N9372
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 854 OF 2012

NICHOLAS MANIHOROU trading as ELKEN CONSTRUCTION
Plaintiff

-V-

JOHN SINI PORTI as Secretary of Defence
First Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

Waigani:  Kariko, J
2021: 12th November & 2nd December

DAMAGES – telephone cabling works –unauthorized works – restitution – lack of corroboration - credibility of evidence –claimed amount discounted
  
Cases Cited:

Fly River Provincial Government v Pioneer Health Services (2003) SC 705
William Mel v Coleman Pakalia and Others (2005) SC790 

Counsel:

Mr T Tingnni, for the plaintiff
Mr T Tanuvasa & Ms Z Waiin, for the Defendants

JUDGMENT ON DAMAGES 

2nd December, 2021

1.	KARIKO, J: The plaintiff was contracted by the Department of Defence in April 2010 to do external telephone cabling at Taurama Barracks N.C.D. for K286,400.00 (“the Contract”). He completed the works but was only paid K100,00.00. Summary judgment was granted in his favour for the unpaid balance of K186,400.00. 

2.	He has also claimed a further K651,00.00 for additional works he performed, installing the internal telephone cabling for the Barracks which works he pleaded was a variation of contract.

3.	After the trial on liability, I found on 10 September 2021 that:  

•	the parties to the Contract had not agreed to vary it, and
•	while there was a willingness by certain Defence Force officers to pay the claim, they also acknowledged that the additional works were done without proper authority, and
•	the value of the additional works required the project to be tendered pursuant to the Public Finance (Management) (Amended) Act 2013, 

and I concluded that the Contract was not validly varied or amended, and no separate agreement was executed for the additional works either.    

4.	While I decided there was no breach of contract, I viewed the plaintiff is entitled to restitution on a quantum meruit basis. I allowed parties time to file any further evidence and address me on the amount that ought to be ordered.

CONSIDERATION

5.	I relied on the observations of the Supreme Court in Fly River Provincial Government v Pioneer Health Services (2003) SC705 in deciding restitution as appropriate relief in this case. In that case, the court stated: 

A bona fide contractor who has provided services of value is not left without a remedy.  There is no unfairness in upholding the legislation in such circumstances and allow an innocent party to recover damages on a quantum meruit basis to avoid unjust enrichment by the other if the contract has been part performed.  Some authorities describe this principle as the right of restitution.  The decision in the Barclay Brothers case discusses this at page 17 of the judgement as a right in equity to claim restitution for it lies outside the parameters of a contract.  Such a right is not to enforce a contract but because justice and equity demands it.  

6.	In determining what to award as quantum meruit in the present case, I view   as relevant the principles for considering damages endorsed by the Supreme Court in the case of William Mel v Coleman Pakalia and Others (2005) SC790, and particularly the principles that:

•	The plaintiff has the onus of proving his loss on the balance of probabilities. 
•	Corroboration of a claim from an independent source is usually required.
•	The principles of proof and corroboration apply even when the defendant fails to present any evidence disputing the claim. 
•	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. 
•	The court must be alert to vague claims, unsupported by corroborating evidence, as they might be false claims. 

7.	According to his affidavit (Exhibit P3), the plaintiff completed the works he was contracted for (the external cabling) by the first week of November 2010. The additional works (internal cabling) commenced in mid-December 2010. Due to non-payment of the outstanding K186,400.00 under the Contract, the plaintiff used his own funds to do the internal cabling. For this reason, the additional works could not be completed earlier until December 2011. He then issued the invoice for K801,400.00 (Exhibit P1 Annexure “A”).

8.	The plaintiff urged the court to award the full amount of K651,000.00 that he claimed for breach of contract. He relied on the invoice for K801,400.00 which included the unpaid K186,400.00 under the Contract. As already stated, that invoice (“the Elken Invoice”) is annexed to his affidavit Exhibit P1 and marked “A”. The invoice is undated, but the plaintiff deposed that it was sent to the Secretary for Defence in 2012. 

9.	I am not inclined to award the K651,000.00 because that would be in effect agreeing to the relief claimed for breach of contract.  I am minded ordering as restitution the amount spent on the materials used for the internal cabling. 

10.	In respect of those costs, the plaintiff referred to an invoice from Telikom PNG Limited dated 16 October 2010 issued to Elken Construction for K349,090.62, and an invoice from Cable Technologies dated 17 November 2010 issued to Elken Construction for K94,209.54.  The total of these invoices (more accurately quotations) is K443,300.16. 

11.	Interestingly, the costs of the 37 specific jobs listed on the Elken Invoice equates to the total of the quotations of Telikom and Global Technologies added together, K443,300.00. This might seem in order except there are no receipts at all from either Telikom or Global Technologies to confirm that the materials quoted for were paid for. Further, the Telikom and Global Technologies quotations were issued at the end of 2010. According to the plaintiff, the additional works took another year after then to complete, and that it took that long because he did not have funds to complete the works on time. It would be most unusual for prices to remain the same throughout the year. To me, it is too much of a coincidence that the value of each of the 37 jobs when added up should be exactly the same as the costs of the materials quoted 12 months earlier. It is noted also that during that period, further jobs were requested by the Defence Officers as he progressed the cabling. There also appears some discrepancies between the Elken Invoice and the two quotations. For example, while the total cost of jobs that involved installing 50mm PVC conduit pipes (Items 5 and 6) is K10.000.00, the quotations for this material only add up to K6,686.00. Labour is of course charged separately. As another example, there are several jobs that involved installation of 15mm PVC conduit pipes. However, the quotations do not provide for such pipes but for 20mm pipes. All these matters lend doubt to the veracity of the claim for material costs. 

12.	There is no corroborative evidence also of the exact works that were carried out. The list of jobs on the Elken Invoice does not provide sufficient details. Critically, there is no corroboration from an independent source. 

13.	I also do not find it believable that in carrying out the internal cabling over the course of twelve months, the plaintiff only issued one invoice, and that was after the completion of the works. That is rather unusual, and especially when he said he needed funds to complete on time. 

14.	In the circumstances where there are deficiencies and lack of corroboration in the plaintiff’s evidence, I consider discounting the claimed amount for cost of materials (K443,300.00) by 75% as a fair and reasonable sum to award as damages on quantum meruit basis. That is calculated to be K110,825.00.

INTEREST

15.	Pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act, Ch. 52, I exercise my discretion to award 2% interest on the judgement sums to be applied from the date of filing of the Further Amended Statement of Claim (15 October 2014) to the date of this judgment, a period of 7.2 years. Interest = damages x 2% x 7.2 years, and that is K110,825.00 x 0.02 x 7.2 = K15,958.80.

COSTS

16.	While costs normally follow the event, the plaintiff was unsuccessful in his substantive claim for breach of contract. I therefore think the parties should bear their own costs. 

ORDER

(1)	Damages on a quantum meruit basis in the sum of K110,825.00 plus interest of K15,958.80 are payable by the State to the plaintiff.
(2)	The parties shall bear their own costs of and incidental to this proceeding.
(3)	Time for entry of this order is abridged to the date of settlement by the Registrar which shall take place forthwith.   

Tingnni Lawyers: Lawyer for the Plaintiffs
Solicitor-General: Lawyer for the Defendants