N7129
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 627 OF 2010

BETWEEN:
DOMINIC YAURIN
Plaintiff

	AND:	
BRUCE LIU in his capacity as the Project Manager
First Defendant

	AND:	
COVEC (PNG) LIMITED
Second Defendant

Goroka: Yagi J
2017: 02nd August

ASSESSMENT OF DAMAGES – Default Judgment – negligence claim - extraction of gravel from river bed resulting in diversion in flow of river causing river bank erosion – damage and destruction to land, improvements and environment – award of K28,983.68 in damages and interest plus cost.

Cases cited:

Coecon Ltd (In Receiver-Manager Appointed) v. National Fisheries Authority of PNG (2001) N2182
Papua New Guinea Banking Corporation v Jeff Tole (2002) SC694
Steven Naki v AGC (Pacific) Ltd (2006) N5015
William Mel v. Coleman Pakalai & Ors (2005) SC790 
Yondu Coffee Producers Ltd v Fred Punangi & 2 Others, WS No. 1038 of 2009, unreported and unnumbered, (Goroka dated 14 February, 2017 – Yagi J)

Legislations:

Judicial Proceedings (Interest on Debts and Damages) Act 2015.

Counsel:

V. Agusave, for the Plaintiff 
K. Peri, for the First & Second Defendants

DECISION

02nd August, 2017

1.	YAGI, J:	This is a claim for damages arising from negligent conduct in connection with excavation of gravel from the bed of a river that flows alongside the plaintiff’s land resulting in loss and damage to properties including environmental damage.

2.	On 18th March 2011 the Court entered default judgment against the defendants and ordered damages to be assessed. 

3.	At the trial on assessment of damages the plaintiff adduced evidence in relation to the loss and damage he suffered. The plaintiff relied on two affidavits filed in the proceeding. The first is an affidavit by the plaintiff himself sworn on 30th September 2013. The second is an affidavit sworn by Mr. Ignatius Mujijauw sworn on 12th February 2013. Both deponents were examined by the defence on their affidavit evidence.

4.	Mr. Mujijauw is an academic and researcher at the University of Goroka. He was engaged by the plaintiff to compile a report on the loss and damage to land, improvements and environment generally caused by the river due to the defendant’s negligent conduct. The report was tendered in evidence as Annexure “A” to his affidavit. It was compiled after Mr. Mujijauw’s visit to the area in about mid December 2011. The method of assessment used by Mr. Mujijauw was “site visitation, observation and assessment and literature reviews”. The valuation applied by Mr. Mujijauw is based on 2 methodologies; the standard valuation method (SVM) and the contingency valuation method (CVM). The SVM is based on the standard value used by the Department of Primary Industry (formerly Department of Agriculture and Livestock) whilst the CVM, as the name suggests, is a non-standard based valuation. It is a survey-based technique where public survey is carried on prices on a particular item or good. The CVM has been heavily criticised by scholarly experts as hopeless and dubious. See article by Jerry Hasman on “Contingent valuation: dubious to hopeless” published in ‘Journal of Economic Perspectives’, Vol. 26 No. 4 (November 2012) at pp. 43 – 56 and another article entitled “From Hopeless to Curious? Thoughts on Hasman’s Dubious to Hopeless”, a Critique of Contingent Valuation by Timothy C. Haab, Mathew G. Interis, Daniel R. Petrolia and John C. Whitehead published in ‘Applied Economic Perspectives and Policy’ (2013), Volume O Number O dated October 22, 2013 at pp. 1 – 20. For this reason I consider that CVM is neither reliable nor appropriate method of ascertaining a reasonable price on a particular good and should be rejected.

5.	The defence produced no evidence at trial.

6.	The plaintiff is from Sefoluga village, Kamaliki in Goroka. He claims to be the owner of customary land known as “Sefoluga” land. The land is situated about 150 meters from the Kamaliki bridge and about 500 meters from the main Okuk Highway formerly Highlands Highway. The entire land is said to be about 4,270 square meter in size. The Kamaliki river (river) flow on the side of the land which formed a natural boundary. He has a family house and other garden and economic crops on the land.

7.	The plaintiff says that in or about 11th November 2007 he first noticed the river had diverted its course or direction by running into his land. The river had washed away the banks on his side of the land. He claims that the reason for the river to change its normal direction is because of direct interference by the operations of the second defendant company which increased the strength and speed of the river flow. The increase in the water current smashing against banks is causing land erosion. He therefore claims that his land, improvements and environment had been damaged and lost through the process of erosion of the river bank.

8.	As I mentioned the issue of liability has already been determined by the default judgment. What is before the Court is the question of what is or are the damages that the plaintiff is entitled to that the Court should award. The plaintiff is claiming special damages, general damages, pain and suffering and cost of re-location to another land area.

9.	The relevant principles in assessment of damages in a case where default judgment is obtained are now settled. These principles have been applied in numerous cases. The Supreme Court in William Mel v. Coleman Pakalai & Ors (2005) SC790 approved the principles which was applied by the National Court in Coecon Ltd (In Receiver-Manager Appointed) v. National Fisheries Authority of PNG (2001) N2182. See also Papua New Guinea Banking Corporation v Jeff Tole (2002) SC694 where the Supreme Court also adopted and applied these principles. In Coecon’s case his Honour Justice Kandakasi stated this:

“A survey of the authorities on assessment of damages after entry of judgment on liability mainly in default of a defendant’s defence, clearly show the following:
1.	The judgment resolves all questions of liability in respect of the matters pleaded in the statement of claim.
2.	Any matter that has not been pleaded that is introduced at the trial is a matter on which the defendant can take an issue on liability.
3.	In the case of a claim for damages for breach of contract as in this 	case, such a judgment confirms there being a breach as alleged and leaves only the question of what damages necessarily flow from the breach.
4. 	The plaintiff in such a case has the burden to produce admissible and credible evidence of his alleged damages and if the Court is satisfied on the balance of probabilities that the damages have been incurred, awards can be made for the proven damages.
5. 	A plaintiff in such a case is only entitled to lead evidence and recover such damages as may be pleaded and asked for in his statement of claim.”

10.	The same principles were summarised in Steven Naki v AGC (Pacific) Ltd (2006) N5015 which I adopted and applied recently in Yondu Coffee Producers Ltd v Fred Punangi & 2 Others (2018) N7128.  I will also apply these principles in the present case. Both counsel have also referred to some of the other cases in submissions.

11.	The plaintiff pleads in the statement of claim, amongst others, the following categories of damages:

	1.	Special Damages	- K510.00
	2.	General Damages	- unspecified amount
	3.	Pain and Suffering	- unspecified amount
	4.	Cost of re-location to another location - unspecified amount

Special Damages

12.	Special damages are damages which are sometimes referred to as out of pocket expenses or reimbursement claims. These are claims where the claimant is claiming money already spent whilst pursuing his or her cause of action in the proceeding. Therefore these claims can be easily proven by production of receipts, invoices, business records, etc as evidence of payments made. In this case, the plaintiff claims K10.00 for company search and K500.00 for bus fares. There is no evidence of search fee receipts produced and therefore this claim is declined. As regards the claim for bus fares I note that the defence has not challenged this claim. However, at the same time the plaintiff has not led any evidence on this aspect. I find no evidence to support this claim. I therefore decline to make any award on this basis.

General Damages

13.	Under this head of damages the plaintiff claims loss of his semi permanent residential building which he says was washed away by the river due to riverbank erosion. He also claims for the land which was washed away by the river, two rest houses, a number of valuable plants, trees and food plants including the family grave site. All these items are listed in his statement of claim.

14.	As to his family residential building he claims K20, 000.00 for the loss. He gave evidence the house is constructed of iron roof, bamboo blind walls, timber frame, timber flooring, it has 4 windows with 32 window glass blades. A photograph of a house was also produced as annexure “F” to his affidavit. No other details are provided. The photograph itself is not clear and is blurry. It shows only one elevation of the building. The building is standing on posts/stilts but it is unclear whether the stilts are wooden, steel or other solid material. It has a small veranda from the front. The photograph appears to be a side elevation. No other elevation is shown. The precise size in terms of the square meter of the building is not disclosed.  There is no evidence as to the number of bedrooms, whether it has a kitchen, laundry room, septic toilet, shower room, whether there is electrical and plumbing works installed, whether internal frame structure consists of sawn timber and other modern materials, etc. There is also no evidence as to when the house was constructed and whether a private building contractor was engaged to construct the house. All these important information are lacking. From the photograph one would expect a qualified valuer or builder should have been engaged to inspect and value the building. In the circumstances I am not satisfied that K20, 000.00 is a fair and reasonable value claimed. I award a sum of K15, 000.00.

15.	As regards the 2 rest houses both are made of bush materials, however, there is no evidence of the value of these houses nor is there any evidence on size and structure of the houses. Mr. Mujijauw has placed a value of K500.00 based on the CVM. According to Mr. Mujijauw the houses are made of kunai houses. It is not clear where and how the amount of K500.00 is arrived at by Mr. Mujijauw. It seems that amount is excessive. A fair and conservative figure would be K200.00. I therefore award K400.00 for both rest houses. 

16.	As for the other items the evidence is very sketchy in that it is very unclear who owns each of the trees, plants, cemeteries, flowers, etc as itemised in Item 4.4.1 “Valuation of the Damages” in Mr. Mujijauw’s report. All these items have been lumped together; however, it is obvious from the evidence that not all the items are owned by the plaintiff (see Appendix 2 (List of Names of Dominic Yaurin’s extended family members). These items have not been clearly shown to be owned by the plaintiff. It is common knowledge that customary land is not based on private or individual ownership. Traditional or customary land in PNG is owned by the community. In this respect the plaintiff has no right to make the claim individually. By the same token there is no denial that he has partial rights and interest to the land as a member of the customary group. The extent of the partial interest is unclear. If, for argument sake, there are 100 members of the customary group, then the plaintiff interests will be worth one hundredth of a fraction. In this case going by the list provided in the Mujijauw report (Appendix 2) there appears to be over 61 members of the customary group. However, some of them are females and church leaders. The plaintiff seems to claim the entire land to himself. The evidence is also not clear as to whether these people have any rights to the affected land. In this case whilst there is lack of particularity, clarity and certainty in the claims I will nevertheless make a nominal award which I consider to be just and fair in the overall circumstances of the case. According to evidence the total land area comprised of 4,270² meters and there are over 61 members of the customary group. The plaintiff makes a claim of K180,000.00 (see item 4.4.2.B.1 in Mujijauw report). I award the plaintiff K3,000.00 for the damage to his land.

17.	In respect to the other properties including plants, trees and improvements generally as claimed in paragraph 18 of the plaintiff’s affidavit I award damages as follows:

Pain and suffering

The claim by the plaintiff under this category has not been sufficiently particularised in the statement of claim. There is however a general claim made in the prayer for relief but this is not strictly pleading per se. I am therefore not satisfied that this claim is sufficiently pleaded and therefore I decline to make any award.

Cost of re-location
Similarly this claim had not been pleaded clearly and sufficiently. Although there appears to be general evidence relating to this aspect of the claim, the claim is unsupported by the pleading. Accordingly, there will be no award made in respect to this claim.

Interests

Interest has been claimed at 8% per annum pursuant to Judicial Proceedings (Interest on Debts and Damages) Act 1962. This Act has recently been repealed and replaced with a new legislation - Judicial Proceedings (Interest on Debts and Damages) Act 2015, hence interest will be ordered under the new Act at the rate that the Court “thinks proper”. The defence has not submitted any other rate as being proper. I will therefore apply the annual 8% interest as claimed by the plaintiff. Interest awarded will be from the date of issue of the writ of summons to date of judgment, which is a period of 7.19 years.

Cost

The general principle will apply and that is costs follow the event. That means that the successful party will be entitled to costs. In this case cost is awarded in favour of the plaintiff.

Summary of the Damages Awarded

18.	The following damages are awarded to the plaintiff:

1.	Special damages		- Nil
2.	General damages		- K18,400.00
3.	Pain and suffering		- Nil
4.	Interest			- 8% x K18,400.00 x 7.19 years = 						K10,583.68
5.	Cost 				- The defendants shall pay the plaintiff’s 				cost of and incidental to the proceeding 				on party-party basis to be taxed, if not 				agreed.

Orders

19.	The following will therefore be the formal orders of the Court:

1.	The defendants shall pay to the plaintiff damages in the sum of K18,400.00 plus interest of K10,583.68, being a total judgment sum of K28,983.68.

2.	Pursuant to s. 6(1) and (3) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015, in the event that the total judgment in the sum of K28,983.68 is not paid within 60 days hereof interest shall be payable at the rate of 8% yearly on the total outstanding judgment sum accruing from time to time until full payment.

3.	The defendants shall also pay the plaintiff’s cost of and incidental to the proceeding on a party-party basis to be taxed, if not agreed.

 Judgment accordingly.

________________________________________________________________
Public Solicitor: Lawyer for the Plaintiff					
Warner Shand Lawyers: Lawyer for the Defendant