Yan Kun v Ah Ben [2006] WSSC 53 (29 September 2006)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

PALOTA YAN KUN
of Apia, Manager.
Plaintiff

AND

CHRISTOPHER AH BEN a.k.a B.J AH BEN
of Alafua, Self Employed.
Defendant

AND

CEDO CHAN BOON
of Vaimea, Shop Assistant
Third Party

Counsels: Ms M.V. Peteru for Plaintiff
Mr K Drake for Defendant
Mr S Tuala for 3rd Party

Hearing: 27 April 2005
Judgment: 29 September 2006

DECISION OF VAAI J

The plaintiff is the operator of a car rental business under the title Sunrise Rental. On the 15th August 2003 the plaintiff hired to the defendant a 1995 sidekick Suzuki for one day at $140 for the day. Later in the evening the car was taken for a drive by the sister in law of the defendant with the consent of the defendant and with full knowledge that the sister in law was not licensed, due to her young age, to drive a motor vehicle. She met up with her boyfriend and after attending a movie they decided to drive to the Faleolo airport. On their return trip to town the sister in law requested the boyfriend to drive; he drove but he too was not licensed to drive a motor vehicle also due to his young age. During the trip the car rolled, was severely damaged and considered a write off. The accident was attributed solely to the manner of driving by the boyfriend. The plaintiff demanded the defendant as bailee of the motor vehicle to be responsible for the costs of a replacement vehicle, loss of earnings, general and exemplary damages and reasonable legal costs. The defendant denied responsibility and sought an order to join the boyfriend as the driver who crashed the vehicle to be joined as third party. Although the intended third party initially opposed the application counsel for the third party subsequently consented and the driver was jointed as third party.

The claim against the defendant and breach of rental agreement

The thrust of the claim against the defendant is negligence; a claim which on the undisputed facts the defendant had difficulty in defending. As the transaction was one of bailment, the common law prima facie presumption of negligence against the defendant as bailee arises from the fact that the accident which caused damage to the vehicle occurred during the time the vehicle was rented to the bailee: Fawcett v Smethurst (1914) 84 LJKB 473. The common law imposes on the bailee an obligation to take reasonable care of the motor vehicle; he is not liable for loss or damage to the vehicle unless it is caused by his negligence or that of his agent or servant so that the common law prima facie presumption of negligence can be displaced if the bailee can show that the mishap occurred without his negligence: Bullen v Swan Electric Engraving Co. (1907) 23 TLR 258; Avis Rent A Car v Mainzeal Group Ltd (1995) 3 NZLR 357; Coldman v Hill (1918-1919) All ER 434. On the 15th August 2003 about two hours after the defendant took possession of the vehicle from the plaintiff under the rental agreement he authorised and allowed a young person, his sister in law, too young to obtain a driver’s licence and had no drivers licence to drive away the car unaccompanied. I accept from her affidavit and oral evidence that she asked and obtained permission from the defendant to take the car for the night; evidence which tantamounts to a deliberate violation by the defendant of his obligation as bailee to take reasonable care and which warrants a conclusion of gross negligence on the part of the defendant. The accident later that night which resulted in severe damage to the vehicle flowed directly from his negligence and he must bear the consequences. On this essential issue the line of defence pursued and the resulting submissions which followed were totally misdirected and neglected to address the real issue. Which also explained why the negotiations initiated by the plaintiff to resolve and settle the matter between the parties to avoid costly court action were frustrated; the expense and complication contributed to by counsel for the third party consenting to the application by the defendant to join the driver of the vehicle as third party. The third party application was based on a sworn affidavit by the defendant that the intended third party unlawfully took the car from the defendant’s home while the defendant was asleep; an allegation which was deliberately and blatantly false and which the defendant rectified in his oral testimony.

The Third Party

For very obvious reasons the defendant had no desire to join his sister in law as third party and opted to join a 16 year old instead. Against the third party the defendant contended that the third party drove the car without the defendant’s permission and is therefore liable in conversion. Counsel referred to a decision of Tipping J in Wilson v New Brighton Panelbeaters Ltd (1989) 1 NZLR 741 where at page 77 he quotes from Salmond and Henston on Torts (19th ed, 1987) at page 110:

"Every person is guilty of a conversion who, without lawful justification, takes a chattel out of the possession of anyone else with the intention of exercising a permanent or temporary dominion over it, because the owner is entitled to the use of it at all times".

Counsel also cited from The Law of Torts in N-Z 3rd edition Todd 2001 at page 570 – 571:

"... the defendant must intend to do the act which constitutes the denial of the plaintiff’s rights. The defendant’s intention is taken to include the actual and probable consequences of those actions which are intended in fact, although such consequences may have been unintended and even undesired. However, once this intent is established liability is generally strict and conversion may be committed, with no moral fault or dishonest intention on the part of the defendant.

But the two passages cited cannot assist the defendant; it could not be said that the third party took the vehicle; it could not be claimed the third party converted the motor vehicle when he drove from the airport towards the town area where both the plaintiff and defendant were living; it could not be argued that the third party unlawfully denied the defendant’s right to the motor vehicle; and it could not be argued that the third party exercised some temporary dominion over the vehicle in a manner inconsistent with the defendant’s right to possess or the plaintiff’s right to ownership. The third party drove the motor vehicle at the request of the person whom the defendant had authorised to take the car. Conversion requires dealing with a chattel in a manner inconsistent with the owner’s right and with an intention in so doing to deny that right or to assert an inconsistent right: Cuff v Broadlands Finance Ltd [1987] NZCA 93; (1987) 2 NZLR 343. A mere taking without any intention to exercise dominion over the chattel is not conversion. A simple asportation of a chattel, without any intention of making any further use of it, although it may be sufficient foundation for an action of trespass, is not sufficient to establish conversion: Foulds v Willoughby (1841) 8 M & W540 cited with approval by McGregor J in Aitken Agencies Ltd v Richardson (1967) NZLR 65

The Rental Agreement

The written rental agreement consists of two pages; the front page signed by the defendant list the names and addresses of parties, description of vehicle, rental rates and other standard informations whilst the back page set out the terms and conditions of hire. But the terms and conditions were not acknowledged in writing by the defendant because he said he was not made aware of them and as a consequence he did not sign in the space provided for the customer’s signature. This part of his evidence is supported by the testimony of Ani Aaati the daughter of the plaintiff who filled out the rental agreement before the defendant signed on the front page.

The terms and conditions on the back page of the agreement are not binding on the defendant who was not aware of them or brought to his notice. This finding however cannot exonerate the defendant from liability for failure to comply with his common law obligation.

Assessment of Damages

The plaintiff seeks $34,000 for the replacement value together with freight and taxes. The plaintiff’s is entitled to damages for the loss of the vehicle but she cannot claim the full purchase price she paid in 2002 for the vehicle she used in her rental business for more than 12 months because at the time the vehicle was damaged it has considerably depreciated in value. It will cost $25,000 to do the necessary repairs to return the vehicle to pre accident value and after deducting $5,000 for the cost of the wrecked vehicle the plaintiff is entitled to $20,000 under this head.

As to loss of earnings the plaintiff is entitled to recover her losses provided there is evidence to support. At the same time she is obliged to mitigate her losses. Under this head she claims $140 a day from the date of the accident to the date of judgment. Whilst I accept she is entitled to recover losses, I cannot under no circumstances accept that she is entitled to the amount she claimed. When she said the vehicle was rented out every day lacks credibility; unsupported by any documentary evidence and is contradicted by the evidence of her own daughter who told the court the vehicle was rented out most of the time. There are only 4 cars in the rental fleet and production of documentary evidence should not have posed difficulties. But even in the absence of evidence as to loss of earnings she would still be entitled to some general damages for the absence of the car from her fleet; she was deprived the use of the vehicle. However as I have earlier indicated proof of earnings for a car in a fleet of 4 should not have posed problems for the plaintiff. In assessing loss of earnings I consider 10 weeks as reasonable time for the plaintiff to obtain a replacement vehicle and accordingly I will consider loss of earnings for a period of 10 weeks. At $140 a day the vehicle if rented every day for 10 weeks will bring in earnings of $9,880. Against this gross earnings there should be deductions to account for the periods when the vehicle is not utilised for hire and when it is put aside for maintenance. In the absence of evidence I consider a deduction of 40 % as reasonable and under this head award $5,880 for loss of earnings.

Costs

In awarding costs against the defendant, I consider that the third party is not entitled to the same quantum of costs to be awarded to the plaintiff for the reasons reflected in my judgment. The plaintiff is awarded costs of $2,000. The third party is awarded cost of $600.

Judgment

1. The defendant’s claim against the third party is dismissed.
2. The defendant is ordered to pay to the plaintiff damages as follows:
   1. Cost of Vehicle $20,000
   2. Loss of Earnings 5,880

$25,880

3. The defendant is ordered to pay costs of:
   1. $2,000 to the plaintiff
   2. $600 to the third party
      

VAAI J