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Joe Nosi (trading as EM 37 Services) v Madang District Development Authority [2024] PGNC 440; N11112 (15 December 2024)

N11112

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 328 OF 2021

BETWEEN:
JOE NOSI TRADING AS EM 37 SERVICES
Plaintiff

AND:
MADANG DISTRICT DEVELOPMENT AUTHORITY
Defendant

Madang: Narokobi J
25 March 2022, 15 December 2024

DAMAGES –Special Damages – Sum Awarded for the Balance of the Contract.

DAMAGES – Economic Losses – Whether economic losses proven.

DAMAGES - General Damages for hardship and inconvenience for breach of contract.

The Plaintiff entered into a roadworks contract with the Defendant on 13 February 2017 for the sum of K350,000.00 for the maintenance of a stretch of road called the Bau-Mawan Road, in the Ambenob area of Madang District. Mobilisation fee of K100,000.00 was paid at the same time the contract was signed on 13 February 2017. At the completion of the work, the Plaintiff sought payment for the balance of the contract but it was refused, and he then filed proceeding for the balance of the agreement, also asking for economic loss, general damages, interests and costs. Liability was determined by default judgment on 17 September 2021, and the matter ordered to proceed on to assessment of damages, where the Plaintiff claimed K250,000.00 as the balance of the contract, K100,000.00 economic losses and K100,000.00 general damages, together with interests and costs. The Defendant submits that the Plaintiff should only be entitled to the balance of the contract.

HELD

(1) A judgment sum of K275,000.00 with interests and costs awarded, which consists of K250,000.00 for the balance of the contract and general damages of K25,000.00 awarded.

(2) The claim for economic loss is refused as no evidence was provided to support the claim.

Cases cited

Albert Baine v The State (1995) N1335
Mel v Pakalia (2005) SC790
Motor Vehicle Insurance Ltd v Kol (2007) SC902
Rodao Holdings Ltd v Sogeram Development Corporation (2007) N5485
Stephen Asivo v Bank of South Pacific Ltd (2009) N3754
Yondu Coffee Producers Ltd v Punangi (2017) N7128

Trial

This is a trial on assessment of damages.

Counsel

Mr B Wak for the plaintiff
Ms S Maliaki for the defendant

JUDGMENT

1. NAROKOBI J: This is a decision on assessment of damages after trial arising from a claim for breach of contract. Liability was determined through default judgment.
   

Background

2. The Plaintiff entered into a roadworks contract with the Defendant on 13 February 2017 for the sum of K350,000.00 for the maintenance of a stretch of road called the Bau-Mawan Road, in the Ambenob area of Madang District. Mobilisation fee of K100,000.00 was paid at the same time the contract was signed on 13 February 2017. At the completion of the work, the Plaintiff sought payment for the balance of the contract but it was refused, and he then filed proceeding for the balance of the agreement, also asking for economic loss, general damages, interests and costs. Liability was determined by default judgment on 17 September 2021, and the matter ordered to proceed on to trial on assessment of damages. The Defendant attempted to set aside the default judgment but this was refused. Trial on assessment of damages was completed with both parties tendering affidavits.
   

Issues

3. The issue for the court to determine is whether the Plaintiff is entitled to damages claimed in the statement of claim? In that regard, the Plaintiff makes the following claim for damages, interests and costs:
   
   • Balance of the contract for K250,000.00.
   • Economic Loss for K100,000.00.
   • General Damages for K100,000.00.
   • Interest at 8% from 5 March 2017 to the date of judgment.
   • Costs in the fixed sum of K30,000.00.
     

Evidence

4. In the trial on assessment of damages was both the Plaintiff relied on two affidavits while the Defendant tendered one. These affidavits are:
   
   • Affidavit in support of Joe Nosi, filed on 23 September 2021 – Exhibit P1.
   • Affidavit in Defence by Joe Nosi, filed on 3 December 2021 – Exhibit P2.
   • Affidavit of Hon. Bryan Kramer filed on 16 November 2021 – Exhibit D1.
     
5. Each of these affidavits have been read carefully to see if the Plaintiff has adduced sufficient evidence to make their case. On the contrary, whether the Defendant has negated the claim.
   

Principles on Assessment of Damages

6. The principles in relation to assessment of damages are settled in this jurisdiction whether the matter goes to trial on liability or after entry of default judgment. I apply these principles in this matter. In my view the case of Mel v Pakalia (2005) SC790 sums up these principles well. They are [from the headnotes]:
   
   • 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.)
     

Considerations

7. I consider these principles and apply them to the facts of this case. I have read the affidavits and the submissions of the parties. The Plaintiff as I stated earlier claims a total of K450,000.00, being K250,000.00 for the balance of the contract and K100,000.00 for economic loss and also the same amount for general damages. On the other hand, the Defendant denies the claim, and submits that if there is going to be any award at all, it should just be for the contract amount of K250,000.00. The balance of the contract is a fixed sum and is otherwise regarded as special damages.
   
8. There is no dispute that there was a contract between the Plaintiff and the Defendant. There is also no dispute that some work was done. What is missing from the evidence is the scope of work. This is what the Defendant attacks in Hon Bryan Kramer’s affidavit, by stating that the work was completed in a month when it was supposed to be for six (6) months, and it is not clear what the Plaintiff did. The Plaintiff says he has completed the work and has attached a completion report, dated 27 February 2017. The type of work completed was clearing and grubbing of 10km of road. The author of the report states that the Plaintiff, has completed the work and he is to be paid. When I am comparing the evidence of the Plaintiff and the Defendant, while the Defendant raises valid questions on the face of the Plaintiff’s evidence, the Plaintiff has attached a completion report, and that is the evidence that should be relied on to determine the claim. In my view, the Defendant has not sufficiently rebutted the evidence of the completion report with first hand evidence. Their evidence is basically hearsay. This means that the Plaintiff has made its claim on the balance of probability. It is trite law that the objective of damages whether in contract law or personal injuries claim, is to place the inured party to their position prior to the breach of the contract or injury (Motor Vehicle Insurance Ltd v Kol (2007) SC902), at [6]). Based on the completion report, I award the balance of the contract of K250,000.00.
   
9. The next question is whether the Plaintiff should be entitled to economic losses and general damages. I deal with economic losses first. Economic loss or business loss is the loss of profit that the innocent party suffers to his business as a result of the breach of contract. The principles of assessment of damages that I have referred to earlier in my judgment points to the Plaintiff providing evidence of his economic loss, and that evidence must be corroborated by an independent source, preferably an accountant (Albert Baine v The State (1995) N1335). No such evidence is provided here. The claim for economic losses is dismissed.
   
10. In the claim, general damages follows on from economic losses. Such awards are made for hardship, inconvenience, pain and suffering caused by the offending party, which in this case, was from the breach of contract. The Plaintiff has succeeded in showing that there was a breach of contract. Naturally, the Plaintiff would have suffered hardship from the breach of contract. The Plaintiff relies on a number of cases detailing the range of general damages awarded in comparable cases. Rodao Holdings Ltd v Sogeram Development Corporation (2007) N5485 awarded K50,000.00 general damages for the breach of a management agreement. In Stephen Asivo v Bank of South Pacific Ltd (2009) N3754, hardship and frustration for the breach of a mortgage agreement resulted in a K10,000.00 award for general damages. In my view, for the Plaintiff to be entitled to the amount it claims, it must provide sufficient evidence for the hardship suffered. Not much information on this aspect has been detailed in the two affidavits filed. Yondu Coffee Producers Ltd v Punangi (2017) N7128 awarded 50% of the amount claimed because of deficiencies in the evidence. There are also some issues which the Defendant could have pressed if it had relied on direct evidence, such as the actual scope of work compared to the type of work completed, and the reasons why the work was completed in a month when the agreement was for six months. For these reasons, I will award 25% of the claim and award K25,000.00 for general damages for hardship and frustration for non-payment of the contract sum.
    

Conclusion

11. In summary, as a result of my findings, the total judgment sum will be composed of the balance of the contract, of K250,000.00, and general damages of K25,000.00, a total judgment sum of K275,000.00.
    
12. Interest will also be awarded at 8% from the date the proceedings were filed to the date of judgment. Interest will be awarded on the judgement sum of K275,000.00.
    
13. The Plaintiffs has asked for costs in the fixed sum of K30,000.00. Taxation does not regularly occur in Madang. Given the fact that there was some aspect of the case that was contested, the amount submitted is reasonable and I award costs in the fixed sum of K30,000.00.
    

Orders

14. The final orders of the court are that:
    
    1. The Defendant pays the Plaintiff a judgment sum of K275,000.00.
    2. The Defendant pays the Plaintiff interest at 8% from the date the proceedings were filed that is 22 October 2021 to the date of judgment on assessment of damages, that is 15 December 2024.
    3. The Defendant pays the Plaintiffs costs in the fixed sum of K30,000.00.
    4. The Defendant is given 60 days to settle the judgment sum, failing which the Plaintiff is at liberty to institute enforcement proceedings.
    5. The matter is considered determined, and the file is closed.
    6. Time for the settlement of the orders is abridged.
       
15. Judgment and orders accordingly.
    

Lawyers for the plaintiff: Bradley and Co Lawyers
Lawyer for the defendant: Acting Solicitor-General