N4978
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1596 OF 2005

MISAC POKONOMING
Plaintiff

V

JEFFERY SIMIRI
Defendant

Buka: Cannings J
2007: 26 October

DAMAGES – breach of contract – assessment of damages following entry of judgment – loss of business income – general damages – exemplary damages.

The plaintiff entered into an agreement with the defendant to purchase a vehicle and paid the defendant K25,000.00. The defendant failed to supply the vehicle and the plaintiff commenced legal proceedings against the defendant seeking recovery of the purchase price, plus damages. Liability was established at an earlier hearing in which summary judgment for K25,000.00 was entered against the defendant. Then a trial was conducted to assess damages, in three categories: (a) loss of business income; (b) general damages; and (c) exemplary damages. This is the judgment on assessment of those damages.

Held:

(1)	There was insufficient evidence to support the plaintiff's claim of business losses of K108,800.00. The evidence was sufficient to warrant an award of damages of only 10% of that amount, ie K10,800.00.

(2)	General damages were appropriately claimed, representing the inconvenience, frustration and stress inevitably suffered by an innocent party in a case such as this; and K5,000.00 was awarded.

(3)	Exemplary damages are a special head of damages, as a form of punishment and a deterrent against similar conduct to the defendant's conduct by other persons. In the circumstances, exemplary damages of K5,000.00 was awarded.

(4)	The total amount of damages awarded was K10,800.00 + K5,000.00 + K5,000.00 = K20,800.00.

(5)	Interest and costs are also payable by the defendant.

Cases cited

The following cases are cited in the judgment:

Albert Baine v The State (1995) N1335
Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24
Jonathan Mangope Paraia v The State (1995) N1343
Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331
Livingston v Raywards Coal Co [1880] 5 App Cases 25
Obed Lalip and Others v Fred Sikiot and The State (1996) N1457
Peter Wanis v Fred Sikiot and The State (1995) N1350
Yange Lagan and Others v The State (1995) N1369
Yooken Paklin v The State (2001) N2212

ASSESSMENT OF DAMAGES

This was a trial on assessment of damages following the entry of summary judgment in favour of the plaintiff.

Counsel

E Latu, for the plaintiff

26 October, 2007

1. CANNINGS J: Misac Pokonoming, the plaintiff, comes from Siwai, South Bougainville. He operates a trade store at Kokopau, across the passage from Buka town. A few years ago he planned to start a PMV business between Siwai and Buka. He needed an appropriate vehicle so he agreed with the defendant, Jeffery Simiri, to purchase from him a Toyota 4 x 4 single-cab Hilux for K25,000.00. The plaintiff says that the defendant is a senior engineer with Telikom PNG Ltd in Port Moresby who runs a business on the side importing reconditioned vehicles from Japan and on-selling them. On 27 October 2003 the plaintiff deposited K25,000.00 into the defendant's bank account at BSP Port Moresby. The defendant let him believe that the vehicle would be available for delivery by the plaintiff's agent a few weeks later. Some months, then years, passed and no vehicle materialised so in October 2005 the plaintiff commenced legal proceedings against the defendant. He filed a statement of claim seeking recovery of his K25,000.00 plus damages in excess of K100,000.00. The defendant kept promising that he would come good with the vehicle but his promises remained empty; and he failed to return the plaintiff's money. He filed no intention to defend the case so on 24 August 2006 summary judgment for the refund of the purchase price was entered against the defendant, with damages to be assessed. A trial on assessment of damages was held today on Sohano Island in Buka Passage. The plaintiff is claiming three categories of damages:

(a) loss of business income;
(b) general damages; and
(c) exemplary damages.

LOSS OF BUSINESS INCOME

2. The plaintiff is claiming K108,800.00. He says that if the vehicle had been delivered to him as promised he would have been able to put it into service on the Siwai-Buka-Siwai routes in December 2003, charging K100.00 per passenger for a one-way fare. He relies on an affidavit by a PMV operator, Peter Kauma, who runs this route and gives an account of his gross earnings. In determining this claim, some basic rules about assessment of damages must be applied, in particular:

•	In a civil action, the purpose of an award of damages is to put the innocent party in the same position, as far as possible, as they would have been in if the wrongdoer had not committed the wrongful act (the breach of contract). (Livingston v Raywards Coal Co [1880] 5 App Cases 25.)

•	The plaintiff has the onus of proving his loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and then expect the court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person's case, that person has the onus of proving the allegation. (Yooken Paklin v The State (2001) N2212, National Court, Jalina J.)

•	Corroboration of a claim is usually required and the corroboration must come from an independent source. (Albert Baine v The State (1995) N1335, National Court, Woods J; Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331, National Court, Lenalia AJ.)

•	The principles of proof and corroboration apply even when the defendant fails to present any evidence disputing the claim. (Peter Wanis v Fred Sikiot and The State (1995) N1350, National Court, Woods J.)

•	The same principles apply after default or summary judgment is entered and the trial is on assessment of damages – even when the trial is conducted ex parte. A person who obtains a summary judgment is not entitled as of right to receive any damages. Injury or damage suffered must still be proved by credible evidence. (Yange Lagan and Others v The State (1995) N1369, National Court, Injia J.)

•	If the evidence and pleadings are confusing, contradictory and inherently suspicious, the plaintiff will not discharge the onus of proving his losses on the balance of probabilities. It is conceivable that such a plaintiff will be awarded nothing. (Obed Lalip and Others v Fred Sikiot and The State (1996) N1457, National Court, Injia J.)

•	The fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying damages. Where precise evidence is available the court expects to have it. However, where it is not, the Court must do the best it can. (Jonathan Mangope Paraia v The State (1995) N1343, National Court, Injia J.)

3. In light of those principles, I have to say that I am not greatly impressed by the evidence in support of this claim. It is vague and unsubstantiated. What saves the plaintiff from being awarded nothing, however, is the last principle mentioned: the court will do the best it can on the available evidence. I will award a figure that I consider is fair in all the circumstances, equal to ten per cent of what is sought, ie K10,800.00.

GENERAL DAMAGES

4. The plaintiff claims K10,000.00 to compensate him for the embarrassment, humiliation and inconvenience he has endured. He has been without the use of the K25,000.00 he paid the defendant and he has had to go into debt to pay for his daughter's school fees.

5. I consider that general damages have been appropriately claimed, representing the inconvenience, frustration and stress inevitably suffered by an innocent party in a case such as this. I award K5,000.00.

EXEMPLARY DAMAGES

6. The plaintiff alleges that the defendant is a disreputable character who has conned other innocent people out of their money, promising to provide them with imported vehicles that have never materialised. No evidence has been adduced in support of these allegations, however, and I disregard them.

7. On the other hand, though it is unusual for the court to award exemplary damages for breach of contract, I am persuaded to do so in this case as Bougainville has developed quite a bad reputation for being a place where innocent and gullible people can be duped out of their hard earned money through unethical and greedy business practices. Exemplary damages are a special head of damages, as a form of punishment and a deterrent against similar conduct to the defendant's conduct by other persons. In the circumstances, I award exemplary damages of K5,000.00.

SUMMARY OF DAMAGES AWARDED

Loss of business income = K10,800.00
General damages = K5,000.00
Exemplary damages = K5,000.00
Total damages = K20,800.00

This amount is in addition to the judgment already entered for K25,000.00 (the refund of the purchase price).

INTEREST

8. In the statement of claim the plaintiff claimed interest under the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. Section 1 is the appropriate provision. It states:

(1) Subject to Section 2, in proceedings in a court for the recovery of a debt or damages the court may order that there be included in the sum for which judgment is given interest, at such rate as it thinks proper, on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause of action arose and the date of the judgment.

(2) Where the proceedings referred to in Subsection (1) are taken against the State, the rate of any interest under that subsection shall not exceed 8% yearly.

9. As Bredmeyer J pointed out in Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24, this section confers a four-fold discretion on the Judge: (1) whether to grant interest at all; (2) to fix the rate; (3) to grant interest on the whole or part of the debt or damages for which judgment has been given; and (4) to fix the period for which interest will run.

10. I exercise that discretion in the following way:

1 A plaintiff should in the normal course of events receive interest. There is nothing that takes this case out of the ordinary in that regard. The Court will order that interest be included in the sum for which judgment is given.

2 The rate of interest commonly used is 8%. In view of current economic conditions in the country I think 8% is the proper rate of interest.

3 Interest should be payable on the whole of the sum of damages for which judgment is given.

4 The appropriate period is the whole of the period between the date on which the cause of action arose and the date of the judgment. The cause of action arose on the day the vehicle was agreed to be supplied, which I regard as 1 December 2003. The date of judgment is 26 October 2007. The appropriate period, for the sake of mathematical convenience, is 3.9 years.

11. I calculate the amount of interest by applying the following formula:

•	D x I x N = A

Where:

•	D is the amount of damages assessed;

•	I is the rate of interest per annum;

•	N is the appropriate period in numbers of years;

•	A is the amount of interest.

Thus:

•	K20,800.00 x 0.08 x 3.9 = K6,489.60.

COSTS

12. The general rule is that costs follow the event, ie the successful party has its costs paid for by the losing party on a party-to-party basis. The question of costs is a discretionary matter. There are no special circumstances in this case that warrant departure from the general rule.

ORDER

13. The court directs entry of judgment in the following terms:

(1)	damages payable by the defendant to the plaintiff, of K20,800.00;

(2)	interest payable by the defendant to the plaintiff, of K6,489.60;

(3)	being a total of K27,289.60, which, for the avoidance of doubt, is payable in addition to K25,000.00 payable under the summary judgment of 24 August 2006;

(4)	in the event that the total judgment lump sum for the plaintiff is not paid within 30 days after the date of entry of this judgment interest shall be payable at the rate of 8% yearly from the date of entry of the judgment on so much of the total judgment lump sum as is from time to time unpaid;

(5)	costs to be paid by the defendant to the plaintiff on a party-party basis, to be taxed if not agreed.

Judgment accordingly.
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Latu Lawyers: Lawyers for the plaintiff