrich themselves at his expense. The Court with order the plaintiffs, if they recover the car, or its improved value, to recompense the innocent purchaser for the work he has done on it. No matter whether the plaintiffs recover it with the aid of the Courts, or without it, the innocent purchaser will recover the value of the improvements he has done to it."

His Lordship might easily have used the .words 'the cost', in lieu of the words emphasised by me in that passage just quoted, without any change in the meaning.

In Public Trustee v Foketi Brown and Others, supra Sapolu CJ stated the law succinctly (at p22):

"The function and purpose of the law of restitution is thus restoration; it is to disgorge from a defendant unjust benefits and ill-gotten gains and restore them to the plaintiff who has suffered a counter-veiling deprivation"

As helpful as that statement of the law is, it begs the question as to what basis the 'unjust benefits' and 'ill-gotten gains' and the 'countervailing deprivation' are to be assessed

Likewise, in Peel v Canada (1992) 3 SCR 762, the decision of the Supreme Court of Canada which Sapolu CJ preferred to follow, the references to 'benefit gained' and 'corresponding detriment sustained' beg this question as to what is the basis for the assessment of the compensation.

In applying the doctrine of unjust enrichment in Foketi Brown's case supra to the facts of that case Sapolu CJ referred to 'all the hard labour and money.... expended in reclaiming this land' (at p.37), and referred to 'the land... reclaimed with hard labour and money' (at p.40), but then referred to 'the value of the improvement to the land which is the reclamation work' and 'the value of the.... reclamation work.' Except to the extent His Honour used the phrases just quoted, 'the basis upon which the value' is to be ascertained was not indicated.

In Chalmers v Pardoe (1963) 1 WLR 677 the Privy Council, whilst indicating the need for Courts to be flexible, highlighted the need to assess 'the sums expended' and 'the amounts of money.... expended.'

In Morris v Morris (1982) 1 NSWLR 61 a respected member of the Equity Division of the Supreme Court of New South Wales, Australia, McLelland J applied Chalmers v Pardoe supra and indicated the duty of the Court to 'determine how in all the circumstances justice requires that equity be satisfied.'

In Houghton v Immer (No. 155) Pty Ltd [1997] NSWSC 608; (1997) 44 NSWLR 46, a decision of the Court of Appeal in New South Wales, Australia, Handley JA, with whom Mason P (as he then was) and Beazley JA agreed, said (at p.56):

"Equitable compensation is intended to compensate for loss caused ... The award should compensate the plaintiff but it is no part of its function to strip profits from the defendants or to punish them for wrong-doing."

His Honour went on to state (at p.59):

"The defendants are entitled to a set-off for the actual cost of the improvements, but there was no evidence of the cost .......... The defendants, having improved common property without lawful authority .... are wrong-doers, and their failure to keep and produce proper accounts of their actual expenditure on the common property has made it difficult to assess the compensation due to the plaintiff compare Armory v Delamirie (1722) 1 Stra 505; [1722] EWHC KB J94; 93 ER 664. In my judgment the Court should assess the compensation in a robust manner, relying on the presumption against wrong-doers, the onus of proof. and resolving doubtful questions against the party whose actions have made an accurate determination so problematical - see LIP Investments Pty Ltd v Howard Chia Investments Pty Ltd. (1990) 24 NSWLR 499 at 508.'

[The emphasis is mine.]

There is recent authority on this issue in this Court. I refer to Misileti Tufuga Fatu v Siaosi Leavasa, supra. In that persuasive decision, Bisson J after discussing the use of the phrase 'the value of any improvements', held that the measure of compensation is 'the market cost of the work done and expenses incurred' (at p. 5).

I am not persuaded by Mr Enari's submission to the effect that the cases Public Trustee v Foketi-Brown and Others supra and Misileti Tufuga Fatu v Siaosi Leavasa supra should be distinguished on their facts from the present case. The New Zealand decision of Jeffries J, Van den Berg v Giles (1979) 2 NZLR 111, whilst cited to me by Mr Enari for another purpose, assists the plaintiff's case on this question of compensation or damages. Jeffries J said (at p.123).

"Finally, I turn to damages. The plaintiff claimed $20,500 on the following basis. He called in evidence the valuer who performed the valuation of the property in January 1975 and who then fixed it at $30,000. He assessed the enhanced value of the defendant's property through the services of the plaintiff by his expenditure in time, effort and materials at the figure of $20,500.................. The evidence of the valuer was not challenged in cross-examination, and no evidence was advanced concerning valuation by the defence. I accept $20,500 as the true measure of the constitution due to the plaintiff."

[The emphasis is mine.]

APPLYING THE LAW TO THE FACTS

The value of fill or the cost of fill

The plaintiffs claim was for 'value of fill' of $1,433,000.00; although that claim is supported by the only valuation evidence that was adduced, that is not the proper basis at law for assessing the compensation to which the plaintiff is entitled for unjust enrichment. The plaintiff is, therefore, not entitled to anywhere in the region of $1m compensation under this heading.

What is, in my judgment, the proper basis at law for the assessing compensation under this heading of 'fill' is to have regard to the evidence, albeit incomplete, as to the actual cost of the fill as expended by the plaintiff and his family. Adopting a broad axe approach and doing the best I can to take account of the evidence as to the cost of fill given by the plaintiff, Feagaimalii Pili, Vaitoelau Sua Hewson, Tuuu John Sio and Henry Westerlund and not overlooking the evidence as to the volume of the total fill testified to by Malaki Tuilulupona, the valuer, I assess that actual cost at $200,000.00. That is as 'robust' a sum as I can reach in all of the circumstances here. The plaintiff has simply not discharged the onus of proof with regard to any greater sum than that. In so far as there is a difference (and there is a substantial one) between the totality of the costs testified to and implied by those witnesses on the one land and 'the value' (an inappropriate basis at law, in my judgment) according to Malaki Tuilulupona on the other hand, then that is due to 'the presumption against wrong-doers (the plaintiff here)' and the tact that he carries the onus of proof: and it is because my duty requires me to 'resolve doubtful questions against' the plaintiff, who is the party whose actions 'have made an accurate determination so problematical' (see Houghton v Immer (No. 15) Pty Ltd. supra at p.59)

I do not accept, as a matter of law, Mr Toailoa's submission to the effect that the assessment of compensation should be based on the 'market value', as opposed to the actual cost.

In the event of me being held to be in error in rejecting the 'market value' approach, there would need to be a substantial discount from the slim of ST$1,433,000.00 (perhaps as much as 70% to 80%) on account of the fact that a great deal of the reclamation work was done free of commercial cost and what was done was done in the period 1040 to 1974 at a cost of much less than the inflationary sum of ST65. 00 per load.

The cost of improvements

The plaintiffs claim for 'buildings, including bar facilities and amenities' of S528,000 00, supported as it was, by the expert opinion valuation evidence adduced on behalf of the plaintiff does have, I conclude, a proper basis at law. Although Malaki Tuilulupona used the phrases 'current market value assessment' and 'value of the subject improvements' and 'replacement value approach', he went on (in exhibit P3) to explain that he adopted 'the depreciated replacement value approach' which involves 'calculation of the cost to replace such improvements and then allow for physical depreciation' (see page 2 of exhibit P4). Although there was no evidence called on behalf of the plaintiff as to his actual costs incurred in undertaking the several improvements (it certainly would have been more satisfactory if he had) the valuer's evidence is premised upon the basis of cost and is to be relied upon in relation to the question of the cost of the improvements.

As indicated supra the evidence of the valuer as to the improvements was not challenged in cross-examination and no evidence was advanced concerning valuation by the defence. I accept the evidence of the valuer (regarding the improvements) as the best measure of the restitution due to the plaintiff in the circumstances of this case

CONCLUSION

I assess the compensation to which the plaintiff is entitled for unjust enrichment flexibly and as follows:-

Parcel 334/67, Flur 1. Upolu - Plan 5483, 0a-1r- 08p:
Parcel 905, Flur 1. Upolu - Plan 5483, 1a-2r-234p
Parcel 75, Flur 1 Upolu - Circuit Plan No.5, 3a-0a-110p

Cost of fill (as per the evidence of the lay witnesses)	=	$200,00000
Cost of improvements (as per the valuer's evidence but limited to the plaintiffs claim)	=	$528,000.00
TOTAL		$728.000.00

In my judgment the plaintiff's equity will be satisfied if the following orders are complied with. There will be judgment for the plaintiff against the defendant in the sum of $728,000.00. There will be an order that the plaintiff remain in occupation of the land until they are required to vacate same by virtue of the order made hereinafter. As from the date that the judgment is paid in full, the plaintiff and his family are ordered to remove their personal belongings and non-fixtures and vacate the land within three months.

I reserve the question of costs for counsel to file submissions in writing within 10 days if they are instructed to do so.

JUSTICE WILSON.

30 June 2000

ORDER: that the formal entry of judgment be postponed until Friday, 14 July at 9.00 a.m. when I will hear any submissions as to costs and as to any other aspect of the matter.

JUSTICE WILSON

14 July 2000

His Honour confirms the liberty to the parties' counsel to lodge written submissions as to costs, such submissions to be lodged and served within 7 days from this day.

ORDER:

(1) that the defendant do pay to the plaintiff his costs of this action to be quantified by this Court as above.

(2) that there be judgment for the plaintiff against the defendant in the sum of ST$728,000.00 plus costs.

(3) that the plaintiff do remain in occupation of the land until he is required to vacate same by virtue of the order made hereinafter.

(4) that, as from the date that the judgment is paid in full, the plaintiff and his family do remove their personal belongings and non-fixtures and vacate the land within three months.

(5) that, until further order, the said judgment debt shall not carry interest.

JUSTICE WILSON