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Pandopa v Urupu [2020] PGNC 303; N8510 (21 September 2020)

N8510

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 901 OF 2019

BETWEEN
ELIS PANDOPA
Plaintiff

AND:
YAPILI URUPU
Defendant

Waigani: Thompson J
2020: 14^th September
2020: 21^st September

CONTRACT - Monies paid for purposes not wholly performed - claim for unjust enrichment - sufficiency of evidence - need to prove claim on balance of probabilities - no damages without evidence

Counsel:
Mr A Tokam, for the Plaintiff
Defendant in person

1. THOMPSON J: The Plaintiff’s claim is that in March 2018, the Defendant requested that the Plaintiff give financial support to enable her to register a company and prepare a project proposal for submission to her Member of Parliament.

2. The Plaintiff said that she agreed, on the basis that she would become a Director of the proposed company, and that the Defendant agreed.

3. The Plaintiff claimed that in reliance on this agreement, she paid the Defendant K40,000.00 by way of 11 separate payments from 11 March 2018 to 14 April 2018.

4. The Plaintiff’s evidence was that the Defendant incorporated a company on 21 March 2018, of which the Plaintiff was not a director.

5. The Plaintiff says in her statement of claim that in 2019 she found that she was not a director of the company. There is no pleading in the statement of claim that she has requested the shareholders and/or directors to appoint her as a director.

6. In her Statement of Claim, there is no pleading that the payments had been made by the Plaintiff to the Defendant by way of a loan, or that there was any debt owing, or for a breach of contract, or that the payments were subject to an express or implied trust, or for tort, with the exception of the claim for general damages for frustration and stress. The Plaintiff has in effect waived claims for a breach of contract or tort, and has elected to pursue a restitutionary remedy based on a pleading of unjust enrichment.

The Law

7. The nature of a claim for unjust enrichment is set out by the Supreme Court in Covec (PNG) Ltd v Peter Kama and ors (2020) PG SC 9. The Court quotes from The Law of Torts in New Zealand, 5^th Ed, 2009, Hughes Burrows Smillie Hawes: “Outside contract and tort, there is a source of civil obligation ... based on the idea of unjust enrichment.”

8. They proceed to quote from The Law of Restitution, 1998, Goff and Jones, to state that the Defendant must have been enriched by the receipt of a benefit which has been gained at the Plaintiff’s expense, and it would be unjust to allow the Defendant to retain that benefit. The sums recoverable are not damages. They are measured by the amount of the gain made by the Defendant, rather than by the loss suffered by the Plaintiff.

9. In order to succeed in her claim, the Plaintiff must establish that the Defendant received a benefit from the Plaintiff at the Plaintiff’s expense, and that it would be unjust to allow the Defendant to retain that benefit.

10. The Defendant denies receiving any payment or benefit from the Plaintiff.

11. The general rule is that the burden of proving a fact is upon him who alleges it and not upon him who denies it, so that where a given allegation forms an essential part of a person’ s case, the proof of such allegation falls on him. “Even if the Defendant fails to deny the allegations ... the Plaintiff must still prove his loss”. (see McGregor on Damages, 1972, Sweet and Maxwell 13^th Ed). The minimum requirement in any action is for the Plaintiff to provide admissible and credible evidence in support of his claim (see PNGBC v Jeff Tole (2002) SC 694).

12. The first element of the Plaintiff’s claim is giving a benefit to the Defendant, which she pleads in para 11(3) of the statement of claim was the payment of K40,000.00.

Evidence

13. The Plaintiff tendered into evidence her affidavit filed 27 September 2019, and the affidavits of Dickson Noki filed 27 September 2019, Fred Yokolo filed 16 October 2019, Mark Mosinakave filed 23 October 2019, Joshua Kraip filed 23 October 2019, and Francis Pom filed 28 October 2019.

14. The Defendant had filed a number of affidavits in English, without an interpretation clause. However, it was apparent that she was illiterate and did not speak English. She confirmed that her affidavits in reply had been prepared by a lawyer who read them out to her, and she understood that they contained her story in reply to some of the affidavits filed by the Plaintiff. Pursuant to S 34 – 36 of the Evidence Act and Order 11 Rule 22, the Affidavits in Reply filed by the Defendant in reply to the affidavit of Dickson Noki on 30 September 2019, filed in reply to the affidavit of Fred Yokolo on 1 November 2019, filed in reply to the affidavit of Mark Mosinakave on 1 November 2019, filed in reply to the affidavit of Joshua Kraip on 1 November 2019, and filed in reply to Francis Pom on 1 November 2019, were admitted into evidence.

15. The affidavits of Mark Mosinakave and Joshua Kraip were not relevant. They merely said that they were policemen to whom the matter had been referred, but there were no grounds for arrest.

16. The Statement of Claim listed 11 dates on which the Plaintiff says that she made payments to the Defendant. Neither in her statement of claim nor in her affidavit evidence, does she provide any particulars of how, when or where or the circumstances in which, such payments were made. She does not say that any of the payments were witnessed by anyone else. Her evidence does not mention any of the matters raised by the deponents of the other affidavits filed in support of her claim.

17. The affidavit by Fred Yokolo says that on 14 April 2018 he was with the Defendant and a taxi driver when “the Plaintiff came and gave K9,000.00 to the Defendant”. He says he heard the Plaintiff telling the Defendant that if the money was not deposited it should be returned to her, and that the payment was in addition to the sum of K21,000.00 previously given by the Plaintiff to the Defendant, making a “total amount borrowed” of K30,000.00. He says that he was present when the Defendant was later interviewed at the Police Station, and after initially denying it, the Defendant “admitted” that she had “borrowed only K25,000.00 from the Plaintiff”. The affidavit of Francis Pom says that on 14 April 2018 he was a taxi driver who drove the Defendant to a service station, the Plaintiff and the Defendant sat in the back seat, that Fred Yokolo was also there, and Francis Pom saw the Plaintiff give K9,000.00 to the Defendant and heard the Plaintiff tell the Defendant that “the total amount she borrowed was now K30,000.00”.

18. Neither of these deponents say that Dickson Noki was present. They also do not say anything about another payment of K10,000.00 which the Plaintiff has pleaded was also paid to the Defendant on 14 April 2018. The Plaintiff does not give any explanation for why she would have given K9,000.00 to the Defendant in the presence of other people, and then on the same day given another K10,000.00 to her, not seen by anyone. The Plaintiff did not plead or give evidence that either the payment of K9,000.00 or any other payments, were witnessed by the deponents or by her husband or anyone else.

19. The only other affidavit in relation to the payments, was made by the Plaintiff’s husband, Dickson Noki. It was very brief, and simply said that he had read the Plaintiff’s affidavit, he agreed with it, and he had witnessed her paying monies to the Defendant. He gives no particulars of the dates of such payments, how he came to be there on 11 occasions, or how and in what circumstances the payments were made. He gives no explanation for why the affidavits of the Plaintiff, Fred Yokolo and Francis Pom do not mention him being present on any occasion. He also said that the Plaintiff always consulted him prior to paying the Defendant, because he was the Plaintiff’s husband. The Plaintiff made no mention of this in her evidence, and little or no weight could be attached to such a generalized statement.

20. None of the Deponents gave any evidence of seeing or hearing the Plaintiff enter into an oral agreement with the Defendant in March 2018, whereby she would provide K40,000.00 to enable the Defendant to register a company, and the Defendant agreed to make the Plaintiff adirector of that company.

21. The Defendant denies this. In her affidavits, she refers to the events at the service station in April 2018. She says that Francis Pom drove the taxi, Fred Yokolo was her consultant and he was in the front seat, and the Defendant was in the back seat with a man named Mr. Simeon whom she described as one of the Plaintiff’s customers who had borrowed money from the Plaintiff. She says that the Plaintiff came into the back seat from the right hand side, took out an unknown amount of money from her bag in her closed palm, and put that money into Mr Simeon’s bag. The Defendant was sitting on the left hand side of the back seat, while Mr Simeon was in the middle. She says that neither Francis Pom nor Fred Yokolo could have seen how much money was in the hand of the Plaintiff, and says that in any event, the Plaintiff put it into Mr Simeon’s bag, and did not give it to her. She denies making or hearing any statements about borrowing K30,000.00.

22. The second element of the Plaintiff’s claim, is that the Defendant has been unjustly enriched by the benefit.

23. The Plaintiff pleads that she gave K40,000.00 to the Defendant, for the purpose of financial support for the registration of a company, of which the Plaintiff would become a Director.

24. The evidence showed that the Defendant did register a company, but the Plaintiff was not a Director. The principal purpose for which the funding was to be applied, was fulfilled by the registration of the company. The Plaintiff’s sole complaint is that she was not made a Director.

25. The company was registered on 21 March 2018, after the Plaintiff says she had made the first seven payments. There is no evidence that the Plaintiff then made enquiries with the Defendant or in any way followed up to see if the Defendant had in fact registered the company and had in fact made her a Director. She had not been asked to sign a Consent Act as a Director. She made no enquiries as to progress as to what was happening, but made a further four payments to the Defendant. She heard nothing from the Defendant, so in July 2019 she did a company search and found that the company had been registered in March 2018, and that she was not a Director.

26. The search showed that apart from the Defendant, there was also another Director and another Shareholder. There is no evidence that the Plaintiff contacted them and informed them of her agreement with the Defendant, or of her claim to be entitled to be made a Director, or that she asked them to appoint her as a Director. There was no evidence at the time of trial in September 2020, that the Plaintiff had made any contact with the other Director and Shareholder of the company or asked them to make her a Director. This did not support her claim that there was an agreement to that effect which had not been carried out.

27. The Defendant denies receiving payment from or entering into an agreement with the Plaintiff, and this is why the Plaintiff is not a Director.

Conclusion

28. It is difficult to determine if the Defendant could be said to have been unjustly enriched by the benefit, in circumstances where the main purpose of the payment was fulfilled, namely, the registration of the company. The issue would be whether or not the failure to make the Plaintiff a Director is sufficient to show that it would be unjust to allow the Defendant to retain the benefit.

29. However, that issue can only arise if the first element of the Plaintiff’s claim is made out, that is, that she paid K40,000.00 to the Defendant to enable her to register a company and make her a Director.

30. There is no independent documentary evidence corroborating the payments. There are no bank records of cash or other withdrawals by the Plaintiff, or receipts, or signed acknowledgments from the Defendant. There was no evidence from witnesses to 10 of the 11 payments. The evidence from two persons that they saw one payment being made, is not strong. It is difficult to see how a vehicle driver and a front seat passenger could see a specific amount - K9,000.00 - being paid behind them by the Plaintiff to the Defendant in the back seat. Their evidence is also considerably weakened by the fact that the Plaintiff did not say that those two persons were present when she made the payment. Further, neither the Plaintiff nor those two persons said that the Plaintiff’s husband was also present. No weight could be attached to that part of the husband’s evidence.

31. When a fact is asserted by the Plaintiff and denied by the Defendant, the onus is on the Plaintiff to produce admissible and credible evidence to prove the fact, on the balance of probabilities. The Plaintiff provided no documentary evidence of the payments at all, in circumstances where a relatively large sum - K40,000.00 cash – was involved. The only evidence offered in corroboration of the payments was weak, and lacked credibility.

32. The Defendant strongly denied receiving the payments totaling K40,000.00, and strongly denied entering into an agreement to make the Plaintiff a Director of a company that she would be registering.

33. The Plaintiff produced some weak evidence that a payment of K9,000.00 had been made but produced no evidence at all to prove payment of the balance of K31,000.00. More significantly, the Plaintiff produced no evidence at all to prove that she had entered into an agreement with the Defendant to financially support her company registration and to be made a Director, which is an essential element of her claim for unjust enrichment.

34. I find that the evidence produced by the Plaintiff was insufficient to prove on the balance of probabilities that she entered into an agreement with the Defendant to financially support registration of the company by payment of K40,000.00 and that she would be made a Director of the company or that she made payments totaling K40,000.00 to the Defendant.

35. In relation to costs, the Defendant was unrepresented.

36. I therefore make the following Orders:

1. The Plaintiff’s claim is dismissed.

2. Each party is to pay its own costs.

__________________________________________________________________
Lawyers for the Plaintiff: Public Solicitor’s Office: Lawyers for the Plaintiffs
Lawyers For The Defendant: In Person