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Dateline Shipping Travel Ltd v Veikoso [2004] TongaLawRp 37; [2004] Tonga LR 72 (30 July 2004)

IN THE COURT OF APPEAL OF TONGA

Dateline Shipping Travel Ltd anors

v

Veikoso

Court of Appeal, Nuku'alofa
Burchett, Tompkins, and Salmon JJ
A 5/2004

28 July 2004; 30 July 2004

Contract law – claim of breach of contract – denial of liability – claim allowed and appeal dismissed

The respondent was a grower of taro and yams on his tax allotment. In or about May 2001 the respondent decided to ship a reefer container (a container with refrigeration) load of taro and yams to San Francisco for selling on the US market. The respondent entered into a contract with Dateline for the supply of a container for that purpose. The loading of the container commenced on Tuesday 22 May 2001. 26 bags of yams and 41 bags of taros were loaded into the container. On each day from then until Friday 25 May further bags of yams and taro were loaded into the container. By the end of the week the container held 151 bags of yams and 47 bags of taro. It was a little over half full. No further loading was carried out over the weekend. On Monday 28 May 2001 the person whose truck the respondent was using to transport the produce to the wharf went to the wharf sometime between 10 am and 11am. When he opened the door to the container, he noticed that the temperature was no longer cold. It was found that the produce had thawed and was no longer fit for export. Some was fed to pigs. The rest was taken to the dump. The respondent, the plaintiff in the Supreme Court, claimed against the appellants, the defendants in the Supreme Court, damages for losses he claimed to have suffered through the loss of frozen taro and yams due to the breach of his contract with the first appellant (Dateline). Although the other appellants were named in the proceedings as defendants, the action proceeded as one against Dateline. The respondent was awarded damages of $17,569 together with interest at 10% from 30 June 2001 to the date of payment, and three quarters of the costs allowed on taxation. Dateline appealed the judgment and sought a retrial.

For the full Supreme Court judgment see Veikoso v Dateline Shipping anors [2004] Tonga LR 56.

Held:

1. The real issue was the cause of the temperature in the container rising. The issue clearly in turn put in issue the obvious possibilities that could cause that result, namely the packing of the container, the electricity supply, or a fault in the container itself or a combination of two or more of those causes. Dateline was well aware of these possibilities. It called considerable evidence for the purpose of establishing that the method of packing the respondent adopted was the cause of the problem. It also called an expert electrician to establish that, after the event, no fault was found in the container. There was ample time for Dateline to call evidence on this issue. For these reasons the Court was satisfied that no injustice was caused to Dateline resulting from any departure from the precise allegations in the statement of claim.

2. There were no grounds made out that would justify ordering a retrial, and as that was the only relief sought on the appeal, the appeal was dismissed. The respondent was entitled to costs on the appeal to be taxed if not agreed.

Counsel for appellant: Mr Edwards
Counsel for respondent: Mr Kengike

Judgment

[1] The respondent, the plaintiff in the Supreme Court, claimed against the appellants, the defendants in the Supreme Court, damages for losses he claimed to have suffered through the loss of frozen taro and yams due to the breach of his contract with the first appellant (Dateline). Although the other appellants were named in the proceedings as defendants, the action proceeded as one against Dateline.

[2] In a judgment delivered on 10 May 2004, Ford J awarded the respondent damages of $17,569.00 together with interest at 10% from 30 June 2001 to the date of payment, and three quarters of the costs allowed on taxation. Dateline has appealed against the judgment.

Facts

[3] The respondent is a licensed law practitioner, a retired police officer and, relevantly to this appeal, a grower of taro and yams on his tax allotment.

[4] In or about May 2001 the respondent decided to ship a reefer container (a container with refrigeration) load of taro and yams to San Francisco for selling on the US market. The judgment of Ford J sets out in some detail the events that led to the respondent entering into a contract with Dateline for the supply of a container for that purpose.

[5] The loading of the container commenced on Tuesday 22 May 2001. 26 bags of yams and 41 bags of taros were loaded into the container. On each day from then until Friday 25 May further bags of yams and taro were loaded into the container. By the end of the week the container held 151 bags of yams and 47 bags of taro. It was a little over half full. No further loading was carried out over the weekend.

[6] On Monday 28 May 2001 the person whose truck the respondent was using to transport the produce to the wharf went to the wharf sometime between 10 am and 11am. When he opened the door to the container, he noticed that the temperature was no longer cold. It was found that the produce had thawed and was no longer fit for export. Some was fed to pigs. The rest was taken to the dump.

The claim and the defence

[7] The statement of claim was, in many respects, unsatisfactory. However, it is clear that the respondent sued Dateline and the other defendants in contract. Having alleged an agreement relating to the supply of the container, the statement of claim's cause of action is in these terms (reproduced in its actual form):

"20 On breach of the terms of the agreement on or about 28th May, 2001 the defendants failed for daily checked the Electric power connected to the container #LPIU19940 it was properly operated at all times for frozen peeled produce commodities for export, which was:

[a] Failed to check the Electric power connected to the container #LPIU19940 properly operated at all times:

[b] 47 bags of taro, and 151 bags of yams were in bad condition and destroyed;

[c] not satisfactory performance."

[8] The statement of claim went on to claim damages for the destroyed produce, expenses, general damages and interest.

[9] The Judge noted that the case proceeded as one against Dateline only. On the course to be adopted in relation to the pleadings he said;

"The approach I have taken to the inadequate pleadings and other procedural defects identified in the present case is that adopted by this court in the past namely, that in spite of the defects, if an issue is raised and understood by the opposing party then it should be dealt with on its merits. I am satisfied that Dateline Shipping was fully aware of the issues involved in this case."

[10] In its statement of defence Dateline denied any liability to the respondent. It denied having entered into any agreement with the respondent, thereby denying any liability for breach of any contract. As an affirmative of defence Dateline pleaded that it had an agreement with another company relating to the consignment, and that there was no privity of contract between the respondent and Dateline.

[11] The real issue between the parties related to the cause of the rise in temperature in the container resulting in the thawing of the produce and its consequential loss. It was the respondent's case that the cause was a malfunctioning of the container, either through a break in the supply of electricity or some defect in the compressor. It was Dateline's case that the cause was the method the respondent adopted when packing the produce into the container. It claimed that fresh produce should never have been packed into the container that already held the frozen bags because the fresh produce immediately causes the container temperature to rise to unacceptable levels.

The Judge's findings

[12] It is not necessary for the purpose of this appeal to summarise the judgment in any detail. The following are the relevant findings and conclusions:

• No instructions were given to the respondent by any Dateline staff about packing the produce into reefer containers.

• The method adopted by the respondent accords with the normal practice for loading refrigerated containers at Queen Salote wharf.

• All the produce that had already been packed into the container was in a frozen state before any fresh produce was loaded.

• He accepted the opinion of the expert witness who gave evidence on behalf of the respondent that the most likely cause of the problem with the container was a compressor failure. The problem would not have been caused by the respondent's method of packing the container.

• Although the breach of contract identified in the statement of claim was directed at the failure of the electric power supply, the evidence was broad-based enough to encompass any failure in the proper functioning of the container and that would include a compressor failure.

• Dateline was fully aware of the case it had to meet and that the real issue was whether or not the container was functioning properly. There can be no prejudice to Dateline if the cause of the problem was a malfunctioning of the compressor as distinct from the failure of the power supply.

• The respondent did have a contract with Dateline. Under that contract Dateline was to provide a container that was functioning properly and would ensure that it continued to function properly until the container was loaded onto the vessel.

• The respondent succeeded in his claim. Judgment was entered in his favour against Dateline in the sum off $17,569.00 together with interest at 10% from 30 June 2001 down to the date of payment.

• The respondent was entitled to costs but due to the unsatisfactory nature of the pleadings, failing agreement, the award was fixed at three-quarters only of the amount allowed upon taxation.

The nature of the appeal

[13] The notice of appeal sought an order that the judgment be set aside and the matter submitted for retrial. The retrial was sought on two principal grounds.

[14] The first ground was that the Judge found in favour of the respondent on a ground contrary to the pleadings. It was Dateline's submission that the breach pleaded was a failure of the power supply whereas at the hearing the respondent claimed it was due to a fault in the container's compressor.

[15] The second ground was that the Judge erred in allowing evidence to be introduced by way of rebuttal after the close of the respondent's case.

[16] As to the first ground, we accept that the principal allegation in the paragraph of the statement of claim we have set out above related to the failure of the electricity supply. However, the paragraph included an allegation of "not satisfactory performance", an allegation that rather inelegantly appears to relate to the performance of the container. In any event, we consider that the Judge was correct in approaching this issue of pleading in the manner we have set out in [9]. As long as the real issue was identified, no injustice could occur just because that issue was not clearly identified in the statement of claim

[17] There can be no doubt that the real issue was the cause of the thawing in the container, or to put it another way the cause of the temperature in the container rising. This issue clearly in turn puts in issue the obvious possibilities that could cause that result, namely the packing of the container, the electricity supply, or a fault in the container itself or a combination of two or more of those causes.

[18] Dateline was well aware of these possibilities. It called considerable evidence for the purpose of establishing that the method of packing the respondent adopted was the cause of the problem. It also called an expert electrician to establish that, after the event, no fault was found in the container. We also note that the hearing in the Supreme Court took place over four days in February, two days in March, and three days in April 2004. The possibility of the problem being caused by a defect in the container must have emerged before possibly the first and certainly the second adjournment. There must have been ample time for Dateline to call evidence on this issue. For these reasons we are satisfied that no injustice was caused to Dateline resulting from any departure from the precise allegations in the statement of claim.

[19] We turn to the second ground. At the close of the case for Dateline, counsel for the respondent applied for leave to call evidence from an expert in the refrigeration field. This application was granted. Mr Guttenbeil gave evidence of a recording type instrument that records the temperature in every refrigerated container. The graph that this instrument produces had not being made available - the Judge noted that the respondent had failed to apply for discovery. On the respondent's application, the judge granted an adjournment to enable the witness to have access to this information. However Dateline was unable to find these records. The Judge considered that the fact that no one from Dateline mentioned this recording equipment in their evidence can only mean, at best, that Dateline was badly advised on the refrigeration aspects of the problem or, at worst, the connotations were something more sinister.

[20] The Judge found that Mr Guttenbeil was an impressive witness with considerable practical experience in refrigeration matters. He accepted the witness's opinion that the most likely cause of the problem with the container was a compressor failure.

[21] Mr Edwards, counsel for Dateline advised the Court from the bar that although he objected to this expert evidence being called at this late stage, he did not seek an adjournment. There can be no doubt that had he done so, the Judge would have granted that adjournment to enable Dateline to meet the evidence the witness had given. However, counsel apparently considered that there was no need to make such an application and was content to allow the matter to proceed to a conclusion without seeking the opportunity to call rebuttal evidence on behalf of Dateline.

[22] On this appeal Dateline filed an application to admit further evidence together with an affidavit by the operations manager of Dateline in support. This application was misconceived. There can be no question of Dateline being entitled to call evidence in this court, as Mr Edwards accepted. The affidavit in support sets out in some detail the reasons why Dateline does not accept Mr Guttenbeil's evidence or the judge's conclusions. The affidavit states that Dateline has "found proper expert evidence to rebut his testimony." Unfortunately, however, no brief of evidence or report from this expert has been provided, nor are his name and qualifications stated. So it is impossible for this Court to judge whether the opinion of this expert is sufficiently persuasive to establish that the late calling of Mr Guttenbeil may have resulted in an injustice to Dateline.

[23] What Dateline is now seeking to do is to re-litigate the issues that were before the Supreme Court in the light of adverse findings made by the Judge. This is not an acceptable course. The reality is that counsel for Dateline elected to continue with the hearing in the belief that the evidence already called was sufficient to meet Mr Guttenbeil's evidence. That strategy having failed, Dateline now seeks to have another try.

[24] In the events that occurred, we are unable to find that any injustice resulted to Dateline sufficient to justify the grant of a retrial. This ground for seeking a retrial cannot succeed.

Result

[25] As no grounds have been made out that would justify this Court ordering a retrial, and that was the only relief sought on the appeal, the appeal is dismissed. The respondent is entitled to costs on the appeal to be taxed if not agreed.