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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS (COMM) NO. 115 OF 2019
BETWEEN
NKW HOLDINGS LIMITED
Plaintiff
AND:
PALADIN SOLUTIONS PNG LIMITED
Defendant
Waigani: Anis J
2019: 29th November
2020: 5th June
LAW OF CONTRACT – Debt recovery claim based on outstanding invoices – whether there was a valid contract between the parties based upon which invoices were issued – When was the contract entered into? Where there evidence of or conducts that constituted an offer, acceptance, consideration and intention to create legal relations?
RESTITUTION FOR UNJUST ENRICHMENT – whether money had been paid under a mistake of fact – money paid to settle one of the invoices for provision of meals – consideration of evidence – whether defendant able to establish mistake of fact – whether payment amounts to unjust enrichment – assessment
Cases Cited:
Papua New Guinea Cases
Keam Investments Ltd v. Toyota Tsusho (PNG) Ltd (2019) N7859
Hargy Oil Palm Ltd v. Ewase Landowners Association (2013) N5441
Steven Naki v. AGC (Pacific) Ltd (2005) N2782
Shell Papua New Guinea Ltd v. Speko Investment Ltd (2004) SC767
Vanimo Forest Products Ltd v. Ossima Resources Ltd (2013) SC 1275
Nivani Ltd v. Coconut Products Ltd (2016) N6582
Koroguen v. Wagen (2008) N3422
Steven Turik v. Mathew Gubag (2013) N5132
Overseas Cases
Banque Financiere de la Cite v. Parc (Battersea) Ltd [1998] UKHL 7; [1999] AC 221
Counsel:
Mr A Mana, for the Plaintiff
Mr H D Katter with counsel assisting Ms Heagi, for the Defendant
JUDGMENT
5th June, 2020
1. ANIS J: This matter was trialed on 29 November 2019. I reserved my ruling to a date to be advised. Parties have been notified so I will rule on it now.
BACKGROUND
2. The plaintiff operates as the Facility Manager at areas called the West Lorengau Haus and Hillside Haus, in Manus Province. It is engaged by the Commonwealth of Australia (the Commonwealth) to, amongst others, house refugees and non-refugees. It also provides catering service at the area. Its claim is this. It says
that in January of 2018, it had entered into a contract (the January 2018 contract) with the defendant to provide meals to the defendant’s employees who were stationed in Manus Island. It says that the contract
had been entered into by the conduct of the parties. It says meals were charged at the rate of K15 per meal. It says the defendant’s employees were required to and had to sign
meal dockets before they received their meals at the material time. It says that based on the January 2018 contract, it had, from
1 January 2018 to 31 July 2018, provided meals to the defendant’s employees. It says that following that, it sent a total
of 6 meal invoices to the defendant that totaled K2,156,853. It says that the defendant has refused to pay. It files this proceeding
to claim the K2,156,853 plus interest and cost.
3. The defendant’s defence is this. It says the pleading, that is, the Amended Statement of Claim (ASoC), is vague and does not disclose the alleged January 2018 contract. It claims that the ASoC lacks the pleaded facts that establish
the elements of a valid contract, namely, offer, acceptance, consideration and intention to create legal relations. It submits,
as its substantive defence, that there was no contract as alleged by the plaintiff, that had been entered in January of 2018. It
says the only contract it is aware of was the one that had been entered into between the parties and the Commonwealth, on or about
23 October 2017 (the October 2017 agreement). It says the October 2017 agreement had initially been set for a period of 1 month, but it says that it (i.e., the October 2017
agreement) continued on until it was terminated on 31 July 2018. According to the October 2017 agreement, the Commonwealth had agreed
to and had paid for meals that had been provided by the plaintiff and consumed by the defendant’s employees. The defendant
claims that the payment of meals consumed by its employees was always the responsibility of the Commonwealth, and as such, it says
that the plaintiff should seek payment of its invoices from the Commonwealth and not against it.
4. The defendant has also filed a cross-claim. In the cross-claim, it seeks to reclaim under the relief, restitution for unjust enrichment, a sum of K246,939 or a reasonable sum that may be assessed by the Court. The defendant claims that the money had been paid to the plaintiff under a mistake of fact. It also seeks to recover interest and cost.
EVIDENCE
5. The plaintiff tendered 3 affidavits. The affidavits were marked as Exhibits P1, P2 and P3. They were all deposed to by Heath Bruns who is the Commercial Manager for the plaintiff. The defendant, on the other hand, tendered a total of 4 affidavits. They were marked as Exhibits D1, D2, D3 and D4 respectively. Exhibits D1, D2 and D4 consist of affidavits that were deposed to by David Saul, and Exhibit D3 consists of an affidavit that was deposed to by Philip Burke. David Saul is the Managing Director of the defendant. Philip Burke was the General Manager – Operations for the defendant at the material time.
COMMON GROUND
6. The parties do not dispute that meals that were provided to the employees of the defendant before 1 January 2018 were paid for by the Commonwealth. The parties do not dispute the main terms and conditions of the October 2017 agreement which included these: The agreement was for an interim period of 1 month, that is, from or about 27 October 2017 to on or about 27 November 2017. During that time, meals were supplied by the plaintiff to the defendant’s employees upon signing meal dockets, and the Commonwealth was responsible for and had paid for the meals.
ISSUES
7. The issues, in my view, are, (i) whether the pleadings concerning the material facts are vague, (ii), whether there is evidence disclosed of the January 2018 contract or of its existence, (iii), whether the plaintiff is entitled to be paid the sum of K2,156,853 together with interest and cost, and (iv), whether the K246,939 was paid under a mistake of fact and whether the defendant should repay the money; whether the plaintiff has unjustly enriched itself having received the money from the defendant.
MATERIAL FACTS/VALID CONTRACT?
8. I prefer to address the first and second issues together. I ask myself this. Was there a valid contract that existed at the material time? What material facts existed then which are disclosed that would assist me determine the January 2018 contract?
9. I refer to the pleading, and in particular, the ASoC. The plaintiff alleges that the January 2018 contract was entered into between the plaintiff and the defendant. The plaintiff pleads that the January 2018 contract was created by conduct of the parties. I refer to paragraph 4(c)(a) of the ASoC and the evidence that the plaintiff has adduced. According to the plaintiff, the conducts which it says constituted the January 2018 contract, were, and I summarize as follows:
- the provision of meals by the plaintiff to the defendant’s employees upon their request, from 1 January 2018 to 31 July 2018;
- the act of signing meal dockets by an employee of the defendant for every meal that was provided to the defendant’s employees, from 1 January 2018 to 31 July 2018.
- consumption of meals by employees of the defendant from 1 January 2018 to 31 July 2018.
10. I refer to Exhibit P1. Mr Bruns gives evidence to support the plaintiff’s claim of the existence of the January 2018 contract. Mr Bruns states at paragraphs 3 to 7, and I quote:
3. The Plaintiff and the Defendant entered into an agreement in or about January 2018. The Defendant requested and the Plaintiff agreed to provide meals to the Defendant and the Defendant’s sub-contractor, namely, Peren Investment Limited (Peren, and their respective employees deployed at the Facilities at the rate of K15.00 per meal.
4. The agreement was partly verbal and partly by conduct of the parties.
5. Consistent with this agreement, the Plaintiff provided meals to the Defendant’s employees for the period between January to July 2018.
5. Consistent with this agreement, the Plaintiff provided meals to the Defendant’s employees for the period between January to July 2018.
6. The Defendant’s and Peren’s employees deployed at the Facilities accepted the provided meals which was evidenced by endorsement of the relevant meal dockets.
7. The Plaintiff’s provision of meals to each employee of the Defendant and Peren was evidenced by the signing of meal dockets and no meals were provided without the endorsement of the relevant docket covering all meals provided on the day by a duly authorized representative from Paladin.
(Bold letterings mine)
11. I ask myself this. What agreement is Mr Bruns referring to here? Mr Bruns, in my view, does not give full disclosure or evidence at all of the agreement in his evidence. He appears to merely state that an ‘agreement’ was entered into in January of 2018, and then he refers back to the ‘agreement’ and deposes facts or events that were said to have occurred based on the ‘agreement’ which he has not, in my view, clearly set out or explain.
12. The next question I have is this? What does the plaintiff mean when it uses the phrase that the agreement was entered into or existed by conduct of the parties? I found it difficult at first to understand this argument. Was the plaintiff referring to the conduct of the parties for purposes of establishing each of the elements of a valid contract, namely, offer, acceptance, consideration and intention to create legal relations? See cases: Keam Investments Ltd v. Toyota Tsusho (PNG) Ltd (2019) N7859; Hargy Oil Palm Ltd v. Ewase Landowners Association (2013) N5441 and Steven Naki v. AGC (Pacific) Ltd (2005) N2782. I refer to the January 2018 contract which the plaintiff says is binding. I note that the plaintiff has not called any material evidence to establish the contract. There is no direct oral or written evidence of an offer, acceptance and consideration adduced or furnished by persons employed with the plaintiff who have or had been in charge at the material time. For example, there is no evidence of any email exchanges between the parties leading up to or before January of 2018 concerning the January 2018 contract. There is no evidence adduced of discussions on the rates of the meals that were to be charged on the defendant; there is no evidence adduced of discussions concerning the method of payment for the meals; there is no evidence adduced of discussions concerning the meal docketing system and how that was to operate from 1 January 2018 to 31 July 2018. Mr Bruns for the plaintiff was not present at the material time. He was unable to give detail accounts of what may have been discussed at that time. He was always based in Lae at the material time after he joined the plaintiff towards the end of January of 2018. His evidence is based on what had been furnished to him and his own knowledge which is based on information of the plaintiff which he keeps on its behalf in the capacity that he holds. The plaintiff is the one that is alleging the January 2018 contract. It has the burden to show that to the satisfaction of this Court on the balance of probabilities, that such an agreement was reached between the parties, and that the 6 invoices sent were based on the said agreement.
13. I have observed Mr Bruns during cross-examination. His evidence is that there were 2 contracts or arrangements for provision of meals. The first was the October 2017 agreement. And the second contract, he claims on behalf of the plaintiff, was the January 2018 contract. It is the latter contract, which he says, is relevant and binding upon the parties.
14. I have noted the submissions of both counsel. To me and with respect, I find more questions and uncertainties than answers to Mr Bruns’s evidence and to the plaintiff’s evidence as a whole. The questions and uncertainties include the following:
(i) The plaintiff tries to deny not being a party to the October 2017 agreement. Yet, email correspondence shows that the plaintiff was fully aware of the arrangement. Evidence shows that it had been dealing directly with the Commonwealth for payment of its invoices or meals that had been consumed by the employees of the defendant. Evidence of that may be seen at attachment 55 to Exhibit D2. It consists of an email dated 31 October 2017, from the plaintiff’s Mick Shippey to the defendant’s Paul Hunt. Mr Shippey said, and I quote in part, Paul, we are more than happy to supply the meals for the task force, and given we have the approval that we will be paid from ABF it will commence from the date requested. And Mr Saul in Exhibits D1 and D2, if I can summarise them, says that the plaintiff at all material times since October of 2017 had been dealing with the Commonwealth directly for all its meals that were consumed by its employees at the site.
I must be clear here that I am not making a determination on who the parties to the October 2017 agreement were. The October 2017 agreement is not before me for determination.
(ii) Mr Bruns says in cross-examination that he believes, although he could not confirm, that the interim or the October 2017 agreement may have continued till December of 2017. The interim arrangement again is the contract for 1 month where meals were supplied by the plaintiff to the defendant’s employees which were then paid for by the Commonwealth through its instrumentalities. Documentary evidence of that may be seen at attachment 3 to Exhibit D1. I must say I find it odd that the plaintiff did not adduce any documentary evidence whatsoever to show who was footing the bills for the defendant’s meals that were consumed and charged, from 27 November 2017 to 31 December 2017. The defendant, on the other hand, has provided numerous documentary evidence, namely, emails, which suggest that the October 2017 agreement may have continued beyond 27 November 2017. These are deposed to at paragraphs 14 to 74 in Exhibit D2. Email exchanges attached therein show that the parties had conducted business as usual on 30 December 2017, 8, 15 and 22 January 2018, 11 February 2018, 1, 10, 20, 25 and 29 March 2018, 1, 12, 23 and 26 April 2018 and 1, 6, 20 and 21 May 2018.
Now, I note that I have been using the word “may” when addressing the October 2017 agreement. This is because I note that I am not making a determination in regard to its validity. My role herein is to make a determination only in relation to the validity or existence of the January 2018 contract which is the subject of this proceeding.
(iii) Mr Bruns gave evidence under oath in cross-examination. With respect, I find some of his evidence inconsistent or contradictory. His oral testimony that there were 2 contracts (one which was the October 2017 agreement and the other which was the January 2018 contract) is not consistent with his written testimony. I refer to paragraphs 7 and 8 of his affidavit marked as Exhibit P2 (Volume 1). Mr Bruns states, and I quote,
“7. The Plaintiff commenced supplying meals to the Defendant’s employees after the date of that meeting. At the conclusion of that interim period, no updated arrangement was introduced and the Plaintiff continued supplying meals to the Defendant’s employees until July 2018 when the Defendant informed the Plaintiff that its services were no longer required.
(Bold lettering mine)
Counsel for the defendant, I note, drew the said inconsistency to Mr Bruns in Cross-examination. It was at that point I note that Mr Bruns may have seen his inconsistent evidence. He did not, in my view, give a satisfactory answer to explain that. I note that Mr Bruns’s written accounts at paragraphs 7 and 8 actually support the defendant’s defence and submissions, and in particular, the defendant’s understanding in regard to the October 2017 agreement and of its continuation to 31 July 2018.
(iv) I note that the 6 invoices were never sent to the defendant at the end of each month from 31 January 2018 to 31 July 2018. Had that occurred, it would have supported the plaintiff’s claim that the defendant was responsible for the meals and not the Commonwealth. It would have also made logical sense to its claim, that is, that meals were provided; that the defendant signed for them before they were consumed by its employees; that the invoices were issued to the defendant at the end of each month until 31 July 2018; and that the invoices remain to be settled. However, the evidence that have been adduced in Court have shown otherwise. The 6 invoices were all prepared towards the end of the termination period in June and July of 2018. They were then all addressed to a different but perhaps related entity, namely, Paladin Group Limited. And the invoices were never sent and received until sometimes in September or October of 2018. What was the explanation for that? The lack of invoices prepared on a regular basis plus the conduct of the parties in requesting and consuming meals, are evidence and conducts which are similar to the conduct or practice that had occurred during the October 2017 agreement. It therefore also makes me wonder whether the evidence of both parties actually support the defendant’s claim that the parties had operated under just one contract which was the October 2017 agreement until it was terminated on 31 July 2018.
The defendant denies that it is liable to pay the 6 invoices under Exhibits D1, D2 and D3. That said, I refer to Exhibit P1. Mr Bruns states the following at paragraphs 9 and 10 of his affidavit,
9. The Defendant did not dispute the liability to pay until after services (meals) were provided and invoices were issued in September 2018. The accuracy of the invoiced sums and the total is not disputed by the Defendant.
10. On 25 September 2018, the Defendant advised the Plaintiff that the invoiced sums would be paid on 4 October 2018, before defaulting on this position and subsequently refusing to pay by correspondence dated 27 November 2018.
(Bold letterings mine)
These depositions, in my view, are not depositions of facts that are based on actual knowledge nor are they corroborated with documentary evidence. They also appear to contain general assertions or submissions. As such, I obviously cannot have regard to them as good or credible evidence.
(v) Other email correspondences suggest that there may have been misunderstandings between the Commonwealth and the parties, that is, as to who was responsible for paying the meal invoices of the defendant during, after or at a certain date or time. Evidence adduced shows that in March and April of 2018, the Commonwealth had queried the parties in this regard. I refer in particular to attachment 15 to Exhibit D1. It attaches an email from the plaintiff’s Anthony Whitfield dated 23 April 2018 to the defendant’s Craig Thrupp and other service providers. The email reads in part, and I quote.
I write to advise that DHA (Department of Home Affairs of the Commonwealth of Australia) have directed that the meals services NKW have been providing to fellow stakeholders now need to be invoiced to each of you.
NKW have maintained records of the meal services and the accounts team is now preparing accordingly.
It is NKW’s intention to charge at minimum cost as a gesture of goodwill.
If you would like to discuss this issue, please contact myself or project accountants Phil Kaiwai and Rob Grimwade, both copied into this email.
(Bold letterings mine)
This piece of evidence is one which, in my view, tends to clarify or if not puts into disarray, the basis or foundation of the plaintiff’s claim. The plaintiff is seen here expressly informing the defendant that unlike the previous procedure where the defendant’s meals were paid for by the Commonwealth, the meal invoices shall and I quote now be sent to the defendant directly, to pay. The email also appears to invite the defendant and the other service providers to negotiate an agreement given the change of circumstance. I also note that the evidence tends to contradict the plaintiff’s assertion or pleading where it says that the contract had commenced in January of 2018. And I also note that it also tends to affirm the defendant’s argument that the parties were bound by the October 2017 agreement.
15. I note that the plaintiff has in support referred to case authorities, namely, Shell Papua New Guinea Ltd v. Speko Investment Ltd (2004) SC767, Vanimo Forest Products Ltd v. Ossima Resources Ltd (2013) SC 1275 and Nivani Ltd v Coconut Products Ltd (2016) N6582. The plaintiff argues that, like these cases and similarly, the conduct of the parties herein at the material time constituted the January 2018 contract, which continued or was extended on a weekly basis until it was terminated on 31 July 2018. I refer to the plaintiff’s written submission. The plaintiff submits at paragraphs 36 to 39, and I quote,
......
16. I find that the case authorities referred to do not assist the plaintiff. The mere conduct(s) of the parties itself or themselves, cannot, in my view, constitute or create a principal contract or an agreement. Under the common law, a contract may be created in writing, orally, or partially in writing and partially orally. The term conduct of the parties may be used to establish for example one or more of the elements of a legally binding contract. And I note that I have covered that above at paragraph 12 of my judgment.
17. The second scenario or means where conduct of the parties may be used to establish a binding agreement, is this. There must already be in place or existence, an agreement which is binding but which has ended or reached its tenure. And despite that and if the parties continue to trade or conduct themselves as if the agreement still exists, then the parties’ conduct may be regarded or treated as an extension of the original agreement; the agreement may continue in the exact terms as those contained in the original agreement or otherwise, or perhaps until the parties give notice for its termination; the parties may even choose to formally enter into the same agreement at a later date with variations made to its original terms and conditions. So existence of an original or a prior agreement or contract, is paramount in the second scenario. This was what had occurred in the cases, Vanimo Forest Products Ltd and Nivani. In the Nivani case for example, the original contract for extraction of gravel had lapsed. But despite that, the parties continued to perform their obligations under it, that is, gravel was extracted and monies paid for the extraction. The Court, which I presided over, found, amongst others, the existence and continuation of the contract on a month to month basis until it was terminated. However, I find that the same cannot be applied in the circumstance as presented by the plaintiff. The first problem I see is lack of an original agreement. The plaintiff does not rely on the October 2017 agreement so I cannot use that for this purpose. My findings and observations above show that it is difficult to ascertain the existence of the January 2018 contract as alleged by the plaintiff. Having said these, I note that even if the plaintiff is to base its argument on the October 2017 agreement, the case law will still not support its proposition because in the October 2017 agreement, one of the material terms was that the Commonwealth would foot the meal bills of the defendant. And if it was to be assumed that the contract had continued thereafter, then the payment responsibility would still be bestowed upon the Commonwealth and not the defendant.
18. And this. Even if I am to assume that a new contract was created in January of 2018, the conduct or the implied terms, were or would be similar to the October 2017 agreement, would it not be the case? Meals were provided at K15 per meal which was what had been charged in the October 2017 agreement. Meals were requested by the defendant’s employees and meal dockets were signed for every meal that was consumed, again, like what had been agreed to in the October 2017 agreement. Evidence adduced shows that the defendant had not been receiving monthly invoices for the meals in the January 2018 contract. In the October 2017 agreement, meal invoices were sent directly to the Commonwealth for payment. The plaintiff did not adduce any evidence to show that the payment arrangement had changed in or immediately after January 2018. In fact, evidence adduced shows or indicate that there were no changes or that changes may have occurred well after January of 2018. I refer to various email exchanges. The first is attachment 15 to Exhibit D1, which I have already stated above in my judgment. The email appears damning against the plaintiff because it seems to be the first documentary evidence whereby the plaintiff had notified the defendant that as of 23 April 2018, the defendant would have to pay for its own meals. This email, in my view, directly contradicts the plaintiff’s substantive argument and claim of a valid contract, that is, in reference to the January 2018 contract. The content of the email of the plaintiff, as stated above, indicates that the parties did not have any agreement in place as at 23 April 2018 apart from the October 2017 agreement. The second is the email dated 28 March 2018 by the Commonwealth’s Dawn Delaney to the defendant’s Craig Thrupp. It is located at annexure E to Exhibit P2 (Volume 2) and also at attachment 13 to Exhibit D1. In the email, the Commonwealth was querying whether the defendant had any arrangement in place to settle meals that were consumed by the defendant’s employees and sub-contractors. And the third is the email dated 3 April 2018 from the Commonwealth’s Katie Arizapa to the plaintiff’s Mick Shippey. It is located at annexure F to Exhibit P2 (Volume 2). In the email, the Commonwealth made it clear that it was not its responsibility to pay for meals consumed by the service providers like the defendant. The Commonwealth also informed the plaintiff that the plaintiff was at liberty to enter into contracts with the service providers to provide catering services. And in the same email, the Commonwealth also suggested to the plaintiff to immediately discuss the matter with service providers and issue invoices for the catering service delivered. I note that the plaintiff has not adduced evidence to show whether it had done that. There is evidence of invoices being prepared and sent by the plaintiff but as stated above in my judgment, the invoices were sent in September or October of 2018, which was about 3 to 4 months later and they were all addressed to a different party.
19. In the end, I will uphold the defendant’s submissions on the 2 issues. I find the pleading, namely, the ASoC vague, uncertain and ambiguous. I find that the plaintiff has failed to establish that there was a valid contract that had been entered into between the parties in January of 2018 based upon which it could justify issuing the 6 invoices to the defendant for payment. I will remark that it is possible that the invoices may be valid but that they were based on a different arrangement other than the one that is alleged by the plaintiff herein. I note that there is another party involved who initially had the obligation to pay for the defendant’s meals. The party is the Commonwealth and I note that it is not a party in this proceeding. Evidence disclosed, in my view, shows as follows. Firstly, it does not support the plaintiff’s claim that a valid contract was entered into in January 2018. Secondly, it shows that it is possible that the October 2017 agreement may have continued or had been extended by the conduct of the parties, that is, after it expired on or about 27 November 2017. And it could have continued on a month to month basis thereafter until it was terminated on 31 July 2018. Thirdly, it is also possible that the October 2017 agreement may have continued on a month to month basis by the conduct of the parties, until it ended in March or April of 2018 when clarity was received from the Commonwealth and conveyed to the defendant by the plaintiff. However, in regard to these scenarios, I note that the plaintiff has had its opportunities to plead and argue these before this Court but it has chosen not to. The plaintiff instead chose to allege the January 2018 contract which this Court has now found to not exist; the Court has found that the plaintiff was unable to prove to its satisfaction that such a contract exist. I must conclude by saying that due to the number of ambiguities, anomalies and possibilities shown in the evidence, it is not safe and I would say that it would be unwise, wrong and unjust to find the defendant liable based on what is pleaded and on the evidence that is adduced, by the plaintiff. I find that the plaintiff has failed to establish its case on the balance of probabilities.
20. I am therefore not satisfied that the plaintiff and the defendant have entered into a valid contract that is enforceable in law, in January of 2018. Because of that, the plaintiff’s claim must fail.
MISTAKE OF FACT
21. The next issue is this, whether the K246,939 was paid under a mistake of fact and whether the defendant should be paid back the money or whether the plaintiff should be held liable for unjust enrichment.
22. Justice Cannings, in various cases including Koroguen v. Wagen (2008) N3422 and Steven Turik v. Mathew Gubag (2013) N5132, states the elements of an unjust enrichment claim. They are:
· that the defendant has been enriched by the receipt of a benefit; and
· that the defendant has been enriched at the plaintiff’s expense; and
· that it would be unjust to allow the defendant to retain that benefit.
23. These elements, it seems, were derived from the common law. I would add that the House of Lords in the case of Banque Financiere de la Cite v. Parc (Battersea) Ltd [1998] UKHL 7; [1999] AC 221, stated the elements in the form of 4 questions:
(i) Has the defendant been enriched?
(ii) Was the enrichment at the claimant’s expense?
(iii) Was the enrichment unjust?
(iv) Are there any defences available to the defendant?
24. In this case, the defendant claims mistake of fact on the following basis. It says that it mistakenly paid the sum of K246,939 to the defendant on 9 October 2018. The payment was in regard to the plaintiff’s meal invoice no. 00011729. In support, the defendant relies on Exhibit D3. The exhibit consists of the affidavit of Philip Burke. He deposes that he was the person who had authorized the payment of said invoice on behalf of the defendant. His explanation is this. He said in September of 2018, he was working independently on rotation at Manus Island. He said he had no operational knowledge of the catering arrangements that the plaintiff had had with the defendant at the time. But he said that he was aware that the defendant had also, whilst contracted there, been paying the plaintiff for meals that were consumed by its sub-contractor Peren Investments Limited. He said that he had assumed that the invoice 00011729 was an invoice for meals that were consumed by employees of its sub-contractor, which the defendant was obligated to pay, which was why he said he had authorized the payment of K246,939. He said that it was only after the commencement of this proceeding and through the discovery process that the mistake was identified by the defendant. In conclusion, Mr Burke said at paragraph 22 of his affidavit, and I quote:
25. To me, the issue is not difficult to determine. I have already found above that there was no valid contract in January of 2018 between the parties. And it is not disputed that the K246,939 was money had and paid by the defendant to the plaintiff in regard to invoice no. 00011729. This fact is admitted in evidence and at paragraph 10 of the ASoC by the plaintiff. So based on my finding, the defendant is or was not liable and should not have paid the plaintiff the sum of K246,939 in regard to invoice no. 00011729. The said invoice had been issued based on the January 2018 contract which is found to be non-existent. As such and for the plaintiff to keep this money, in my view, amounts to unjust enrichment. I will therefore uphold the submissions and cross-claim of the defendant in regard to its primary relief.
26. In addition to my above findings, I also find the explanation by Mr Burke reasonable as well as credible. His evidence was not challenged. And I note that Mr Burke’s evidence is also consistent with the defendant’s evidence, namely, that it had been responsible for and had paid the plaintiff for all meals that had been consumed by its contractor Peren Investments Limited on site or at the Manus facility for the duration of its operation. It is also consistent with the defendant’s claim that the Commonwealth had been responsible for paying meals that were consumed by its employees at the facility, pursuant to the October 2017 agreement.
27. I will grant the relief sought by the defendant. I find that the K246,939 was mistakenly paid by the defendant to the plaintiff at the material time. There was no basis for the payment to be made in the first place. I find that to disallow the cross-claim would also be wrong because in keeping the money, the plaintiff has unjustly enriched itself, that is, of the K246,939 which belongs to the defendant. In the cross-claim, the defendant claims, amongst others, the relief, restitution for unjust enrichment, and based upon which it claims the sum of K246,939 or an assessment for the said relief. I therefore assess and find that the sum to be awarded under this relief shall be K246,939.00.
SUMMARY
28. In summary, I decline the plaintiff’s claim and uphold the defendant’s cross-claim.
INTEREST
29. The defendant also claims interest on its primary relief. Awarding of interest is discretionary. I am inclined to award interest at a minimal rate of 8% per annum. But given the nature of the relief, restitution, which is not compensation, I will award interest at the rate of 8% per annum but it shall only apply to post judgment, that is, it will apply if judgment is not settled within 30 days from today, that is, 5 June 2020.
COST
30. Cost award is discretionary. In this case, I will order cost to follow the event. I will award cost of the proceeding to be awarded to the defendant on a party/party basis which may be taxed if not agreed.
THE ORDERS OF THE COURT
31. I make the following orders:
The Court orders accordingly.
_______________________________________________________________
Corrs Chambers Westgarth: Lawyers for the Plaintiff
Ashurst PNG: Lawyers for the Defendant
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