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Nayabbanung (trading as Lonestar International Agency) v Adams [2020] PGNC 456; N8729 (23 October 2020)

N8729

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 803 OF 2018

BETWEEN:
KIETH NAYABBANUNG t/as LONESTAR INTERNATIONAL AGENCY
Plaintiff

AND:
JEFFREY ADAMS, Survey Coordinator, Division of Policy Planning and Research, Morobe Provincial Government
First Defendant

AND:
MOROBE PROVINCIAL GOVERNMENT
Second Defendant

Lae: Dowa AJ
2020: 31^st July & ---23^rd October

DAMAGES – trial on assessment of damages – liability established through entry of default judgment - claim based on damages caused to the plaintiffs vehicle hired out by the first defendant on behalf of the second defendant - terms and conditions of hire – defendant agreed to meet costs of repair if vehicle was damaged during the period of hire – assessment of heads of damages – plaintiff entitled to damages – interest and costs awarded to plaintiff

Cases Cited:

Albert v Aine (2019) N7772
Coecon Ltd (Receiver Manager) v The National Fisheries Authority of PNG (2002) N2182,
Enaia Lanyat v State (1996) N1481
Jonathan Mangope Paraia v The State (1995) N1343,
Obed Lalip v Fred Sheekiot and The State (1996) N1457
PNGBC v Jeff Tole (2002) SC 694,
Peter Wanis v Fred Sheekiot and The State (1995) (N1350)
Samot v Yame (2020) (N8256).
Yooken Paklin v The State (2001) N2212

Counsel:

T. Dawidi, for the Plaintiff
No appearance for the Defendants

JUDGMENT

23^rd October, 2020

1. DOWA AJ: This is my judgment on assessment of Damages. Judgment on liability was entered on 4^th December 2019.

FACTS

2. The Plaintiff is the registered proprietor of a motor vehicle, a Toyota Landcruiser, 10 seater, Registration No. WAD 865.
   

3. On 6^th October 2016, the Defendants hired the Plaintiff’s motor vehicle under an agreement for hire. The parties agreed that the vehicle would be hired for a term of 90 days at the rate of K850.00 per day. It was a term of the Agreement that in the event of any accident during the course of the hire, the Defendants would meet the full cost of the damage.

5. On 17^th December 2016, and in the course of hire, the Plaintiff’s motor vehicle was extensively damaged in a road accident. The accident was caused by the negligent driving of the Defendants employed driver, one Thomas Nombe. As a result of the accident, the Plaintiff’s vehicle was damaged beyond economic repairs.

6. The Plaintiff made a request for replacement of the Motor Vehicle and for settlement of the outstanding invoices for hire. The Defendant made promises for settlement but did not honour their promises.

7. This is the basis of the Plaintiff’s claim. In the Statement of Claim the Plaintiff seeks the following reliefs:

1. K89,250.00 being for outstanding invoices.
2. Damages/replacement value for motor vehicle

100. Post Judgment interest

4. Cost of the proceeding
   

Issues

8. The issues for consideration are two-fold:

1. What is the effect of default judgment; and
2. Whether the Plaintiff is entitled to various heads of damages claimed.
   

Effect of Default Judgment

9. The law on the effect of default judgment is settled in this jurisdiction. A trial Judge must satisfy himself with the principles summarised in the cases; Coecon Ltd (Receiver Manager) v The National Fisheries Authority of PNG (2002) N2182, PNGBC v Jeff Tole (2002) SC 694, and Albert v Aine (2019) N7772. In Albert v Aine, Kandakasi DCJ at paragraphs 7 & 8 of his Judgment said:

“7. Fourthly, the law on the effect of the entry of default judgment is clear. In Coecon Limited (Receiver/Manager Appointed) v. The National Fisheries Authority of Papua New Guinea (2002) N2182, I summarised the principles that govern an assessment of damages after the entry of default judgement in the following terms:

“A survey of the authorities on assessment of damages after entry of judgement on liability mainly in default of a defendant’s defence, clearly show the following:

1. The judgement resolves all questions of liability in respect of the matters pleaded in the statement of claim.
2. Any matter that has not been pleaded but 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 judgement 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.”
8. The Supreme Court in PNGBC v. Jeff Tole (2002) SC694 adopted and applied this summation of the principles. Later, the decision of the Supreme Court in William Mel v. Coleman Pakalia (2005) SC790, did the same. Additionally, however, the Court in that case went further by noting several decisions of the National Court in which the principles were adopted and applied. It then added the following:

“Turning back to the issue raised above as to the role of the trial judge after entry of default judgment, we consider the following to be the correct approach:

the trial judge should make a cursory inquiry so as to be satisfied that the facts and the cause of action are pleaded with sufficient clarity;

if it is reasonably clear what the facts and cause of action are, liability should be regarded as proven;

only if the facts or the cause of action pleaded do not make sense or would make an assessment of damages a futile exercise should the judge inquire further and revisit the issue of liability.”
10. In the present case, I have thoroughly examined the pleadings and the cause of action. I have also considered the process and steps taken in the entry of default judgment. I am satisfied that the default judgment is in order and to that extent liability is proven.

Burden of Proof

11. Whilst the issue of liability is settled, the Plaintiff is still required to prove its damages with credible evidence. Refer: Yooken Paklin v The State (2001) N2212, Peter Wanis v Fred Sikiot and The State (1995) (N1350), Enaia Lanyat v State (1996) N1481, Obed Lalip v Fred Sekiot and The State (1996) N1457; Jonathan Mangope Paraia v The State(1995) N1343, Samot v Yame (2020) (N8256).

12. In Samot v Yame (Supra), His Honour, David J referring to legal principles to be applied in assessing damages said this at paragraph 46 of his judgment:

“ The Supreme Court in William Mel v Coleman Pakalia (2005) SC790 and the National Court decision of Cannings, J in Steven Naki v AGC (Pacific) Ltd (2006) N5015 summarise or identify a number of legal principles that are applicable in assessing damages where liability is established either following a trial or after the entry of default judgment and these are:

• The plaintiff has the onus of proving his loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and then 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. If an allegation forms an essential part of a person’s case, that person has the onus of proving the allegation. (Yooken Paklin v The State (2001) N2212, National Court, Jalina J.)
  
• Corroboration of a claim is usually required and the corroboration must come from an independent source. (Albert Baine v The State (1995) N1335, National Court, Woods J; Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331, National Court, Lenalia J.)
  
• 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, National Court, Woods J.)
  
• The same principles apply after default judgment is entered and the trial is on assessment of damages – even when the trial is conducted ex parte. A person who obtains a default judgment is not entitled as of right to receive any damages. Injury or damage suffered must still be proved by credible evidence. (Yange Lagan and Others v The State (1995) N1369, National Court, Injia J.)
  
• 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. (Obed Lalip and Others v Fred Sikiot and The State (1996) N1457, National Court, Injia J.)
  
• Where default judgment is granted, for damages to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded. (MVIT v Tabanto [1995] PNGLR 214, Supreme Court, Kapi DCJ, Hinchliffe J, Sevua J; Waima v MVIT [1992] PNGLR 254, National Court, Woods J; MVIT v Pupune [1993] PNGLR 370, Supreme Court, Kapi DCJ, Jalina J, Doherty J; Tabie Mathias Koim and 28 Others v The State and Others [1998] PNGLR 247, National Court, Injia J.)
  
• The fact that damages cannot be assessed with certainty does not 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. (Jonathan Mangope Paraia v The State (1995) N1343, National Court, Injia J.)
  
• The court must be alert to vague claims, unsupported by corroborating evidence, as they might be false claims. The court must only uphold genuine claims. (Kolaip Palapi and Others v Sergeant Poko and Others (2001) N2274, National Court, Jalina J.)
  
• The person who has been wronged has a duty to mitigate their losses; though it is the defendant who has the onus of proving failure to mitigate (Dia Kopio v Employment Authority of Enga and Others (1999) N1865, National Court, Hinchliffe J; Coecon v National Fisheries Authority (2002) N2182, National Court, Kandakasi J.)”

13. I will adopt and apply these principles in the present case when considering each head of damages sought by the plaintiff.

Evidence

14. The Plaintiff relies on his Affidavit sworn 12 July 2020 tendered into evidence and marked as Exhibit P1.

15. The Plaintiff says he is the registered owner of the motor vehicle, a Toyota Land Cruiser Reg No. WAD 865. He purchased the vehicle from Ela Motors for K42,806.16 at a discounted price. The Plaintiff gave evidence that the actual value of the vehicle was about K 84,000.00. He purchased the vehicle at a discounted price as a staff member of the British American Tobacco Co. after the Employer company traded in the said vehicle at Ela Motors for a new fleet. The vehicle was used for about three years by the Plaintiff in the course of employment before the trade-in and is well aware of the condition of the vehicle. After he purchased the vehicle, he entered into a contract for hire of the vehicle with the defendants. The motor vehicle was hired out to the Morobe Provincial Government, Division of Policy Planning Research and Survey Unit. The hire agreement was in writing dated 16^th October 2016. The hire rate was fixed at K850.00 per day for a period of 90 days. It was a term of the agreement that if the vehicle is damaged during the course of the agreement, the Defendants would be responsible to make good any damage.

16. On 17^th December 2016, the Plaintiff’s motor vehicle got involved in a road accident, whilst in the custody of the Defendants. The vehicle was driven by one Thomas Nombe, an employee or agent of the Defendants. The accident took place at a section of road between Busu and Poahum village, along the Busu road, Nawae District.

17. As a result, the Plaintiff’s motor vehicle sustained extensive damage. The Plaintiff says, the vehicle was damaged beyond economic repair. This is confirmed from three motor dealers namely Ela Motors, Boroko Motors and PNG Motors. As a result of the accident, the Plaintiff says he suffered loss of use of the motor vehicle.

18. The Plaintiff gave evidence that up to the time of the accident, the Defendant did not make any payment for the hire of the vehicle. He sent invoices for the hire of the vehicle, and also made requests for the replacement of the vehicle. Although the Defendants promised to pay the outstanding debts for the hire and to replace the vehicle as per the agreement but did not make any payments.

19. The Plaintiff gave evidence that after waiting for a long while, he instituted to these proceedings claiming the following:

1. K89,250.00 for outstanding hire invoices, and
2. K48,300.00 for replacement value for motor vehicle
   

20. However, after the commencement of these proceedings, the Defendant made several payments by instalment as follows:

Date Amount

24.11.18 K8,000.00

10.05.19 K10,000.00

05.09.19 K6,000.00

10.10.19 K30,000.00

K54,000.00

21. The Plaintiff says he now claims the balance of the outstanding debt and for the value of the vehicle.

Assessment

22. Claim No. 1 - Outstanding Hire: K89,250.00
    
    1. The Plaintiff claims K89,250 for the voices for hire. I have considered the evidence of the Plaintiff. The Plaintiff has annexed to his affidavit, a copy of the Hire Agreement. The terms are clear, even though some parts of the writing are illegible. The agreement shows, the hire was at the rate of K850.00 per day, commencing 6^th October 2016. The accident took place on 17^th December 2016. The total number of days is 105 and calculating at K850.00 per day amounts to K89,250.
       
    2. I note the Plaintiff has attached several invoices in his Affidavit which total the sum of K89,250. The evidence is consistent with the pleading.
       
    3. I am also satisfied, that the Plaintiff is the owner of the Land Cruiser Reg. No. WAD 865. The Plaintiff has attached to his affidavit, copies of the Registration Certificate, as well as invoices for the purchase of the vehicle from Ela Motors.
       
    4. For these reasons, I am satisfied that at the time of commencement of the proceedings, the Plaintiff was owed K89,250.00 by the Plaintiff under the terms of the Lease/Hire of motor vehicle agreement signed 6^th October 2016. I will allow the claim of K89, 280.00.; as it is proven.
       

Replacement value

23. The Plaintiff claims in the Statement of claim general damages being for replacement Cost of the vehicle. In his evidence, the Plaintiff is making a claim for K42,000 being the purchase price plus a 15% makeup to reflect the true value of the vehicle at the time of accident. The Plaintiff gave evidence that he purchased the vehicle at a reduced price, even though the real market value was more than the price he paid. He gave evidence that it was about K84,000. There is evidence of the invoice and receipt from Ela Motors that he purchased the vehicle from Ela Motors on 8^th January 2016, at the purchase price of K42,802.16. I am not prepared to consider or accept the value of the vehicle for any amount more than what is pleaded and supported by credible evidence.

24. The Supreme Court settled the law on pleadings in the case, Papua New Guinea v Tole (2002) SC694. At page of their judgment, the Court said:

”First Two Issues – Pleadings

The first two issues are closely related. They involve the issue of pleadings so they are being dealt with together. The law on pleadings in our jurisdiction is well settled. The principles governing pleadings can easily be summarized in terms of, unless there is foundation in the pleadings of a party, no evidence and damages or relieves of matters not pleaded can be allowed. This is the effect of the judgements of this Court in Motor Vehicles Insurance (PNG) Trust v. John Etape [1995] PNGLR 214 at p.221 and Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370 at pp. 373 –374. These judgements re-affirmed what was always the position at common law and consistently applied in a large number of cases in our country. The list of such cases is long but reference need only be made to cases like that of Repas Waima v. Motor Vehicles Insurance Trust [1992] PNGLR 254 and Carmelita Mary collins v. Motor Vehicles (PNG) Insurance Trust [1990] PNGLR 580 at p. 582 for examples only.

This position follows on from the objects behind the requirements for pleadings. As the judgement in Motor Vehicles Insurance (PNG) Trust v. James Pupune (supra) at p. 374 said in summary, pleadings and particulars have the object or functions of:

"1. they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it;

2. they define the issues for decision in the litigation and, thereby, enable the relevance and admissibility of evidence to be determined at the trial; and
3. they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. See Dare v. Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664."

It is clear law that, where a plaintiff’s claim is special in nature, such as a claim for loss of salaries or wages, they must be specifically pleaded with particulars. Unless that is done, no evidence of matters not pleaded can be allowed and relief granted. That is apparent from the judgements in the James Pupune and John Etape cases. These cases adopted and applied principles enunciated in those terms in authorities such as Ilkiw v. Samuel [1963] 2 All ER 879, per Diplock L J at pp. 980-891 and Pilato v. Metropolitan Water Sewerage and Drainage Board (1959) 76 WN (NSW) 364, per McClemens J at 365. This follows in turn from the fact that, our system of justice is not one of surprises but one of fair play. Reasonable opportunity must be given to each other by the parties to an action to ascertain fully the nature of the other’s case so that, if need be, a defendant can make a payment into Court.”
25. The Plaintiff has not produced a pre-accident value of the vehicle at the time of the accident, in order for the Court to be satisfied as to the estimate value of the vehicle. I am not prepared to accept that the value is anything other than or has increased to an amount above that of the purchase price. I will therefore accept the amount of K42,802.16.

26. Besides I am aware that motor vehicles are perishable commodities and they depreciate over time. I will therefore make a discount on the value of the vehicle at 10% to allow for depreciation which amounts to K 4,281.20. I will make an award of K38,530.80 being for the replacement cost of the Plaintiff’s vehicle.

26. The Plaintiffs total claim shall be.

Hire K 89,250.00

Replacement Value K 38,530.80

Total K127,780.80

Less amount received (K 54,000.00)

K 73,780.80

27. There shall be an award for K73,780.80
    

28. The Plaintiff claims interest at 8%. I will allow interest at 8% on the total award of K73,780.80 from date of writ (09/07/18) to date of Judgment (21/10/2020) which is calculated as follows:

K73,780.80 x 8% = K 5, 902.464

K5,902.46/365 days = K 16.171 per day

K16.71 x 834 days = K13,486.73

29. The amount to be awarded is K73,780.80

Plus K13,486.73, totalling K87,267.53

Cost

30. The Plaintiff has claimed cost. The Plaintiff is allowed to claim the cost of the proceedings.

Orders

31. The Court orders:

1. Judgment is entered for the Plaintiff in the sum of K87,267.53.
2. Post Judgment interest shall accrue at 8% per annum until settlement.

100. The Defendant shall pay the Plaintiffs cost of the proceedings to be taxed, if not agreed.

________________________________________________________________
Dawidi Lawyers: Lawyer for the Plaintiff
Inhouse Lawyer: Lawyer for the Defendants