N4321

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 564 OF 2003

RUTH WAMA
Plaintiff

V

JOHN KAMA BURI
First Defendant

ANNA BURI
Second Defendant

Madang: Cannings J
2010: 9 July, 10 September;
2011: 22 June

JUDGMENT

TRIAL – negligence – liability – fire allegedly caused by defendants destroyed plaintiff's trade store.

DAMAGES – measure of – plaintiff claims damages for: loss of trade store stocks; business losses.

The plaintiff leased the ground floor of a two-storey building owned by the defendants and had used it as a trade store for one year when the building and its contents, including the plaintiff's store goods, were destroyed by fire. The plaintiff commenced proceedings against the defendants claiming damages for negligence.

Held:

(1)	The plaintiff's evidence was sufficient to prove, on the balance of probabilities, that her version of events was correct and that the defendants were negligent.

(2)	The plaintiff succeeded in establishing a cause of action in negligence against the defendants.

(3)	Damages were assessed at K6,329.20, and the plaintiff was awarded interest of K4,101.32, being a total judgment sum of K10,430.52.

Cases cited

The following cases are cited in the judgment:

Abel Kopen v The State [1988-89] PNGLR 655
Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24
Daniel Jifok v Kambang Holdings Ltd (2008) N3475
Dempsey v Project Pacific Ltd [1985] PNGLR 93
Edwards v Jordan Lighting [1978] PNGLR 273
Graham Mappa v ELCOM (1992) N1093
Jonathan Mangope Paraia v The State (1995) N1343
Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC837
Misac Pokonoming v Jeffery Simiri WS 1596/2005, 26.10.07
Otto Benal Magiten v Bilding Tabai (2008) N3470

TRIAL

This was a trial on liability and damages.

Counsel

Y Wadau, for the plaintiff
P Kunai, for the defendants

22 June, 2011

1. CANNINGS J: The plaintiff leased the ground floor of a two-storey building owned by the defendants and had used it as a trade store for one year when the building and its contents, including the plaintiff's store goods, were destroyed by fire. The plaintiff commenced proceedings against the defendants claiming damages of K194,292.00 for negligence.

2. The building was at Newtown in Madang town, Section 152, Allotment 4. The defendants, John Kama Buri and Anna Buri, were the registered proprietors. The plaintiff, Ruth Wama, had been paying rent of K1,000.00 per month when the fire occurred on the afternoon of Sunday 13 June 1999. 3. The defendants occupied the top floor and used it as a residence. They deny liability. They say that the plaintiff should be responsible for her own losses as the fire started on the ground floor. In the event that they are found liable they argue that the plaintiff should be awarded nothing as she has not proven any losses. A trial has been held on both liability and damages.

4. Mr Wadau, for the plaintiff, raised a preliminary point arising from the failure of the defendants to verify their defence. He submitted that in these circumstances the court should enter default judgment against the defendants.

5. The issues are:

1	Should default judgment be entered against the defendants? If not –

2	Has the plaintiff proven that the defendants were negligent?

3	Are the defendants liable in negligence? And, if the defendants are liable –

4	What damages is the plaintiff entitled to?

1	SHOULD DEFAULT JUDGMENT BE ENTERED AGAINST THE DEFENDANTS?

6. The argument that default judgment should be entered is based on Order 8, Rule 24(1) (defence: verification) of the National Court Rules, which states:

Where a plaintiff, by his statement of claim, makes a claim against a defendant for a liquidated demand, but no other claim, and the statement of claim bears a note requiring the defendant to verify his defence, the defendant shall verify his defence, that is to say, he shall, within the time limited for filing his defence, file an affidavit verifying his defence to the claim in accordance with this Rule.

7. Mr Wadau submits that, as no verifying affidavit was filed by the defendants, their defence should be struck out and judgment entered for the plaintiff.

8. It is true that the defendants did not file an affidavit verifying their defence. However, the plaintiff cannot gain the benefit of this rule as her claim is not for a liquidated demand, which is a claim the value of which is capable of being ascertained by a simple calculation, where there is no element of assessment and it is in the nature of a debt (Dempsey v Project Pacific Ltd [1985] PNGLR 93, Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC837). I will not strike out the defence. Therefore the application for default judgment is refused.

2	HAS THE PLAINTIFF PROVEN THAT THE DEFENDANTS WERE NEGLIGENT?

9. Mr Kunai, for the defendants, submitted that the plaintiff's case is based on mere allegations which are not supported by facts. A coronial inquest conducted by his Worship Mr Mark Selefkariu concluded in 2001 that the cause of the fire was unknown. Therefore the plaintiff has not proven her case.

10. I reject this submission as Mr Kunai's submission fails to mention one critical finding of the Coroner: that the fire started in one of the bedrooms on the top floor. That finding was made following an extensive inquest conducted under the Coroners Act. Ten witnesses gave oral testimony and the findings were recorded in a 22-page written report which has been admitted into evidence in these proceedings. I am not bound by those findings but, having considered the report, together with the plaintiff's evidence that she was present when the fire started and that it started in the top floor, I conclude that the fire did, in fact, start in one of the bedrooms on the top floor. The only reasonable inference that can be drawn from this is that the defendants, who had full possession and control of the top floor of the building, did something negligently that allowed the fire to start there. The doctrine of res ipsa loquitur applies: the thing speaks for itself. It is obvious that someone has been negligent, and the presumption is that it was the defendants. The doctrine has been pleaded in paragraph 12(3) of the statement of claim (even though it was not necessary to do so: Edwards v Jordan Lighting [1978] PNGLR 273) and it has been raised in submissions. It was therefore incumbent on the defendants to prove that they were not negligent. This has not been done. The defendants adduced no evidence. Therefore I find it proven on the balance of probabilities that the defendants were negligent.

3	ARE THE DEFENDANTS LIABLE?

11. Negligence is a tort (a civil wrong) consisting of five elements. The plaintiff must prove that:

•	the defendants owed her a duty of care;
•	they breached that duty (ie acted negligently);
•	the breach of duty caused her damage;
•	the type of damage was not too remote; and
•	she did not contribute to her own detriment, eg by being contributorily negligent or voluntarily assuming the risk of detriment.

(Otto Benal Magiten v Bilding Tabai (2008) N3470).

12. The plaintiff has proven all those elements. The defendants, as lessors and co-occupiers of the premises, owed a duty of care to the plaintiff (as lessee and co-occupier). They breached the duty of care by negligently allowing a fire to start on the top floor. This caused damage and losses to the plaintiff, which are not of a type that are too remote. There is no evidence that the plaintiff is guilty of contributorily negligence or that she voluntarily assumed the risk of detriment. The defendants are therefore liable in negligence.

4	WHAT DAMAGES IS THE PLAINTIFF ENTITLED TO?

13. The plaintiff is claiming:

•	K43,292.00 for damages to trade store goods and other property;
•	K125,800.00 for loss of trading; and
•	K25,200.00 as loss of salaries,

her total claim being K194,292.00.

Damages to trade store goods

14. The only evidence in support of this claim is the plaintiff's affidavit deposing that there was in the store at the time of the fire trade store goods and other property (itemised in a schedule to the affidavit) worth K43,292.00. Interestingly she deposes that among the property that was burned was K5,360.00 cash. It is difficult to believe that a storekeeper would not be able to retrieve her cash before leaving a store that was being encroached upon by a fire that was observed to have started in another part of the building. It is reasonably to have been expected – given the way the fire is described in the plaintiff's affidavit – that she would have been able to grab, at least, the cash and retrieve some store goods before evacuating the premises. It was not an explosion. The contention that all the goods in the store, including a substantial amount of cash, were lost, is not credible and is rejected.

15. Another problem with the special damages claim is that there is no corroboration of the plaintiff's evidence. The explanation for this is that all receipts and invoices were burned in the fire. It is easy to accept that that is true. But invoices and receipts would readily be available in respect of most of the items, which are store goods such as tinned fish (for which K2,600.00 is claimed) and rice (K1,835.00). Such goods would surely have been purchased from a wholesaler who would have records of sale of the items to the plaintiff.

16. So there is very little evidence to support the plaintiff's claim and I will have to estimate what is reasonable. The defendants want me to award her nothing but I do not think that would be doing justice. The plaintiff has proven that due to the negligence of the defendants she lost some property. I will award special damages equal to ten per cent of the value claimed: K4,329.20.

Loss of trading

17. The plaintiff is claiming business losses of K125,800.00. She deposes that the store's turnover was K8,000.00 per month and that the only expense was monthly rental of K1,000.00. She seeks damages for a period of about 18 months.

18. There is no difficulty with the legal basis of this claim. If a defendant negligently causes damage to a plaintiff's profit-earning assets, the plaintiff is entitled to damages to compensate her for profits lost during the period that is reasonable to repair or replace the assets (Abel Kopen v The State [1988-89] PNGLR 655). Again, however, there is a problem with the evidence. There is nothing to support the claim other than bald assertions in the plaintiff's affidavit. It has been pointed out in many previous cases that a plaintiff seeking damages for economic loss should provide an audited set of accounts to verify the claim. On the other hand, if that evidence is not forthcoming, it does not follow, necessarily, that the plaintiff will be awarded nothing. The court will do the best it can on the evidence that is available (Graham Mappa v ELCOM (1992) N1093; Jonathan Mangope Paraia v The State (1995) N1343; Misac Pokonoming v Jeffery Simiri WS 1596/2005, 26.10.07; Daniel Jifok v Kambang Holdings Ltd (2008) N3475).

19. I estimate on the available evidence that the plaintiff's true net profit per month was K2,000.00 and that the reasonable period for her to replace the income-earning assets (the store goods), given that she held only a periodic tenancy of one month, was one month. Thus K2,000.00 is awarded for trading losses.

Loss of salaries

20. The plaintiff claims K26,280.00 for salaries said to be payable to four storekeepers and a manager over an 18-month period. This is a spurious claim, which would only have a chance of succeeding if it were proven that the plaintiff was contractually obliged to keep paying her employees despite the business no longer operating. There is no evidence of this, so I award nothing.

Summary of damages awarded

•	Damages to trade store goods		 = K4,329.20
•	Loss of trading				 = K2,000.00
•	Loss of salaries				 = 0
•	Total damages				 = K6,329.20

INTEREST

21. In the statement of claim the plaintiff claimed interest under the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. Section 1(1) is the appropriate provision. As Bredmeyer J pointed out in Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24, this provision confers a four-fold discretion on the Judge: (a) whether to grant interest at all; (b) to fix the rate; (c) to grant interest on the whole or part of the debt or damages for which judgment has been given; and (d) to fix the period for which interest will run. I exercise that discretion in the following way:

(a)	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.

(b)	The conventional rate of interest is 8%. In view of current economic conditions in the country I think 8% is the proper rate of interest.

(c)	Interest should be payable on the whole of the sum for which judgment is given.

(d)	The appropriate period is from the date on which the writ was served (8 May 2003) to the date of judgment (22 June 2011): 8.1 years.

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

•	D x I x N = A

Where:

•	D is damages;
•	I is the rate of interest;
•	N is the numbers of years;
•	A is the amount of interest.

Thus:

•	K6,329.20 x 0.08 x 8.1 = K4,101.32.

COSTS

23. 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. In view of the amount of damages claimed by the plaintiff, K194,292.00, both sides have had a victory of sorts. It is appropriate in these circumstances that they pay their own costs.

ORDER

(1)	The defendants are liable in negligence to the plaintiff, who has established that she is entitled to damages.
 
(2)	The defendants shall pay to the plaintiff damages of K6,329.20 plus interest of K4,101.32, being a total judgment sum of K10,430.52.

(3)	The parties shall bear their own costs.

(4)	Time for entry of the order is abridged to the date of settlement by the Registrar which shall take place forthwith.

Orders accordingly.
____________________________
Young Wadau Lawyers: Lawyers for the plaintiff
Kunai & Co Lawyers: Lawyers for the defendants