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Poholi v Potuku [2008] PGNC 306; N3564 (25 September 2008)

N3564
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 70 OF 2006

BETWEEN:

ANDREW POHOLI
Plaintiff

AND:

ALBERT POTUKU
First Defendant

AND:

EAGLE FINANCE LIMITED
Second Defendant

AND:

VISUPP INVESTMENT LIMITED
Third Defendant

AND:

EAGLE HIGH ADVENTURE LIMITED
Fourth Defendant

Waigani: Davani, .J
2008: 16th July
25th September

DAMAGES – Default judgment – assessment of damages – claim must be proven by credible evidence

DAMAGES – Evidence – general and special damages – evidence lacking

Facts

The plaintiff's claim is for assessment of damages, default judgment having already been entered. The Plaintiff claims to have been employed by the defendants on a Contract, at a time when he was still repaying a loan over the property he was residing in. The plaintiff claims to have taken out an additional loan because his present employer wanted to build an additional unit on the property. However, the defendants did not complete the extension work nor did they repay the loan.

The plaintiff also claims that the defendants had promised to increase his housing allowance but never did. As a result of the failure by the defendants to repay the loan, the plaintiff claims the bank then conducted a mortgagee sale and sold the property on which he was resident.

As a result, the plaintiff claims damages for breach of his employment contract or alternatively, a claim in negligence and losses associated thereto.

Issue

- Whether there is sufficient and credible evidence on which to make such an award?

Held

1. The plaintiff did not put before the Court evidence on which to prove his claims.
   
2. There must be credible evidence of the transactions that the plaintiff refers to that either failed or did not eventuate. It is not sufficient to just tender documents and expect the Court to make an award. It must be good evidence.
   
3. The evidence must be such that, a Court when tasked with the task of assessing damages, must be satisfied, on the balance of probabilities, that the evidence before it supports such a claim.
   

Cases cited:

Papua New Guinea Cases
Eriare Lanyat & Ors v George Wagulo & The State [1997] PNGLR 253
Jonathan Mangope Paraia v The State N1343
Peter Wanis v Fred Sikiot & The State N1350
Tabie Mathias Koim v The State & Ors N1737
Obed Lalip & Ors v Fred Sikiot & The State N1457

Overseas cases
Bonham-Carter v Hyden Park Hotel Ltd (1948) 64 TLR 177
Counsel:

C. Jaminan, for the plaintiff
No appearance for the first, second, third and fourth defendants

DECISION

25 September, 2008

1. DAVANI .J: This is a claim by Andrew Poholi against the defendants for monies allegedly owing to him as a result of the following;
   

- Breach of an agreement to pay him his housing allowance;

- which then led to failure to complete a sale/purchase of a property;

- which actions amount to negligence by the defendants;

2. The plaintiff claims the sum of K204,077.00, general and special damages and costs.
   
3. This matter is before me for assessment of damages, default judgment having been entered on 10th November, 2006, against the first, second, third and fourth defendants.
   

Evidence

4. According to submissions put before me, Andrew Poholi relies solely on his affidavit sworn on 28th September, 2007 and filed on 26th October, 2007.
   
5. The matter proceeded in the absence of the defendants even though they were informed of the hearing date.
   

Issues

6. The only issue before this Court is whether Andrew Poholi is entitled to the damages that he seeks. The amounts sought by Andrew Poholi of K204,077.00 is made up of the following;
   
   • - the sum of K54,077.00 in unpaid housing allowance which the first and second defendants (Albert Potuku and Eagle Finance Ltd, respectively) failed to pay him whilst employed as Eagle Finance Limited's ('Eagle Finance') Manager;
     
   • - the sum of K150,000.00 being the market value of Andrew Poholi's property at the time the property was repossessed by the Bank of South Pacific Limited ('BSP') and sold by tender.
     

Analysis of evidence and the law

7. Prior to commencement of trial, I issued directions that Andrew Poholi conduct company searches of 3 named defendants to assist the Court in determining whether all defendants were and are properly registered entities and are viable. Searches were conducted and affidavits filed by Andrew Poholi sworn on 9th July, 2008. Extracts of company searches are attached confirming the following;
   
   • - Eagle Finance Limited;
   • Incorporated and registered on 28th July, 1998;
   • Registration status – operating.
     
   • - Visupp Investment Limited;
   • Incorporated and registered on 26th October, 1989;
   • Registration status – operating
     
   • - Eagle Hire Adventure Limited
   • Incorporated and registered on 4th January, 2000;
   • Registration status – operating.
     
8. The evidence is that, all three companies were properly registered and could be sued in that capacity as at 2nd February, 2006 when the Writ of Summons and Statement of Claim was filed.
   

1. Employment Contract
   

Andrew Poholi claims to have been employed by Eagle Finance as its Manager in or around October, 1998, and prior to that, was employed by the Bank of South Pacific ('BSP'). Attached to the affidavit is his Contract of Employment which states his conditions of employment. It is a three-page document which has, in the first page of that document, his remuneration package. It reads;

2. Statement of Claim
   

9. In the Statement of Claim, Andrew Poholi pleads that at the time he was employed, Eagle Finance was aware that he had a housing loan of K78,000.00 over a property located at Allotment 44 Section 208 Hohola Garden Hills (the 'Property'). He was also a tenant on the property.
   
10. The Statement of Claim pleads at pars. 8, 10, 11, 12, 13, 14, 15, 16, 17, 18 and 19 that because Eagle Finance wanted to extend the plaintiff's property by building a bedroom unit at the bottom of the property to accommodate Eagle Finance's other employees, and on reaching agreement with Andrew Poholi, that he then took out an additional loan of K30,000.00 to be repaid in monthly instalments of K2,000.00. BSP approved such a loan which was drawn down on 14th January, 2000. The Statement of Claims also pleads that on or about 23rd June, 2000, the additional loan was fully drawn but that the extension work was not completed "due to the quotation produced by the first and third defendants, being insufficient to complete the extension work". (par. 15 of Statement of Claim)
    
11. The Statement of Claim further pleads that on or about October, 2000 and thereafter, Albert Potuku and Eagle Finance made irregular payments to the BSP during the period 24th October, 2000 to 15th October, 2002, an amount of K23,923.00.
    
12. Andrew Poholi further alleges that because of Eagle Finance's inability to repay the loan, that Andrew Poholi went into arrears which then resulted in the bank conducting a mortgagee sale and selling the property at K90,000.00.
    
13. Andrew Poholi claims loss of unpaid housing allowance over a period of three years 5 months from July, 2000 to September, 2003, a sum of K78,000.00. This is reduced by K23,923.00, monies allegedly paid by Eagle Finance, leaving a balance owing in housing allowance to Andrew Poholi, of K54,077.00.
    
14. Andrew Poholi also claims loss of property being K150,000.00, what he claims to be the real market value of the property at the time of the purchase of the sale by tender.
    

3. Loss of housing allowance
   

15. Andrew Poholi alleges that it was Albert Potuku who promised an increase in his housing allowance which promise was made to the BSP and on which the additional loan was granted.
    
16. As evidence of his agreement or arrangement is Albert Potuku's letter to Andrew Poholi dated 26th November, 1999. This letter refers to a quotation of K20,000.00 for materials and K10,000.00 for labour, a total of K30,000.00 that would be required to complete the unit under Andrew Poholi's house. However, that letter is not on letterhead nor is there a letter from a contractor, if any, to either Albert Potuku and Andrew Poholi advising that K30,000.00 is the value of the extension work to be done to the house, and a description of the work to be done, which is the usual practise.
    
17. Also attached to that affidavit, is a letter dated 16th December, 1999 addressed to the Manager of BSP from Albert Potuku as Principal Director, advising and confirming Andrew Poholi's employment with Eagle Finance and that his accommodation allowance is K2,000.00 per month. The letter advises that the bank contact Albert Potuku with any queries. However, this letter is not on letterhead. If it is a copy, I do not understand why Albert Potuku is advising BSP that he will take out a standing order to meet the loan repayments, when based on the evidence, the BSP has yet to approve the loan. There is no evidence of loan approval for Andrew Poholi, from BSP.
    
18. As at 7th November, 2000, Andrew Poholi was allegedly in arrears to the Bank of South Pacific at K113,605.17. Before me is written advice to Andrew Poholi from BSP, letter which is undated and not on BSP's letterhead.
    
19. The letter advises of a first registered mortgage which is registered over the state lease to the property. However, a copy of the State Lease is not before me to verify the existence of the State Lease and the Mortgage.
    
20. This is followed by a "Notice to Vacate to Owners of the Property" dated 2nd March, 2001, allegedly signed by a representative of BSP. The letter is not on BSP's letterhead.
    
21. A letter dated 28th March, 2001 from BSP advises that although there was a standing order, it was for the month of November, 2000 only. It also advises of arrears in the sum of K9,358.69 which should be cleared by 6th April, 2001 and which if not cleared, will result in the BSP proceeding to further recovery. This letter is also not on BSP's letterhead.
    
22. Also before me, is a standing order authority from BSP dated 23rd April, 2001 to the credit of Andrew Poholi and to be debited against Nova Limited. This is attached to a letter from Albert Potuku dated 20th April, 2001 to the Manager, Lending Centre, BSP. It is not on letterhead nor is there a letter from BSP to Andrew Poholi either enclosing the standing order or advising that loan repayments will be by way of irrevocable authority and standing order.
    
23. There is also before me Notice to Vacate the Property dated 5th July, 2001 addressed to the occupiers of the property and allegedly signed by a representative of BSP. It is not on BSP's letterhead.
    
24. Before me also, is a Contract for Sale between Andrew Poholi and Eagle High Adventure Limited ("Eagle High'). Evidence is that this Contract for Sale and Purchase of the property was never lodged with the Department of Lands because the sale never took place. The Contract was drawn up because Eagle High had promised to purchase the property.
    
25. Because the Contracts were not lodged, Eagle Finance advised BSP that it would pay the outstanding arrears as it was expecting some monies from the State. However, this never occurred.
    
26. Eventually, Albert Potuku claims that the BSP, after many follow ups with Albert Potuku and Eagle Finance, decided to advertise the sale of the property by tender. Strickland Real Estate tendered the property at K131,000.00. Eagle Finance tendered for the property and was successful. It received that advice of the successful tender on 9th January, 2003. However, it failed to pay the 10% deposit of K13,100.00.
    
27. Andrew Poholi claims that the property was then re-advertised for sale and his family and him were evicted from the property after it was purchased by someone else for K90,000.00. Evidence of the re-advertisement is not before me. Also evidence of the tender advertisements, bank statements of Andrew Poholi's loan account with the BSP showing the outstanding arrears and advice from the BSP to Andrew Poholi of the mortgagee sale are not before me.
    
28. Therefore, evidence of a loan, if any, with BSP, has not been proven.
    
29. Is Andrew Poholi entitled to the amount of K54,077.00?
    
30. Andrew Poholi claims in the alternative, either breach of a Contract for Sale or negligence by the defendants for failing to pay the agreed housing allowance of K2,000.00.
    
31. In relation to the alleged breach of Agreement, although there is a letter before me allegedly from Eagle Finance to BSP, agreeing to pay K2,000.00 in repayment of the loan, that this letter is not on letterhead. Not only that, the payment of K2,000.00 was dependent very much on the quotation of K30,000.00 from the prospective construction firm. As I said earlier, I have not seen evidence of a quotation from a construction firm. The plaintiff must show the Court the basis on which he decided to take the risk of taking out an additional loan, and that is where the quotation from a construction firm is relevant and important. It is only upon sighting a quotation from a genuine construction firm, will the bank, any bank, approve a loan.
    
32. Another matter that perplexes me is the loan documentation from the bank. If the BSP agreed to increase the loan, then there must be a letter from it to Andrew Poholi agreeing to increase the loan facility. That is the usual standard banking practice. The Bank will only approve increase in existing loan facilities, after it has sighted a quotation from the construction firm and conducted its own investigations as to whether the customer is able to repay the loan or not. That is usual standard banking practice which I take judicial notice of. But the evidence before me from the bank is only confined to letters of demand and a standing order, which are not on letterhead.
    
33. Again, Andrew Poholi claims Eagle Finance agreed to increase his housing allowance to K2,000.00 per month based on the quotation of K30,000.00 it sent to him. Again, where is the evidence of the quotation from the construction firm? And where is the evidence of the BSP agreeing to increase the existing loan facility to K30,000.00? These are not before me. These materials are very crucial towards establishing that Andrew Poholi did take out an additional loan relying on quotation from a construction firm, whose quotation was approved by the BSP.
    
34. Another perplexing fact is that I cannot and do not see how a bank is willing to make a commercial decision to release additional loan funds without first ascertaining who the contractor is and secondly, without properly assessing the viability of repayment. Notwithstanding, the letters from Eagle Finance to the bank, apart from being hearsay and not on letterhead, are not evidence of approval of the additional loan.
    
35. As to Andrew Poholi's evidence that Eagle Finance paid K23,923.00 to the bank, there is no evidence from BSP, preferably a bank statement of Andrew Poholi's loan account, showing that he did pay K23,923.00, albeit, intermittently. There is no basis on which to find that Eagle Finance did pay K23,923.00 in satisfaction of Andrew Poholi's loan arrears. No evidence at all is before me.
    
36. The added difficulty this Court has is that because this claim is undefended, that the onus is upon the plaintiff to prove his case on the balance of probabilities, meaning it must ensure to place before the Court all the necessary evidence it has, to prove its case on the civil standard.
    
37. In support of all the above propositions, the Court has held that the plaintiff must prove his losses with credible evidence. A default judgment does not relieve the plaintiff from proving his loss; (see Tabie Mathias Koim v. The State & Ors (N1737) Injia J (as he then was) dated 26th February, 1998). The fact that default judgment was entered against the defendants does not mean that the plaintiff is automatically entitled to what he is claiming. When the Court is assessing damages, it must be satisfied that the plaintiff has proved his damages. The above principle is well established in the case of Peter Wanis v. Fred Sikiot & The State (N1350); Eriare Lanyat & Ors v George Wagulo & The State [1997] PNGLR 253; Obed Lalip & Ors v. Fred Sikiot & The State (N1457); Jonathan Mangope Paraia v. The State (N1343). In Bonham-Carter v Hyden Park Hotel Ltd (1948) 64 TLR 177 at p. 178, Lord Goddard C.J. held as follows;
    

"Plaintiff must understand that if they bring action for damages,, it is not enough to write down particulars and so to speak, throw them at the head of the Court saying – This is what I have lost, I ask you to give me these damages, they have to prove it".

38. It is not sufficient for the plaintiff to simply provide documentation that do not support the basis from which this claim arises. It must be good, credible, evidence.
    
39. Therefore, in relation to the claim for payment of K54,077.00, I find that the plaintiff has not proven on the balance of probabilities that he is owed the sum of K54,077.00 from the four defendants or at least, one of them.
    
40. As to the claim for K150,000.00, there is no evidence before me proving that the property is worth K150,000.00. It would have been prudent for Andrew Poholi to bring evidence of how much the property was worth at that time, ie. From a valuer. That evidence is not before me. Because there is no evidence of the value of that property, I am unable to make the award sought.
    
41. In the way of special damages, it is dependent very much on the success of the claim for general damages. As I have seen, Andrew Poholi did not put before me evidence of a loan with the BSP, taken out, based on a quotation from a construction company. Because that part of the claim has failed, the claim for special damages will not succeed as there is no nexus between the two. Not only that, the plaintiff has not attached any evidence of airline tickets or purchases he made in relation to this claim. He has also not put before me evidence from the various schools his children attended, confirming that they did attend these schools and the school fees paid. I will not make any awards for special damages.
    
42. A court has the very unenviable task of deciding whether to order the defendants to pay the plaintiff or not. And before a court can do that, it must satisfy itself that the plaintiff has put before it the evidence on which to make such an award. The evidence must not only be credible but sufficient to establish or prove that certain amounts of monies were paid or are owing and must now be paid or repaid. The evidence must be such that a court when tasked with the task of assessing damages, must be satisfied, on the balance of probabilities, that the evidence before it supports such a claim.
43. In relation to this case, although the plaintiff is claiming damages against four defendants, he has not proven to my satisfaction, that at least one of them owes money to the plaintiff. In fact, there is no evidence at all against the third and fourth defendants.
    
44. A court should not make orders for payment unless there is good, credible evidence on which to make orders supporting such a claim.
    
45. I make no orders as to costs.
    

________________________________

Jaminan Lawyers: Lawyer for plaintiff

No appearance for the first, second, third and fourth defendants