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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO. 1023 OF 2016
BETWEEN
PRAISE HIRE CARS LTD
Plaintiff
AND
DIANNE LEKA, Department of Police
First Defendant
AND
TONY HASU, Department of Police
Second Defendant
AND
GARI BAKI, Commissioner of Police
Third Defendant
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant
AND
NORMAN KAMBO – Commander for NCD/CENTRAL
Fifth Defendant
Waigani: Makail, J
2023: 3rd & 28th February
LIABILITY – Breach of contract of services – Hire car services – Contract unlawful and unenforceable – Lack of authority and capacity of party to contract – Non-compliance with procurement requirements – Lack of Integrated Local Purchase Order and Authority to Pre-commit Expenditure Form – Contract performed – Services rendered – Unpaid services – Void contract – Public Finances (Management) Act, 1995 – Sections 47C & 47D – Claims By and Against the State Act, 1996 – Section 2A
LIABILITY – Breach of contract – Privity of contract – Certainty of contract – Variation of contract – Terms of contract must be clear and unambiguous – Terms are vague and ambiguous – Void contract – Liability established against party to contract
DAMAGES – Unjust enrichment – Damages awarded for sum claimed in unpaid invoice
Cases Cited:
Jhelson Ray trading as Bara Construction v. Timothy Numara & The State (2018) N7380
Seken Kewa v. Minister for Community Development & Ors (2019) N7753
Counsel:
Mr. B. Lakakit, for Plaintiff
No appearances, for First, Second & Fifth Defendants
Mr. E. Kopi with Ms. T. Ohuma, for Third & Fourth Defendants
JUDGMENT
28th February, 2023
1. MAKAIL, J: The plaintiff sues the defendants for breach of contract of services in the form of hire car services. It alleges that services and invoices were rendered but remained unpaid.
STATEMENT OF CLAIM
2. Summarising the allegations in the amended writ of summons and statement of claim filed 15th June 2019 the plaintiff operates a hire car business in the National Capital District. It entered into a contract with the fifth defendant to supply its motor vehicles for policing duties for a fee. The first and second defendants are employees or officers of the fourth defendant and either had real or ostensible authority on behalf of the third defendant to bind the third defendant to receive and use the motor vehicles for official purpose and the fourth defendant is liable for their acts or omissions as their employer under the principle of vicarious liability.
3. The terms of the contract were:
(a) the motor vehicle shall be used in the National Capital District.
(b) the defendants shall pay damages occasioned on the motor vehicle.
(c) the defendant shall pay the bills as and when they are submitted for payment.
4. Further, when a motor vehicle was given to the defendants to use, the first defendant signed a Lease Agreement/Form (The actual document is titled “Motor Vehicle Hire Car Request Form”).
5. The contract provided for the lease of two motor vehicles from 2nd April 2015 to 22nd June 2015. They are:
(a) Toyota Landcruiser (Maroon 5 Door) Reg. No: BEM 934; and
(b) Toyota Camry Sedan Reg. No: BEL 896.
6. Additional motor vehicles were leased to the fifth defendant from 24th June 2015 to 17th August 2015 as follows:
(a) Toyota Landcruiser 10-Seater Reg. No: BDO 505; and
(b) Toyota Landcruiser 10-Seater Reg. No: BDX 265.
7. Invoices were submitted to the defendants for payment but were not settled. The total sum due and payable is K138,820.00.
8. One of the motor vehicles identified as Toyota Landcruiser 10-Seater Reg. No: BDO 505 was damaged while being used by the first defendant and repaired at the costs of K3,972.10.
9. The plaintiff claims a total sum of K142,292.10 for unpaid invoices and costs of repairs.
THIRD AND FOURTH DEFENDANTS’ DEFENCE
10. Pursuant to their statement of defence filed 7th September 2021, the third and fourth defendants deny liability on the following grounds:
(a) the alleged debt was personally incurred by the first, second and fifth defendants,
(b) that the engagement of the plaintiff was without the expressed authority and approval of the third defendant as Commissioner of Police,
(c) that the third and fourth defendants, in particular, the fourth defendant were not parties to the contract
(d) the first defendant does not have the capacity to entered into the contract,
(e) that the use of the motor vehicles was not within the scope of employment of the defendants,
(f) the contract is null, and void and unenforceable because it did not comply with the procurement requirements for obtaining an Integrated Local Purchase Order (“ILPOC”) and Authority to Pre-Commit Expenditure Form (“APCE”) under Sections 47C and 47D of the Public Finances (Management) Act, 1995 (“PFM Act”) and Section 2A of the Claims By and Against the State Act, 1996 (“CB&AS Act”).
PARTIES’ EVIDENCE
11. The plaintiff tenders the following affidavits:
(a) Affidavit of John Mong sworn 11th July 2019 and filed 23rd August 2019 and marked as exhibit “P1”, and
(b) Affidavit in support of John Mong sworn 26th October 2018 and filed 29th October 2018 and marked as exhibit “P2”.
12 The third and fourth defendants tender two affidavits:
(a) Affidavit of Troy Mileng sworn and filed 2nd November and marked as exhibit “D1”, and
(b) Affidavit in support of Troy Mileng sworn 14th June 2019 and filed 28th June 2019 and marked as exhibit “D2”.
13. The rest of the defendants did not participate since the beginning of the proceedings and, did not appear and tender any affidavits at trial to refute the assertions of the plaintiff’s witness Mr John Mong.
PLAINTIFF’S EVIDENCE
14. Mr Mong deposes that he is the managing director and proprietor of the plaintiff. On 30th November 2012 he signed a written contract of services with the fifth defendant to lease the plaintiff’s motor vehicles to the members of the Police for official use. The document constituting the contract is three-page long. Subsequently, lease agreement forms were executed commencing from April 2015 where additional motor vehicles were supplied by the plaintiff to the defendants for official use.
15. According to Mr Mong the lease agreement forms were issued at the request of the first and second defendants and signed by them each time a motor vehicle was supplied to them. The first and second defendants are officers of the Department of Police and based at the Police Headquarters at Konedobu.
16. The contract identifies the following motor vehicles:
(a) Vehicle Reg. No: BDX 265 at K850.00 plus GST per day, and
(b) Vehicle Reg. No: BEM 934 at K850.00 with GST per day.
17. The additional motor vehicles identified in the Motor Vehicle Hire Car Request Form are:
(a) Toyota Landcruiser 10-Seater (White) Reg. No: BOD 265 at K800.00 with GST per day, and
(b) Toyota Landcruiser 10-Seater Reg. No: BOD 505 at K800.00 with GST per day.
18. Mr Mong annexes a total of nine Motor Vehicle Hire Car Request Forms. The total sum sought for nine Motor Vehicle Hire Car Request Forms is K138,820.00.
19. He further annexes twenty-two invoices as follows:
(a) Invoice dated 17th August 2015 for Toyota Landcruiser 10-Seater Reg. No: BDX 265 – K5,280.00.
(b) Invoice dated 4th August 2015 for Toyota Landcruiser 10-Seater Reg. No: BDX 265 – K3,520.00.
(c) Invoice dated 24th July 2015 for Toyota Camry Sedan Reg. No: BEL 896 – K12,320.00.
(d) Invoice dated 31st July 2015 for Toyota Landcruiser 10-Seater Reg. No: BDX 265 – K9,680.00.
(e) Invoice dated 20th July 2015 for Toyota Landcruiser 10-Seater Reg. No: BDX 265 – K14,960.00.
(f) Invoice dated 3rd July 2015 for Toyota Camry Sedan Seater Reg. No: BEL 896 – K990.00.
(g) Invoice dated 2nd July 2015 for Toyota Landcruiser Maroon 5 Door Reg. No: BEM 934 – K2,640.00.
(h) Invoice dated 29th June 2015 for Toyota Landcruiser 10 White Seater Reg. No: BDO 505 – K6,160.00.
(i) Invoice dated 30th June 2015 for Toyota Camry Sedan Reg. No: BEL 896 – K4,950.00.
(j) Invoice dated 29th June 2015 for Toyota Landcruiser 5 Door Seater Reg. No: BDM 934 – K7,040.00.
(k) Invoice dated 5th June 2015 for Toyota Camry Sedan Reg. No: BEL 896 – K6,270.00.
(l) Invoice dated 15th June 2015 for Toyota Landcruiser 5 Door Maroon Reg. No: BEM 934 – K7,040.00.
(m) Invoice dated 15th June 2015 for Toyota Landcruiser 10-Seater Reg. No: BDX 265 – K1,760.00.
(n) Invoice dated 12th August 2015 for Toyota Landcruiser 10-Seater Reg. No: BDX 265 – K4,400.00.
(o) Invoice dated 15th June 2015 for Toyota Landcruiser 5 Door Maroon Reg. No: BEM 934 – K9,680.00.
(p) Invoice dated 7th June 2015 for Toyota Camry Sedan Reg. No: BEL 896 – K3,630.00.
(q) Invoice dated 4th June 2015 for Toyota Landcruiser 5 Door Maroon Reg. No: BEM 934 – K7,920.00.
(r) Invoice dated 27th May 2015 for Toyota Camry Sedan Reg. No: BEL 896 – K4,290.00.
(s) Invoice dated 8th May 2015 for Toyota Camry Sedan Reg. No: BEL 896 – K1,650.00.
(t) Invoice dated 2nd April 2015 for Toyota Landcruiser 5 Door Maroon Reg. No: BEM 934 – K4,400.00.
(u) Invoice dated 17th March 2015 for Toyota Landcruiser 10-Seater Reg. No: BDX 265 – K3,520.00.
(v) Invoice dated 30th September 2013 for Toyota Landcruiser 10-Seater Reg. No: BDO 505 – K25,000.00.
20. The total sum sought for these invoices is K147,100.00.
21. Mr Mong further deposes that the motor vehicles were supplied to the defendants on a need basis and were used for policing duties.
22. One of the motor vehicles was damaged while it was in the possession of the first defendant and was repaired at the cost of K3,972.10. He produces an invoice from the plaintiff dated 7th August 2015 and a quotation from Ane Auto Parts & Services Ltd dated 7th August 2015 bearing the sum sought.
THIRD AND FOURTH DEFENDANTS’ EVIDENCE
23. Apart from deposing to matters in relation to the plaintiff filing a motion for default judgment and was dismissed by the National Court on 8th May 2018, discovery of documents and settlement negotiations, Mr Mileng deposes that on 19th October 2012 this Court directed parties to research the date of commencement of Sections 47C and 47D of the PFM Act and Section 2A of the CB&AS Act. He produces a Notice of Gazettal which shows that the amendments were passed by the National Parliament on 10th December 2002 and certified by the Speaker of the National Parliament on 21st February 2003.
FINDINGS OF FACT
24. Based on the summary of the evidence of Mr Mong and Mr Mileng, the Court notes that Mr Mileng does not refute the assertions of Mr Mong in relation to the existence of the contract, lease of motor vehicles and sum due and payable. Similarly, Mr Mong does not refute the assertions of Mr Mileng in relation to the commencement date of Sections 47C and 47D of the PFM Act and Section 2A of the CB&AS Act.
25. Given this, the Court finds that Mr Mong signed a written contract of services with the fifth defendant on an unknown date to supply the plaintiff’s motor vehicles to the defendants for a fee. The document constituting the contract is three-page long and incomplete. The third and fourth defendants are not parties to the contract and further, did not sign the contract.
26. The first and second defendants requested the plaintiff to supply motor vehicles to them. Upon release of a motor vehicle the first and second defendants signed a motor vehicle hire car request form. Commencing from April 2015 the first and second defendants signed the motor vehicle hire car request forms where two additional motor vehicles were supplied by the plaintiff to them. In total, there were nine hire car request forms signed by the first and second defendants of various sums. The first and second defendants are officers of the Department of Police and based at the Police Headquarters at Konedobu.
27. According to the contract the following motor vehicles were supplied to the fifth defendant:
(a) Vehicle Reg. No: BDX 265 at K850.00 plus GST per day, and
(b) Vehicle Reg. No: BEM 934 at K850.00 with GST per day.
28. The additional motor vehicles identified in the lease hire car release forms were:
(a) Toyota Landcruiser 10-Seater (White) Reg. No: BOD 265 at K800.00 with GST per day, and
(b) Toyota Landcruiser 10-Seater Reg. No: BOD 505 at K800.00 with GST per day.
29. The plaintiff submitted a total of nine hire car request forms. Except for two of the forms where no sums have been stated, adding the sum sought in each hire car request form, the total sum sought is K27,090.00.
30. Only one ILPOC and APCE form was produced by the plaintiff for Invoice dated 30th September 2013 for Toyota Landcruiser 10-Seater Reg. No: BDO 505 in the sum of K25,000.00.
31. One of the motor vehicles sustained damage while in the possession of the first defendant and according to an invoice dated 7th August 2015 and a quotation from Ane Auto Parts & Services Ltd dated 7th August 2015, it was repaired at a cost of K3,972.10.
32. The total sum sought in the invoices of K147,100.00 and cost of repairs of K3,927.10 gives a total sum of K151,027.10 as opposed to Mr Mongs’ calculation of K142,792.10.
CERTAINTY OF CONTRACT
33. Learned counsel for the plaintiff submits that the contract is clear and enforceable because it was signed by the fifth defendant in his capacity as Commander for NCD and Central. Secondly, the motor vehicles were used by the defendants for police duties. Thirdly, additional motor vehicles were supplied by the plaintiff to the defendants. They are not captured in the contract but in the hire car release forms. These hire car release forms constitute separate contracts for supply of the additional motor vehicles.
34. The third and fourth defendants contend otherwise. Learned counsel submits that the contract is void for uncertainty because the written contract is missing pages of the fundamental terms of the contract as alleged in the amended statement of claim, in that, there are no clauses to establish that the motor vehicles are for use in the National Capital District, that the defendants are to pay damages occasioned on a motor vehicle and that the defendants are to pay bills as and when they are submitted for payment.
35. Secondly, the contract is unclear as to whether it relates to the motor vehicles in dispute, that the contract document is not dated to indicate when it was signed by the parties and that it was not signed by a witness to verify it.
36. In order to establish that a contract is enforceable against a defaulting party, one of the fundamental principles in the law of contract is certainty. This essentially means that parties to a contract must ensure that the contract is complete, that is, it must be clear, precise and unambiguous.
37. In the present case, based on the above findings of the Court, the Court accepts the submission of learned counsel for the third and fourth defendants that the contract is incomplete because the pages where fundamental terms of the contract necessary to establish if they were breached are missing.
38. First, a contract must state the purpose of the supply of the motor vehicles. Here given that it is incomplete, the purpose of the supply of the motor vehicles is not known. For example, there are no clauses that the motor vehicles are for use in the National Capital District, that the defendants are responsible for costs of any damage occasioned on the motor vehicles and that the defendants are to pay bills submitted by the plaintiff for payment.
39. Secondly, the contract must identify or give a description of the motor vehicles and rate of hire for each motor vehicle. Here except for two motor vehicles identified at Item 11 of the Schedule of the contract as Reg No: BDX 265 at K850.00 plus GST and Reg No: BEM 934 at K850.00 plus GST, there is no mention of additional motor vehicles which Mr Mong asserts were supplied to the defendants, they are being:
(a) Toyota Landcruiser 10-Seater (White) Reg. No: BOD 265 at K800.00 with GST per day, and
(b) Toyota Landcruiser 10-Seater Reg. No: BOD 505 at K800.00 with GST per day.
40. Thirdly, a contract must be dated to show the date of its commencement and its duration. Here, the contract is not dated and does not have an expiry date. An unfixed period of contract reinforces Mr Mong’s assertion that the motor vehicles were supplied on a need basis. Fourthly, the contract must have an execution clause for the contracting parties to sign and verified (signed) by a witness. Here, the written contract shows that it was signed by Mr Mong on behalf of the plaintiff and the fifth defendant signed in person. However, it was not signed by a witness as there is no name and signature indicated in the witness clause.
41. A lack of these terms including the date and verification by a witness in the written contract raises serious questions in relation to its certainty and whether parties had agreed to be bound by these terms at all. It follows that, as the plaintiff is relying on a written contract, it speaks for itself and the Court will disregard any extrinsic evidence such as the hire car request forms and Mr Mong’s assertions to establish the terms of the contract and their breach.
42. For the foregoing reasons, the Court upholds the third and fourth defendants’ defence and finds that the contract is void for uncertainty and unenforceable against the third and fourth defendants.
PRIVITY OF CONTRACT
43. The next question is not whether the first, second and fifth defendants had expressed or implied authority to bind the third and fourth defendants to the contract but whether the third and fourth defendants are privy to the contract. Thus, while the Court notes the learned counsel for the plaintiff’s extensive submissions on the authority of the first, second and fifth defendants to bind the third and fourth defendants to the contract, it is not necessary to consider them as they are irrelevant. On the other hand, according to the doctrine of privity of contract, a contract cannot confer rights and impose obligations on any person who is not a party to the contract. The Court notes that the contract was signed by the fifth defendant in his capacity as the Commander for NCD and Central.
44. However, based on the doctrine of privity of contract, the Court upholds the submissions of learned counsel for the third and fourth defendants and finds that the third and fourth defendants are not parties to the contract and are not bound by it. On the other hand, the fifth defendant is a sole party to the contract and is bound by it. Where it has been breached, the fifth defendant is liable. For these reasons, the contract is unenforceable against the third and fourth defendants.
AUTHORITY AND CAPACITY TO ENTER INTO CONTRACT
45. The next question is whether the fifth defendant has the authority and capacity to enter into a contract on behalf of the State. Learned counsel for the plaintiff submits that the fifth defendant has authority and capacity to enter into the contract on behalf of the State because he is the Commander of NCD and Central police.
46. The Court observes that a “State contract” is regulated by Section 47 of the PFM Act. Putting aside the requirement to comply with the tender process under Section 42, Section 47(1) provides for authorised persons to execute a contract on behalf of the State and the threshold limit for each contract. In a case where the amount of consideration does not exceed K5,000,000.00 the authorised person to execute the contract is the Minister for Finance: Section 47(1)(b).
47. In the present case, according to the contract the fee per day for a motor vehicle is K850.00 inclusive of GST and is charged on a need basis. However, irrespective of whether it is K850.00 per day or the cumulative sum of K147,100.00, both are less than K5,000,000.00. Thus, the authorised person to execute the contract is the Minister for Finance. It follows that the Court finds that the fifth defendant lacks the authority and capacity to enter into the contract on behalf of the State and the contract is unenforceable against the third and fourth defendants.
COMPLIANCE WITH STATUTE
48. The next defence relied upon by the third and fourth defendants is the plaintiff’s non-compliance of Sections 47C and 47D of the PFM Act and Section 2A of the CB&AS Act. Learned counsel for the third and fourth defendants submits that to procure a contract by a contracting party with the State, it is a requirement to produce an ILPOC and APCE form and the plaintiff failed to satisfy this requirement. Learned counsel relies on the case of Jhelson Ray trading as Bara Construction v. Timothy Numara & The State (2018) N7380 where proceeding was dismissed by the National Court for not disclosing a reasonable cause of action and being frivolous because the plaintiff did not produce an ILPOC and APCE form to comply with this statutory requirement.
49. In response, learned counsel for the plaintiff submits that this defence is without merit because the Secretary for the Department of Finance is the issuing authority for ILPOC and APCE and the plaintiff cannot be expected to produce them if none were issued to it by the Secretary.
50. The Court notes that Section 47D(2) of the PFM Act and Section 2A of the CB&AS Act are in identical terms. They are stated thus:
“A claim for the price arising from sale of property or stores or for the supply of goods and services to the State shall not be enforceable, through the courts or otherwise, unless the seller of the property or stores or the suppler of the goods or services produces –
(a) an Integrated Local Purchase Order or Claim (ILPOC); or
(b) an Authority to Pre-commit Expenditure,
relating to the property or stores or goods or services, the subject of the claim, to the full amount of the claim.” (Emphasis added).
51. On a close reading of these identical provisions, the Court is of the view that the onus of proof is discharged by the plaintiff when it produces the ILPOC and APCE form. It follows the Court is not satisfied that the plaintiff is free from the obligation to produce the ILPOC and APCE. Where none of these documents are produced, it is open to find that the contract is not one where the Secretary has approved to commit funds to meet the costs of provision of services supplied by the plaintiff as a service provider.
52. In the present case, except for one ILPOC and APCE form for supply of Reg No: BOD 505 dated 5th December 2015 there are no ILPOCS and APCE forms for the supply of other motor vehicles specified in the contract. A contract which does not meet the statutory requirements is void for illegality and unenforceable. In Jehlson Ray case (supra) the Court held that: “A contract purportedly entered into for and on behalf of the State without full compliance of the PFM Act is null and void and shall not be enforced in any court and any property, goods or services supplied under such a contract may not be sued upon and no claim is enforceable in respect of them, in any court”. This is the case here and the Court so finds.
53. In regards to the claim for Reg No: BOD 505 of K25,000.00, while there is an ILPOC and APCE form for it, it is unenforceable because it does not form part of the written contract and the third and fourth defendants are not privity to it. Furthermore, the person who engaged the plaintiff to supply this motor vehicle lacked authority and capacity to procure its services.
MOTOR VEHCILE CAR REQUEST FORM
54. The second aspect of this proceeding relates to the motor vehicle hire car request form. According to learned counsel for the plaintiff’s submissions, it constitutes a separate contract of services of an additional motor vehicle that was supplied to the defendants. Learned counsel for the third and fourth defendants did not address this issue in his submissions.
55. Nevertheless, the issue is whether a hire car request form constitutes a sperate contract of services for supply of an additional motor vehicle. The Court does not accept the submissions of learned counsel for the plaintiff because first, based on the allegations pleaded in the amended statement of claim and reproduced in a summary form at [2] to [9] of the judgment (supra) there is no pleading that the plaintiff and the defendants entered into a contract of services for supply of a motor vehicle in the form of a “Motor Vehicle Hire Car Request Form” or that the “Motor Vehicle Hire Car Request Form” is a contract of services for supply of a motor vehicle. The pleading in relation to the existence of the contract is lacking.
56. At the highest, the pleadings are vague and ambiguous because it is not stated at [14] of the amended statement of claim whether the defendants made an offer, and the plaintiff accepted it to provide an additional motor vehicle to the defendants in consideration of a sum of K800.00 per day.
57. Even if the motor vehicles were supplied to the defendants in addition to those specified in the contract, it is not expressed in the amended statement of claim that the contract was varied and the number of motor vehicles were increased and their description stated in the contract.
58. Where it is not pleaded that the parties varied the contract to include additional motor vehicles and evidence is led to establish that the defendants agreed to use additional motor vehicles, the probative value of the evidence is reduced, and it is open to the Court to disregard it. In the result, Mr Mong’s assertion that additional motor vehicles were supplied to the defendants does not form part of the contract. It is extrinsic evidence and is disregarded. To conclude, the Court is not satisfied that the hire car request form constitutes a contract between the plaintiff, the third and fourth defendants.
59. In any case, if a hire car request form is construed as a contract, it is a contract between the plaintiff, the first and second defendants. This is because the first and second defendants are named and signed off on the form. According to the doctrine of privity of contract, the third and fourth defendants are not parties to the contract and are not bound by it. If it was breached, they are not liable for any damages. It is the first and second defendants who should be held liable for its breach.
UNJUST ENRICHMENT
60. As the contract is unenforceable against the third and fourth defendants, the final question is whether the third and fourth defendants should not unjustly enrich themselves by relying on a void contract to avoid liability. To answer this question, it is necessary to consider whether the third and fourth defendants benefited from the services rendered by the plaintiff. It is also necessary to consider whether the plaintiff was an innocent party to the contract.
61. Based on the finding of the Court that the first, second and fifth defendants requested the plaintiff to supply the motor vehicles to them to use, learned counsel for the plaintiff submits that the defendants benefited from the supply of the motor vehicles. The notion of a benefit is further pursued by learned counsel because of the existence of a memorandum by the fifth defendant to the Director, Finance at the Police Headquarters dated 4th December 2015 to settle the debt and a follow-up memorandum almost a year later by Jeffery Lemb, a Divisional Commander to the Director, Finance dated 24th November 2016. That, according to learned counsel for the plaintiff these memoranda “have confirmed [the defendants] using the vehicles for their purposes”.
62. The Court is of the view that where officers of the State departments and agencies request for supply of motor vehicles for use, the onus of proof is discharged if the service provider gives details of the purpose of the request for supply of a motor vehicle, the duration of the use of the motor vehicle and return date of the motor vehicle and for completeness, must be set out in the written contract.
63. In the present case, Mr Mong did not give details of the purpose of the request for supply of the motor vehicles by the first, second and fifth defendants. Mr Mong’s assertion at [10] of his affidavit (exhibit “P2”) that “....the various vehicles were leased to the Department of Police for their purposes....” is vague because it does not give the details of their use. Further, the statement at [11] of the same affidavit (exhibit “P2”) that “The first hire of vehicles commenced on the eve of the 2012 Christmas.....” is vague because it is not known why the motor vehicles were used on the eve of the 2012 Christmas.
64. Moreover, as observed above the onus of proof is discharged if the plaintiff gives evidence that the first and second defendants as officers of the Department of Police and the fifth defendant as the Commander of NCD and Central used the motor vehicles with details of the specific police duties. This is to rule out all other possibilities such as the first, second and fifth defendants used the motor vehicles for private purposes. Even the memoranda by the fifth defendant and Jeffery Lemb, Divisional Commander to Director, Finance of 4th December 2015 and 24th November 2016 respectively add no credence and clarity to the issue and are disregarded. Given the lack of details and clarity in the evidence, the Court is not satisfied that the plaintiff has discharged the onus of proof that the motor vehicles were used for police duties such that the third and fourth defendants should not unjustly enrich themselves by denying liability.
65. The next issue is whether the plaintiff is an innocent party. In Seken Kewa v. Minister for Community Development & Ors (2019) N7753, it was held that despite of the illegality of the contract for breach of Sections 59 and 61 of the PFM Act the plaintiff was paid for the services as it was established that it was unaware of the contravention and was an innocent party.
66. While learned counsel for the plaintiff submits that the plaintiff supplied the motor vehicles to the defendants in good faith, Mr Mong does not say that he was not aware of the requirements of Sections 47C and 47D of the PFM Act and Section 2A of the CB& AS Act. Secondly, that he had enquired with the defendants as to the authorised person to enter into the contract before proceeding with the signing of the contract and supplying of the motor vehicles. The undisputed fact is that the amendments to Section 47 of the PFM Act and Section 2 of the CB&AS Act were in force since 21st February 2003. A prudent business owner such as Mr Mong or any service provider for that matter is bound to ensure that their engagement must comply with the law. Here, given the lack of evidence the Court is not satisfied that the plaintiff has discharged the onus of proof that it is an innocent party.
67. On the other hand, the first and second defendants are the main parties to the engagement of the plaintiff to supply motor vehicles to the defendants. They were the ones who requested the supply of motor vehicles. One of the motor vehicles was in the first defendant’s possession when it was damaged. As to the fifth defendant, he is the sole party to the engagement of the plaintiff under the contract.
68. The end result the Court is not satisfied that the engagement of the plaintiff by the first, second and fifth defendants was done with the authority of the Minister for Finance under Section 47(1)(b) of the PFM Act, 1995 and the third defendant as the Commissioner of Police. Further, the Court is not satisfied that the third and fourth defendants benefited from the services provided by the plaintiff and that the plaintiff was an innocent party such that the third and fourth defendants should not unjustly enrich themselves from an illegal and void contract. On the other hand, the facts as found points to the plaintiff being engaged by the first, second and fifth defendants within the police organization with a promise of payment without following the proper procurement process.
69. It follows the first, second and fifth defendants are personally liable for the engagement of the plaintiff. Judgment on liability is entered against the first, second and fifth defendants.
AWARD OF DAMAGES
70. As to damages, as the Court has found the total sum due for unpaid invoices is K151,027.10 it follows there shall be a judgment in this sum in favour of the plaintiff which shall be paid by the first, second and fifth defendants.
INTEREST
71. An award of interest is discretionary. It is awarded to compensate a party for the time being kept out of the money and also to encourage expeditious litigation and outcomes. According to Section 4 of the Judicial Proceedings (Interest on Debts and Damages) Act, 2015, pre-judgment interest may be awarded on whole or part of the debt or damages, from the date of cause of action, or from date of issue of writ of summons to date of judgment and on a rate of up to 8% per annum where it is a non-State party. As to post-judgment interest, Section 6 of the said Act states that it may be awarded on whole or part of the judgment sum, at a rate of up to 8% per annum where it is a non-State party from whole or part of the period from the date of judgment to final settlement.
72. In the present case, in the absence of a reasonable explanation for the delay between the date of cause of action and date of filing of writ of summons, the plaintiff will be awarded interest at the rate of 8% per annum from the date of issue of writ of summons to date of judgment and until final settlement on the judgment sum of K151,027.10 which shall be paid by the first, second and fifth defendants.
COSTS
73. Finally, and similarly, an award of costs is discretionary. Ordinarily, costs are awarded to the successful party. In the present case, the plaintiff has been successful against the first, second and fifth defendants but not so against the third and fourth defendants. Thus, the first, second and fifth defendants will be ordered to pay the plaintiff’s costs of the proceedings and the plaintiff will pay the third and fourth defendants’ costs of the proceedings, such costs are to be taxed, if not agreed.
ORDER
74. The formal terms of the final order of the Court are:
_______________________________________________________________
Lakakit & Associates Lawyers: Lawyers for Plaintiff
Solicitor General: Lawyers for Third & Fourth Defendants
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