N7685
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 941 of 2012

BETWEEN:
THOMAS TULIN
Plaintiff

AND:
TOYOTA TSUSHO (PNG) LIMITED
trading as ELA MOTORS
Defendant

Waigani: Hartshorn J.
2018: 19th November

ASSESSMENT OF DAMAGES

Cases Cited

Agnes Kapipi v. Andrew Andu (2015) N6125
Biggin & Co Ltd v. Permanite Ltd [1951] 1KB 422 
Jonathan Paraia v. State (1995) N1343
Madang Cocoa Growers Export Co Ltd v. National Development Bank Ltd (2012) N4682
University of Papua New Guinea v. Jerry Duwaino (2011) SC1119

Counsel:

Mr. R. Lains, for the Plaintiff
Mr. R. Bradshaw, for the Defendant

19th November, 2018

1.   HARTSHORN J. This is decision on an assessment of damages as ordered by the Supreme Court.

Background

2.    The plaintiff alleged that he entered into a contract with the defendant to purchase two new five door Toyota Land Cruiser vehicles. The vehicles were not delivered and as a result he suffered loss and claimed damages. After a trial, this court found that there was a binding contract between the parties for the sale, purchase and delivery of the specific vehicles and that the two vehicles were available when the defendant generated invoices for them. This court found however, that the contract was abandoned by the conduct of the plaintiff and the defendant changed its position as a consequence. Further, the plaintiff was estopped from bringing his claim as he had requested, received and accepted a refund of the funds that he had paid to the defendant and did not reserve any rights that he may have had against the defendant in respect of the contract. This court held that the plaintiff was not entitled to the relief that he had sought and the proceeding was dismissed.

3.    The Supreme Court upheld the plaintiff’s appeal of this court’s decision, and remitted the matter back to this court to assess damages.

Plaintiff’s submissions    

4.   The plaintiff submits amongst others, that he is entitled to the loss of expected interest of K30,000.00 for 2011 – 2012, being interest that he would have earned on an interest-bearing deposit; general damages, which includes loss of forecasted income for non-delivery of the two vehicles, in the sum of K 991,440.00 (being K 1,101,600.00 less 10% for contingencies); out-of-pocket expenses in the sum of K 2,000.00; 8% interest on the judgment amount and costs of the proceedings. 

Defendant’s submissions

5.   The defendant submits amongst others, that there is no evidence of the costs, if any, incurred by the plaintiff in his attempts to obtain delivery of the vehicles; the plaintiff is not entitled to damages for loss of income as the Supreme Court stated that the plaintiff is entitled to damages for the lost opportunity to make a profit, as distinct from loss of income, from the lease of vehicles. Further, the plaintiff is not entitled to damages for loss of income, and in any event, the plaintiff has failed to prove loss of income.

Law

6.   Both parties referred to:

a)	 the decision in Madang Cocoa Growers Export Co Ltd v. National Development Bank Ltd (2012) N4682 for the summary of the principles for assessment of damages contained therein. Paragraphs 4 to 6 are as follows:

“4.     The following general principles have been taken into account when assessing the various categories of damages:

·	In a civil action, the purpose of an award of damages is to put the innocent party in the same position, as far as possible, as it would have been in if the wrongdoer had not committed the wrongful act (Livingston v Raywards Coal Co [1880] 5 App Cases 25).

·	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 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 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).

Specific

5.     Specific principles that apply to assessment of damages for breach of contract are:

·	The general principle that the purpose of an award of damages is to put the innocent party in the same position, as far as money can do, as if the guilty party had not committed a wrongful act, is qualified substantially: the innocent party only gets the amount of his actual losses that were reasonably foreseeable at the time the contract was formed.

·	What is taken to have been reasonably foreseeable at the time the contract was formed depends on two things: (a) the sort of knowledge that any reasonable person would be expected to have; and (b) knowledge of special circumstances outside the ordinary course of things.
 
6.     Those specific principles emerge from the leading British cases on damages for breach of contract, Hadley v Baxendale (1854) 9 Exch 341 and Victoria Laundry v Newman [1949] 2 KB 528, which have been applied in PNG in, for example, Tetley v The Administration (1971) No 647, Coecon Ltd (Receiver/Manager Appointed) v National Fisheries Authority (2002) N2182 and PNG Aviation Services Pty Ltd v Geob Karri (2009) SC1002.”

b)	 the decision in Agnes Kapipi v. Andrew Andu (2015) N6125. At [11] and [12] the Court said:

“11.    After giving consideration to the above, I am of the view that the factual scenario as pleaded and particularised in paragraph 8 of the statement of claim does not make sense: William Mel (supra). I also refer in this regard to the case of Obed Lalip v. Fred Sikiot and The State (1996) N1457, a decision of Injia J. (as he then was) where he said:

“If the evidence and pleadings are confusing, contradictory and inherently suspicious, the plaintiff will not discharge the onus of proving his losses on the balance of probabilities. It is conceivable that such a plaintiff will be awarded nothing.”

This passage was cited with approval by the Supreme Court in William Mel (supra).

12.     I am mindful of the following passage from Chitty on Contracts, volume 1, General Principles, 28th ed. at page 271, to which I referred in PNG Nambawan Trophy Ltd v. Tuban Investments Ltd (2009) N5349 as to the calculation of damages for breach of contract:

“Damages for a breach of contract committed by a defendant are compensation to the claimant for the damage, loss or injury he has suffered through that breach.  He is, as far as money can do it, to be placed in the same position as if the contract had been performed.  This implies a “net loss” approach in which the gains made by the claimant as a result of the breach (e.g. savings made because he is relieved from performing his side of a contract which has been terminated for breach; savings in taxation; benefits obtained from partial performance; or the salvage value of something left in his hands) must be set off against his losses arising from the breach (after he has taken reasonable steps to minimise those losses).” ”

7.    I also make reference to the Supreme Court case of University of Papua New Guinea v. Jerry Duwaino (2011) SC1119 in which at [14] to [16] the Court said:

“14.      The objective of an award for damages is to give the complainant compensation for whatever injury or loss he suffered. Assuming that the claim for damages was properly before the Court, the onus was on the respondent/complainant, to prove the damages being claimed. The Plaintiff has an obligation to prove his losses with much certainty and particularity as is reasonable, see Ray Tese Pty Ltd –v- Syntex Australia Limited [1998] 1 Qd R 104.

15.      In Bonham Carter –v- Hyden Park Hotel Ltd [1948] 64 TLR at page 178 Lord Goddard CJ said;

“Plaintiffs must understand that if they bring actions for damages, it is for them to prove their damages, it is not good enough to write down particulars and so to speak, throw them at the hand of the court saying, This is what I have lost, I ask you to give me these damages.  They have to prove it.”

16.      This principle has been adopted and applied in many decisions of the National Court. The principle was first adopted and applied by Injia J (as he then was) in Jonathan Mangope Praia v The State (1995) N1343, and applied  in subsequent cases: Yange Lagan v The State (1995) N1369, Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331, Yooken Pakilin v The State (2001) N2212, Kolaip Palapi v Sergeant Poko (2001) N2274, Paul and Grace Nari v The State (2004) N2769, Stanely Magi Eremugo v Daniel Tande (2005) N2889, Firman Mawa v Southern Highlands Provincial Government (2008) N3505, Kui Valley Business Group v Kerry Wamugl  (2009) N3667, Martin Piaore v Ian Barr (2009) N3786, Bob Kol v The State (2010) N 3912.” 

Consideration

8.    The Supreme Court in its decision at [30] held that:

“In those circumstances, we uphold the appeal and remit the matter back to the National Court to assess damages.”

9.   Those circumstances are set out in [26] and [29]. These paragraphs are:

“26. The evidence was that he had made known the purpose of his purchase of the vehicles and, hence obtained a promise to obtain delivery within 2 - 3 weeks, a time he allowed to extend until his third party contract was withdrawn. It follows that he was entitled to damages for the lost opportunity to make a profit from the lease of the vehicles as well as the costs of his attempts to obtain delivery.  ……

29. Of course, the quantum of damages remains a real issue. It is clear that the plaintiff was unlikely to have let the vehicles for 5 years at the agreed rental. Also, the payment made to the defendant represented a revenue stream that would have been foregone, to be offset by the payments from TDL.”

10.   The plaintiff submits that notwithstanding the above, it was not for the Supreme Court to assess what damages should be awarded. That is a role that this court should perform, it is submitted. 

11.    It is the position though that s. 16(d) Supreme Court Act provides that the Supreme Court, may remit the case in whole or in part for further hearing. Further, this court is bound by the decision of the Supreme Court and should act upon its orders accordingly.

12.   I concur with the submissions of the defendant that the Supreme Court remitted the matter to this court to assess the plaintiff’s damages for the lost opportunity to make a profit from the lease of the vehicles and the costs of the plaintiff’s attempts to obtain delivery. The Supreme Court did not find that the plaintiff was entitled to the relief sought in its amended statement of claim.

Costs of attempts to obtain delivery

13. The defendant claims that there is no evidence of the costs of the plaintiff’s attempts to obtain delivery of the two vehicles. From a perusal of the evidence, I concur with this submission. No submissions were made specifically on this issue by the plaintiff. The plaintiff has not proved on the balance of probabilities any entitlement to such costs.

Lost opportunity to make a profit from the lease of the vehicles

14. There is evidence given on behalf the plaintiff concerning alleged income that it is alleged would have been generated, but there is no evidence given concerning damages to which the plaintiff is entitled for the lost opportunity to make a profit from the lease of the vehicles.

15.   In regard to profit projections, in Cheshire and Fifoot, Law of Contract, 8th Australian Edition 2002, at [23.13], the learned authors stated:

“The plaintiff has the onus of establishing that a profit would have been earned. To the extent to which this depends on a hypothetical course of events, the task of the court is to assess damages for loss of a chance: … However, damages for loss of profit or net gain are not awarded on a merely speculative basis. So in McRae v. Commonwealth Disposals Commission, as the tanker had never existed, its value could not by any means be ascertained (the court refused to accept a calculation based on an ‘average-sized tanker’), and the plaintiff was limited to damages covering wasted expenditure and loss of opportunity.”

16.   Further, in Madang Cocoa Growers (supra), the Court stated at [13]:

“13.     The evidence shows that the value (gross revenue) of the hire agreement from September to December 2008 was: K18,000.00 (Sep) + K18,600.00 (Oct) + K21,700.00 (Nov) + K21,700.00 (Dec) = K80,000.00. How much of that was net profit? The court has little to go on. The plaintiff should have provided an audited set of accounts to verify this claim. But there is nothing. The plaintiff seems to have naively presumed that it only had to throw some gross figures at the court and they would be accepted. That, of course, is not an acceptable approach. ….”

17. To my mind the last three sentences correctly describe the state of the evidence of the plaintiff in this instance. Given that state, I am mindful of the reference of Injia J. (as he then was), in Jonathan Paraia v. State (1995) N1343 to the following observation of Devlin J. in Biggin & Co Ltd v. Permanite Ltd [1951] 1KB 422 at 438:

“Where precise evidence is obtainable, the Court naturally expects to have it (but) where it is not, the Court must do the best it can.”

18.   Here however, there is no evidence relied upon concerning profits to prove any loss suffered for the lost opportunity to make a profit, that the court may take into account to do “the best it can”. Similarly, there is no evidence of the costs of the plaintiff’s attempts to obtain delivery of the two vehicles with which the court may do “the best it can”.

19.    I am not satisfied that the plaintiff has proved to the requisite standard, upon the balance of probabilities, any loss suffered by him for the lost opportunity to make a profit.

20.    Consequently, the damages sought by the plaintiff are refused. It is not necessary to consider the other submissions of counsel apart from as to costs. Given that the plaintiff has been unsuccessful in having damages awarded, his costs of the hearing on assessment of damages should be refused notwithstanding the remission of the matter back to this court by the Supreme Court. In the circumstances, the parties should bear their own costs.

Orders

21.    The orders of the Court are:

a)	No award of damages is made;

b)	The parties shall bear their own costs of and incidental to the hearing 	on assessment of damages;

c)	Time is abridged.

Hardy & Stocks Lawyers: Lawyers for the Plaintiff                  
Bradshaw Lawyers: Lawyers for the Defendant