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Samson Murema (trading as SM Mini Finance) v Waluka [2026] PGNC 41; N11712 (13 February 2026)

N11712

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 350 OF 2022

BETWEEN:
SAMSON MUREMA trading as SM Mini Finance
Plaintiff

V
PAUL WALUKA Chairman of Lolokoru Estate Limited
First Defendant

JOE LINGE – Secretary of Lolokoru Estate Limited
Second Defendant

LOLOKORU ESTATE LIMITED
Third Defendant

KIMBE: ANDELMAN J
7 NOVEMBER 2025; 13 FEBRUARY 2026

DAMAGES – Assessment – after entry of default judgement – breach of contract – registered money finance lending

PLEADINGS – whether plaintiff confined to debt and damages pleaded in the Statement of Claim

The plaintiff is a money lender. He lent cash to the defendants on four occasions in April 2022. The amount borrowed was K217, 500, with 30% interest charged on a fortnightly basis, the amount came to K344,040. The defendants repaid K80,000 and then defaulted. The defendants failed to file a defence and default judgment on liability was entered against them.

In the Statement of Claim the plaintiff claimed K264,040 outstanding debt to be paid in instalments of K10,000 every month until the amount is fully paid, costs of the proceedings and any other Orders the Court deems necessary.

Held:

(1) The Court awarded the plaintiff K264,040.
(2) Interest calculated at the rate of 8% per annum from the commencement of the cause of action to final settlement to the plaintiff pursuant to Judicial Proceedings (Interest on Debts and Damages) Act 2015.
(3) The third defendant pay the plaintiff’s costs of the proceedings on a party-party basis which shall be taxed if not agreed.

Cases cited

Anton Johan Pinzger v Bougainville Copper Limited [1985] PNGLR 160
Juffa v Juffa SC2781">[2025] SC2781
Papua New Guinea Banking Corporation (PNGBC) v Tole [2002] PGSC 8; SC694
William Mel v Coleman Pakalia & Ors [2005] PGSC 36; SC790

Counsel

Mr P Mokae, for the plaintiff
Mr P Waluka, first defendant, in person

1. ANDELMAN J: This is a decision on assessment of damages for breach of contract. On 10 November 2023 this court entered default judgement in respect of the matters pleaded in the plaintiff’s writ of summons and statement of claim filed on 18 August 2022. Judgement was entered against the defendants.
   
2. Prior to the commencement of the hearing, Mr Waluka made an application for an adjournment on the basis that his solicitor had proceedings in the National Court in Waigani. Mr Waluka and the third defendant had filed a Notice of Motion to dismiss the plaintiff’s proceeding on 3 November 2025. The defendants’ application had not been set down for hearing. The plaintiff opposed the adjournment. I gave an ex tempore judgement refusing the adjournment application. Mr Waluka had an opportunity to confer with his solicitor over the telephone. Mr Waluka returned and participated in the hearing. He stated that he appeared for himself and the third respondent.
   
3. The plaintiff made a single claim in the Statement of Claim, that is outstanding money borrowed together with interest on the following amounts:
   1. 12 April 2022 - K200,000 was borrowed to be repaid with charges of 30% interest every fortnight - Invoice #037;
   2. 21 April 2022 - K10,000 was borrowed to be repaid with charges of 30% interest every fortnight - Invoice #038;
   100. 24 April 2022 - K1,500 was borrowed to be repaid with charges of 30% interest every fortnight - Invoice #039; and
   4. 28 April 2022 - K6,000 was borrowed to be repaid with charges of 30% interest every fortnight – Invoice #041.
4. The total amount owing to the plaintiff was claimed to be K344,040.
   
5. The plaintiff pleaded that on 12 May 2022 the third defendant convened a meeting with all of its directors including the first and second defendants and passed a resolution that the plaintiff's debts will be repaid at a rate of K50,000 every month until the amount owed was fully repaid. The first installment of K50,000 was deposited into the plaintiff’s account on the 16 May 2022 and a second deposit of K30,000 was made on the 13 June 2022 bringing the outstanding amount to K264,040.
   

The Evidence

6. The plaintiff relied on his affidavit sworn on 19 November 2024. Mr Murema stated that he operated a registered money lending company that lent money to individuals and companies who are in need of quick cash to be repaid back at 30% in a fortnight and failure to repay on time also incurs accumulated interests.
   
7. Mr Murema did not refer to any written contract between the parties but stated that the defendants were ‘regular customers’ and had previously ‘faithfully’ paid back the loans with interest.
   
8. However, the defendants did not repay the payments due in May 2022 and as a result he issued them with Invoices which were annexed to the affidavit. Mr Murema stated that ‘they signed the Invoices’.
   
9. In April and May 2022, K80,000 was paid by the defendants. Mr Murema stated that he continued to issue Invoices for the outstanding amounts and ‘they sign on them’. Other Invoices are not ‘counter signed’ due to ‘no office in town’.
   
10. In evidence is a letter dated 12 May 2022 on the letterhead of the third respondent signed by the first and the second respondents.
    
11. The letter acknowledges the outstanding amount of K344,040 and continues:

We further understand that there has been monthly interest applied onto the outstanding balances which is a concern to us now. We the Board are now asking that you cease adding monthly interest as of this monthly payment of K50,000 made to you, and the balance of K294, 040 be paid monthly to complete this debt.

12. On 16 May 2022, the plaintiff wrote to the third defendant in the following terms:

SM Mini Finance lending terms are fortnightly and all lending are charged fortnightly;

Our lending rate are 30% of lending amount for a fortnight and or on demand a shorter period for that matter;

All lending are issued with invoices which state clearly ‘fortnightly;

All bank fees are met or by our clients;

All lending are issued with invoices which clients signed for agreeing to pay;

Lending that’s exceeds fortnight are charged accordingly;

Our dealings with Lolokuru Estate Ltd are varied and request forward payment without any deduction. Our doors are open for renegotiations with terms and conditions;

A full repayment of K344,000 are expected from Lolokuru Estate Ltd which is due on the 10/05/22; and

Monthly repayments of outstanding credits as stated in your letter is not within our terms and conditions, as is always full outstanding are paid on the 10th of each month.

13. Mr Waluka sought to rely on affidavits filed in support of his Notice of Motion filed on 3 November 2025 to set aside the default judgement that did not address the assessment of damages. The evidence was filed on 3 November 2025, where orders had previously been made for the parties to file evidence as to assessment of damages by 27 June 2025.
    
14. I did not give leave for Mr Waluka to rely on the two affidavits. Mr Waluka did not have with him any documents filed by the plaintiff. Mr Waluka was shown a copy of the letter dated 12 May 2022 on the letterhead of the third respondent signed by himself and the second respondent referred to in paragraph [11] above.
    
15. Mr Waluka stated that he had never seen a copy of the letter before and that this was not his signature.
    
16. In evidence is an affidavit of service which attested that the defendants’ solicitors were served with a Notice to rely on the affidavit of Mr Murema sworn on 19 November 2024 on 29 July 2025, which annexed to it the letter date of the 12 May 2022.
    
17. I'm satisfied based on the evidence before me that the plaintiff's solicitors placed the defendants’ solicitors on notice since 29 July 2025 that the plaintiff sought to rely on letter dated 12 May 2022. Mr. Waluka had an opportunity to and failed to file any evidence to refute or to deny the accuracy of this letter.
    

Submissions

18. The plaintiff filed written submissions on 31 October 2025 and made oral submissions.
    
19. The plaintiff calculated interest at 30% per fortnight from 11 June 2022 to 10 October 2025 to be K3, 247,692, together with the principal amount of K264,0430 the total sum claimed was K3,511,732.
    
20. The plaintiff also claimed 8% interest for 3 years on the unsettled invoice, general damages of K50,000, special damages of K28,000 and costs of K35,000.
    
21. It was asserted in the written submissions that the contract provided that if the defendants defaulted to pay the principal amount borrowed with the 30% interest, the 30% interest accumulated every fortnight until such time as the accumulated interest for the principal amount was settled by the defendants.
    
22. It was also submitted that a meeting held by the defendants on the 12 May 2022 and the letter setting out the agreement reached at the meeting constituted an agreement or an understanding that the defendants would be paid K50,000 every month until the total amount of K344,040 was fully settled. However, the defendants defaulted on this agreement by paying K50,000 in May 2022 and paying K30,000 in June 2022 with no further repayments.
    
23. The plaintiff submitted that the defendants continued to sign invoices following the default which demonstrated their agreement to 30% interest being accrued on a fortnightly basis.
    
24. The plaintiff submitted that despite there being no pleadings for general damages and special damages and an outstanding debt of K264,040 being pleaded, these issues were consequential damages and were “interpleaded” and that the court should award these damages to the plaintiff. No authority was offered to ground these submissions. The evidence that the plaintiff relied on to support general damages claim were the Invoices and the award of special damages was the engagement of lawyers.
    
25. It was also submitted that as the defendants have failed to file any evidence in reply they cannot dispute the claim for damages.
    
26. As to the costs, the plaintiff submitted that despite there being no evidence of costs incurred being in order of K35,000, the court ought to make an order for this amount as this was a sufficient amount.
    

Consideration

Claim for K3,247,692

27. The starting position in this claim is the Writ of Summons and Statement of Claim and the Order for default judgement on liability. Default judgement was entered on 10 November 2023 pursuant to Order 12 r 28 of the National Court Rules against the defendants’ with damages to be assessed.
    
28. Any evidence as to damages is only admissible if it within the confines of the pleading: Amet, Sheehan and Kandakasi JJ in Papua New Guinea Banking Corporation (PNGBC) v Tole [2002] PGSC 8; SC694; Los, Jalina & Cannings JJ in William Mel v Coleman Pakalia & Ors [2005] PGSC 36; SC790.
    
29. The purpose of the Writ of Summons and Statement of Claim is to allow the other party a fair opportunity to meet the claim against it, secondly to define the issues so that questions of relevance and admissibility of evidence are transparent and thirdly to permit the defendant to make payment into court if they concede all or some of the claim; Papua New Guinea Banking Corporation (PNGBC) v Tole.
    
30. When assessing damages the court must first check whether the damages have been pleaded. If the damages have been pleaded, there is an assessment of whether there is evidence to support the pleaded claim.
    
31. The amount claimed in the Statement of Claim was K264,040. The claim in paragraph 5 is for loan arrears that the third defendant owes the plaintiff. At paragraph 12 it is pleaded that the defendants were yet to repay K264,040. The particulars of the breach are first that there was a ‘failure to repay the full loan within time as agreed between the parties’ and secondly to honour their undertaking to repay K50,000 per month ‘until full repayment of the debt.’
    
32. There is no pleading that 30% interest calculated every fortnight was a term of the contract or that there was any claim for interest beyond K264,040.
    
33. There is no pleading that the contract provided that if the defendants defaulted to pay the principal amount borrowed with the 30% interest, the 30% interest accumulated every fortnight until such time as the accumulated interest for the principal amount was settled by the defendants.
    
34. There are instances where matters not pleaded are raised at trial without objection. In these circumstances they expand the pleaded case and may be subject of submissions for particular relief; Papua New Guinea Banking Corporation (PNGBC) v Tole.
    
35. I do not consider that in this case there were any circumstances that can be characterized as the defendants agreeing to allow the plaintiff to expand the pleaded case. There was no consenting conduct, assessed on an objective basis that could be considered to be permitting the plaintiff to expand his case beyond the terms of its Statement of Claim.
    
36. While Mr Waluka did not object to the tender of Mr Murema’s affidavit, I do not consider that it would be fair or just to expect a self represented litigant to understand this technical procedure. The manner in which the trial was conducted did not demonstrate any acquiescence of the defendants to the course adopted by the plaintiff; Juffa v Juffa [2025] SC2781 Makail, Purdon-Sully, Andelman JJ at [33].
    
37. I consider that in this case, I am confined to give judgement on the matters pleaded and the orders sought in the Statement of Claim; William Mel v Coleman Pakalia & Ors (2005) SC790.
    
38. I accept that the first and second defendants entered into a contract with the plaintiff on behalf of the third defendant.
    
39. The terms of the contract were that the plaintiff would lend money to the defendants with 30% interest to be fully repaid within the fortnight. On 12, 21, 24 and 28 April 2022 the defendants borrowed K200,000, K10,000, K1,500 and K6,000 respectively. These amounts were to be repaid within a fortnight of the borrowing together with 30% interest.
40. The full borrowings with their respective interests and principal amounts added up to K344,040. The principal amount borrowed was K217,500 and the accumulated interest was K126,450.
    
41. On 12 May 2022 the third defendant convened a meeting at which the first and second defendants were in attendance and agreed to repay the debt of K344,040 at the rate of K50,000 every month until the amount owed was fully repaid.
    
42. The defendants failed to repay the loans apart from paying K50,000 on the 16 May 2022 and K30,000 on the 13 June 2022.
    
43. The plaintiff is entitled to the outstanding debt claimed in the Statement of Claim of K264.040.
    

Claim for general damages and special damages

44. There is no reference to a claim of general damages or special damages in the of the Statement of Claim and it would be unfair to the defendants if such a claim was awarded against them. I decline to make any order for general damages or special damages. I also consider that there is no evidence to ground such claims.
    

Claim for Interest of 8%

45. There is no claim for interest in the Statement of Claim. The plaintiff failed to explain whether the 8% claimed was pursuant to Judicial Proceedings (Interest on Debts and Damages) Act 2015, however reference was made to Anton Johan Pinzger v Bougainville Copper Limited [1985] PNGLR 160. In that case Pratt, Amet and Woods JJ made reference to Judicial Proceedings (Interest on Debts and Damages) Act (Ch No 52) and to 8% interest being appropriate for damages for personal injury.
    
46. I consider that in this case; statutory interest is warranted as it serves the purpose of compensating the plaintiff for the loss of the use of the money that should have been paid to him. It also prevents the defendants who withheld the money from unjustly enriching themselves. Interest is to be calculated at the rate of 8% per annum on K264,040 from 18 August 2022, the commencement of the cause of action to the date the debt is finally settled.
    

Costs

47. The plaintiff has been successful in the breach of contract claim. However, I refuse to award a specific amount for legal costs absent any evidence that such costs have been incurred or paid by the plaintiff. I am unable to come to any factual finding that the costs sought are reasonable or appropriate. I consider that in these circumstances, I should make the ordinary orders that costs be awarded on a party party basis to be agreed or assessed.
    

Orders

48. I make the following Orders:
    1. The defendants shall pay the plaintiff K264,040.
    2. The defendants shall pay the plaintiff interest of 8% on K264,040 from the commencement of the cause of action to final settlement to the plaintiff.
    100. The defendants shall pay the plaintiff’s legal costs on an ordinary basis as agreed or assessed.
    4. I give administrative direction for this file to be closed.

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Lawyers for the plaintiff: Mokae & Associate Lawyers