Luteru v Accident Compensation Board [2003] WSSC 7 (8 April 2003)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

HEROTA FM LUTERU
of Matafele Public Accountant.
Plaintiff

AND

ACCIDENT COMPENSATION BOARD
a body corporate established pursuant to the Accident Compensation Act 1989.
Defendant

Counsel: PA Fepuleai for plaintiff
TK Enari for defendant

Judgment: 8 April 2003

JUDGMENT OF SAPOLU CJ

I will deal with this case under three Parts. Part A will set out the facts, Part B will deal with the legal status of the relationship between the plaintiff and the defendant, and Part C will deal with the question of damages as raised by the plaintiff in his amended statement of claim and by the defendant in its counterclaim. I will also deal under Part C in more detail with the evidence which is relevant to the question of damages.

PART A

Facts

By a tenancy agreement dated 29 November 1994 between the Government of the Independent State of Samoa as landlord and the plaintiff as tenant, the plaintiff leased from the Government one of the shops at the Fugalei Market complex which had just been opened that year. This was shop number 24. The tenancy was for a term of two years commencing from 1st December 1994. The rent was to be $4320 per annum payable by monthly installments of $360. However, the evidence given by both parties at the trial was that the rent that was actually paid by the plaintiff and accepted by the Government was $300 per month. I will accept that was the correct rent pursuant to the tenancy agreement.

The plaintiff made use of the shop as a billiard saloon but he did not work there or look after its daily operation as he operates a practice as a public accountant elsewhere. He employed someone else to look after his billiard saloon. As the management of the new Fugalei Market complex (henceforth “the market”) was at that time placed by the Government under the Department of Lands, Survey and Environment, the plaintiff paid his rent to that Department. When the tenancy agreement expired in 1996 at the end of two years, no fresh tenancy agreement was made between the Government and the plaintiff. The plaintiff simply continued to use the premises for his billiard saloon and paid the rent. At some stage, not clear when, the ownership and management of the market was transferred to the defendant, the Accident Compensation Board, which is a quasi-government corporation established under the Accident Compensation Act 1989. The plaintiff then paid his monthly rent of $300 to the defendant. It is pleaded by the plaintiff in his amended statement of claim and admitted by the defendant in its statement of defence and counterclaim that the defendant had become the owner of the market at the time of the events which gave rise to this case. Up to now, the defendant is still the owner of the market. It is not clear when the ownership of the market was transferred from the Government to the defendant but I will accept on the basis of the pleadings that at the material times the defendant was the legal owner of the market. It is clear from the evidence that no tenancy agreement has ever been concluded between the plaintiff and the defendant. The plaintiff simply continued to use the shop which the Government had previously leased to him for his saloon and paid the rent to the defendant. It was common ground between counsel that the continuing occupation of the shop by the plaintiff was on the basis of a tenancy.

On 1 February 1999, the plaintiff’s billiard saloon was closed down upon instructions from the then chairman of the defendant and the plaintiff became aware of the closure of his billiard saloon on the same day. The next day he went to see the then manager of the market who informed him that his shop had been closed upon instructions from above. The plaintiff then sought a meeting with the then chairman of the defendant but was unsuccessful after several attempts. He went on 4 February to see his billiard saloon and found that it was locked with a different padlock so that he could not get in. He then wrote a letter on 5 February to the then chairman of the defendant complaining about the closure of the shop where he was operating his billiard saloon claiming that he had not done any wrong. On 6 February he went to the shop again and discovered that his billiard table had been taken out and left outside at another part of the market which is readily accessible to the public. He then got a tarpaulin and covered his billiard table with it. On 8 February the plaintiff received a letter dated 5 February 1999 from the then manager of the market advising the plaintiff that his use of shop 24 had been terminated effective from 1 February. The reason given for the termination was that marijuana substances had been found inside his billiard saloon and that he was aware of the presence of such substances inside his saloon.

In his oral testimony the plaintiff complained that his employee who looked after his billiard saloon had been set up in order for the defendant to have a basis for closing his business. He said that an inspector from the Labour Department had visited his billiard saloon and asked his employee who was looking after his business to go to another shop at the market and buy a packet of marijuana substances. When the plaintiff’s employee returned with the packet of marijuana, he was apprehended by others and the police were informed. The plaintiff’s employee was subsequently charged and convicted with being in possession of marijuana. The plaintiff then said that his billiard saloon should not have been closed as his employee had been set up by a Labour inspector and that the marijuana was found in the possession of his employee outside of the billiard saloon as he was bringing it to the Labour inspector who had asked him to go and buy the marijuana. Further the plaintiff said he had no knowledge of what had happened. Evidence was given for the defendant at the trial that the consumption of marijuana had been reported from the plaintiff’s billiard saloon on previous occasions. However, the plaintiff was never informed by the defendant of such consumption of marijuana. The plaintiff also testified that he did not know of any marijuana substances being consumed in his billiard saloon at any time. The defendant did not adduce any evidence to show that the plaintiff knew of the alleged presence of marijuana in his saloon. It was therefore asserted for the plaintiff that the closure of his billiard saloon was unfair and wrongful.

After the plaintiff was served with the letter from the then manager of the market on 8 February, he went and consulted his present counsel. A motion dated 23 February 1999 was then prepared and filed for an ex parte interim injunction. It was alleged in the motion and the supporting affidavit of the plaintiff that the plaintiff was a tenant and occupier of shop 24 at the market which belongs to the defendant. There was no mention that the plaintiff had been a tenant under a tenancy agreement with the Government that had expired in 1996 and that no fresh tenancy agreement had been entered into between the Government and the plaintiff or between the defendant as the new owner of the market and the plaintiff. Then on 24 February an exparte interim injunction was granted against the defendants, its agents and servants restraining them from terminating the alleged tenancy until further order of the Court. The injunction was served by the plaintiff on the defendant the same day.

According to the plaintiff he went back to his billiard saloon after serving the injunction on the defendant. He found his billiard table at where it had been removed and left at the market. Its cloth was torn and damaged. He also found men working inside the saloon putting up new shelves for a new tenant. This was strongly denied by the manager of the defendant who testified that shelves were only built inside shop 24 in June 1999 when it appeared to the defendant that the plaintiff had abandoned the tenancy. I would accept the evidence given by the manager of the defendant but it is clear that shop 24 was still at that time being locked with a different padlock so that the plaintiff could not get back in or return his billiard table back into the premises.

Negotiations then followed between counsel for the plaintiff and the defendant for the return of the plaintiff to shop 24. The inference to be drawn from these negotiations is that the defendant was not willing to allow the plaintiff to return to the shop notwithstanding the exparte interim injunction which the Court had granted. It was not until by letter of 21 June 1999 that the defendant advised the plaintiff to return to shop 24. However, the plaintiff did not return to shop 24 as he wanted the defendant to pay him first for lost income from his billiard saloon for the period from 1 February to 21 June. The loss claimed was $8160 and was eventually conveyed by counsel for the plaintiff to the defendant by letter dated 30 August 1999. Then by letter dated 27 September 1999 counsel for the defendant wrote to counsel for the plaintiff withdrawing the defendant’s offer for the plaintiff to return to shop 24 and terminating the plaintiff’s tenancy. A lease was then granted by the defendant to a new tenant to commence from 1 October 1999 for a term of two years. At that time the injunction was still in force. In fact the injunction has still not being discharged.

The plaintiff in its amended claim is now claiming from the defendant loss of income from its billiard saloon for the period from 1 February 1999 to 18 October 1999 and for damages to his billiard table. The defendant is counterclaiming for loss of rent.

PART B

Relationship between plaintiff and defendant

In his written submissions given to the Court at the conclusion of the trial, counsel for the defendant submitted that when the tenancy agreement made between the Government and the plaintiff in 1994 expired in 1996 there was no fresh tenancy agreement. He further submitted that in the circumstances the continued occupation of the shop by the plaintiff for the purpose of his billiard saloon was under an implied tenancy at will. That tenancy at will was terminated by the defendant when it shifted out the plaintiff’s billiard table from the premises and when it informed the plaintiff by letter dated 5 February 1999 from the then manager of the market that his use of the premises was terminated as from 1 February. In other words there was no longer any tenancy at will as from 1 February 1999. It follows, as I understand this part of the submissions by counsel for the defendant, that the plaintiff is not entitled to the damages or most of the damages he claims because the tenancy had been properly terminated. This part of the submissions by counsel for the defendant does touch on some significant issues of the law of landlord and tenant which the Court needed time to consider. Counsel for the plaintiff in his written submissions which were also given to the Court at the end of trial did not submit on this issue.

The tenancy agreement by which the plaintiff occupied the premises from 1994 to 1996 was made between the Government as landlord and the plaintiff as tenant. When that tenancy agreement expired in 1996, the parties did not enter into any new tenancy agreement. The tenant simply continued to occupy the premises and paid the monthly rent of $300. Ownership of the market was transferred to the defendant which is a quasi-government statutory corporation and the rent was paid by the plaintiff to the defendant. No tenancy agreement was concluded or even negotiated between the plaintiff and the defendant. Matters just continued as before. The only difference was that the rent was paid by the plaintiff to the defendant and no longer to the Department of Lands, Survey and Environment which used to receive the rent on behalf of the Government. I will accept for the purpose of this case that the relationship between the plaintiff and the defendant was at some stage a tenancy at will as submitted by counsel for the defendant. There was no suggestion that it could be any other kind of legal relationship such as a licence.

A tenancy at will is explained in Land Law in New Zealand (1997) by Hinde, McMorland and Sim at para 5.021 at p443 where the learned authors state:

“A tenancy at will comes into being whenever a person occupies land as tenant (and not merely as servant or agent), with the consent of the owner, on the terms that either party may determine the tenancy at any time.... It is of the essence of a tenancy at will that it is determinable by either party on demand; and even if, when it is created, it is expressed to be determinable at the will of the landlord only, or at the will of the tenant only, the law implies that it shall be determinable at the will of the other party also. Every tenancy at will must be at the will of both parties.

“A tenancy at will may be created either expressly or by implication, but it is unusual for such a tenancy to be expressly created”.

The learned authors then go on to state:

“The payment of rent under an implied tenancy at will normally converts the tenancy into a periodic tenancy.”

In the footnote to that statement the learned authors state:

“In New Zealand the payment of rent would normally convert the tenancy into a “monthly tenancy under the Property Law Act 1952, s.105”.

Reference is then made by the learned authors in para 5.022 at p.445 to a passage in the judgment of North J in Blackie v Fullerton – Smith [1961] NZLR 901 (CA). The whole of that passage is not applicable to the circumstances of the present case but part of it is relevant to the point which is presently in issue. That whole passage reads:

“For myself, I am not prepared to accept the view that a prospective lessee let into possession prior to the signing of a contract for a lease for a term automatically becomes in New Zealand, a monthly tenant, though I agree that if a rent is paid the character of the tenancy may change and what began as a tenancy at will may “become a periodic tenancy, determinable on the execution of the lease contracted for. (emphasis mine)

From these statements of the law, I have decided that the implied tenancy at will in this case would normally transform into a periodic tenancy with the payment of rent. I conclude in the absence of any circumstances which suggest the contrary, that the payment of rent on a monthly basis by the plaintiff to the defendant had converted what might have been an implied tenancy into a monthly periodic tenancy. Counsel for the defendant cited the English cases of Javad v Aqil [1991] 1 A11 ER 243 (CA) and Cardiothoracic Institute v Shrewdcrest Ltd [1986] 3 A11 ER 633 but I think one needs to be cautious in applying those cases to this case because of the intervention of English statutes peculiar to England in the law of landlord and tenant in that country. I prefer to apply the New Zealand authorities on the law of landlord and tenant because the relevant statute in New Zealand is the Property Law Act 1952 and that New Zealand statute is still applicable in Samoa by virtue of s.7 of our Reprint of Statutes Act 1972.

Having decided that the tenancy at will in this case became a periodic tenancy with the payment of rent, the next question is: how can a periodic tenancy be validly terminated. To put the question in another way, can it be said that the act of the defendant in shifting out of the premises the billiard table which belonged to the plaintiff or the letter of 5 February 1999 from the then manager of the market advising the plaintiff that his use of shop 24 had been terminated effective from 1 February 1999, constitute a valid termination of the periodic tenancy that had come into being between the plaintiff and the defendant. Section 105 of the Property Law Act 1952 (NZ) which is relevant here provides:

“No tenancy from year to year shall be created or implied by payment of rent, and if there is a tenancy it shall be deemed in the absence of proof to the contrary to be a tenancy determinable at the will of either of the parties by one month’s notice in writing”.

In dealing with s.105 in Beattie v Lyttleton Borough [1966] NZLR 65 Wilson J said:

“The method adopted by the Legislature was to provide that a tenancy should be deemed to be determinable by either party by one months’ notice in writing, unless the contrary were proved. It created a rebuttable presumption and used the clearest possible words to throw upon the party seeking to rebut it the onus of doing so, whether that party be landlord or tenant or even a stranger”.

On the issue presently under discussion the learned authors of Land Law in New Zealand (1997) state in para 5.019 at p.440:

“Tenancies are sometimes erected without any express agreement as to their duration. The landlord simply lets the tenant into possession, and rent is paid weekly, or monthly or in some other way.

“At common law a yearly tenancy would arise by implication whenever a person occupied land with the owner’s consent and rent measured with reference to a year was paid and accepted. Implied tenancies for other periods could, at common law, arise in a similar way.”

The learned authors then go on to note that yearly tenancies may no longer be implied by payment of rent because of the first part of s.105. The learned authors then go on to state:

“A tenancy to which this section [s.105] applies is commonly called a ‘monthly tenancy’ and the tenant may be referred to as a ‘monthly tenant’.

“It is now settled that s.105 of the Property Law Act 1952 creates a rebuttable presumption that a tenancy is determinable by one month’s notice in writing and uses ‘the clearest possible words to throw upon the party seeking to rebut it the onus of doing so, whether that party be landlord or tenant or even a stranger. In order to rebut the statutory presumption it is necessary to prove either: (1) an express agreement that the tenancy is determinable in some other way; or (2) facts or surrounding circumstances from which such an agreement may be implied. It is not permissible to rely on any implication of law to rebut the presumption. Where there is a mere general letting with no agreement as to how it maybe terminated, the bare fact that rent has been paid by the week is not by itself sufficient to rebut the presumption of a monthly tenancy raised by s.105 of the Property Law Act 1952. Unless there is some other evidence of surrounding circumstances from which it may “be inferred as a fact that some other arrangement existed, one month’s notice to quit “must be given.” (emphasis mine)

Applying these statements of legal principles to the circumstances of this case, what might have been an implied tenancy at will between the plaintiff and the defendant, had in the circumstances, become a periodic tenancy with the payment of rent on a monthly basis. That is by reason of s.105 of the Property Law Act 1952 (NZ). The periodic tenancy is a monthly tenancy. A rebuttable presumption derived from s.105 requires that such a tenancy may only be terminated by either party by one month’s notice in writing unless there was an express or implied agreement that the tenancy was to be terminated in some other way. There was no such agreement in this case. That being so the presumption that a monthly periodic tenancy may only be terminated by a one month’s notice in writing still applies. The act by the defendant of shifting out the plaintiff’s billiard table from the premises was not a one month’s notice in writing to the plaintiff to quit, so such a physical act by the defendant could not have constituted a valid termination of the tenancy. Likewise, the letter of 5 February 1999 from the then manager of the market that the plaintiff’s use of the premises was terminated as from 1 February 1999 was not a one month’s notice to quit and could not have constituted a valid termination of the tenancy. Thus when the plaintiff obtained the ex parte interim injunction on 24 February 1999, the monthly periodic tenancy had not been validly terminated and was therefore still in existence.

It is clear that after the injunction was served on the defendant, the plaintiff wanted to return to the premises. He made visits to the premises. The negotiations which followed between counsel for the plaintiff and the defendant suggest that the defendant was reluctant to allow the plaintiff back into the premises. During all that time there was no further attempt by the defendant to terminate the tenancy. But the defendant could have moved to discharge the ex parte injunction and then terminate the tenancy by giving a one month’s notice in writing. Such a motion would have been likely to succeed because at the time the injunction was granted, it was unknown to the Court that the tenancy agreement between the Government and the plaintiff had expired in 1996 and the plaintiff was occupying the premises on the basis of an implied tenancy with the defendant which is the new owner of the market. The plaintiff on the other hand did not seek to enforce the injunction. Matters then continued on the basis of negotiations between the parties with the plaintiff being kept out of the premises and his billiard table lying somewhere at the market. It was not until the defendant’s letter of 21 June 1999 that the plaintiff was asked to return to the premises. However, the plaintiff refused to return until the defendant first paid him for lost income from his billiard saloon from 1 February to 21 June. The loss claimed by the plaintiff was conveyed to the defendant by letter dated 30 August 1999.

I will come back to those matters when I deal with the question of damages. But it is clear that up to 21 June 1999 the monthly periodic tenancy was still in existence as it had not been validly terminated by a one month’s notice. It was then said on behalf of the defendant that by letter of 27 September 1999 the defendant terminated the tenancy. A copy of that letter was not produced by the defendant in evidence and counsel for the plaintiff did not seek production of that letter. So it is not possible to say whether that letter constituted a one month’s notice of termination of the tenancy. However, the injunction to restrain the defendant from terminating the tenancy was still in force so that the purported termination of the tenancy by the defendant in its letter of 27 September 1999 could not have been a valid termination.

I turn now to the question of damages.

PART C

Damages

The plaintiff claims damages under two heads: (a) loss of income from his billiard saloon, and (b) costs of a replacement billiard table he has purchased as his billiard table which the defendant had removed from the premises has been so badly damaged that it will be too expensive to have it repaired. The defendant on the other hand has counterclaimed for loss of rent during the period of time that it did not rent out its premises. The defendant also counterclaims for general damages but this part of the defendant’s counterclaim was not pursued at the trial or in the written submissions by counsel for the defendant. I say no more about it. Counsel for the defendant also raised the question of mitigation in relation to the plaintiff’s claim for damages. I will deal with the claim and counterclaim in more detail shortly. But before I do so, I will refer first to the relevant legal principles on the issue of mitigation as this is quite a significant issue in this case.

It is the fundamental principle of the law of damages that a plaintiff should be restored as far as money can do to the same position he was in before the wrong was committed. But that fundamental principle is qualified by another which imposes on the plaintiff the duty of taking all reasonable steps to mitigate the loss consequent upon the commission of the wrong by the defendant and debars the plaintiff from recovering any part of the damage which is due to his neglect to take such steps. In the leading English textbook on the law of damages which is McGregor On Damages the learned author in the 14^th edition of that work in para 285 at p.171 set out those principles in these words:

“The extent of the damage resulting from a wrongful act, whether tort or breach of contract, can often be considerably lessened by well-advised action on the part of the person wronged. In such circumstances the law requires him to take all reasonable steps to mitigate the loss consequent on the defendant’s wrong, and refuses to allow him damages in respect of any part of the loss which is due to his neglect to take such steps. Even persons against whom wrongs have been committed are not entitled to sit back and suffer loss which could be avoided by reasonable efforts or to continue an activity unreasonably so as to increase the loss. This well-established principle finds its most authoritative expression in the speech of Viscount Haldane L.C. in the leading case of British Westinghouse Co. v Underground Ry [1912] UKLawRpAC 43; [1912] AC 673, 689 where he said:

‘The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach; but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps.’”

British Westinghouse was a case on breach of contract and a claim for pecuniary loss. But it has been generally held in England, Australia and New Zealand, that this principle of mitigation applies generally to actions in both contract or tort for pecuniary and non-pecuniary losses. The question of whether the plaintiff had taken all reasonable steps to mitigate his loss consequent on the wrong committed by the defendant is one of fact and not of law. That was the position as confirmed in Payzu v Saunders [1919] 2KB 581 where Bankes LJ said at p.588 when dealing with the question of mitigation of damages in that case:

“It is plain that the question what is reasonable for a person to do in mitigation of his damages cannot be a question of law but must be one of fact in the circumstances of each particular case.”

As to onus of proof, the onus is on the defendant to show that the plaintiff in the circumstances ought reasonably to have taken certain steps to mitigate the loss which flowed from the wrong but failed to do so: Roper v Johnson (1873) LR 8CP 167; Garnac Grain Co v Faure & Fairclough [1968] AC 1130, 1140 (HL).

I have said that the principle of mitigation applies to an action for damages in contract or tort. The question then is whether it applies to the present action by the plaintiff. It is not expressly stated in the pleadings whether the action by the plaintiff is in contract or in tort. However, it is clear from the plaintiffs pleadings that the plaintiff as tenant was in lawful possession of the shop under the implied tenancy when the defendant as landlord shifted the plaintiff’s billiard table out of the shop, locked the shop with a different padlock so that the plaintiff could not enter the shop, and then wrote to the plaintiff that his use of the shop was terminated. Those facts in my view disclose a cause of action in the tort of trespass. It is not necessary as a matter of pleading for the plaintiff to expressly use the word ‘trespass’. It is enough if sufficient facts are pleaded to show trespass: see Drane v Evangelou [1978] 2 A11 ER 437 per Lord Denning MR at p440. In Street on Torts (1988) 8th ed, it is stated at p.73 with reference to Drane v Evangelou:

“A tenant who is unlawfully evicted by his landlord may recover exemplary damages in trespass – to teach the landlord that tort does not pay.”

In Winfield & Jolowicz On Tort (1994) 14th edn at p.385 it is there stated:

“[A] lessor of land gives up possession to his tenant so that the tenant alone can bring trespass during the tenancy of the lease – even against the lessor unless, of course, the lessor’s entry was effected in accordance with the provisions of the lease.”

In the Australian textbook of The Law Of Landlord And Tenant (1993) 4^th ed by Evans & Smith, the learned authors after discussing the measure of damages in an action by a tenant against a landlord for breach of an implied covenant for quite enjoyment, then state at p.86:

“If the landlord commits a tort, such as trespass or nuisance, then an additional separate claim may be framed by the tenant in tort. If the Court considers that the conduct of the landlord has been particularly outrageous, exemplary damages may be awarded: these need bear no relation to the tenant’s losses. An example is where the landlord deliberately ignores the tenant’s legal rights as by illegally evicting him. It is not necessary for the tenant to plead trespass in his statement of claim as a condition precedent to an award of exemplary damages”.

I have only referred to the above authorities to show that the action by the plaintiff lies in the tort of trespass so that the principle of mitigation which applies to an action in contract or tort applies to this case. But I must point out that this Court has decided in previous cases in tort that if a party wants to claim exemplary damages in tort then such damages ought to be specifically pleaded with sufficient particularity. Exemplary damages are not sought, claimed, or pleaded in this case so that the Court is not being asked to deal with such a claim. In fact there was no contest on the question of exemplary damages so that the defendant did not take steps to address or submit on that issue.

I will now deal with the first part of the plaintiff’s claim for damages which is for loss of income from his billiard saloon which was closed down by the defendant. This appears to be a claim for consequential loss arising from the trespass committed by the defendant in wrongfully evicting the plaintiff by closing down his billiard saloon. As already pointed out earlier in this judgment, the purported termination of the tenancy in February 1999 by the defendant shifting out the plaintiff’s billiard table from the premises and by the defendant advising the plaintiff by letter dated 5 February 1999 that his use of the premises was terminated effective from 1 February 1999 were not valid acts of termination and therefore ineffective. The reason is that the tenancy was a monthly periodic tenancy in terms of s.105 of the Property Law Act 1952 (NZ) which still applies in Samoa by reason of s.7 of our Reprint of Statutes Act 1972 and therefore a one month’s notice of termination in writing was required. No such notice was given. Thus the tenancy continued in being. An ex parte interim injunction was granted against the defendant on 24 February but the defendant did not permit the plaintiff to re-enter the premises until 21 June 1999 when by letter of that date the defendant advised the plaintiff to return to shop 24. However, the plaintiff did not want to return to shop 24 until the defendant first paid him for lost income from 1 February to 21 June. There was some suggestion in the course of the plaintiff’s oral testimony that he did not immediately return to shop 24 because another person was already occupying the shop at that time. This was strongly denied by the defendant’s manager who testified that shop 24 was never occupied by another person until 1 October 1999 when it was relet to a new tenant. I have decided to accept the evidence given by the defendant’s manager on this point as it appears clear that the real reason for the plaintiff not making an immediate return to the premises upon receiving the letter of 21 June 1999 from the defendant was because the plaintiff wanted to be paid first for lost income from 1 February. That is confirmed by the letter of 30 August 1999 sent by the plaintiff’s counsel to the defendant.

It appears from the evidence that the defendant did not pay the claim for lost income by the plaintiff and the plaintiff did not return to shop 24. Then by letter of 27 September 1999 the defendant terminated the tenancy. That letter was not produced but it was referred to verbally in the course of the evidence. If one were to assume that that letter constituted a valid one month’s notice of termination, then the tenancy effectively came to an end in October 1999 one month after that notice. However, there is a problem. Up to that time the injunction granted by the Court to restrain the defendant, its servants and agents from terminating the tenancy was still in force. So the letter of 27 September 1999 cannot constitute a valid termination. If anything it was a clear breach of the injunction and punishable by contempt. What the defendant should have done in order to comply with the law was to move first to discharge the injunction. If that was successful then serve a month’s notice in writing upon the plaintiff terminating the tenancy. Be that as it may, the defendant relet the premises effective as from 1 October 1999 to a new tenant. The plaintiff claims for loss of income up to October 1999. He may not claim for loss of income up to the time of the trial in view of his ‘duty’ to mitigate his loss. He has also quite sensibly not sought reinstatement now because if he is reinstated he will necessarily incur some costs to restart his billiard saloon. But I expect that the defendant, on the basis of this judgment, will react by serving on the plaintiff a one month’s notice to quit. So it will be a shortlived reinstatement which may not be worth the expense.

The plaintiff claims loss of income of $80 per working day for six working days a week from 1 February 1999 to October 1999. He said that the arrangement he made with the employee he had employed since the beginning of December 1998 to 1 February 1999 to look after his business was that his employee would give him $80 per day for six working days of the week from the takings from people playing billiard in his saloon. Any money above $80 per day belonged to the employee. However during the public holidays like the Easter holidays the billiard saloon was closed. Thus the plaintiff was earning about $480 a week or $1920 a month from his billiard saloon at the time it was closed down by the defendant on 1 February 1999 except when the billiard saloon was closed on some of the public holidays like the Easter holidays.

In terms of his monthly operating expenses, the plaintiff said he spent $15 on electricity, $200 on other miscellaneous expenses, and $300 on rent. He also gave $50 to his employee every Saturday plus $40 for his toonai (food for Sunday lunch). In total the plaintiff’s monthly expenses were about $875. Thus his net income per month was about $1045. For the nine months from February to October 1999 that the plaintiff is claiming that will be $9405, but for the five months from February to June that will be $5225.

In terms of the principle of mitigation, a ‘duty’ is imposed on the plaintiff to take all reasonable steps to mitigate the loss which was consequent upon the wrong committed by the defendant, and the plaintiff will be debarred from claiming any part of the loss which is due to his neglect to take such steps. I have come to the view that the plaintiff should have mitigated his loss by returning to the premises that was the subject of the tenancy when he was advised by the defendant by letter of 26 June 1999 to return to the premises. By not doing so, he neglected to take reasonable steps to mitigate his loss and in principle he is therefore debarred from claiming loss of income after June 1999. I am not aware of any law that is applicable in Samoa which would have prevented the plaintiff from claiming loss of income from 1 February to the date he received the defendant’s letter of 26 June 1999 if he had re-entered the premises at the end of June and resumed his billiard saloon. In other words the plaintiff could have resumed his business and claimed for loss of income. He would thereby have mitigated his loss.

Counsel for the defendant also submitted that the plaintiff could have mitigated his loss by applying to the Court to enforce the injunction. I do not accept this submission because the parties had been in negotiations from February to June and one can understand the plaintiff’s position in holding back pending the outcome of those negotiations. It was also equally open to the defendant to move to discharge the ex parte injunction and then bring the tenancy to an end by serving a one month’s notice of termination.

I have also decided to deduct $240 for three days income for the public holidays during the period February to June when the plaintiff’s billiard saloon would have been closed.

In all the circumstances I have decided to award the plaintiff under its claim for loss of income the sum of $5225 being his net loss of income for the months February to June less $240 for public holidays when the plaintiff’s billiard saloon would have been closed. The final award under this part of the claim is therefore $4,985.

In the second part of his claim for damages, the plaintiff claims NZ$3250 for the cost of a second-hand replacement billiard table he has purchased from New Zealand, NZ$470 for transportation and freight from New Zealand and $400 tala for duty. In his oral testimony, the plaintiff said that it was when he visited the shop he had rented for his billiard saloon on 6 February 1999 that he found his billiard table had been shifted out and placed at another place in the market which was not safe as it was readily accessible to people who come to the market. He then took a tarpaulin and covered his billiard table with it. The billiard table was not damaged at that time. Then on 24 February when he visited the shop again after serving the injunction on the defendant, someone told him that the cloth of the billiard table had been torn and all the pockets had been removed. The cost of the cloth was $450 and the labour costs for repairing the cloth would have been $400. The cost of the pockets was $12.50 per bundle. The billiard table continued to be left where it was. Early the following year when the Court first dealt with the trial of this matter, the billiard table was still at the same place at the market and its cushions and legs had all been removed. The billiard table is still at the same place at the market up to now but it has been damaged beyond repair.

The question is whether in the circumstances the plaintiff took all reasonable steps to mitigate the loss consequent on the wrong committed by the defendant. If not, then he will be debarred from claiming any part of the damage which was due to his neglect to take such steps. In my view, the plaintiff is entitled to claim the cost of the torn cloth of his billiard table together with the cost of labour for replacing it as well as the cost of the stolen pockets without any reduction. He only found out on 6 February that his billiard table had been shifted out of the shop. He must have thought once he got the ex parte injunction his counsel was working on, he would be allowed back in by the defendant. However that was not to be so, The defendant was not willing to allow the plaintiff back into the shop. The plaintiff’s counsel then entered into negotiations with the defendant. I think the plaintiff should have been aware by then that it would not be easy for him to go back to the shop. He was also aware that where his billiard table had been shifted to at the market was unsafe. The damage to the cloth and the removal of the pockets which was reported to him on 24 February should have confirmed that to him beyond doubt. However, all that he did was to cover his billiard table with a tarpaulin when he should have removed it to a place of safety. When the plaintiff was advised by letter of 26 June 1999 to return to the shop he refused unless he was first paid for loss of income for the months he had been kept out of the shop. Nothing further was done by the plaintiff to protect his billiard table which was still at the same unsafe place where it had been shifted to. Up to the time the Court first dealt with the trial of this case in early 2000 the billiard table was still at the same place. By that time someone had removed all the legs and cushions of the billiard table and it was damaged beyond repair. In fact up to now the billiard table is still lying at the same place at the market. The plaintiff, in my view, had failed to take all reasonable steps to mitigate his loss by removing his billiard table to a place where it would be safe. The damage to his billiard table which occurred due to his neglect to take reasonable steps to protect its safety are not recoverable by reason of the principle of mitigation.

In Drane v Evangelou [1978] 2 A11 ER 437 whose facts bear similarities to the facts of this case, the tenant who had been unlawfully evicted by the landlord removed his belongings which the landlord had shifted out of the leased house into the backyard and took them to a garage owned by a friend where they were safely stored pending the outcome of Court proceedings to restore him to the house. The landlord in that case remained defiant and refused to allow the tenant back into the leased house despite an injunction the tenant’s lawyers had obtained. However, at that time the tenant’s belongings were already safely stored away in a friend’s garage so that when the tenant was subsequently reinstated in the leased house, his belongings stored in the garage of his friend were still safe. I think if the plaintiff in this case had acted in the same way, his billiard table would not have been damaged beyond repair.

In all the circumstances, I will award only $850 to the plaintiff for the cost of the cloth of the billiard table and the cost of labour plus $12.50 for the cost of the pockets. I make no further award on this part of the plaintiff’s claim for damages.

As for the defendant’s counterclaim of $2,700 for loss of rent from February to October 1999, that must be rejected. The rent for the months of February to June have already been deducted from the amount awarded to the plaintiff. For the month of October the defendant had relet the shop to a new tenant notwithstanding that the injunction was still in force. I am not prepared in the circumstances to make any award for loss of rent for the months of July, August and September. The defendant was partly responsible for its loss of rent for those three months by refusing to pay the plaintiff’s claim for loss of income when asked by the plaintiff to do so before he would move back into the shop. In other words the defendant itself did not take reasonable steps to mitigate the loss on its part by paying the plaintiff’s claim for loss of income so that the plaintiff could return to the premises and continued to pay rent for the months of July to September.

I regret that there has been some repetition in this case. But that has been unavoidable because of the nature of the issues in this case and the way the case was presented by both parties.

All in all then, the plaintiff is awarded total damages in the sum of $6,087.50 for loss of income, costs of the damaged cloth of his billiard table and labour, and lost pockets of the billiard table. In all the circumstances of this case, I will award costs of $2,000 to the plaintiff plus any reasonable disbursements to be fixed by the Registrar.

In view of the present circumstances between the plaintiff and the defendant, I consider the injunction granted in 1999 should now be discharged. It is accordingly discharged.

CHIEF JUSTICE

Solicitors:
Fepuleari & Schuster Law Firm for plaintiff
Kruse, Enari & Barlow Law Firm for defendant