Pati v Westerlund - Addendum [2001] WSSC 38 (25 January 2001)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

TULAI TAULAPAPA PATI
of Vaitele, Housewife.
Plaintiff

AND

CHARLES WESTERLUND
of Apia, Businessman.
Defendant

Counsel: K.M. Sapolu for plaintiff
P. A. Fepuleai for defendant
H. Wallwork for third party

Judgment: 25 January 2001

ADDENDUM OF SAPOLU CJ.

In my judgment delivered on 23 August 2000, the defendant was ordered to vacate the reclaimed land which was the subject of proceedings in that judgment. But as the land was reclaimed by the defendant in spite of stop notices from the third party, which is the Land Board, and the plaintiff will have the use of the reclaimed land the plaintiff was ordered to pay compensation to the defendant on the basis of unjust enrichment. The reason for this is that the plaintiff is going to gain an "incontrovertible benefit" in the sense that, by having the use of the reclaimed land, she would inevitably be saved the expense of having to do the reclamation herself, for the defendant has already done that. I therefore asked counsel for written submissions to be filed on the measure and quantum of compensation. As a consequence of the submissions and the valuation reports filed by counsel, further oral evidence needed to he called from the valuer for the plaintiff as well as from the defendant and his valuer. In considering this evidence, as well as the valuation reports and submissions by counsel, I have decided to adopt as the measure of the compensation to be paid by the plaintiff to the defendant the market cost at today's rate the plaintiff would incur to carry out the same reclamation, as stated by Bisson J in this Court in Misileti Tufuga Fatu v Siaosi Levasa (2000) (C.P. 455-94; unreported judgment delivered on 14 May 1998). However, I have to bear in mind that this case was heard in December 1996, and it is no fault of the plaintiff that this case was not resolved earlier than now.

In his evidence, the defendant said that the reclamation work was carried out for him by one of his brothers. He did not pay for it with money but with 150 heads of cattle, on the basis of $1,000 tala per cattle, and two flat deck trucks worth $42,000 and $40,000 each. He said this is how he has always done business with his brother who is also a businessman like the defendant. They use a barter system where payment for goods or services rendered by one to the other is made not in money but in kind. On the basis of 150 heads of cattle at $1,000 tala each and the two flat deck trucks, the defendant estimated that it cost him a total of $232,000 to carry out the reclamation which will now be used by the plaintiff. He does not recall the number of truckloads of fill that were used in the reclamation and he did not keep a record of the number of those truckloads. He also did not give evidence as to the cost per truckload of fill.

In my judgment, the method of payment for the reclamation given by the defendant is not the appropriate basis for assessing compensation in this case. It is too subjective and somewhat arbitrary. The plaintiff will no doubt gain an "incontrovertible benefit" in the sense that she would be saved the expense, she would have inevitably incurred, of having to carry out the same reclamation, herself, if the defendant had not carried out that reclamation. It will be unjust for the plaintiff to retain that benefit without compensating the defendant for it. But there must be a reasonable relationship between the compensation the plaintiff has to pay and the benefit she has gained, which should be measured in terms of the expense, at today's rate, she had been saved, if she were to do the same reclamation herself. As I have said, the basis for assessing compensation that I adopt in this case is what is the market cost the plaintiff, herself, would incur to carry out the same reclamation today. An estimate of the number of truckloads of fill that were used by the defendant for the reclamation and the cost per truckload would have been a reasonable basis for assessing compensation and would have assisted the Court in that task. But the defendant could not testify as to the number of truckloads of fill used or the cost per truckload. I do not accept the method of payment the defendant said he used. It is not an appropriate basis for the assessment of compensation in this case.

I turn now to the valuation evidence that was given for all parties. The valuation evidence for the plaintiff was given by Mr Lui Seru, a licensed surveyor and valuer, who is practising as a valuer, and Mr To'o Te'o who is not a qualified valuer, but is the owner of National Property Services and is engaged in the business of selling land. They produced a joint valuation report and gave oral testimony in relation to their report. Their evidence was that to reclaim the half acre of foreshore in this case would require about 3930m³ of fill. As the area that was reclaimed was the foreshore, they included in the estimated volume of fill a 5% increase to take account of sinking effect and compaction. They also made enquiries of the various earthworks companies for their rates of fill and the rates offered ranged from $100 to $300 per 8m³ truckload of dirt which included transportation and delivery. They took for the purpose of their calculations the figure of $1 00 as a prudent developer would be expected to take the lowest cost of reclamation and a satisfactory service. So to fill 3930m³ would require 491 truckloads on the basis of 8m³ per truckload. At the rate of $100 per truckload, that would come to $49.000. They then added 10% for contingencies and their estimated cost for the reclamation is $54.010.

For the third party, its counsel produced a valuation report dated 31 August 2000 which was prepared by Mr Patea Setefano, the chief valuer in the Department of Lands, Surveys and Environment. The current market value given in that report for the reclamation is $56,800. To arrive at that result Mr Setefano, who was not called to give evidence, adopts and applies in his report the valuation technique called the "before and after method". As I understand this valuation method from his report, it means the market value of the land before reclamation, is subtracted from the current market value of the land after reclamation. The difference between the two values, is the current market value of the reclamation. The before reclamation market value and the current market value after reclamation are calculated by reference to the market value of land sales at the relevant points in time.

After careful consideration, I do not favour this method of valuation for a case of this kind, even though the result reached by Mr Setefano is the closest to the amount of compensation I have decided should be paid by the plaintiff to the defendant. I do not accept the use of comparisons with the value of land sales in the Vaitele area as a point of reference for calculating the compensation to be paid in this case as we are not here concerned with a sale of land. The reclaimed land is government land, and neither the plaintiff nor the defendant can sell it. What we need to ascertain is the value of the benefit which the plaintiff, who is going to occupy and use the land under a lease from the third party, will gain at the expense of the defendant who reclaimed the land. This must mean the present day value of the expense which the plaintiff has been spared because of the fact that the defendant has already reclaimed the land which he now has to vacate. So it is the present day value of the expense the plaintiff would inevitably have incurred if she were, herself, to reclaim the same land today. The other flaw with the application of the 'before and after method' to a case like this, is that it suggests that the defendant has an equity in the reclaimed land and is entitled to a share in the appreciation to land values: Misileti Tufuga Fatu v Siaosi Levasa (2000) (C.P. 455-94; unreported judgment of Bisson J delivered on 14 May 1998). The truth of the matter is that the defendant does not have any equity in the reclaimed land as it belongs to the government. And the land was reclaimed by the defendant in contravention of stop notices given by the third party which is the Land Board.

Counsel for the defendant produced two reports by Elon Betham and Associates Ltd. The first report is dated 28 August 1996. This was before this case was heard in December 1996. According to this report, to reclaim the half acre of foreshore which is the subject of these proceedings, would require about 2163m³ of fill. The report arrives at that volume of fill by taking the total area of half an acre and then multiply it by 2m which is the depth of the reclamation and the total volume of fill comes to 2793m³. A volume of 630m³ which represents the site of the fale (house) on the reclamation, which was not reclaimed by the defendant, was then subtracted leaving a balance of 2163m3 as the volume of the fill that was carried out by the defendant. On the basis of 4m³ per truckload, the total number of truckloads of fill that were used would be 541. A quote obtained from H & M Ulberg Co. Ltd was $121 per truckload of fill. On that basis, the total cost for the fill came to $43,280. The sums of $20,000 for 200 hours of levelling at $100 per hour and $25,200 for a sea wall and $4,000 for the fale were then added on. The total amount claimed for the reclamation in that report for the defendant is $93,000.

Even though the defendant subsequently did not rely on that report, there are several matters mentioned in that valuation report which I do not think should be taken into account in assessing any compensation. I wish to refer to them now as they are relevant to the assessment of compensation in this case. I do not accept that it should take 200 hours or 25 eight hour working days for the levelling work. I prefer the valuation evidence for the plaintiff that it would take only three days for the levelling work at the most. One should also bear in mind that part of the two acres of reclamation we are concerned with which includes the site of the fale had already been reclaimed by someone else before the defendant came to this area. So the amount of $20.000 claimed for 200 hours of levelling work is too excessive. Secondly, I do not accept the sum of $25,200 claimed for the seawall. The reason is that from the photos taken of this reclamation by the valuation witnesses for the plaintiff, I do not see any seawall. It appears that what is claimed as a seawall is just part of the reclamation itself on the northern and western sides. Thirdly, as the defendant would have to remove and keep his own fale, no compensation should be allowed for the fale. Fourthly, the quote of $121 per truckload of fill of 4m3 as of 28 August 1996 seems rather too high, for that should be about $242 per truckload of fil1 of 8m3 in 1996. Compare that to the rates of $100 and $240 for a similar truckload of fill charged by Eneliko Earthworks and Blue Bird Transport Ltd respectively in August 2000, as shown in the report of the plaintiff's valuers, and it would become clear that the quote of $121 for a 4m3 truckload of fill in August 1996 is too high.

If adjustments are made to take into account the matters, I have raised, then the costs for levelling for 3 eight hour working days at say $100 per hour, would come to $2.400. There should be no amount claimed for the seawall as that appears to be all part of the reclamation. There should also be no amount claimed for the fale as the defendant would keep his fale. As for the cost of the fill, I would allow the rate of 541 truckloads of fill at $80 per load to stand on the basis they were 8m3 truckloads. Taking into account these adjustments, the total amount the defendant should have claimed as of August 1996 before this case was heard in December 1996 would be about $45,680. Making allowance of 10% for contingencies, that amount would come up to $50.248. That would be the more appropriate amount to be claimed by the defendant on the basis of the report by Elon Betham and Associates Ltd dated 28 August 1996 rather than $93.000. But even the amount of $50,248 would be slightly excessive because as it became clear from the evidence of Mr Colin Forbes who was called by the plaintiff, it was not just the site of the fale that was not reclaimed by the defendant. The area between the fale and the fence on the dry land owned by the plaintiff's husband was also not reclaimed by the defendant. So the appropriate amount which should have been claimed on the basis of the report by Elon Betham and Associates Ltd dated 28 August 1996, should have been less than $50,248. However, in fairness to Elon Betham and Associates Ltd, it did qualify its report by saying that the figure it had submitted was subject to further verification from a civil engineer or quantity surveyor who are the real experts in this particular field.

Subsequently on 8 September 2000, counsel for the defendant submitted another report dated 5 August 2000 from Elon Betham and Associates Ltd. Attached to that report is a brief handwritten report dated 6 September 2000 prepared by Mr Colin Forbes of Piki Surveying Firm. Mr Forbes is a registered quantity surveyor with many years of experience as such. In this second report from Elon Betham and Associates Ltd, two kinds of valuation are given. The first is the current market valuation of the half acre in question as of 4 September 2000 if it were put up for sale. The second, for which the services of Mr Colin Forbes were engaged, is the cost of the fill.

The first kind of valuation given in this second report by Elon Betham and Associates Ltd is not appropriate. We are not concerned with a land sale in this case. The land in question being part of a reclamation of the foreshore, it is therefore government land and the defendant cannot sell it to the plaintiff or to anyone else. I will therefore concentrate on the second kind or valuation which is the valuation of the fill.

In assessing the valuation of the fill, Elon Betham and Associates Ltd in its second report seems to have adopted the volume of 7072.5m³ assessed by Mr Forbes and divide that by 4m³ being the volume for each truckload of fill to arrive at 1,768 truckloads. At the rate of $100 per truckload, the total cost comes to $176,800. Another volume of 110m³ was then added on for the seawall rocks. On the basis of 4m3 of rock fill per truckload, the report arrived at 28 truckloads. At the rate of $300 per truckload, the total cost for those truckloads comes to $8.400. The sum of $22,000 was then further added on for levelling work which is estimated to have taken 200 hours at $100 per hour. Further sums of $8439 for the fale, $4.400 for the fence or the reclamation and $300 for transportation of the levelling equipment to the site were also added on. The total amount claimed in this second report for the defendant comes to $222,400.

I must say I also do not accept this second valuation given by the defendant. I will go through the items on which the claim is based in reverse order. I do not accept the sum of $300 for the cost of the transportation of the levelling equipment to the site. Levelling work for reclamations are normally carried out with loaders which travel on their own four wheels to a site. I also do not accept the amounts of $4,400 for the fence and $8,439 for the fale as the defendant would have to remove those items of property and keep them for himself. As for the $22.000 claimed for levelling work, I have already indicated that such work should take only 3 eight hour working days at the total cost of $2.400, especially as part of the total reclamation had already been filled by someone else before the defendant came to this area. The amount of $8,400 claimed for the seawall of rocks should also be disallowed. As I have already indicated, the photos of the reclamation which were taken by the valuers for the plaintiff and produced as part of their evidence, do not show a seawall. If any rocks do appear interspersed on the sides of the reclamation, then they do appear as part of the reclamation itself rather than a separate seawall. It is also clear from the evidence that the fill used in this reclamation included soil and rocks. That brings me to the main part of the claim which is $176.800 for the fill. In order to decide on this part of the claim, I would also have to refer to the brief handwritten report dated 6 September 2000 prepared by Mr Forbes and to his oral evidence.

The estimated area which is given in Mr Forbes report is 2,400 m2. This must be more than half an acre as it appears from the evidence of Mr Seru, the valuer called for the plaintiff. The area of 2312 m² was then multiplied by 2.4m which is the estimated average depth or the fill, and the total volume of the fill comes to 5760 m³. A further 390 m³ was then added on for what Mr Forbes describes as the "batter slope". The total volume of the fill then comes to 6150 m³ which includes compaction. This total volume was then increased by 15% to calculate the number of truckloads of fill, and the total volume comes to 7.072.5m³. On the basis of 4m3 per truckload of fill, the total number of truckloads used came to 1,768. At the rate of $100 per truckload, that should bring a total cost of $176.800 for the fill.

I am also unable to accept that total cost of $176.800 for the fill. In the first place, I accept the evidence of the valuers for the plaintiff who testified that they actually went out and measured the trays of the trucks in order to find out the volume of one truckload. That volume is 8m³. So whatever is the volume of the fill that was calculated, should be divided by 8 m3 and not by 4m³ in order to arrive at the correct number of truckloads of fill. In fairness to Mr Forbes, it does not appear from the evidence that it was him who came up with the volume of 4m³ per truckload of fill. For the average depth of the fill, I am of the view it should be less than 2.4m as given by Mr Forbes even though he took different measurements at various points in relation to the reclamation in order to arrive at an average overall depth. Mr Seru for the plaintiff did the same kind of measurements and came up with an overall average depth of 1.5m. Elon Betham and Associates Ltd in its first report dated 28 August 1996 gave an average depth of 2m. In my opinion, the measuring of the depth or average of depth of this reclamation is not something that requires specialised expertise or technical knowledge. It is more a manual and straight forward arithmetical exercise. I have therefore decided to take 2m as the overall average depth which is just about midway between the average depths given by Mr Forbes and Mr Seru. This means, to arrive at an estimated volume of the fill, its area should be multiplied by the average depth of 2m in order to arrive at the volume. Given that the total area found by Mr Forbes is 2,400m², the volume of fill to reclaim that area should be 4,800m³. Add to that the 390m³ for the "batter slope" described by Mr Forbes and the total volume comes to 5190m³. However, part of the total reclamation was already filled by someone else before the defendant came to this area. This consists of the site of the fale and the reclaimed land between the southern side of the fale and the fence on the land owned by the plaintiff's husband. In the first report dated 28 August 1996 by Elon Betham and Associates Ltd, the volume of fill estimated for the site of the fale alone was given as 630m³ but in its second report dated 5 August 2000, the area for the fale is given as 58.2m². If that area is multiplied by the average depth of 2m, the volume of fill for the site of the house should be 116.4m³. There is quite a marked difference between the two volumes which is not explained in the evidence. Be that as it may, I have decided to accept the volume of fill of 630m³ as the Court had inspected the reclamation and that is a more realistic volume of fill for the site of the fale than a 115.4m³. The average depth of 2m which was used by Elon Betham and Associates Ltd in its report to calculate the volume of the fill is the same average depth I have decided to adopt in this judgment. In respect of the area between the southern side of the fale and the fence on the land owned by the plaintiff's husband, its width is 25m and its length is about 30 to 40 feet as given in Mr Forbes evidence. Taking the length as 36 feet, that would be about 11 m. Multiply 11m by 25m and the area comes to 275m². Multiply that area by the average depth of 2m, and the volume of the fill that was used to reclaim the area between the southern side of the fale and the fence on the land of the plaintiffs husband comes to 550m³. Subtract 80m³ in case part of that volume of fill has already been included in the figure of 630m³ for the site of the fale and the balance is 470m³. Add together 630m3 and 470m³ and the total volume of the fill for the site of the house and the area between the southern side of the fale and the aforesaid fence, would come to 1100m³. If that volume of fill is subtracted from the total volume of fill of 5190m3 for the whole reclamation of half an acre, less the "batter slope", what is left is 4909m³. Add on the 390m³ for the "batter slope", and the total volume of fill for the whole reclamation comes to 4470m³. Mr Forbes then increased that volume, which is of compacted fill, by 15% for the purpose of ascertaining the number of truckloads and it comes to 5140.5m³. Divide that volume by 8m3 and the number of truckloads of fill comes to 642. At the rate of $100 per truckload, the total cost for 642 truckloads comes to $64,200.

I have decided to take the middle figure of $59,105 which represents the differences between $64,200 and $54,010, which is the valuation given by the valuers for the plaintiff. I have further decided to deduct 2 ½% as the hearing of this case was completed in December 1996 and there must have been a slight increase in costs between the completion of the hearing and now. The plaintiff, in my judgment, should not bear that increase in costs. The result is $57,628, and that is the amount of compensation I award to the defendant to be paid by the plaintiff.

Accordingly, the plaintiff is ordered to pay $57,628 compensation to the defendant. The defendant is to vacate the reclaimed land in question and remove his fale, fence and any other properties on the land within seven days after he has been paid the compensation as ordered.

CHIEF JUSTICE

Solicitors:
Sapolu Lussick for plaintiff
Fepuleai & Schuster Law Firm for defendant
Attorney General's Office for third party.