Laalaai v South Pacific Cladding Co [2018] WSSC 134 (21 December 2018)

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SUPREME COURT OF SAMOA
Laalaai v South Pacific Cladding Company [2018] WSSC 134

Case name:	Laalaai v South Pacific Cladding Company

Citation:	[2018] WSSC 134

Judgment date:	21 December 2018

Parties:	TUNUMAFONO SIMI LAALAAI v SOUTH PACIFIC CLADDING COMPANY a duly incorporated company with its registered office at Tamaligi AND PATRICK BOON male of Siusega.
Hearing date(s):	16^th and 20^th March 2018
Judgment date(s):	21 December 2018

File number(s):

Jurisdiction:	Civil

Place of delivery:	Supreme Court of Samoa, Mulinuu

Judge(s):	JUSTICE LEIATAUALESA DARYL MICHAEL CLARKE

On appeal from:

Order:	- The Plaintiff’s claim against the First and Second Defendants are dismissed. - Similarly, the Defendants Counter-Claim against the Plaintiff is dismissed. - Given this result, each party are to bear their own legal costs.
Representation:	T. T Patea for the Plaintiff L. R Schuster for the First and Second Defendants
Catchwords:

Words and phrases:	breach of contract; plaintiff’s claim are dismissed; the defendant’s counter claim against the plaintiff is dismissed;

Legislation cited:

Cases cited:

Summary of decision:

SOUTH PACIFIC CLADDING a duly incorporated company with its registered office at Tamaligi.
First Defendant

Counsel:
T. T Patea for the Plaintiff
L. R Schuster for the First and Second Defendants

[1] By Statement of Claim dated 12th February 2016, the Plaintiff brought these proceedings against the First and Second Defendants alleging breach of contract.

[2] The Plaintiff’s claim is that he is the sole owner of two ½ acre parcels of land at Vaitele described as Lots 3843 and 3848 Plan 5317 (Lot 3843 and Lot 3848). He is also the joint owner of Lot 3851 plan 5317 (Lot 3851) with his wife Fu’a Simi.

[3] On or about 31st October 2014, he entered into a written Sale and Purchase Agreement (‘the Agreement’) with the Defendants for the sale of Lot 3843 to the Defendants, the pleaded terms of which were relevantly:

- the Defendants were to pay off the Plaintiff’s mortgage with the ANZ Bank (Samoa) Ltd (“ANZ”), which had a balance of $80,000.00 owing;

- the balance amount of $60,000.00 of the sale price was to be remitted to the Plaintiff;

- title to Lot 3843 would be registered to the Defendants on receipt of the $60,000.00.

- the “Defendants committed to pay $20,000.00 per month towards the ANZ loan so that the transfer would be effected sooner than planned.

- The Plaintiff had used Lots 3843 and 3848 as security for the loan with the ANZ.

[4] In breach of the Agreement, the Defendants paid only $20,000.00 over the course of 6 months. In February 2015, the ANZ gave notice of loan arrears notifying that no payments had been made since the ‘Agreement’ was signed. The Defendants allegedly made numerous promises to pay, which were not honored. As a result of the Defendants breach of the Agreement, on the 24th April 2015, the ANZ notified the Plaintiff that Lots 3843 and 3848 would proceed to mortgagee sale. Lot 3848 was subsequently sold by the ANZ for $83,215.00 and Lot 3843 returned to the Plaintiff.

[5] The Plaintiff claims that as a result of the Defendants breach, he has suffered loss and damage. In his prayer for relief against the Defendants, the Plaintiff seeks damages of:

(i) $160,000 made up by loss of the sale price and the payment of $20,000 (paragraphs 7 and 11 of the Statement of Claim); and

[6] The Plaintiff also seeks Solicitor costs of $7,500 (paragraph 26, Statement of Claim) and vacant possession of Lot 3843.

[7] In his Closing Submissions, counsel for the Plaintiff withdrew the claim for lease payments, a concession appropriately made given that there is no lease agreement between the Plaintiff and the First Defendant on which such a claim could properly be maintained.

[8] The Defendants deny that the Plaintiff is the owner of the parcels of land as they “had already been placed...on mortgagee sale [and] the land therefore was transferred under power of sale”. The Defendants allege that because the Plaintiff was in default with the ANZ and the lands taken by the ANZ, the Plaintiff had no legal standing to enter into the Agreement as they were not the legal owners. The Plaintiff’s loss was ‘contributory and of his own default.’

[9] By way of counter-claim, the Defendants allege that the Plaintiff breached the Agreement by misleading and deceiving them into believing the land was owned by the Plaintiff and yet at the time of the agreement, he was not. The Defendants claims $20,000.00 damages for breach of contract, $20,000.00 paid towards the purchase price, $45,000.00 for the improvements for the building and filling the land together with legal and court costs. The Plaintiff denies the Defendants counter-claim.

[10] Despite both the Plaintiff and the Defendants pleading the existence of the Agreement and alleging breaches by each other, there is no pleading concerning the status of the Agreement, whether it has been terminated or repudiated or whether it remains on foot. There was also no evidence tendered by either party showing any steps by either party to terminate the agreement nor did submissions address the status of the Agreement, whether it had been terminated, repudiated or otherwise.

[11] Similarly, whilst the Plaintiff seeks vacant possession of Lot 3843, there is no action pleaded in his Statement of Claim for example in trespass against the Defendants or anyone claiming under the Defendants occupying the land. These necessarily underpin the claim for vacant possession.

[12] The Plaintiff and his wife Fu’a Simi gave evidence. The Plaintiff is a 67 year old retiree residing at Vaitele-uta.

[13] His evidence is that he was the owner of Lots 3843 and 3848 plan 5317 (exhibits P2 and P3). Lot 3851 Plan 5317 (exhibit P1) is jointly owned by he and his wife, Fu’a Simi, the land on which they live. All lots are approximately ½ acre in size and are located at Vaitele-uta. Lots 3848 and 3851 share a common boundary. Lot 3843 is however separated from lots 3848 and 3851 by a one-acre parcel between them.

[14] He had a loan with the ANZ secured by a mortgage over Lots 3843 and 3848. He had problems servicing the loan so decided to sell one Lot. He had a valuation carried out in 2010 valuing the half acre lots at $189,000.00 (exhibit P4). He had calculated that the sale of a half-acre would pay-off the debt owed to the ANZ which he said was about $70,000.00. The land was advertised for sale on the ‘FM’ many times.

[15] After advertisement for sale of the land, negotiations with the Defendants followed. On the night of the 30th of October 2014, the Second Defendant and his wife came to him and his wife and asked to meet the next day at the First Defendant’s office at Tamaligi. The next day, he and his wife met with the Second Defendant, his wife and James Tavana. They discussed three options and agreed that the First Defendant would buy Lot 3843 as lot 3843 is not adjacent to their other two lots.

[16] An agreement between “South Pacific Cladding Co. Ltd” and the Plaintiff was then prepared by James Tavana. The Second Defendant signed for the First Defendant witnessed by James Tavana. The Plaintiff signed witnessed by Fua Sini (see exhibit P5). The Agreement is dated 31st October 2014.

[17] In terms of how payment was to be made, clauses (F) and (G) and 1 of the Agreement provided:

“F. ONA ua malie foi le SPC o lea totgiina le nonogatupe e tusa ma le $80,000.00 o loo le faletupe ANZ muamua ona totogi lea o le tupe e totoe ai.”

“G. ONA ua malilie le le SPC o lea latou totogiina le nonogatupe mo se taimi vave ae aumai pepa o le fanua I le SPC e faatusatusa e $20,000.00 I le masina.”

“1. Ua malilie Faatasi le Pule o le Fanua ma le SPC e faatauina le fanua (1/2) eka ma e totogiina atu se tinoitupe e $60,000.00 i le pule o le fanua pea maea ona totoiina le nonogatupe I le faletupe ma aveese mai ai pepa I lalo0 o le SPC.”

[18] The Defendants then failed to pay the ANZ loan amount of $20,000.00 per month. The Plaintiff said that he received many letters from the bank advising that their payments were behind. His evidence was that the Defendants were asked to make payments under the Agreement. The Second Defendant however responded that on advice of his lawyer, no further payments were to be made.

[19] The Plaintiff confirmed that the Defendants made payments in amounts varying between shown in exhibit P6 amounting in total to $20,000.00. The Plaintiff did not however pay these to the ANZ. He agreed that the obligation to the ANZ was between he and the ANZ. He also agreed that if he had paid the money paid to him by the Defendants, the Bank would not have sold his land:

“Schuster o lou le faaooa lena o le $20,000 i le bank lea ua minoi ai loa le bank omai ai loa le bank faatau le fanua ia Aperila poo Me, e sao?

Schuster aua ete ioe mai ana maua e le bank le $20,000 lea e le faataua e le bank lou fanua e sao?

[20] As a result of payments to the ANZ not being made, the ANZ sold lot 3848 by mortgagee sale for $145,000.00. From the mortgagee sale proceeds, after loan and legal fees deducted, he received $32,000.00 being the balance from the sale.

[21] The Plaintiff denied that the balance of the mortgagee sale proceeds should be offset against his claim for damages for breach of contract for the purchase of lot 3848.

[22] Responsibility for who was to make the payments to the ANZ was at issue. The Plaintiff’s oral evidence was contradictory. When first cross-examined on this issue, the Plaintiff’s evidence was that the Agreement terms was that what should be done is that the First Defendant pays him and he then pays the ANZ. Later in cross-examination however, he changed his evidence saying it was his oversight and referring to the wording of the Agreement:

“Wit ia e moni ae a ou toe tilotilo i le agreement lea na fai e muamua totogi e le kamupani o lea e manino mai a ii e totogi e le kamupan le bank ao lea e totoe ai ona amai lea ia te au

Schuster a la lea ua totogi atu le $20,000 ae ete le’i faaooa le $20,000 i le bank e sao?

Schuster o lou le faaooa lena o le $20,000 i le bank lea ua minoi ai loa le bank omai ai loa le bank faatau le fanua ia Aperila poo Me, e sao?

“Schuster lea tali mai i le sao pe sese la’u fesili, o le maliliega e totogi atu e le kamupani ia te oe le tupe e totogi e oe agai i le bank e sao?

Schuster ete talia e le o iai se feagaiga a le kamupani ma le bank mo le totogiina o le loan a?

Schuster o le feagaiga lena o le feagaiga i le va o oe ma le bank, o le matafaioi lena a oe o lou tiute lena agai i le bank a?

“Wit o le maliliega a lea oute tausisia e au e totogi e latou le loan e $20,000 i le masina o le mea lena lea oute sasi ai aua o lea ua faimai e totogi e latou le $20,000 i le masina e le aumaia e le totogia mai ia te au ona ou alu lea o au e ave iai i le bank leai e totogi e latou agai o le $20,000.”

[25] He further clarified that when he received the money from the Defendants, it was money for him towards the payment of the $60,000.00.

[26] The Plaintiff then talks about fault in terms of repayments to the ANZ in the following terms:

Wit lape lena lea oute fai atu ai o le lape a a’u ina ua ou concentrate lava i luga o le agreement lea na fai, na ou faapea a la a’u ina ua aumai le tai afe e pei o le peimegi o le loan le mea lea le tai afe lea e aumai. But na ua e sau tonu a i le mea o le lape aua o mea na e tau o lape o lauga lea la ua ou fai atu ai o le lape lena lea ua ou sasi ai ona o lea ua aumai ia te au le tupe ae le alu la e ave i le bank ona o lea na fai ai le agreement.”

[27] In terms of why the ANZ sold the land, it was put to the Plaintiff that he had not paid the $20,000.00 to the Bank paid by the Defendants to him. He accepted that that was the reason the bank sold the land. When it was then put to him that if the bank had received the $20,000.00, the land would not have been sold, he responded:

[28] The Plaintiff said that by selling Lot 3848, part of their house was affected. He did not specify in his evidence what the effect was or costs of the effect on the house of the sale of Lot 3848 although he agreed when cross-examined that it was $30,000.00. He said he had asked the ANZ to sell lot 3843 instead of lot 3848 but the ANZ did not do so because people were living on lot 3843.

[29] In terms of Lot 3843, the Plaintiff explained that employees of the First Defendant had been residing on the land since 2014 to the present. The Plaintiff confirmed in examination-in-chief that there was no agreement to lease.

“Schuster ia Tunumafono e faigofie ia o la’u fesili, e leai se tou feagaiga leai sau tusi leai sau telefoni leai se isi mea na faailoa i le kamupani o lea ua e manao laa fai le lisi i le fanua o le tau o le lisi e $2,000 i le masina e sao?

Schuster ae leai ma se taimi na e oo iai ma fia atu iai o lea laa fai le lisi 2,000 i le tausaga sao?

[31] The Plaintiff accepted that he permitted the land to be occupied and filled and improved by the First Defendant including buildings on the land. He however rejected that (a) the improvements made to the land by the First Defendant were valued at $35,000.00 and (b) that the improvements had increased the value of lot 3843. The building improvements can be seen in exhibit P8.

[32] The Plaintiff seeks the return of lot 3843 to him but that in terms of the lot 3848 sold by the ANZ, he accepted that what he is seeking to recover from the First Defendant is the financial losses he suffered as a result of the mortgagee sale of lot 3848 by the ANZ.

[33] In her evidence, Fu’a Simi confirms that they live on lot 3851. She confirmed that it was decided to sell lot 3843 because their business could not afford their loan repayments to the ANZ. She said that the loan was for $73,000.00 but with interest, had increased to $80,000.00. She said that she and the Plaintiff was approached by the Second Defendant and his wife on the 30th October 2014 to meet on the 31st October 2014 at Tamaligi.

[34] At the meeting on the 31st October 2014, she said that they reached and signed an agreement. She confirmed the agreement terms for lot 3843 as follows:

“Wit o le matou maliega nai iai mai le 140,000 lea matou malilie lea o le a togitogi e le kamupani a le Southpac e ave e latou le 20,000 i totonu o le bank i masina taitasi ina ia faamama ai le loan lea tai 20,000 i le masina e totogi e le southpac i totonu o le ANZ

Wit ua uma ona ave iai le account numbere o le ma loan i le susuga ia Patrick e togitogi iai i totonu le loan i le ma account lea ei le ANZ ina ia faamama ai le loan. E le aumaia la ia maua le tupe ao le kamupani a e gafa ma latou le totogiina o le loan i totonu o le bank.”

[35] She said that the Second Defendant knew that the Plaintiff was selling the land because of the debt to the ANZ. At the time the Agreement was entered into on the 31st October 2014, she accepted that loan repayments to the ANZ had fallen in to arrears.

[36] She explained that she went often to the Second Defendant, perhaps 5 or 6 times, for payment of the loan because they had been informed by the ANZ that no payments had been made. She says this was in 2014 or 2015 when the ANZ was about to take the land and before the auction of the land was carried out. The Second Defendant would tell her “e aua oute popole o lea o le a totogi le loan” and that he said he would have “James” go the bank and pay the loan. The Second Defendant did not pay her any money on these occasions when she spoke to him about the arrears.

[37] Fu’a explained that they did not pay the $20,000.00 received from the Defendants to the ANZ because they had been told by the Second Defendant that the money was to help them and their family.

[38] Fu’a explained that the sale of lot 3848 by the ANZ had a significant impact on them. She explained:

“Wit sa alu le tupe i le tau faiga o le galuega i le tau aveeseina o le matou fale lea na tala ese, o matou lo’ilo’i foi e tele a se tupe sa faaaogaina ai i le faiga o matou pa mo meatuāolō.”

[39] She confirmed that on lot 3843, there is a couple working for the First Defendant living on that land and that since the $20,000.00 was paid to the Plaintiff by the Defendants, no further money had been paid to them.

[41] He said that in October 2014, an agreement was discussed and was then prepared by James Tavana, the First Defendant’s Finance person. It was then signed between the First Defendant and the Plaintiff (exhibit P5).

[42] He said that there was no agreement that he would make payments to the bank directly. When the Plaintiff spoke to him about the loan to the ANZ, he was only told that there was a loan secured over the land.

[43] In terms of the payment of $20,000.00 paid to the Plaintiff, his evidence was:

Wit o le maliliega lea e iai e faapea o le isi vaegatupe e alu i le bank, o lo’u talitonuga o tupe uma a e pay ia laua e pule a la laua i totogiina e fai ai le laua tupe.”

Schuster lea foi na e faafofoga i le mau a Fu’a e faavalu na lua feiloai ma sa ia faailoa atu foi ia te oe i le tele o taimi ia ete lua feiloai ai le tulaga lea ua fia masina e lei totogia le aitalafu, o le a sau mau iai?”

[44] The Second Defendant denied that he met with Fu’a as she claimed because James Tavana was the Finance Officer who handled the finances and received payments. In response to Fu’a’s evidence that she had spoken to him about 8 times and that she had told him about the arrears, he responded:

“Wit oute talitonu e lei iai so’u malamalamaaga o iai se arrears i le aitalafu e leiloa e au le itu lena pau a le mea la oute malamalama ai e iai le aitalafu i luga o le fanua.”

[45] The Second Defendant’s evidence however appears to confirm that he made payments to the Plaintiff and/or his wife. He said in his evidence in chief:

“Schuster le tupe la lea e faapea mai Tunumafono le $20,000 lea ua uma ona totogi atu ia ia lea ua e faafofoga i le mau a Tunumafono lea ua faapea mai o le tupe lea ua e fai atu o le tupe lea a laua, o le a sau tali iai i lena mau?

Wit o lo’u talitonuga o le tupe a laua e lei faapea na iai se maliliega a au sa faatalatalanoaina pau lava le mea e iai o le pay o le tupe agai ia laua “

[46] In cross-examination, he was again questioned on this point and he confirms that he paid the money to the Plaintiff or his wife:

“Patea e mafai ona faaali atu le P6 i le molimau faamolemole – sei e tagai ane a iai i le pepa lena tai $1,000 tai $2,000 lea la e maua ai le $20,000 lea na e totogia ai e sao lea?

Wit o lo’u talitonu oute lei faia se faapea o le tupe a laua. O lo’u talitonuga o le pay a o le tupe ia laua faitalia ai laua poo le a le mea e fai.”

[47] He said that he was only told in April or May of 2015 by the Plaintiff about the arrears. He then told the Plaintiff that as the land was taken by the bank, he could not make any further payments.

[48] When questioned on his failure to pay the payments in accordance with the Agreement, the Second Defendant’s evidence was:

“Patea lea foi ete silafia lelei o loo iai le loan $80,000 i totonu o le bank a si vaega lea na faatauina atu le fanua mo oe mo le tou kamupani sao lea?

Patea o lona uiga na e silafia lelei a o tupe nei e ave iai e tatau ona alu i totonu o le bank e totogi ai le loan?

Wit o lo’u talitonuga e pule a laua i le mea e fai i le tupe ae e tatau foi ona pay e laua le laua va ma le bank aua o le mea moni lava e leai se feau a au i le va o le bank ma laua.”

[49] In terms of improvements to the Lot 3843, the persons occupying the land were employed and placed on the land by him. However, there was no work presently so they are not currently working for him.

[50] In terms of improvements to the land, the Second Defendant said that the land was filled and there were many large rocks on the land as well as a hole at another end of the land. A lot of work was carried out including excavation work and about 30 to 40 loads by his 6 wheeler lorry and that of Livi Brown.

[51] The Second Defendant tendered exhibit D2 and estimated the cost of the reclamation work at $30,000.00 to $35,000.00. He confirmed that the buildings shown on exhibit P8 photo 1 were built by him. He estimated the cost of the buildings to be $20,000.00 plus if you include labour. The Second Defendant was questioned by the Court on where the financial records were to support his claim and his evidence was that it was with his auditor but it was possible to obtain those records.

[52] In terms of the occupation of the land by the people on Lot 3843, his evidence was that:

“HH the people that are living on the land how do you understand their occupation? Are they occupying it under you o le faatagana a oe lea e nonofo ai i luga o le fanua lenei poo le faatagana a ai?

Wit o lea lava lau afioga o le faatagana a au sa sulu mai ia te au i se mea e nonofo ai

Wit ona e iai foi a’u tupe ma galuega ua spend i luga o le fanua oute talitonu e pei o le mea lena lea oute talanoa ai i la’u loia.”

[53] The Plaintiff’s claim against the Defendants for breach of contract seeks damages and vacant possession of Lot 3843. The Plaintiff does not in his prayer for relief seek specific performance of the Agreement, a discretionary remedy that is awarded according to equitable principles. Whilst counsel for the Plaintiff in his closing submissions indicated that the Plaintiff’s claim is for specific performance, it clearly is not based on the pleadings. In any event, specific performance has not been established by the Plaintiff as an appropriate remedy. The relief pleaded is damages for alleged breach and vacant possession of lot 3843. I proceed accordingly.

[54] The Agreement is clearly between the Plaintiff and the First Defendant. The Plaintiff however has pleaded that the “Second Defendant should not be allowed to use the corporate veil protection to evade being held personally responsible under the agreement for the debts incurred by the First Defendant.”

[55] The Second Defendant was not a party to the Agreement (Exhibit P5). The debts as pleaded and consistent with the evidence are debts of the First Defendant. It is not pleaded on what basis the Second Defendant is alleged to be personally liable to the Plaintiff except to say that he “should not be allowed to use the corporate veil protection to evade being held personally responsible under the agreement for the debts incurred by the First Defendant.” What cause of action that may give rise to the Second Defendant’s personal liability is not pleaded nor is one made out on the evidence. There is no basis for the claim against the Second Defendant and it should be dismissed.

[56] I accept that the Plaintiff and the First Defendant entered into the Agreement on the 31st October 2014 (exhibit P5). Whilst it is not stipulated in the Agreement which Lot the Agreement relates to, it is not in dispute that it is Lot 3843. The relevant terms of the agreement included, amongst others:

(b) the First Defendant agrees to pay the loan amount of about $80,000.00 with the ANZ first before paying the balance $60,000.00 to the Plaintiff;

(c) the Second Defendant agrees that they would pay the loan quickly to get the papers from the ANZ at $20.000.00 per month; and

(d) that the balance would be paid to the Plaintiff when the loan had been paid off.

[57] It is also not in dispute that the First Defendant (a) did not pay $20,000.00 per month; and (b) that the payments made by the First Defendant totaled $20,000.00 as set out in exhibit P6. Accordingly, I accept that payments were made in accordance with exhibit P6. The following table sets out the Agreement and relevant dates (column 1), payments made by or on behalf of the First Defendant (column 2) and the consolidated monthly arrears on the payments due as at the 31st of each month after 31st October 2014 (column 3) as follows:

Date	Payment Amount to Plaintiff	Consolidated Monthly Shortfall
31st October 2014	Agreement signed between Plaintiff and First Defendant
31st October 2014	$2,000.00.
11 November 2014	$1,000.00.
31st November 2014		$17,000.00
31st December 2014	Nil Payments December 2014	$37,000.00
31 January 2015	$2,000.00.	To 31st January 2015 $55,000.00
28 February 2015	$1,000.00.
31st February 2015		$74,000.00
5 March 2015	$1,000.00.
28 March 2015	$3,000.00.
31st March 2015		$90,000.00
15 April 2015	$3,000.00.
18 April 2015	$3,000.00.
24th April 2015	Letter Latu Lawyers to Plaintiff Mortgagee Sale Exhibit P7
02 May 2015	$2,000.00
08 May 2015	$2,000.00.
Total:	$20,000.00

[58] I accept that at the time of entering into the Agreement, the Plaintiff’s loan with the ANZ was in arrears.

[59] Due to the default by the First Defendant however to make payments as agreed, the Plaintiff says he suffered loss and seeks damages. I now turn to the Plaintiff’s claims.

(a) $160,000.00 for the sale price of lot 3843 being the sale price of lot 3843 plus $20,000.00 see (paragraphs 7, 11 and prayer 3 in the Statement of Claim); and

[61] In The Laws of New Zealand (online looseleaf edn, LexisNexis) General Principles of Damage at [3], the learned authors state that ‘“Damage” is the loss or disadvantage that a person suffers through the act or default of another person.”

[62] In Chitty on Contracts Twenty-Eighth Edition (Volume 1) General Principles at [27-001], the learned authors state:

“Damages for a breach of contract committed by the defendant are compensation to the claimant for the damage, loss or injury he has suffered through that breach. He is, as far as money can do it, to be placed in the same position as if the contract had been performed. This implies a ‘net loss’ approach in which the gains made by the claimant as the result of the breach (e.g. savings made because he is relieved from performing his side of the contract which has been terminated for breach; savings in taxation; benefits obtained from partial performance; or the salvage value of something left in his hands) must be set off against his losses arising from the breach (after he has taken reasonable steps to minimize those losses.”

[63] In order to be liable for damages in contract, there must be a causal connection between the Plaintiff’s loss and the First Defendant’s breach (Chitty on Contracts (supra) at [27-024]). In The Laws of New Zealand (online looseleaf edn, LexisNexis) Factors Limiting Compensatory Damages at [92], the learned authors state that:

“A plaintiff must show not only that the defendant caused the damage for which the plaintiff seeks to recover, but also that that kind of damage was not too remote from the defendant’s act or omission. The limits of what is considered not too remote are set... in contract, by what was within the reasonable contemplation of the parties. These rules of remoteness limit the amounts recoverable to those that are not only connected to the act but that are reasonable having regard to the nature of the act and the interests of the parties and society.

In principle the issue of remoteness arises only after the issue of causation has been dealt with. The tests of remoteness are not, in themselves, tests of “causation”, as instead they mark the limits beyond which wrongdoers will not be held responsible for damage resulting from their wrongful acts.

For the defendant to be liable it is only the kind of damage, not necessarily the precise details or the extent of damage, that must be foreseeable.”

[64] In terms of remoteness, as stated by the learned authors in Chitty on Contracts (supra) at [27-042] from Hadley v Baxendale (1854) 9 Exch at 341 and Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 K.B. 528:

“The combined effect of these cases may be summarized as follows: A type or kind of loss is not too remote a consequence of a breach of contract if, at the time of contracting (and on the assumption that the parties actually foresaw the breach in question), it was within their reasonable contemplation as a not unlikely result of that breach...”

[65] Turning first to the claim for damages of $160,000.00, this claim concerns the First Defendant’s failure to complete the purchase of Lot 3843. The Plaintiff claims the full purchase price plus $20,000.00, i.e $140,000.00 plus $20,000.00.

[66] Firstly, as accepted by the Plaintiff in his evidence, the claim for $160,000.00 is in error as the purchase price was $140,000.00 and should be amended accordingly.

[67] Secondly, the Plaintiff seeks vacant possession of Lot 3843 but also seeks payment of the full purchase price from the First Defendant. The claim for damages is misconceived as damages, “...is, as far as money can do it, to be placed in the same position as if the contract had been performed.” In this case, that would mean the conveyance of Lot 3843 to the First Defendant and payment to him of the purchase price, that is specific performance of the contract, which he is not pursuing. The Plaintiff remains the owner of Lot 3843 and cannot successfully seek damages in the way in which he has proceeded.

[68] Thirdly, in order to claim damages, a net loss approach is generally applied with the Plaintiff specifically pleading and establishing the losses arising from the breach of contract. This may for example be additional advertising costs for the re-sale of the land, additional legal fees and other costs attributable to the breach of contract. That however has not been pleaded or led. The claim for damages for $160,000.00 is simply not sustainable.

[69] This claim is for the relocation costs of the Plaintiff’s house of $30,000.00 from Lot 3848. The essence of this claim is that as a result of the First Defendant’s breach of the Agreement to pay $20,000.00 per month to the ANZ for the purchase of Lot 3843, the ANZ sold Lot 3848 on which part of the Plaintiff’s house was located. The Plaintiff claims the relocation cost of $30,000.00 from the First Defendant.

[70] There are key problems with this claim by the Plaintiff. First, I accept that a factor in the ANZ selling lot 3848 is attributable to the First Defendant breaching the terms of the Agreement. However, I am not satisfied that it was the effective or dominant cause of the mortgagee sale. This is because:

(a) The Plaintiff was well aware that loan payments were in arrears, received payments from the First Defendant and did not pay these towards the ANZ;

(b) When cross-examined that if he had paid these payments towards the loan, the mortgagee sale would not have proceeded, he agreed that as correct and also acknowledged his oversight; and

(c) Whilst the First and Second Defendants were aware that the Plaintiff had a loan with the ANZ and I accept they were aware that there was a mortgage over Lot 3843 as the Agreement expressly states that the ANZ would be paid first and quickly so that the land being bought could be released from the ANZ (i.e. Lot 3843), there was no evidence that the First and/or Second Defendant were aware of a mortgage over Lot 3848. It could not then be said on the evidence that the damage here complained of, that is the relocation of that part of the Plaintiff’s house that was on Lot 3848 was within the reasonable contemplation of the parties as a not an unlikely result of that breach by the First Defendant.

[71] Secondly, even if I were satisfied as to causation and that the damage was not too remote, the only evidence of the alleged damage was oral evidence by the Plaintiff and his wife. In his evidence in-chief, the Plaintiff in terms of the effect of the sale of lot 3848 referred only to his agricultural produce grown on Lot 3848. In cross-examination, he refers to his claim for $30,000.00 but does not specify how the claim for $30,000.00 is arrived at or what loss it is that the $30,000.00 relates to.

[72] In her evidence, Fu’a Simi said that when Lot 3848 was about to be sold, they were told by the ANZ Bank to remove all their things off the land. They were told to remove their house and their pigs. She did not give any description of the house, what was to be removed or the value or cost to them of removing their house from the land.

[73] The Plaintiff’s case for his alleged loss of the building was wholly deficient. It was scant and general in nature and did not provide any evidence of the cost of any such relocation of assets to them. There was no receipts, no description of what was involved in the removal, no photographs of that part of the house allegedly removed or a description of the house removed. Even if there was a causal connection, I cannot be satisfied as to the damage claimed.

[74] The Plaintiff and his wife’s evidence quite clearly stated that in terms of the people currently occupying Lot 3843, they had discussed the issue and agreed together that their occupation of the land should be addressed after the Court’s decision on their claim.

[75] On the 19th December, this matter was called for mention to confirm the status of occupiers of the land. Only counsel on behalf of the Defendants appeared. Counsel for the Defendants confirmed that the occupiers of the land are no longer employed by the First Defendant and if they continue to occupy the land, they do not do so under his authority. In accordance with the wishes of the Plaintiff and in the absence of any properly pleaded claim in trespass for seeking vacant possession, I decline to order the eviction of the occupiers of Lot 3843.

[76] The Defendants’ plead that they were misled and deceived by the Plaintiff into believing that the Plaintiff owned the land at the time of the agreement. The Defendants counter-claim then pleads breach of the contract by the Plaintiff in that “the Plaintiff had no legal standing to enter into this agreement given the Plaintiff by this time had defaulted and the lands taken possession of by the ANZ Bank.”

[77] The Plaintiff accordingly pleads breach of contract by the Plaintiff and seeks:

[78] The Defendants counter-claim is without merit. It fundamentally misunderstands the mortgagee sale process. At the time the Plaintiff signed the Agreement in October 2014, the Plaintiff was the legal owner of Lot 3843. There is no evidence that at the time of entering into the Agreement, the ANZ had exercised its mortgagee power of sale over Lot 3843. The Defendants have certainly not established that the Plaintiff had no legal standing to enter into the Agreement. The Plaintiff was and remains the owner of Lot 3843 and I am satisfied that he lawfully entered into the Agreement

[79] The Defendants claim against the Plaintiff arises from alleged breach of contract by the Plaintiff. First, as I have said, I am satisfied that the Plaintiff did not breach the Agreement and therefore, as there is no breach by the Plaintiff, it cannot be said that the Defendants have suffered any damage from such a breach by the Plaintiff.

[80] Secondly, it is unclear what the claim to ‘$20,000.00 damages for breach of contract relates to’. It was also not evident on the evidence but in any event, as I have found that the Plaintiff was not in breach of the Agreement, it is unnecessary to consider this further.

[81] In relation to the claim for compensatory damages for the improvements to the land, there is also no valid claim in contract on this basis. The Plaintiff did not breach the Agreement. The only party that breached the contract was the First Defendant. In Chitty On Contracts (supra) at [12-080], the learned authors relevantly state:

“Party cannot rely on his own breach. It has been said that, as a matter of construction, unless the contract clearly provides to the contrary, it will be presumed that it was not the intention of the parties that either should be entitled to rely on his own breach of duty to avoid the contract or bring it to an end or to obtain a benefit under it ....”

[82] It is clear that from the outset of the Agreement, the First Defendant breached its Agreement with the Plaintiff. The Second Defendant claimed in his evidence that the reason for the breach of the Agreement arose because a contract with a third party did not materialize as expected. That he said was the way of business. Despite the First Defendant being in breach from the outset and the Second Defendant claiming that it was due to issues with a third party contract, what is clear on the evidence is that the First and Second Defendant failed to take any steps to address these with the Plaintiff and/or his wife. When the First Defendant could not pay, there was no evidence that the Second Defendant or anyone else on behalf of the First Defendant made any contact with the Plaintiff or his wife to discuss the failure to pay. The evidence clearly demonstrates that it was the Plaintiff and his wife, forced by their financial circumstances with the ANZ and in a difficult position financially, to pursue the First and Second Defendant for payments. Whilst the Second Defendant claimed that he felt ‘alofa’ to the Plaintiff and his wife, his conduct and treatment of the Plaintiff and his wife in this case leaves a lot to be desired.

[83] There was no evidence about the status of the Agreement and whether it has been discharged by termination, frustration, repudiation or otherwise. It also did not form part of either party’s pleaded case. If there are any remaining issues between the parties, I urge the parties to resolve these amicably.

[84] The Plaintiff’s claim against the First and Second Defendants are dismissed.

[85] Similarly, the Defendants Counter-Claim against the Plaintiff is dismissed.

Supreme Court of Samoa

Laalaai v South Pacific Cladding Co [2018] WSSC 134 (21 December 2018)