N2321

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 1026 OF 1998 (H)

BETWEEN:

FRANK ONGA
for and on behalf of himself and JOHN PARU & KAMB KIN
Plaintiffs

AND:

THE GENERAL MANAGER
ENGINEERING MANAGEMENT PTY LIMITED
First Defendant

AND:

THE ENGINEERING MANAGEMENT t/a ENGINEERING DIVISION
Second Defendant

AND:

WESTERN HIGHLANDS PROVINCIAL GOVERNMENT
Third Defendant

MT. HAGEN: KANDAKASI, J.
2003: 08th & 10th January

PRACTICE & PROCEDURE – Assessment of damages after judgement on liability – Principles governing considered – Plaintiff not at liberty to take issue on liability – No evidence on liability can be allowed – Evidence of plaintiffs not rebutted – credibility of witnesses not questioned – Open to Court to rely on available evidence – Once plaintiff establishes his case onus shifts to the defendant to rebut it - Failure of defendant to secure and call relevant and appropriate evidence operates against their case – Concept of depreciation does not apply in a simple contract for supply and purchase of goods, pursuant to which goods have been supplied but not yet paid for..

EVIDENCE - Evidence of plaintiffs not rebutted – credibility of witnesses not questioned – Open to Court to rely on available evidence – Once plaintiff establishes his case, onus shifts to the defendant to rebut it - Failure of defendant to secure and call relevant and appropriate evidence operates against their case.

CONTRACT – Oral contract with ordinary villagers and road maintenance contractors acting on the instruction of defendants – Contract for extraction of gravel at an agreed rate per load – Record of loads kept by villagers – Plaintiffs’ as ordinary villages involved in a one off transaction not expected to render invoices - Defendants having no records due to changes in officers and government, either to confirm or rebut plaintiffs’ claim – Court left with no evidence rebutting plaintiffs’ evidence – Judgement for the plaintiff in the sum of K13, 644.00 on the available evidence.

Cases cited:
Coecon Limited (Receiver/Manager Appointed) v The National Fisheries Authority of Papua New Guinea and The Independent State of Papua New Guinea (Unreported judgement delivered 28/02/02) N2182.
Yange Lagan & 58 Ors vs. The State (unreported judgement delivered 15/09/95) N1369.
Mangope Paraia vs. The State & Ors (unreported judgement delivered 29/06/95) N1343.
Bank of Hawaii (PNG) Limited v Papua New Guinea Banking Corporation, CSC Investment Pty Limited, Chiu Ho Chan and Wan Siew Chan (unreported judgement delivered 08/06/01) N2095.

Texts cited:
McGregor on Damages Sweet & Maxwell, 13th Edn, 1972, London

Counsel:
Mr. P. Kunai for the Plaintiffs.
Mr. P. Dowa for the Defendants.

10th January 2003

KANDAKASI, J:	The plaintiffs are claiming a sum of K13, 644.00 plus interest and costs. It is allegedly for a breach of an oral agreement in which, they agreed to allow the defendants to extract gravel from their land for road maintenance work and the defendants agreed to pay a sum of K36.00 per load of gravel in May 1997. The plaintiffs also claim that a total of 379 loads of gravel were extracted from their land and used for the road maintenance work. However, they were not paid as agreed. A claim was therefore lodged with the Western Highlands Provincial Government (the WHPG) for payment. The WHPG or any of the defendants failed to respond to the claim.

History of the Case

From the Court record it is clear that on 20th October 1998, these proceedings were issued. They were eventually served on the defendants. The defendants failed to file and serve their Notices of Intention to Defend and Defence within the time period stipulated in the rules of the Court. The plaintiffs therefore filed an application for default judgement on 11th February 2000. That motion was adjourned several times. In the meantime, the defendants filed a motion on 17th May 2000, seeking leave of the Court to file and serve their defence out of time. The application was support by an affidavit by a Miss Julie Bengi sworn also on 5th May 2000. That affidavit simply deposed to the defendants having no record of the road maintenance work and the plaintiffs’ claim. So on 16th June 2000, the defendants were ordered to file and serve further affidavits. The defendants did not do that. On 9th April 2001, the Court ordered judgement for the plaintiffs’ with damages to be assessed. It also dismissed the defendants’ application for leave to file and serve their defence out of time. 

The defendants did not lodge any appeal against the decision of 9th April 2001. The judgement of the Court has therefore, been accepted and the parties have been progressing the matter to trial for an assessment of plaintiffs’ damages. Hence the matter came before me for hearing on the 8th of this month.

Before proceeding any further, I consider it necessary to state the principles that govern an assessment of damages hearing after the entry of judgement on liability.

Principles Governing Assessment of Damages

After considering nearly all of the cases on assessment of damages, I summarized the principles that govern the assessment of damages after entry of judgement on liability in the case of Coecon Limited (Receiver/Manager Appointed) v The National Fisheries Authority of Papua New Guinea and The Independent State of Papua New Guinea (Unreported judgement delivered 28/02/02) N2182. I did that in these terms:

"A survey of the authorities on assessment of damages after entry of judgement on liability mainly in default of a defendant’s defence, clearly show the following:

1.	The judgement resolves all questions of liability in respect of the matters pleaded in the statement of claim.
2.	Any matter that has not been pleaded but is introduced at the trial is a matter on which the defendant can take an issue on liability.
3.	In the case of a claim for damages for breach of contract as in this case, such a judgement confirms there being a breach as alleged and leaves only the question of what damages necessarily flow from the breach.
4.	The plaintiff in such a case has the burden to produce admissible and credible evidence of his alleged damages and if the Court is satisfied on the balance of probabilities that the damages have been incurred, awards can be made for the proven damages.
5.	A plaintiff in such a case is only entitled to led evidence and recover such damages as may be pleaded and asked for in his statement of claim." 

I have and will allow myself to be guided by these principles in this judgement.

Arguments of Parties

At the end of the trial, the parties went into their respective submissions. The defendants counsel handed up a written submission and took the Court through it. In the opening of his submissions counsel acknowledges that there is already a judgement in favour of the plaintiffs’ on liability. Yet he submits that the evidence does not support a finding of liability. Then in relation to the issue of damages, Mr. Dowa of counsel for the defendants argues that the plaintiffs’ evidence is unreliable. This is because he says the transaction was a "one off" one. Therefore, the plaintiffs have no idea about the person they dealt with, there is no official record of work done, there is no official or written agreement, there is no invoices or official and or independent verification and or valuation. He therefore submits that, I should dismiss the plaintiffs’ claim. Yet he submits at the same time that the best evidence there is, is that of the plaintiffs’ particularly as to the number of loads of gravel and rates to be charge and or paid. Then in the alternative he argues for a reduction of the plaintiffs’ claim by 50%.

Mr. Dowa cited the cases Yange Lagan & 58 Ors vs. The State (unreported judgement delivered 15/09/95) N1369; Mangope Paraia vs. The State & Ors (unreported judgement delivered 29/06/95) N1343 and McGregor on Damages Sweet & Maxwell, 13th Edn, 1972, London, page 935 in support of his submissions.

The plaintiffs have not handed up any written submissions, nor have they assisted the Court with any citation of any relevant case or other authorities. They nevertheless submit that they have made out their case on the balance of probabilities and that I should make an award in the sums claimed with interest and costs. 

Issues

The above arguments give rise to three issues. These are as follows:

1.	Whether the defendants’ are at liberty to raise arguments on liability in the light of the judgement already entered against them?
2.	Have the plaintiffs made out their claim on the balance of probabilities?
3.	Whether there is any basis to reduce the plaintiffs claim by 50%?

Going by the principles governing an assessment of damages as I summarized in the Coecon Limited (Receiver/Manager Appointed) v The National Fisheries Authority of Papua New Guinea and The Independent State of Papua New Guinea (supra) case, I dismissed the defendants’ argument on liability, in the course of the hearing the submissions. So the simple answer to the first issue is that, the defendant’s are at no liberty to raise arguments going into the liability aspects of the this claim in view of the judgement covering that aspect. This is more so because the plaintiffs are not claiming anything additional and new to what has already been set out in their statement of claim on the basis of which judgement was signed.

This leaves us to consider the remaining issues. For that, they require a consideration of the evidence produced in Court by the parties. I will therefore, first consider the evidence before me to be followed by findings of fact and then determine the remaining issues.

The Evidence 

The plaintiffs called three witnesses. This consisted of themselves. The first to be called was Mr. Frank Onga who is the lead plaintiff. He has sworn to an affidavit on 18th and filed in Court on 22nd February 2002. That affidavit was admitted into evidence as exhibit "A" for the plaintiffs and Mr. Onga was cross-examined upon it. 

Mr. Onga’s evidence is this. He comes from Keta Village, Dei District, Western Highlands Province. He is the principal plaintiff in these proceedings. He says on or about early 1997, the first defendant negotiated with them (plaintiffs) to extract untreated gravel from their customary land and river beds for the upgrading of roads. The upgrading of the roads was to be from Muglamb to Kraldong Lutheran Mission, Kraldong to Keta Catholic Mission and Kraldong to Moga Lutheran Mission, in the Dei Council District. An agreement was orally reached between the plaintiffs and the defendants, allowing the defendants to extract the untreated gravel from the plaintiffs’ land and pay them K36 per load of gravel extracted. This was through a foreman known to the witness as Ala and the Engineering Division of the WHPG through the first Defendant. 

In accordance with the agreement, the plaintiffs allowed the defendants to extract the gravel as agreed and the upgrading of the roads took place. The records of the number of loads of gravel extracted by the defendants was taken and kept by Mr. Onga with the foreman in charge of the road works confirming from time to time. These records were produced in Court under cross-examination but not formally admitted into evidence. The total number of loads of gravel taken from 1st to 14th May 1997 was 379 at a rate of 36 and 39 loads per day. At the end of the extraction a claim totalling K13, 644.00 was lodged with the WHPG for payment. There was no response to that claim despite numerous follow-ups and demands. So this proceedings were issued.

The cross-examination of this witness failed to discredit his evidence in chief. Instead it filled in and made the witness’ evidence complete in terms of the above summation. The only thing established in cross-examination was the fact that the witness could not give the full name of the foreman, the company carrying out the road works and an admission that no invoices were rendered. I find however, that nothing much can be made out of this against the witness given that, he is a villager and was and his not in the business of providing gravel to the defendants or anybody else either before or after the transaction in this case. Therefore, neither he nor his other co-plaintiffs could be expected to render invoices or keep any other formal records of the transaction. They dealt with the foreman and the other employees or agents of the defendants for the first time in a one off transaction. It is thus, unreasonable in my view, to expect the plaintiffs to name the people involved. All they know is what was deposed to and testified in Court by this witness as far as he could recall.

No questions were asked in cross-examination going into the credibility of this witness resulting in question marks raised over the credibility of this witness. No reason as therefore, been provided for me to doubt the credibility of his evidence. He has not given any evidence that defies any logic or common sense or his inconsistent with his other evidence. Hence, I accept his evidence as both truthful and credible.

The second witness was Mr. Kamb Kin. He is one of the other plaintiffs. He too comes from the same village and area as Mr. Onga. He gave oral evidence corroborating the evidence of Mr. Onga. Again as with Mr. Onga, cross-examination failed to create any doubt or hole in the witness’s evidence. There were no questions or suggestions put to this witness that questions his credibility and trustworthiness. I therefore, also accept his evidence as being both truthful and credible. 

The third and final witness for the plaintiff was Mr. John Paru. He also comes from the same village and area as Mr. Onga. He too is illiterate and this is the first time he has dealt with the defendants. His evidence corroborates that of Mr. Onga’s evidence. Again there was no attack by the defence on this witness’ credibility or trustworthiness. Therefore, I also accept his evidence as being both truthful and credible.

The evidence for the defence comes from Julie Bengi. She is an executive officer to the Administrator of the Western Highlands Province. She was employed in early 2000, well after the matters giving rise to this action. She is the one that deposed to the affidavit of 5th May 2000 for the defendants. Her affidavit was admitted into evidence as exhibit "D1" for the defendants. 

In her affidavit she deposes to having conducted a search of the Engineering Division’s files. The search failed to produce any record of the contract between the plaintiffs and the defendants and the plaintiffs’ claim. On this basis, she says she has grave doubts about the plaintiffs’ claim. 

I find Ms. Julie Bengi’s evidence going into the question of liability only. As noted however, the issue of liability was already resolved by the judgement of 9th April 2001. Hence, based on the principles set out in the case of Coecon Limited (Receiver/Manager Appointed) v The National Fisheries Authority of Papua New Guinea and The Independent State of Papua New Guinea (supra) I find this witness’ evidence irrelevant. I therefore reject it.

Findings of Fact

In the end result I am left only with the evidence of the plaintiffs. I have already decided in favour of that evidence being both truthful and reliable. I therefore find the relevant facts for this case in terms of the evidence of Mr. Onga, which is set out above as corroborated by the evidence of Mr. Kamb Kin and John Paru. 

This now leaves for me to consider the remaining issues. I start that process with the question for whether the plaintiffs have established their claim against the defendants?

Whether the Plaintiffs Established their Case?

I agree with Mr. Dowa’s submission that the plaintiffs are under an obligation to prove their damages after having secured a judgement in their favour. There is ample authority for that proposition. The learned authors of McGregor on Damages (supra) at p. 935 stated that principle in these terms:

"The plaintiff has the burden of proving both the fact and the amount of damages before he can recover substantial damages. This follows from the general rule that the burden of proving a fact is upon him who alleges it and not upon he who denies it, so that where a given allegation forms an essential part of a persons case, the proof of such an allegation falls on him. Even if the defendants fail to deny the allegation or damage or suffers default, the plaintiff must still prove his loss."

This principles have been cited with approval and applied by both the National and Supreme Courts in many cases on assessment of damages. The judgement of my bother Justice Injia in Yange Lagan & 58 Ors vs. The State (supra) and Mangope Paraia vs. The State & Ors (supra) are examples of such cases. On my own part, I referred to those principles and applied them in the case of Bank of Hawaii (PNG) Limited v Papua New Guinea Banking Corporation, CSC Investment Pty Limited, Chiu Ho Chan and Wan Siew Chan (unreported judgement delivered 08/06/01) N2095.

As noted in Coecon Limited (Receiver/Manager Appointed) vs. The National Fisheries Authority of Papua New Guinea and The Independent State of Papua New Guinea (supra), a plaintiff can discharge his burden of prove by calling credible evidence. If he is able to do that in relation to what he alleges then, there is no reason why there should be a finding in his favour unless, the defendant is able to rebut it by other credible evidence. Apparent in this is the fact that, once a plaintiff establishes his case on the balance of probabilities, the burden then shifts to the defendant to rebut it. If a plaintiff fails to discharge that burden, it is open to the Court to act on the evidence of the plaintiff.

In this case, all that the plaintiffs had to prove was that, there was an agreement between them and the defendants which was breached by the defendants as alleged in their statement of claim. This aspect was concluded in favour of the plaintiffs’ by the judgement in default. That meant that the plaintiffs were left to prove the damages that followed from the breach. I find that the evidence of the plaintiffs, which I have decided to accept, does establish on the balance of probabilities the damages they suffered. That damage was in terms of K36 per load of gravel taken from their land for a total load of between 36 and 39 loads per day from 1st to 14th of May 1997 giving a grand total of 379 loads. When the full total of the loads of gravel of 379 is multiplied by K36 it gives a total of K13, 644.00. I therefore, find that the plaintiffs have established their claim on the required standard.

There is no evidence of the defendants rebutting in any way what the plaintiffs’ evidence establishes. It was incumbent on the defendants to secure and produce appropriate evidence to rebut and therefore defeat the plaintiffs’ claim if they wished. If indeed they do not have any records of the road maintenance work, there was nothing stopping them from securing other evidence to support their refusal to meet the plaintiffs claim. For example, they could have easily gone to the plaintiffs’ village and inquire and established whether or not there was an extraction of any gravel from the plaintiffs’ land and if so when. They could have also inquired with people living along the road on which the upgrading work took place and ascertain if indeed there were upgrading works such as those claimed by the plaintiffs. If they did that, they could have ascertained either of two possibilities. Either, 379 loads of gravel were taken from the plaintiffs’ land and the related upgrading of the road works did in fact take place or that, either or both of these things did not happen. Mr. Dowa says, due to changes in the WHPG and its relevant employees, this could not be done. I fail however, to see how that could have stopped the defendants’ and their lawyers from carrying out such investigations and if need be settle the plaintiffs’ claim out of Court or produce witnesses in Court with evidence rebutting the plaintiffs’ claim. I find this failure operates against the defendants as that failure means the court is left with only the plaintiffs’ evidence.

No opportunity or reason is placed before me to doubt the plaintiffs claim. I find that the claim is not exorbitant. Instead I find that, it is a claim for only K13, 644.00 in total which is fairly small and very reasonable in the absence of any evidence to the contrary.

Although the defendant has not raised it, I find this is a case in which the Public Finances (Management) Act 1995 does not apply, given the size of the claim. It is also on the basis that, it is not a case of the plaintiffs setting out to sell their gravel to the defendants. Instead it appears to be a case in which the defendants have already made a decision to upgrade certain roads and material required for that job had to be secured and it seems there was no choice but to extract what the plaintiffs had. 

For these reasons, I find that the plaintiffs have established their damages.

In relation to the alternative argument of the defendants that I should reduce the plaintiffs claim by 50%, I fail to appreciate the basis for this submission. Reference is made to the case of Mangope Paraia vs. The State & Ors (supra). In that case my brother Injia J., decided to reduce the plaintiffs damages by 50% for various heads of the plaintiff’s damages. That was on the basis of depreciation and or the possibility of a lower price. It was in a case of and unlawful police raid resulting in the destruction of a house and other items.

I do not consider it is appropriate to adopt that practice here because, it is a case of contract on terms and conditions on the evidence of the plaintiff that were agreed to by the parties. Therefore, the issue of depreciation and the possibility of a lower price do not apply. Thus, I order that there be judgement for the plaintiffs in the sum of K13, 644.00 with interest at 8% from the date of the issue of the writ.

I also order costs against the defendants. In so doing I reject the defendants’ argument that cost should be ordered on the District Court scale. The reason for this is simple. The claim exceeds the District Court’s monetary jurisdictional limit of K10,000.00. I further order that the costs be agreed within 14 days if not taxed.
______________________________________________________________________
Lawyers for the Plaintiffs:		Kunai & Co Lawyers.
Lawyers for the Defendants:		Paulus M. Dowa Lawyers.