N11342

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO 68 OF 2021 (IECMS) (COMM)

ROKOBADA LIMITED (1-9998)
First Plaintiff

WEISHAN CHEN
Second Plaintiff

V

JIAMIN YAN
First Defendant

JM VENTURE LIMITED (1-40366)
Second Defendant

WAIGANI: ANIS, J
4, 10 MARCH, 26 JUNE 2025

ASSESSMENT OF DAMAGES – Breach of Contract – Summary Judgement entered with K1.3 million awarded – balance of the relief set down for assessment – matter was referred to mediation – mediation failed in good-faith and a certificate was issued – parties stated issues for determination by the National Court – assessment premised on orders or referral matters by the Mediator – whether the plaintiffs should be entitled to compensation and damages apart from those that they have been received, from the period November 2018 to 1 October 2021 – considering heads of damages - ruling

Cases cited

Alfred v. Kaupa (2024) SC2569
David Imig and Ors v. John Tuka and Ors (2025) N11125
Edasave Corporation Ltd v. National Capital District Commission and Ors (2024) SC2535
Graham Mappa v. PNG Electricity Commission [1995] PNGLR 170
Koia Wak Trucking and Hire Cars Ltd v. Simon Lakeng and Ors (2025) N11214
Labian-Saiuwen v. Yerei Yautan [1965-66] PNGLR 152
Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370
Motor Vehicles Insurance (PNG) Trust v. John Etape [1995] PNGLR 214
Nambis v. Ling (2023) N10582 at para. 34
Nivini Ltd v. Coconut Products Ltd (2016) N6582
Pako F&C Holding (PNG) Ltd v. Cloudy Bay Sustainable Forestry Ltd (2021) N9141 at para. 36
Philip Takori & Ors v. The State & Ors (2008) SC905
PNG Sustainable Development Program Ltd v. Ronald Coehn (2024) N10833 at para.40
PNGBC v. Jeff Tole (2002) SC694
Roselyne Cecil Kusa v. Motor Vehicle Insurance (PNG) Trust Ltd (2002) N2328
Roy Malai v. Huang Wen Jung (2005) N6152
Serrie Willie Walaun v. James Droaz and Or (2017) N6641 at para. 39
Summit Development Ltd v. Chan (2016) N6390
The Administration of Papua New Guinea v. Carroll [1974] PNGLR 265
Wahune and 1 Or v. Barton and Ors (2017) SC1636

Counsel

S K Liria, for the plaintiffs
I Shepherd, for the defendants

JUDGMENT

1.	ANIS J:  This was a hearing on assessment of damages.  The matter was trialed on 4 and 10 March 2025 before the Court reserved its ruling to a date to be advised.

2.	This is my ruling.

BACKGROUND

3.	The second plaintiff is a director and shareholder of the first plaintiff, and as for the defendants, the first defendant is a director and shareholder of the second defendant.  In 2014, the defendants invited the plaintiffs to invest in their property which was described as Section 68 Allotment 141, Moresby, National Capital District (Property).  The parties agreed partly in writing and partly orally in November 2018 (Contract) as follows, and I will summarize; that in consideration for a sum of K1.3 million to be paid by the plaintiffs to the defendants, the defendants would transfer 10% of the interest in the Property over to the plaintiffs; the payments would be by instalments; that after receipt of the full payment of the K1.3 million, the defendants will apply for a joint tenancy over the title to the Property to be in the names of the parties; or alternatively, the parties will create a joint venture type company (new company) and have the Property registered to the name of the new company where they will hold shares in, and in the plaintiffs’ case, the defendants will issue them with 10% of the total shares in the new company.

4.	The plaintiffs claimed that despite having fully paid the K1.3 million on 5 March 2018, the defendants did not honor their commitments to either have the title to the Property converted into a joint tenancy or let them own 10% interest in the Property through ownership of shares in the new company.

5.	The plaintiffs terminated the contract on 1 October 2021 and commenced this proceeding against the defendants for breach of contract.  In their Writ of Summons and Statement of Claim filed 21 November 2021 (Writ), they sought, amongst others, reimbursement of their K1.3 million, damages and costs.  On 11 February 2022, plaintiffs successfully obtained summary judgment against the defendants.  The Court’s order included the following:

1.	Summary judgment for a liquidated sum of K1.3 million is entered against the Defendants;
2.	Interest at 8% pursuant to Judicial Proceedings (Interest on Debts & Damages) Act;
3.	Summary judgment is entered on liability generally against the Defendants with damages to be assessed on the Plaintiffs’ claim for loss of income;
……

6.	The plaintiffs later appealed the matter to the Supreme Court against an interlocutory decision of the National Court that was made on 11 July 2023 where the Court had struck out the plaintiffs’ claim for the relief loss of business income.  The appeal proceeding was described as SCA 106 of 2023.  On 5 April 2024, the Supreme Court upheld the appeal and, amongst others, reinstated the plaintiffs’ claim for loss of business income, for assessment.  An order for mediation was also made by the Supreme Court.  However, mediation failed in 2024, and the matter returned to the National Court for hearing on assessment of damages.

EVIDENCE

7.	Both parties gave affidavit evidence without the benefit of cross-examination.  The plaintiff filed 4 affidavits.  Three of the affidavits were deposed by Weishan Chen and were marked as Exhibit P1 (filed 13 December 2021), Exhibit P2 (filed 6 January 2022) and Exhibit P3 (filed 12 April 2023).  The fourth affidavit of the plaintiff was deposed by Zhengyu Chen, and it was marked as Exhibit P4 (filed 10 October 2024).  

8.	The defendants tendered 2 affidavits which were deposed by Yiamin Yan.  They were marked as Exhibit D1 (16 May 2023) and Exhibit D2 (filed 21 February 2025).

PRELIMINARY MATTER

9.	The preliminary matter I should determine now is to consider whether I should assess damages premised entirely on what is sought in the Writ or whether it should be premised on what the parties had agreed on or as determined by the mediator in the good faith but unsuccessful mediation that was conducted.

10.	In the Writ, apart from the reimbursement claim of K1.3 million which was ordered by this Court and has been paid in full by the defendants, the plaintiffs seek the following relief in this assessment hearing:

2.	Judgement in the sum of K2.6 million to be entered in favour of the plaintiffs being damages for loss of business income.
3.	Special damages.
4.	General damages.
5.	Interest at 8% pursuant to Judicial Proceedings (Interest on Debts and Damages) Act;
6.	The Defendants to pay the Plaintiffs costs of and incidental to these proceedings; and
7.	Such Orders the Court deems fit.

11.	As for mediation, a copy of the Mediator’s Certificate – No settlement Despite Good Faith Form dated 2 September 2024 (Mediation Certificate), is attached as Annexure A to Exhibit D2.  The mediator was Justice Geita (Mediator).  The certificate reads in part as follows:

1.	The parties Rokobada Limited & Weishan Chen -Vs- Jiamin Yan & JM Venture Limited participated in a mediation before me on Monday 2nd September 2024 in good faith but were not able to settle the matter despite their best efforts and the following meritorious issues are presented for the Court to consider and determine:

a.	Assessment of Damages from November 2018 to October 2021.
b.	Inclusive in the assessment of damages is the question whether the Plaintiff is entitled to any/further rental monies covering the same period (Nov 2018 – Oct 2022), (sic) having already received K155,500.00 from the Defendant.
c.	The matter is returned to the referring Judge His Honour Anis, J for mention on 23rd September 2024 at 09.30am.

12.	I observe that the parties, through mediation, have identified a main relief which is whether the plaintiffs would be entitled to receive additional rental monies apart from what had been paid to them by the defendants, which was a sum K155,500.  Further, other assessment of damages suffered may be considered but confined to the period from November 2018 to October 2021 (Stated Period).  I also observe that the consensus reached as stated in the Mediation Certificate has not been contested nor has it been appealed against by the plaintiffs.

13.	Therefore, and in my view, and contrary to the submissions of the plaintiffs, the assessment hearing will be premised on these refined issues, that is, as primarily identified by the parties during mediation.

ISSUES

14.	Therefore, the main issues, premised my preliminary findings and assessments, are (i) whether the plaintiffs should be entitled to any further rental monies over the Property in the Stated Period, and if so, (ii) how much should this Court award to the plaintiffs?  Regardless of the first and second issues, whether the plaintiffs are entitled to other damages from within the Stated Period, and if so, (iv), how much compensation should be awarded on these damages (if any)?

COMMON GROUND

15.	It is not disputed that after the entry of summary judgment on 11 February 2022, the defendants made the following payments to the plaintiffs:

(i)	K1.3 million which was the principal investment sum;

(ii)	K89,183.09 which consisted of interest on the principal sum which was assessed and ordered by the Supreme Court in SCA 106 of 2023; and

(iii)	K155,500 which was for rental income for the Stated Period.

LOSS OF RENTAL INCOME

16.	I ask myself this question.  Can the plaintiffs make further claims for loss of rental income from the State Period?

17.	To answer that, I make the following observations:

•	It was acknowledged at mediation and by the Mediator, that the plaintiffs received K155,500 from the defendants as rental payments within the Stated Period;
•	The consensus that was had between the parties to acknowledge the payment and receipt of K155,500 cannot be ascertained or scrutinized here; however, I acknowledge that at mediation, the parties were not obligated to strictly follow the law, meaning that they may reach consensus based on their own requirements and negotiation skills;
•	That was the case here or it would be reasonable, in my view, to make that assumption, where it was conceded as a non-issue that K155,500 was already paid and received by plaintiffs as the rental payments received for the Stated Period;
•	However, this is now a hearing proper before the National Court; as such and unlike a mediation hearing, this Court is obligated to observe the rule of law and make a ruling or decision that is premised on law and facts that must be supported with evidence;  See cases: Koia Wak Trucking and Hire Cars Ltd v. Simon Lakeng and Ors (2025) N11214, Alfred v. Kaupa (2024) SC2569, Labian-Saiuwen v. Yerei Yautan [1965-66] PNGLR 152 and Summit Development Ltd v. Chan (2016) N6390
•	As such and in the present case, I note that the claim for rental income is not pleaded in the Writ as a relief that may be sought by the plaintiffs;
•	I also note that the plaintiffs did not make reference to the payment of K155,500 nor did they address that, in any of their adduced evidence that is before me;
•	The defendants, on the other hand, have addressed the payment of rentals and content of the Mediation Certificate, in Exhibit D2.  The first defendant has provided uncontested evidence that the plaintiffs actually received a higher sum than K155,500 which was K159,338.99;
•	The plaintiffs did not adduce any evidence to show what further rental income they were or would have been entitled to receive in the Stated Period, to prove their claim or assist the Court in that regard; their evidence were vague and unreliable.  See case: Edasave Corporation Ltd v. National Capital District Commission and Ors (2024) SC2535.

18.	This is a Court of law and justice.  Therefore, despite the referral by the Mediator that this Court should consider whether the plaintiffs are entitled to receive any further rental monies within the Stated Period, I decline to make any such findings or awards.  The main reason is that the relief rental monies has not been pleaded in the Writ.  And it is settled law that a party cannot seek a relief or claim something that it has not pleaded.  See cases:  PNGBC v. Jeff Tole (2002) SC694, Motor Vehicles Insurance (PNG) Trust v. John Etape [1995] PNGLR 214, Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370, Wahune and 1 Or v. Barton and Ors (2017) SC1636, Philip Takori & Ors v. The State & Ors (2008) SC905, Koia Wak Trucking and Hire Cars Ltd v. Simon Lakeng and Ors (supra) and David Imig and Ors v. John Tuka and Ors (2025) N11125.

19.	I adopt herein what Justice Makail stated in David Imig as follows:

6.  However, it is important to be reminded that one of the principles of assessment of damages is that a plaintiff must plead the allegation of fact it seeks to prove at trial to put the defence on notice. Similarly, a plaintiff must plead the relief it seeks to be granted by the Court. Where the pleadings in relation to an allegation of fact and relief are materially lacking, it is not open to the plaintiff to adduce evidence to prove the allegation or be awarded a relief.  [Underlining mine]

20.	The other main reason for rejecting this relief is premised on my other observations above.  The defendants have already paid the plaintiff a total sum of K155,500 for loss of rental income.  And the uncontested evidence of Ms. Yan shows that the actual figure was K159,338.99.  Given that the relief was not pleaded in the Writ but was acknowledged as a payment received in the disputed matter as rental income, it was something that was within the discretion of the Mediator and the parties, which was accepted as part of the settlement payment without having to consider or follow the strict application of the rules or law.  As such, and to try to ask for more apart from what had been acknowledged as already received would amount to ‘double dipping’ or a show of insincerity or disingenuity by the plaintiffs.  I would also reject this relief for this reason.

21.	The final reason is this.  Even if I may be wrong with the 2 reasons (which I say otherwise) and proceed to assess damages as per the orders of the Mediator, I would still make no further awards for rental income in favour of the plaintiffs for the Stated Period.  The plaintiffs have the burden of proof, and they have, in my view, failed in that regard.  I will address that further below in the judgment.

OTHER DAMAGES – GENERAL

22.	The next matter to consider is whether this Court can award other damages that the plaintiffs may have suffered during the Stated Period, as requested or identified under term 1(a) of the Mediation Certificate.

23.	Term 1(a) of the Mediation Certificate states Assessment of Damages from November 2018 to October 2021.  In my view, this covers in general the damages that the plaintiffs are seeking in the Writ.  However, they would be limited to the Stated Period as per term 1(a) of the Mediation Certificate. 

24.	The additional main relief sought in the Writ are:

2.	Judgement in the sum of K2.6 million to be entered in favour of the plaintiffs being damages for loss of business income;
3.	Special damages;
4.	General damages;

DAMAGES FOR LOSS OF BUSINESS INCOME

25.	The damage, loss of business income, is sought under para. 18 and as relief 2, in the Writ.  The total sum claimed is K2.6 million for the annual period from 2014 to 2021.

26.	The defendants deny that the plaintiffs are entitled or have made out a case, to seek this relief.

27.	I note the submissions of the parties on the matter.

28.	I, however, reject this relief for the following reasons:

•	The relief includes or covers the period outside of the Stated Period;
•	The plaintiffs failed to provide sufficient and credible evidence, including expert evidence, to support their claims under this head of damage, to show that they have suffered this damage from November 2018 to 1 October 2021; I find the evidence of the second plaintiff, namely, Exhibit P3 and Exhibit P4 to be unreliable.  Mr. Chen is not an expert witness, and he appears to attach documents that were sourced from third parties which constituted hearsay, unreliable and irrelevant evidence;
•	The plaintiffs also failed to provide their company records to prove that because of their investment commitment of K1.3 million in the Contract that was had between themselves and the defendants, that they had suffered loss of earnings or profits for the financial years from 2018 to 2021; there is no evidence of their company balance sheet that shows losses suffered during the periods ending in 2018, 2019 and 2021;  See cases: Graham Mappa v. PNG Electricity Commission [1995] PNGLR 170 and Edasave Corporation Ltd v. National Capital District Commission and Ors (supra)
•	Evidence of tax returns or loss of earnings are relevant requirements that this Court cannot simple discard.  See cases: Graham Mappa v. PNG Electricity Commission (supra) and Edasave Corporation Ltd v. National Capital District Commission and Ors (supra)
•	The full investment amount of K1.3 million has been fully repaid with interest, the latter which was ordered by the Supreme Court in the sum of K89,183.09; 
•	The intended business investment never eventuated as intended by the parties, that is, where they would create an investment or joint venture company where the Property would be transferred to the said company and where they would own shares with the plaintiffs to own 10% of the shares in the new company; this also could mean that such a damage may be speculative.

29.	For these reasons, I find the claim by the plaintiffs for this damage to be baseless, speculative and also that the plaintiffs have failed to adduce evidence to establish that they have suffered this damage.  I will conclude by stating what His Honour Woods J stated in Graham Mappa v. PNG Electricity Commission (supra) as follows:

This ruling therefore makes it clear that if you wish to establish matters like loss of profits from the operation of a modern business then it is necessary to comply withe the modern law such as produce such records as are required by the law. Thus if you wish to have the advantages of a modern world of business then you must comply with modern matters like tax laws. This would require appropriate business records to show whether any profit over an above business running costs were earned. And then if a profit was earned there is the requirements to pay taxes.

SPECIAL DAMAGE

30.	Special damage consists of actual expenses incurred that may be ordered by the Court to be reimbursed as a direct result of a proven liability or in this case for breach of contract.  The requirement to prove this type of damage is very strict and must be supported with actual proof, that is, before a Court may make such an award.

31.	I adopt what Gavara-Nanu J stated in Roselyne Cecil Kusa v. Motor Vehicle Insurance (PNG) Trust Ltd (2002) N2328, that is:

These are special damages which must be specifically claimed and proved strictly. This principle was stated by Lord Macnaugton in Stroms Bruks Aktie Bolag –v- John and Peter Hutchinson [1905] A.C 515 at page 525.

"Special damages ..... are such that as the law will not infer from the nature of the act. They do not follow in the ordinary course. They are exceptional in their character, and therefore, they must be claimed specifically and proved strictly...." (my underlining).

This principle was stated broadly by Lord Goddard in, British Transport Commission –v- Gourley [1956] A.C 185 at page 206:

"In an action for personal injuries the damages are always divided into two main parts. First, there is what is referred to as special damage, which has to be specially pleaded and proved. This consists of out – of pocket expenses and loss of earnings incurred down to the date of trial, and is generally capable of substantially exact calculation. Secondly, there is general damage which law implies and is not specially pleaded. This includes compensation for pain and suffering and the like, and, if the injuries suffered are such as to lead to continuing or permanent disability, compensation for loss of earning power in the future" (my underlining).

32.	The plaintiffs have the burden to establish special damages that were incurred in the Stated Period.  The plaintiffs make reference to Exhibit P3.  Having considered that, I note that there is no actual proof of payment of K110,000 allegedly made to their consultants.

33.	I find that the plaintiffs have failed to prove this damage, thus I reject this relief.

GENERAL DAMAGES

34.	The plaintiffs also seek general damages, that is, for the duration of the Stated Period.

35.	The first question I ask is this.  Can the plaintiff seek such damage in a claim that is premise on breach of contract?  The answer to that is this.  If damages suffered in a claim for breach of contract are quantifiable (pecuniary losses), then that is how a party may be compensated or be awarded damages.  If it is difficult to quantify damages or assess quantum (non-pecuniary losses), then Courts may consider and award general damages.  See cases:  Nambis v. Ling (2023) N10582 at para. 34, Pako F&C Holding (PNG) Ltd v. Cloudy Bay Sustainable Forestry Ltd (2021) N9141 at para. 36, The Administration of Papua New Guinea v. Carroll [1974] PNGLR 265 and Nivini Ltd v. Coconut Products Ltd (2016) N6582.  

36.	I also adopt what Chitty on Contracts, Volume 1 - General Principles, 26th Edition (1989) has stated on application of general damages by the Court.  I quote in part at page 1117 as follows:

General damages are given in respect of such damages as the law presumes to result from the infringement of a legal right or duty: damage must be proved but the claimant cannot quantify exactly and any particular items in it.  (Underlining is mine)

37.	In the present matter, various damages, compensations and awards for breach of contract have been quantified and made or considered in favour of the plaintiffs.  It was not difficult to quantity the damages that were suffered by the plaintiff in their claim for breach of contract.  A substantial sum has already been awarded totaling about K1.5 million.

38.	As the plaintiffs’ claim for breach of contract was quantifiable and assessments had been made in that regard, I decline to make a general award for general damages for the Stated Period.

39.	But this is not the end of the matter.  The plaintiffs say they also suffered hardship, stress and anxiety, and they also seek general damages on that premise.

40.	With that, I make the following observations.  First, I observe that the actual parties to the Contract were the first plaintiff and the second defendant.  I observe that this was an agreement between 2 companies and not between individuals.  General damages for hardship, stress and anxiety are normally awarded to individuals and not against companies.  Thus, and in my view, it would be wrong and unfair on the part of the defendants if I were to make an award to the plaintiffs in this manner.  It will mean (if I make the award) that the Court is rewarding non-parties to the Contract.  See cases: PNG Sustainable Development Program Ltd v. Ronald Coehn (2024) N10833 at para.40, Serrie Willie Walaun v. James Droaz and Or (2017) N6641 at para. 39, and Roy Malai v. Huang Wen Jung (2005) N6152.

SUMMARY

41.	In summary, the claim for assessment of damages by the plaintiffs will fail.

COST

42.	I will order cost to follow the event, that is, on a party/party basis which may be taxed if not agreed.

ORDERS

43.	I make the following orders:

1.	The plaintiffs have failed in their assessment of damages hearing.

2.	The plaintiffs shall pay the defendants’ costs of the assessment hearing on a party/party basis which may be taxed if not agreed.

3.	Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.

The Court orders accordingly

________________________________________________________________
Lawyers for the Plaintiffs:	Liria & Forensic Services
Lawyers for the Defendants:	Ashurst PNG