Samoa Independent Seventh Day Adventist Church v Silva Transport Company Ltd [2013] WSSC 15 (30 January 2013)

SUPREME COURT OF SAMOA

Samoa Independent Seventh Day Adventist Church v SilvaTransport Company Limited [2013] WSSC 15

Case name: Samoa Independent Seventh Day Adventist Church v Silva Transport Company

Citation: [2013] WSSC 15

Decision date: 30 January 2013

Parties:
SAMOA INDEPENDENT SEVENTH DAY ADVENTIST CHURCH a incorporated religious society having its registered office at S.I.S.D.A.C Centre, Saleufi (Plaintiff) and SILVA TRANSPORT COMPANY LIMITED, a duly incorporated company having its registered office at Vaitele (Defendant)

Hearing date(s):

File number(s): CP 106/07

Jurisdiction: Civil

Place of delivery: Mulinuu

Judge(s): Justice Nelson

On appeal from:

Order:

Representation:
Mr R T Faaiuaso and Ms L Tamati for plaintiff
Mr L R Schuster for defendant

Catchwords:

Words and phrases:

Legislation cited:

Cases cited:

Summary of decision:

IN THE SUPREME COURT OF SAMOA

HELD AT MULINUU

CP 106/07

BETWEEN

SAMOA INDEPENDENT SEVENTH DAY ADVENTIST CHURCH a incorporated religious society having its registered office at S.I.S.D.A.C Centre, Saleufi.

Plaintiff

AND

SILVA TRANSPORT COMPANY LIMITED, a duly incorporated company having its registered office at Vaitele.

Defendant

Counsel: Mr R T Faaiuaso and Ms L Tamati for plaintiff

Mr L R Schuster for defendant

Decision: 30 January 2013

DECISION OF NELSON J

1. Firstly the court apologies to counsel and the parties for the delay in rendering this decision. This file was placed to one side to give priority to election petition hearings and went missing in action from thereon. It only resurfaced from the depths of the Ministry of Justice and Courts Administration late last year.
2. This case has a protracted history. By amended statement of claim dated 17 February 2008 the plaintiff alleges that in or about June 2005 it engaged the defendant to undertake reclamation work in respect of its recently purchased property at Fugalei. The property is located in a swampy sea estuary area and is alleged to be 3 acres in size but the plaintiffs documents confirm it to be only 2½ acres. The work comprised filling the land to a depth of 4 metres above sea level and constructing a stonewall to protect the land from erosion. The property was intended to house attendees of the plaintiffs December 2006 World Convention Meeting. The plaintiff originally intended to fill the property itself and had imported a loader, excavator and 2 trucks for the purpose. There were difficulties in landing the trucks which were eventually returned. Consequently the plaintiff sought a suitable contractor who could make use of the loader and excavator. The defendant agreed to undertake the work in return for the loader and excavator collectively valued at $200,000 plus a cash payment of $100,000. Making a total contract sum of $300,000 which was the plaintiffs budget for the work.
3. The plaintiff says it was a term of the contract that the work be completed within 60 days or inside 2 months. In pleadings, plaintiff says this was subsequently extended to 4 months. Further that this was a term the defendant failed to comply with. Both parties accept that originally due to a mistake by the plaintiffs surveyors the defendant began filling in the adjoining piece of land by mistake. The error was discovered and rectified by new surveyors. Compensation for the extra work was agreed upon and accepted at a meeting in Auckland, New Zealand on 19 September 2005 by Mrs Jacinta Silva on behalf of the defendant. A written memorandum recording the agreement and duly executed by the parties was produced as attachment “C” to the affidavit of Pastor Willie Papu the Executive Director and main witness for the plaintiff. Because that document is pivotal it is herein reproduced in full:

“AN ADDENDUM TO A FORMER CONTRACT BETWEEN THE SAME PARTIES IN REGARDS TO THE SAME PROJECT AT FUGALEI, SAMOA.

This agreement made on the 19^th September, 2005 at Auckland, New Zealand

Between: Samoan Independent Seventh-day Adventist Church of Apia, Samoa, hereafter referred to as the “church”

AND: Silva Transport Co. Ltd of Apia, Samoa, hereafter referred to as the “company”.

Whereas, the church agrees to compensate the above named company for an additional $20,000 NZD for additional work in filling the church land at Fugalei. The additional work involves filling an adjacent land of approximately a half acre more or less by error through no fault of either parties. The error was caused solely by a miscalculation of the land surveyor. This additional work also includes digging up the mistaken land fill and to return the soil to within the proper boundaries, if necessary.

In addition, the company further warrants that it would make good its commitment to complete the former contract by filling the church land of approximately 3 acres at the project site and to guarantee:

That a proper stone wall be built to separate the above said fill in land from the sea.

That the land would be filled to no less than four (4) metres above sea level.

That the truck loads of sand for the bricks would be fully compensated for until the project is complete.

This agreement is a binding agreement between the two parties and is hereby signed below by authorized signatories on behalf of the said entities at 17 Cape Road Mangere Auckland, New Zealand.

For: Samoan Independent For: Silva Transport Co. Ltd

Seventh-day Adventist Church

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

Pastor Willie Papu Sita Silva (Jacinta Silva)

Executive Director Company Owner”

4. Significantly there is no mention in the document of a time frame for completion of the work. There are however handwritten notations thereon made by Pastor Willie but he agreed in re-examination that these were added subsequent to the document being executed and were for the information of his lawyer. As such the notations which refer to a time frame for completion can have no evidentiary value as they were not a contemporaneous record and were made specifically for the purposes of litigation.
5. Following the Auckland meeting the contract work resumed with the fill now redirected to the proper piece of land. It also became necessary to extend the access road to the property under reclamation. As near as I can determine from the evidence there were further delays to completion of the work caused by rain and flood damage and by interference from the neighbouring village of Vaimoso who blocked the road prohibiting access to the plaintiffs property which they claimed belonged to them. These were resolved and reclamation work duly continued.
6. Plaintiff says assurances were given by the defendant they would complete the job expeditiously. But as 2006 progressed it became apparent this expectation would not be realized in time for the Convention. Accordingly almost one year later on 29 September 2006 the plaintiffs lawyers wrote to the defendant “that because the landfill is in no way near completed and the stone wall having not been constructed at all, the Church has no choice but to engage another contractor to complete the job.” The defendant was given written notice of its breach of contract and of the plaintiffs intention to claim resultant costs - see attachment “D” to plaintiffs Exhibit “P-1.”
7. On 20 October 2006 the plaintiff under the hand of Pastor Willie documented its agreement with the replacement contractor Bluebird Construction for Bluebird to construct stonewalls along the western (SW 1) northern (SW 2) and eastern (SW 3) boundaries of the land - see attachment “E” to Exhibit “P-1”. Contract price was $94,000. This included “any necessary fill up and leveling connected with the stonewall”. The southern boundary behind the three buildings that were then being constructed by the plaintiff on the land was not referred to or made part of this contract. A 5 week completion date was provided for with substantial penalties for late completion.
8. By letter dated 02 November 2006 produced as attachment “F” to Exhibit “P-1”, the plaintiff wrote to the defendant expressing its concern as to “the urgency of the remaining time frame” and documenting “our verbal agreement on the 13^th October 2006 at the Fugalei Project” (site) that the plaintiff would hire another company to build the three stonewalls while the defendant would complete filling the land in front of the three buildings, level the fill to the same height as in front of the buildings including topsoil for grass and “build a proper stonewall behind the buildings with fill up to complement stonewall”. The letter further added that if this were done by 17 November 2006 the plaintiff would meet all the costs of the new contractor of “about $100,000”. Otherwise such costs would be charged to the defendant.
9. By contract dated 28 November 2006 between the plaintiff and Bluebird (attachment “G” to “P-1”) the plaintiff once again engaged Bluebird to “build and complete a proper stonewall on the backside of the buildings” and “to fill and level the land surrounding the houses with top soil in preparation for planting grass”. Contract sum was $90,000. The document noted “the work has already started” and specified a completion date of 10 December 2006.
10. The defendant accepts they were hired to reclaim the land to about 4 meters above sea level and to construct rock walls to separate the land from the sea. They are adamant however there was no time limit specified nor were they made aware there would be buildings constructed on the land. They say their original contract quote was double the eventual agreed sum which they reduced in half as their assistance to the plaintiff. The fiasco with filling in the wrong land was the fault of the plaintiffs surveyors and although they agreed to accept NZ$20,000 as compensation, their actual costs were $108,000 as detailed in a letter dated 24 December 2005 sent to Pastor Willie (annexure “A” to the affidavit of Mrs Silva produced as Exhibit “D-1” for the defendant). Correspondence which the plaintiff denied receiving.
11. Defendant admits there were delays but say these were not of their making. Further that their task was hampered by the plaintiff constructing its buildings while the reclamation works were under way. And that when they received the lawyers letter of 29 September 2006 “the works was almost completed save for the filling of a small portion of the front north side of the land and rockwall to the western side of the land” (para 7 Exhibit “D-1”).
12. Furthermore the defendant repudiates the agreement of 13 October 2006 asserted in “F” of “P-1” that provided they complete filling and leveling the land in front of the buildings and complete the stonewall to its rear, the plaintiff would meet the cost of the other three stonewalls. Paragraph 9 of Mrs Silvas affidavit which is echoed verbatim by paragraph 8 of Mr Silvas affidavit (Exhibit “D-2” for the defendant) says:

“That neither I nor my husband discussed with the plaintiff that should the defendant fail to complete the works on a specific date that a new contractor was to be engaged and that the defendant was to be responsible for the cost of the other contractor. Sometime in mid or late October 2006, I and my husband, Pastor Willie and Pastor Ata Tanuvasa met on site to sort out the issue of the new contractor. I noted that Bluebird Transport Co. Ltd was filling the remaining north end of the plaintiffs land. I and my husband informed Pastor Willie that we were disappointed in the manner that the plaintiffs dealt with the defendant and the letter from their lawyer. Pastor Willie apologized and offered to settle the contract and bring it to an end with the defendant by the defendant completing the rockwall to the western side of the land plus 10 truck loads to tidy up and that will be the end of the matter. On behalf of the defendant, I and my husband agreed and proceeded to do so cutting our losses but moving on.”

13. The defendant also disputes that Bluebird was required to build and complete the stonewall behind the buildings and say they are supported in this by the evidence of their additional witness Mate Tiave who operated the Bluebird excavator on this job. They say they completed this stone wall.

Analysis

14. The terms of the contract between the plaintiff and the defendant are clear from “C” of “P-1”, a document signed on behalf of the defendant by Mrs Jacinta Silva. She seems to have been the main player for the defendant in the entirety of this matter. The contract was to fill the plaintiffs property to a height of no less than 4 meters above sea level and “a proper stone wall to be built to separate the above said fill in land from the sea.” The intent obviously was to surround the reclaimed land with a stone wall to prevent erosion. As the land is rectangular in shape four stonewalls one along each boundary was necessary. The reference in the document to truck loads of sand for bricks were not made the subject of these proceedings.
15. Had there been any intention or agreement that this work would be completed within 60 days, I have no doubt this would have been referred to in “C” of “P-1” and the other relevant documents. Its absence is telling. I do not therefore accept the plaintiffs assertion that this was a term of the contract. But even if it was, the parties subsequent conduct and course of dealings make it clear that the plaintiff agreed to vary the contract by extending the deadline more than once. Pastor Willie in “P-1” at paragraph 5 says it was extended to 90 days. By the time “C” of “P-1” was executed in Auckland this time limit was only 11 days from expiry because the Pastor says the contract was entered into in June 2005 (opening para. of “P-1”). It is also clear the plaintiff vacillated and allowed this matter to drag on into and during 2006 before finally bringing matters to a head by their lawyers letter of 29 September 2006. That correspondence likewise makes no reference to a 60 or 90 day completion date.
16. I am however satisfied that the parties having worked closely together on the reclamation as evidenced by various site meetings and discussions and that accordingly the defendant was aware of the looming Convention at the end of 2006. To this extent time was of the essence. The defendants insistence that they were ignorant of this is simply not believable as is their claim that they were unaware buildings would be constructed on the property. At the latest, by the time “C” of “P-1” was executed on 19 September 2005 they would have had such knowledge as that document refers specifically to truck loads of sand for bricks. There is no evidence the bricks or more accurately concrete blocks which is commonly referred to in our language as “piliki” (bricks) were intended for anything other than the construction of buildings. This much was accepted by Mrs Silva in her evidence. At the latest when building construction commenced the defendant who admits they were still then working on the land would have become plainly aware what the land was to be used for. See para.7 of “D-1” where Mrs Silva refers to their trucks having to manouvre around “the construction near the centre of the land” and refilling “areas where the plaintiff dug up to use towards the houses foundation.”
17. It was imperative that the defendant completed their work expeditiously and I am satisfied Pastor Willie in discussions with them at various times both on and off-site reinforced this. There is no question he did this when he moved to Samoa in late 2006 in an endeavour to have the job completed. His efforts to try and settle the matter with the defendant are borne out by his evidence and attachment “F” to “P-1” indicates that by that time the pressure to complete the Fugalei Project was well and truly on and the Pastors priority was to amicably resolve matters and complete the work. In his evidence Mr Silva accepted that he received “F” but did not reply. Similarly with “D” of “P-1” (the lawyers letter) which his wife in her testimony said she passed to him.
18. The defendant was under a contractual obligation to expeditiously complete a task for which it had already been paid. It failed to do so. It thus became in breach of its contract. The plaintiff accordingly had ample justification for engaging a replacement contractor. Costs of the replacement contractor must be met by the defendant subject only to a deduction for work already undertaken by the defendant.
19. As to work completed by the defendant there was a great deal of conflict in the evidence as to how much was carried out. The plaintiffs evidence and its trail of documents indicates that Bluebird built and/or completed 3 of the 4 stonewalls of the property at a cost of $94,000. And because of the failure of the defendant to adhere to what it agreed to on 13 October 2006 as documented by “F” of “P-1”, Bluebird was contracted to also complete the fourth stonewall at the rear of the buildings and fill and level the land including provision of top soil for seeding. This cost the plaintiff a further $90,000. The defendant maintains according to Mrs Silvas affidavit para 7 that when their services were terminated the work contracted for was by and large complete except for filling of a small portion on one side of the land and the rock wall behind the buildings. She said that after discussions with Pastor Willie they agreed to complete the rock wall “plus 10 truck loads to tidy up” and leave. Her husbands affidavit is word for word in identical terms. Their oral evidence generally followed their affidavits.
20. The plaintiff called two witnesses. Pastor Willie and Murray Campbell a qualified engineer. As will become apparent Mr Campbells evidence does not need to be addressed. And I have referred extensively to the Pastors evidence and supporting documents submitted on behalf of the plaintiff.
21. The defendant called only Mrs Silva and her husband. It does not assist their credibility that their affidavits and evidence was for all practical purposes mirror images. Especially when it appears that it was Mrs Silva who played the leading role in this drama. Where their evidence conflicts with the plaintiffs, I prefer Pastor Willie and his documents.
22. At the conclusion of the evidence the defendant sought leave to call an additional witness one Mate Tiave who operated the Bluebird excavator on this job. The plaintiff counter-applied to recall Pastor Willie as this witnesses evidence had not been put to him. It also appeared there were numerous matters referred to in the evidence in chief of Mrs Silva that defence counsel had not put to the Pastor in cross examination. Accordingly I ruled:

“That it is in the interests of justice:

That the defendants application to call a further witness should be granted; and

That the plaintiffs Pastor Willie be recalled to give evidence in rebuttal and to deal with those matters not put to him in cross examination by defence counsel (arises out of the evidence of Jacinta Silva).”

23. In the final analysis the additional witnesses did not greatly assist either party. Tiaves testimony was he only worked on two of the stonewalls. And further that when he left the defendant was still working on the stone wall behind the buildings. But that is not to say Bluebird did not use other operators in respect of the other stonewalls. I do not accept the defendants argument that Tiave was necessarily the one and only operator that Bluebird utilised to carry out the work the company had contracted to do in accordance with “E” and “G” of “P-1”. To hold otherwise would mean finding that the plaintiff paid Bluebird substantial sums for work Bluebird did not carry out. I do not accept either Pastor Willie or the plaintiff would considering the background and circumstances of this entire matter have been that foolish or negligent.
24. I also bear in mind it has been some 6 years since this witness worked the site. According to his affidavit he was employed by Bluebird for almost 20 years. It is unlikely he was all that time driving excavators. It is probable he worked on a number of sites for what is a well known company in the building and transportation industry. To expect him to recall with precision all the details of a relatively small excavation job many years past is expecting too much. I prefer instead the documentary evidence and the common sense inference that people do not generally pay for work not done. And that the work carried out by Bluebird was to the plaintiffs satisfaction and was as per “E” and “G” of “P-1”. Court inspection of the plaintiffs site revealed well established stonewalls on all four sides of the land.
25. This is not to say I totally reject the defendants contentions. Far from it. I accept the plaintiffs land was filled to the level contracted for and that accordingly the first part of the contract was adequately performed by the defendant. The plaintiffs focus and the documents produced in this litigation relate more to the stonewall part of the contract rather than the filling. What is in dispute is the number of stonewalls built if any and the extent of the work thereon the defendant carried out.
26. In this regard I note that for the initial three (3) stonewalls and associated filling Bluebird charged as per attachment “E” to “P-1” the sum of $94,000. Included in this was the cost of providing a special plastic cloth to stop drainage to the ocean in particular on the side of SW 1. That is the side nearest to Vaiusu Bay and thus the most vulnerable to soil loss from tidal movement. For the stonewall behind the buildings Bluebird charged as per attachment “G” to “P-1” the sum of $90,000. Included in that was the cost for leveling the land surrounding the houses “with top soil in preparation for grassing”. The provision of a special cloth and topsoiling was not part of the plaintiffs contract with the defendant and accordingly the defendant should be not liable for same. Unfortunately the court heard no evidence as to the value of the cloth or the topsoiling process.
27. The evidence however did show the defendant had completed adequate retaining walls of some kind around sides 1, 2 and 3 of the land thus preventing the land from being reclaimed by the surrounding waters. But not a “proper stone wall” to the satisfaction of the plaintiff. In this regard the plaintiff must bear some responsibility for its failure to properly document its agreement with the defendant as to the kind of stonewalls required or to prescribe by way of plans or otherwise the specifications and requirements for said stonewalls.
28. In relation to the stonewall behind the buildings it is difficult to quantify from the evidence how much of this the defendant actually completed. Other than again to note an adequate retaining wall of some form must have been constructed. The mixing in of the cost of leveling the land and providing topsoil for the purpose of grassing muddies an already murky pond.
29. The defendant also included as part of its case the report of a professional valuer indicating the value of the reclaimed land as at 14 September 2007: annexure “B” to Mrs Silvas affidavit. The difficulty with that evidence is it does not address what parts of the land are attributable to the efforts of the defendant and what represents the work undertaken by the replacement contractor. It only provides an overall value for the whole of the property.

The claims

30. The plaintiff has brought proceedings for breach of contract claiming the sum of $189,000 being the cost of engagement of the replacement contractor. How it calculated this sum is not clear as plaintiffs evidence was Bluebird charged $94,000 for the first three stonewalls and $90,000 for the subsequent work. These were the amounts the Pastor confirmed they fully paid. That totals $184,000.
31. Plaintiff also claimed $89,000 and $285,000 costs of removal of its buildings and restoration of the property to a state upon which habitable buildings could be built. But these claims were abandoned by plaintiffs counsel in final submissions as such work was never in fact undertaken. This also seems a recognition of the fact that none of the contractual documents in this matter make reference to the fact that the reclaimed land had to be of a certain quality or standard and suitable for building. There were no specifications either as to the kind of fill required, whether compacting was necessary, the mix of materials to be used or such like. All the evidence points to this being a very loose contractual agreement to fill in and embound with stonewalls of some unspecified type the plaintiffs land.
32. Plaintiff also seeks $100,000 or such lesser sum as the court thinks fit in general damages arising out of the defendants breach of contract to fill the land and to erect the necessary stonewalls.
33. The defendant seeks dismissal of the plaintiffs claim and has counter claimed for $110,000 being its actual cost of constructing an access road to the land and rectifying the erroneous reclamation of the neighbouring piece of land. As the actual costs claimed were in fact $108,000 I similarly fail to follow the defendants calculations.

Decision

34. The plaintiff ought not to recover the full costs of the replacement contractor. A deduction for the work already performed by the defendant must be made. Furthermore the defendant must bear some responsibility for its failure to properly detail its requirements.
35. The evidence establishes on a balance of probabilities that the defendant was in breach of its contract and that inadequate stonewalls were built by the defendant. And that a replacement contractor had to be engaged to properly complete the job. In making the necessary assessment of adequacy of the defendants work I bear in mind that some of the costs of the replacement contractor was incurred for other work.
36. I do not accept that no stonewalls of any kind were built as some form of retaining wall around the perimeter of the property had to have been put into place by the defendant. Otherwise the defendant would have been unable to fill the land. It is also noted that no complaint was made as to erosion of the land while the fill process was under way. It is likely such retaining walls comprised a mixture of stones and soil.
37. The plaintiff must succeed in its claim. But only to the extent of 50% of the amount claimed making due allowance for the matters referred to above. From that however should be deducted the costs of the “extras” provided by the replacement contractor. Here I speak of the special cloth on the ocean side of the property and topsoiling of the land surrounding the houses in preparation for grassing. Bearing in mind what I saw during inspection of the land I make a deduction of $10,000 for the cloth and $20,000 for the topsoiling process. The difference in resultant cost for the first three stonewalls as opposed to the fourth one behind the buildings is still reconcilable because the evidence establishes that the fourth and last stonewall was unlike the other three far from complete and was under construction when Bluebird were engaged. This was admitted to by the defendants. Associated leveling after construction of the wall would also have been necessary.
38. Judgment will be entered for the plaintiff in the sum of 50% of its claim namely $92,000 less $30,000 for other work undertaken by the contractor on the plaintiffs instructions making a final judgment sum of $62,000 which is roughly one-third of the plaintiffs claim. That is in my assessment a fair and adequate measure of the loss the plaintiff has sustained in this matter.
39. As to the claim for $100,000 general damages, there was no evidence justifying an award for general damages, this part of the claim is dismissed.
40. As to the defendants counter claim, even if I accepted its figure of $108,000 as justifiable it is clear the defendant settled its claim in respect of the mistaken filling of the adjoining property at its Auckland meeting with Pastor Willie resulting in a payment of NZ$20,000. Attachment “C” of “P-1” states inter alia “This additional work also includes digging up the mistaken land fill and to return the soil to within the proper boundaries.” That necessarily includes the cost of extending the access road to the “new” land. The defendant never sought at that point to renegotiate its contract on the basis that the earlier quote provided was for “different” land. Having accepted the money and executed “C” of “P-1” in Auckland, the defendant cannot later change its mind and unilaterally render an account for such work to the plaintiff. The counter claim has no basis, it too is dismissed.
41. The plaintiff as successful litigant is entitled to costs. As counsel are unable to agree upon quantum these are fixed as follows:

Taxed Costs

Costs of original counsel	Approved in full	$16,686.75
Costs of second counsel	Partially approved (see taxed Bill on file)	$3,220.00
Witness expenses (unsupported by documents) – based on counsels account, airfare for trial and additional evidence (2 trips) and 4 nights accommodation (200/night)	$2,200 plus $800	$3,000.00
		$22,906.75
Defendants reasonable contribution of ⅔	=	$15,271.90

42. Defendant to pay as its contribution to plaintiffs reasonable costs the sum of $15,271.90 inclusive of VAGST.

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

JUSTICE NELSON