DC648

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE
SITTING IN IT’S CIVIL JURISDICTION]

DCCi 370 of 2004

BETWEEN

RONALD BEJIGI
Complainant

AND

RICHARD DIMER
Defendant

Madang: M Selefkariu
2008 : March 11

CIVIL		:	Breach of simple contract – claims special and general damages of K10,000.00

TEXT
Roebuck, D., Srivastava K.D., Nonggorr, J., Pacific Contract Law,
UPNG Press 1987, Port Moresby, PNG.

COUNSELS
Narokobi Lawyers, for Complainant
Wadau Lawyers, for Defendant

11 March 2008

SELEFKARIU, M:	The Complainant claims K10, 000.00 damages for breach of contract. The parties entered into an oral agreement for the defendant to take possession of the complainant’s vehicle a Toyota Dyna registration number P119U and to repair it.

2. Once the vehicle is repaired and in good working condition, the defendant must produce to the complainant all the receipts of payments made to repair the vehicle including labour costs. Having established all the costs incidental to the repairment of the vehicle, the defendant is to operate the vehicle for hire in order for him to recover all the repairment cost and expenses. Once all the expenses have been recovered the defendant must deliver possession of the vehicle to the complainant.

BACKGROUND

3. On 20 October 2004 the complainant laid the complaint into Court.

On 21 October 2004 defendant filed his statement of defence and in general denies breaching the agreement. After several adjournments, the case proceeded ex-parte the defendant on 28 April 2006 and default judgement entered in favour of the complainant for the sum of K7,220.00.

The defendant applied to have the above judgement set aside and was successful on 25 October 2006. 

4. The substantive complaint was reinstated and re-listed back to case-track. Evidence from both sides were put to Court by way of affidavits. Notices for cross-examination of affidavit witnesses were filed pursuant to section 36 of Evidence Act. 

5. On 29 August 2007 both sides decided to forgo their rights for cross-examination of witnesses as noticed. Notice that a motion by complainant seeking orders for police to impound the vehicle, restrain the defendant, his family, relatives, wantoks and agents from tampering with and damaging the vehicle, from harassing or abusing complainant, his family, relatives, wantoks and agents and for defendant to produce and surrender all records of accounts pertaining to the use of the vehicle to court was filed into Court but was not determined.

EVIDENCE

6. On the complainant’s side he relied on his own affidavits dated 20 October 2004 and 7 December 2004 respectively. On the defence side defendant relied on his affidavits dated 15 November 2004 and 2 December 2004 respectively and affidavits of Martin Lusin dated 2 December 2004 and Bart Waki dated 31 December 2004.

7. In essence there appears to be no contest on the actual wordings of the terms and conditions of the agreement. However, the complainant alleges that the defendant breached the agreement when he let the vehicle on hire and at the time he had recovered all his expenses, he failed to deliver the vehicle to the complainant as agreed. The time as to when the defendant had recovered his expenses can be determined as to the income earned from hiring of vehicle as in contrast to the costs of repair. According to evidence the vehicle was taken out from the Ela Motors workshop sometime in May 2004.

7. There is a slight contest as to whether the vehicle was fully serviced and in good working condition. But whether dispute or no dispute the court would not concern itself with it.

8. On 2 August 2004 with the assistance of police the defendant was made to speak with complainant and there produced a total receipt of K12,186.74 as cost of repairs. The vehicle was operational then but according to defendant was not in good working condition as the defendant was compelled to pay for the defects in order to keep it operational. 

9. The defendant then produced additional receipts for repairs and the total cost of repair escalated to K15,900.25. It appears the defendant went on to operate the vehicle letting it on hire to RD Tuna Canners Ltd and some other forms of hire up until 20 October 2004 when the complainant laid this complaint and thereafter until the complainant forcefully seized the vehicle on 9 December 2004. 

10. To prove that the defendant had by then recovered all his expenses for the cost of repairing the vehicle and failing to deliver the vehicle, hence breaching the agreement, the complainant obtained information from RD Tuna Canners Ltd primarily because the said vehicle was on hire to the company under the defendant’s family company called Disa Family Transport.

11. According to complainant he said the defendant’s company through their vehicle hire contract to RD Tuna Canners Ltd received a total payment of K24,083.72 for period 1st September to 30th November 2004. Such that, the complainant concluded that defendant had recovered all his expenses and when he failed to deliver the vehicle, (non performance) was in breach of this condition in their agreement.

12. To encounter that the defendant said he had another vehicle a Mazda LBW 3.5 ton truck registration number P.5802.0 under his family company contracted to RD Tuna Canners Ltd. This vehicle including the complainant’s vehicle were on hire contract under Disa Family Transport to RD Tuna Canners Ltd. The earnings of the two vehicles were used to pay for their running costs in terms of fuel, lubrication and repairs.

13. The defendant said because the complainant’s vehicle developed constant defects he did not recover all his costs, by how much is not known. In the pleadings the complainant alleged that once the defendant had recovered his expenses and when he failed to deliver the vehicle, he then by conversion used the vehicle for his own use, such that the complainant lost revenue as he could have earned some revenue had the defendant honoured his part of the agreement and delivered the vehicle as soon as he recovered his expenses.

14. I think the issue of conversion is conditioned to the exact time the defendant actually recovered his expenses. So when the defendant went on to use the vehicle without delivering it to the complainant was then in breach of the agreement and for the same action guilty of conversion.

15. No doubt the complainant carries the burden to prove his claim.
The evidence adduced by the complainant are general in nature suggesting that if the final repair costs were K15,900.25 then the income earned up till 30 November 2004 which is K24,083.12 should offset that by way of simple arithmetic.

16. But then the defence adduced counter evidence that the earnings were for two vehicles including the complainant’s vehicle and that most of the earnings were paid to keep them operational for fuel, lubrication and repairs. Further the defendant said due to constant defects faced by the complainant’s vehicle it was not operational full time.

17. The complainant has not call rebuttal evidence on the above facts.
The defendant alleged he has not fully recovered all his expenses but he did not say how much. But in the opinion of court the complainant fail to give specific evidence to show the defendant has recovered his expenses and was in breached of the agreement. It appears the defendant continued to use the complainant’s vehicle because he had not fully recovered his expenses. In that regard he could not be in breach of the agreement.

18. In the defence submissions they submitted that the complainant was actually in breach of the agreement by repudiation, when the complainant forcefully seized the vehicle and took possession on 9 December 2004.

According to Roebuck, Srivastava and Nonggorr "Pacific Contract Law" (supra) at page 709 the authors say "Breaches of contract maybe put into three categories: failure to perform, repudiation, and selef-imposed inability to perform." "Repudiation may happened before the due date for performance". "Repudiation takes place where a party expressly or impliedly says that he will not carryout his part of the contract".

19. If there is an express repudiation, or if the breach is so serious that the injured party may treat it as repudiation then he may treat the contract as at once discharged and sue for damages. It would appear the defendant has an action for breach of contract against complainant for repudiation but has not sued even though he had the opportunity to do so since 9 December 2004.

20. But this is not for the court to concern itself with. For the present complaint this court finds that there is no evidence credible to prove that the defendant was in breach of the agreement and so the complaint must fail. The court is of the view that the agreement entered was an open ended one and has the elements of the type of contract called "Divisible Contract". This type of contract is where parties are progressively adding new terms and conditions as different stages are performed or discoveries are made. So that once the vehicle is repaired parties must consider the next stage of their performances or obligations. 

21. I think the conduct of the defendant has frustrated the complainant because after police assistance to bring them together they never got back together to progressively determine how much the defendant has earned and how much the complainant still owes the defendant in terms of repair cost. 

22. Even the continued repairs that defendant alleged, he did not have the courtesy to inform the complainant. That I think angered the complainant and compelled him to sue as he did. So even when the defendant knew the complainant was desperately trying to find evidence of facts to know how much defendant may have earned and even if the information given were tainted with other factors such as earnings and running cost of other vehicle including the complainant’s vehicle the defendant kept his distance and showed no courtesy to help settle the pressing issue. 

23. I think the complainant concluded that the defendant was cheating him and it became unbearable when he forcefully seized the vehicle as he did.
Even though his action would appear unlawful under the circumstance he believed that was the most reasonable thing to do in order to recover his property and mitigate his losses. So frustration is an element for breach of contract but I do not think the pleadings specifically were based on that.

24. In summation both parties are guilty of some sort either they conducted themselves improperly to their agreement or otherwise they lack ingenuity to carefully consider their agreement to avoid abuse as it appears to be open to abuse. 

25. COURT ORDER: As mentioned earlier this Court is not satisfied with the evidence as there is no credible evidence to prove the claim and ought to be dismissed.

26. As for cost, the court is of the view that no order should be made on either sides considering the issues raised and considered in judgment.

For Complainant - Bernie Meten
For Defendant - Young Wadau