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Belcher v Brown [2019] WSSC 19 (3 May 2019)

SURPEME COURT OF SAMOA
Belcher v Brown [2019] WSSC 19


Case name:
Belcher v Brown


Citation:


Decision date:
3 May 2019


Parties:
ALAN BELCHER of Vaivase-tai, Contractor v ALBERT BROWN of Salelologa, Savaii, Contractor And ALCC BROWN ENTERPRISES LIMITED a duly incorporated company having its head office at Vailima. And LUSIA BROWN trading as LUSIA’S LAGOON CHALETS Salelologa, Savaii


Hearing date(s):



File number(s):
CP 199/11


Jurisdiction:
CIVIL


Place of delivery:
Supreme Court of Samoa, Mulinuu


Judge(s):
SAPOLU J
TEMPORARY JUSTICE OF THE SUPREME COURT AND FORMER CHIEF JUSTICE


On appeal from:


Order:
- I have dismissed several claims and counterclaims. I have allowed a few claims and counterclaims. But there are issues or matters that I have left for settlement discussions between the parties and their respective counsel. I have also set out the legal principles that apply to the claims and counterclaims between the plaintiff on one hand and the first and second defendants on the other hand. The position taken by counsel for the first and second defendants before the commencement of these proceedings to have this case settled out of Court has much to commend itself.
- This matter is adjourned to Friday 17 May 2019 for counsel and the parties to settle the outstanding issues. This matter will then be recalled at 12:30pm on 17 May 2019.
- I reserve the question of costs.


Representation:
K Kruse for plaintiff
S Wulf for first and second defendants
A Su’a for third defendant


Catchwords:
Counterclaims – factual matrix – factual complexities – legal principles –tort of detinue – tort of conversion –– unjust enrichment – vague and obscure


Words and phrases:


Legislation cited:
Bateman Television Ltd v Bateman and Thomas [1971] NZLR 453
Dyer v Dyer (1788) 2 Cox Ext 97
Mt Vaea Company Ltd v Faanunu [2000] WSSC 20

Standing v Bowring [1885] UKLawRpCh 282; (1885) 31 Ch D 282
Pounama Properties Ltd v Brons [2012] NZHC 590
Hemu Trade Company Ltd v Le [2018] NZHC 982
Zajonskoski v North Swan Treatment (BOP) Ltd [2013] NZHC 3505
Bigyard Holdings Ltd (in receivership) v Tasmandairy Ltd [2017] NZHC 1918
Carey v Smith [2013] NZHC 2291, [51] – [55]
Kuwait Airways Corp v Iraqi Airways Co (Nos 4 & 5) [2002] UKHL 19 paras 69 – 70
Public Trustee v Foketi Brown (1995) (unreported judgment delivered on 24 January 1995; CP 393/33)
Nash v Barnes [1921] NZGazLawRp 153; [1922] NZLR 303
McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303
Strand Electric & Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246
Cases cited:


Summary of decision:

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU


BETWEEN


ALAN BELCHER of Vaivase-tai, Contractor.
Plaintiff


A N D


ALBERT BROWN of Salelologa, Savaii, Contractor
First Defendant


A N D


ALCC BROWN ENTERPRISES LIMITED a duly incorporated company having its head office at Vailima.
Second Defendant


A N D


LUSIA BROWN trading as LUSIA’S LAGOON CHALETS Salelologa, Savaii
Third Defendant


Counsel:
K Kruse for plaintiff
S Wulf for first and second defendants
A Su’a for third defendant


Judgment 3 May 2019


JUDGMENT OF SAPOLU J
TEMPORARY JUSTICE OF THE SUPREME COURT
AND FORMER CHIEF JUSTICE

Introduction

  1. This is a complex case. The evidence is conflicting, confusing and vague in many respects. As a result, it has been extremely difficult to identify the correct factual matrix to which the relevant law can be applied. Some of these factual complexities may not be apparent from this judgment as I do not want to further prolong the delivery of this judgment by dwelling on them. Even the applicable law is not straightforward. I disagree with counsel for the plaintiff that the facts of this case are fairly straightforward and the factual issues are not overly complex. Given the difficulties with the evidence, particularly the many conflicts between the accounts given by the plaintiff and the first defendant, this case is anything but straightforward. I agree with counsel for the first and second defendants that this is a complex case with complex issues. I wish this case had been resolved when it was referred to mediation. It would have brought this dispute to an early resolution.
  2. The plaintiff has been eager for an early judicial resolution of this case. So are the defendants. This is understandable. I regret it has taken this long to produce my judgment. Perhaps if the parties themselves had understood the evidential and legal difficulties associated with this case, they would have reached an early negotiated settlement of their dispute and each party to go his own way. Litigation is not the only way for settlement of disputes. It is normally an expensive and time consuming way of dispute resolution. Numerous commercial disputes in other jurisdictions are now resolved through mediation. Mediation is quicker and much less expensive and time consuming than litigation.
  3. For the purpose of this judgment, I have decided to deal first with the plaintiff’s claim against the first and second defendants and the first and second defendants counterclaim against the plaintiff in PART A. I will then deal with the plaintiff’s claim against the first and third defendants and the first and third defendants counterclaim against the plaintiff in PART B and the third defendant’s counterclaim against the plaintiff in PART C. This is to facilitate understanding and to avoid or reduce confusion.

PART A
THE PLAINTIFF’S CLAIM AGAINST THE FIRST AND SECOND DEFENDANTS AND
FIRST AND SECOND DEFENDANTS COUNTERCLAIM AGAINST THE PLAINTIFF

(a) THE PLAINTIFF’S CLAIM AGAINST THE FIRST AND SECOND DEFENDANTS

  1. The plaintiff’s claim against the first and second defendants is founded in the tort of detinue, the tort of conversion, and unjust enrichment in the law of restitution. For the claim in detinue, the plaintiff seeks:
  2. For the alternative claim in conversion, the plaintiff seeks:
  3. For the plaintiff’s claim in unjust enrichment it is alleged that the defendants have continued to earn income as a result of detaining for their own use the plaintiff’s machinery, equipment, and rentals. Hence the defendants had been enriched at the plaintiff’s expense. I am not very clear about this claim by the plaintiff as what follows in the pleadings is a claim for consequential loss. I suspect that the claim in unjust enrichment relates to the alleged use by the third defendant of the plaintiff’s two Toyota Estima vans as taxis for an alleged period of thirty-four (34) weeks since April 2011. I will deal with this claim by the plaintiff when I come to the plaintiff’s claim against the first and third defendants.

(b) The first and second defendants counterclaim against the plaintiff

  1. The first and second defendants in their amended statement of defence and counterclaim have counterclaimed against the plaintiff as follows:

Rent of the second defendant’s Vaitele yard $22,600.00
Rent of the second defendant’s Vailima unit
at $2,500 per month x 18 months $54,000.00
Rent of the second defendant’s Vailima
yard and warehouse at $2,500 per month x 18 months $ 45,000.00
Rent of the second defendant’s Salelologa yard
and office at $3,000 per month x 18 months $ 54,000.00(and continuing)
Costs for preparing, shipping, customs duties and wharf charges
for machines including costs in running expenses for the machine
and company (wages, fuel, maintenance) $599,953.23
-----------------
TOTAL AMOUNT CLAIMED $735,556.23
==========

  1. Even though the last part in (g) of the counterclaim by the first and second defendants suggests that the counterclaim is based on contract, the counterclaim in (f) for expenses in shipping the machines from New Zealand to Samoa and for work done on the machines suggests that that part of the counterclaim is based on unjust enrichment and the law on restitution.

Background

  1. The plaintiff is a New Zealand national. He came to Samoa in May 2009 for vacation and to check if there is a business opportunity for him in Samoa. The first defendant is a businessman. He owns the second defendant which is a company that carries out, inter alia, road construction and maintenance works in Upolu using heavy machinery and equipment. The third defendant is the wife of the first defendant and she operates a resort at Salelologa called Lusia’s Lagoon Resort.
  2. The different accounts given by the plaintiff and the first defendant regarding this matter are conflicting from the outset. The plaintiff testified that he first met the first defendant in New Zealand in July 2009 and the first defendant approached him for them to go into business together in the form of a company called CPH. The first defendant, on the other hand, testified that he first met with the plaintiff in May 2009 at the premises of the second defendant at Vailima when the plaintiff, in the presence of an acquaintance, approached him that he wanted to enter into a joint business with the second defendant. The first defendant said he replied no, but there is another company called CPH in which his daughter is a shareholder that the plaintiff can enter into business with. This company, as the first defendant said, was formerly owned by his brother who died five years ago.
  3. The documentary evidence shows that CPH was registered on 4 June 2009. So it could not have been in existence prior to 4 June 2009 the date of its incorporation. There is no other documentary evidence to show that CPH was incorporated at any other time. Even though the first defendant said that CPH was “reopened” in June 2009 whatever that means, the fact remains that CPH was incorporated on 4 June 2009. It makes me prefer the plaintiff’s evidence that he first met with the first defendant in New Zealand in July 2009 which was after CPH was incorporated and reject the first defendant’s evidence that he first met with the plaintiff at Vailima at the second defendant’s premises in May 2009 which was before the incorporation of CPH as a company. The evidence of both the plaintiff and the first defendant was that at the first time that they met, the first defendant mentioned CPH as the company in which the plaintiff and the first defendant’s daughter would each have a 50% shareholding. Both the plaintiff and the first defendant’s daughter were also to be directors of CPH. There were other references by the first defendant to CPH at that meeting. This implies that CPH was already in existence by the time of the first meeting between the plaintiff and the first defendant otherwise when the plaintiff told the first defendant that he wanted to enter into business with the second defendant, the first defendant would not have replied no, “but there is another company called CPH in which his daughter is a shareholder that the plaintiff can enter into business with”.
  4. Furthermore, if the first meeting between the plaintiff and the first defendant had taken place in May 2009 before the incorporation of CPH on 4 June 2009, important issues of company law would have arisen as to whether the contractual arrangements made by the plaintiff and the first defendant at their first meeting would be binding on CPH which was subsequently incorporated on 4 June 2009. Neither counsel touched in their submissions on such issues regarding pre-incorporation contractual arrangements. I am therefore inclined to think that perhaps counsel did not consider that such company law issues arise from the circumstances of this case because the first meeting between the plaintiff and the first defendant occurred after the incorporation of CPH on 4 June 2009.
  5. The arrangements that were made between the plaintiff and the first defendant at their first meeting in July 2009 was that the first defendant promised the plaintiff a 50% shareholding and a directorship in CPH which had been granted a permit to carry out routine road maintenance work at Savaii and the other 50% shareholding would be held by the first defendant’s daughter. In return, the plaintiff agreed that he would put into CPH his machines and equipment to be purchased in New Zealand and brought to Samoa on the “first shipment” which arrived in September 2009 according to the first defendant’s evidence. Apart from the machinery and equipment, the first shipment included two Toyota Estima vans purchased by the plaintiff. The plaintiff paid for the freight and duty costs of the first shipment. The first defendant said that he also put in machines and equipment into CPH as part of his daughter’s share in the company. It is not clear from the first defendant’s evidence what those machines and equipment were. But it appears from the plaintiff’s evidence under cross-examination that they included one ex120 excavator, a tipping trailer, and a 6 wheeler tipping truck. The first defendant also said that it was agreed that he was to repair and service the first shipment machines when they arrived in Samoa as they secondhand. And he repairs those machines when they arrived in Samoa. And he did those repairs. It was also him who inspected the machines in Auckland and advised the plaintiff on what machines to purchase and it was him and his brother who prepared and drove the machines to the wharf in Auckland for shipping to Samoa because the plaintiff did not know how to drive the machines.
  6. One other matter that the plaintiff said arose from his first meeting with the first defendant in July 2009 was the question of the plaintiff’s accommodation in Samoa. The plaintiff said that at that meeting the first defendant agreed to provide free accommodation for him at the second defendant’s compound at Vailima as part of the CPH deal. The first defendant also agreed that when the plaintiff or people on behalf of CPH go to Savaii they would stay free of charge at the resort of the third defendant who is the wife of the first defendant. This resort is called Lusia’s Lagoon Resort and is at Salelologa. However, when CPH begins to make some money, then CPH would pay for those accommodation costs.
  7. The first defendant in his evidence denied that he agreed to provide free accommodation for the plaintiff in one of his units at Vailima. He said that he told the plaintiff that he would pay rent when CPH starts making a profit. The plaintiff stayed at one of the second defendant’s Vailima units for eighteen months without paying rent, electricity or phone bills. The plaintiff also did not pay for any water bills except on two occasions. The first defendant also said that it was when he went with the plaintiff to Salelologa that he told the plaintiff that he could stay at the third defendant’s resort and the bills will be put to CPH. When CPH starts to make some money then it would pay for those bills.
  8. Up to this point, the evidence as well as the submissions of counsel show that at the meetings between the plaintiff and the first defendant, the first defendant was acting on behalf of CPH and his daughter a shareholder in CPH. I agree with counsel for the plaintiff that at that time the first defendant was making all the decisions for CPH and appeared to be running the daily operations of CPH. In these circumstances, one gets the impression that the first defendant was acting as agent for CPH. It is difficult to pinpoint whether the fist defendant was at any time acting on his own and not on behalf of CPH as he and the plaintiff were always referring to CPH at their talks.
  9. After the machines and equipment from the first shipment arrived in Samoa in September 2009, the plaintiff said they were taken to the compound of the second defendant ALCC Brown Enterprises Ltd at Vailima. The first defendant said that some of the machines and equipment from the first shipment were in poor condition as they were second hand. The first defendant also said that one of the tractors that was brought over is still not operational. He used the second defendant’s employees and mechanical workshop at Vailima to fix and repair all five machines to make them work properly. Damaged parts of some of the machines were replaced with parts from the second defendant’s machines. All of this cost him a lot of money.
  10. The plaintiff further said that the machines and equipment from the first shipment were then used in various contracts of the second defendant such as in November 2009 removing fuel tanks at the government fueling station at Sogi, January 2010 site development for a new school at Aleipata, and March 2010 clearing the site for a new school at Poutasi, Falealili. The plaintiff supervised the use of the first shipment machines at those jobs and expected to be paid wages from CPH as promised by the first defendant. However, the plaintiff did not receive any wages.
  11. Counsel for the plaintiff in her submissions said that all the machinery and equipment brought on the first shipment are now in the plaintiff’s possession except for a David Brown tractor and a Mower grader which are in the custody of the registrar. So counsel for the plaintiff further said that the basis of the plaintiff’s claim in the tort of detinue is his ownership of the first shipment machinery, equipment, rentals, and miscellaneous items which are still in the custody and control of the first and second defendants and in respect of which he is seeking an order for their return to him.
  12. The plaintiff also discovered that despite the promise of the 50% shareholding in CPH he in fact owns only thirty shares of the one thousand share capital of the company or 3%. The rest of the shares are owned by the first defendant’s daughter.
  13. According to the first defendant’s evidence, when the first shipment arrived in Samoa, the majority of the machines were taken to Salelologa. Only one or two machines remained in Upolu and were used in the second defendant’s contracts. The fist defendant paid for the fuel and wages of the workers who operated the machines. It is not entirely clear from the evidence who was the employer of these workers. But I am prepared to draw the inference that they were workers of the second defendant itself and therefore the second defendant should have paid for their wages. There is no evidence to show that CPH which had only been incorporated on 4 June 2009 had any employees by November 2009, January 2010 or March
  14. 2010 except for the plaintiff who is a foreigner that had been in Samoa for only a few months. The second defendant, on the other hand, had been a long established company with its own employees. The workers who operated the machines for the said contracts by the second defendant must have been employees of the second defendant whose wages should be paid by the second defendant. In fact, in reply to a question from the Court, the first defendant said that CPH had no employees. However, the first defendant said he was claiming for the wages of workers employed in CPH contracts. If that is so, then the first defendant’s claim should have been directed at CPH. Likewise, the fuel for the machines. The second defendant should have been responsible for refueling the machines at its own expense` at the time it was using the machines in its contracts. The machines were not being used for CPH contracts. Thus, the claim by the first and second defendants against the plaintiff for fuel and wages of the second defendant’s workers is unsustainable.
  15. In February 2010, the plaintiff and the first defendant travelled to New Zealand to attend a liquidation sale in Auckland of various machinery and vehicles. Here again, the evidence of the plaintiff and the first defendant are quite conflicting. The plaintiff said that at the request of the first defendant he purchased several items of heavy machinery. The plaintiff maintained these machines belonged to him and were never transferred to CPH or anyone else. The plaintiff also purchased two Nissan vehicles. These machines and vehicles were brought to Samoa on what has been described by the parties as the “second shipment”.
  16. The evidence of the first defendant was that before he and the plaintiff went to Auckland to attend the liquidation sale, they had discussed the need to purchase more machines and equipment to expand their fleet so that they could get more and bigger jobs. It was also discussed that the plaintiff would use his funds in New Zealand to purchase the additional machines and equipment for CPH. In return, CPH would use the Salelologa yard which belongs to the second defendant for its machinery and equipment. The first defendant explained that at the rent of $3,000 a month that would come to $720,000 for 20 years. It seems to me that what the defendant meant was that the plaintiff would purchase the machines and equipment using his own funds but that CPH would not pay any rent to the second defendant for twenty years for the use of the second defendant’s Salelologa yard.
  17. On the other hand, the evidence is vague and obscure as to who was the plaintiff’s employer at the time the first shipment machines and equipment were used in the second defendant’s contracts at Sogi, Aleipata and Poutasi, Falealili. The evidence is also vague as to who was responsible for paying the plaintiff’s wages. The first shipment machines and equipment belonged to CPH. The plaintiff was a shareholder and director in CPH. When the machines and equipment were used by the second defendant in its contracts, it seems the CPH machines and equipment were being hired by the second defendants for its contracts. When the machines and equipment were used by the second defendant under the plaintiff’s supervision, the plaintiff was supervising the machines and equipment as a shareholder and director of CPH rather than as an “employee” of the second defendant. The second defendant should therefore have paid for the hirage of the machines and equipment to CPH and the plaintiff should have been remunerated by CPH from that money for supervising its machines when used by the second defendant. The plaintiff’s personal claim for wages should therefore have been directed at CPH.
  18. The first defendant further said that they also talked about starting a rental car business in Salelologa. So when he and the plaintiff travelled to New Zealand in February 2010, it was the first defendant’s understanding that they were going to buy more machines and equipment for CPH and not for the plaintiff himself. If that had been so, he, the first defendant would not have gone to New Zealand.
  19. Furthermore, the first defendant said that they purchased trucks and rock breakers at the Auckland auction for the liquidation sale using the plaintiff’s funds in New Zealand. The first defendant also put in some money which according to the plaintiff’s evidence was NZ$1,000. The first defendant also said that he put some money into CPH’s bank account to pay for the freight and for the duty costs when the machines, equipment, and vehicles arrived in Samoa. This was strongly disputed by the plaintiff’s counsel who said that the documentary evidence showed that payment of the freight was sourced from the CPH bank account. I think that if it is true that the first defendant as he claimed put money into CPH’s bank account to pay for the freight of the second shipment, that must have been money from the hirage of CPH’s first shipment machinery and equipment in the second defendant’s contracts. I do not see any evidence that CPH was ever paid by the second defendant for the use of those machines and equipment. Unlike the first shipment, there was no document executed to transfer the second shipment machines, equipment, and vehicles to the ownership of CPH. But it was the first defendant’s understanding all along that those items of properties were intended for CPH.
  20. The first defendant further testified that he spent labour in preparing the machines and equipment in Auckland for their shipment to Samoa and for their transportation to the wharf in Auckland. He dismantled some of the machines and cut in halves about three of the trucks so that they could be shipped to Samoa. When the “second shipment” arrived in Samoa he handled all the paperwork and the second defendant’s workers transported the machines and equipment from the wharf to the second defendant’s yard at Vailima where the first defendant rebuilt the machines and welded together the vehicles that had been dismantled or cut in halves in Auckland. He also carried out some repairs to the machines and equipment as they were secondhand. It also appears from the evidence that some of the machines were stored at the Vailima yard and some of the machines were taken to the second defendant’s yard at Vaitele.
  21. What is clear from this part of the evidence is that the funds that were used to purchase the machines, equipment, and vehicles for the second shipment were the plaintiff’s personal funds except for the NZ$1000 put in by the first defendant. No document was ever executed for the transfer of those machines and vehicles to CPH. So those machines and equipment remained the personal properties of the plaintiff. and not of CPH. Even though the first defendant said that it was his understanding that those machines and vehicles were intended for CPH, the machines and vehicles were purchased with the plaintiff’s own funds, not CPH funds. And their ownership was never transferred to CPH. The first defendant has however claimed for the NZ$1,000 he contributed to the purchase price of the machines and equipment in New Zealand and the repairs he carried out when the machines and equipment arrived in Samoa. There is also a claim, presumably by the second defendant, for the use of its Vailima and Vaitele yards to store the machines and equipment and for the repairs carried out by the first defendant.
  22. The majority of the machines and vehicles from the second shipment were then shipped to Savaii. Here again, the evidence of the plaintiff and the first defendant are conflicting. The plaintiff said that the machines from the second shipment were used by the first defendant to carry out the contracts for his company the second defendant and he did not receive any payment from the first and second defendants for the use of those machines. The first defendant testified that the machines that were shipped to Savaii were used for CPH works. The machines and vehicles that were left in Upolu were hired out by both himself and the plaintiff to customers. He, the first defendant, also paid for the fuel and wages of the employees every time the machines and vehicles were hired out for CPH works.
  23. It seems from the evidence that the plaintiff was of the view that the machines shipped to Savaii belonged to him and therefore the first and second defendants should have paid him for their use of the machines in Savaii. The first defendant, on the other hand, was of the view that the machines were being hired out for CPH works. It follows that any payments for the use of the machines should have gone to CPH instead of the plaintiff. I find this part of the evidence rather vague and difficult to resolve. Counsel in their submissions did not try to clarify matters or resolve the evidential conflicts. However, I am of the view that the workers who were used to drive the machines were employees of the second defendant which should have paid for their wages. The second defendant should also have refueled the machines while using them. What the second defendant should have paid to the plaintiff as the true owner of the machines was the hirage of the machines. The fact that employees of the second defendant were used to operate the machines was a factor that could have been taken into account in the assessment of the hirage to be paid to the plaintiff. The second defendant should also have refueled the machines to the level of the fuel in the machines at the time it first hired the machines or paid an appropriate sum to the owner if it did not refuel the machines.
  24. I come now to the plaintiff’s claim in detinue in relation to miscellaneous items which consists of a Suzuki outboard, a torque wrench, one set of Allen keys, assorted yachting ropes, one grease gun, fifteen Americas Cup prints, a quick release attachment for the Hitachi Ex 200 excavator, and an Ex 200 weed bucket which he said had not been returned by the first defendant. The plaintiff said that these miscellaneous items had been borrowed by the first defendant over time from him. All the other miscellaneous items had not been returned. The plaintiff gave an approximate value of NZ$4,500 for all the miscellaneous items but he did not give a value for the quick release attachment for the Hitachi Ex 200 excavator.
  25. The first defendant in his evidence in chief said that the plaintiff had a “load of stuff” (whatever that means) except for the quick release attachment for the Hitachi Ex 200 excavator which was broken and was left at the Vailima yard but was later taken down to the custody of the registrar. As for the other miscellaneous items, the first defendant said he did not know where they were. The first defendant did not say that the other miscellaneous were returned to the plaintiff. He merely said that the plaintiff took a “load of stuff” and he did not know where the other miscellaneous items were except for the quick release attachment of the Hitachi 200 excavator which is now in the custody of the registrar. I do not find this evidence of the first defendant satisfactory. I prefer the plaintiff’s evidence that the miscellaneous items had not been returned to him by the first defendant.
  26. In March 2011 while the first defendant was in New Zealand, the plaintiff moved out of the second defendant’s unit at its Vailima yard. The first defendant said that the plaintiff removed his personal belongings and took with him machines and equipment from the second defendant’s Vailima and Vaitele yards. He also found that some of his tools were missing. However, there is no evidence that such tools were taken by the plaintiff. The first defendant said he texted the plaintiff several times to set up a meeting to discuss the situation that had arisen but the plaintiff only replied through his solicitor.
  27. On 23 March 2011, the plaintiff wrote to the first defendant and requested the return of his machinery, equipment, and rentals but the first defendant released only the plaintiff’s Hitachi Ex 200 excavator. The plaintiff’s solicitor on 30 August 2011 again wrote to the first defendant requesting the return of the plaintiff’s machinery and equipment and rentals but the first defendant refused to comply. The plaintiff also requested the first defendant in the said letters for the return of the miscellaneous items the first defendant had borrowed over time from the plaintiff as well as the two Nissan vehicles and the two Toyota Estima vans but the first defendant also refused to comply.
  28. In his evidence in chief, the first defendant said that he texted the plaintiff several times saying: “Allan, you need to come and talk if you want to leave. You have to resign properly or settle matters for CPH. I have spent a lot of money Allan. Lawyers cost too much money. I asked him that we need to settle CPH and then he can go his way and I go my way”. However, the plaintiff’s response was “refer to my lawyer”. The first defendant also said that his finances were low at the time and it would cost a lot of money for him to bring the machines from Savaii to Apia.
  29. The first defendant did not elaborate on how much it would have cost him to bring the machines from Savaii. Neither did he tell the plaintiff that it was too expensive for him to bring over the machines from Savaii. I do not find this particular reason about bringing over the machines being expensive and not affordable by the first defendant convincing.
  30. The first defendant’s position was that he had put some money into the purchase of the machinery and equipment; he had spent time and labour in preparing the machinery and equipment so that they could be shipped to Samoa; he then moved the machines and equipment to the wharf in Auckland for shipment to Samoa; he had put money into the CPH bank account to pay for the freight and duty costs; the second defendant’s workers had moved the machines and equipment upon their arrival in Samoa from the wharf in Apia to the second defendant’s yard at Vailima where they were stored; the first defendant and the second defendant’s workers had rebuilt the machines and done some repairs; they also had to weld together the trucks that had been cut in halves in New Zealand so that they could be shipped to Samoa; the plaintiff had not paid rent for his accommodation at the second defendant’s unit at Vailima; and the plaintiff had not paid rent for the storage of the machinery and equipment at the second defendant’s Vailima, Vaitele, and Salelologa yards. It was not argued that the first or second had any lien on the machinery and equipment in the face of the claim in detinue. The first defendant also said that it was his belief that the machinery and equipment belonged to CPH.
  31. When the first defendant did not return the machinery, equipment, miscellaneous items, the two Nissan vehicles, and the two Toyota Estima vans, counsel for the plaintiff filed an ex parte motion for an interim injunction on 24 November 2011 directed at the first, second, and third defendants to yield up possession of the machinery, equipment, miscellaneous items, and rentals to the plaintiff. I ordered that the plaintiff’s motion be served on the three defendants. The defendants opposed the plaintiff’s motion and the matter was set down for an early hearing on 20 December 2011. After hearing counsel for the plaintiff and Mr Wulf for all three defendants, I made the order that the machinery, equipment, miscellaneous items, and rentals be surrendered to the custody of the registrar.
  32. As a result of the first defendant not returning the machinery, and equipment and rentals, the plaintiff has claimed that his newly formed company Altra has suffered consequential losses from several contracts. The following consequential losses are claimed by the plaintiff:

(i) Return to Paradise job

24 loads (10 Wheeler) x $250 per load $ 6,000.00
17 loads (6 Wheeler) x $250 per load $ 4,200.00

--------------

$10,200.00

(ii) Roman Catholic Church job

Hard fill from Fagalii to Beach Road
10 loads (6 Wheelers) x $500 per load $18,200.00
Hard fill from Leauvaa to Beach Road
10 loads (6 Wheelers) x $500 per load $ 5,000.00
Six jobs on hold until return of the Komatsu PC 200
Excavator $25,000.00
---------------
$95,000.00

(iii) 2 Toyota Estima Vans as taxis earning

$1,000 per week x 34 weeks $34,000 (and continuing)

  1. The plaintiff has also claimed that all three defendants are continuing to earn money off his machines, equipment and rentals and are therefore being unjustly enriched at his expense.

The relevant law

(a) Resulting trust

  1. As the first defendant had said that he contributed NZ$1,000 to the purchase of the second shipment machinery, equipment, and vehicles, I was expecting a resulting trust claim from the first defendant for that amount, the presumption of advancement not being relevant to the circumstances of this case. The first Samoan case on resulting trust was Mt Vaea Company Ltd v Faanunu [2000] WSSC 20. In that case the plaintiff and another person both contributed in different proportions to the purchase price of a chattel. Subsequently, there was a dispute as to who takes the chattel. I referred to the decision of the New Zealand Court of Appeal in the case of Bateman Television Ltd v Bateman and Thomas [1971] NZLR 453 and said:
  2. In the second Samoan case on resulting trust, namely, Ching v Elisara [2000] WSSC 40 this Court referred to a number of Australian and English cases on resulting trust and went on to say:
  3. In the New Zealand case of Pounama Properties Ltd v Brons [2012] NZHC 590 at [178] Duffy J said:
  4. In Hemu Trade Company Ltd v Le [2018] NZHC 982 at [57], [58], [60]-[62], [63], Fitzgerald J in discussing the legal principles on resulting trust said:
  5. Fitzgerald J then continued at [60] – [62]:
  6. Fitzgerald J then went on to say at [63]:

It is to be noted that the presumption of advancement referred to in the foregoing authorities does not apply in the circumstances of this case.

(b) Detinue

  1. The essential features of the tort of detinue were recently summarised in Bigyard Holdings Ltd (in receivership) v Tasmandairy Ltd [2017] NZHC 1918 at [56] and [57] where Moore J stated:
  2. In the another New Zealand case of Zajonskoski v North Swan Treatment (BOP) Ltd [2013] NZHC 3505 at [15], Heath J stated:
  3. In The Law of Torts in New Zealand (2009) 5th ed by Stephen Todd et al 12.4.08 p.579, the learned authors stated:
  4. At p.580 of the same text, the learned authors stated:
  5. Further on at p.580, the learned authors stated:

(c) Conversion

  1. The leading authority on the tort of conversion is now Kuwait Airways Corp v Iraqi Airways Co (Nos 4 & 5) [2002] UKHL 19; [2002] 2 AC 883 where Lord Nicholls, who gave the judgment for the majority, stated the essential features of the tort of conversion as follows:
  2. The principles of conversion stated in Kuwait Airways Corp v Iraqi Airways Co (Nos 4 & 5) [2000] UKHL 19; [2002] 2 AC 883 at [39] were adopted in New Zealand by the Court of Appeal in Brooksbank and Co (Australasian) Ltd v EXFTX Ltd [2009] NZCA 122; (2009) 10 NZCLC 264, 52, at [21] – [22] and have been applied in several decisions of the New Zealand High Court.
  3. In Carey v Smith [2013] NZHC 2291, [51] – [55], Duffy J said:
  4. In Bigyard Holdings Ltd (in receivership) v Tasmandairy Ltd [2017] NZHC 1918, Moore J after referring to the passage from the judgment of Lord Nicholls in Kuwait Airways Corp which states the essential features of conversion, went on to say at [53]:
  5. The principles relevant to the assessment of damages for conversion were also discussed by Lord Nicholls in Kuwait Airways Corp v Iraqi Airways Co (Nos 4 & 5) [2002] UKHL 19 paras 69 - 70; [2002] UKHL 19; [2002] 2 AC 883, a case on conversion, where His Lordship said:

(b) Unjust enrichment

  1. The elements of the cause of action based on unjust enrichment in the law of restitution have been discussed in a number of Samoan cases starting from the unreported decision in Public Trustee v Foketi Brown (1995) (unreported judgment delivered on 24 January 1995; CP 393/33). Some of those cases were referred to in the submissions of counsel in this case. I would therefore not spend time again in discussing the law on an unjust enrichment cause of action. I will go directly now to the cases which I consider to be relevant and helpful to the determination of this case.
  2. I start with Greenwood v Bennett [1971] 3 A11 ER 586. The relevant facts of that case were that Mr Bennett (B) gave a car to S for repairs. The car was worth £500 at the most at that time. Without the authority or permission of B, S took the car out on the road on a frolic of his own. The car was in collision with another vehicle and was extensively damaged. Without any right to do so, S sold the damaged car to Mr. Harper (H) who purchased it in good faith for £75. B then informed the police who found the car and took possession of it. At the trial Court, the Judge held that B was entitled to the car and H was entitled to nothing for the work he had done on it. H appealed. In the Court of Appeal Lord Denning MR said at pp 588-589:
  3. In the Australian case of McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303, the plaintiff purchased a yacht from the first defendant, trading in another yacht that he owned. The first defendant produced a hull (frame) for the plaintiff’s yacht to be built, the property in the hull being in the plaintiff. The first defendant then sold its business to the second defendant. It was not clear whether the plaintiff was aware of the sale by the first defendant of its business to the second defendant. Likewise, it was not clear whether the second defendant was aware of the arrangements between the plaintiff and the first defendant. Nevertheless, the second defendant completed the work of building the yacht. Both the plaintiff and the second defendant claimed ownership of the yacht. The plaintiff sought a remedy in detinue, or in specific restitution in equity, or in conversion. Young J in the Equity Division of the Supreme Court of New South Wales said at [308]:
  4. In Stephen Todd (ed) The Law of Torts in New Zealand (2009) 5th ed, p. 582, 12.4.03 (1) the learned authors state:
  5. I have, perhaps, cited more extensively from the relevant authorities in this area of the law than it would be necessary in a developed jurisdiction. But Samoa is still a developing jurisdiction and some of the issues that have arisen in this complex case have not been the subject of any previous Samoan decision. Hence, it has been necessary to cite at length from the authorities in order to try and explain those issues, especially the Court’s equitable discretionary jurisdiction to determine whether to order restitution of a chattel to the plaintiff in an action in detinue where the defendant has made improvements to the chattel. This issue, in my view, is also relevant to the cause of action in conversion.
  6. In Stephen Todd (ed) The Law of Torts in New Zealand (2009) 5th ed para 12.3.04 (2), p.578, 12. 3. 04(2) the learned authors said:

Discussion

(a) The plaintiffs claim in detinue against the first and second defendants and the first and second defendants counterclaim against the plaintiff

  1. As it appears from the submissions of counsel for the plaintiff, the plaintiff’s claim in detinue against the first and second defendants is based on his alleged ownership of the second shipment of machinery, equipment, rentals and miscellaneous. I will put aside for the moment the plaintiff’s claim against the rentals until I come to the plaintiff’s claim against the first and third defendants. The counterclaim by the first and second defendants against the plaintiff is based on unpaid rent for the storage of the machinery and equipment at the second defendant’s yards at Vailima and Vaitele, costs of work done on the machinery and equipment, as well as the costs paid in relation to the shipment of the machinery and equipment from New Zealand to Samoa and then the shipment of some of the machinery and equipment from Upolu to Savaii.
  2. The relevant evidence shows that in February 2010, the plaintiff and the first defendant travelled to New Zealand to a liquidation sale in Auckland. The plaintiff purchased some heavy machinery and equipment with his own funds. The first defendant’s understanding was that they were travelling to New Zealand to acquire more machinery and equipment for CPH. The first defendant contributed some money, which the plaintiff said was NZ$1,000, to the purchase of the machinery and equipment. He also worked on preparing the machinery and equipment in Auckland for shipment to Samoa. This included cutting up some of the machinery into halves so that they could be shipped to Samoa. The first defendant was also responsible for transporting the machinery and equipment to the wharf in Auckland for shipment to Samoa. The first defendant would not have done all that if he did not believe the machines and equipment were intended for CPH of which his daughter was one of the two shareholders/directors. Upon arrival of the machinery and equipment in Samoa, the first defendant handled all the paperwork and the second defendant’s workers transported the machines and equipment from the Apia wharf to the second defendant’s yard at Vailima. It was there that the first defendant and the second defendant’s workers rebuilt the machines and welded together the vehicles that had been cut in halves in Auckland so that they could be shipped to Samoa. The first defendant also did repairs to the machines and equipment as they were secondhand. Some of the machines were stored at the second defendant’s yard at Vailima while others were stored at the second defendant’s yard at Vaitele.
  3. The first and second defendants have counterclaimed against the plaintiff for the work done on the second shipment machinery and equipment in Auckland and in Samoa. Given the circumstances of this case and the principle explained in Greenwood v Bennet [1973] 1 QB 195; [1972] 3 A11 ER 586; McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303 ; Nash v Barnes [1921] NZGazLawRp 153; [1922] NZLR 303, I am of the view that for the plaintiff to recover possession of his chattels a fair compensation should be paid first to the first defendant for the work he had done on the chattels in Auckland and Samoa and for a reasonable rent to be paid for the storage of the chattels on the second defendant’s yards at Vailima and Vaitele. Even though Greenwood v Bennett, McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303, and Nash v Barnes were concerned with an innocent purchaser, the principle involved is that one person should not be allowed unjustly to enrich himself at the expense of another. In my view, that principle should also apply to the circumstances of this case. The plaintiff’s claim in detinue against the first and second defendants should therefore be dismissed. Anyhow, the machines and equipment have been in the custody of the registrar.
  4. What should have been done is for the parties to sit down and discuss what should be a fair compensation for all the work done by the first defendant on the plaintiff’s chattels and a fair compensation for the storage of the chattels at the second defendant’s yards. Any monies that may be owed by the first and second defendants to the plaintiff in relation to the second shipment should also be taken into account. When that issue is settled, the chattels should then be returned to the plaintiff. This seems to have been what the first defendant had wanted from the plaintiff but the plaintiff’s response had always been ‘refer to my lawyer’. I strongly urge the parties to reach agreement as soon as possible on a fair compensation to the defendants applying the principle I have set out in this judgment and then the chattels to be returned to the plaintiff.
  5. As to the counterclaim by the first defendant against the plaintiff for funds the first defendant stated that he spent on the purchase of the machinery and equipment in Auckland, which the plaintiff said was NZ$1,000, the plaintiff should reimburse the first defendant for that amount on the principle of resulting trust. This should also be done before the return of the chattels to the plaintiff.
  6. The plaintiff also claims for consequential losses. Because the plaintiff should have first paid a fair compensation for all the work done by the first defendant on the machines and the equipment, a fair rent for the storage of his machines and equipment in the second defendant’s yards, as well as reimbursing the first defendant for the money the first defendant had spent in New Zealand for the purchase of the machines and equipment, the claim for consequential losses should also be dismissed. This is because the plaintiff’s claim for consequential losses arose from the alleged wrongful detention which is dismissed.
  7. In the circumstances, the plaintiff’s claim for exemplary damages should also be dismissed.

(b) The plaintiff’s alternative claim in conversion against the first and second defendants

  1. Detinue has been said to be a species of conversion; it is conversion by taking: Stephen Todd (ed) The Law of Torts in New Zealand (2009) 5th ed at 12.4.08 p580. As the plaintiff’s claim in detinue has been dismissed, it follows that the alternative claim in conversion should also be dismissed. However, the plaintiff said that there had been some damage to his machines and equipment which had been used by the first and second defendants and therefore seeks damages. The plaintiff called evidence in support of that part of his claim. In my view, damages should be awarded to the plaintiff against the first and second defendants for the damage caused to the plaintiff’s machines and equipment during the time that they were used either by the first defendant or second defendant or both. To this extent, the claim in conversion succeeds.
  2. There was also a claim by the plaintiff in conversion for NZ$3,500 being the value of the plaintiff’s Nissan Primera van alleged by the plaintiff to have been sold by the first defendant without his knowledge and consent. This allegation was not denied by the first defendant. He said that he sold the plaintiff’s van because the plaintiff had damaged one of his vehicles and the plaintiff would not fix his vehicle. I would therefore award NZ$3,500 damages to the plaintiff for the value of his vehicle. In discussions for settlement, the parties should take into account the damage caused by the plaintiff to the first defendant’s vehicle.
  3. Other claims by the plaintiff for consequential loss and exemplary damages for conversion are dismissed.

(c) The plaintiff’s alternative claim in unjust enrichment against the first and second defendants

  1. The plaintiff’s alternative claim in unjust enrichment relates to the continuing use by the first and second defendants of the machines and equipment after the plaintiff’s solicitor by letters dated 23 March 2011 and 30 August 2011 respectively requested the return of the machines and equipment. The plaintiff seeks damages and an account of all income earned by the defendants for themselves while using the machines and equipment.
  2. Insofar as the claim relates to damages, I am of the view that the proper measure of compensation that the plaintiff should have relied upon is a reasonable hire for the use of his machines and equipment during the period in question rather than to ask for an account. For an illustration of this approach, see the judgment of Denning LJ (as he then was) in Strand Electric & Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246 which was concerned with a common law action in detinue claiming the return of goods and damages for detention.
  3. After arriving at a reasonable hire as the proper measure of damages, it would be redundant to seek an account which would be likely to involve the parties being heard and examined by Court-appointed auditors. This will only further increase the costs of these proceedings and further delay a resolution of this matter. So I will not order an account.
  4. The plaintiff’s claim for exemplary damages is also dismissed.

(d) The plaintiff’s claim in detinue and conversion against the first defendant for miscellaneous items

  1. This part of the plaintiff’s claim in detinue and in the alternative conversion against the first defendant relates to miscellaneous items pleaded in para 11 of the amended statement of claim. These were a 2.2 h.p. Suzuki outboard, 250 f/pd torque wrench, one set of Allen keys, assorted yachting ropes, one grease gun, fifteen America’s Cup prints, one quick release attachment of the Hitachi Ex 200 excavator, and an Ex 200 weed bucket. In reply to questions from the Court during examination in chief, the plaintiff said that his estimate of the total value of these miscellaneous items was NZ$ 4,500.
  2. The plaintiff testified that the first defendant had borrowed these miscellaneous items from him over time but had not returned them in spite of the letters of 23 March 2011 and 30 August 2011 from his solicitor requesting the return of those items. The response by the first defendant was that he does not know the whereabouts of these items as the plaintiff had these items with him while he was staying at the second defendants compound at Vailima. The first defendant also said that the quick release attachment of the Hitachi Ex 200 excavator is now in the custody of the registrar.
  3. After careful consideration of this part of the evidence, I have decided to accept the plaintiff’s evidence that the first defendant had borrowed the miscellaneous items over time and had not returned them to him. However, the plaintiff’s evidence did not contradict what the first defendant said that the quick release attachment for the Hitachi Ex 200 excavator is now in the custody of the registrar. It follows that the correct amount of damages that should be awarded on this part of the plaintiff’s claim is NZ$4,500 less the cost of the quick release attachment of the Hitachi Ex 200 excavator. The more appropriate basis of this claim is conversion rather than detinue because of what the first defendant said that the whereabouts of the miscellaneous items are unknown. This implies that the first defendant must have lost the miscellaneous items that he borrowed from the plaintiff. The problem is that the cost of the quick release attachment does not appear from the evidence. The plaintiff has to provide satisfactory evidence of that cost and then deduct it from the sum of NZ$4,500. That should be done when the plaintiff and the first defendant discuss settlement of this case.

(e) The first and second defendants counterclaim against the plaintiff for rent of the Vailima house

  1. The fact that the plaintiff stayed at the second defendant’s house at its Vailima compound was part of a business deal which involved the plaintiff, the first defendant, the second defendant, and CPH with the first defendant acting on behalf of himself, the second defendant, and CPH in talks with the plaintiff. The first defendant said that the agreement that was made with the plaintiff was that the plaintiff was to stay at the second defendant’s house at Vailima until CPH made a profit. This was strongly denied by the plaintiff who testified that at his first meeting with the first defendant in 2009, the first defendant agreed to provide free accommodation for him at the second defendant’s compound at Vailima as part of the CPH deal. I am not able to conclude which of these conflicting versions of the evidence is true as it was just the first defendants word against that of the plaintiff. However, it is evident that the question of the plaintiff’s accommodation in Samoa was raised in the course of business talks between the plaintiff and the first defendant and whatever agreement that the parties reached on the question of accommodation for the plaintiff in Samoa was part of a business deal. It follows that the issue regarding free accommodation for the plaintiff must be considered as part of a business deal which involved an element of give and take on the part of the parties. Now that the business relationship between the parties has soured and their business deal has fallen through, I am of the view that it is only fair that the plaintiff should pay for his accommodation at Vailima. The offer by the first defendant of the Vailima house for the plaintiff’s occupation was made in the context of a business deal. It was not made out of the kindness of the first defendant’s heart. So it was not truly meant to be ‘free accommodation’ as claimed by the plaintiff; it was ‘free accommodation’ within the context of a business deal. Therefore, the plaintiff should pay a reasonable rent for the period of about eighteen months that he stayed at the Vailima house of the second defendant. I expect the parties to act responsibly and reasonably in arriving at a reasonable rent. After all, the plaintiff also has claims against the defendants which must be taken into account.
  2. The first defendant, on the other hand, said that it was a term of the agreement with the plaintiff that the plaintiff would stay at the Vailima house until CPH made a profit. If I were to accept what the first defendant said, then there is no evidence that CPH has ever made a profit. This would mean that the plaintiff does not have to pay any rent as CPH has not yet made any profit.
  3. There is also a counterclaim by the first and second defendants for unpaid water, electricity, and phone bills in relation to the Vailima house. Like the counterclaim for rent of the Vailima house, I also propose to allow the counterclaim for water, electricity, and phones less the two water bills paid by the plaintiff.
  4. All in all then, the plaintiff should pay a reasonable rent for his use of the Vailima house for about eighteen months plus unpaid water, electricity, and phone bills. The claims by the plaintiff against the defendants should also be taken into account for settlement purposes.

PART B
PLAINTIFF’S CLAIM AGAINST THE FIRST AND THIRD DEFENDANTS


  1. Like the plaintiff’s claim against the first and second defendants in PART A, the plaintiff’s claim against the first and third defendants is also founded in detinue, conversion, and unjust enrichment. For the claim in detinue, the plaintiff seeks from the first and third defendants:
  2. For the alternative claim in conversion, the plaintiff seeks from both defendants:
(c) an order for the return of the rentals;
(d) an account of all income earned from the plaintiff’s rentals;
(e) and;
(f) exemplary damages.
  1. For the claim in unjust enrichment, the plaintiff seeks from both defendants:

Background

  1. In 2009, the plaintiff and the first defendant orally agreed to go into a partnership for the purpose of setting up a rental car business at Salelologa. The rental business was named AB Rentals as suggested by the plaintiff. The plaintiff contributed to the rental business four vehicles, namely, two Toyota Estima vans, one Nissan Pulser van, and one Nissan Primera van while the first defendant put in two Nissan vehicles of his own. So AB Rentals had a fleet of six vehicles.
  2. The third defendant, who is the wife of the first defendant, owns and operates a hotel called the Lusia Lagoon Resort (Resort) at Salelologa. According to the evidence of the third defendant, the plaintiff and the first defendant operated AB Rentals as a partnership and they made a proposal to her for the compound of her Resort to be used as a temporary parking lot for the rentals. This was to await lease arrangements between the CPH company and the second defendant and then the second defendant’s compound at Salelologa would be used as the planned parking lot for the rentals. No such lease arrangements were ever concluded. What followed, according to the third defendant, was that the plaintiff and the first defendant not only placed their rentals at the Resort’s compound but lumped all of the administration and management of the rental business with her while they proceeded with their other business arrangements with CPH. The rentals were left with the Resort for about two years from 18 May 2010 to 3 February 2012.
  3. The third defendant further said that the plaintiff and the first defendant were in full control and custody of the rentals and received monies now and then from the rentals. She also paid $6,330 from the rentals to the first defendant for himself and the plaintiff. I do not accept that the plaintiff and the first defendant were in full control and custody of the rentals when the rentals were left in the custody of the Resort. It would be more realistic to say that the rentals were in the custody of the third defendant and under the joint control of the plaintiff, the second defendant, and the third defendant. It is also clear from the evidence of the plaintiff that he did not receive any of the money the third defendant said she had given the first defendant for him and the plaintiff.
  4. In reply to the plaintiff’s claim in detinue, counsel for the third defendant submitted that the rentals were left with the third defendant’s Resort with the consent of the plaintiff and the first defendant. In fact, the administration and management of the rentals was lumped with the third defendant. The third defendant also never received any requests or demands, or was informed of such requests or demands, from the plaintiff or his solicitor for the return of his rentals and therefore never detained them. The two letters of 23 March 2011 and 30 August 2011 from the plaintiff’s solicitor for the return of the machinery, equipment, and rentals were addressed solely to the first defendant and made no mention of the third defendant. The first time that the third defendant became aware of any request or demand by the plaintiff for the return of his rentals was when the present proceedings by the plaintiff were served on her. The plaintiff’s rentals had also been surrendered to the custody of the registrar.
  5. Whilst there may be some doubts as to whether the third defendant was not aware of the letters from the plaintiff’s solicitor, I am not prepared to conclude as a matter of fact that the third defendant was actually aware of those letters. There is no evidence to contradict her evidence that she was not aware of those letters or the evidence of the first defendant that he did not inform the third defendant about those letters. I am also not satisfied with the plaintiff’s evidence in support of his claim for $34,000 for loss of use of his two Toyota Estima vans on the basis that each van could have earned $1,000 a week as a taxi for thirty-four weeks since April 2011. Expenses such as petrol and the taxi driver’s wages would also have to be deducted from such a claim. But there was no evidence in relation to such expenses or their amounts.
  6. In reply to the plaintiff’s alternative claim in conversion, counsel for the third defendant relied on the same evidence as in the claim in detinue. He then submitted that the third defendant did not exercise any dominion over the rentals inconsistent with the plaintiff’s right to immediate possession or exclude the plaintiff from the use and possession of his rentals.
  7. In respect of the plaintiff alternative claim in unjust enrichment, I will not express any view whether this claim would have been more appropriately brought in contract. As counsel for the third defendant did not dispute the legal basis of the unjust enrichment claim, I will proceed on the assumption that this claim is legally proper. The third defendant in her evidence said that she collected $18,360 which were the earnings from the rentals for the period 18 May 2010 to 3 February 2012. From that amount, she paid $6,330 to the first defendant for himself and the plaintiff. She also deducted $3,703.50 being 15% for administration costs, and $1,365 for labour (washing and cleaning the rentals). The outstanding amount of $6,962 is her indebtedness to the partnership of the plaintiff and the first defendant.
  8. The third defendant also denied that the plaintiff’s rentals were ever operated as taxis as alleged by the plaintiff. So it is the plaintiff’s word against that of the third defendant. I am not able to resolve this conflict in the evidence and I make no finding of fact on it.
  9. The plaintiff seeks an account against the third defendant of all the income earned from his rentals. The third defendant’s response was that the plaintiff had never before sought from her any accounts of the income and expenses regarding the rentals. If the plaintiff had done so, she would have provided him with a statement of income and expenses. The plaintiff’s claim was the first time he had claimed from her an account of all the income earned from the rentals. And the rentals had been surrendered to the custody of the registrar as ordered by the Court. Even though there was a relatively short period of time between service of the plaintiff’s proceedings on the third defendant and the time the rentals were surrendered to the custody of the registrar, that could not have had much impact on the plaintiff’s claim.
  10. The remedy of “account” is sometimes called “account of profits”. What is sought by the plaintiff is not an account of profits but an account of all the income earned from the rentals. No authority was cited in support of such a remedy. An account or account of profits relates not to gross income but to the margin of income over costs. Perhaps what counsel for the plaintiff should have done was to seek discovery of all documents under the control or in the possession of the third defendant relating to the operation of the rentals. Interrogatories, by leave of the Court, could also have been served for the examination of the third defendant. Anyhow, I will order the third defendant to provide a statement of the all the income and expenses of the operation of the rentals including any time that the plaintiff or the first defendant had themselves rented out the rentals to their customers.
  11. The plaintiff’s claim for damages to the rentals consisting of dents and scratches was opposed by the third defendant on the basis that there was no evidence that such damages were caused by her. They could have been caused by the customers who hired the rentals.

Discussion of the plaintiff’s claim against the third defendant

(a) The plaintiff’s claim in detinue against the third defendant

  1. There was no evidence to show that the third defendant detained the rentals with the intention of keeping the rentals in defiance of the plaintiff’s right to possession of them. The plaintiff had written two letters addressed solely to the first defendant for the return of the machinery, equipment, and rentals. There was no evidence that the third defendant was aware of those letters. So there was no evidence of a demand by the plaintiff, known to the third defendant, for the return of the rentals and a refusal or failure by the third defendant to return the same. The plaintiff’s claim in detinue against the third defendant is therefore dismissed.

(b) The plaintiff’s alternative claim conversion against the third defendant

  1. The third defendant relied in conversion of the same evidence in relation to detinue. There was no evidence to show that the third defendant’s conduct was inconsistent with the plaintiff’s right to possession of the rentals. The plaintiff’s claim in conversion against the third defendant is therefore also dismissed.

(c) The plaintiff’s alternative claim in unjust enrichment against the third defendant

  1. In respect of the plaintiff’s claim in unjust enrichment, the third defendant admitted that she owed the plaintiff and the first defendant $6,962 after making certain deductions from the total earnings of $18,360 from the rentals. I have, however, ordered the third defendant to provide the plaintiff with a statement of income and expenses in connection with the operation of the rentals. I would expect such a statement of income and expenses to include supporting documents such as receipts, invoices and so forth where possible. There are also counterclaims by the second defendant against the plaintiff in relation to the operation of the rentals. There is therefore uncertainty at this stage whether the third defendant had been unjustly enriched at the expense of the plaintiff and, if so, to what extent. I urge counsel to settle this part of the plaintiff’s claim rather than to fight it out again in Court which would be time consuming with more costs to the parties.

(d) The plaintiff’s claim for damages to the rentals

  1. The damages to the rentals claimed by the plaintiff against the third defendant consisted of dents and scratches to the rentals. There was no evidence that the second defendant caused such damages or any other kind of damage to the rentals. Such damage could have been caused by the customers who hired the rentals. If that was so, the customers concerned should pay for the damage. Alternatively, those damages could have been covered by insurance if the rentals were insured. This claim for damages against the third defendant is also dismissed.
  2. The plaintiff’s claim for exemplary damages is also dismissed.
  3. The claims by the plaintiff in detinue, conversion, and unjust enrichment against the first defendant should also be dismissed except that the first defendant should hand over an appropriate portion of the sum of $6,962 paid to him by the third defendant for him and the plaintiff. As AB Rentals was made up of four rentals contributed by the plaintiff and two rentals contributed by the first defendant, a reasonable distribution would be the plaintiff gets two thirds of the sum of $6,962 and the first defendant gets on third.

PART C
The Third Defendant’s Counterclaim Against The Plaintiff

  1. The third defendant counterclaimed against the plaintiff in unjust enrichment and sought:
  2. The third defendant also counterclaimed against the plaintiff for breach of contract seeking damages for the same items as claimed in unjust enrichment.
  3. A further counterclaim by the third defendant was for $117,401.46 for what the third defendant said was her share of the work and time spent on the rentals.
  4. Given the third defendant’s evidence that the total earnings she collected from the operation of the rentals was $18,360, the total amount of the third defendant’s counterclaim of $354,410.34 looks far too excessive. There must be something seriously wrong with it even before one considers the evidence.

Background and discussion

  1. As already mentioned, the third defendant said that she only earned $18,360 from the rentals from 19 May 2010 to 3 February 2012 which is about twenty-one months. She then set off $6,330 already paid to the first defendant for him and the plaintiff, $3,703.50 for administration costs, and $1,365 for labour costs relating to the washing, cleaning, and maintenance of the rentals. The outstanding balance of $6,962 was her indebtedness to the plaintiff and the first defendant.
  2. As for the counterclaim of $2,245 for accommodation and meals, the third defendant said that while the plaintiff was doing business with the first defendant in connection with CPH at Savaii, the plaintiff was accommodated at her Resort and he had enjoyed full meals each time he spent at her Resort. Sometimes the plaintiff would bring with him to the Resort his family and certain people he was employing at the time to assist with the business of CPH.
  3. In respect of her counterclaim of $2,400 for marketing costs, the third defendant said that the plaintiff requested her for the use of her Resort name, websites, and logo for the purpose of promoting or marketing his rentals. The third defendant agreed and assisted the plaintiff in marketing his rentals through the use of her Resort name, websites, and logo.
  4. In relation to the counterclaim for maintenance, operating and labour costs, the third defendant said that when the rentals were in her custody and under her care, she had to pay regular service checkups, purchase spare parts, pay for petrol and oil as daily operational costs for the rentals. She also engaged the labour of two of her staff members to maintain and operate the rentals. The third defendant therefore counterclaimed for $51,000 being $500 a week for one hundred and two weeks for maintenance and operating costs and $24,480 for the labour of her two staff members at $120 per person a week for one hundred and two weeks. The total amount of this part of the third defendant’s counterclaim is $72,480.
  5. In relation to the third defendant’s counterclaim of $156,922.92 for remuneration inclusive of SNPF, VAGST, ACC, the third defendant said that her weekly wages for the management and administration of the rentals was $1,538.46 a week. For one hundred and two weeks, that came to $156,922.92. It seems that the amount of the weekly wages claimed by the third defendant was not the subject of discussions or agreement with the plaintiff and the first defendant but was unilaterally determined by the third defendant herself.
  6. In respect of the third defendant’s alternative counterclaim for breach of contract, she repeated her counterclaim in unjust enrichment of $156,922.92 for remuneration being unpaid wages, $51,000 for maintenance and operating costs, and $24,480 for labour costs.
  7. The problem with this alternative counterclaim in contract is that the terms of the alleged contract are not clear from the evidence. So there is no evidence as to which precise term of the alleged contract was breached by the plaintiff. The counterclaim for breach of contract should therefore be dismissed. The counterclaim in unjust enrichment for work done or services provided is the proper one to rely on.
  8. The other problem with the third defendant’s counterclaim is that it keeps referring to “the rentals” without specifying whether “the rentals” relate only to the plaintiff’s four vehicles. As it would be recalled, the evidence of the plaintiff and the first defendant was that the plaintiff contributed four vehicles whilst the first defendant contributed two vehicles to AB Rentals fleet of six rentals. So if the third defendant’s counterclaim related to all the rentals as it seems to be because of the repeated references to “the rentals”, then it would not be fair that the third defendant had counterclaimed only against the plaintiff without including the first defendant.
  9. The third defendant also counterclaimed for 50% of the total amount she was claiming for remuneration, maintenance and operating costs, and labour costs because of the emotional distress, pain, and suffering she had experienced due to what she had expended on the arrangements for the rentals. No authority was cited in support of this counterclaim for emotional distress, pain, and suffering. The evidence in support of this counterclaim is also not convincing as the third defendant had never before made any complaint to the plaintiff regarding the administration and management of the rentals. If what the third defendant had in mind was the distress she suffered when remanded in custody for non-compliance with the Court’s previous order, then the third defendant was remanded in custody not by order of the plaintiff but by order of the Court. In the circumstances, I am not prepared to allow this counterclaim. It is therefore dismissed.
  10. The plaintiff response to the counterclaims by the third defendant consisted primarily of denials of the allegations in support of the counterclaims and putting the third defendant to the proof thereof. In respect of the counterclaim for accommodation, it was said for the plaintiff that an agreement was made between the plaintiff and the first defendant that when the plaintiff was in Savaii for CPH business, he could stay at the third defendant’s Resort. Counsel for the plaintiff in her submissions said that the plaintiff was promised by the first defendant that when he was in Savaii for CPH business he would be able to stay free at his wife the third defendant’s Resort until CPH made some money then CPH would pay for this expense. So for about two years when the plaintiff was in Savaii for CPH business and stayed at the Resort, the third defendant never invoiced or requested him to pay for his accommodation and meals. It was only when the plaintiff brought these proceedings that the third defendant claimed payment for the plaintiff’s accommodation and meals.
  11. After careful consideration, I am of the view that the third defendant was aware of the agreement between the plaintiff and the first defendant and decided to adopt that agreement. It is not fair for her to walk away from that agreement now. The first defendant had also promised as part of the agreement that CPH would pay for the plaintiff’s accommodation when it made some money. The times that the plaintiff was in Savaii and stayed at the Resort were in connection with CPH business. The counterclaim against the plaintiff for accommodation should have been directed at CPH instead of the plaintiff. This part of the counterclaim is dismissed.
  12. The plaintiff, however, admitted that on a few occasions he went with his son to Savaii and stayed at the Resort. There was no evidence that the plaintiff’s son was in Savaii for CPH business. There was also no evidence that the agreement between the plaintiff and the first defendant included free accommodation and meals at the Resort for the plaintiff’s son. This part of the counterclaim against the plaintiff should have been directed at his son. It is therefore dismissed.
  13. In respect of the employees said to have been brought by the plaintiff to the Resort and stayed there enjoying full meals, it would appear that these employees were guests of the plaintiff. CPH did not have employees of its own and the agreement between the plaintiff and the first defendant did not include free accommodation and meals for such people. In my view, the plaintiff should pay for the accommodation and meals of these people he brought to the Resort. This part of the counterclaim is allowed. The problem is that this part of the counterclaim was not particularised by the third defendant. I therefore do not know how much to award to the third defendant. In discussions for settlement, this matter should be sorted out and clarified.
  14. In respect of the third defendant’s counterclaim for marketing costs, the plaintiff said that his understanding of the agreement with the first defendant was that 10% of the income from the rentals was to be used towards administrative and maintenance costs. The rest of the income was to be shared 50% for the plaintiff and 50% for the first defendant and the third defendant. Obviously, the third defendant was not a party to this agreement and therefore the agreement was not binding on her. There was also no evidence that she was aware of this agreement and decided to adopt it. In fact, in her evidence, the third defendant made no reference to the agreement. What she said was that she was just lumped with the rentals and their administration and management were imposed on her.
  15. The third defendant’s evidence was that the plaintiff and the first defendant asked her for her expert assistance with the marketing of the rentals mainly to guests of the Resort. The plaintiff’s evidence was that he never requested the third defendant to incur such costs on his behalf or on behalf of AB Rentals. The marketing done consisted of logos on the two Toyota Estima vans advertising the name of the Resort with no mention of AB Rentals. In a sense, the rentals were being used to promote the name of the Resort. There was no evidence from the third respondent as to why the name of AB Rentals was not used instead of the name of the Resort. Anyhow, the marketing done by the third defendant does not appear to have been of any help as according to her evidence the total income from the rentals for about twenty-one months was $18,360. It also appears that the marketing was not just for advertising the rentals but more for the purpose of advertising the Resort whose name appeared in the logos on the rentals. I have decided to accept the plaintiff’s evidence that he never requested the third defendant for expert assistance with marketing the rentals. The third defendant’s counterclaim for marketing costs is dismissed.
  16. The third defendant’s counterclaim of $51,000 for maintenance and operating costs and $24,480 for labour costs are far too excessive. If the six rentals had earned a total income of $18,360 for twenty-one months, that means the total income per month from the rentals was about $874 or $218 per week. That would treat on the average each of the monthly income from each of the six rentals would be about $146 per month or $37 per week. But the third defendant appears to have counterclaimed for $500 per week for maintenance and operating costs and $240 for labour by two staff members per week in respect of all six rentals. That would mean $2,000 per month for maintenance and operating $960 per month for labour. A total of $2,960 per month or $740 per week for such expenses. In other words, the total monthly income from all six rentals was $874 but the total monthly maintenance and operating costs plus labour costs was $2,960. So the total monthly expenses exceeded the total monthly income by $2,086. It is a real surprise that the rental business was able to exist for twenty-one months, despite the heavy losses, until the plaintiff’s proceedings were served on the third defendant. But it also appears that the rental business would have continued beyond twenty-one months if the plaintiff had not taken out proceedings against the third defendant. In addition, the third defendant also counterclaimed for weekly wages of $1,538.46 which was not the subject of any discussions or agreement with the plaintiff and the first defendant but unilaterally determined by the third defendant herself. This further shows that the rental business must have been in real bad shape. I find the amounts claimed in this counterclaim to be simply incredible.
  17. Furthermore, if the total monthly income from the six rentals was $874 or $218 per week, then the rentals could not have been hired out to customers that often. It is therefore difficult to see how the exorbitant maintenance, operational, and labour costs claimed by the third defendant can be justified. Even though the plaintiff said that he had hired out a rental on three separate occasions, still that cannot justify the exorbitant costs claimed by the third defendant.
  18. I accept, however, that the third defendant must have incurred some costs in relation to maintenance, operation, and labour but the costs claimed are simply far too excessive. This counterclaim should be sorted in settlement discussions and the parties should act reasonably.
  19. There was also a counterclaim for petrol. I do not accept this counterclaim. The practice by rental businesses is that the customer and not the rental business pays for the petrol. This counterclaim is dismissed.
  20. In relation to the counterclaim of $156,922.92 for remuneration for the third defendant’s weekly wages of $1,538.46 per week, I cannot see how the third defendant could justify such wages when the rentals were operating at a substantial loss according to her own evidence. She could not have been doing a good job with the administration and management of the rentals to deserve the wages she counterclaimed. She was also at the same time managing her own Resort. She must have done some work in connection with the management of the rentals but the wages she had counterclaimed for are simply far too excessive.
  21. The third defendant’s counterclaims for maintenance and operations expenses and remuneration should be included in settlement discussions between the parties. I expect both parties, especially the third defendant, to act reasonably.

Conclusion

  1. I have dismissed several claims and counterclaims. I have allowed a few claims and counterclaims. But there are issues or matters that I have left for settlement discussions between the parties and their respective counsel. I have also set out the legal principles that apply to the claims and counterclaims between the plaintiff on one hand and the first and second defendants on the other hand. The position taken by counsel for the first and second defendants before the commencement of these proceedings to have this case settled out of Court has much to commend itself.
  2. This matter is adjourned to Friday 17 May 2019 for counsel and the parties to settle the outstanding issues. This matter will then be recalled at 12:30pm on 17 May 2019.
  3. I reserve the question of costs.

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TEMPORARY JUSTICE OF THE SUPREME COURT
AND FORMER CHIEF JUSTICE

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