N3923

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 357 OF 2007

BETWEEN:

ALOIS KAWA, FOR HIMSELF, & FOR & ON BEHALF OF DOROTHY KAWA 
& AS NEXT FRIEND OF ROSALIE KAWA, NIGEL KAWA, ANNETTE KAWA, 
DAPHNE KAWA, GHAI KAWA & JOE KAWA, ALL INFANTS
Plaintiff

AND

HANS YOB, FOR HIMSELF & 
ON BEHALF OF GUM VILLAGERS, MADANG PROVINCE
First Defendant

AND:

BUNAG KIUP
Second Defendant

AND:

COMMISSIONER OF POLICE
Third Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Madang: Cannings J

2009: 24 July, 29 September,
16 October,
2010: 19 February

JUDGMENT

DAMAGES – assessment of damages – negligence – negligent failure by Police to protect plaintiff and his premises from attack and destruction of properties by village residents – failure to enforce court order prohibiting villagers from entering premises

A group of villagers raided the plaintiff’s premises on which he had a family home and had established a number of businesses, including a guesthouse, restaurant, bar and canteen, medical store and mechanical workshop. The villagers burned, destroyed and/or stole properties, and as a result the plaintiff’s businesses ceased to function. He had 16 months earlier obtained a National Court order restraining the villagers from entering his premises and threatening or intimidating him and delivered the order to the local police, and asked the police to serve it on the villagers. The police failed to enforce the order. The plaintiff sued the villagers (the first and second defendants) and the Commissioner of Police and the State (the third and fourth defendants). He obtained default judgment against the Commissioner and the State, the principal cause of action being negligence on the part of the police in failing to enforce the National Court order. The proceedings against the villagers have not been pursued. A trial was held to assess damages against the Commissioner and the State.

Held:

(1)	The plaintiff claimed seven categories of damages, totalling K19,438,600.00. He was awarded a total sum of K441,000.00.

(2)	In addition, interest of K144,648.00 is payable, making the total judgment K585,648.00.

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
Coecon v National Fisheries Authority (2002) N2182
Dia Kopio v Employment Authority of Enga and Others (1999) N1865
Eles Jay Clothing Ltd v The State WS No 858 of 1998, 29.09.06
Graham Mappa v ELCOM (1992) N1093
James Liwa v Markis Vanimo (2008) N3486
Jonathan Mangope Paraia v The State (1995) N1343
Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331
Marcus Mong v John Selou (2002) N2208
Misac Pokonoming v Jeffery Simiri WS 1596/2005, 26.10.07
Nelson Pawa v Linus Yumbun (2009) N3784
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

TRIAL

This was a trial on assessment of damages.

Counsel

S Toggo, for the plaintiff
G Odu, for the third and fourth defendants

19 February, 2010

1. CANNINGS J: This is an assessment of damages against the Commissioner of Police and the State (the third and fourth defendants). They have been found liable for the negligence of the Madang Police in not protecting the plaintiff, Dr Alois Kawa, against a violent raid staged by residents of Gum village on his premises at Gum on the outskirts of Madang town.

2. On 1 January 2006 the villagers (the first and second defendants) raided Dr Kawa’s premises, known as Portion 505, on which, he claims, he had a family home and conducted a number of businesses, including a guesthouse, restaurant, bar and canteen, medical store and mechanical workshop. They burned and destroyed the buildings and stole things from within them, as a result of which Dr Kawa’s businesses have ceased to function. They assaulted and injured Dr Kawa. The events of the day have caused him physical and psychological trauma and led to estrangement from his wife and children.

3. Dr Kawa had since 2002 been in conflict with the villagers and in August 2004 obtained a National Court order restraining them from entering his premises and threatening or intimidating him. He delivered the order to the local police immediately after it was made and asked the police to serve it on the villagers. The police, however, failed to enforce the order.

4. Dr Kawa sued the villagers and the Commissioner of Police and the State. On 14 May 2008 he obtained default judgment against the Commissioner and the State. The principal cause of action is negligence on the part of the police in failing to enforce the National Court order. The case against the villagers has not been pursued. A trial was held to assess damages against the Commissioner and the State. He seeks seven categories of damages, totalling about K19.5 million.

1	LOSS OF PROPERTY

5. Seven sub-categories of damages are claimed:

(a) guesthouse – claimed to consist of 12 rooms, fully tenanted at the time of the raid – damages sought: K2 million;

(b) residential home – claimed to be a permanent high-covenant house, a ‘magnificent, huge and beautiful home’ – damages sought: K500,000.00;

(c) restaurant, guest bar and canteen – claimed to be all in the same building – damages sought (including lost stock): K1 million;

(d) medical store – claimed to contain expensive medicines and accessories for use in clinics and hospitals that were utterly destroyed in the inferno – damages sought: K3 million;

(e) plaintiff’s personal effects – claimed to consist of clothes, utensil and other personal things that were destroyed when the residential home was destroyed – damages sought: K500,000.00;

(f) workshop – claimed to hold equipment used to fix motor vehicles, tyres and also carpentry tools, equipment and accessories – damages sought: K2 million;

(g) motor vehicle – this is actually a separate claim in detinue (a cause of action in tort, constituted by unlawful possession of a person’s property), which is not directly related to the raid of 1 January 2006 – the plaintiff claims that the vehicle, a Nissan Navara 2 x 4 utility, was unlawfully detained by the Madang Police on 19 August 2005 – damages sought: K30,000.00;

5. There is a paucity of evidence in support of these claims. As to the guesthouse, for example, the only evidence that it was worth K2 million is in the form of brief statements in the plaintiff’s supporting affidavits (exhibits A and D) and a collection of photographs.

6. In para 9 of exhibit A he states:

I built a guest house worth about K2,000,000.00 with all the white goods in it on my premises that were destroyed. The business used to make a turnover of about K20,000.00 a month from the four units that were normally fully occupied because it was located just outside Madang town beside a river with natural vegetation and villages surrounding it. It was a perfect place to relax but within range of town for shopping and amenities.

7. In paras 5 and 6 of exhibit D he states that at various times he had employees of Shorncliffe (PNG) Ltd and Bank of South Pacific Ltd staying in the guesthouse, which generated revenue of K20,000.00 per month. From these statements it is possible to infer that the guesthouse was a substantial structure but drawing the inference that it had a value of K2 million is another matter altogether.

8. There are 12 photographs of what Dr Kawa calls the "ruins" of his premises. They are certainly a depiction of the ruins of something but it is impossible without further explanation or evidence to conclude that they are photographs of a ruined guesthouse; or for that matter a residential house, medical store or workshop. The evidence is scanty indeed.

9. At this juncture it is necessary to refer to some general principles about assessment of damages, in particular:

- 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).

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

- 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).

- The same principles apply after default judgment is entered and the trial is just on assessment of damages. A person who obtains a default judgment is not entitled as of right to receive any damages. Damage suffered must still be proved by credible evidence (Yange Lagan and Others v The State (1995) N1369).

- 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).

10. Applying those principles I conclude that even though the defendants have not presented any evidence the plaintiff has fallen well short of proving that the guesthouse was worth K2 million. 

11. There is no independent corroboration of the claim. All that has been proven (and only because it was not disputed by the defendants) is that the plaintiff had a guesthouse on his premises and that it was destroyed. Given the vague and unsubstantiated nature of the claim, I have considered making a zero assessment in relation to the guesthouse. 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 five per cent of what is sought, ie K100,000.00.

12. The state of the evidence is similar in relation to the residential home, the restaurant, guest bar and canteen, the plaintiff’s personal effects and the workshop. I will award five per cent of what is claimed.

13. As to the medical store, it is hard to believe that it would have had a value of K3 million, even if the value of its contents was included. Records should have been presented to the court that the store was licensed and that all the requirements of the Poisons and Dangerous Substances Act Chapter 231 and the Medicines and Cosmetics Act 1999 had been complied with. I will award only 2.5 per cent of this claim.

14. As to the motor vehicle, it is said to be worth K30,000.00. A valuation by F Poma, Workshop Manager, of Coastal Automotive of Madang is annexed to Dr Kawa’s affidavit. It is a bald statement, unsupported by any comparative or verifying data, that the vehicle is valued at K30,000.00. Seven photographs of the vehicle are annexed to the affidavit. They do not in my assessment depict a vehicle that any reasonable person would value at K30,000.00. I award K10,000.00.

15. Table 1 summarises the amounts claimed and awarded.

TABLE 1: LOSS OF PROPERTY

No	Sub-category of claim	Amount claimed (K)	Amount awarded (K)	
(a)	Guesthouse	2,000,000.00	100,000.00	
(b)	Residential home	500,000.00	25,000.00	
(c)	Restaurant, bar & canteen 	1,000,000.00	50,000.00	
(d)	Medical store	3,000,000.00	75,000.00	
(e)	Plaintiff’s personal effects	 500,000.00	25,000.00	
(f)	Workshop	2,000,000.00	100,000.00	
(g)	Motor vehicle 	30,000.00	10,000.00	
Total	9,030,000.00	385,000.00	

2	FUTURE ECONOMIC LOSS

16. The plaintiff claims that of the six items of property that were destroyed, four were income-earning assets: the guesthouse, the restaurant, bar and canteen, the medical store and the workshop. He claims that he intended to earn income from those assets for 11 years after the date of the incident; he was 49 years old at the time and planned to rely on the income until he turned 60. The guesthouse, he claims, would have generated K20,000.00 per month x 12 months x 11 years = K2,640,000.00.

17. Just as with the claimed value of these assets, which I discounted heavily in assessing damages for loss of property, there is very little evidence to go on. The courts are increasingly alert to spurious claims for lost profits in the case of businesses that appear to have been operated outside the lawful market (Graham Mappa v ELCOM (1992) N1093; Jonathan Mangope Paraia v The State (1995) N1343; Marcus Mong v John Selou (2002) N2208; Eles Jay Clothing Ltd v The State WS No 858 of 1998, 29.09.06; Misac Pokonoming v Jeffery Simiri WS 1596/2005, 26.10.07; James Liwa v Markis Vanimo (2008) N3486; Nelson Pawa v Linus Yumbun (2009) N3784). There is no evidence that Dr Kawa was operating his businesses under any conventional corporate structure or that they were registered in any way or that income tax was being paid. No business records are available. Dr Kawa attempts to explain this away by saying that all his business records were destroyed in the inferno on 1 January 2006. I do not doubt that. But if the businesses were being conducted in a conventional and regular manner, copies of records would be readily available from the Internal Revenue Commission, from banks or other financial institutions or from other businesses (eg pharmaceutical suppliers) with which Dr Kawa was doing business.

18. I regard the amounts claimed – K2.64 million for the guesthouse, K2.64 million for the restaurant, bar and canteen, K3.3 million for the medical store and K2.64 million for the workshop – as outlandish. I award nothing for future economic loss.

3	AGGRAVATED DAMAGES

19. The sum of K10,000.00 in ‘aggravated damages’ is claimed in respect of each of the four years since the commencement of the plaintiff’s businesses in mid-2002 until the date of the raid by the villagers: a total of K35,000.00. Mr Toggo, for the plaintiff, asserts that Dr Kawa’s premises were the subject of regular attacks and raids by Gum villagers during this period.

20. I reject this claim for three reasons. First, it is not pleaded in the statement of claim. Secondly, it does not relate to the cause of action, which is the negligence of the Madang police in failing to enforce the National Court order of August 2004. Thirdly, any claim for aggravated damages should be brought under the rubric of exemplary damages, which is dealt with below.

4	MENTAL AND PSYCHOLOGICAL INJURIES

21. The plaintiff is claiming K70,000.00 for himself; K10,000.00 on behalf of his wife and K20,000.00 on behalf of his children, a total of K100,000.00.

22. As for his wife and children, it appears that they have been seriously affected by what happened on 1 January 2006. Dr Kawa has given evidence of the breakdown in his marriage and the trauma suffered by his wife and children. However, there is no direct evidence from Dr Kawa’s wife and none relating directly to the children. I will award half of the amounts claimed, ie K5,000.00 for Dr Kawa’s wife, and K10,000.00 for the children. As for the effect on Dr Kawa himself, there is medical evidence that he has been adversely affected. I will award half of the amount claimed, ie K35,000.00.

5	EXEMPLARY DAMAGES

23. Mr Toggo submits that the defendants should be punished for the contumelious conduct of the Madang police (ie their wilful failure to enforce the court order of August 2004) by being subject to an award of exemplary damages of K20,000.00.

24. I reject this claim for two reasons. First, it is not sought in the statement of claim. Secondly, it does not meet the requirements of Section 12(1) of the Claims By and Against the State Act 1996, which states:

No exemplary damages may be awarded against the State unless it appears to the court that, regardless of the nature of the claim, there has been a breach of Constitutional rights so severe or continuous as to warrant an award of exemplary damages.

25. The principle cause of action relied on by the plaintiff is negligence, not breach of constitutional rights, or human rights. Nothing is awarded for exemplary damages.

6	ASSAULT AND BATTERY

26. Dr Kawa has given evidence that when the villagers raided his premises they assaulted him and beat him with rocks, sticks and other missiles. There is some medical evidence to verify these claims and it is not seriously disputed that he was assaulted. He claims K20,000.00 but the evidence does not support an award of that amount. I allow K5,000.00.

7	SPECIAL DAMAGES

27. Dr Kawa says he spent K200,000.00 cleaning up the mess created by the villagers plus K2,000.00 on funeral expenses for a person who was killed during the siege plus K5,000.00 on his medical costs. There is insufficient evidence in support of these claims. I will allow only K1,000.00 for medical costs. Nothing is awarded for cleaning or funeral expenses.

MITIGATION AND CONTINGENCIES
 
28. A plaintiff who has been wronged has a duty to mitigate his losses; though it is the defendant who has the onus of proving failure to mitigate (Dia Kopio v Employment Authority of Enga and Others (1999) N1865; Coecon v National Fisheries Authority (2002) N2182). There is evidence that Dr Kawa has found alternative employment and made a genuine attempt to get his life and livelihood back in order following the events of 1 January 2006 and has earned K71,400.00. The defendants have failed to prove that he has taken insufficient steps to mitigate his losses. I will not discount the award of damages for failure to mitigate.

29. As for contingencies, Mr Toggo suggested that the plaintiff’s K11.22 million claim for economic loss could be discounted by 10 per cent. He was willing to reduce the total claim for damages by K1,122,000.00 + K71,400.00 = K1,193,400.00. However, as there is no discount for failure to mitigate and I have awarded nothing for future economic loss, the question of contingencies is irrelevant. Nothing will be deducted on account of failure to mitigate or contingencies. 

CONCLUSION

30. The plaintiff’s case suffers from a shortage of evidence. This is reflected in table 2.

TABLE 2: SUMMARY OF AMOUNTS CLAIMED AND AWARDED

No	Category of claim	Amount claimed (K)	Amount awarded (K)	
1	Loss of property	9,030,000.00	385,000.00	
2	Future economic loss	11,220,000.00	0	
3	Aggravated damages	35,000.00	0	
4	Mental & psychological 	100,000.00	50,000.00	
5	Exemplary damages	20,000.00	0	
6	Assault & battery	20,000.00	5,000.00	
7	Special damages 	207,000.00	1,000.00	
Less	Mitigation & contingencies	1,193,400.00	0	
Total	19,438,600.00	441,000.00	

INTEREST

31. In the statement of claim the plaintiff claimed interest. The relevant law is Section 1(1) of the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52, which states:

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.

32. 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.

33. 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 commencement date for the appropriate period will be when the cause of action accrued, 1 January 2006. The end of the period is the date of judgment, 19 February 2010. The appropriate period, for the sake of mathematical convenience, is 4.1 years.

34. 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:

•	K441,000.00 x 0.08 x 4.1 = K144,648.00

COSTS

35. 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.

JUDGMENT

36. I direct entry of judgment in the following terms:

(1) damages, payable by the third and fourth defendants to the plaintiff, of K441,000.00;

(2) interest, payable by the third and fourth defendants to the plaintiff, of K144,648.00;

(3) being a total judgment lump sum of K585,648.00;

(4) costs of the proceedings shall be paid by the third and fourth defendants to the plaintiff on a party-party basis, to be taxed if not agreed.

Judgment accordingly.

_____________________________
Daniels & Associates: Lawyers for the Plaintiff
Solicitor-General: Lawyer for the 3rd & 4th Defendants