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RSI Holdings (Samoa) Ltd v Attorney General [2012] WSSC 130 (21 December 2012)

SUPREME COURT OF SAMOA

RSI HOLDINGS (SAMOA) LTD V ATTORNEY GENERAL [2012] WSSC 130


Case name: RSI Holdings (Samoa) Ltd v Attorney General

Citation: [2012] WSSC 130

Decision date: 21 December 2012

Parties:
RSI HOLDINGS (SAMOA) LIMITED a duly incorporated company having its registered office at Samoa (Plaintiff) and THE ATTORNEY GENERAL sued for and on behalf of the Government of Samoa (First Defendant) and FAAMOETAULOA LEALAIAULOTO TAITO DR. FAALE TUMAALII the Honourable Minister of Natural Resources and Environment of the Government of Samoa (Second Defendant)

Hearing date(s): 16 – 19 October, 22 – 24 October 2012

File number(s):

Jurisdiction: CIVIL

Place of delivery: MULINUU

Judge(s): JUSTICE SLICER

On appeal from:

Order:

Representation:
I Hutchinson and T S Toailoa for the plaintiff
M Lui and S Faamausili for the defendants

Catchwords:

Words and phrases:

Legislation cited:
Property Law Act 1952, ss.50, 118
Constitution of the Independent State of Samoa 1960, Article 14, 111
Judicature Ordinance 1961, s.31
Judicial Act 1789
Government Proceedings Act 1974, s.3(c)(d)
Unit Titles Act 2004
Revision and Publication of Laws Act 2008
Trade Practices Act 1974, Part IV A
Unit Trusts Act 2008

Cases cited:
Jones v Swansea City Council 1990 3 All ER 737
Investments Ltd v Registrar General of Lands [2007] NZCA 384
Australian Broadcasting Corporation v Lenah Valley Meats Pty Ltd [2001] 208 CLR 99
McArthur v Cornwall [1891] UKLawRpAC 46; [1892] AC 75
Collins (1933) WSLR, later affirmed 1960 –1969 WSLR 52
Pendlebury v CML Life Assurance [1912] HCA 9; (1912) 13 CLR 676
Forsythe v Blundell [1973] HCA 20; (1973) 129 CLR 477
c/f Ins Re Johnson and Co. (1955) Ch 634
Downsville Nominees Ltd v First City Corporation Ltd (1993) ACT 295
Standard Chartered Bank Ltd v Walkere (1982) 3 All ER 938
O’Day v The Commercial Bank of Australia Limited [1933] HCA 37; (1933) 50 CLR 200
Williams and Another v Frayne and Another [1937] HCA 16; (1937) 58 CLR 710
ANZ v Carnegie (Victorian Supreme Court 16 June 1987)
Esera v Samoa Realty and Investments Limited [2007] WSSC 26
Invercargill City Council v Hamlin [1996] UKPC 56: (1996) 1 ALL ER 756
Pavey and Matthews Proprietary Limited v Paul [1987] HCA 5; (1987) 162 CLR 221
Australia and New Zealand Banking Group Limited v Westpac Banking Corporation (1987 – 1988) HCA 17; (1988) 164 CLR 662
David Securities Pty Ltd v Commonwealth Bank of Australia (1991-1992) HCA 48; (1992) 175 CLR 353
Caparo Industries PLC v Dickman (1990) UKHL 2; (1990) 2 AC 605
R Lowe Lippmann Figdor and Franck v AGC (Advances) Ltd [1992] VicRp 93; (1992) 2 VR 671
Esanda Finance Corporation v Peat Marwick Hungerfords (1994) 12 ACLC 199
cf Columbia Coffee and Tea Pty Ltd v Churchill (1992) 29 NSWLR 141
Norwich Pharmacal v Customs and Excise Commissioners [1973] UKHL 6; [1974] AC 133
Siskina (Cargo Owners) v Distos SA [1979] AC 210
Mercedes Benz v Leiduck [1996] 1 AC 284
Channel Tunnel Group v Balfour Beatty Ltd [1993] AC 334
Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2
Grupo Mexicano de Desarrollo, SA, et al, v Alliance Bond Fund, Inc, et al 527 US 1 (1999)
Cardile and Others v LED Builders Pty Ltd [1999] HCA 17
Nippon Yusen Kaisha v Karageogis [1975] 2
Atlas Life Ins Co v WI Southern, Inc, [1939] USSC 69; 306 US 563, 568 (1939)
Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 NZLR 289
Latimer v Commissioner of Inland Revenue [2004] 3 NZLR 157
Kleinwort Banson Ltd v Malaysia Mining Corporation Berhad (1989) 1 WLR 379
Banque Brussels Lambert SA v Australian National Industries Ltd (1989) 21 NSWLR 502
Perlak Petroleum Maatschappi. J v Dean (1924) 1 KB 111
NZPS Investments Limited v Registrar General of Lands
Lebeaupin v Richard Crispin and Company [1920] 2 KB 714
Hyundai Merchant Marine Company Ltd v Darkbrook Coal (Sales Pty Ltd) [2006] FCA 1324; 236 ALR 115
Matsaukis v Priestman and Co [1915] 1 KB 681
Ringstad v Collins Pty Ltd [1924] HCA 57; (1924) 35 CLR 303
Garcia v National Australia Bank [1998] HCA 48; (1998) 194 CLR 395
Yerky v Jones [1939] HCA 3; (1939) 63 CLR 649
Commercial Bank of Australia WA v Amadio [1983] HCA 14; (1983) 151 CLR 447
Royal Bank of Scotland v Etridge (No 2) [2002] AC 773
Liverpool City Council v Lewis [1976] UKHL 1; [1977] AC 239
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Con-Stan Engineering (Aus) Pty Ltd v Norwich Winterthur Insurance (Aus) Ltd [1986] HCA 14; (1986) 160 CLR 226
Shirlaw v Southern Founderies Ltd [1939] 2 KB 206
Bell v Lever Brothers Ltd [1931] UKHL 2; [1932] AC 161
BP Refinery Pty Ltd v Hastings Shire Council (1997) ALJR 20
Prenn v Summonds (1971) 3 All ER
WEL Energy Group Limited v Electricity Corporation of NZ Ltd [2001] 2 NZLR
Great Western Railway Midland Railway v Bristol Corp ( 1918) LJ Ch 414
Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41
Elders Pastoral Ltd v Bank of New Zealand [1989] NZCA 406; [1989] 2 NZLR 180
Carson Enterprise Ltd v Broughton Co [1991] 85 DLR (4th) 129
Bristol and West Building Society v Mathew [1996] EWCA Civ 533; [1996] 4 All ER 698
Meredith v Drake Company Ltd [2001] WSSC 32
Seddon v North Eastern Salt Co. Ltd [1904] UKLawRpCh 170; [1905] 1 Ch 326
Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101
Apia Quality Meats Ltd v Westfield Holdings Ltd [2009] WSSC 1
Burbury Mortgage Finance and Savings Ltd v Hindsbank Holdings Ltd [1988] NZCA 220; [1989] 1 NZLR 356
Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362
O’Connor v Hart [1985] UKPC 1; (1985) AC 1000
Nichols v Jessup [1986] NZCA 84; (1986) 1 NZLR 226
Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457
Meredith v Manoa [2002] WSSC 51
Rice v Rice [1853] EngR 1102; (1853) 61 ER 646
Abigail v Lapin [1934] AC 491
Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 264
Three Rivers District Council v Bank of England (No 3) [2000] UKHL 33; [2000] 3 All ER 1
Bourgeon SA v Ministry of Agriculture
Fisheries and Food [1985] 3 All ER 585
Northern Territory v Mengel (1995) 185 CLR 307
Garrett v Attorney General [1997] 2 NZLR 332
Chang Tung v Attorney General [2005] WSSC 24

Summary of decision:


IN THE SUPREME COURT OF SAMOA

HELD AT MULINUU

BETWEEN

RSI HOLDINGS (SAMOA) LIMITED a duly incorporated company having its registered office at Samoa

Plaintiff

AND

THE ATTORNEY GENERAL sued for and on behalf of the Government of Samoa

First Defendant

AND

FAAMOETAUOLA LEALAIAULOTO TAITO DR. FAALE TUAMAALII the Honourable Minister of Natural Resources and Environment of the Government of Samoa

Second Defendant


Counsel: I Hutchinson and T S Toailoa for the plaintiff

M Lui and S Faamausili for the defendants

Hearing: 16 – 19 October, 22 – 24 October 2012

Written Submissions: 29 November and 10 December 2012

Judgment: 21 December 2012


JUDGMENT OF SLICER J

Introduction

  1. The actions in common law or suits in equity illustrate an intersection between modern and flawed business practice, government’s desire to enhance the growth of its economy and the Samoan traditions of discussion, compromise and consensus, sometimes tainted by indecision. Here that intersection resulted in discord, distrust and enmity. Business seeks money as redress and government sought protection of its good faith. Both come to this Court for remedy.

The Parties

  1. RSI Holdings (Samoa) Limited (“RSI”) is a wholly owned subsidiary of RSI Holdings (BVI) Limited which is a company duly registered in the British Virgin Islands. It became incorporated in Samoa, because of the then legal requirements, and is described as a development company. It issued 50,000 shares; 49,999 of which are currently held by Derek Sinclair Firth (“Firth”), a New Zealand resident, on trust for Gordon Taylor (“Taylor”); and the remaining share held by Leun Leun Wan (“Wan”), who is said to be residing in China but his address is unknown. Wan is the adopted son, by custom or otherwise, of Taylor. His identity was unknown to Firth, and itself surprising to government. He became a trust shareholder following government’s insistence on 12 July 2010 that Taylor divest himself of all shares. Wan’s share had previously been held by Trevor Stevenson (“Stevenson”) at the direction of a Taylor family trust or entity, a transfer not disclosed to either Firth or the government, and effectively remains within the control of Taylor. That, in itself, shows a lack of transparency and a sign of bad faith or, at least, a failure to properly disclose to government the true state of affairs.
  2. Firth is the majority shareholder but holds those shares on trust for Taylor, a matter disclosed to government and not contested.
  3. The real party is Taylor, acting through the corporate shield, who would be the real beneficiary of the plaintiff’s success in this action. Taylor was not called as a witness in these proceedings.
  4. The first defendant is the representative of government, primarily the Ministry of Natural Resources and Environment (“MNRE”), Treasury and the Prime Minister and Cabinet (“PMC”).
  5. The second defendant ought not have been joined in person and the actions and suits against him are dismissed.

The Issues

  1. Following the commencement of proceedings the defendants, by motion, sought to strike out the actions. The Court dismissed the strike out motion in its judgment of 13 July 2012 (CP #13/12). In doing so it stated in its Reasons for Judgment at paragraph 7 – 10:

“7. The Court is not intending to examine the respective cases in detail. The parties had entered into a lease agreement and it is common ground that the Respondent has failed to comply with an initial term requiring it to complete the first stage of that agreement. But it has performed some of the work necessary for the completion of that term. On the face of the material before the Court, the Applicant has a strong case.

  1. The leave agreement was executed on 29 September and on 13 January 2010 gave the Respondent a notice to remedy the breach within 2 months. On 2 February 2010, the Respondent unsuccessfully requested an extension and on 31 March 2010, the Applicant served a Notice of Termination to take effect within 2 months after which the Applicant would take possession of the land. Had the matter stopped there it is likely that the Court would have struck out the ensuing action commenced by writ and Statement of Claim on 27 February 2012.
  2. However, there were further discussions and negotiations between the parties on 7 July and a further extension of 1 year was granted before termination. The original deed is complex and the details of what occurred on 7 July stated only in general terms. A question is whether the 7 July and 12 July enlivened or amended the original lease. A further question is whether the deed dated 14 July 2010 transferring the interest of Taylor to Firth amounted to part compliance with the July agreement.
  3. The Applicant relies on the following grounds in support of its strike out motion, namely:

- the action is frivolous, vexatious and an abuse of court process;

- the interpretation of the Respondent’s plea of force majeure;

- determination of the issue of fiduciary duty;

- determination of the issue of equitable estoppel raised by the Respondent, with secondary issues of reliance and detriment;

- determination of unconscionable conduct;

- disposition of a claim of misfeasance in public office (see generally Jones v Swansea City Council 1990 3 All ER 737); and

- conclusions that the action has prospect of success on the basis of stated facts and their application to legal principle.”

  1. It was the continued negotiations which were the primary cause of the dismissal since it would have been necessary to receive and determine evidence on those continued meetings and variations of conditions.
  2. At trial the plaintiff relied on 8 causes of action or equitable suits namely,
  3. The defendant relies on its claim that the plaintiff has clearly breached its agreement, and any variations, and ought be denied remedy.
  4. The leasehold property and its development have since been put to tender by government and an agreement reached with the successful bidder. The plaintiff has, accordingly, abandoned its claim for remedy through enforcement of an agreement but seeks a declaration of entitlement and the remedy of damages. The defendant claims waiver.

History of Proceedings

  1. The history is complicated and confusing. Each party had a different agenda, and the varying attempts of resolution and compliance by government with varying terms. Changing requirements by Taylor made it difficult for the Court to examine and outline them in simple terms.
  2. The dispute concerns an island adjacent to the village of Taumeasina, approximately 3 kilometres from the centre of Apia.
  3. Taylor originally operated through a company, Jan Bain Holdings Limited (“JB”) and throughout these proceedings engaged the firm and its varying nomenclatures Stevenson, Nelson and Mitchell, primarily Trevor Stevenson who gave evidence at trial.
  4. In September 2000, Taylor wrote to Treasury suggesting the development of the island, following meetings with a government task force, in a manner different from the original proposal of an international hotel and resort type development. He claimed the island was too small for the infrastructure and required facilities. He proposed an apartment and condominium based model which would require the implementation by government of strata title legislation. It is this difference of desired models which forms the core of the following negotiations, disputations, variations, delays and eventual termination over 12 years, culminating in these proceedings.
  5. The evidence supports the conclusion that Taylor’s model depended on the sale of condominiums and the use of capital thus raised to finance other portions of the project. On that model, Taylor would not be required to raise or provide much of the capital. Purchasers would be able to use their own condominium and rent them to the resort when unoccupied. Presumably, separate arrangements would be made by a return to purchasers or investors of payments made by renting guests using the particular unit.
  6. In November 2000, Taylor wrote to Treasury, through JB, providing details of the proposed stated development as:
  7. The total project cost was to be in the vicinity of NZD$27 million, but required a 99 year lease, rental limited to ST$14,000 and immigration approvals. There were other incidental conditions requiring government to provide water and electricity and roadwork but 3 central matters to this case were:
  8. Treasury advised of ‘in principle agreement’ with conditions including ‘an undertaking that the construction of hotel rooms would take priority over the housing agreement’. JB, through its lawyer Stevenson, rejected the Treasury reply and added further requirements stating that Taylor was the only promoter and that:

“before spending this large amount of money Mr Taylor requires (emphasis added) the commitment upon the conditions outlined.”

  1. On 29 January 2001, Cabinet met and resolved:
    1. To use the island at Taumeasina (13 acres) for the construction of a hotel resort of not less than fifty (50) rooms together with ancillaries thereto.
    2. The construction of a hotel resort to be the first priority before building any other ancillary constructions on the island.
    3. The land on the inland as requested by the hotel project, is declined due to the fact that it was already resolved by Cabinet decision [FK(00)07] for a national park to protect its environment and this decision cannot be dissolved for any other project.
    4. That part of this inland land can be used for access road to the island.
    5. In accordance with lease, the Task Force is requested to look into it in accordance with the conditions pertaining to construction of hotels.
    6. To instruct Mr Taylor to produce to the Cabinet Tourism Taskforce the following information for the proposed construction of the hotel within three months from the date of this decision:
      1. Project proposal for the construction of the hotel resort on the island at Taumeasina;
      2. Budget for financing the project;
      1. Architectural plans;
      1. Financial report of promoters and their respective companies.

If by the 30th April 2001 the above cannot be (6a – d) cannot be produced then this project will be cancelled and will not be discussed in future.

This decision was made on an urgent basis in accordance with Section 36(1)(C) of the Independent State of Samoa.

  1. Stevenson replied, on 21 May, with further and new conditions including an effective 10 year ‘tax free holiday’ and free of duty imports, dual lane tar sealed roads and the like, and significantly:

“For Government to introduce the following legislation:

(1) Strata title legislation to enable leasing of the Condominiums;

(2) Body Corporate Legislation to ensure the smooth and efficient functioning and management of the leasehold condominiums, villas and public areas of the Resort.”

  1. Body Corporate legislation has significant implications especially within a mixed purpose and confined area. Taylor saw it as essential to the project.
  2. A formal (undated) application, presumably attached to the Cabinet papers (“Exhibit P2.2”, pages 154 – 158), contained a requirement: the enactment of a Strata Title Act and Body Corporate Act before 30 December 2001. It also provided as a ‘good faith’ provision the lodging of ST$1 million by JB. The Court notes a number of variations for the conversion of 25 units into 50 rooms ‘if and when required’. Stevenson, on 28 May 2001, wrote directly to the Prime Minister informing him of the benefits of strata title legislation.
  3. Had the matter ended there much time and resources would have been saved. Taylor was under no obligation to proceed but chose to do so, presumably because he foresaw a long term profit. Business can take risks but must accept consequences.
  4. Cabinet again considered the project, probably in September 2001 and its decision communicated to Stevenson by the Ministry of Commerce, Industry and Labour (“MCIL”) on 1 October in the terms:
  5. It is significant that Cabinet approved no laws specific to Taylor but any legislation would apply to ‘all similar enterprises’. Cabinet had also specified compliance with current legislation of Samoa.
  6. The plaintiff’s counsel argued, at trial, that although an individual citizen or corporation could not require government to enact specific legislation, it ought be compensated if it acted to its detriment on the basis of a promise to enact such legislation. Here government indicated the possibility of new legislation applicable to ‘all similar enterprises’ not those of the present plaintiff. The reply did not ‘induce’ the plaintiff to proceed with any construction but to simply proceed with the ordinary business processes which might lead to a successful contractual outcome. That process is common to business and its cost the commercial responsibility of that business.
  7. In May 2001, Stevenson employed Betham and Associates Valuers which in their estimate assessed and proved the land value at $480,000. Taylor was to deposit a ‘good faith’ sum of $1 million in June 2002, and following further discussions, Betham provided an estimate of rental value at $61,000 per year and disputed a value stated by the Land Board of $5 million for the land. In 2003, Taylor provided an Environment Impact Assessment Report which led to further negotiations. There was no concluded agreement.
  8. On 31 January 2004, JB, the predecessor of the current plaintiff, wrote similar but not identical letters to the Minister of Finance and the Minister of Commerce, Industry and Labour on a number of matters and conditions. In both letters it misstated the government’s position claiming that government had undertaken to enact strata title and body corporate legislation in 2004. Examination of government documentation shows such not to be the case. Consideration differs from commitment.
  9. Stevenson further complicated the matter by writing, on 3 May 2004, to MNRE, which replied raising concerns about any commencement of the construction of a causeway. There followed a series of meetings and correspondence between Stevenson, RSI and various Ministries. There is a hiatus in the documentation or evidence at this stage.
  10. On 11 June 2004, Taylor wrote to the Minister of Tourism, claiming that there had been agreement between Stevenson and Precious Chang to permit the construction of a ‘temporary causeway’ in order to ‘see the effects of the current before the engineers finalise the permanent construction’. If such be the case, the Court does not accept that “agreement” as binding government to eventual approval. On 30 June, Stevenson advised the Minister of Tourism that work had been commenced, by a contractor Ah Liki Constructions Co. Limited (“Ah Liki Constructions”), on the construction of the causeway. A letter of Ah Liki Constructions, of the same date, referred to an approval letter from the Ministry of Tourism, authorising the construction. The status or validity of that approval is uncertain but what is clear is that permission was granted only for the construction of a ‘temporary causeway’. Evidence at the hearing suggests that the cost of those works were to have been $14,749.
  11. The Attorney General became involved in the Taumeasina project as evidenced by a letter from one of its officers to MNRE in July 2004, forwarding a valuation report supplied by the plaintiff’s valuer, providing an estimate of value of the island reclaimed area as $672,000 and the ‘natural inland land area’ as $1,653 million.
  12. On 21 July 2004, Taylor wrote to the Minister of Tourism advising:

“Last night I attended a function of the fire dance group down at the waterfront and met with a Tony Lawson from the Attorney General’s office who assured me that the Unit Titles Act was underway and would be ready for the Parliamentary session in August. I found his approach quite refreshing compared to the other problems I have had from the Attorney General’s Office.”

  1. That evidence does not assist the plaintiff’s cause. The letter itself is self serving and Lawson’s assurance no more than social gossip.
  2. RSI was registered as a Samoan corporation on 26 July 2004. The document trail restarts with a letter from MNRE, dated 30 August, to Taylor stating that the plaintiff had breached the terms of the permit to construct ‘the causeway’, a complaint repeated by MCIL on 31 August. In September, the plaintiff’s architect provided the Minister of Tourism with an estimate of construction costs as $1.06 million, and the plaintiff set out its proposed terms of lease and again raised the question of strata and corporate body legislation.
  3. Internal documentation shows the then Attorney General had serious concerns about the hasty introduction of strata legislation, which would affect all of Samoa. At trial, the plaintiff called Timothy Jones, an experienced New Zealand lawyer claiming the right to call evidence of the interpretation of that legislation enacted but not proclaimed by the Samoan Legislative Assembly. Some of his evidence was admitted by the Court but did little to advance the plaintiff’s cause. Distilled his evidence can be summarised as:
  4. His evidence will be later considered but shows that the concerns voiced by the Attorney were accurate and justified. Central to the plaintiff’s case is the contention that failure to proclaim the legislation and introduce regulatory provisions caused damage, and entitles the plaintiff to compensation. That matter will be later considered but the September 2004 demand by Taylor for its enactment was unilateral. It did not bind government. Government’s failure was to continue with negotiations rather than to clearly reject the development proposal outright. Three years had elapsed. The plaintiff’s variations to its proposal had complicated the process.
  5. In February 2005, MNRE advised Taylor that he had acted illegally in removing and transporting sand from the foreshore and coastal waters of Taumeasina contrary to the Lands, Surveys and Environment Act 1989. The sand had been taken for the construction of facilities required for the Pan Pacific Games. The evidence was that the trucks had returned with rocks for the resort development. Either the sand had been sold or exchanged for rocks. Either way the plaintiff had exploited a natural resource which was the property of the government. The plaintiff defended its actions and requested permission to ‘sell and exchange excess material.’ That evidence supports the conclusion that any costs or expenses incurred by the plaintiff, at that stage, were at its own risk.
  6. On 17 February 2005, MNRE demanded payment of $15,000 for 3,000 cubic meters of sand removed before the issue of a permit (granted on 18 February 2005) and $10,000 for 2,000 cubic meters to be removed under that permit.
  7. On 24 February 2005, the Office of the Prime Minister advised in terms designed to avoid

“any unnecessary misunderstanding at a later stage”

which included:

(1) “(a) Government Approval was on the basis of submission dated 15th September, i.e. 25 rooms converted to 50.

(b) 16 deluxe 2 bedroom apartment suites.

(c) Stage 3 – 30, 2 to 3 bedroom villas.

(d) Stage 4 – Conference center. This approval is upon the condition that nothing else will be built on the island before the first stage of the Hotel is built.

(e) Prior execution of lease, final architectural plans to be submitted. This is very important.

(f) $1 million deposit with the National Bank upon execution of lease.”

(2) Reclamation was limited to the original Royal Samoan boundaries and prohibition of the sale of selling any reclaimed material.

(3) The provision of a schedule for construction (before the execution of any lease) and the use of ‘restraint, reasonableness and decorum in dealing with the government officials.’

  1. The letter made no reference to strata or body corporate legislation.
  2. Further discussions were undertaken in October 2005, and on 24 October MNRE advised of requirements for proceeding with the project, specifically:

“1) Pay royalties of $10,000 to supply 2,000m3 of sand on permit issued 18 February 2005 – sand already supplied;

  1. Apply for permission to supply extra 1,317m3 of sand – sand already supplied;
  2. Pay royalties of $6,585 for permit in 2);
  3. No more future supply of sand without a permit;
  4. Apply for permission to cover the reclamation works at the island already completed;
  5. No more new reclamation works without a permit;
  6. Apply for permission to cover the dredging of fill materials from the lagoon already completed; and
  7. No more new dredging or mining of fill materials without a permit; and
  8. Apply for development consent from PUMA to implement all reclamation, dredging and other development works.”
  9. In its delayed reply of 15 December, RSI complained about some of the conditions but agreed to making no reference to strata legislation. It was only then that it confirmed the payment of money required in February 2005.
  10. In January 2006, MNRE again advised of the illegal removal of sand by RSI. In March, the Attorney repeated the earlier request for a project proposal and budget, and later that month noted the non payment of the $1 million previously referred to.
  11. In April, the Attorney advised that the rental per annum amount of $126,097, approved by Cabinet, specified precisely the land to be leased and excluded 5 perches in Parcel 652 which was customary land. On 28 April 2006, MNRE formally advised RSI that its application had been refused.
  12. The Court determines that, as of that date, any costs incurred by RSI were not recoverable since they were no more than project proposed items ordinarily incurred by business in seeking a licence or lease.
  13. Had the matter rested there, the plaintiff would have no basis for remedy.
  14. There were fresh negotiations following which the Prime Minister advised that on execution of a lease government undertook:
  15. In turn RSI was required to provide villas, rooms and car park within a time to be specified.
  16. A draft lease was prepared by the Attorney General and certain of RSI’s counterproposals rejected. Within 10 days of the Attorney’s reasonable response, Stevenson replied complaining of the delay, stating that ‘frankly its getting ridiculous.’ Given RSI’s previous conduct, the Court finds the reply to be offensive and belligerent. On 12 September, Stevenson wrongly advised the Prime Minister that all outstanding matters had been finalised.
  17. The plaintiff relies heavily on a letter written by the Deputy Prime Minister, dated 12 September 2006, which is stated in full and will be later considered. It states:

“The Hon Prime Minister has made it clear that either the issues are resolved or “to cancel immediately the lease”.

Government will allow until 30 September 2006, after this date these issues will be either resolved or the lease cancelled.

Kindly also note the strata titles legislation is one to which the government has given a firm undertaking and I will not allow this matter to be a distraction to a resolution of the main issues.

The Attorney General is making herself available, either you meet and resolve the outstanding issues, or the negotiations between the parties will end on 30 September 2006.”

  1. The Court accepts the defence’s submission that the letter can be read in a number of ways. What it is not is a clear and unequivocal understanding by government that the legislation would fit the precise needs of RSI. It referred to general, not special, legislation such as the Royal Samoan Hotel Act, designed for a special development.
  2. Stevenson was equivocal in his response, putting in a 5 year rather than a 3 year time period from the passage of the strata legislation. Its effect was that there was no concluded agreement. On 28 September, Stevenson was advised that Cabinet had approved the lease but if not executed on 29 September, the process would lapse.
  3. On 29 September, the parties executed a lease which made limited but precise reference to strata or body corporate legislation in Clause 33 (6) which provides:

“Notwithstanding anything to the contrary, the Lessee’s obligations to construct twenty five (25) deluxe apartments suits with two (2) bedrooms and thirty (30) villas with two (2) to three (3) bedrooms is subject to the enactment of Strata Title legislation. The obligation to construct and complete the deluxe apartment suites and villas shall be three (3) years from enactment (if any) of Strata Title legislation.”

  1. The lease provides for staged development with terms:
  2. Clause 33 (3) provides that failure to comply with Clauses 3.3, 3.4 and 3.5 shall not be considered to be a breach of the lease ‘in so far as such inability arrives from an event of Force Majeure.’
  3. It is common ground that the plaintiff has not complied with Clauses 3.4 and 3.5.
  4. Drawings and site plans were prepared.
  5. On 5 April 2007, the Land Board purported to terminate the lease since the plaintiff had failed to commence construction of the project within the 6 month period required by the Lease Agreement Clause 3.3. Formal notice as required by Clause 29 was given on 15 April.
  6. Later developments involving attempts to involve an international hotel group Wyndham will be later outlined.
  7. In 2008, the Legislative Assembly enacted the Unit Trusts Act which, for good reason, possibly influenced by the New Zealand experience in repealing its counterpart, remains unproclaimed. The Act states “Assent and commencement date: 25 March 2008”. The defendants contend that had the plaintiff completed Phase 1, it would have been ‘easy’, if necessary, to quickly proclaim. It further contends that the enactment fulfilled any commitment, if such existed, the plaintiff’s claimed requirement.

The Pleadings

  1. The plaintiff in its Amended Statement of Claim relevantly states:

(1) Reliance on the interpretation of the Lease (paragraphs 5 and 6);

(2) Its expenditure of $1.5 million on the project (paragraph 7);

(3) Ongoing negotiations concerning the Wyndham Hotel Group culminating in a fresh agreement and extension as of 12 July 2010 (paragraphs 8 – 16);

(4) Breach of the Property Law Act 1952 (paragraphs 28 – 36) with the remedy of declaration;

(5) Equitable estoppel and breach of fiduciary duty (paragraphs 38 – 40);

(6) Misfeasance of office in failing to enact appropriate legislation and regulations (paragraph 42);

(7) Breach of Lease through express and implied terms (paragraphs 47 – 48);

(8) Breach of agreement to extend the Notice of Termination of Lease;

(9) Equitable estoppel by agreement to extend Notice of Termination; and

(10) Unjust enrichment (paragraphs 61, 64).

  1. It seeks declaratory relief, damages of $1.5 million, general damages in a sum of ‘several million tala’ and exemplary damages.
  2. The defendant denies, generally the causes of action, and its reply to the Amended Statement of Claim denies completion of the 50 rooms and seawall (paragraph 29) and the contingency of the strata title claim (paragraph 30), fiduciary relationship (paragraph 30), claims of equitable estoppel and the terms of the claimed agreement of 12 July 2010 (paragraph 52) and specifically pleads ‘waiver by election’ (paragraph 67) and illegality (paragraph 68).

Structure of Reasons for Decision

  1. The pleadings and final submissions are complex and voluminous raising many bases or defences to remedy. That complexity makes it difficult to discern a schematic approach to the issues. Each seeks vantage from whatever source they can find. The plaintiff’s final submissions run to 176 pages whilst the defendants’ to 376 paragraphs. That summary does not include the numerous authorities handed up and relied upon for the respective causes or suits.
  2. The Court will attempt to approach and determine the issues in a different matter. It sets out its considerations under the following headings:

The Constitution

  1. In the Australian Broadcasting Corporation v Lenah Valley Meats Pty Ltd [2001] 208 CLR 99, Gleeson CJ stated at 220 that:

“(The Constitution) restricts law – making power and executive action. And, because the common law of Australia conforms to the Constitution, it has an important role in the formulation of common law principle.”

  1. But it is not a more balancing factor in a discretionary judgment as to the preferred outcome in a particular case, to be given such weight as a Court seems fit. The same principles apply to the Courts of Samoa which derive their principles of common law from the Constitution.
  2. The Constitution of Samoa Article 14 relevantly provides:

“14. Rights regarding property – (1) No property shall be taken possession of compulsorily, and no right over or interest in any property shall be acquired compulsorily, except under the law which, of itself or when read with any other law:

...

(b) Gives to any person claiming that compensation a right of access, for the determination of his interest in the property and the amount of compensation, to the Supreme Court; and

(c) Gives to any party to proceedings in the Supreme Court relating to such a claim the same rights of appeal as are accorded generally to parties to civil proceedings in that Court sitting as a Court of original jurisdiction.”

  1. Article 14 provides for limitation to that general right by:

“Nothing in this Article shall be construed as affecting any general law:

...

(c) relating to leases, tenancies, mortgages, charges, bills of sale, or any other rights or obligations arising out of contracts...”

  1. Here the General Law is the Property Law Act 1952 which will be separately considered.
  2. The plaintiff contends that the taking of the leasehold land was a denial of this right, and seeks declaratory relief and compensation for unlawful dispossession.
  3. No Constitutional right has been offended.
  4. The Constitution of the Independent State of Samoa Article 111 provides:

“Law” being in force in Samoa; and includes this Constitution, any Act of Parliament and any proclamation, regulation, order, by-law or other act of authority made thereunder, the English common law and equity for the time being in so far as they are not excluded by any other law in force in Samoa, and any custom or usage which has acquired the force of law in Samoa or any part thereof under the provisions of any Act or under a judgment of a Court of competent jurisdiction.”

  1. The term ‘English’ is not confined to the United Kingdom but extends to the English speaking world (c/f Sri Lanka, a former British colony which retained the European Napoleonic Code and East Timor which applied Portuguese law). Samoan Courts interpret the common law from a number of sources. The Legislative Assembly, in accordance with the Constitution, enacted the Judicature Ordinance 1961 section 31 which provides:

“Jurisdiction of the Supreme Court – The Supreme Court shall possess and exercise all the jurisdiction, power, and authority, which may be necessary to administer the laws of Samoa.”

  1. The Constitution does provide for common law and equity rights and defences except where altered by statute.

Differing Jurisdictions

  1. In Australian Broadcasting Corporation v Lenah Valley Meats (supra), Gleeson CJ stated at paragraph 20:

“The scales of justice are a powerful image in the judicial process. But the imagery should not lead to the misapprehension that the essential function of a court is to decide every case by a discretionary preference for one possible outcome over another.”

  1. The difficulty is that principles of common law and equity are diffuse between jurisdictions and sometimes within those judicial systems. Samoa has made its own contribution to the common law, especially in the areas of elections and custom in the Pacific areas. In one instance a Samoan dispute ended (via Fiji) in the Privy Council (McArthur v Cornwall [1891] UKLawRpAC 46; [1892] AC 75) before the Berlin Treaty and another (Collins (1933) WSLR, later affirmed 1960 –1969 WSLR 52) in the New Zealand Court of Appeal. Samoan Courts ordinarily refer to New Zealand (due to historic attachments, legislative framework and membership of the Court of Appeal), extended to the United Kingdom and Australia for determination of common law and equity cases. Where there are differences the problem becomes which line of authority should be followed. Some examples will suffice. In relation to property law, mortgages and the like between English and Australian Courts (Pendlebury v CML Life Assurance [1912] HCA 9; (1912) 13 CLR 676, Forsythe v Blundell [1973] HCA 20; (1973) 129 CLR 477, c/f Ins Re Johnson and Co. (1955) Ch 634, Downsville Nominees Ltd v First City Corporation Ltd (1993) ACT 295).
  2. The law in Australia relating to the powers of a receiver and manager is not totally in accord with that of the United Kingdom. In his text, Company Receivers and Managers, 2 ed, ch 10, 4011, Professor O’Donovan, whilst approving the decision of the Privy Council in Downsview Nominees Ltd v First City Corporation Ltd (supra) noted: “In Australia, receivers exercising a power of sale were not under the general law, subject to a higher duty to take reasonable care to obtain a proper price. They were merely required to act in good faith. There was, therefore, some symmetry in their general duties and their duties exercising their powers of sale. In this respect Australian law diverged from English and New Zealand law”.
  3. In discussing the import of cases such as Standard Chartered Bank Ltd v Walkere (1982) 3 All ER 938, O’Day v The Commercial Bank of Australia Limited [1933] HCA 37; (1933) 50 CLR 200 and Williams and Another v Frayne and Another [1937] HCA 16; (1937) 58 CLR 710, Crockett J, in ANZ v Carnegie (Victorian Supreme Court 16 June 1987), in relation to whether the test of the conduct of the receiver was reasonable care or good faith, said at 20: “I have read the authorities to which I have been referred and also a number of cases discussed in them. It is plain that the law in Australia on the question has taken a different course from that which it followed in England.”
  4. That difference was recognised in this jurisdiction in the case of Esera v Samoa Realty and Investments Limited [2007] WSSC 26, where the learned Chief Justice considered the differences between the Australian and New Zealand courts and the Privy Council as to remedy against forfeiture. He determined the latter because the Property Law Act 1952 sections 50, 118 still applied to Samoa. He found the difference to be immaterial to his disposition of the case (Esera at 13).
  5. Although the above relate to different questions, the remarks are apposite to differing approaches taken within different jurisdictions. Such was recognised by the Privy Council in Invercargill City Council v Hamlin [1996] UKPC 56: (1996) 1 ALL ER 756. Concepts of equity have been developed within Australia at a pace different from other jurisdictions and have effected substantial changes to the law (Pavey and Matthews Proprietary Limited v Paul (supra), Australia and New Zealand Banking Group Limited v Westpac Banking Corporation (1987 – 1988) HCA 17; (1988) 164 CLR 662 and David Securities Pty Ltd v Commonwealth Bank of Australia (1991-1992) HCA 48; (1992) 175 CLR 353. There has been substantial development in the area of the law concerning the liability of auditors to their parties following the decision of the House of Lords in Caparo Industries PLC v Dickman (1990) UKHL 2; (1990) 2 AC 605 with differences between various Australian jurisdictions (R Lowe Lippmann Figdor and Franck v AGC (Advances) Ltd [1992] VicRp 93; (1992) 2 VR 671, Esanda Finance Corporation v Peat Marwick Hungerfords (1994) 12 ACLC 199, cf Columbia Coffee and Tea Pty Ltd v Churchill (1992) 29 NSWLR 141).
  6. The legacies are differences in equity between British and American courts and the House of Lords and the Privy Council.
  7. Limitations of the existence and exercise of equitable injunctive power by reason of territoriality, nature and location of assets, arbitration clauses, the existence of proceedings in other jurisdictions and the like, have given rise to much complexity, contradiction and judicial refinement in the United Kingdom. Competing approaches have been taken by the Court of Appeal, House of Lords and the Privy Council. (Norwich Pharmacal v Customs and Excise Commissioners [1973] UKHL 6; [1974] AC 133, Siskina (Cargo Owners) v Distos SA [1979] AC 210, Mercedes Benz v Leiduck [1996] 1 AC 284, Channel Tunnel Group v Balfour Beatty Ltd [1993] AC 334.
  8. The legacy of Mareva (Mareva Compania Naviera SA v International Bulkcarriers SA [1975] 2 Lloyd’s Rep 509, but see Scarlia J in, Grupo Mexicano de Desarrollo, SA, et al, v Alliance Bond Fund, Inc, et al 527 US 1 (1999), note 9 and Kirby J in Cardile and Others v LED Builders Pty Ltd [1999] HCA 17 at 34, note 108 as to Nippon Yusen Kaisha v Karageogis [1975] 2 Lloyd’s Rep 137) designed to prevent the removal of assets has been an extension of equity into areas of intellectual property and the transmission of information on the bases of exception and extension resulted, rather than through development of a separate doctrine or a return to the original framework of equitable principles. That approach, albeit inevitable, has resulted in competing answers being given to similar problems. In the United States, the proposition that equity (adopted in that jurisdiction by the Judicial Act 1789) conferred:

“...authority to administer in equity suits the principles of the system of judicial remedies which had been devised and was being administered by the English Court of Chancery at the time of the separation of the two countries.”

has long been accepted (Atlas Life Ins Co v WI Southern, Inc, [1939] USSC 69; 306 US 563, 568 (1939)). However, the Supreme Court, in a majority decision, rejected any application of a Mareva power to the disposition of property of a person not the subject of judgment. In the words of Saclia J who delivered the majority judgment at 21 – 25: “The parties debate whether Mareva was based on statutory authority or on inherent equitable power. See Brief for Petitioners 17, n 8; Brief for Respondents 35 – 36. Regardless of the answer to this question, it is indisputable that the English Courts of equity did not actually exercise this power until 1975, and that federal courts in this country have traditionally applied the principle that courts of equity will not, as a general matter, interfere with the debtor’s disposition of his property at the instance of a nonjudgment creditor. We think it incompatible with our traditionally cautious approach to equitable powers, which leaves any substantial expansion of past practices to Congress, to decree the elimination of this significant protection for debtors.”

  1. The differences between New Zealand and the United Kingdom courts were analysed and accepted by the Privy Council in Invercargill (supra). As Scalia J observed in Grupo Mexicano (supra) at 24 – 25:

“We set them forth only to demonstrate that resolving them in this forum is incompatible with the democratic and self-deprecating judgment we have long since made: that the equitable powers conferred by the Judiciary Act of 1789 did not include the power to create remedies previously unknown to equity jurisprudence. Even when sitting as a court in equity, we have no authority to craft a ‘nuclear weapon’ of the law like the one advocated here.”

  1. In one of the last New Zealand Appeals to the Privy Council in Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 NZLR 289 (the last reported fittingly appears to be Latimer v Commissioner of Inland Revenue [2004] 3 NZLR 157), the Judicial Committee accepted those differences but reserved its opinion on the issue of an ‘obligation of good faith’ as being an undesirable development.
  2. The above, if tedious exposition, has a point. The plaintiff relied heavily on the failure of the Samoan processes and sought the aid of equity as its remedy. But much of the criticism did not take into account, in determining equity, the differences between the sophistication and complex infrastructure as the European and New Zealand models. Samoa has less infrastructure and resources in dealing with foreign corporations and development. The plaintiff relies on Misa’s letter (outlined above at paragraph 51) as forming a conclusive agreement. Samoans would regard it as letter of comfort (Kleinwort Banson Ltd v Malaysia Mining Corporation Berhad (1989) 1 WLR 379), which depending on textual analysis might not give rise to legal obligation (Banque Brussels Lambert SA v Australian National Industries Ltd (1989) 21 NSWLR 502).
  3. The doctrine of equity includes that of competing equities. In determining the balance and discretionary remedies, it is for the Samoan Courts to apply Samoan standards, needs, resources and the like. The defendants are also entitled to equity.

Statute

  1. The plaintiff’s first cause of action relies on the Property Law Act 1952 section 118 which relevantly provides:

“Restrictions on and relief against forfeiture – (1) A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, condition, or agreement in the lease, shall not be enforceable by action or otherwise unless the lessor serves on the lessee a notice specifying the particular breach complained of, and, if the breach is capable of remedy, requiring the lessee to remedy the breach, and in any case requiring the lessee to make compensation in money for the breach, and the lessee fails within a reasonable time thereafter to remedy the breach, if it is capable of remedy, and to make reasonable compensation thereof in money to the satisfaction of the lessor.

...

(2) Where a lessor is proceeding by action or otherwise to enforce such a right of re-entry or forfeiture, or has re-entered without action, the lessee may, in the lessor’s action (if any), or in any action brought by himself or herself, or by proceeding otherwise instituted, apply to the Court for relief; and the Court, having regard to the proceedings and conduct of the parties under subsections (1), (1A) and (1B), and to all the circumstances of the case, may grant or refuse relief, as it thinks fit; and in case of relief may grant the same on such terms (if any) as to costs, expenses, damages, compensation, penalty, or otherwise, including the granting of an injunction to restrain any like breach in the future, as the Court in the circumstances of each case thinks fit.”

  1. The legislation provides a remedy for compensation if the defendant has breached an agreement. It will be later considered in the event of a finding of breach. The defendants have given the required notice as required by the Act. The Court is afforded a discretion “having regard to ‘the proceedings and conduct of the parties ... and to all the circumstances of the case.”
  2. The Government Proceedings Act 1974 refers to liability of government in tort contract and trust. It was those terms together with actions and duties at common law. For the purposes of this case the defendant is liable for equitable breaches and duties. At first glance it appears to limit liabilities to action in tort and contract but the wording of section 3 (c) and (d) show that the wording is inclusive.
  3. The Unit Titles Act 2004 has yet to be proclaimed. The plaintiff called Jones, a New Zealand barrister and solicitor since 1975 and experienced in residential property work, to explain the workings of the comparable New Zealand legislation. The Court received portion of his evidence as advisory on foreign law (see generally Perlak Petroleum Maatschappi. J v Dean (1924) 1 KB 111). Much of his affidavit and evidence on the hearing was argumentative and could have been better handled by counsel in submissions. Distilled his evidence was:
  4. The evidence does not assist the plaintiff’s cause. The plaintiff was demanding general legislation as a precondition to its project and in its own private interest. The Court notes that the date of the Act was 2008 and not 2009 as the witness avers. The Revision notes that it has been consolidated and revised in between 2008 and 2011 under the authority of the Revision and Publication of Laws Act 2008. The Assent and Commencement date is shown as 25 March 2008.
  5. The complexity shows the wisdom of the then Attorney General not to proceed with the legislation. The New Zealand decision may have given reason for the decision not to proclaim the legislation. In any event it was enacted after the execution of the Deed of Lease and was unworkable in the absence of concordant of Body Corporate legislation. Further, if it was interpreted in the manner decided by the New Zealand Court of Appeal it would not have served the plaintiff’s purpose. Thus, irrespective of other matters, there could be no grant to a purchaser or investor except through a sublease and a person could not permit subleases to a number of persons at intervals as anticipated by Taylor. Taylor never suggested subdivision although that course would raise further difficulties. This matter will be further considered in relation to inducement and misrepresentation.

Common Law

  1. Some principles of common law will be dealt with separately. It is convenient here to consider the term force majeure relied upon by the plaintiff. The plaintiff pleads in paragraph 9 (of its Statement of Claim):
  2. It relies on the words in the deed where performance is ‘so impracticable as reasonably to be considered impossible in the circumstances’ (plaintiff’s submissions, paragraph 383). These contentions are rejected.
  3. In Lebeaupin v Richard Crispin and Company [1920] 2 KB 714, McCardle J determined that the phrase was not interchangeable with an act of God. (See generally: Hurricane Damage and the Law Brock (2006) Commonwealth Law Bulletin, Vol. 32, page 3). A tsunami can be regarded as an ‘act of God’ and many insurance policies, which are contracts, specifically deal with such events either by specific inclusion or exclusion. A tsunami and inability to raise capital are different causes. The tsunami did not impact on the leasehold lands. In some instances a flood or cyclone can enliven the flow of capital because of the increased demand for rebuilding. The authority of Hyundai Merchant Marine Company Ltd v Darkbrook Coal (Sales Pty Ltd) [2006] FCA 1324; 236 ALR 115 does not assist the plaintiff. It is an event which makes performance impossible not more difficult. A hurricane or tsunami may constitute ‘force majeure’, derived from the Napoleonic Code (Matsaukis v Priestman and Co [1915] 1 KB 681, Ringstad v Collins Pty Ltd [1924] HCA 57; (1924) 35 CLR 303) enabling a party to escape liability for a failure to perform a contract as a result of the circumstance. A party must show a direct causative link between the event and the consequence. The plaintiff has not done so. It could have completed the initial phase of the agreement.
  4. The global economy affected the whole world. It did not entitle the whole world to escape responsibility for contracts entered into. The Lease Clause 33 (4) excluded ‘insufficiency of funds.’
  5. It is the Legislative Assembly not the government or Minister which enacts legislation. The Government may introduce legislation but not enact it. The Court was told that drafting of the Unit Titles Act commenced in 2004. It was not an easy task. It was more suited for a city or developed state such as Singapore. It was the business model adopted by the plaintiff which caused the problem. The plaintiff can only succeed if the terms were varied or it suffered loss or damage as a result of misinterpretation or inducement. Those, and matter of equity, will be separately considered. The defendants are entitled to the exception clause in the Deed of Lease Clause 33.4 which states:

“Force majeure shall not include any insufficiency of funds or failure to make any payment required under the deed.”

Equity

  1. Equity has many facets both in the law of evidence and remedy. In Samoa it could be described as ‘tao ma tali’. It has been summarised by Spy as:

“Equitable principles have above all a distinctive ethical quality, reflecting as they do the prevention of unconscionable conduct. They are of great width and elasticity, and are capable of direct application, as opposed to application by analogy, in new circumstances as they arise from time to time.”

  1. It enables equitable relief for a purely common law right.
  2. Maxims relevant to these proceedings include:

Equitable Relief

  1. Equity permits monetary damages in lieu of performance. Here the plaintiff seeks damages and a declaration. For reasons later to be stated the Court will not grant a declaratory order.

The Deed

  1. It is clear that the plaintiff is in breach of the terms of the Deed of Lease, Clauses 3.3, 3.5 (a) (i) and the Court has determined that it is not entitled to rely on the exception Clause 3.5 (b). It is clear that the defendants have complied with Clause 29.
  2. The defendants have re-entered the property and the plaintiff does no longer seeks dispossession as a remedy and claims damages instead. The execution followed a long course of negotiations. Waiver will be separately considered.
  3. The Deed Claims 33 (6) provides:

“33 (6). Notwithstanding anything to the contrary, the Lessee’s obligations to construct twenty five (25) deluxe apartments suites with two (2) bedrooms and thirty (30) villas with two (2) to three (3) bedrooms is subject to the enactment of Strata Title legislation. The obligation to construct and complete the deluxe apartment suites and villas shall be three (3) years from enactment (if any) of Strata Title legislation.”

  1. The proviso only applies to the requirement to construct the deluxe suites and villas. It does not apply to the requirement to the first phase of the construction of 50 hotel rooms. The defendant relies on that failure as a basis for termination.
  2. There is a difference between the witnesses Clarke and Stevenson on the events surrounding and during the execution. The Court accepts the evidence of Clarke rather than Stevenson on those differences. Clarke has no personal interest in the project and was quite clear that the wording meant what it said and that there was no question that the Phase 1 requirement was irrespective of a disjunctive from the strata term.
  3. Stevenson’s evidence was argumentative and often consisted of opinion and conjuncture. The Court accepts the document trail he outlined and his uncontroversial evidence and sequence. In this case, it relies heavily on the documentation and sequence of events. In relation to the exchanges between Stevenson and Clarke, it prefers the latter. Much of Firth’s evidence comprised hearsay of what Taylor had said. He was unaware of the single share transfer.
  4. The deed itself contains a proviso ‘if only’. It reads that if no strata legislation is enacted the plaintiff would not be required to continue the construction of the deluxe apartments and villas.
  5. Equity might intervene if a defendant relies on the definition of enactment as not requiring proclamation.
  6. The Court is not prepared to conclude that equity would intervene if ‘enactment’ was the only basis of defence. Given the other findings it is not necessary to determine this single point raised by the defendant. The term ‘if any’ is more clear.
  7. It is clear from the deed that government rejected the business model urged by the plaintiff. That model included the raising of capital through sales in order to commence Phase 1 i.e. the construction of the 50 hotel rooms. The plaintiff, through Taylor, was experienced in commerce and dealings with government and had experienced legal counsel to undertake the agreement. This is not a case such as Garcia v National Australia Bank [1998] HCA 48; (1998) 194 CLR 395 or Yerky v Jones [1939] HCA 3; (1939) 63 CLR 649, its extension of principle in Commercial Bank of Australia WA v Amadio [1983] HCA 14; (1983) 151 CLR 447 or Royal Bank of Scotland v Etridge (No 2) [2002] AC 773.
  8. Equity might intervene if the defendant argued that the term Strata Title legislation did not involve accompanying Body Corporate legislation. The defendant does not rely on this interpretation although the Court notes that the plaintiff, through its legal advisors and/or Taylor, would be aware that only one enactment had been made by the Legislative Assembly and made no complaint until the commencement of these proceedings.

Implied Term

  1. The plaintiff contends that the Court should imply in the deed a term which made the strata issue a precondition to the commencement of the construction of the hotel rooms. In law the Court ought not do so. An implied term is one where a term should have been included (Liverpool City Council v Lewis [1976] UKHL 1; [1977] AC 239.
  2. A term can be implied through the failure of the parties to direct their minds to a particular eventuality (Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, Con-Stan Engineering (Aus) Pty Ltd v Norwich Winterthur Insurance (Aus) Ltd [1986] HCA 14; (1986) 160 CLR 226) or is so obvious that it goes without saying (Shirlaw v Southern Founderies Ltd [1939] 2 KB 206), or to afford business efficacy. In the words of Mason J in Codelfa (supra) ‘the courts have been at pains that is reasonable to imply a term it must be necessary, to do so to give business efficacy to the contract. (see also: Bell v Lever Brothers Ltd [1931] UKHL 2; [1932] AC 161).
  3. The principles were summarised by the Privy Council in BP Refinery Pty Ltd v Hastings Shire Council (1997) ALJR 20 at 26 in the following terms:
  4. The pre-contract negotiations might form a background for any interpretation (Prenn v Summonds (1971) 3 All ER, Codelfa (supra), WEL Energy Group Limited v Electricity Corporation of NZ Ltd [2000] NZCA 326; [2001] 2 NZLR 1) but here the impugned words of the lease are explicit and not ambiguous.
  5. The contended ‘implied term’ argued by the plaintiff is not supported by legal or equitable principle. The surrounding circumstances are admissible only to resolve ambiguity (Great Western Railway Midland Railway v Bristol Corp (1918) LJ Ch 414), and do not support the plaintiff’s cause. The contended ‘implied term’ concerning the strata issue is limited by the terms of the Deed of Lease. It provides for a phased development. The plaintiff breached the terms of the lease at Phase 1 i.e. before any requirement, express or implied, for the enactment of strata legislation.

Side Agreement

  1. Stevenson was unable to produce an executed copy of a side agreement claiming it to be lost or destroyed during a burglary. No corresponding document has been discovered by the defendant. The Court is unable to find that the plaintiff concluded a side agreement with the defendant.

Custom and Usage

  1. Any claim for an implied term based on custom or usage does not meet the criteria stated in Con-Stan (supra).

Variation

  1. In January 2010, the lessor issued a Notice of Remedy stating a breach of the lease because RSI had not constructed 50 hotel rooms within the first 3 years of the lease. It is clear from the whole of the evidence that the plaintiff was, in fact, in breach of the agreement. The Notice provided for a 2 month period for the breach to be remedied. The plaintiff did not do so. In February, the plaintiff requested an extension of time to permit the Wyndham proposal to be implemented. Under that proposal the plaintiff was to assign its interest in the lease for consideration.
  2. On 31 March, the lessor gave Notice of Termination effective within 2 months and would take possession of the land at the end of that period.
  3. There were further discussions culminating in a meeting on 7 July 2010, regarding a proposal by the plaintiff to extend the effect of the termination notice. On 12 July government granted an extension of 1 year (until 10 August 2011) upon conditions which included the transfer of all Taylor’s shares to Firth. It is clear that government had lost all confidence in Taylor. Taylor did not do so. He transferred all but one share to Firth and the remaining one to his stepson said, at trial, to be a resident of China. Firth, himself was not advised of that transfer. Firth, in fact, held all of his shares on trust for Taylor, a matter disclosed to government. At some stage Taylor claimed that the share had been transferred to Stevenson for sale. It is probable that government would not have been prepared to grant an extension if it was aware of the transfer of the share.
  4. Retention of the one share, within family, and non disclosure enabled Taylor to retain a direct link with the Company. The transfer to the stepson was a sham. Taylor retained control of the Company through trust (disclosed) and family (undisclosed). Taylor and the plaintiff do not come to a court of equity with clean hands. The plaintiff and government continued with their relationship but the Wyndham proposal foundered. Government was not at fault in the failure of an assignment to Wyndham. Government had continued with its initial requirements of a phased development specifically the erection of the 50 hotel rooms.
  5. The failure of the Wyndham proposal meant that the plaintiff did not or could not comply with the terms of the extension. Either way RSI was in breach of the term of the lease and its extension.
  6. On 10 August 2011, the lessor gave final Notice of Termination.
  7. These proceedings were commenced on 20 January 2012.

Equity

  1. The plaintiff, through Taylor, does not come to the Court ‘with clean hands’. Irrespective of that bar it ought not succeeded in its suit for equitable relief. These grounds will be separately considered.

Fiduciary Duty

  1. There is no fiduciary relationship between the plaintiff and government. Fiduciary duties are proscriptive rather than prescriptive. Equity does not impose positive legal duties on the fiduciary to act in the interest of the person with whom it is engaged. It can intervene where a fiduciary fails to perform a duty. Proscriptive duties prohibit a person owing those duties from acting other than in the interests of the person to whom the duty is owed. Unconscionability permits one party to act self interestedly in his or her actions towards the other but precludes excessive self interest or exploitative conduct. ‘Good faith’ permits a party to act in self interest but requires that party to have regard to the legitimate interest of the other. A fiduciary relationship involves undivided loyalty in the interest of the other. There are graduated standards and a fiduciary relationship requires a higher standard of conduct above those imposed by tort contract and ‘mere equities’. In Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, Mason J stated at 96.7:

“The critical feature of [accepted fiduciary relationships] is that the fiduciary undertakes or agrees to act for or on behalf of or in the interest of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense .... The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction.”

  1. That approach is consistent with that taken in other jurisdictions (Elders Pastoral Ltd v Bank of New Zealand [1989] NZCA 406; [1989] 2 NZLR 180, Carson Enterprise Ltd v Broughton Co [1991] 85 DLR (4th) 129, Bristol and West Building Society v Mathew [1996] EWCA Civ 533; [1996] 4 All ER 698).
  2. This was not a case of disadvantage, vulnerability or unequal bargaining partner (see generally: Equity and Trusts in Australia, Dal Pont and Chalmers (3 Ed) Ch 4, Law of Contract in New Zealand, Burrows (2 Ed) 2.3.1, 11.4.1). The parties had entered into a commercial arrangement. The evidence demonstrates that each had sought advantage as seen through their interests. No fiduciary duty arose.
  3. There is nothing in these reasons contrary to the authority of Meredith v Drake Company Ltd [2001] WSSC 32.

Misrepresentation and Misleading Conduct

  1. Misrepresentation either through contractual or equitable principle will be considered under the one heading. The issue will be considered in two sections namely, the period leading up to the execution of the Deed of Lease and conduct or representations until the final Notice of Termination.
  2. Although the Rule in Seddon’s Case (Seddon v North Eastern Salt Co. Ltd [1904] UKLawRpCh 170; [1905] 1 Ch 326 has been weakened, it remains a good starting point. The Rule is that a court will not grant rescission of an executed contract on the grounds of innocent misrepresentation. Here RSI has not established fraud or willful misconduct. Government has sought to enforce the executed contract while RSI contends that equity ought protect it from those terms. It has never sought rescission of any portion of the contract; rather it has attempted to assign it to a third party.
  3. The plaintiff relies heavily on a letter from Misa Telefoni, already referred to.
  4. That letter must be seen in the context of other correspondence between RSI and the Attorney General and the Minister for Tourism in the same period. The reference to an undertaking is to the passage of general strata legislation not specific for RSI.
  5. The legislation was enacted in 2009. Given the decision of the New Zealand Court of Appeal in NZPS (supra), even if proclaimed the Act would not suit the plaintiff’s purpose, especially if Samoan Courts followed the New Zealand ruling. Even if the legislation was workable (and the New Zealand experience seems to be to the contrary) RSI would not have been able to split its title more than once. RSI ought, through its directors and legal advisors, have been aware of this.
  6. There is a fundamental flaw in the plaintiff’s argument. The Deed of Lease provided for a condition precedent of the development. It expressly provided a sequence. The developer would not be required to undertake the construction pf further units until the enactment of strata legislation and not required to complete the apartment suites and villas until 3 years from ‘enactment (if any) of Strata Title Legislation’. The letter from Misa Telefoni of 12 September ought be regarded as a letter of comfort (Kleinwort Banson Ltd (supra)) rather than on giving rise to legal obligation (Banque Brussels Lambert SA v Australian National Industries Ltd (supra)).
  7. There had been no misrepresentation or misleading conduct as of 29 September 2006 when the plaintiff executed the deed. Government had provided for enactment in the terms stated in the Deed Clause 33 (6).
  8. Following Misa Telefoni’s letter, Stevenson wrote to the Deputy Prime Minister stating that:

“Mr Taylor has agreed to all other conditions if Government will extend the 3-year time period in Claim 33 (6) from 3 years to five years, from the passage of the Strata Title Legislation.”

  1. The lease was signed by Taylor unaltered. Concurrent with those exchanges was a letter (undated) from the Prime Minister for the enactment of ‘Strata Title and Body Corporate Legislation within 12 months from the date of execution of the lease’ and advising that on completion of Phase 1 government would grant an additional four (4) acres of land to that provided in the lease.
  2. On 28 September 2006, Misa again wrote to Stevenson advising that Cabinet had approved the lease but if RSI did not execute the lease on 29 September ‘the process will lapse’.
  3. There was no misrepresentation or misleading conduct which caused RSI to authorise its director on 29 September to sign the lease.
  4. Little, if anything, happened with the construction. On 5 April 2007, MNRE wrote to Stevenson advising them that the Land Board had resolved to terminate the lease. On 13 April, Stevenson replied complaining that neither Taylor nor Trevor Stevenson had received the initial correspondence of 28 March since both were overseas, that Taylor strongly disagreed with the Board’s interpretation and would reply when he returned to Samoa on 22 April. The complaints are irrelevant. Stevenson had an office in the Samoa National Provident Fund building in Apia, and RSI a registered office in Apia and a mail address of P.O. Box 2709 Apia. Taylor’s strong disagreement is likewise irrelevant.
  5. On 11 May, Misa wrote a strong letter to Trevor Stevenson who replied on the same day advising Misa that he had again ‘mis-stated the facts’ – an offensive form of address. It is obvious that at that stage Taylor had entered into negotiations with Wyndham although Stevenson advised that Wyndham were negotiating to buy into RSI not to purchase the lease. The distinction is meaningless. Wyndham were unlikely to deal with RSI a small private company with few shares unless the lease and development were central to the negotiations. The vehicle was unimportant. The fact was that RSI had neither commenced nor completed the hotel room phase.
  6. On 23 May, the Prime Minister advised that RSI could continue with negotiations but stressed the importance of ‘the physical construction of the hotel facilities.’ It is significant that RSI did not apply for a building permit until 11 June 2007, nine months after the execution of the lease. This shows RSI’s real purpose to be not development but sale of an asset. Wyndham was certainly aware of the nature of the negotiations as stated in its letter of intent dated 29 February 2008 referring to acquisition of land, its development and management. Whether the word ‘owner’ is a misnomer or otherwise is a matter of speculation since no evidence was adduced at the time of trial from Wyndham. The letter of intent stated the acquisition of the 6.5 acres and the lease of the 4 acres previously offered for government. It further stated that RSI would undertake the construction and provided for payment of USD$1.5 million on the grant of land and the entry of management. Term 6 required the ‘owner’ to provide estimates of costs of construction and the court infers that those costs were payable in addition to the $1.5 million. If not, Wyndham would be the assigned a lease rather than as the registered owner of freehold title. The letter also provided that the applicable law and jurisdiction to be Queensland. The lease itself provided for the application of Samoan law.
  7. Taylor wrote to Misa on 3 April 2008 raising the issues of Strata Title and other grievances and promises in terms which caused Misa to note on the letter ‘Kindly advise given this letter if the gentleman is still ‘compus mentis’ (sic) enough to proceed.’
  8. The evidence of events between April 2008 and 13 January 2010 is scant. On the latter date MNRE gave Notice to Remedy. On 2 February 2010, Stevenson advised:

and sought a two year delay ‘to get the project underway.’

  1. In his evidence, Stevenson was adamant that Wyndham did not wish for a fresh lease but insisted on retention of the existing lease. RSI would be in a better position if it could assign the lease (its asset) for consideration.
  2. On 2 March 2010, Stevenson advised that Wyndham could not commit until 2011. That letter caused MNRE to serve a Notice of Breach dated 31 March.
  3. On 1 June, Taylor wrote to the Minister of MNRE advising of the intended sale of his interest and needing a two year extension. In that letter he stated ‘I have unconditionally offered my interest in the company for sale’. That statement was mendacious. He transferred all but one of his shares to Firth who then held all shares, but one, on trust for Taylor. The remaining share he transferred to his step or foster son in China. On 14 June, Taylor wrote to Stevenson granting ‘sole exclusive irrevocable authority’ to Trevor Stevenson to sell his shares for USD$1.5 million stating the company had 99 percent of the shareholding and Trevor Stevenson 1 percent. That in turn was mendacious. The transfer of shares was made by deed on 14 July 2010 and the statutory form completed on 12 August.
  4. On 12 July 2010, MNRE extended the effect of termination for a further 12 months.
  5. The SAT $1 million bond deposited with the National Bank of Samoa has been released.
  6. On 20 January 2011, Stevenson wrote afresh to the Prime Minister setting out unrealistic time and financial frameworks, claiming Wyndham’s support and seeking a variation of the lease. The letter claimed to have the support of the Attorney General in legal proceedings concerning the enforceability over customary leases in government leasehold land. It also sought a 15 year ‘Duty Free and Tax Holiday’ period. The letter was devoid of reality. In a follow up letter, Stevenson stated ‘we are confident that now armed with the Unit Title Legislation and recent passage of the amendment to the Income Tax Act 1994, the project with Wyndham can be realized.’ That letter also stated that:

“Stevensons lawyers or their nominees and Pacific Venture Capital will value ownership of the shares in RSI ... until 31 March 2012 ... at which time the shares shall be transferred to the investors.”

  1. Firth was and remains a trustee not an investor. Alice could not have done better.
  2. In April 2011, government put an end to any remaining arrangement.
  3. If there be fault in the government and its officers it was its acceptance of delay and avoidance by the plaintiff. It granted extensions to assist RSI in making attempts to on-sell or assign its only tangible asset, the lease.
  4. There was no misrepresentation or misleading conduct by government which caused RSI harm between the date of the lease and the hearing of these actions or suits in equity. The converse is true. It was RSI which attempted to mislead, delay, make unwarranted promises and seek vantage in its own commercial interests at the cost of government.

Unconscionable Conduct

  1. This equitable remedy requires an explicit finding of unconscionable conduct in a person against whom it is invoked. Fraud, misrepresentation, breach of fiduciary duty, undue influence and estoppel form some of the bases for remedy. It is both a sword and a shield (tao ma tali). Here the Court is not persuaded, on the evidence, that government engaged in unconscionable conduct.
  2. The plaintiff sought commercial reward in the development and potential management of the resort. It wished to raise capital through the sale of titles to individual owners for villas for luxury units. It sought special interest legislation as a means to achieve its commercial enterprise. It sought the raising of capital protected by statute in order to fund the project. It resorted to special pleading in its attempts.
  3. Government sought the development of its land to enhance its tourism and fiscal policies. It saw the erection of hotel units as its priority and resisted attempts to develop ‘top down’. The initial negotiations and variations took some 6 years. It accommodated the special interests by agreeing to the terms of the lease claim 33.6. The terms of the lease were favourable to the plaintiff. The rental terms and provision of extension were generous and deferred payment for five years. Government was required to consider the general and public interests in any enactment of strata legislation. It permitted reclamation of land to its original boundary. It allowed 6 years for the completion of the project. In doing so it accommodated many of the demands or requirements of the plaintiff.
  4. Government allowed for 3 years 4 months before it gave notice to remedy, far longer than the required completion date for Phase 1 and far longer than the commencing date required by Clause 3.3. At the time of its repossession there had been no commencement of the resort buildings envisaged in Phase 1.
  5. Government further allowed for a 12 month extension although not required to do so. It did so to enable RSI to assign the lease and on-sell the project to Wyndham or a like purchaser. That course provided the plaintiff a means to recoup its claimed expenditure. RSI failed or was unable to take advantage of the extension. That is part of the risk of commerce.
  6. In return RSI made unreasonable demands. It complained of delay, value, length of lease and general legislation designed to meet its special interest. It attempted to extract sand from the land and sell or exchange to outside purchasers. Taylor failed to disclose the transfer of a share to his family. It failed to seek its own financing except through its preferred model.
  7. It now seeks exemplary damages on the ground of unconscionable conduct. The Court sees no reason to do so.

Estoppel

  1. The plaintiff relies on the decision of the Commonwealth of Australia v Verwayen (1990) 170 CLR 394 for its plea of estoppel. Since that decision the High Court is less inclined to embark on the exercise of reshaping fundamental doctrine where innovation is unnecessary to decide the case at hand. That sobriety has had an impact on estoppel and a more recent case is that of Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101. The distinction between promissory and propriety estoppel has been strengthened.
  2. In Apia Quality Meats Ltd v Westfield Holdings Ltd [2009] WSSC 1, the learned Chief Justice, in strike out proceedings, considered the application of estoppel. His Honour applied the principles stated by the New Zealand Court of Appeal in Burbury Mortgage Finance and Savings Ltd v Hindsbank Holdings Ltd [1988] NZCA 220; [1989] 1 NZLR 356. He considered the essential elements to be:
  3. There is no departure in these reasons contrary to the formulation of the learned Chief Justice.
  4. For the reasons stated above the defendant is (and was) not estopped from either repossession or terminating the contract.

Unjust Enrichment

  1. This equitable doctrine is a form of unconscionable dealings although it can be seen as a form of unconscionable conduct or substantive unconscionability. The authors Dal, Pont and Chalmers (supra) refer to the term ‘improvidence of transaction’ and/or ‘inadequacy of consideration’. A requirement is exploitation by the stronger party and analysis of cases such as Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362, O’Connor v Hart [1985] UKPC 1; (1985) AC 1000, Nichols v Jessup [1986] NZCA 84; (1986) 1 NZLR 226 and Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457 show a ‘blurring’ of the doctrine. Subjective intent or its absence is not a bar to a claim although a New Zealand Court in Nichols v Jessup (supra) introduced the terms of ‘active exploitation, abuse of confidence and lack of good faith’ into the equation. Good faith and fair dealing requirements were a product of American statutes not the common law. In Australia those requirements have been introduced through the Trade Practices Act 1974 Part IV A.
  2. On either approach, this Court is not prepared to find government, objectively or subjectively, liable for unjust enrichment. It may have received the benefit of some relatively minor improvements and a causeway but it had lost time and opportunity to enhance its tourism policy and delay resulted in lost rental income.
  3. These were commercial dealings between experienced entrepreneurs and government. Those dealings were not exploitive. RSI executed a lease and did not comply with its terms. Government provided an extension to permit RSI to ‘on-sell’ or assign its lease for consideration. The deed still permitted Wyndham or another entrepreneur to undertake phased development with a future possibility of the sale of unit titles at Phase 3. Whether Wyndham declined to purchase was not the responsibility of government.
  4. The conclusion reached in Meredith v Manoa [2002] WSSC 51 accords with these reasons.

Competing Equities

  1. Both parties had equitable interests in the leased land and its development. In that respect an owner had a prior equity (Rice v Rice [1853] EngR 1102; (1853) 61 ER 646) although Kindersley VC regarded time to be the last criterion to be resorted in determining priorities (see: Abigail v Lapin [1934] AC 491). The failure of government to enforce its first Notice of Breach ought not afford RSI a basis for claiming a stronger right to equitable relief (see generally: Dal, Pont and Chalmers (supra) at 2.140 – 2.185). The equities relied upon by RSI could be described as ‘mere equities’ as distinct from government’s equitable priority (see: Latec Investments Ltd v Hotel Terrigal Pty Ltd (1965) 113 CLR 264, Kitto J at 277.279). Government had committed itself for the cost of related infrastructure and had a strong interest in the completion of the project.

Misfeasance of Public Office

  1. There is no merit in this pleading.
  2. The elements of this tort is stated in Three Rivers District Council v Bank of England (No 3) [2000] UKHL 33; [2000] 3 All ER 1 which approved and/or applied the earlier English decision of Bourgeon SA v Ministry of Agriculture, Fisheries and Food [1985] 3 All ER 585, the Australian decision of Northern Territory v Mengel (1995) 185 CLR 307 and the New Zealand decision in Garrett v Attorney General [1997] 2 NZLR 332. Central to the tort is ‘targeted malice’. Lord Hutton summarised the tort as requiring dishonesty as a necessary ingredient of the tort. The requirement can include the terms ‘corrupt motive, improper motive’ or the term ‘in bad faith’ together with the term ‘dishonesty’.
  3. It is insufficient to show objective foreseeability of damage (Garrett (supra)) and a party must prove ‘that the public officer himself foresaw the probability of damage, or was reckless as to the harm which is likely to ensue or was reckless as to the harm which is likely to ensue.’ Lord Hutton considered that the New Zealand decision did ‘not detach the unlawful conduct from its consequences but regard(ed) the abuse of power as consistent in the unlawful exercise of power by a public officer with knowledge that it is likely to harm another citizen, when the power is given to be exercised for the benefit of other citizens’ (Lord Hutton at 41).
  4. The Samoan courts have followed the test of ‘bad faith’ (Chang Tung v Attorney General [2005] WSSC 24). In that case, the learned Chief Justice dismissed a ‘strike out’ application. In doing so, he applied the Three Rivers (supra) conclusions and statement of principle stating at page 11:

“...bad faith is an essential ingredient of the tort of misfeasance in public office.”

  1. This Court should follow the approach taken by the learned Chief Justice.
  2. Irrespective of which of the two forms of the tort are applied, the plaintiff ought not succeed. There is no evidence of bad faith or reckless indifference. Knowledge of the Attorney General’s advice or caution did not constitute the tort. Public officers continued to assist the plaintiff and granted an extension for compliance. Government ought not be held responsible for the plaintiff’s failure to assign the lease, was entitled to insist on Taylor’s removal and ought not be required to pay him (as controller and shareholder by trust) compensation through this action.

Waiver

  1. The evidence relevant to waiver is vague. The plaintiff was involved in some way in the re-tendering process. The Court is not prepared to determine whether it did so by withdrawal or engagement. Given the findings on other causes of action or suits it is not necessary to determine this bar or defence. On balance, the Court is not prepared to conclude that the plaintiff waived its claimed accrued rights. If that be wrong then it would be entitled to claim that it was attempting to mitigate its loss, a matter not argued by the parties.

Damages

  1. Given the nature of the case it might have been preferable to split the hearing in to liability and damages. Such is done for the benefit of the Court and any appellant court. In some instances a trial court will assess damages even if it has denied liability. In this instance the Court declines to do so.

Conclusion

  1. The plaintiff should leave this Court on its corporate shield, not with the shield of equity. Each action and equitable suit is dismissed. It follows, absent compelling argument, that it ought pay the defendants’ costs of these proceedings.

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

(JUSTICE SLICER)


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