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Ah Liki Construction Ltd v Island Ventures Ltd [2012] WSSC 125 (31 October 2012)

SUPREME COURT OF SAMOA

Ah Liki Construction Ltd v Island Ventures Ltd & Anor[2012] WSSC 125


Case name: Police v Ah Liki Construction Limited v Island Ventures Limited and Fatu Seti

Citation: [2012] WSSC 125

Decision date: 31 October 2012

Parties: AH LIKI CONSTRUCTION LIMITED, a duly incorporated company having its registered office at Apia (Plaintiff) and ISLAND VENTURES LIMITED, a duly incorporated company having its registered office at Manono-uta (First Defendant) and FATU SETI, of Manono-uta, Company Employee (Second Defendant)

Hearing date(s): 3 – 6 September 2012

File number(s):

Jurisdiction: CIVIL

Place of delivery: MULINUU

Judge(s): JUSTICE SLICER

On appeal from:

Order:

Representation:
S Leung Wai for plaintiff
R Drake for first and second defendants

Catchwords:

Words and phrases:

Legislation cited:
Civil Law (Wrongs) Act 2002 ACT
Contributory Negligence Act 1964, s.3
Road Traffic Ordinance 1960 ss. 30, 31, 36

Cases cited:
Attorney General Reference (No. 3 of 1979) (1979) 69 Cr. App. R 411
R v Kelsey [1981] 74 Cr. App. R 213
R v Van Beilen [1972] 6 SASR 534
R v Da Silva (1990) 1 All E R 29
Deloitte, Haskins and Sells v National Mutual Life Nominees (1991) 3 NZBCC 102, 259; [1993] AC 74
Kuwait Airways Corporation v Iraqi Airways Co. [2002] UKHL 19; [2002] 2 AC 883
Environment Agency v Empress Car Co. Ltd [1997] 2 AC 22
Chappel v Hart [1998] 195 CLR 232
March v Stramare [1991] HCA 12; [1991] 171 CLR 506
Roe v Minister for Health [1954] EWCA Civ 7; [1954] 2 QB 66
Travel Compensation Fund v Tambree [2005] HCA 69; [2005] 224 CLR 627
Pleadge v RTA [2004] HCA 13; [2004] 78 ALJR 572
Cattanach v Melchoir [2003] HCA 51; [2003] 215 CLR 317
Tame v NSW [2002] HCA 35; (2002) 211 CLR 317
Fairchild v Glenhaven Funeral Services Ltd [2002] 1 AC 32
Corporation of the Presiding Bishop of Jesus Christ of Latter Day Saints v McLean [2006] WSSC 10
Donoghue v Stevenson [1932] AC 562
Ans v London Borough of Merton [1977] UKHL 4; [1978] AC 728
Scott Group Ltd v McFarlane [1977] NZCA 8; [1978] 1 NZLR 553
Sutherland Shore Council v Heyman [1985] HCA 41; (1985) 157 CLR 424
Caparo Industries plc v Dickman (1990) AC 605
South Pacific Manufacturing Co Ltd v New Zealand Security Consultants and Investigations Ltd [1992] 2 NZLR 282
Connell v Odlum [1993] 2 NZLR 257
Lesatele v Board of Trustees of the Methodist Church [2002] WSSC 7
Poulous v Samoa Rugby Union Incorporation [2011] WSSC 86
Morris v West Hartlepool Steam Navigation Co. Ltd 1956 AC 552
Yango Pasotral Co. Pty Ltd v First Chicago Australia Ltd [1978] HCA 42; (1978) 21 ALR 585

Summary of decision:


IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU
BETWEEN
AH LIKI CONSTRUCTION LIMITED, a duly incorporated company having its regsitered office at Apia
Plaintiff
AND
ISLAND VENTURES LIMITED, a duly incorporated company having its registered office at Manono-uta
First Defendant
AND
FATU SETI, of Manono-uta, Company Employee
Second Defendant


Counsel: S Leung Wai for plaintiff

R Drake for first and second defendants

Hearing: 3 – 6 September 2012

Written Submissions: 11 and 12 October 2012

Judgment: 31 October 2012


JUDGMENT OF SLICER J

  1. The plaintiff, Ah Liki Construction Limited (“Ah Liki Construction”) is a subsidiary or associated with the Ah Liki group of corporations. As its name suggests, it is primarily concerned with the construction and renovation industry. Its managing director is Andrew Ah Liki (“Andrew”) and its operations manager is his son, Leonardo.
  2. The first defendant, Island Ventures Limited (“Island Ventures”) is owned and managed by Soraya May (“Soraya”) and the second defendant, Fatu Seti (“Fatu”) is employed by Island Ventures as a maintenance and tourist liaison worker.
  3. At a casual luncheon during Christmas 2010, Andrew and Soraya met and had an informal discussion about her plans for the future of Le Vasa Resort (“the resort”). In August 2010, Soraya had engaged a consultant to prepare a ‘concept plan’ which would assist in defining the future development, and the report was prepared in the same month. The Christmas conversation was in general terms, but Andrew raised a suggestion which he described as a ‘win/win’ outcome and suggested further consideration and discussion. Ah Liki Construction needed sand for its operations and it possessed the skills and equipment to help this development, at little cost to Island Ventures, and would receive a supply of sand for its own operations. He suggested that Soraya obtain a ‘sand permit’ and the two agreed to meet in early 2011.
  4. On 5 January, Soraya and Fatu met with Andrew at his office. She brought with her the August concept plan, and the three discussed the project. Soraya had obtained a ‘sand permit’, and after the meeting made some notes on her copy setting out her understanding of the agreement reached.
  5. At trial, Andrew and Soraya disagreed as to the terms of the agreement reached; a matter which will be later considered. After the meeting, Soraya wrote some notes at the bottom of the concept plan and later set out in typed form her considered terms of the agreement, which she wished to present to Andrew for confirmation and signature. Unfortunately, she was unable to make contact with Andrew and he never saw the ‘non contemporaneous’ terms. It differs in some respects from the document on which her first notes were made, and the Court is unable to accept the second document as one which would assist the Court other than to state her intention. The written one was made almost immediately after the January meeting and can be regarded as akin to a contemporaneous document since it was brought into existence while the facts were still fresh in the witness’ memory (Attorney General Reference No. 3 of 1979 (1979) 69 Cr. App. R 411, R v Kelsey [1981] 74 Cr. App. R 213, R v Van Beilen [1972] 6 SASR 534). The Rule has been modified giving a court discretion to permit the witness who has began to give evidence to refresh his or her memory made near the time of the events in issue (R v Da Silva (1990) 1 All E R 29) but the modification to the second document has requirements which would preclude or lessen the import of such a document, and is not evidence of a concluded agreement.
  6. Both the original and the modified documents were received into evidence but the Court will give the second little weight since:
  7. Andrew Ah Liki is uncertain that the marking ½ m was his but does not deny it. He denied adding the figure of $20 to the plan.
  8. The document is annexed to this judgment to assist in following the evidence to be later considered. The notes at the bottom were made by Soraya soon after the event. The Court accepts, on the balance of probability, that the notations of ½ m and $20 were made by Andrew and the remaining notations 1 – 5 and ‘top up sand’ were made by Soraya.
  9. It was common ground between the parties that the agreement, at least, that:

(1) Work would be carried out by the plaintiff at no cost, in exchange for a supply of sand;

(2) Island Ventures would be responsible for the supply of rocks necessary for the foundation and would provide food and accommodation for the operator of the machinery;

(3) Soraya did not wish for trucks and excavators mining or removing of the sand through the resort area as it was likely to cause damage and interfere with normal operations; and

(4) It was necessary to build and extend a rock based causeway along the south east section of the resort and to wide parts of the existing rock area. The road described on the plan called the main west coast is called such because traffic travels in a westerly direction although on a different map it is described as the main south coast road.

  1. On other matters the parties differed, although they agreed it to be likely that further works would be undertaken. An aerial photograph prepared for the plaintiff shows where large offshore sandbanks were located. It will be later considered.
  2. The excavator was delivered to the resort together with its operator Lafi Laulau (“Lafi”) and spoke with Andrew about the work to be done. Fatu was not present at that discussion until the end of the instructions. Rocks were delivered to an area north of the filler pond and Lafi commenced the building of the causeway base, on 28 January and arrived on that day, in accordance with Andrew’s instructions. Further rocks were delayed by nearby villagers who refused to allow vehicle movements until money and/or more money was paid to them or the village. They did so because recent rains had softened their roadways and extensive use by heavy trucks would cause damage to those roadways. Work was stopped on the causeway, and the excavator was left unused. Lafi asked Fatu if there was any other work which the excavator could undertake. Fatu, after consultation with Soraya, decided or agreed to direct Lafi to take the excavator to the north west beach and to deepen the area along the area shown as ‘white sand’. Fatu and Lafi first walked the beach, both using sticks to test the depth of the silt or mud, and its extent. It appears that Lafi had a younger companion, not an employee of Ah Liki Construction, who had accompanied him to the site. Such is not uncommon as the younger could make tea, fetch and carry and provide companionship. It is likely that the youth walked the beach with the two men. Also present on the beach were a number of employees of Island Ventures who were cleaning debris and other items from it.
  3. After testing the beach and low water areas, the two men returned to the excavator parked in the vicinity of the ‘causeway’. The tide was out or at least on the ebb. According to Leonardo, at 6 p.m. ‘it wasn’t full high tide. I think it was half way through high tide’. Fatu walked alongside the machine and guided it through the resort buildings, one of which is shown as a bar. Lafi drove the vehicle onto the firm sand area and onto the silted area.
  4. The evidence was that the excavator had a ‘bucket reach’ of some 15 meters in an extended or downward motion. It was able to move the operator’s cabin, arm and bucket in a rotating movement while the tracks remained in the same position. The tracks could move both forwards or backwards and the vehicle turned by use of one track operating in a manner different from its opposite.
  5. The excavator lost traction and began to sink into the silt/sand portion. Its tracks increased the viscosity of the surface and, absent a firm foundation, sank deeper. Lafi rotated the cabin and bucket arm of the machine attempting to use the bucket as a means of providing a fixed point and using it as a device to clear the silt beneath it and then to move the machine back onto firm ground where the tracks could further move it back onto the firm sand. Despite repeated attempts, he was unsuccessful. Eventually, he used Fatu’s mobile phone to ring his father, an experienced operator, also employed by the plaintiff, but engaged at a different site. It was the father who, over a period of time, had taught Lafi his skills in driving such a complex machine. He provided Lafi with advice and immediately rushed to the scene. Leonardo was advised of the problem and promptly organised company employees and equipment to be taken to the scene. The transportation of two heavy excavators carried on a large specialised vehicle was not a quick or easy task. Attempts of retrieval will later be described in detail.
  6. Despite all attempts, which continued until 2 a.m. the following morning, the excavator could not be retrieved until the following day by which time, given the intervening high tide, much of its electronic and computer systems had been destroyed or rendered inoperable.
  7. The plaintiff claims compensation for the loss of its vehicle.

The Pleadings

  1. The plaintiff seeks remedy in the tort of negligence and contract. Central to the plea of negligence is the allegation that Fatu, as an employee of Island Ventures:

(1)(a) “...instructed Lafi Laulau the operator of the Excavator (the “Operator”) to move the Excavator away from the beach area it was excavating to the other side of the beach.

(b) “...to excavate the area of the beach front in the vicinity of the wharf.”

(2)(a) “...told the Operator the ground in that vicinity was solid and safe for the Excavator to proceed to this area.

(b) “...walked alongside the Excavator while it was being driven towards the area the Second Defendant wanted to be excavated.”

  1. The particulars of negligence are stated in paragraph 15 as:

“The First Defendant by its employer or agent the Second Defendant and Second Defendant were negligent in that the Second Defendant:

(i) instructed the Operator to proceed to an area of the beach which was not safe or he ought to have known was not safe for the Excavator to go onto;
(ii) failed to warn the Operator to stop or not to proceed onto the said area;
(iii) failed to instruct or direct the Operator not to proceed onto the said area;
(iv) failed to take any or any adequate precaution to ensure the Excavator did not proceed onto the said area; or
(v) failed to take any or any adequate precaution to provide for the safety of the Excavator or to ensure it is not damaged;
(vi) failed to properly instruct the Operator on which area of the beach it was safe to proceed.”
  1. It claims the sum of NZD$75,000 as the replacement cost of the vehicle and lost income for 20 days assessed as WST$24,000.
  2. The defendants denied the allegations but admitted that the operator, absent the supply of rocks, had asked Fatu if there was any further work to be done but alleged that Lafi had failed to heed Fatu’s caution to stay on the solid part of the beach, and chose to drive further onto the soft area. That plea included the contention that the operator was inexperienced and unlicensed which led him to the conclusion that he could safely proceed further into the bay. The defendants further pleaded that there was an unreasonable delay in the plaintiff’s response to the retrieval of the machine.
  3. At the behest of the Court, both parties amended their pleadings to include mutual claims of contributory negligence.
  4. The second basis of the plaintiff’s claim was in contract. It pleaded the agreement made in January 2011, and that the defendants had breached the implied and/or expressed terms of the contract in that:

“(i) The Excavator will carry out the excavation works on areas of the beach that are safe and will not cause damage to the Excavator.

(ii) The Excavation works will be carried out under the control and supervision of the Plaintiff.

(iii) The excavation works will only be carried out on the areas agreed to between the parties.”

  1. Those matters were denied.
  2. The defendants, in turn, claimed remedy for damage to its resort caused in the retrieval of the excavator and its provision of food and beverages for the plaintiff’s employees engaged in the retrieval operation. In its counterclaim it essentially reversed the plaintiff’s claim of negligence and further pleaded delay in the retrieval process. It added that there was a lack of care for the protection of its property in the operation.
  3. Its pleadings relevantly stated:

“That the loss allegedly suffered by the Plaintiff was caused by the Plaintiff’s own negligence in that:-

(i) the Plaintiff failed to respond within a reasonable time frame to the emergency situation that had arisen when notified;
(ii) the Plaintiff’s employees who arrived about 4 or 5 hours later arrived without any equipment to assist in freeing the excavator;
(iii) the Plaintiff’s employees did nothing for at least an hour after arriving before they went over to the excavator and covered the muffler by which time it was nearly high tide;
(iv) the Plaintiff failed to take precautionary measures to protect the computer and internal parts of the excavator;
(v) the two excavators that came to extricate the excavator that got stuck did not arrive until between 7 p.m. and 8 p.m., some 10 hours since the incident occurred and was notified to the Plaintiff;
(vi) during the process of extricating the excavator, its motor became submerged in the sea thus making it difficult to remove the excavator that night;
(vii) the Plaintiff’s machine operator was young, inexperienced and unlicensed;
(viii) the Plaintiff’s machine operator failed to heed the Second Defendant’s caution to keep on the solid part of the beach;
(ix) the Plaintiff’s machine operator on his own violation drove the excavator towards the sea where the sand was soft;
(x) the Plaintiff’s machine operator failed to heed the Second Defendant’s caution to stop and come back to the solid part of the sand.”

and as to the damage:

“That when the Plaintiff’s machines and motor vehicles came on to the First Defendant’s property to free up the excavator, they negligently drove all over the First Defendant’s property and thus caused and left behind a lot of damage to the First Defendant’s property:-

Causation

  1. It is first necessary to determine the legal principle of causation, consider the facts giving rise to the event or result and apply those principle to the facts as found by the Court.
  2. A defendant who is in breach of a duty in tort cannot be held responsible for loss suffered by the plaintiff unless the defendant’s conduct was the cause of that loss. There are three commencing propositions, which must be distinguished:

(1) Whether the defendant’s conduct was a cause, in fact, of the plaintiff’s loss;

(2) If a casual link in a strictly objective sense is shown it is necessary to consider whether the conduct can be seen as a cause in law. It is not enough that the conduct constitutes a historic condition for the harm to happen. This distinction is often referred to as the difference between ‘causa sine qua non’ and a causa causans; and

(3) Proximity between the cause and the damage i.e. the remoteness of the damage.

(See generally: Hart and Honore’s Causation in the Law (2 Ed.) Oxford Press, 1985).

  1. In Deloitte, Haskins and Sells v National Mutual Life Nominees (1991) 3 NZBCC 102, 259 (upheld by the Privy Council as reported in [1993] AC 74) McGechan J, speaking for the Court of Appeal, stated that the question is whether there was causation in fact with a ‘but for’ test (Kuwait Airways Corporation v Iraqi Airways Co. [2002] UKHL 19; [2002] 2 AC 883) of a character which the law, as a further matter of policy will recognise. He observed that whether one starts with a ‘but for’ question and then looks for a policy (remoteness) limitation or starts further along the line with a ‘real and effective cause’ question looking back to ‘but for’ aspects and then onward to policy (remoteness) one will often one will end up at the same point.
  2. An example is that of any responsibility on the part of the village. Had the villagers not prevented the continued passage of the rocks there would have been no need for Lafi to ask whether there was any fresh work for the excavator as he would have continued with the causeway work without danger. Had he not have asked for an alternate task, Fatu would not have suggested work on the white sand beach, and the excavator would not be damaged. Yet cause in law and/or ‘remoteness’ would protect the villagers from liability.
  3. The plaintiff has the onus of proving legal causation, Lord Hoffman suggested new terminology such as ‘the relevant rule of responsibility’ in Environment Agency v Empress Car Co. Ltd [1997] 2 AC 22, a view shared by Gummow J of the High Court of Australia in Chappel v Hart [1998] 195 CLR 232. Lord Hoffman was concerned that the law of causation has become overcomplicated by attempts to over theorize its application but warned against unfocussed commonsense notions and not be oversimplified.
  4. The High Court of Australia provided the relevant jurisprudence on the issue in March v Stramare [1991] HCA 12; [1991] 171 CLR 506. Mason CJ stated three propositions:

“(1) The division of the issue of causation into these two specific questions placed too much weight on the ‘but for’ test of causation to the exclusion of the commonsense approach that the common law has always favoured.

(2) They implied that value judgments had no part to play in resolving causation as an issue of fact.

(3) However, the ‘but for’ test applied as a negative criterion of causation had an important role to play in the resolution of the question.”

  1. McHugh J took a different position stating that the ‘but for’ test of causation should be the sole test of legal causation since any other rule limiting responsibility should be recognised as a policy-based rule concerned with remoteness of damage rather than causation.
  2. Yet Mason CJ and McHugh J reached the same conclusion showing the prescience of McGechan J earlier referred to. McHugh J explained his conclusion in the following terms at 536 stating:

“But for the breach of the duty which the defendants owed to the plaintiff...the damage which he suffered would not have occurred. Consequently, the defendants’ breach of duty was a cause of the accident. But should the defendants be exempted from responsibility on the ground that the plaintiff’s damage was not within the scope of the risk created by the defendants’ breach of duty? . . . the damage will be held to be within the scope of the risk which the defendant was required to avoid unless the plaintiff sustained the damage intentionally (or, perhaps, recklessly) or the damage occurred in a manner which could not reasonably be foreseen in a general way...Both the damage which the plaintiff suffered and the manner of its occurrence were fairly within the risk created by the defendants’ breach of duty.”

  1. The term of ‘fairly within the risk created’ followed a statement of Denning LJ in Roe v Minister for Health [1954] EWCA Civ 7; [1954] 2 QB 66. McHugh J relied on the test of reasonable foreseeability although the precise damage need not have been foreseen. He defined relevant factors on:

- analogies drawn from accepted patterns of past decisions;

- general community notions regarding the allocation of blame; and

- supervening consideration of judicial policy bearing on accident prevention, loss, distribution and insurance.

  1. The Australian government attempted to apply a uniform approach through legislation following the IPP Report (Civil Law (Wrongs) Act 2002 ACT and similar enactments in each state).
  2. This Court is required to apply the common law and no consideration will be given to the 2002 legislative provisions. It will apply the New Zealand and English cases and the Australian cases prior to the 2002 legislation. However, despite the legislative changes, the Australian courts have consistently favoured Lord Hoffman’s articulation of the rule of responsibility (Travel Compensation Fund v Tambree [2005] HCA 69; [2005] 224 CLR 627, Pleadge v RTA [2004] HCA 13; [2004] 78 ALJR 572, Cattanach v Melchoir [2003] HCA 51; [2003] 215 CLR 317 and Tame v NSW [2002] HCA 35; (2002) 211 CLR 317).
  3. Lord Hoffman had cause to repeat his earlier approach in Environment Agency (supra) in Fairchild v Glenhaven Funeral Services Ltd [2002] 1 AC 32, framing the relevant questions at paragraphs 52, 54.

“The question of fact is whether the casual requirements which the law lays down for that particular liability have been satisfied. But those requirements exist by virtue of rules of law. Before one can answer the question of fact, one must first formulate the question. This involves deciding what, in the circumstances of the particular case, the law’s requirements are...[T]he essential point is that the casual requirements are just as much part of the legal conditions for liability as the rules which prescribe the kind of conduct which attracts liability or the rules which limit the scope of that liability. If I may repeat what I have said on another occasion, one is never simply liable, one is always liable for something – to make compensation for damage, the nature and extent of which is delimited by the law.”

Factual Basis for Causation

  1. The following matters are not in dispute.

(1) The first task agreed on by the parties was the construction or extension of a causeway using rocks as a foundation base.

(2) An employee and equipment owned or subject to the plaintiff’s direction, were to be used for that purpose. The employee was to proceed with the construction of the task.

(3) A third party (the village or villagers) prevented the further delivery of rocks due to heavy rain and potential damage to its roads, preventing the plaintiff’s employee from continuing with the allocated task.

(4) The plaintiff’s employee approached the Island Venture’s employee asking if there was any alternate task which could be undertaken.

(5) Fatu suggested or allocated as a task, the removal of material from the white sand beach and the deepening of the inshore section.

(6) Both men, probably assisted by the youth, walked the area and tested the viscosity of the area and the depth of a solid base.

(7) Lafi operated the machine, drove at Fatu’s guidance to the area and drove it onto the softer area of the beach. The differing accounts of whether he was warned by Fatu are a matter of contention.

(8) The excavator, whilst under Lafi’s control, lost traction and despite the best efforts of the operator and employees of both parties, it could not be retrieved. The disputed matter is the delay in the retrieval.

(9) Nature, through tide, covered damage to the electronically or computerised equipment.

  1. Items (3) and (9) are irrelevant to the issue of liability.

Multiple Causes

  1. Normally there is no difficulty in principle in establishing acts of two or more persons which combine to produce the same damage, whether the acts are simultaneous or successive. The question is whether the conduct is a contributory cause not whether it is, in some sense, a main or primary cause.
  2. It was for this reason that the Court requested each party to amend their respective pleadings to include contributory negligence.
  3. Here the primary cause was the act of driving the machine from the dry portion of the beach onto the soft or silt area.
  4. The principles are as those previously considered in cases such as Deloitte, Kuwait, March and Fairchild (supra). It is for the plaintiff to prove that it was the defendants who caused the damage and were negligent in its conduct. In Fairchild (supra), Lord Hoffman stated, as a proposition, that one is not simply liable; one is always responsible for something. His premise is that the rules which determine what acts give rise to liability. Once it is appreciated that the rules laying down casual requirements are not autonomous expressions of some form of logic or judicial instinct but creatures of the law, part of the conditions of liability, it is possible to explain their content on the grounds of fairness and justice in exactly the same way as other conditions of liability. In support, Lord Nicholas thought that any other outcome would be deeply offensive to instinctive notions of what justice and fairness requires.

Negligence

  1. Here the plaintiff relies on four propositions in support of its claim of negligence namely:

(1) Andrew had set down the construction project and the order of its execution.

(2) Fatu wrongfully interfered with the planned method, and directed Lafi to undertake an inherently dangerous operation. He relied on his age and position to cause Lafi to undertake the project.

(3) Fatu had failed to warn Lafi not to move the machine beyond a certain point.

(4) Fatu had knowledge of the nature of the ‘white sand beach’ and had wrongly advised Lafi to undertake the project.

  1. For convenience, Proposition (1) will be separately considered in relation to the contractual claim.
  2. It is clear that the operator was young and unlicensed but the Court accepts that he had been well trained by his father and was experienced. It is clear that he was conscientious to both parties in attempting to seek out productive work for expensive equipment. The plaintiff cannot have it both ways. Either he was unskilled and the task beyond him. In that case, he should have been supervised. In the alternative he was skilled and well able to exercise his own judgment. Both those findings would be adverse to the plaintiff’s cause. Alternatively if, as the plaintiff correctly contends, he was skilled and had previously undertaken similar work then either the plaintiff ought to have advised him not to obey a request or direction from anyone other than a superior officer of Ah Liki Construction in particular: Andrew, Leonardo or his own father. In his evidence at trial, Leonardo gave his assessment of Lafi’s skills in the following exchange:

“Slw at the time, last year, how many excavator operators were there working for Ah Liki Construction?

Wit I think roughly about 10.

Slw if you’d do a ranking of the abilities, how would you rank Lafi amongst those 10?

Wit short of his father, he was next to his father; he’s the most experienced of operators, so his father is the most experienced then Lafi would be his predecessor; he’s probably the next one to take over.

Slw so how would you rate his abilities or competence as an excavator operator?

Wit very competent otherwise I wouldn’t leave a brand new machine to him; this is one of the most complicated machines bcoz of its computer capabilities; apparently Lafi just has a knack for gadgets; I would say the older operators wouldn’t be able to operate a computer system; it’s kind of hard to read; Lafi just had a natural ability for that, so very experienced.

Slw prior to this job at Le Vasa, were there any other jobs Lafi was involved in?

Wit many other roading jobs, sea road jobs; he was also involved in some sort of similar building a causeway jobs at Apolima when he was a younger kid.”

  1. Secondly, if skilled and experienced, he was able to exercise his own judgment in deciding the safety of leaving the dry sand and assessing the risk in proceeding onto the silted or soft sand. He had conducted a preliminary assessment of the nature and condition of the beach area and the degree of a safe bottom or base.
  2. Items (6) and (7) stated in paragraph 38 above are the prime causes and acts of negligence.
  3. The plaintiff’s case is essentially:
  4. This matter will be later considered under the heading of contributory negligence.

Duty of Care

  1. In the case of the Corporation of the Presiding Bishop of Jesus Christ of Latter Day Saints v McLean [2006] WSSC 10, the learned Chief Justice stated at paragraph 6:

“The first question to be determined in an action in negligence is whether the defendant owed to the Plaintiff a duty of care . . . I must point out that negligence is one of the most developing areas of the law and it continues to apply itself to novel situations which arise from time to time in society. Negligence does not simply live, it also develops. As Lord Macmillan once said in Donoghue v Stevenson [1932] AC 562 at p.619:

‘The categories of negligence are never closed’.”

  1. I would prefer the first question to be that of causation but in all other respects agree with the approach taken in McLean (supra). The original approach in the English Courts was that of a two stage test (Ans v London Borough of Merton [1977] UKHL 4; [1978] AC 728) followed by the New Zealand Courts in Scott Group Ltd v McFarlane [1977] NZCA 8; [1978] 1 NZLR 553, but disproved by the High court of Australia in Sutherland Shore Council v Heyman [1985] HCA 41; (1985) 157 CLR 424. The original approach taken in Ans (supra) was later abandoned by the House of Lords culminating in its decision of Caparo Industries plc v Dickman (1990) AC 605. New Zealand Courts continued to examine the duty question in the manner taken in Ans (supra) but maintained that they were not diverging from the approach taken in Caparo (supra) (South Pacific Manufacturing Co Ltd v New Zealand Security Consultants and Investigations Ltd [1992] 2 NZLR 282, Connell v Odlum [1993] 2 NZLR 257).
  2. The Sutherland Shore Council case is simpler and more understandable but for the purpose of this case any distinction is of little import. As Lord Cooke observed in South Pacific (supra):

“A broad two-stage approach or any other approach is only a framework, a more or less methodical way of tackling a problem. How it is formulated should not matter in the end. Ultimately the exercise can only be a balancing one and the important object is that all relevant factors be weighed. There is no escape from the truth that, whatever formula be used, the outcome in a grey area case has to be determined by judicial judgment. Formulae can help to organise thinking but they cannot provide answers.”

  1. The defendant had a general duty of care to the plaintiff’s equipment in the sense as stated in Lesatele v Board of Trustees of the Methodist Church [2002] WSSC 7. Likewise the plaintiff had a duty of care with respect to the defendant’s property. The respective duties arose because of the relationship or ‘proximity’. The real questions posed in these proceedings are those of causation and standard of care (Poulous v Samoa Rugby Union Incorporation [2011] WSSC 86).
  2. However, neither party was an employee of the other (Morris v West Hartlepool Steam Navigation Co. Ltd 1956 AC 552) which in many cases impose a duty which is almost absolute. But the operator was an employee of the plaintiff and the plaintiff becomes liable for his conduct in accordance with the principles of vicarious liability.
  3. It is for those reasons that the Court suggested to the parties that the pleadings be amended to include the issue of contributory negligence in accordance with the Contributory Negligence Act 1964 section 3.

The Agreement

  1. It is common ground that Ah Liki Construction would undertake development in exchange for sand not used for the restoration of north beach. The Court accepts the original notations made by Soraya on the concept plan, made soon after the January meeting, as a primary source of the agreement. The memorandum (“Exhibit D1”) has the notations:

“1. Recycle rocks from pond to form North Beach and South Beach and form truck access from the Pond.

  1. Dredge the Harbour and Fill the Pond.
  2. Rock protection extended to hold up sides of dredged basin.
  3. Bring in coarse sand for the beaches.”
  4. The parties agree that phase 1 was the completion of a ‘causeway’ to the southern end of south beach. Andrew agreed that he ought not operate within the resort area itself and needed to use a causeway to allow safe access and the movement of vehicles. The causeway would later become a seawall. He claimed that there was no discussion about the ‘white sand beach’ but conceded that it would be necessary to use sand from the north beach to the silt area of ‘the bay’. The Court accepts the evidence of Andrew that it would not have been practicable to move equipment from the south beach to the north beach just above the monument because of the terrain.
  5. Andrew maintained that the work could only be undertaken to remove the silt from the harbour by using a firm foundation from the area marked ‘wharf’. But he contradicted himself during cross-examination by answering the question:

“the causeway was only to go to south beach”

with the answer:

“if they wanted...to go further - we were flexible. We could stop the causeway if they ask, at South Beach, but could go further if (they) wanted.” (from Judge’s Notes).

  1. Soraya gives a different account of the meeting. In her evidence she states:

“...so on that concept plan I believe it says north beach; there was not really a beach there but if we put the fishing jetty there it would create a beach on the north beach side and the south beach side, that’s why it’s labelled like that . . .and his suggestion bcoz he believed that you could never entirely get rid of the silt of that area bcoz of several river inlets, his suggestion was to deepen right in front of the existing beach and create a rock wall, and his suggestion was to deepen it, excavate about a meter deep and so we were going off that concept plan and that was what we showed to Andrew Ah Liki . . . well, actually we had thought about the several ideas, different ways to do things to create flow but there wasn’t enough waves in that direction to do that; the waves came from the north beach that would, as I said, if we put the jetty out it would create more coarse sand and of course I went off the expert advice of the engineer that he felt it would be better to make the existing beach area with the rock well more of a harbor style to be able to put small boats so we were going to do posts and rocks and be able to tie up small boats, so we were only going to have the existing beach topped up a little bit so people could still utilize the area but not necessarily swim in it . . . yes, I can, your honor; Andrew Ah Liki wanted to make a causeway out to where we were going to put a proposed fishing jetty; he wanted to use just sand and I told him the sand here was silty and there would be no way his excavator would be able to go up on the sand bar, that’s what he wanted to do; there was a little bit of land already in front, we called this big white sand area beach volleyball and then there’s unit 10 and 9; there is some existing reclaimed rocks there and so all we needed to do, he suggested widening it, if we wanted to use the rocks then it wasn’t possible to use the sand but we just needed to widen it another ½ meter and so I said, okay well how much do you think a load of rocks would be and he said it should only be about $20, so that’s how we got the figures on the concept plan.

  1. $20 a truckload or per cubic meter or what?

Wit $20 a truckload; that would be the small lava rocks . . . he suggested I go and get a sand permit; he felt we’d probably need about 20,000 cubic meters, I believe that’s what he said, although he said to go ahead and do it step by step and just pay for $500 worth and once I got the sand permit to give him a call and he would bring the excavator out and do the road as well as clean up the beach and be able to excavate for the sand; I did miss something – for exchange of his, I needed to supply the rocks and provide the housing for his driver and food.”

and at a later meeting when she, Andrew and two New Zealand men walked the area.

“...yes, and the reason behind this was I was a little bit concerned bcoz I felt that Andrew’s main focus was to get the sand and my main focus was to clean up the beach so I wanted to be sure that he didn’t just take the sand and then not do his end of the bargain so I decided I would add this on the physical plan that I showed him and spell it out very clearly as to what I agreed to do and what he agreed to do, and I called him a few times to arrange a meeting bcoz he was going to come out to see and actually walk thru this plan as well, and he was not available the few times that I called him to sign the document . . . we saw each other prior to me drawing this up; he came on his way to Savaii with 2 gentlemen from NZ that were either selling him timber or going to a mill in Savaii, I’m not sure exactly, and we sat down in the restaurant and had coffee and banana cake and sat down, the two gentlemen, myself, Andrew and Fatu was present and I asked him to walk the road where we would put the rocks and then we also walked in between the beach and the units, the whole area, we went over the entire plan as to what we were going to do.”

  1. Soraya’s version is supported by the plaintiff’s Exhibit “P1”, Figure 3 (a copy of which is attached to this judgment). It shows good, clean sand along the causeway, south beach and an area north easy of the harbour. It was in the plaintiff’s interest to take good sand for its own use and project from the areas marked on Figure 3 in exchange for its work.
  2. The Island Venture’s project shows that it was necessary to convert the north beach into a sandy beach, use the harbour as a kayak ramp and access jetty and to leave the ‘white sand beach’ as it was, protected by rocks but with some deepening of the silted area. That deepening could readily be made from the firm ground at the ‘wharf’ area and from the white sand beach area to a length of the bucket arm of an excavator placed on firm ground along the ‘white sand beach’ area.
  3. It was Andrew’s intention to collect sand from the areas shown in Figure 3 and to do so, was prepared to extend the causeway to or near the ‘wharf’ area and to use the surplus ‘clean sand’ for his own purpose.
  4. Andrew said he was aware of the list but the future unknown, but in his mind Andrew said the original plan changed at the January meeting but elsewhere says that the meeting lasted for only 5 minutes.
  5. The basic difference between the understandings were:
  6. It is clear that the project was time staged and subject to review. There was no concluded agreement other than:
  7. The agreement was made in the course of a 5 minute meeting. There was general agreement that there would be further discussions as the plan unfolded and work completed but no concluded agreement. In his evidence Andrew denied that Soraya called him for further discussions stating:

“no, she didn’t call me to come in and discuss in detail the works.”

  1. The Court accepts Soraya attempted to do so, on a number of occasions, but was unsuccessful. Whether the fault lay with the plaintiff’s staff or Andrew is not important. Andrew prevaricated on any alteration to the original agreement as is shown in the following exchange:

“Rd but you have drawn the causeway to be much more extensive than what was agreed to on 7/01/2011.

Wit okay, the causeway is just a platform above, it could be made of stones but originally it has to be stones bcoz all around that area, even with the 15 meters of the excavator’s reach, is all silt and there is no good sand around the original area; once we pass that stage and the excavator is free to get the good sand then it moves on; it’s easy and just build its causeway around.

Rd yes, but I’m putting to you that when you drew the red line to show the causeway, it is much more extensive than the discussion based on the concept plan.

Wit it’s more, come again?

Rd it is more extensive.

Wit extensive.

Rd yes.

Wit what do you mean extensive?

Rd meaning that there was no agreement that you put the road work or the causeway right around as you have indicated on this plan that it would come to the top there where it says south beach and then that would be where it would stop?

Wit and how are they going to get the excavator around to get the silt out and build their fishing jetty, how is that going to be done if they want the causeway stopped here?

Rd well, I’m asking you the question.

Wit the causeway has to go all around up to the area as figure 1 so any works can be done; it’s got the flexibility of doing anything they want.

Rd but I’m putting to you that you didn’t raise that with them on 7 January; the causeway or the extent of it was to go up to that area that I’ve indicated on the concept plan.

Wit my understanding, to do any works, the causeway has to be built and I told them that.

Rd but you did not specifically discuss that it would be extensive as you have demonstrated on figure 4 of your plan or report.

Wit to me, at that time, there’ no point of telling them bcoz it’s commonsense, you don’t have a causeway, you can’t do any work; I can’t explain any further, I mean you don’t have to be rock(et) scientist to figure that out.”

  1. He continued to do so when the Court intervened advising counsel and the witness were at cross purposes but eventually agreed in the following exchange with the Court:

“no, your honor; it doesn’t have to; if indeed that we’ve gone that far and they say we’re happy, leave it there, I’ll be very happy too but the understanding is build a causeway to what they want; if halfway thru they say that’s enough Andrew, back off, oh yes; I’m not obligated to go all the way, the lesser the better for me.

...

HH right, so your answer is we were flexible, could stop causeway if they asked at south beach but could go further if they wanted.

Wit yes.”

  1. The Court is satisfied that there was no concluded agreement as to the whole of the project.
  2. The Court finds that the details were not fully dealt with at the January meeting. The Court does not accept that the whole of the silt area of the harbour was agreed to by both parties. It does not find that either Andrew or Soraya gave wrong accounts of their respective understanding but does find that there was no mutual agreement of the details. It accepts that it was agreed that the first defendant was under a contractual duty not to cause damage to the excavator but not under a duty as stated in the amended defence, paragraph 23. The action based on contract ought fail. In any event, the findings of the Court on the question of causation made the contractual issue irrelevant to the outcome of these proceedings.

Ex Turpi Causa

  1. The plaintiff relied on the doctrine of ‘ex turpi causa’ which concerns contract and illegality and relies on the case of Yango Pasotral Co. Pty Ltd v First Chicago Australia Ltd [1978] HCA 42; (1978) 21 ALR 585. The doctrine has no application in this case or at least given the findings of fact, does not advance the plaintiff’s cause.

Delay

  1. The defendants pleaded that there was undue delay in the retrieval process. The claim is that, had the plaintiff acted more promptly, it might have been possible to retrieve the excavator before full tide which was the real cause of the damage to the electrical and computerised components of the machine.
  2. The Court rejects the claim. Lafi immediately contacted his father, an experienced operator, who gave immediate advice. The attempts by Lafi and Fatu in attempting to use a foundation of coconut logs were immediate. The father, working at a different site, hurried to the scene. Leonardo, the project manager, acted as quickly and competently as possible. It was no easy task to assemble two excavators from different sites and arrange for their transportation on short notice. The transportation itself took time. The task was the movement of heavy machinery not an ambulance or police car. Four chains were broken during the retrieval attempts and the plaintiff’s employees continued their efforts until 2 a.m.
  3. This portion of the defendants’ counterclaim ought be dismissed.

The Licence, Operation and Experience

  1. It is common ground that neither the machine nor the operator was licensed. Neither Andrew nor Leonardo was aware of their statutory obligation.

Licence

The operator was not licensed. The Road Traffic Ordinance 1960 sections 30, 31 state:

“30. Test of competence – (1) The Head of State, acting by and with the advice of Cabinet, may make regulations with respect to the nature of tests of competence to drive any class or classes of vehicle for the purposes of this Part, to the qualifications, selection, and appointment of examining officers by whom they may be conducted, and to the revocation of any appointment, to evidence of the results thereof, and without prejudice to the foregoing provisions, regulations made under this section may provide:

(a) for requiring a person submitting himself for a test to provide a suitable vehicle for the purposes thereof;

(b) for requiring a person submitting himself or herself for a test to pay for the prescribed fee . Different fees may be prescribed in respect of tests of competence to drive different classes of vehicle;

(c) in regard to disease or disabilities as mentioned in this Part.

(2) Subject to any regulations made under this section, the Minister may appoint suitable persons as examining officers, and may revoke any appointment so made.

31. Classification of vehicles – (1) The classification of vehicles may be determined by the Principal Licencing Authority by Notice as may be necessary for the purposes of sections 27, 29 and 30.

(2) The Principal Licencing authority shall cause to be published any Notice under subsection (1) in Samoan and English in the Savali and one other newspaper circulating in Samoa.”

  1. But section 36 refers to driving on ‘a road’.

“36. Restriction on driving by young persons, etc. – (1)Except in the case of any person learning to drive under section 28, a person under 17 years of age shall not drive a motor vehicle on a road.

(2) A person under 21 years of age shall not drive a public service vehicle or goods vehicle the net weight of which exceeds 60 cwt. on a road unless on first applying for a licence after the commencement of this Ordinance he or she satisfied the licensing authority that he or she was during the 6 months immediately preceding the commencement of this Ordinance licensed to drive and in the habit of driving a motor vehicle of that class.

(3) A person prohibited by this section by reason of his or her age from driving a motor vehicle or a motor vehicle of any class is, for the purposes of this Part, taken to be disqualified under the provisions of this Part from holding or obtaining any driving licence other than a licence to drive such motor vehicle, if any, as he or she is not by this section forbidden to drive.

(4) A person shall not drive on a road any motor vehicle of a class other than that which he or she is entitled to drive by virtue of the terms of a licence issued to him or her.

(5) A person who drives or causes or permits any person to drive a motor vehicle in contravention of this section commits an offence.”

  1. Leonardo and Andrew conceded that Lafi was unlicensed and that the company was unaware of its responsibility, a matter rarely enforced by the relevant authorities.
  2. Neither the transport of the excavator nor the operation of the digging occurred on a road. They were conducted on private land held by lease or title. The question is whether it was the operator who was negligent and/or inexperienced and in need of supervision by a more senior member of the company.
  3. Lafi was aged 21 as of November 2011. But he had been trained by his father since the age of 15 and was deemed qualified to operate equipment and work unsupervised at the age of 18, and allowed to operate heavy equipment at 19.
  4. This is an action in negligence not a prosecution for a breach of statute. It was the skill and experience of the operator which was an issue. It may be that a more experienced operator would:

(a) refuse to comply with Fatu’s request or directive;

(b) make a more thorough assessment of the foreshore; or

(c) not moved the machine further out from the dry sand area.

  1. Those are the issues, not the holding of a licence, which are relevant to negligence.

Negligence

  1. Lafi was an employee and the plaintiff vicariously liable for his conduct. He was an experienced operator and responsible for the safety of the machine. He agreed that on earlier occasions he had got into difficulty but on each of those occasions he was able to recover or remedy the problem.
  2. In good faith, he asked if there was other work which the machine could undertake because of the absence of rocks for the causeway.
  3. He walked the beach with Fatu. He denied that he had used a stick to test the depth of the silt and the extent to which his vehicle could enter the bay. He said he relied solely on Fatu’s advice, a claim not accepted by the Court. He alone knew of the capabilities of his excavator. It was for him to assess the risk especially since it was low tide. Although he was assisted by Fatu, he and he alone could assess the risk.
  4. Fatu was recalled. He stated that the excavator had got stuck some 2 meters from the edges of the dry sand, although the evidence suggests that it was a little further out. He maintained that the three (Lafi, himself and the youth Mafui’e) all used sticks to check the silted area at the edge of the dry sand before the machine was driven down to the edge of the dry sand at the white beach. The Court accepts the substance of that evidence.
  5. Lafi was negligent in the following ways:

(1) He failed to properly inspect the tidal area of that harbour or beach area;

(2) He failed to properly assess the risks associated with driving the vehicle beyond the dry sand area;

(3) He failed to make any objections to the request or directive of Fatu.

(4) He failed, as soon as the vehicle began to lose traction, to immediately rotate the cabin and bucket to pull the vehicle from the silted area.

(5) It is probable that he placed some reliance on the advice of his young companion, aged 15, in his assessment of the stability of the tidal area of the beach.

  1. Ah Liki Construction was negligent in that:

(1) It failed to provide sufficient supervision of the operation.

(2) It failed to give firm instructions to the operator to refuse or resist any request or direction from a third party.

(3) It failed (if such were necessary on the plaintiff’s case) to advise that the ‘white beach’ area was not part of the project.

  1. But the defendants are not without fault. Its employee, Fatu knew the area well. His assisted in the preliminary testing of the beach area. He guided the operator to the place of the entry. He had also used a stick to test the level of silt. The defendants are directly or vicariously liable because:

(1) Fatu did not show Andrew the white sand beach or discuss whether it could be dug with an excavator from only the dry sand area.

(2) He assisted in the ‘testing’ of the foreshore and tidal areas.

(3) He failed to properly warn the operator of the risk in leaving the dry sand area.

(4) He walked alongside the machine to its point of entry. The Court does not reject his claim that he shouted to the operator to stop at the edge of the dry white sand area but may not have been heard by the operator. It is more probable that he used a hand signal which might have been missed by the operator. It does not accept the evidence of Pio Sali that, at some stage, Fatu called out for the operator to reverse the machine but at that stage it was too late.

(5) He had no right to make the request or give a direction to the operator to undertake the work. He was not present when Andrew gave precise directions of the work to he done and ought not, absent Andrew or Leonardo’s permission, given the direction. He ought to have known that a young Samoan would be reluctant to challenge a man aged 42 and who knew the site.

  1. Weighing up the competing cases, the Court determines that the plaintiff was negligent but the defendants contributed to the harm. The assessment is that the degree of contributory negligence on the defendant’s part was 10%.

Counterclaim

  1. It is certain that the retrieval operation caused damage to the resort’s property. Whether some of the damage was caused on the entry of its equipment and other by the departure is uncertain. The Court cannot determine that in detail and will simply use the same proportion assessment of contributory negligence.

Damages

  1. The plaintiff abandoned its claim for freight and duty at trial. It claimed:

Replacement value of a second hand excavator NZD$75,000

Lost income of 20 days before replacement WST$24,000

  1. The plaintiff provided a conversion rate of 0.5295 for NZD$1.00. The Court will allow for fluctuation and apply a conversion rate of 0.529 as the buyer’s rate. Translated the replacement value as claimed is $141,616.
  2. Leonardo conceded that the replacement machine was more advanced and had a longer service life. Allowance is made for that. He assessed the saleable value of the salvage components as:

Engine $8,000

Hydraulics $8,000

Tracks $6,000

Scrap Metal $3,000

Total $25,000

  1. The amount discounted for a better machine with a longer working life will be $10,000. Allowing for that discount, the replacement value which ought be allowed is $131,616.
  2. The claim for lost time and use will be accepted.
  3. Damages for the plaintiff are assessed as:

Replacement value $131,616

Loss of use or income $ 24,000

$155,616

Less return for sale of items $ 25,000

Total $130,616

  1. Applying the proportion of contributing negligence, the plaintiff is entitled to judgment at 10% which produced an outcome of $13,061.60.
  2. There was little challenge to the quantum of the defendants’ loss and damage which are claimed as:

Labour costs for general cleaning incl. plumbing repairs $2,216.75

Cleaning of the beach $5,732.43

Electrical repairs $5,969.56

Administration costs $ 328.00

Miscellaneous costs $ 852.50

Food $1,045.00

Beverages $ 175.00

Electricity $ 239.26

Gas $ 129.08

Water $ 89.00

Wages for restaurant staff $ 110.50

  1. The total of $16,887 will be assessed at 90%, producing an outcome of $15,198.

ORDERS:

(1) Judgment is entered for the plaintiff in the sum of $13,061.
(2) Judgment is entered for the defendants in its counterclaim in the sum of $15,198.
(3) The plaintiff is to pay 90% of the costs of the defendants, such costs to be taxed.
(4) The defendants are to pay 10% of the costs of the plaintiff, such costs to be taxed.

..............................

(JUSTICE SLICER)


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