Supreme Court
Action No. 369 of 1981
25th April, 1983
Alcantara, J.

Mr. Glenn Godfrey, for the Plaintiffs.
Mr. Oscar Sabido, for the Defendant.

Defendant and second Plaintiff entering into verbal agreement to for a company limited by shares (first Plaintiff) for the purpose of operating a lumber sawmill - Defendant undertaking to provide sawmill and land on which sawmill was to be located - Second Plaintiff undertaking to contribute $120,000 towards the joint enterprise - Second Plaintiff only contributing $20,000 and purchasing spare parts for the sawmill - No written contract ever concluded between the Parties - Contract - Action for return of machinery, tools and equipment or their value and for damages for detaining the same - Detention of property - Special damages - Quantum of damages.

J U D G M E N T

In this Action, the Plaintiffs seek the return of certain machinery, tools and equipment or their value, and damages for detaining the same. The list of the goods claimed is set out in the Statement of Claim and includes a generator.

There is no dispute that the second Plaintiffs and the Defendant entered into negotiations for a joint enterprise in the lumber business. The second Plaintiff was going to contribute money and the Defendant was going to provide a sawmill and land. A limited company was going to be formed, the Toledo Lumber Company Limited, the first Plaintiff; the second Plaintiff would own 60% of the shares in the company and the Defendant 40% of the shares. The second Plaintiff would contribute $120,000 to buy the sawmill from the Defendant, and the Defendant would sell the sawmill to the company, and his wife would execute a lease of the land where the sawmill stood for the benefit of the company.

According to both parties, the second Plaintiff and Defendant, though contrary to their pleadings, the contract was never finalized. The second Plaintiff says that there was never any contract. The Defendant in turn says that whatever agreement there was, it was subject to contract.

Notwithstanding this, a number of things happened. The Defendant allowed the sawmill to be used for the benefit of both parties. The second Plaintiff contributed $20,000 to their joint enterprise. As pleaded, the limited company was incorporated on the 15th July, 1980. There is no evidence as to whether any shares were fully paid up. Also, the second Plaintiff procured and installed a number of equipment and machinery in the sawmill to enhance production.

What never happened was the transfer of the sawmill or the execution of the lease on one side, or the further contribution of $100,000 on the other side. Each blames the other for the break down in the negotiations. I have seen them both in the witness-box and my impression is that they are equally to blame. My assessment is that neither side trusted the other.

The joint enterprise came to an end without the contract having come into existence or finalized. The Plaintiff does not claim the return of the $20,000 but does claim the return of the machinery and equipment.

Although the Defendant admits having received the said equipment and machinery, he alleges that there was an agreement whereby the second Plaintiff would replace parts and equipment needed for the sawmill operation. The evidence adduced does not lead me to this conclusion. Rather it was on the second Plaintiff's initiative that such parts were replaced, and according to the Defendant, he did not make any request or demand. He just allowed it to happen.

I find as a fact that the parts and equipment supplied and installed at the sawmill did for a time benefit both parties. As they were permanently installed, they cannot be easily removed, more so when the replaced parts have now disappeared. I find as a fact that the sawmill has been enhanced by these new parts and the generator. The Defendant cannot be allowed to benefit from them without in some way compensating the Plaintiffs. At the very least, the Plaintiffs are entitled on a quantum meruit. However, I find that the Plaintiff succeeds on the ground of detention of property.

Counsel for the Defendant has referred me to the Law of Bailment and has drawn my attention to Clerk and Lindsell on Tort p.973 arguing that the machinery and equipment which was incorporated in the mill was a bailment. This is not only contrary to the pleadings but not in accord with the evidence. I find it unnecessary to deal with the legal principles of Bailor and Bailee as there was no bailment.

The Plaintiffs say that the second Plaintiff paid $4,000 by way of deposit for the generator, which the Defendant surprisingly says is worth $12,000. I think that the Plaintiffs are entitled to $4,000 for that item. I refer to paragraph l2A Defence which reads as follows:

"The Defendant denies wrongfully depriving the Plaintiffs of one 60 KW Generator with GM 671 Power Unit with control boxes, and avers that said Generator is the property of William Gillett who is the sole owner of same and has not transferred his ownership to the Plaintiffs."

Mr. William Gillett has come to give evidence. I say without hesitation that I do not believe him on the question of the generator. There is no doubt that he made an arrangement with Mr. Whitney and not with Mr. Derkits. In this Action he has no right or standing to claim the generator back, particularly when he still retains the $4,000 paid by the Plaintiff Whitney as a deposit. As regards the other items claimed, the evidence is somewhat nebulous. The Plaintiff in examination in chief did not give any value. In cross-examination he said he paid $10,000. The Defendant in his evidence did say $3,000 as being their present value. On this point I prefer the evidence of the Defendant.

I give judgment for the Plaintiff in the sum of $7,000 and costs.

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