Stanley v Vito [2004] WSSC 18 (1 July 2004)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

HINI TOFILAU STANLEY
of Saleimoa, Minister of Religion
and
ALOFISA STANLEY
his wife.
Plaintiff

AND:

FUIMAONO LAFAELE VITO
of Togafuafua, Businessman.
First Defendant

AND

LAFAELE VITO & SONS LIMITED
A duly incorporated company having its Office in Apia.
Second Defendant

Counsel: Ms F Vaai-Hoglund for the Plaintiff
Mr S Toailoa for Defendants

Decision: 1 July 2004

DECISION OF VAAI J

The plaintiffs are the registered proprietors of a piece of land at Maluafou near Apia upon which the first defendant, (a brother in law of the first named plaintiff) with the permission and consent of the plaintiffs constructed a dwelling house and operated a supermarket and petrol station. The second defendant is the family company of the first defendant which operated the supermarket and the petrol station. No rent was payable and the plaintiffs claim that the defendants were to vacate the land after seven years; but since the defendants have refused to vacate after seven years the plaintiffs seek an order to evict the defendants and removal of all buildings erected on the land.

The defendants do not deny constructing a dwelling house and other buildings on the land to accommodate a supermarket and petrol station. But they say they moved on to the land for an indefinite period at the instigation of the plaintiffs who not only wanted the defendants to develop the land but to construct a two storey residential home for the plaintiffs as well which they did. Having regard to the nature of the developments and the substantial costs to be incurred it was never agreed to that the defendants shall only occupy the land for seven years. And since the plaintiffs have demanded the defendants to vacate, the defendants counterclaim against the plaintiffs the sum of $1,624,000 for the unjust enrichment of the plaintiffs by the efforts of the defendants when the defendants filled and reclaimed the land, constructed several buildings and other improvements resulting in the increase in the value of the land. The defendants also counter claims that the defendants should occupy the land until the plaintiffs who have been unjustly enriched has paid to the defendants the value of the enrichment.

In response to the defendant’s statement of defence and counterclaim the plaintiffs filed a statement of defence to the counterclaim and a counterclaim to the counterclaim. It is this counterclaim by the plaintiff which the defendants say should be struck out on the grounds that it discloses no cause of action, and it is an abuse of process. Briefly the plaintiff’s cause of action in the counterclaim relates to a separate piece of land at Togafuafua which was conveyed by way of gift by the first named plaintiff to the wife of the first defendant to enable the defendants to borrow money on security from financial institutions. On the same date the conveyance was executed a trust agreement was also signed by the first defendant and his wife to hold the land for the benefit of the children of the plaintiffs and the defendant. But the plaintiffs now say that since the defendant's business operations are beyond redemption resulting in the loss of the property at Togafuafua through a mortgagee's sale, the plaintiffs therefore have therefore suffered loss while at the same time the defendants have been unjustly enriched.

The counterclaim is expressed in four paragraphs:

(9) That the business operation of the defendants is under severe financial difficulties and beyond redemption with total loan debts around $900,000 resulting in the property at Togafuafua being sold by mortgagee sale.

(10) That the sale of the Togafuafua property will mean a property loss by the plaintiffs and the Trust obligations by the first defendant’s wife in consideration of the plaintiff Hini Stanley transferring his interest to her for the defendants businesses cannot be honoured.

(11) That the loss of the Togafuafua land by a mortgagee sale is a substantial property loss for the plaintiffs which is a direct consequence of the business operations by the defendants and resulting in a loss of opportunity or opportunity costs of approximately $600,000.

(12) That the total loss for the plaintiffs which is a gain for and unjust enrichment of the defendants contributing to their wealth and offsetting their debts is $1,200,000.

The law concerning the power of the court to strike out has been correctly stated by both counsels in their well prepared written submissions. For present purposes I disregard the affidavits filed and assume that the facts pleaded in the plaintiffs counterclaim are true which can be reworded as follows:

9. The Togafuafua property was sold by mortgagee’s sale to pay the defendant’s loans.
   
10. The plaintiff Hini Stanley transferred his interest in the Togafuafua land to the first defendant’s wife on trust but because the land is lost through a mortgagee’s sale, the first defendant’s wife cannot honour her obligations under the trust.
    
11. The loss of the Togafuafua property is a financial loss to the plaintiffs of approximately $600,000.
    
12. The loss of the Togafuafua property which the defendants have used as security for years to their benefit and to offset their debts by $600,000 is a financial gain or enrichment for the defendants by $1,200,000.
    

If paragraphs 9 and 10 are correct then the plaintiff’s claim is really directed at the wife of the first defendant who is not a party to these proceedings. The allegation levelled at the wife of the first defendant is that contrary to her obligations under a trust she has mortgaged the land thus frustrating her ability to fulfil her trust obligations when the land was sold through a mortgagee’s sale. Perhaps the allegations in paragraphs 9 and 10 can be the subject of separate proceedings against the wife of the first defendant but since the allegations are not levelled at the defendants the allegations and the remaining allegations in paragraphs 11 and 112 of the plaintiffs counterclaim must fail as they do not disclose a cause of action against the defendants. The plaintiff’s counterclaim is accordingly struck out.

I reserve the question of costs until the hearing of the claim and the defendants counterclaim.

JUSTICE VAAI