In the High Court of Kiribati
Civil Jurisdiction
Held at Betio
Republic of Kiribati

Civil Case 52 of 2003

Between:

N. Tiria Kobaua
Plaintiff

And:

Meei Ititaake
Development Bank of Kiribati
Defendants

For the Plaintiff: Mr Banuera Berina
For the 1st Defendant: Mr Aomoro Amten
For the 2nd Defendant: Ms Batitea Tekanito

Date of Hearing: 29 January 2004

JUDGMENT

The plaintiff's husband, Kobaua Biriraki, wanted to have a fishing boat built. He needed a loan. His wife, Nei Tiria Kobaua, made an application to the Development Bank of Kiribati. The plaintiff and her husband were working together in all this: each was the agent of the other in the applications to the second defendant for a loan and in having the boat built by the first defendant.

The application was supported by a quote from a boat builder, Temraka. The DBK refused the application, Nei Tereti Awira the business manager said, for two reasons. The first was that there were already enough boats fishing from Abaiang. The second was that Temraka's quote was too high and he was too slow in doing a job. The Bank gave Kobaua and his wife the names of three boat builders whom the Bank preferred, the second defendant Meei, Ekueta and the Betio Shipyard. They had all built boats satisfactorily. Kobaua chose Meei because Meei was in Bairiki, conveniently situated to Kobaua.

The second application was successful. A loan for $7,228 was approved. Meei built the boat towards the end of 1999.

After use for 10 months the boat was leaking. Kobaua took it back to Meei for repair. After another four months the boat was leaking again. It was again returned to Meei and again repaired. The same problem after only another two weeks. Kobaua complained to the DBK but the Bank did not help.

Kobaua had the boat examined by Mr Tibanga Taratai. Ironically Mr Taratai is the boat building manager at the Betio Shipyard, one of the other two boat builders preferred by the Bank. Mr Taratai made a written report on 15 January and it was tendered during his evidence. I accept Mr Taratai as an expert witness, he having trained and worked in Fiji before coming to Kiribati. The report, in part:

The boat was found to be completely unsafe to be used due to the wrongly fittings of structural components (especially in the bottom part).
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In boat building, bottom battens are to be inserted through the main frames to give a flush (Flat) outside area where Marine ply-boards are to be fitted and have an even reinforcement from the inside. This is usually done to maintain a stable and uniform strength throughout the entire bottom structure and at the same time maintain the maritime law of Safety Of Lives At Sea (SOLAS).

Battens are inserted when grooves are cut in the main frame to house the battens so that they sit flush with the frame. Plywood is then fixed in position to form the hull. The battens being flush with the frame the plywood rests on and is supported by both frame and battens, giving the hull more strength.

Battens are lapped when they are merely fixed over the main frame. They do not lie flush with it. The plywood as a consequence is fixed to the battens only and has the support only of the battens.

That the battens were lapped, not inserted, was in Mr Taratai's opinion the cause of the problem. Apart from the battens being lapped when they should have been inserted, Meei had used nails when he should have used screws.

Kobaua used the boat in the normal course of fishing. Mr Taratai said the boat should have gone about three years without leaking. 

I do not hesitate to accept Mr Taratai's opinion as the cause of the problem. In short, the boat had not been properly built.

Meei gave evidence. I was not much impressed by him. Meei's answer to the claim was that Kobaua should have used the boat more carefully, not as roughly. He, Meei, had given guidelines on use to Kobaua. I reject Meei on this. Kobaua used the boat as any fisherman would in the normal course of fishing: he should have been provided with a boat satisfactory for that purpose.

It came out that Meei had another job and had left most of the construction to his employees, one of whom, Tawaia Tataua, gave evidence. Meei worked on the job only from time to time.

Meei is liable to the plaintiff. He did not give Kobaua and his wife a boat fit for the purpose for which he knew it was to be used.

What of the DBK? Mr Berina argued that it had given Kobaua and his wife negligent advice in recommending Meei as a boat builder. He relied on the principle recognised in Hedley Byrne v Heller (1964 AC 465) and much developed since.

The Bank had had experience before of Meei's work and it had been satisfactory. How then can it be negligent in recommending him as one of the three builders with whom the Bank would be happy? It would have been otherwise if Meei had performed poorly in the past and the Bank had known or should have known that. There was no such evidence. 

The Bank was not negligent under the principle in Hedley Byrne v Heller.

I have looked through the document headed "Loan Offer/Acceptance" which includes "General Loan Conditions". The Bank undertook no responsibility for the job, merely lent the money for it. The Bank was in no way a guarantor of the job.

The Bank is not liable to the plaintiff.

I was invited for the time being to make findings on liability. If necessary I shall hear the parties later on quantum.

The first defendant is liable to the plaintiff: the second defendant is not liable to the plaintiff.

Dated the 2nd day of February 2004

THE HON ROBIN MILLHOUSE QC
Chief Justice