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Madang Reforestation Co Ltd v Mario [2016] PGNC 316; N6516 (11 November 2016)

N6516

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 789 OF 2013

MADANG REFORESTATION CO LTD
First Plaintiff

BRUNO DENFOP
Second Plaintiff

V

WU-JU MARIO
First Defendant

GOGOL REFORESTATION CO LIMITED
Second Defendant

JANT LIMITED

Third Defendant

Madang: Cannings J

2016: 18, 31 October, 11 November

DAMAGES – breach of contract – assessment of debt and damages following trial on liability – failure by defendants to terminate reforestation contracts in accordance with terms – claim for debts due for work done by plaintiffs under two contracts – claim for damages for mental anxiety and suffering – claim for damages for business loss.

The plaintiffs established liability in breach of contract against the third defendant, a timber company, due to its failure to terminate two reforestation contracts with the first plaintiff (which is owned and controlled by the second plaintiff) in accordance with its terms. The contracts provided that the third defendant give one month notice in writing of its intention to terminate the contract; in fact, no notice was given. At this trial on assessment of debt and damages, the plaintiffs claimed a total debt of K289,016.40 due in respect of the two contracts plus damages of K50,000.00 for mental anxiety, suffering and inconvenience suffered by the second plaintiff plus damages of K83,884.90 for business losses incurred by the first plaintiff. The defendants argued that nothing should be awarded in respect of either the debt claimor the damages claims as the pleadings were vague and there was no evidence to support them.

Held:

(1) The claim of the first plaintiff for debt, as distinct from damages, was adequately pleaded. However, there was a dearth of evidence to support it. Only 10% of the claim of K289,016.40 was awarded = K28,901.64.

(2) The claim of the second plaintiff for damages for mental anxiety, suffering and inconvenience was poorly pleaded, lacking in evidence and misconceived as the second plaintiff was not a party to either of the contracts, breach of which had given rise to liability. Nothing was awarded.

(3) The claim of the first plaintiff for business losses was poorly pleaded and lacking in evidence. Nothing was awarded.

(4) The total award for the first plaintiff of debt (K28,901.64) and damages (0) was K28,901.64; in addition, interest of K7,630.03 was awarded. The total judgment sum, payable by the third defendant to the first plaintiff, was K36,531.67. The second plaintiff was awarded nothing. The second defendant was not liable to any extent. The parties were ordered to bear their own costs.

Cases cited

The following cases are cited in the judgment:

Albert Baine v The State (1995) N1335
Graham Mappa v ELCOM (1992) N1093
Jonathan Mangope Paraia v The State (1995) N1343
Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331
Leeway East Enterprise Ltd v Daniel Danaben (2013) N4951
Yooken Paklin v The State (2001) N2212

ASSESSMENT

This was a trial on assessment of debt and damages for breach of contract.

Counsel:

B Denfop, the Second Plaintiff, in person, for both Plaintiffs
D F Wa’au, for the Defendants

11 November, 2016

1. CANNINGS J: This has been a trial on assessment of debt and damages. The plaintiffs, Madang Reforestation Co Ltd (first plaintiff) and Bruno Denfop (second plaintiff), established liability in breach of contract against Gogol Reforestation Co Ltd (second defendant) and Jant Ltd (third defendant), due to their failure to terminate two reforestation contracts with the first plaintiff in accordance with their terms. Liability was not established against the first defendant, Wu-Ju Mario, and the case against him was dismissed. The second plaintiff owns and controls the first plaintiff.
   
2. It was clarified at the present trial that the plaintiffs are seeking an award of debt and damages in respect of two contracts:
   

• a contract between the first plaintiff and the third defendant dated 1 May 2010, due to run until 30 August 2011 (the “first contract”);
  
• a contract between the first plaintiff and the third defendant dated 8 September 2010, due to run until 3 December 2010 (the “second contract”).
  

3. The plaintiffs claimed a debt of K289,016.40 due in respect of the two contracts plus damages of K50,000.00 for mental anxiety, suffering and inconvenience suffered by the second plaintiff plus damages of K83,884.90 for business losses incurred by the first plaintiff, a total claim of K422,901.30.
   
4. The defendants argued that nothing should be awarded in respect of either the debt claim or the damages claims as the pleadings were vague and there was no evidence to support them.
   

1 DEBT

5. Mr Denfop, for the plaintiffs, submitted that the first plaintiff should be awarded the following amounts:
   

• for the first contract: K119,835.60, for reforestation work done in accordance with the contract in August and September 2010, but not yet paid for;
  
• for the second contract: K169,180.80, for reforestation work done in accordance with the contract from September to December 2010, but not yet paid for;
  
• being a total of K289,016.40.
  

6. Mr Wa’au, for the defendants, submitted that nothing should be awarded as the first plaintiff had been paid K12, 276.20 for the work actually done under the first contract and K16, 911.70 for the work actually done under the second contract. Furthermore, the pleadings were vague and there was no evidence to support the claim.
   
7. I cannot accept Mr Wa’au’s submission as to the amounts actually paid, as the defendants presented no evidence at the trial. There is no evidence to support the submission and it is rejected. I also reject the submission as to this part of the statement of claim being vague. It is adequately pleaded.
   
8. Mr Wa’au’s submission about the lack of evidence carries more weight. However, it must be pointed out that there is some evidence in support of the claim. Mr Denfop has given sworn evidence in his supporting affidavits, which have been admitted into evidence that the reforestation work was actually done, and the third defendant has not paid for it. However there is a dearth of detailed evidence to corroborate it. Affidavits by Mr Dunlop’s colleagues, Siurei Tuwaup and Luke Ulad, provide only general support for the allegation that the work was actually done. Nowhere in the evidence is there the normal sort of business records, such as job cards, invoices and counter-signed records, to show that the work was actually done and to explain how the amounts were calculated.
   
9. At this juncture, in view of the deficiencies in the evidence, it is appropriate to call upon some pertinent principles for assessment of damages:
   

• the plaintiff has the onus of proving its loss on the balance of probabilities, it is not sufficient to make assertions in a statement of claim and simply 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 (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 fact that damages cannot be assessed with certainty does not necessarily 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 (Graham Mappa v ELCOM (1992) N1093, Jonathan Mangope Paraia v The State (1995) N1343).
  

10. The best the Court can do in this case is, on the one hand to view with scepticism the claim that the third defendant allowed a debt of K289, 016.40 to accrue in such a short period, without paying anything, and on the other hand, to find that it is highly likely that the first plaintiff did some work, for which it was not paid. I accommodate these competing considerations by awarding 10% of the amount claimed. I award K289, 016.40 x 0.10 = K28, 901.64.
    
2. MENTAL ANXIETY, SUFFERING AND INCONVENIENCE
   

The second plaintiff seeks K50, 000.00. However, I uphold Mr Wa’au’s submission that the claim is poorly pleaded and lacking in evidence. It is also misconceived as the second plaintiff was not a party to either of the contracts, breach of which gave rise to liability. Nothing is awarded.

3. BUSINESS LOSSES
   

The first plaintiff seeks K83, 884.90. I uphold Mr Wa’au’s submission that the claim is poorly pleaded and lacking in evidence. Nothing is awarded.

SUMMARY

11. The total award for the first plaintiff of debt (K28, 901.64) and damages (0) is K28, 901.64, payable by the third defendant. The second plaintiff is awarded nothing. The second defendant is not liable to any extent.
    

INTEREST

12. Interest is awarded at the rate of 8 per cent per annum on the total amount of debt and damages under Section 4(1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015. Interest will be calculated in respect of the period from the date of service of the writ (25 July 2013) to the date of this judgment, a period of 3.3 years, by applying the formula D x I x N = A, where: D is the amount of debt and damages assessed, I is the rate of interest per annum, N is the appropriate period in numbers of years and A is the amount of interest. Thus: K28, 901.64 x 0.08 x 3.3 = K7, 630.03.

COSTS

13. 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. In this case there is no clear winner. The first plaintiff has on the one hand succeeded in obtaining an award of debt and damages. On the other hand, the second plaintiff has been awarded nothing; and the plaintiffs succeeded in convincing the court that only 6.83% of their claims (K28, 901.64 out of K422,901.30) had merit. The defendants succeeded in showing that the bulk of the claims was misconceived. In these circumstances the approach taken in Leeway East Enterprise Ltd v Daniel Danaben (2013) N4951 is the most appropriate: the parties will bear their own costs.
    

ORDER

(1) The third defendant shall pay to the first plaintiff debt and damages of K28, 901.64 plus interest of K7, 630.03, being a total judgment sum of K36, 531.67, within 30 days after the date of judgment.

(2) The second plaintiff is awarded nothing.

(3) The second defendant is not liable.

(4) The parties will bear their own costs.

Judgment accordingly,
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Ninerah Lawyers: Lawyers for the defendants