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Banz Kofi Fectori Pty Ltd v Apa [2002] PNGLR 31 (26 November 2002)

NATIONAL COURT OF JUSTICE

BANZ KOFI FEKTORI PTY LTD

V

RAYMOND SIMON APA

MOUNT HAGEN: GAVARA-NANU J

20 and 26 November 2002

DAMAGES — Special damages — Need to claim and strictly prove such claims — Special damages being exceptional in character do not follow in ordinary course and cannot be inferred.

AGGRAVATED DAMAGES – Nature of.

Facts

The plaintiff brought an action against the defendant seeking damages for breach of an oral agreement made between them in 1996. A default judgment was obtained in 1997, but the action for the assessment of damage was delayed. The plaintiff claimed:

(1) general damages based upon loss of profit for three years; and

(2) special damages.

Held

1. The plaintiff is entitled to damages based on loss of profit for one year only as he took steps to avoid losses in subsequent years, making claims for those years highly speculative and remote.

2. Wilful false promises of the defendant to the plaintiff calculated and designed to deceive him, gave him an entitlement to aggravated damages; and

3. The claim for special damages can only be successful if it is specially pleaded and proven strictly by the plaintiff.

Papua New Guinea cases cited

PNG Aviation Services Pty Limited v Michael Somare (2000) SC658.

Other cases cited

Stroms Bruks Aktie Bolag v John and Peter Hutchnison [1905] UKLawRpAC 52; [1905] AC 515.
Uren v John Fairfax & Sons Pty Limited [1966] HCA 40; (1966) 117 CLR 118.

Counsel

K Peri for the plaintiff.
No appearance for the defendant.

26 November 2002

Gavara-nanu j. The plaintiff is seeking damages against the defendant for breach of an oral agreement made between them on or about 30 May, 1996. The trial was only for assessment of damages because the default judgment was obtained by the plaintiff against the defendant on 7 March, 1997.

The plaintiff claims that on or about 30 May, 1996, the defendant and Mr. Patrick Killoran who is the General Manager of the plaintiff company agreed that the plaintiff would lend K 1,500.00 to the defendant and the defendant would use that money to buy 20,000 kgs of cherry coffee and deliver them to the plaintiff. The plaintiff says, 20,000 kgs of coffee would have earned it K 6,000.00. Upon that understanding, Mr Killoran lent K 1,500.00 to the defendant. The plaintiff says, it agreed to lend the money to the defendant, because the defendant proved to it that he owned a Toyota 6000 Tipper Registration No. AEN-344, and with that truck, the defendant would be able to buy the coffee and deliver it to the plaintiff.

The defendant never delivered the 20,000 kgs of coffee to the plaintiff as he promised. The plaintiff therefore seeks damages against the defendant for breach of the agreement. It also claims the refund of it's K 1,500.00 by the defendant. The plaintiff also claims monies which it says, it paid to tow the defendant's truck from Newtown to the Mt. Hagen Police Station, then from the Mt. Hagen Police Station to the plaintiff's yard, after the truck was impounded by the police. The plaintiff also claims for the cost of advertising the vehicle for sale. The total amount claimed for the cost of towing the truck and advertising it for sale is K300.38. This is special damages, it must therefore be specially claimed and strictly proved by the plaintiff. Mr. Killoran refers to these expenses in paragraphs 3 and 5 of his affidavit, which was sworn on 24 September, 1997. Although the affidavit refers to the receipts for the amounts of K 103.00 and K 47.38, as Annexures 'A' and 'B' to the affidavit, no such receipts are annexed to the affidavit. Then another amount of K150.00, is also referred to in paragraph 3 of the affidavit, but again no receipt for that amount is annexed to the affidavit. These amounts make up the K 300.38, the plaintiff is claiming. More than that, these amounts are not claimed in the statement of claim. The amounts being special damages, they had to be specially claimed and proved strictly by the plaintiff. This principle was stated clearly in Stroms Bruks Aktie Bolag v John and Peter Hutchnison [1905] UKLawRpAC 52; [1905] A.C. 515, at pages 525, 526 by Lord Macnaughton when his Lordship said:

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

Applying this principle to the instant case, the plaintiff has not only failed to plead or claim the amounts in the statement of claim but it also failed to strictly prove them by it's failure to produce the receipts for the amounts. The production of receipts would have shown that the plaintiff did in fact pay for them thus strictly prove the claim. The plaintiff having failed to satisfy these requirements, the claim for K300.38 cannot succeed. The claim in respect of this amount is therefore dismissed.

As to general damages, Mr. Peri submitted that K20,000.00, should be awarded to the plaintiff because that is the amount the plaintiff would have earned in the 1996, 1997 and 1998, coffee seasons with interest, had the defendant kept his promise and delivered the 20,000 kgs of coffee to it. Mr. Peri submitted that the plaintiff would have earned K 6,000.00 in the 1996 coffee season, had the defendant delivered the 20,000 kgs cherry coffee to it. Mr. Peri further submitted that, the plaintiff would have then had the ability to earn similar amounts in 1997 and 1998 coffee seasons, hence the claim for K20,000.00 with interests. However, Mr Killoran told the Court that when the defendant did not deliver the coffee, he decided that he would not make any similar deals with anyone else. With that in mind, I am of the view that the claims for 1997 and 1998 coffee seasons are highly speculative. I therefore consider the claims for 1997 and 1998 very remote and impossible, it follows that I cannot award the amounts claimed by the plaintiff for those years. I therefore dismiss the claims for 1997 and 1998.

I am however, satisfied that the defendant's false promise did result in the plaintiff losing the K 1,500.00, it lent to the defendant and the K 6,000.00, it would have earned in 1996, coffee season. The defendant is therefore liable to the plaintiff for the total sum of K7,500.00.

As to the claim by the plaintiff that the defendant be declared the owner of Toyota 6000 Tipper Registration No. AEN-344, I am satisfied on the balance of probabilities that the vehicle was sold to the defendant on 28 February, 1996, as shown by the affidavit of Mr. Killoram, sworn on 1 October, 1996. I therefore find that the defendant was the owner of Toyota 6000 Tipper Registration No. AEN-344, at the material times.

It is quite clear that the defendant obtained the K1,500.00 through wilful false promise and deception. There is no doubt that the defendant had no intention of repaying the money to the plaintiff. There is evidence from Mr. Killoran that the defendant had used the money. I accept that evidence. The wilful false promise by the defendant to the plaintiff that he would deliver the 20,000 kgs of cherry coffee was calculated and designed to deceive the plaintiff to give him the K1,500.00. I therefore consider that the defendant's actions have aggravated the damages suffered by the plaintiff, see Uren v John Fairfax & Sons Pty Limited [1966] HCA 40; (1966) 117 CLR 118, at page 149, where Windeyer J. described aggravated damages this way, when making the distinction between exemplary and aggravated damages:

"The formal distinction is, I take it, that aggravated damages are given to compensate the plaintiff when the harm done to him by a wrongful act was aggravated by the manner in which the act was done: exemplary damages, on the other hand, are intended to punish the defendant, and presumably to serve one or more of the objects of punishment – more retribution or deterrence". (my emphasis).

There is no doubt that the plaintiff suffered loss in its business as the result of the defendant's actions. See, PNG Aviation Services Pty Limited v Michael Somare and The State (2000) SC658

Therefore, as compensation for the plaintiff's aggravated damages, I order that the plaintiff be allowed to keep Toyota 6000 Tipper Registration No. AEN-344. The plaintiff is also at liberty to sell the said vehicle and the proceeds from such sale be kept by the plaintiff.

I allow 8% interest on K 7,500.00 from the date of the writ which is 21st October, 1996, to the date of judgment which is today, 26 November, 2002. That is a period of 6 years 1 month 5 days. For this period I award K 3,658.20 in interests.

The total amount awarded to the plaintiff in damages and interests is K 11,158.20.
The Orders of the Court are:-

i. The defendant will pay K 11,158.20 to the plaintiff in damages and interest.

ii. The plaintiff is entitled to keep the Toyota 6000 Tipper Registration No. AEN-344, belonging to the defendant as compensation for aggravated damages. The plaintiff is at liberty to sell the said vehicle and keep the proceeds from such sale.

iii. The defendant will pay the plaintiff's costs.

Lawyers for the plaintiff : Warner Shand Lawyers.
No appearance by the defendant.