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Nivani Ltd v Independent State of Papua New Guinea [2025] PGNC 83; N11213 (31 March 2025)

N11213

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 984 OF 2018

BETWEEN
NIVANI LIMITED
Plaintiff

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
First Defendant

AND
STEVEN PUP, Department of Works Acting First Secretary Operations, in his capacity as Superintendent for the Contract
Second Defendant

AND
JOHN SITIPAI, Department of Works Islands Regional Manager, in his capacity as Superintendent’s Representative for the Contract
Third Defendant

WAIGANI: MAKAIL J
3 MAY, 22 JULY 2022; 31 MARCH 2025

ASSESSMENT OF DAMAGES – Assessment of damages following contested trial on liability – Assessment of damages based on unjust enrichment – Services rendered – Invoices rendered for payment – Non-payment of invoices – Proof of – Corroboration of claims – Damages awarded for work performed – Quantum meruit – Claim for interest on principal claim refused

Cases cited
Nivani Limited v The State & Department of Works (2022) N9424
Yooken Paklin v The State (2001) N2212
Albert Baine v The State (1995) N1335
Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331

Counsel
Ms G Norum for plaintiff
Ms R Mesa for defendants

JUDGMENT ON ASSESSMENT OF DAMAGES

1. MAKAIL, J: This is a trial on assessment of damages after a contested trial on liability. Judgment on liability was entered on 4^th February 2022 with damages to be assessed on quantum meruit: Nivani Limited v The State & Department of Works (2022) N9424.

2. The principal issue in contention between the parties is the appropriate sum to award to the plaintiff for services rendered to the defendants in carrying out construction for heavy patching and resealing works. The plaintiff claims a sum of K8,565,614.63. The defendants alleged the plaintiff is entitled to 25% of K8,565,614.63 which is only K2,141,403.66.

3. The plaintiff tendered the following:

(a) affidavit of Christopher Edward Stein sworn and filed on 17^th March 2022 (exhibit “P1”); and

(b) affidavit of Christopher Edward Stein sworn on 19^th April 2022 and filed on 20^th April 2022 (exhibit “P2”).

4. The defendants tendered an affidavit of the third defendant sworn on 8^th April and filed on 11^th April 2022 (exhibit “D1”).

5. Mr Stein and the third defendant were cross-examined by counsel for each party in relation to the accuracy of the information supplied in their respective affidavits.

6. According to Mr Stein and Mr Sitipai, it is common ground between the parties that the dispute is the sum to be awarded for heavy patching and resealing works for the rood undertaken by the plaintiff.

7. However, there is some confusion and uncertainty in relation to which segment of the road are damages being sought in these proceedings.

8. According to paragraphs 9 and 10 of Mr Stein’s affidavit, (exhibit “P2”) and paragraph 14(a) to (c) of Mr Sitipai’s affidavit (exhibit “D1”) there are two segments of the road which the plaintiff carried out heavy patching and resealing works for the defendants. The work was done in phase 1 and phase 2.

(a) 1^st Phase: Heavy Patching and Resealing Works between Hoskins Junction and Moramora Technical School.

The distance is CH 0.00 to CH 12.60 km or 12.60 km.

The contract is described as Contract No: PSTB-COI-WNBP-07/2014; and

(b) 2^nd Phase: Heavy Patching and Resealing Works between Moramora Technical School and Koimumu Wildlife.

The distance is CH 12.60 to CH 27.4 km or 14.8 km.

The 2^nd Phase included Emergency Works from Ivule to Buluma.

The contract is described as Contract No: WNPPSTB-TD-DOW-RDS:10/2014.

9. Mr Stein is one of the Directors of the plaintiff. His account in exhibit “P1” can be summarised as follows: the defendants failed to settle on an agreed amount pursuant to a Court order of 4^th February 2022 whilst annexure “A” contained a summary of the purported outstanding sum of K8,565,614.63 which represents the value of works performed and the associated costs involved up till 28^th February 2022.

10. At paragraph 16 of exhibit “P1” the plaintiff conceded that the first payment of K100,000.00 was made to the plaintiff on 31^st March 2015 and the second payment of K1,011,744.69 was made on 28^th November 2015. Annexure “B” of exhibit “P1” showed a chain of emails of which the plaintiff is relying on to say that the defendants have no dispute on the claims based on clear admissions. At paragraph 17 of exhibit “P1” Mr Stein quoted the defendants that “we have no dispute on claims per the actual work done by Nivani” and “we have no dispute to pay Nivani on work you have actually executed under our supervision.”

11. The defendants submitted that there is no further evidence to corroborate the sum of K8,565,614.63. As to the chain of emails, the defendants submitted that there is no expressed admission in the emails that they agreed to settle the claims in the total sum of K8,565,614.63.

12. Moreover, the defendants submitted that Mr Stein’s account in exhibit “P2” does nothing more than to rebut the defendants’ account. It lacked corroboration because Annexure A is simply the plaintiff’s company Certificate of Incorporation, Annexure B is a copy of Minutes of Site Meeting confirming that the third defendant as the Superintendent Representative, Annexure C is a copy of the Project Status Report # 1 purposely to confirm the supply of the Toyota Landcruiser Utility and Annexure D is a purported list of emergency works carried out by the plaintiff but no further evidence to corroborate it.

13. On the other hand, the defendants submitted that Mr Sitipai’s account should be accepted because he is a civil works engineer of more than 20 years of experience and succinctly summarised the claims in Annexure C to Exhibit “D1” as follows:

(a) claims verified for works carried out from original Bill of Quantity – remaining balance is K1,203,604.44.

(b) claims verified for works carried out outside of the Bill of Quantity – K305,529.41.

(c) interest calculated – K490,913.93.
(d) final verified claims – K2,000,047.78.

14. Finally, the defendants referred to Annexure D which is a letter to the plaintiff dated 23^rd March 2018 advising of termination of Phase 1 Contract and submitted that this was the date of termination of Phase 1 Contract. Theis means that the no damages should be awarded for work after date of termination of Phase 1 Contract.

15. The plaintiff submitted that the Court should accept the plaintiff’s calculation of the unpaid claims provided to the defendants on 1^st March 2022 in Annexure A of exhibit “P1” considering the payments made the defendants and the fact that Mr Sitipai clearly stated in his emails dated 15^th January 2018 and 17^th January 2018 that “we have no dispute on claims per actual work done by Nivani”.

16. Moreover, it was submitted that when this fact was put to him in cross-examination, he did not dispute that he had in fact authored the emails. Further, he was unable to conform if a joint inspection was conducted with the Project Manager of the plaintiff. On the other hand, it was further submitted that Mr Sitipai admitted that:

(a) the figures or sum highlighted in the Claim Verification was a rough estimate of work done, yet to be confirmed,

(b) that the Claim Verification was not given to the plaintiff, and

(c) the claims were not certified on time and as a consequence of that fact, the defendants were liable to pay interest for the delay in the certification under the conditions of the Contract.

17. First, as to the plaintiff’s submissions that the defendants admitted owing a sum of K8,565,614.63, while I uphold its submission that Mr Sitipai is the author of the emails to the plaintiff dated 15^th January 2018 and 17^th January 2018 where it was stated that “we have no dispute on claims per actual work done by Nivani, I uphold the defendants’ submission that there is no expressed admission in these emails that the defendants agreed to settle the claims in the total sum of K8,565,614.63. This position is reinforced by the answers Mr Sitipai gave in cross-examination at the trial.

18. It follows that this account alone is insufficient for the Court to find for the plaintiff and award the sum of K8,565,614.63. The next question is, are there any other evidence to prove the plaintiff’s claim of K8,565,614.63? I accept the plaintiff’s submissions that Mr Sitipai was not on the ground to verify the claim by the plaintiff that the plaintiff completed the work for Phase 1 and Phase 2 including emergency works from Ivule to Buluma.

19. This being the case, there is no evidence to contradict Mr Stein’s account that the plaintiff completed work for Phase 1 and Phase 2 including emergency works from Ivule to Buluma. It follows that there will be a finding that the plaintiff completed work for Phase 1 and Phase 2 including emergency works from Ivule to Buluma.

20. As to the sum to award, I will rely on the Claim Summary in Annexure A to Exhibit “P1” as opposed to the Claim Verification proffered by the defendants in Annexure D to Exhibit “D1” to assess the sum to award for the work completed by the plaintiff because as submitted by the plaintiff:

(a) the figures or sum highlighted in the Claim Verification was a rough estimate of work done, yet to be confirmed, and

(b) that the Claim Verification was not given to the plaintiff.

21. However, I will refuse to award interest on the principal claim because this is an award based on quantum meruit where damages are restricted to the work performed as opposed to breach of contract. Also, I will deduct K100,000.00 and K1,011,744.69 from the sum awarded for payments previously made by the defendants.

22. According to Annexure A to Exhibit “P1” there are 9 Groups of Claims for different work undertaken and/or expenses incurred by the plaintiff to undertake work. Using this, I award damages as follows:

(a) Group 1 – General Clauses K 27,920.00
(b) Group 2 – Establishment K 567,300.00
(c) Group 3 – Cleaning & Crumbbing K 175,641.20
(d) Group 4 – Earthworks K 13,800.00
(e) Group 5 – Pavement K 2,157,899.01
(f) Group 6 – Blfumious Surfacing K 231,023.71
(g) Group 7 – Drainage K 495,360.07
(h) Group 18 – River Training and
Bank Protection K 218,720.00
(i) Group 19 – Days Work K 1,382,072.45
_____________

K 5, 269,736.44
_____________
Less Time Costs from 28^th August
2015 to 28^th February 2022 K 717,500.00

_____________

K 4,552,236.44
_____________

Add 10% GST K 455,223.64
_____________

K 5,007,460.08
_____________

Less payment of K 100,000.00

Less payment of K 1,011,000.00
_____________

Final Total K 3,895,715.39
_____________

23. It will be noted that the claim for Time Costs from 28^th August 2015 to 28^th February 2022 of K717,500.00 has been deducted from the total sum awarded because it is an example of what the Court is explain in past cases where the plaintiff says to the Court “this is what I have lost” and expect the Court to award without providing any justification and corroboration for it. Because of the lack of justification and corroboration, I have no idea what this claim is for and decline to make an award: Yooken Paklin v The State (2001) N2212, Albert Baine v The State (1995) N1335 and Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331.

24. Finally, I reiterate for the reasons given at [21] (supra), I decline to award interest claimed in Annexure A to Exhibit “P1” in the sum of K4,346,044.76.

25. In the result, I award a total sum of K3,895,715.39 in favour of the plaintiff to be paid by the defendants forthwith.

26. I decline to award interest under the Judicial Proceedings (Interest on Debts and Damages) Act 2015 because this is an award based on quantum meruit as opposed to breach of contract.

27. The defendants shall pay costs of the proceeding, to be taxed, if not agreed.

Order

28. The orders are:

1. Judgment is entered in favour of the plaintiff in the total sum of K3,895,715.39 to be paid by the defendants forthwith.

2. The defendants shall pay the costs of the proceedings, to be taxed, if not agreed.

________________________________________________________________
Lawyer for plaintiff: Legal Counsel
Lawyer for defendants: Acting Solicitor General