Unreported National Court Decisions
N1634
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
W.S. NO. 766 OF 1996
BETWEEN: KINSIM BUSINESS GROUP INC.
PLAINTIFF
AND: JOSEPH HOMPWAFI
FIRST DEFENDANT
AND: JOHN KALAUT
SECOND DEFENDANT
AND: THE INDEPENDENT STATE OF PAPUA NEW GUINEA
THIRD DEFENDANT
Madang
Bidar AJ
10 June 1997
4 August 1997
6-7 August 1997
18 September 1997
DAMAGES - Police raid and confiscation of stock of beer - at liquor trading outlet - Return of some cartons - conversion of others - Assessment of - Restitutio in integrum - subject to other principles - Including remoteness of damage and duty to mitigate loss.
DAMAGES - Evidence - requirement to establish proof by production of business records - Taxation matters etc - Trading assumptions - not proof of modern business practices.
Held
(1)      State is liable to pay damages for trespass to goods by members of the Police Force in the execution of their duty.
(2)      In the Police raid cases, it is now settled law that individual policemen identified be liable to pay exemplary damages (Abel Tomba and Peter Kuriti’s cases and also Obed Lalip & Ors. -v- Fred Sheekiot and the State unnumbered Supreme Court Judgement dated 22/04/97).
(3)      In the circumstances, plaintiff did not discharge the onus as to loss of entitlements, business, market and other consequential reliefs claimed.
Cases Cited
John Tuink Salamon & Ors. -v- The State [1994] N1272
Livingstone -v- Rawyards Coal Co. (1980) 5 App. Cas. 25 (HL) 
Butler -v- Egg & Egg Pulp Marketing Board (1966) 114 C.L.R. 185
The Albazero [1977] A.C. 774 (HL)
Johnson -v- Agnew [1980] AC 367 (HL)
General Tyre & Rubber Co. Ltd -v- Firestone Tyre & Rubber Co. Ltd [1995] 2 ALL E R 173 (HL)
Enga Enterprises Pty Limited -v- Danny Porakali [1995] N1359
Graham Mappa -v- PNG Electricity Commission [1995] N 1366
Peter Wanis -v- Fred Sheekiot and The State [1995] N1350
Whitfield -v- De Lauret & Co. Ltd (1920) 20 C.L.R. 71 
Pike Dambe -v- Augustine Peri & The State [1992] PNGLR 4
Helen Jack -v- Marius Karani & The State [1992] PNGLR 391
Thresia Kandapen -v- The State [1995] N1336
Opa Pu -v- John Dupai & The State Unnumbered National Court Judgement dated 8.3.95
Aimon Aure & Ors. -v- The State & Ors. [1995] N1346
Peter Kuriti -v- The State [1994] N1271
Abel Tomba -v- The State [1997] SC 518
Peter Kuriti -v- The State [1997] Unnumbered Supreme Court Judgement dated 7.4.97
Komaip Trading -v- The State & Ors. [1995] N1367
James Koimo -v- The State [1995] N1322
Texts
Luntz H. Assessment of Personal Injury and Death - 3rd Ed. p. 3 para 1.1.3 
Mcgregor, on Damages. 14th Ed. p. 226 para 309.
Mcgregor, on Damages. 15th Ed. para. 1357
Halsburys Laws of England Vol. 12. Para. 1159, 1161, and 1190.
Legislation
Claims by And Against The State Act s. 12.
Counsel
Mr G Langtry: For the Plaintiff
Mr L Pukali: For First and Second Defendants (Until withdrawn).
Mr J. Kawi and R. Saronduo: For the Third Defendant.
JUDGEMENT
BIDAR AJ: In this case, I am concerned only with assessment of damages in an action based on police raid and confiscation of stock of beer on plaintiff’s liquor trading outlet.
Liability was determined with entry of default judgement against defendants on the 10 June 1997. Hence, the matter is before me on assessment of damages only.
It follows that it is necessary to state the facts. Plaintiff is a holder of liquor dealer’s licence and based at Parom Village, East Sepik Province. On the 1st October 1995, while the Manager and Proprietor of the plaintiff’s business group was away in Madang on a business trip, Wewak Police under the command of First and Second Defendants raided the plaintiff’s liquor outlet and confiscated 364 cartons of beer. When the manager, and proprietor, Mr John Simi returned he was arrested and charged for illegally trading and indirectly permitting illegal sale of liquor contrary to the provisions of East Sepik Provincial Liquor Licensing Act.
On the 7th December 1995, Mr Simi defended the charges against him successfully and was acquitted by Wewak District Court. 
Among other orders, the Wewak District Court ordered Police to immediately return 364 cartons of beer then still under police custody. Police returned 283 cartons of beer. The other 81 cartons were never returned at all.
RELIEF SOUGHT
Paragraph 8, 9, 10 and 11 of the Plaintiff’s Statement of Claim sets out the basis of the plaintiff’s claim. I reproduce the paragraphs hereunder.
“8.      The plaintiff was unable to sell the said 364 cartons of beer between 1st October and 7th December 1995 and therefore lost trading and profit.
 9.      The plaintiff’s losses were caused directly by First Defendant’s omission to make reasonable enquires or assessments before exercising his police powers in the circumstances involving a licensed trader with trade goods of huge quantity.
10.     The second defendant caused the plaintiff’s loss also by not exercising his discretions properly because had he done so, no criminal charges would have been laid and the said stock of beer would have been returned immediately without causing any losses.
11.     The plaintiff claims from the defendants jointly and severally as follows:
Loss of Sales	K179,816.00	
Loss of Net Profit	7,146.00	
Unsold Stock Claim	12,399.00	
Loss of Entitlements	11,483.00	
Total	K210,844.00	
12.     The plaintiff further claims exemplary damages and Costs.”
From the paragraphs reproduced in the plaintiff’s statement of claim, the plaintiff’s action is based on trespass to goods, illegal detention of 364 cartons of beer, conversion and detinue with respect to 81 cartons of beer unaccounted and lost while in police custody and loss of profit arising from sale of beer.
Plaintiff also claims consequential damages including claim for unsold stock, loss of entitlements, loss of market etc.
The plaintiff’s evidence consist of oral and affidavit evidence by its Manager and Proprietor. He was cross-examined on both oral and affidavit evidence by Counsel for the State. Plaintiff’s evidence is that, on the 1st October 1995, Police raided it’s liquor outlet at Parom village, Wewak and confiscated 364 cartons of beer, while it’s manager and proprietor, Mr John Simi was away in Madang on a business trip. Mr John Simi was subsequently arrested and charged with a count of illegal trading and a count of indirectly permitting illegal sale of liquor, contrary to the provisions of East Sepik Provincial Liquor Licensing Act. He appeared before Wewak District Court on the 7th December 1995 and was acquitted of the charges. Among other orders, the Wewak District Court ordered immediate return of 364 cartons of beer to the plaintiff. Of the 364 cartons of beer, only 283 cartons were returned and 81 cartons were not accounted for. Mr Simi admitted on cross-examination the return of 283 cartons of beer by police. During the relevant period a Provincial liquor ban in the East Sepik Province, necessitated the plaintiff to sell 283 cartons of beer at a much lower price of K15.00 per carton, thereby rendering a loss of profit. Plaintiff normally sold beer at K38.00 per carton, prior to police raid and Provincial Liquor ban. In cross-examination, Mr Simi told the Court the stock of beer was bought at Lae and shipped to Wewak. 
The freight and relevant taxation was included in the 364 cartons of beer. When the stock of beer landed at Wewak Wharf, plaintiff incurred K100 to transport stock of beer to it’s liquor outlet at Parom village. On further cross-examination, Mr Simi was unable to produce any business records, bank statements or group tax etc, as he left them back in Wewak.
The second witness for plaintiff was Mr Bruno Kaipa. Mr Kaipa is Financial Controller with Leslie Wungen and Co. and a registered public accountant. His evidence is contained in an affidavit sworn on the 24th July 1997. He prepared a statement of account in relation to plaintiff’s records of earnings and losses. The statement of account he prepared was based on information provided to him by the plaintiff’s manager, Mr John Simi, and the invoice from SP Brewery. He admitted the statement of account is based on actual sale and losses of 364 cartons of beer and not 283 cartons which were returned to the plaintiff by police. Again, this witness was not able to produce bill of account invoice from SP Brewery and business records for the same reason that they were left back at Wewak.
The State did not call any evidence, the reason was that the policemen, Joseph Hompwafi and John Kalaut, being first and second defendants withdrew during the trial of the action.
On the evidence, it is incumbent upon the plaintiff to produce business records, such as profit and loss accounts, sales records, bank statements, group tax returns etc to prove business operations and viability of the business. Failure to do so does not assist plaintiff’s cause, particularly the validity of the claim against the defendants. 
There is affidavit evidence by Bruno Kaipa to support plaintiff’s claim, however, there is not an iota of evidence, he is the plaintiff’s regular accountant, who looks after plaintiff’s business records. Mr Kaipa’s evidence as to trading and loss account in my view is mere trading assumptions based on what plaintiff told him. No reference whatsoever is made to business records. Furthermore, the trading and loss statement was based on the sale of 364 cartons of beer. Really it should have been based on 283 cartons of beer returned to the plaintiff and 81 cartons not accounted for. State’s submission is that, I should not accept the figures assessed by plaintiff, which I agree entirely.
In John Tuink Salamon & Ors -v- The State [1994] N1272, a case involving claim for compensatory damages for loss and destruction caused by Police, during a police raid. One of the principal claim was for loss of tradestore and tradestore goods. His Honour Woods, J. had this to say:
“John Tuink Salamon claimed for the loss of houses and tradestore, loss of personal possessions, trade-store goods, and damage to vehicle. He is also claiming for loss of business profits since the incident. Whilst I am satisfied on the basis of his affidavits that the assessment is reasonable with respect to the houses and buildings, and personal possessions and also the vehicle damage, there is one aspect of trade-store goods which I feel needed more evidence and this is interrelated with the claim for loss of profits. Included in the trade store goods is K12,785.00 for stock of cigarettes. That seems to be a large item for a tradestore and suggests more than just a mere convenience village tradestore. Whilst the Court may be lenient with strict evidentiary matters with village claims, once you are claiming for what are major economic activity enterprises the court is entitled to insist on proper evidence in the nature of ledgers and account books and even taxation returns to comply with the modern laws.
The plaintiff says all his records were lost in the destruction of the store however with modern activities there are copies and other records, such as copies of records with suppliers of substantial quantities of goods such as this large claimed amount of cigarettes. There is an affidavit by an accountant Ariel Adraincem to support the plaintiff’s claim but he did not appear to be the plaintiff’s regular accountant who looked after plaintiff’s business records but gave a series of trading assumptions based on what the plaintiff told him and there was no reference to actual business records from anywhere. The Court cannot find a judgement based on mere assertions or assumptions.
Whilst I will accept the fact that there is enough evidence to suggest a reasonably well operating tradestore and therefore some moderate loss in the short term, then of course there is an obligation in modern enterprises to mitigate and insure and rebuild on insurance. The other party cannot be penalised for a person’s failure to follow normal business practice and insure. I will allow a figure of loss of profits of K1000.00 per month for a reasonable time namely three (3) months.”
Whilst, I accept the fact that there is sufficient evidence to suggest a reasonably operating liquor trading outlet, and therefore some moderate loss occurred, I will however, not accept mere trading assumptions based on what plaintiff told the accountant, in the absence of evidence of business records, such as account books, bank statements, group tax return etc. Court in my view is entitled to insist on proper evidence on claims as this, involving major economic activity enterprises.
The fundamental principle which governs the whole of law of damages, in whatever area damages are awarded, is the principle of compensation. Damages to be awarded in monetary terms no more and no less than the plaintiff’s actual loss. It simply means that the amount of money to be awarded as damages must be such an amount which puts the injured party who suffered loss or damage to the same position as he would have been if he had not suffered injury or damage for which he now claims.
See Luntz H. Assessment of Personal Injury and Death 3rd Edition Butterworths p. 3 para. 1.1.3.
The principle was formulated in a classic and much quoted case of Livingstone -v- Rawyards Coal Co. (1980) 5 App. Cas. 25 (HL). That case involved extraction of Coal by defendant which plaintiff was entitled to. Lord Blackburn had this to say at p. 39:
“where injury is to be compensated by damages in settling the sum of money to be given for ....... damages, you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation. .....”
The principle has been reaffirmed in recent years in areas as diverse as conversion of chattels (Butler -v- Egg & Egg Pulp Marketing Board (1966) 114 C.L.R. 185; Carriage of goods, (The Albazero [1977] A.C. 774 (H.L.); Sale of land, (Johnson -v- Agnew [1980] AC 367 (HL) and infringement of a patent (General Tyre & Rubber Co. Ltd -v- Firestone Tyre & Rubber Co. Ltd [1975] 2 ALLER 173 (HL).
The principle is also referred to as ‘Restitutio In Integrum’ which is not an absolute principle. It is qualified by other principles two of which are:
(a)      Remoteness of Damage - the injured party gets damages which naturally arise from the breach or tortious act and not those which are too remote.
(b)      Duty to mitigate losses. Where a tort has been committed or breach of contract occurs, it is the duty of the injured party to lessen the consequences of such breach or tort. If he fails to take such reasonable steps he cannot get damages for loss due to his failure.
Some of the damages claimed in this proceedings is in respect to trespass, conversion and detinue. Similar claims were well explained in Enga Enterprises Pty Limited -v- Danny Porakali [1995] N1359. In that case, plaintiff claimed damages after his vehicle was detained for almost a year by the defendant. he sued for daily hire of K100, costs of repairs, damages and interest totalling K64,766.15 on the basis of consequential loss. The Court held as follows:
“(1)    Claims for consequential loss are usually considered too remote and to claim consequential loss it must be proved that:
(a)      The plaintiff is in the business of hiring out the chattels that have been converted; and
(b)      The consequential loss must be a direct result of the tort.
(2)      A trespass to chattels is actionable without proof of actual damage. Where goods have been destroyed or the plaintiff is permanently deprived of them the measure of damages is their values. 
Where goods exist and have been restored but have depreciated in value the measure of damages is the costs of repair, if any, and depreciation.”
The learned authors of the text Mcgregor on Damages 15th Edition, cited by the court in Enga Enterprises case (supra) define consequential loss at paragraph 1357 as “Loss beyond that represented by the market value of goods may be incurred by the plaintiff through being deprived of their use. Whether he can recover such consequential of damage.”
Again at paragraph 1298 of Mcgregor on Damages it is stated that “the normal measure of damages for conversion is the market value of the goods converted. This is well settled.”
To claim loss of profit, plaintiff needs to produce proper business records, see Graham Mappa -v- PNG Electricity Commission [1995] N1366. In that case plaintiff claimed damages for loss of income following damage to his 25 Seater PMV Bus when it was involved in an accident with a vehicle owned by defendant. The matter was heard and award of damages was made. On appeal against assessment of damages, the Supreme Court allowed the appeal and remitted the matter for reassessment before the trial judge.
In rehearing Woods, J. was faced with the issue of sufficient evidence. It seems the only evidence plaintiff led was his statement that the business earned K1,200 a week. Woods, J. had this to say at rehearing: (pp. 2-3).
“This ruling therefore makes it clear that if you wish to establish matters like loss of profit from operations of modern business then it is necessary to comply with modern law, such as produce records as are required by 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 and above business running costs were earned and then if a profit was earned there is the requirement to pay taxes. The Courts have been referring to these requirements in recent years especially in the operation of shop or tradestore business. ..
From the evidence of the bank it appears that the plaintiff was a reliable customer and an astute business operator. But is that sufficient to satisfy what the Supreme Court states as sufficient evidence to establish damages in law.
Damages in law must include adherence to the law such as the taxation laws. Thus if a person is making profits over and above the running and operating costs which of course would include salary then a person must file the appropriate tax returns and show profits and pay the appropriate tax. The evidence is quite clear that the plaintiff did not keep any proper business records income and expenditure and did not disclose profit for taxation purposes. Therefore as no proper business records and as tax returns have been produced to the Court to show any profit from the operation of the vehicle this court cannot find that there has been any such loss. The mere assertions and depositing of sums of money in a bank is not sufficient evidence.”
There is no evidence of any business records at all in this case. All I have is mere trading assumptions based on what the Plaintiff told the Accountant. This, I find is not sufficient evidence to establish damages in law.
ASSESSMENT OF DAMAGES
Following the principles discussed and based on the decisions in Enga Enterprises case (supra) and Graham Mappa case (supra), I consider damages should be restricted to the following heads:
(a)      Trespass to goods (ie 364 cartons of beer.
(b)      Illegal detention of 364 cartons of beer for 67 days.
(c)      Conversion of 81 cartons of beer which went missing or lost whilst in police custody.
(d)      Loss of profits.
(A) TRESPASS TO GOODS (IE 364 CARTONS OF BEER)
The evidence is that police raided the plaintiff’s liquor outlet and confiscated 364 cartons of beer on the 1st of October 1995. On 7th December 1995, Court ordered return of 364 cartons of beer. The 364 cartons of beer were therefore held illegally in police custody for nine weeks and four days or sixty-seven days (67). The evidence is that prior to police raid and Provincial Liquor ban, one carton of beer was sold for K38.00. Had plaintiff sold 364 cartons of beer at the price of K38.00 per carton, he would have fetched K13,832.00. This represents the actual value of the 364 cartons of beer.
The evidence shows however, that of the 364 cartons, 283 were returned to the plaintiff, whilst 81 were unaccounted for. At the material time, there was Provincial Liquor ban in the East Sepik Province, and the plaintiff was forced to sell 283 cartons of beer at a much low price of K15.00 carton, instead of the normal price of K38.00 per carton.
At K15.00 per carton, the 283 cartons were sold for total of K4,245.00. Had they been sold for normal K38.00 per carton plaintiff would have made K10,754.00. To arrive at actual sale value of the 283 cartons of beer, the amount of K4,245.00 is deducted from K10,754.00. This would give the figure of K6,509.00 which represents the actual loss incurred by the plaintiff for selling beer at a lower price.
The amount of K6,509.00 should be added to K10,754.00. This is what plaintiff would have earned had he sold 283 cartons at normal K38.00 per carton. It works out to K17,263.00. I would assess the sum of K17,263.00 as damages for trespass to 364 cartons of beer. 
(B) ILLEGAL DETENTION OF THE 364 CARTONS
Plaintiff claims the total time lost for active trading during confiscation of 364 cartons of beer is 13 weeks. Plaintiff therefore claims he would have earned K179,816.00 during that period. Here, I accept State’s submission that, this approach is wrong, because even if there was no confiscation, he would have sold out the 364 cartons of beer anytime. Furthermore, I find no evidence to support the amount claimed. It is in my view unreal to claim such an amount.
For damages under this head, really the plaintiff could have sold, if not, all of his beer before thirteen (13) weeks and liquor ban coming into force. However, the continued illegal detention of beer deprived plaintiff of cash sales.
The principles suggest that in actions for detinue the judgement is usually for the return of the chattels detained or their value together with damages for their detention. See Halsbury’s Laws of England Vol. 12 para. 1161.
At para. 1159 it is stated:
“a trespass to chattels is actionable without proof of actual damage, and a plaintiff is at least entitled to nominal damages for any unauthorised direct physical interference with chattels in his possession.”
In this case, because 283 cartons were returned, I would accept State’s submission that a global assessment only be made for illegal detention. I would assess a sum of K1000.00.
The interest should be computed at the usual 8% yearly rate for period of detention, which runs from 1st October 1995 to 7th December 1995. It works out to be nine (9) weeks and four (4) days or 67 days. Again, I accept the calculation by State on the interest.
Hence:
8/100 X 100 = K80 yearly interest
To get interest for 67 days
= K80.00 (Yearly Interest)
365 (No. of days in a year)
= K0.22 (daily interest)
For 67 days = K0.22 X 67
= K14.74
I would therefore allow K14.74 interests for the period of detention.
(C) CONVERSION OF 81 CARTONS
It is clear from evidence that of the 364 cartons of beer only 283 were returned and 81 were unaccounted for while in police custody. The law on conversion of goods is well explained in Enga Enterprises Case (supra) applying the relevant principles the actual damages recoverable is the sale value of 81 cartons at K38.00 per carton. This gives the figure of K3,078.00. I assess the sum of K3,078.00 for damages in conversion and detinue.
(D) CLAIM FOR LOSS OF PROFIT
Principles in the cases discussed insist the need to provide proper business records to prove a claim arising out of loss of business. John Tuink Salamon (supra) and Graham Mappa (supra). Woods, J. again expressed similar sentiments in Peter Wanis -v- Fred Sheekiot and the State [1995] N1350.
In this case plaintiff has failed to produce books of accounts, bank statements, declaration of profits or any tax returns. In the absence of such evidence, the plaintiff’s claim for loss of profit, unsold stock is not substantiated. There is hardly any evidence to verify the claim for profit. Accordingly, I disallow it. In any case, the amount of profit is already assessed for trespass and conversion, because plaintiff bought 364 cartons of beer at K32.00 per carton and sold at K38.00 per carton.
(E) CLAIM FOR UNSOLD STOCK, LOSS OF ENTITLEMENTS
Loss of Market, etc.
In my view these claims fall under consequential losses. Principles governing claims for consequential losses have been discussed - See Enga Enterprises Pty Ltd case (supra).
First plaintiff must prove he is in the business of trading in liquor.
Secondly, defendant must anticipate consequential loss and finally the consequential loss must be direct result of the tortious actions of police.
Applying these principles, it is clear plaintiff was in the business of trading liquor. Plaintiff has not proven the consequential losses are the direct result of the tortious actions of police. He could have done so by producing relevant business records to show he suffered no loss prior to police raid, but did so after the raid.
There is no evidence to suggest that defendant anticipated such loss to occur as a result of tortious actions by police. Finally, plaintiff has failed also to show he took reasonable steps to mitigate the losses by insuring his business and rebuilding on that insurance policy. Instead, the plaintiff closed down the whole operation. There is some suggestion it was partly due to constant conflicts plaintiff had with the land owners in the area the business was operated.
In these circumstances, plaintiff has failed to properly mitigate his losses, the defendant, particularly the State cannot be penalised, for plaintiff’s failure. In any event, the claim for unsold stock, loss of entitlement, loss of market etc., is too remote, and I am reluctant to award any damages under that head.
Exemplary Damages 
Damages under this head are awarded to compensate plaintiff intended to punish wrong doer and deter others. Rookes -v- Barnard (1964) AC 1129.
Exemplary damages are usually awarded where defendant had acted intentionally with contumelious disregard of another’s right. Whitfield -v- De Lauret & Co. Ltd (1920) 29 C.L.R. 71.
Mcgregor on Damages 14th Edition 1980 p. 226 para. 309 as well as Halsburys 4th Edition Vol. 12 para. 1190 provides good description of this head of damages.
Exemplary damages is awarded not of right. It is discretionary.
Courts in our jurisdiction have either awarded it or refused to award it. An examination of some of the cases show the trend.
In Pike Dambe -v- Augustine Peri & The State [1995] PNGLR 4. A sum of K30,000 was awarded for exemplary damages. The case involved unlawful killing of deceased by police in execution of duties. 
In Helen Jack -v- Marius Karani & The State [1992] PNGLR 391 - another dependency claim arising out of unlawful killing by police, sum of K30,000 was awarded as exemplary damages.
In Theresia Kandapen -v- The State [1995] N 1336, a dependency claim arising out of unlawful killing by police, an amount of K20,000 was awarded as exemplary damages. And Opa Pu -v- John Dupai & The State unnumbered judgement by Woods, J. dated 8th March 1995 - where C.I.S. Officers assaulted prisoner who attempted to escape which resulted in his death, a sum of K10,000.00 was awarded by way of exemplary damages.
In recent cases, what is now popularly known as ‘Police raids’ in villages, Courts in some instances awarded exemplary damages against individual policemen and not the State, while in others it refused to award against policemen but held State liable.
Courts in refusing to award exemplary damages against the State, it held the view that, the wrongful action was in the independent discretion of the police and not sanctioned by the people of Papua New Guinea as enshrined in the Preamble to the Constitution.
In John Tuink Salamon & Ors. -v- The State & 2 Ors. [1994] N1272, Woods J. awarded K26,000.00 against individual policeman named in the writ of summons. Aimon Aure & Ors. -v- The State & Ors. (1995) N1346, another Police raid case, where Defence Force Officers led the raid - were ordered to pay exemplary damages of K71,500.00. In Peter Kuriti -v- The State [1994] N1271, Woods, J. awarded exemplary damages against the State since no individual policemen were named in the writ of summons. This decision was appealed against to the Supreme Court - See Abel Tomba -v- The State [1997] SC 518 and Peter Kuriti -v- The State unnumbered Supreme Court Judgement dated 7 April 1997. In Komaip Trading -v- The State & Or. [1995] N1367, a police raid case, where K70,000.00 was awarded by way of exemplary damages against individual policeman. James Koimo -v- The State [1995] N1322, a police raid case, where Injia, J. awarded exemplary damages against the State and not against the individual policemen, on the basis that State was vicariously liable for actions of its servants pursuant to s. 58 (2) and (4) (b) of the Constitution. This decision was applied in another case of Jonathan Mangope -v- The State N1343. In reaching that decision His Honour Injia, J. declined to follow Woods, J.’s decision in Peter Kuriti, John Tuink Salamon and Alphonse Kopi -v- The State N1270.
The Supreme Court has now remedied the split over the liability to pay exemplary damages. It has held that liability to pay exemplary damages lies with individual policemen and not the State. See Abel Tomba -v- The State [1997] SC 518 and Peter Kuriti -v- The State unnumbered.
Los, J. gave the leading majority judgement and explained why State should not be held liable for payment of exemplary damages. At pp 21 - 22 of the judgement he said:
“when Police exercise powers of search and arrest they do that on behalf of the people. The people must stand ready to support them for any breaches or indiscretions. But, how can the people be punished by ordering them to pay exemplary damages when they have done enough through legislative process by passing laws, rules and procedures under which police must operate yet they deliberately go beyond all expectations to commit wrongs? These considerations in my view must come into play when a Court is exercising it’s discretion. If there is evidence that the State is failing to properly train, fund and generally facilitate it’s servant’s performance then it is relevant consideration whether the State should pay for exemplary damages.”
Again at p. 23 His Honour concludes with these remarks:
“There are also policy considerations that the Courts must bear in mind when they are exercising their discretionary powers pertaining to award of exemplary damages. As exemplary damage is intended to punish and hence serves as moral retribution and deterrence for oppressive and arbitrary acts, should the four million people suffer for the acts of handful of policemen? In an abstract way it may be a lesson for the leadership of the Police Force so that they can take a hard look at training and instilling discipline in the membership of the Force. But the State cannot go on spending money on paying damages and exemplary damages which are unplanned expenditures. The State has more important obligations which concerns the welfare and interest of the majority of the people, that is a planned expenditure to achieve “equalisation of services in all parts of the country” (National Goal number 2 paragraph 4 of the Constitution). A multiplicity of demands upon the State to pay exemplary damages arising from unruly behaviour of few policemen may force the State to make unconstitutional reduction of budget appropriated by National Parliament for different areas and functions of the government in the country as were discovered in Special Reference 1 of 1990 [1990] PNGLR 532 and in Re: Criminal Circuits In Eastern Highlands [1990] PNGLR 82.”
It is now settled law that the liability to pay exemplary damages for wrongful police actions, lies with individual policemen and not the State. s. 12 of the Claims by and Against the State Act also exonerates State from liability to pay exemplary damages, unless there is serious and continuous breach of Constitutional Rights.
Award of exemplary damages is a discretionary matter. Whether or not I exercise the discretion, I consider it necessary to have regard to First and Second Defendant’s conduct in this trial. Both defendants gave no evidence to show whether confiscation of 364 cartons of beer was authorised. For instance by producing search warrant or copy of it. Give an account of why out of 364 cartons only 283 were returned and what became of 81 cartons. There is no such evidence at all. The Defendants through their lawyer, after failing to get the writ of summons dismissed, saw fit to withdraw or as their Counsel put it “abscond” from the trial. Whether it was conspiracy or collusion by Defendants (one and two) and their counsel such conduct in my view is discourteous to Court. In my view, such conduct may well amount to Contempt of Court. It is not the judge concerned who is made mockery off, but the propriety of the their conduct, particularly that of their counsel. In my view, ethical considerations come into play, and such conduct should be referred to Lawyers Statutory Committee. I do not wish to take the matter any further than those remarks.
In the circumstances, exercise of the Court’s discretion to award exemplary damages against the individual policemen, Joseph Hompwafi, first defendant and John Kalaut, second defendant is called for, which I do so.
The obvious question then, is the measure of exemplary damages to be awarded against the policemen. It is by no means an easy question. Recent cases, I have referred to above involve unlawful killing through Police wrongful actions, and which have resulted in awards of K10,000 to K30,000.00 in exemplary damages. Case before involve no loss of human life. 
On the other hand it is suggested that, measure of damages should reflect the value of 81 cartons of beer lost in Police custody, sold at K38.00 per carton. This works out to K3,078.00. In addition, I am asked to take into account the loss of K6,509.00 incurred when 283 cartons were sold at K15.00 per carton. This is on the basis that if it was not for the wrongful action of the police, plaintiff would not have suffered such loss. I compute the total exemplary damages as follows:
(a)      K3,078.00 (actual loss of 81 cartons at K38.00 per carton)
(b)      K3,254.50 (half of the total loss of K6,509.00)
I assess exemplary damages at K6,332.50 which I apportion evenly between the policemen.
I assess the exemplary damages as follows:
(a)      Joseph Hompwafi - K3,166.25
(b)      John Kalaut - K3,166.25
In the circumstances, Court orders Joseph Hompwafi pay exemplary damages of K3,166.25 and John Kalaut pay exemplary damages of K3,166.25.
In summary the following awards are made:
(a)      Trespass to goods - K17,263.00
(b)      Illegal detention - K1,000.00
(c)      Interests for 67 days - K14.74
(d)      Conversion of 81 cartons - K3,078.00
(e)      Exemplary damages - K6,332.50
Total -- K27,688.24
There shall be judgement for plaintiff in the sum of K27,688.24. As the sum of K6,332.50 exemplary damages is to be paid by individual policemen, the State is only liable to pay K21,355.74. The plaintiff shall have Costs of the proceedings as well as Costs of application for default judgement, to be taxed if not agreed, and be apportioned equally among all three defendants.
Lawyer for the Plaintiff: Unitech. Develop. & Consult.
Lawyer for the First and Second Defendants: Habuka Lawyers
Lawyer for the Third Defendant: Solicitor General & Police Dept. Legal Branch, Lae.