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ALCC Brown Enterprises Ltd v Mulitalo [2024] WSSC 7 (27 February 2024)

IN THE SUPREME COURT OF SAMOA
ALCC Brown Enterprises Ltd v Mulitalo [2024] WSSC 7 (27 February 2024)


Case name:
ALCC Brown Enterprises Ltd v Mulitalo


Citation:


Decision date:
27 February 2024


Parties:
ALCC BROWN ENTERPRISES LIMITED (Plaintiff) v PAU MULITALO (Defendant)


Hearing date(s):
Hearing: 3rd & 4th October 2023
Closing submissions: 03rd November 2023


File number(s):



Jurisdiction:
CIVIL


Place of delivery:
Supreme Court of Samoa, Mulinuu


Judge(s):
Justice Leiataualesa Daryl Michael Clarke


On appeal from:


Order:
Judgment for the plaintiff by way of nominal damages in the sum $200.00 is awarded to the plaintiff.

The defendant’s counter claim is dismissed in its entirety.

Costs in these circumstances should follow the event in favour the plaintiff. Parties are to agree as to costs failing which, the plaintiff is to file Memorandum as to Costs within 14 days and the defendant to file his response within a further 7 days.


Representation:
M. Lui for the Plaintiff
T. Tufuga for the Defendant


Catchwords:
Tort of conversion – detinue – trespass to goods – trespass to chattels – breach of contract – negligence – measure of damages – compensatory damages


Words and phrases:


Legislation cited:
Limitations Act 1976, s. 26;
Supreme Court (Civil Procedure) Rules 1980, r. 13.


Cases cited:
Belcher v Brown [2019] WSSC 19 (3 May 2019);
Bigyard Holdings Ltd (in receivership) v
Tasmandairy Ltd [2017] NZHC 1918;
Clerk & Lindsell on Torts (1975) Fourteenth ed by Sir Arthur L Armitage et al (Sweet & Maxwell) London;
E E McCurdy Ltd (in liq) v Postmaster-General [1959] NZLR 553;
Hartley v Moxham [1842] EngR 983; (1842) 3 QB 701;
Kuwait Airways Corp v Iraqi Airways Co (Nos 4 & 5) [2002] UKHL 19; [2002] 2 AC 883;
Law of Torts in New Zealand (2009) 5th ed by Stephen Todd et al 12.4.08;
Matautia v Schuster [1993] WSSC 15;
McGregor on Damages (15th Edition Sweet and Maxwell London 1988);
Sadcas Pty Ltd v Business and Professional Finance Pty Ltd [2011] NSWCA 267 (12 September 2011);
The Laws of New Zealand (online looseleaf edn, Lexis Nexis) Wrongful interference with Goods: Conversion and Detinue;
X and Y v Chief Executive of Oranga Tamariki [2022] NZCA 622; [2023] 2 NZLR 261 at [24].


Summary of decision:

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU


BETWEEN:


ALCC BROWN ENTERPRISES LIMITED, a duly registered company having its place of business at Vaivase.


Plaintiff


A N D:


PAU MULITALO, male of Lalovaea


Defendant


Counsel: M. Lui for Plaintiff

T. Tufuga for Defendant


Hearing: 3rd and 4th October 2023

Closing Submissions: 3 November 2023

Judgment: 27 February 2024


RESERVED JUDGMENT

Background

  1. At the beginning of May 2015, the defendant (a lawyer) engaged the plaintiff to construct a small single story “shop”, measuring internally some 5.9 metres x 6.0 metres plus patios. It was a relationship not to last long. By the end of May 2015, the plaintiff and the defendant had a dispute and the defendant terminated the purported contract to construct the “shop”.
  2. In words immortalized by the iconic Australian band ‘Paul Kelly and the Messengers’, “From Little Things Big Things Grow”. Following termination, the defendant withheld tools and items belonging to the plaintiff. The plaintiff lodged a police complaint and the defendant was then charged and ultimately convicted of obtaining by deception. The plaintiff now brings these proceedings to recover damages allegedly arising from the defendant withholding tools belonging to the plaintiff. The defendant counterclaims for breach of contract and negligence.

The Competing Claims

  1. The plaintiff sues the defendant for “rent” of machinery and equipment allegedly withheld by the defendant in the sum of $733,100.00. The causes of action pleaded are:
  2. The plaintiff does not persist with the claim for unjust enrichment.
  3. The defendant counterclaims against the plaintiff seeking “compensatory damages” for breach of contract; “remedial and reconstruction costs”; and “negligence and contributory negligence”. The defendant claims against the plaintiff $1,100,000.00 damages.
  4. A ground pleaded in the Statement of Defence and Counter-claim is that the plaintiff’s tortious claims are statute barred by virtue of section 26 of the Limitations Act 1976. Appropriately, that ground was withdrawn by the defendant.

The Parties

  1. I begin by addressing a preliminary issue. The parties to this dispute shown in the Statement of Claim dated 17 December 2020 are the plaintiff “ALCC Brown Enterprises Limited” and the defendant “Pa’u Mulitalo of Lalovaea.” By Statement of Defence dated 26th April 2021, the defendant’s intitulement then refers to the parties as “Albert Brown, Director of the ALCC Brown Enterprises Ltd” as “First Applicant” and “ALCC Brown Enterprises Limited” as the “Second Applicant”.
  2. No leave was granted for the joinder of Albert Brown (“Mr Brown”) as a party to these proceedings personally nor did Mr Brown consent to being joined as a plaintiff. Mr Brown is not a party to these proceedings in his personal capacity as leave has not been granted. Further, on perusal of the defendant’s counter-claim, there is no pleaded basis or evidence that Mr Brown could properly be joined as a party to these proceedings nor a remedy sought against him personally.
  3. Further, for some unknown reason, the defendant refers to the plaintiff and Mr Brown as the “Applicants”. In proceedings brought by way of action, the parties are referred to as “plaintiff” and “defendant”.[1] The joinder of parties together with correctly referencing the parties are simple procedural matters. It is concerning that counsel of many years legal experience continue to appear before the Court with seemingly little regard to or understanding of the Supreme Court (Civil Procedure) Rules 1980. As I have reiterated on a number of earlier occasions, there is an important role for the Samoa Law Society to fulfill in the delivery of Continuing Legal Education training, particularly in terms of pleadings, civil procedure and legal advocacy.

The Law:

Conversion / Rent

  1. In Belcher v Brown [2019] WSSC 19 (3 May 2019), Sapolu J as he then was at [53] citing from Kuwait Airways Corp v Iraqi Airways Co (Nos 4 & 5) [2002] UKHL 19 stated the law on the tort of conversion as follows:
  2. Sapolu J also referred to Bigyard Holdings Ltd (in receivership) v Tasmandairy Ltd [2017] NZHC 1918 where Moore J went on to say in terms of the essential features of conversion:
  3. The mere misuse of goods by a person such as a bailee in breach of the terms of bailment “is not necessarily conversion, but may be so where the act of misuse is calculated to impair the plaintiff's rights of possession or to deprive the plaintiff of possession.”[2] Conversion may also be committed where the goods are withheld by a defendant such as to amount to an active denial of the owner’s right to immediate possession.[3]

Detinue

  1. Detinue is a species of conversion, the essence of which is the unlawful failure to deliver up goods when demanded.[4] In E E McCurdy Ltd (in liq) v Postmaster-General [1959] NZLR 553 at 556, McGregor J stated:
  2. In Bigyard Holdings Ltd, the distinction between conversion and detinue was explained in this way:[5]
  3. In Clerk & Lindsell on Torts (1975) Fourteenth ed by Sir Arthur L Armitage et al (Sweet & Maxwell) London at [1179], the learned authors stated:
  4. Detinue does not provide a remedy where a bailee returns goods in a damaged condition or where he or she misuses goods without causing loss or destruction.[6] Further, in the Law of Torts in New Zealand (2009) 5th ed by Stephen Todd et al 12.4.08 at 580 cited in Belcher (supra), the learned authors noted:

Trespass to Goods

  1. The tort of trespass to goods was explained by the learned authors in the Laws of New Zealand as follows:[7]
  2. In Clerk & Lindsell on Torts at [1181] - [1182], the learned authors express the tort in the following way:
  3. The defendant’s counter-claim asserts breach of contract and negligence. In order to succeed on the tort of negligence, the defendant will need to establish the following elements on balance of probabilities:[9]

The Evidence

  1. Three witnesses gave evidence. For the plaintiff, Albert Brown and Sailini Iopu gave evidence. Their affidavits were tendered respectively as exhibits P1 and P2. The defendant was the sole witness for the defence.
  2. Mr Brown is a director and manager of the plaintiff company. On or about the 5th May 2015, he says that an oral agreement was reached for the plaintiff to carry out works for the defendant. The work involved the demolition of an existing building and the construction of a new building, the dimensions and description of which had been told to him by the defendant. He told the defendant that the work would cost not less than $100,000.00. The defendant asked if it could be completed for $30,000.00 to which Mr Brown said he did not agree. Mr Brown says the defendant then agreed to the $100,000.00. The defendant was to draw up a contract. Mr Brown rejected the suggestion that he told the defendant to spend $75,000.00 on the work.[10]
  3. After this meeting, Mr Brown says that he again met with the defendant and a written contract was given to him. The contract however had different terms to which they had discussed and he refused to sign. Mr Brown’s evidence was that:[11]
  4. In his evidence, Mr Brown rejected agreeing to a contract price of $30,000.00 and that in terms of the defendant tearing up the written contract: “E leai se $30,000 a lea na sau a Pa’u toe sasae lana $30,000 lea na sau ma ia.”[12]
  5. In his evidence, the defendant said that Mr Brown had been his client. It was on the 3rd May 2015 that he discussed with Mr Brown the construction of a shop / office on his land which the defendant said should cost around $30,000.00. The defendant’s evidence is that Mr Brown suggested spending $75,000.00 on the project but to secure a loan of $100,000.00. In his oral evidence, he said he told Mr Brown that his budget was $25,000.00 to $30,000.00. In his evidence, the defendant said:[13]
  6. On the next day, Mr Brown read the contract and according to the defendant then said:
  7. The defendant confirmed that the contract price in the written contract was $30,000.00.[15] When pointed out to him that Mr Brown did not sign the agreement because of the $30,000.00 contract price, the defendant stated:[16]
  8. It is not in dispute that a deposit of $20,000.00 was paid and work then commenced. However, it was not to last. After Mr Brown requested a further $20,000.00 deposit on the 28th May 2015,[17] the defendant then terminated their contract ‘forthwith’ the next day by letter on the 29th May and warned:
  9. The defendant complained about the cost and quality of the works as the basis for termination. Mr Brown requested the return of the plaintiff’s machinery and equipment, Mr Brown’s evidence is that he was threatened by the defendant that if he enters the property, action in trespass would be taken against him and that the defendant had said he had a “court order for the keeping of my equipment and tools.”[18] In his report the contents of which were confirmed in his oral evidence, the defendant is also alleged to have told Police on or about the 29th September 2015 that he had a Court order to withhold the plaintiff’s equipment. In his oral evidence, the defendant denied that he had claimed to have obtained Court orders to withhold the plaintiff’s equipment.[19] However, in his affidavit exhibit D2 at paragraph 11, he states to the contrary that “[w]hen I told First Plaintiff I had a court over (sic) over the tools at my place...”
  10. It is clear on the evidence that in the very short period of time work had been carried out, the scope of works changed and issues arose in relation to the construction apparently infringing on the neighbouring property. None of the changes were documented nor did either the plaintiff or defendant obtain a building permit or development consent from the Planning and Urban Management Unit (“PUMA”) of the Ministry of Natural Resources and Environment (“MNRE”), which I discuss further below.
  11. A significant amount of the evidence focused on what tools were retained by the defendant, what were returned and when. In his affidavit (exhibit P1), Mr Brown says that after he was terminated, he was told by the defendant that the defendant would be renting the equipment out to recover his money and that his equipment was used by the new builder to complete the work. Mr Brown also states that he usually rented out his equipment to other businesses and contractors. He lists the equipment allegedly retained by the defendant and when they were returned together with the per day rental cost for each item. The first set of items allegedly returned on the 29th September 2015 through Police were:
MACHINERY AND EQUIPMENT Returned 29/9/15
Tool Names
Quantity
Per Day
Days
Total
Damage wheel barrows (cost $450)
1
$450.00
0
$450.00
Portable concrete mixer
1
$80.00
102
$8,160.00
Mechanical concrete mixer
1
$250.00
102
$25,500.00
Pick
1
$10.00
102
$1,020.00
Plate compactor (broken with missing tsnk)
1
$320.00
102
$32,640.00
Set aluminium scaffolding (damage with 3 missing braces)
1
$200.00
102
$20,400.00
Concrete block cutter
1
$200.00
102
$20,400.00
Steel bender
1
$200.00
102
$20,400.00
SUB-TOTAL
$128,970.00
  1. The second set of items were allegedly obtained by the Police on the 7th October 2015. These consisted of:
MACHINERY AND EQUIPMENT Returned 29/9/15
Tool Names
Quantity
Per Day
Days
Total
Large bolt cutter (yellow)
1
$10.00
110
$1,100.00
Large drill (green colour)
1
$20.00
110
$2,200.00
Large skillsaw ($25 per hour) = $200 per day
1
$200.00
110
$22,000.00
SUB-TOTAL “B’
$25,300.00
  1. The third set of equipment set out in paragraph 26 of Mr Brown’s affidavit is a lengthier list of equipment claiming up to 9th December 2020. These were alleged to be:
Claim for Rent (Hire) of Machinery and Equipments withheld by Pa’u Mulitalo from 1st June 2015 to 9th December 2020 (6 work days include Saturday) = 1,346 days
Tool Names
Quantity
Per Day
Days
Total
Extension leads 30m each x $20 each per day
2
$20.00
1,437
$28,740.00
Large square (each x$10 per day)
1
$10.00
1,437
$14,370.00
Missing wheelbarrow (each x$20 per day)
1
$20.00
1,437
$28,740.00
Sledge hammer
1
$10.00
1,437
$14,370.00
Heavy duty bar (kolopa)
1
$10.00
1,437
$14,370.00
B/Hammer ($40x each per day)
4
$40.00
1,437
$57,480.00
Hacksaw & blades
1
$10.00
1,437
$14,370.00
Trowel (alofilima $15 each per day)
3
$15.00
1,437
$21,555.00
Splitlevel ($20 each per day)
2
$20.00
1,437
$28,740.00
Scripers ($15 each per dsay)
3
$15.00
1,437
$21,555.00
Small bolt cutter
1
$10.00
1,437
$14,370.00
Small skill saw
1
$35.00
1,437
$50,295.00
Picks (piki) $20 each per day
2
$20.00
1,437
$28,740.00
Sharvel
3
$10.00
1,437
$14,370.00
Plyers (long nose & standard $20 each per day)
2
$20.00
1,437
$28,740.00
Pull float & aluminium handle
1
$20.00
1,437
$28,740.00
Boxing timber to (replaced)
1

$2,200.00
Bins bar
1
$5.00
1,437
$7,185.00
SUB-TOTAL
$418.930.00
  1. The list of items deposed to by Mr Brown differs from that in the Statement of Claim. He explained in his affidavit exhibit P1 the reason for the differences in the list of items in his affidavit and the Statement of Claim as:
  2. In his evidence, the defendant said that the items retrieved by Police from him are shown in exhibit D1 page 2 “List of Return Tools and Equipment to Mr Albert Brown.” Page 3 of exhibit D1 beginning with “Taimi maea: 11.40am” signed by Sailini Iopu, Iakopo Leota and himself is a confirmation by Sailini Iopu of receipt of those items from him.

Discussion

  1. Mr Brown and the defendant were both unsatisfactory witnesses. In terms of Mr Brown, his evidence was at times evasive, self-serving and not credible. He is a man of some 30 years of experience in the construction industry and by his own admission, is an experienced builder. He acknowledged that he would carry out work provided a written contract was in place.[20] He also accepted that as a builder, he requires to sight the Ministry of Works, Transport and Infrastructure (“MWTI”) Building Permit and PUMA Development Consent before commencing work.
  2. Despite his extensive experience and his practice, he commenced the defendant’s work without a written contract. Having also accepted that full architectural drawings are needed for a building permit and there were no such full architectural drawings for the defendant’s work, he could not remember whether a building permit was obtained and confirmed he did not sight either a building permit or development consent.[21] Further, he unconvincingly disowned any responsibility for obtaining a building permit from MWTI or lodging any variations to the building once such variations were carried out. He said these were the defendant’s responsibility. This is despite Mr Brown having been the person who engaged with and obtained from MWTI the single page drawing annexure “A” Floor Plan and Elevations to exhibit P1 which he then apparently used to build to. I am satisfied that Mr Brown was aware no approvals had been obtained for the work and proceeded with the work nevertheless.
  3. The defendant was also an unreliable witness who by his own admission had misled Police in the course of their investigation to recover Mr Brown’s items in 2015. As a lawyer, he had told Police that he had a “court order” over Mr Brown’s tools when he possessed no such order. The defendant further deposed in his affidavit exhibit D2 that Mr Brown did not challenge or engage a lawyer to verify his assertion about the existence of a court order, seemingly, as some form of exoneration for his own false statement. In his oral evidence, he also categorically denied any discussions with Mr Brown about payment of $75,000.00 stating “leai oute le talia faamatalaga a Sili lea na fai. E le’i iai foi se discussion o le figure 75 e leai ma se mea faapena.”[22] When questioned by the Court, the defendant’s own letter terminating the contract with Mr Brown showed his evidence to be wrong. The transcript reads:
  4. In his oral evidence, the defendant tendered exhibit D1. He explained that he had prepared the second page of exhibit D1, “List of Return Tools and Equipment to Mr Albert Brown”. In his evidence, he said that the third page is a receipt of delivery by Iopu Sailini of the items on page 2, “List of Return Tools and Equipment to Mr Albert Brown”.[23] He said he also prepared the third page described as the receipt of delivery signed by Sailini Iopu and others.[24] This was defendant’s evidence it seemed so as to show that all the items claimed by the plaintiff had been returned by November 2015.
  5. In his evidence, Mr Iopu categorically rejected signing the third page of exhibit D1 as a receipt of delivery of the items in page 2 and explained page 3 as follows:[25]
  6. I reject the defendant’s evidence that page 3 was signed by Mr Iopu as a receipt of delivery of the items listed at page 2 of exhibit D1 “List of Return Tools and Equipment to Mr Albert Brown”. First, for the very reason given by My Iopu, page 3 has all the apparent hallmarks of a caution statement administered by Police well known to Judges and lawyers in this country. Second, although the defendant claims that he prepared page 3, that is not what is stated on the face of the document which states that it was Sailini Iopu that “Faamauina ma fesiligia e” the document. The words are also inconsistent with a receipt of delivery. Third, the fonts between pages 2 and 3 are different, see for example the letter “a” and “a”. Fourth, it refers to the defendant as the person charged (TAGATA MOLIA), when this was supposedly a confirmation of purported receipt of goods returned. Further, it makes no sense that Sailini Iopu would sign a delivery confirmation based on the defendant’s notes of the 19th and 29th of September and the 24th November 2015 at a later date. I view defendant’s evidence concerning the making of exhibit D1 and its signature by Mr Iopu of page 3 not only as unreliable and implausible but more concerningly, possibly intentionally false and misleading.
  7. Now I turn to the items I accept were in the defendant’s possession. The items claimed by the plaintiff are set out in paragraph 26 of Mr Brown’s affidavit, exhibit P1. These cover the period 1st June 2015 – 9th December 2020. The total amount of ‘rent’ claimed by the plaintiff under “Sub-Total A” is $418,930.00.
  8. In Mr Brown’s evidence, there was no evidence that either he or the plaintiff prepared a list of tools and items taken to the defendant’s property for the carrying out of the work. It appears from the evidence that the list of items allegedly kept by the defendant was arrived at on the basis that:
  9. The 4th June 2015 list of plaintiff’s items claimed by the plaintiff from the defendant (page 1, exhibit D1) under the ALCC Brown letter head is also largely replicated at paragraph 26 of exhibit P1. The only variation seems to be a claim for 2 skill saws yet only one is listed on page 1 of exhibit D1. In his affidavit however at paragraph 32, Mr Brown says that he has had the opportunity to “revise my dates” and “review my documentary evidence, and realise I need to make adjustments to the date when the equipment and tools were returned to me.” That “documentary evidence” was not tendered. In circumstances where a list of items and equipment were not made of the equipment taken to the defendant’s property, I do not accept Mr Brown’s evidence as reliable nor established to my satisfaction on balance of probabilities.
  10. The evidence I accept in terms of the items withheld by the defendant is that of Mr Iopu. He was a credible and reliable witness and had no personal interest in these proceedings. I accept that the items and equipment withheld by the defendant and established by the evidence were those items that were recovered by Police. In terms of the other matters reported to Police as withheld, the source of that information was either Mr Brown or the Plaintiff and I am not satisfied that such information was reliable. Accordingly, I accept that the following items were returned on the 29th September 2015:
  11. Additional items recovered by Police and delivered to Mr Brown on behalf of the Plaintiff were those shown in the “Receipt of Delivery” dated 07th October 2015 (annexure “F” to exhibit P1). These were:
  12. For the items recovered on the 29th September 2015 at paragraph [44] above, the plaintiff claims $128,970.00 as rental payments for those items 102 days. For the items returned to the plaintiff on the 7th October 2015, the plaintiff claims rental in the amount of $25,300.00. The items recovered on the 29th September and 7th October 2015 are hereafter referred to collectively as the “items recovered”.

Conversion

  1. I now turn to the three causes of action advanced by the plaintiff. These rely on largely the same facts. Turning first to the cause of action for conversion, the evidence satisfies me on the balance of probabilities that the defendant’s withholding of the items recovered by Police (paragraphs [44] and [45] above) were (a) inconsistent with the plaintiff’s rights as owner of that equipment and items; (b) his conduct was deliberate and not accidental; and (c) his conduct was so extensive an encroachment on the plaintiff’s rights as owner as to exclude him from those goods. As the evidence shows, following the termination of the alleged agreement, the defendant withheld the plaintiff’s equipment on his property so the plaintiff could no longer access and use the equipment; threatened Mr Brown with legal consequences; and I am satisfied, told both Mr Brown and Police that he possessed a court order to withhold the plaintiff’s equipment. On the evidence, I am satisfied that conversion of the plaintiff’s items recovered by Police were committed by the defendant on and from the date of the defendant’s letter to Mr Brown on the 29th May 2015.

Detinue / Trespass to Goods

  1. In terms of the plaintiff’s claim in detinue, I am also satisfied that this cause of action has been established. The plaintiff through Mr Brown requested the return of his equipment on or about the 29th May 2015. The defendant detained the plaintiff’s equipment on and from 29th May 2015 and he consciously did so in defiance of the plaintiff’s rights to possession as owner.
  2. I am not however satisfied that the defendant is liable to the plaintiff in trespass to the plaintiff’s equipment. As the authorities show, in trespass, the plaintiff must be in possession at the time of interference. The plaintiff was not in possession of the equipment at the time, the equipment being in the possession of the defendant and locked on his property to which the plaintiff (or its representative Mr Brown) was prohibited from entering – akin to the circumstances in Hartley v Moxham.

Measure of Damages

  1. In an action for conversion, the normal measure of damages is the market value of goods converted.[27] As Greer LJ stated in Hall v Barclay, “where you are dealing with goods which can be readily bought in the market, a man whose rights have been interfered with is never entitled to more than what he would have to pay to buy a similar article in the market.”[28] Where goods are redelivered prior to the entry of judgment, it is not a bar to the action but goes towards the mitigation of the damages.[29] As the learned author in McGregor on Damages states, “[t]hus the plaintiff may proceed for damages resulting from his being out of possession of the goods, and although he may succeed in recovering only nominal damages he is entitled at least to this.”[30] (emphasis added)
  2. 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 (applied in Belcher v Brown (supra)) , Lord Nicholls also said:
  3. In this case however, the plaintiff is not seeking the normal measure of damages for the market value of goods converted or nominal damages for the converted goods returned. Instead, the plaintiff seeks damages solely on a “rental basis”. For the plaintiff’s items I accept the defendant withheld from the plaintiff, the plaintiff seeks $128,970.00 for the items recovered on the 29th September 2015 at paragraph [44] above and $25,300.00 as rental payments for those items returned to the plaintiff on the 7th October 2015.
  4. The plaintiff’s claim for lost rental for the equipment converted by the defendant rests on a line of authorities starting with Strand Electric and Engineering Co. Ltd v Brisford Entertainment Ltd [1952] 1 All ER 796 at 800 – 801 where Denning LJ stated:
  5. As Romer LJ summed up in a nutshell in Strand Electric and Engineering Co. Ltd (supra) at 801:
  6. In Sadcas Pty Ltd v Business and Professional Finance Pty Ltd [2011] NSWCA 267 (12 September 2011), the New South Wales Court of Appeal referring to Strand Electric and Engineering Co. Ltd per Giles JA stated at [78]:
  7. In his evidence, the defendant said that he was unaware that the plaintiff rented out his equipment.[31] In his evidence, Mr Brown confirmed that he usually rents out his tools and equipment to other businesses and contractors.[32] That the equipment withheld was rented out by the plaintiff was not challenged by the defendant during the cross-examination of Mr Brown. The rental rates for each item of equipment set out in Mr Brown’s affidavit exhibit P1 was also not challenged in cross-examination nor was Mr Brown questioned by counsel on the replacement value of each of those items. Only limited evidence on the replacement value of items converted were given and arose from questions from the Court. Those questions and answers from Mr Brown suggest that the damages claimed on a rental basis as opposed to their replacement value by the plaintiff is grossly inflated. Of those limited items identified by the Court, Mr Brown’s evidence was as follows:[33]
Item description
Claim
Replacement Value
Difference
2 extension leads, 30 metres each.
$20 per day x 1,437 days = $28,740.00.
$50 - $60 = $100.00 - $120.00.
$28,620.00.
1 wheel barrow
$20 per day x 1,437 days = $28,740.00.
$450 - $480.
$28,260.00.
1 large bolt cutter
$10 per day x 110 days = $1,100.00.
$200.
$900.00.
  1. The key question to which the question of damages claimed by the plaintiff turns, it seems to me, is whether the defendant used the items whilst he detained them. For the avoidance of doubt, I accept that the plaintiff’s equipment was profit-earning. I also accept that the plaintiff normally hired out the equipment in the course of its business, when not being used by the plaintiff for its own construction work. The defendant’s evidence in terms of use of the equipment was that he had properly stored and kept the plaintiff’s items in his possession.[34] He also told the carpenters who replaced the plaintiff that they were not to use the plaintiff’s tools.[35]
  2. Mr Brown for the plaintiff however claimed that the defendant told him that he would rent out the plaintiff’s equipment and that he understood that the defendant’s new builder “used all my equipment and tools.”[36] While Sailini Iopu had said in his evidence that in the course of the Police investigation, there was evidence that the defendant hired out or rented the plaintiff’s equipment,[37] that is hearsay and I place little weight on that evidence. I am not satisfied on the evidence before me that the defendant rented out any of the equipment nor was the equipment used to complete his work. The claim for damages based on rent must therefore fail. The defendant, in the words of Denning LJ had “merely detained the goods and not used them” and is not therefore liable “to pay a hiring charge.”[38]
  3. What then is the measure for damages? Ordinarily, it is the market value of goods converted. However, there is only limited evidence of only a general nature of the market value of only three items of equipment. There is no evidence to determine the market value of the tools and equipment at the time they were converted by the defendant and when they were returned to the plaintiff. There is therefore no evidence to ascertain any diminution in the value of the goods wrongfully detained by the defendant when they were returned to establish any damage. I decline the plaintiff’s invitation to find liability and adjourn for further evidence on the quantum of damages to be led. The plaintiff did not plead nor pursue damages in this way. The plaintiff elected to pursue damages on the basis of rental costs for the detained equipment. That is unsuccessful. I am however satisfied that a nominal damages award is warranted.
  4. The plaintiff’s claim for damages in detinue must for the same reasons also suffer the same fate as that for conversion. I am however satisfied that a nominal damages award is warranted which I fix at $200.00.
  5. Although costs often do not necessarily follow the event where an award of nominal damages are made, given the conduct of the defendant, costs should follow the event in this case.

The Defendant’s Counter-Claim

  1. I now turn to deal with the defendant’s counterclaim for $1,100,000.00 against the plaintiff for “compensatory damages” for breach of contract; “remedial and reconstruction costs”; and “negligence and contributory negligence”. The defendant’s counter-claim is bereft of supporting evidence and consequently, sensible argument.
  2. The defendant claims that a binding oral agreement was entered into with the plaintiff. The pleaded terms of that purported agreement included:
  3. The defendant alleges that the plaintiff breached the agreement by failing to complete the work and carrying out the work in “very poor workmanship because it failed to comply with the structural and building plans issued by the Ministry of Works...” [39]
  4. The plaintiff in response pleads that it does not dispute that a valid and binding oral agreement was reached but that the quoted price for the work was not less than $100,000.00 on the general specifications of the building and accepted by the defendant; no start or completion date was specified; and the drawings annexure “A” to exhibit P1 were not followed due to changes sought by the defendant.
  5. In order for the contract to be binding, there must be an express or implied agreement “or the means of an agreement, on every term that is essential in law or is regarded by the parties as essential. This intention is determined objectively. A purported contract may be regarded as incomplete on any of the following three broad grounds:
  6. Although the plaintiff concedes the existence of a valid and binding agreement with the defendant, I am not so satisfied. Although the parties believe they have completed their agreement, in my view, the agreement was incomplete due to the lack of certainty and ambiguity. Mr Brown and the defendant reached no agreement on the contract price for the work. On the evidence I accept, the defendant sought to complete the work for $30,000.00. The plaintiff had given a ballpark estimate of $100,00.00. They reached no agreement on the point with the plaintiff then rejecting to sign a written contract with a stipulated contract price of 30,000.00. They then nevertheless proceeded with starting the building with no agreement and no means of reaching an agreement – Mr Brown and the defendant both simply, in my assessment, expecting to get their way in due course, and to force the other into a concession. This did not occur and resulted in the arrangements being terminated just 4 or so weeks after work had commenced.
  7. I am also not satisfied that there was an agreement on the duration of the work and when it was to be complete and in fact, no particular certainty as to what was to be constructed. Both the defendant and the plaintiff through Mr Brown blundered into an arrangement that was it seems to me doomed from the start. Having found there to be no binding agreement, there can be no breach of agreement giving rise to liability on the part of the plaintiff.
  8. In the event that I am wrong on the non-existence of a valid and binding agreement, there is no reliable or credible evidence that establishes that the plaintiff had failed to construct the work to a good and workmanlike standard or indeed, any damage suffered by the defendant. The cause of action for breach of contract must accordingly be dismissed.
  9. On the defendant’s ancillary point of the plaintiff purportedly breaching building permit specifications, “structural and plan”,[41] the defendant pleads that the plaintiff was to carry out the works in accordance with the building permit and PUMA requirements. The defendant however tendered no building permit, PUMA consent or any regulatory or other requirements that the plaintiff was required to comply with – despite his pleading. Indeed, as I have found, both the plaintiff and the defendant both knowingly proceeded with the work knowing that no building permit or PUMA consent had been obtained. This was a job done on the cheap, as the defendant had sought, by cutting corners. There was no evidence to support the defendant’s pleaded allegations in paragraph 8 of the Statement of Defence.
  10. In terms of the claim in negligence, the defendant has failed to satisfy me that the plaintiff breached any duty of care owed to the defendant, established any harm suffered by him nor that any such harm was sufficiently proximate to such alleged negligence or contributory negligence. In his letter terminating the purported agreement with the plaintiff dated 29 May 2015, the defendant refers to an assessment carried out by “a certified builder to assess the shop project” and which allegedly confirmed the quality of the “work is poor and costly”. The certified builder did not give evidence nor was such an “assessment” tendered, if it was written. There was also no evidence, except the defendant’s word, that the building was within 1.5 metres of the boundary – which I do not accept. Though the defendant pleads a number of allegations of fact, no evidence was led to support many of those. There is simply no merit to the defendant’s counter claim in negligence and contributory negligence.

Result

  1. Judgment for the plaintiff by way of nominal damages in the sum $200.00 is awarded to the plaintiff.
  2. The defendant’s counter claim is dismissed in its entirety.
  3. Costs in these circumstances should follow the event in favour the plaintiff. Parties are to agree as to costs failing which, the plaintiff is to file Memorandum as to Costs within 14 days and the defendant to file his response within a further 7 days.

JUSTICE CLARKE

[1] Rule 13, Supreme Court (Civil) procedure Rules 1980.
[2] The Laws of New Zealand (online looseleaf edn, Lexis Nexis) Wrongful interference with Goods: Conversion and Detinue at [231].
[3] The Laws of New Zealand (online looseleaf edn, Lexis Nexis) Wrongful interference with Goods: Conversion and Detinue at [230]; Cuff v Broadlands Finance Ltd [1987] NZCA 93; [1987] 2 NZLR 343 at 346.
[4] The Laws of New Zealand (online looseleaf edn, Lexis Nexis) Wrongful interference with Goods: Conversion and Detinue at [226].
[5] At [57].
[6] The Laws of New Zealand (online looseleaf edn, Lexis Nexis) Wrongful interference with Goods: Conversion and Detinue at [226];
[7] The Laws of New Zealand (online looseleaf edn, Lexis Nexis) Wrongful interference with Goods: Trespass to Goods at [278].
[8] See also: Hartley v Moxham [1842] EngR 983; (1842) 3 QB 701; Clerk & Lindsell on Torts (supra) at [1181] and [1182].
[9] N91-JBM1-M26J-00000-00?cite=X%20and%20Y%20v%20Chief%20Executive%20of%20Oranga%20Tamariki%20%5B2022%5D%20NZCA%20622%3B%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%20%5B2023%5D%202%20NZLR%20261&context=1230042&icsfeatureid=1517128">X and Y v Chief Executive of Oranga Tamariki [2022] NZCA 622; [2023] 2 NZLR 261 at [24]; Matautia v Schuster [1993] WSSC 15.
[10] NOE, 03 October 2023 at 16.
[11] NOE, 03 October 2023 at p. 19.
[12] NOE, 03 October 2023 at p. 20.
[13] NOE, 03 October 2023 at p. 29.
[14] NOE. 04 October 2023 at p. 29.
[15] NOE, 04 October 2023 at p. 38.
[16] NOE, 04 October 2023 at p. 38.
[17] Exhibit P1 paragraph 17.
[18] Exhibit P1 paragraph 20.
[19] NOE, 04 October 2023 at p.48 and p 58.

[20] NOE, 03/10/2023 at p. 19.
[21] NOE, 03/11/2023 at p.46.
[22] NOE 04/10/23 at p 46.
[23] NOE, 04/10/2023 at pp 32 – 33.
[24] NOE, pp. 53 – 54.
[25] NOE, 04/10/2023 at p.21.
[26] NOE, p.20, 03/10/2023.
[27] Harvey McGregor, McGregor on Damages (15th Edition Sweet and Maxwell London 1988) at [1298].
[28] Cited in McGregor on Damages at [1298].
[29] At [1361].
[30] At [1361].
[31] NOE, 04/10/2023 at pp 49 – 50.
[32] Exhibit P1 paragraph [27].
[33] NOE 03/10/2023 at pp 47 – 48.
[34] NOE, 04/10/2023 at p. 48.
[35] NOE 04/10/2023 at pp 48 – 49.
[36] Exhibit P1 paragraph 22.
[37] Exhibit P2 paragraph7.
[38] Above at paragraph 53.
[39] Statement of Defence dated 26th April 2021 paragraph 6.
[40] The Laws of New Zealand (online looseleaf edn, Lexis Nexis) Agreement on Certain Terms: Completeness and Certainty at [58];
[41] Statement of Defence, paragraph 8.

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