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Nickel v Ah Vui [2000] WSSC 37 (27 October 2000)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

JOHN NICKEL
Company Manager of Aleisa, Samoa.
Plaintiff

AND:

ROMEO AH VUI
Panelbeater of Lotopa, Samoa.
Defendant

Counsel: H. J. Schuster for plaintiff
J. Brunt for defendant

Hearing: 25 September 2000
Judgment: 27 October 2000

JUDGMENT OF SAPOLU CJ

In this case the Court has to deal with a claim for damages by the plaintiff against the defendant, a mechanic and panel beater, for breach of a contract to carry out repairs to the plaintiff’s vehicle, and a counterclaim for damages by the defendant against the plaintiff for breach of the same contract.

The evidence that was adduced for both parties consisted of affidavit and oral evidence. The procedure that was followed was that each witness was first given his affidavit to confirm on oath and then he was left to opposing counsel to cross-examine. Counsel who called the witness to testify was then given the opportunity to re-examine. This procedure helped to reduce the time taken up for the trial quite considerably.

Evidence

The evidence of this case is quite conflicting not only in relation to the formation of the contract between the plaintiff and the defendant to carry out repairs to the plaintiff’s vehicle but also in relation to the performance of that contract. I have decided for ease of understanding to refer first to the evidence for the plaintiff and then to the evidence by the defendant before I make findings of fact.

The plaintiff in his evidence testified that on 21 February 2000 he asked the defendant, who is a mechanic and panel beater with whom he had some acquaintance, to inspect a double-cab pick-up vehicle he wanted to buy and to advise him whether to buy it or not. For this purpose the plaintiff picked up the defendant from his shop at Pesega and went with him to inspect the vehicle. After inspection of the vehicle, the defendant told the plaintiff that the vehicle was in good condition and he was getting it at a good price. They then drove to some other places before they went to the premises of the Pepsi company where the plaintiff was working as general manager. They went inside the plaintiff’s office where the defendant was asked to do paint repairs to a Pepsi vehicle and to have painted on it the new Pepsi graphics or signs. The witness Pulou Tau, who is the sales representative for the Pepsi company, testified in his affidavit that he was present at that meeting with the plaintiff and the defendant and it was held on or about 21 February. In his oral testimony, this witness said that during the meeting the plaintiff, the defendant and himself discussed paint repairs to a Pepsi vehicle; there was no mention of the plaintiff’s vehicle. During the meeting the defendant agreed to do the paint job on the Pepsi vehicle and he (the defendant) said the job would take two weeks. The defendant was then paid half the cost for the job on the Pepsi vehicle. At that stage, the witness Pulou Tau said discussion on the Pepsi was completed and he left the meeting leaving only the plaintiff and the defendant inside the plaintiff’s office.

In his affidavit and oral testimony, the plaintiff said the paint repairs on the Pepsi vehicle and the rust repairs and spray painting on his own vehicle were discussed separately with the defendant. He said when he discussed the repairs to his own vehicle with the defendant he mentioned a quote given to him by another mechanic and panelbeater and the defendant was prepared to match that quote. The defendant then agreed that he would do the repairs to the plaintiff’s vehicle at the discounted price of $1,200 for both labour and materials and that the job would take a week. At that time the plaintiff had not bought his vehicle but had only inspected it with the defendant. The plaintiff only bought the vehicle on 23 February and delivered it to the defendant on 24 February which was a Thursday. On 25 February, which was a Friday, the plaintiff said he paid $600 to the defendant as per the defendant’s policy of 50% payment at the start of a job. The Pepsi vehicle which was to be repainted by the defendant was given to him on the day of the meeting at the Pepsi premises which was 21 February.

From the evidence given by the plaintiff and the witness Pulou Tau, the work on the Pepsi vehicle should have been completed on 3 March, and from the evidence given by the plaintiff alone, the work on his vehicle should have been completed on 1 March. However, none of those works was completed on time. The work on the Pepsi vehicle was not completed until 22 March according to the witness Pulou Tau and the work on the plaintiff’s vehicle was still nowhere near being completed by 27 March when the plaintiff took his vehicle away.

In his affidavit and oral testimony, the plaintiff also said he checked with the defendant by phone from Wednesday, 1 March, to Wednesday, 8 March, about the progress of the work on his vehicle and the defendant told him the work was progressing well. On 8 March the defendant asked him for paint and other materials and on 10 March he purchased the paint and those other materials for $505 and were uplifted by the defendant the same day. In the week commencing 13 March, the plaintiff said he checked with the defendant again by phone about the progress of the work on his vehicle and again the defendant told him the work was progressing well. In the same week the plaintiff sent the witness Atonio Te’o, an employee of the Pepsi company, to check on the progress of the defendant’s work on his vehicle and that witness reported back to the plaintiff that his vehicle had been stripped of numerous body parts but had not been painted. The witness Atonio Te’o also said he was sent four times by the plaintiff to check on the progress of the work on his vehicle and on all four occasions he observed that the vehicle was still in the same condition. Then on Wednesday, 22 March, the defendant visited the plaintiff and told the plaintiff his vehicle would be delivered at 1.00pm on Friday, 24 March. However, the vehicle was not delivered to the plaintiff on that day. So on Saturday, 25 March the plaintiff went to the defendant’s place and found his vehicle was still in the same condition as the witness Atonio Te’o had reported to him, being stripped of numerous body parts and not painted. Even though some body panelling had been done, the plaintiff said the work was nowhere being completed. The defendant was at that time working on three other jobs. The plaintiff said he felt very disappointed and angry with the defendant as the defendant had not done the work agreed to and he told the defendant he was rescinding the contract. He also told the defendant to deliver the vehicle back to him on Monday, 27 March, with all the body parts that had been stripped off together with the paint and materials as he was taking his vehicle to another car body repairer to complete the work. The defendant replied only the painting remained to be done. The plaintiff gave him the deadline of Monday, 27 March. On that day, the vehicle was still not filled, sanded, smoothed or painted, so the plaintiff and the witness Atonio Te’o took the vehicle away with a few of the body parts that had been stripped off. The plaintiff had to obtain a Court order to get the rest of the parts together with the paint and other materials he provided.

Under cross-examination, the plaintiff denied that he ever told the plaintiff that he needed the Pepsi vehicle soon because his big boss was coming from American Samoa. He said he could not have said those words because his boss in American Samoa was not coming to Samoa during that time.

I turn now to the evidence given by the defendant. In his oral testimony the defendant maintained that he and the plaintiff entered into the contract to do repair and paint work on the plaintiff’s vehicle on 24 February and not on 21 February as asserted by the plaintiff. In his affidavit and oral testimony, the defendant said that on 21 February the plaintiff picked him up from his shop at Pesega and took him to inspect a double cab pick-up vehicle the plaintiff was intending on buying. He advised the plaintiff that the vehicle was in good condition and he was getting it at a good price. Then after running some errands they drove to the plaintiff’s office at the Pepsi company. When they arrived at the Pepsi premises, the defendant said the plaintiff asked him to inspect and give a quote on a Pepsi vehicle that required repair and paint work. He gave a quote of $2,100. They then discussed the terms of the work to be done on both the Pepsi and the plaintiff’s vehicle. During that discussion the defendant said he told the plaintiff that the estimated cost to do the job on his vehicle was about $2,400 to $2,500 for labour only but he agreed to do the repair and paint work on the plaintiff’s vehicle at the discounted price of $1,200 because of his good relationship with the plaintiff. The defendant also said that the plaintiff asked for one week to complete the job but he requested two weeks. The conditions on which he agreed to do the job on the plaintiff’s vehicle were that all Pepsi vehicles when needed to be repaired would be given to the defendant, the work on the plaintiff’s vehicle would only commence after repairs to the Pepsi vehicle were completed, and the job would take two weeks. Because the job on the Pepsi vehicle was not completed until 16 March, the defendant in his affidavit maintained that the work on the plaintiff’s vehicle should only have started following that date. The work was therefore to be completed on 31 March. The plaintiff by uplifting his vehicle on 27 March was thus in breach of contract.

Now after the discussion between the plaintiff and the defendant at the Pepsi premises on 21 February, the plaintiff delivered his vehicle to the defendant on 24 February. According to the defendant, the plaintiff told him to complete the work on the Pepsi vehicle before starting on his vehicle. Then on several occasions between 1 March and 8 March the plaintiff would phone the defendant about the progress of the work on the Pepsi vehicle and on one of those occasions the defendant told the plaintiff that the paint on the Pepsi vehicle was boat paint and had to be sand papered before the vehicle was repainted as the paint would not stick on boat paint. For that reason the job on the Pepsi vehicle could not be completed on time which meant delay in the commencement of the work on the plaintiff’s vehicle. The plaintiff on one of these occasions also told the defendant that his big boss from American Samoa was coming soon and if he could complete the work on the Pepsi vehicle soon. The work on the Pepsi vehicle was completed about 16 March and delivered to the company the same day.

As for the plaintiff’s vehicle, the defendant said he attempted to start work on that vehicle during after hours while he was working on the Pepsi vehicle because of his good relationship with the plaintiff. By the time he delivered the Pepsi vehicle back to the company on 16 March, he had completed most of the repair and paint work on the plaintiff’s vehicle. He then took the plaintiff’s work to his father’s workshop to do the finishing work, namely, filling, water sanding and smoothing before painting. However, on 25 March the plaintiff came to him and asked for his vehicle to allow the plaintiff to take it to another panel beater to complete the work. The defendant told the plaintiff that his vehicle was just about ready for painting and the plaintiff agreed to complete the job by Monday, 27 March. On 27 March the defendant said he told the plaintiff he could deliver the vehicle in the evening provided the paint was dry by then and the balance of his costs were paid in full. The plaintiff, however, took his vehicle away.

Resolution of conflicts in the evidence

In considering the conflicting evidence in this case, I must say the plaintiff and the witnesses called for the plaintiff impressed me as more credible witnesses than the defendant. In the first place I accept what the plaintiff said that the contract between himself and the defendant for repairs to his vehicle was made on 21 February and not 24 February as the defendant testified. The only thing that was done on 24 February was the plaintiff delivering his vehicle to the defendant for repairs. There was no further discussion of the terms of the contract. The defendant in his affidavit only said that the plaintiff reaffirmed to him on 24 February that the Pepsi vehicle should be finished first before he started work on his vehicle. I do not believe the plaintiff made such a statement. But if one were to assume that the plaintiff made such a statement for the sake of argument, such a statement does not create a contract; it is only a reaffirmation of something that had already happened before. I conclude that the contract for the defendant to carry out rust repairs and spray painting to the plaintiff’s vehicle was made on 21 February as testified by the plaintiff and not on 24 February as asserted by the defendant.

The evidence as to the manner in which the contract was formed is also very conflicting. I accept the evidence given by the plaintiff that the contract for repairs to the Pepsi vehicle and the contract for repairs to his own vehicle were discussed and made separately but not simultaneously. This was supported by the evidence of the witness Pulou Tau who testified that he was present and participated in the discussion with the plaintiff and the defendant regarding repairs to be done to a Pepsi vehicle and it was a term of the contract reached with the defendant on the Pepsi vehicle that if he did a good job with that vehicle there would be other Pepsi vehicles given to him to be painted. After agreement was reached on the repairs to the Pepsi vehicle, Pulou Tau said he then left the meeting. He also said there was no mention of the plaintiff’s vehicle during the discussion on the Pepsi vehicle. I do not accept the defendant’s evidence which clearly suggested that the two contracts for repairs to the Pepsi vehicle and to the plaintiff’s vehicle were discussed together and concluded almost simultaneously. I prefer the evidence of the plaintiff and the witness Pulou Tau.

In respect of the conflicting evidence as to the terms of the contract that was reached between the plaintiff and the defendant, I again prefer the evidence of the plaintiff that the agreed contract price was $1,200, which was a discounted price, and that the job to be done would take a week. I also accept the plaintiff’s evidence that there was no agreement that the work on the Pepsi vehicle was to be completed first before the work on the plaintiff’s vehicle was to start as the defendant testified.

In their respective testimonies, the plaintiff and the defendant were in agreement that the price for the job to be done on the plaintiff’s vehicle was $1,200 and it was a discounted price. But they differed as to the duration for the work to be done and the time that work was to start. I find the defendant’s evidence in this regard does not inspire confidence. He said that the plaintiff agreed that the duration of job on his vehicle should be two weeks and was to start after the Pepsi vehicle was finished. But then the defendant also said he started work on the plaintiff’s vehicle during after hours while he was still working on the Pepsi vehicle. This is more consistent with the plaintiff’s evidence that he did not agree with the defendant that the work on his vehicle was to start after the Pepsi vehicle was finished than the defendant’s evidence that the plaintiff agreed to start the work on his vehicle after the job on the Pepsi vehicle was finished.

The reason given by the defendant that he started work on the plaintiff’s vehicle during after hours while he was working on the Pepsi vehicle because of his good relationship with the plaintiff also does not generate confidence. It would be recalled that the defendant had said that during performance of the work on the Pepsi vehicle he discovered that the paint on the vehicle was boat paint and therefore the job could not be completed on time as the boat paint had to be sand papered before painting, as the new paint would not stick on the boat paint. He also said the plaintiff called him several times on the phone about the progress of the work on the Pepsi vehicle. And in one of the phone calls by the plaintiff between 1 March and 8 March, the plaintiff said his big boss from American Samoa was coming soon and could he complete the Pepsi vehicle soon. There was no mention by the defendant of any phone call by the plaintiff concerning his own vehicle. If all that the defendant said was true, one would have expected him to devote all of his time, including after hours, to completing the job on the Pepsi vehicle. He need not have thought about his good relationship with the plaintiff, as the plaintiff himself, was more concerned about completing the job on the Pepsi vehicle soon and was making no mention of his own vehicle. And if the defendant, as he said, really had in mind his good relationship with the plaintiff, then he should have devoted all of his time to the Pepsi vehicle because the plaintiff was repeatedly calling him about the Pepsi vehicle rather than spending his after hours on the plaintiff’s vehicle. After all the plaintiff was not calling him about his (the plaintiff’s) vehicle. The witness Pulou Tau also said in his affidavit that he complained to the defendant about the delay as they needed the Pepsi vehicle for company deliveries. So the defendant should have devoted all his time, including after hours, to completing the work on the Pepsi vehicle first. This part of the defendant’s evidence does not inspire confidence. But if what he said about doing work on the plaintiff’s vehicle during after hours while he was also working on the Pepsi vehicle is true, then that evidence is consistent with the plaintiff’s evidence that there was no agreement that the defendant was to finish the Pepsi vehicle first before commencing work on the plaintiff’s vehicle.

The defendant’s affidavit evidence that repairs on the Pepsi vehicle were completed on 16 March and the vehicle delivered to the company the same day, is also in conflict with the affidavit evidence of the witness Pulou Tau that repairs to the Pepsi vehicle were not completed until 22 March. I am also unable to accept the defendant’s evidence that as of 25 March most of the work required for the plaintiff’s vehicle had been nearly completed. It is clear from the defendant’s own evidence that by 27 March when the plaintiff took his vehicle away, the vehicle had not been filled, sanded, smoothed or painted. But one of the two main purposes why the plaintiff gave his vehicle to the plaintiff was spray painting and that was a major part of the job the defendant had agreed to do. The substantial costs of $1,800 the plaintiff had to pay another panel beater to complete the work on his vehicle is further evidence which contradicts the defendant’s evidence that on 27 March the work on the plaintiff’s vehicle was nearly completed.

The defendant’s evidence that he advised the plaintiff on 25 March that he would deliver the plaintiff’s vehicle on Monday 27 March in the evening provided the paint was dry, if true, was just another broken undertaking on the defendant’s part. On 27 March, the plaintiff’s vehicle was still unfilled, unsanded and unpainted. Most of the body parts had been stripped and were kept at a different place from where the vehicle was. So how could the defendant have hoped to complete the job by the evening of 27 March, given the condition the vehicle was in on that date.

I can go on and point out a few more flaws in the defendant’s evidence but that will only prolong this judgment when, in my opinion, I have given sufficient grounds to support the firm view I have formed that the evidence of and for the plaintiff should be preferred to the evidence of the defendant. On the basis of the evidence I have decided to accept, time was of the essence of the contract. And when the defendant failed to complete the job on the plaintiff’s vehicle within the agreed time period of one week, the plaintiff was entitled to rescind the contract. The fact that the plaintiff did not immediately rescind the contract after the one week time period expired, does not mean the plaintiff had lost his right to rescind the contract should the defendant again fail to complete the job within an extension of time. From the evidence the last extension of time granted to the defendant was from 25 March to 27 March, and the defendant said it was him who requested that extension of time. The plaintiff said he then made 27 March the deadline. Thus when the job was still not completed by 27 March, the plaintiff was again entitled to rescind the contract.

I will deal now with the plaintiff’s claim for damages and then with the defendant’s counterclaim.

Plaintiff’s claim for damages

I will deal in turn with each item of the plaintiff’s claim for damages as they are pleaded in the statement of claim. The first part of the claim for damages relates to the sum of $600 paid as part payment to the defendant at the commencement of the job on the plaintiff’s vehicle. The plaintiff said that as the defendant had failed to perform the contract, the money should be repaid to him and the defendant gets nothing. I have decided that this part of the claim for damages cannot succeed. I will now explain why I have come to that view.

If this had been an entire contract where payment of the contract sum by the plaintiff is conditional upon completion by the defendant of his part of the contract, I would have agreed that the defendant should get nothing for failing to perform in full his part of the contract provided none unless one of the exceptions to the doctrine of entire contracts applies. But this is not an entire contract because the plaintiff had paid half of the contract sum pursuant to the defendant’s policy of fifty per cent part payment before commencement of a job. The common law doctrine of entire contracts, or indivisible contracts, as it is sometimes called, is explained in several cases and textbooks. I refer to only three of these. In Phillips v Ellison Brothers Pty Ltd [1941] HCA 35; (1941) 65 CLR 221, Starke J, in the High Court of Australia, said at pp 233 – 234:

“It is a principle of English law that parties having contracted to do an entire work for a specific sum can recover nothing unless the work is done or it can be shown that it was the other party’s fault that the work was incomplete or that there is something to justify the conclusion that the parties have entered into a fresh contract (Cutter v Powell (1795) 2 Smith’s Leading cases 12 ed. (1915), p.1; Appleby v Myers [1867] UKLawRpCP 70; (1867) LR 2 CP 651, at p. 661; Forman & Co Proprietary Ltd v The Ship “Liddersdale” [1900] UKLawRpAC 7; [1900] AC 190, at p. 202). If the contract is indivisible and not severable, then nothing can be recovered under the contract unless it is completed according to its terms or a new contract is made or is to implied from the acts of the parties giving rise to new rights.”

In The Law of Restitution (1993) by Goff and Jones, it is stated at pp. 409 – 410:

“ An entire contract is one which provides expressly or impliedly that a party must perform his part in full before he can recover any part of the price or other “consideration due to him under the contract; in particular, in the absence of anything to the contrary, a contract is held impliedly so to provide where the consideration is a lump sum or is otherwise unapportioned, or where the payment of the consideration is postponed until completion of the work. In such cases a long line of authority has established that the party who has contracted to perform his part on such terms can recover nothing unless the work be done, or it can be shown that it was the defendant’s fault that the work was incomplete, or that there is something to justify the conclusion that the parties have entered into a fresh contract.”

In Law of Contract in New Zealand (1997) by Burrows, Finn and Todd, it is stated at p 633:

“An entire contract is one which provides that one party is to receive payment only when he or she has completed his or her part of the contract, and is to receive nothing until this has happened. In other words it is a contract where completion of that party’s performance is a condition precedent to the other party’s liability to pay.”

The contract in the present case does not come within the definition of an entire contract because payment of the contract price was not conditional upon the defendant completing his part of the contract. Part payment of the contract price was made by the plaintiff to the defendant at the beginning of the contract before any part of it was performed. In saying that the defendant should get nothing because he was in breach of the contract, the plaintiff must show that the contract was an entire contract. But the contract in this case was not an entire contract. And even if it was such a contract, the plaintiff’s claim would still fail if one of the qualifications or exceptions to the doctrine of entire contracts applies.

It would have been appropriate, provided the evidence permits, for the plaintiff to claim restitution damages for the value of the benefit he had conferred on the defendant in the performance of the contract. On this basis, the plaintiff could have claimed that the money he paid to the defendant in part payment of the contract price exceeded the value of the work performed by the defendant on his vehicle and the excess should be paid back to him as restitution damages in order to avoid any unjust enrichment. The difficulty here is that there was no evidence as to the value of the work done by the defendant on the plaintiff’s vehicle. So we do not know whether the sum of money paid to the defendant exceeds the value of the work done on the vehicle. The work performed by the defendant does not appear to be trivial or insignificant despite his breach of the contract. He removed numerous body parts to prepare the vehicle for rust repairs and spray painting, and he also did some body panelling on the vehicle. It is difficult to say without evidence on the value of the work done whether the part payment made by the plaintiff exceeds the value of that work or not. The onus of proving the claim for damages rests on the plaintiff in these circumstances.

It should be helpful if I point out here that in the case of Newmans Tours Ltd v Ranier Investments Ltd [1992] 2 NZLR 68 at p. 91, Fisher J, on the basis of a seminal article “The Reliance Interest in Contract Damages (1936 – 1937) 46 Yale L. J. 52 by Fuller and Perdue, referred to three kinds of interest that are protected in contract. These are the restitution interest, the reliance interest and the expectation interest. In respect of these interests, restitution damages, reliance damages and expectation damages can be claimed, as the case may be, for a loss that has occurred in a breach of contract situation. Such loss has been described, where appropriate, as restitution loss, reliance loss or expectation loss. In saying all this, I am not excluding the possibility of any further contractually protected interest being identified as the law develops.

I turn now to the claim for $1,800 being the amount expended by the plaintiff to complete the repairs to his car. I have decided to adopt the approach of identifying first which contractually protectible interest or interests are relevant given the facts of this case. Firstly, there is no restitution interest involved in this part of the claim for damages as the plaintiff is not claiming for the return or repayment of any benefit he had conferred on the defendant in the performance of the contract to repair his vehicle. Secondly, there is no reliance interest involved because the plaintiff is not claiming for any loss or wasted expenditure he had incurred due to any steps he had taken in reliance on due performance of the contract by the defendant. An illustration to explain what is meant here is, if the plaintiff in reliance on the contract had purchased materials requested by the defendant for performance of the work on the plaintiff’s vehicle, and then the defendant wrongfully abandons the contract and the materials turn out not to be the correct materials required for the work, the plaintiff has suffered a loss in terms of the price of the materials for which he can claim reliance damages against the defendant. Thirdly, is the expectation interest which seems to be the nearest to this part of the claim for damages. The difficulty is whether the sum paid by the plaintiff to the second panel beater to complete the work on his vehicle can be truly described as an expectation loss. I do not think it can be so described. The work on the plaintiff’s vehicle was completed. So the plaintiff received the appropriate value for the sum he expended to complete the work on his vehicle. He suffered no loss in that regard.