N4530

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1458 OF 2008

BETWEEN

LIKUI TRADING LIMITED

AND

JOSEPH SELNA

Buka: Kawi J
2011: 17th & 18th November

ASSESSMENT OF DAMAGES - principles of assessing damages- plaintiff bears the burden to prove his losses with particularity and certainty- Plaintiff failed to prove business losses – Plaintiff cannot get what he has not proven – claim for loss of business and profits must be strictly proven

Held:

 (1) The plaintiff is under an obligation to prove his losses with particularity. The plaintiff has not produced any evidence at all to prove his losses. 

(2) Claims such as claims for loss of business opportunity or claims for loss of business profits must be strictly proven with the production of appropriate business records, accounting records, bank statements, and even tax or company returns. 

CASES CITED IN JUDGEMENT

University of Papua New Guinea –v- Jerry Duwaino [2011] SC1119
Cheong Supermarket Pty Ltd –v- Perry Muro [1987] PNGLR 24

Counsel: 

T. Tamusio, for Plaintiff 
Mr E Latu, for defendants 

18th November, 2011

1. KAWI J: This was a trial for assessment of damages. Liability was determined with the entry of default judgment against the defendant on the 19th October 2011.

2. This trial concerned a claim for monetary compensation arising from what appears to be breach of rental agreement. The plaintiff, Likui Trading Limited entered into an oral agreement with the defendant one Joseph Selna to rent his building located at section 2 Lot 22, Town of Buka Kokopau, Buka passage. It was an oral term of the agreement that the plaintiff would trade in general merchandising and groceries. He would rent the defendant's building by paying a rental amount of K600.00 per month. He physically moved in and occupied the property about January 2006 and commenced trading. By February 2006 the plaintiff had gone into full swing trading. Prior to the plaintiff moving in and commenced trading, he carried out repairs and general maintence to the building. This was about September to December 2005. This was in anticipation of him eventually moving into that building to commence trading. 

3. About 11th December, 2006 the defendant had locked out the plaintiff from operating his business in his building. The Plaintiff sued as a result claiming damages for loss of business, and cost of erecting the repairs and for frustration and distress. 

Claim for Cost of Repairs and Maintenance

4. The Plaintiff claims K44, 188.86 being the cost of the purchase of hardware and other building materials. The plaintiff had produced invoices from relevant suppliers to verify this aspect of his claim. I will therefore award the amount claimed in the sum of K44, 188.86 as damages under this head.

Claim for Labour costs 

5. The contractors submitted a bill for K15,863.16 being for the labour cost. As this claim is properly verified by production of appropriate invoice to substantiate the kind of work done, I will award this amount claimed. 

The Claim for loss of business

6. The plaintiff makes a claim for what he says is a loss of business for about 90 days or three months. He argues that he incurred these losses directly as a result of the defendant's actions in locking him out. The plaintiff argues that when they were locked out from using and running his shop within the building he estimated losing business profits, which he estimates to be at K2,800.00 per day. Over a period of 3 months or 90 days this would give us a loss of K252,000. He therefore claims K252,000 for loss of profits and business opportunity.

It is trite law in this jurisdiction that an objective for an award of compensatory damages is to put the person who has suffered some wrong in the same position as he would have been in but for the injuries or the tort for which he is now getting monetary compensation. It is a further principle of law that a person who seeks compensatory damages is under an obligation to prove his losses with particularity and certainty.

7. The Supreme Court in the case of University of Papua New Guinea –v- Jerry Duwaino [2011] SC1119, held that the onus was on the respondent/ complainant to prove the damages claimed. The court further stated that a plaintiff has an obligation to prove his losses with as much certainty and particularity as is reasonable. Claims such as claims for loss of business opportunity or claims for loss of business profits in my view must be strictly proven with the production of appropriate business records, bank statements, and even tax returns. 

8. It is not sufficient for a plaintiff to simply write down his alleged losses and then request the court to give him back those damages. The plaintiff has an obligation to prove those losses.

9. The plaintiff in the present case has done exactly what the Supreme Court warns against doing. He has simply written down his alleged losses and have given them to the court asking the court to give him back those damages. Clearly the plaintiff has not proven his losses, of the K2,800.00 per day. I am being asked to speculate here and assumed that the plaintiff did make these losses when he did not prove these losses with particularity and certainty. The plaintiff has the onus of proving this losses but he has failed to discharge that burden to prove this losses. I am unable to conclude with some certainty that the plaintiff has made losses of K2,800.00 per day and over a period of 90 days (three months) these losses would accumulate up to K252,000.00. 

10. The plaintiff could have easily proven these losses by providing a Bank Statement to show his earning capacity as well as his losses. I do accept that the plaintiff did make some losses but these losses cannot be K252,000, for 90 days. It could be more than the amount claimed or it could be less. In my view, the alleged losses of K252,000 has never been proven and the Supreme Court in Jerry Duwaino's case made it absolutely clear that the onus is on the plaintiff to prove his losses with particularity and certainty. I will therefore treat this alleged losses as being too remote to be claimed. I will not award the amount of K252,000. Instead accepting that some losses were made, I will in the exercise of my discretion make a global award of K10,000.00 only being losses for the three months. 

DAMAGES FOR HARDSHIP, FRUSTRATION AND DISTRESS

11. The Plaintiff also claimed damages for hardships, inconvenience anxiety and distress. I do accept that this head of damages is claimable in this jurisdiction and Los J in this case of Brian Hodson –v- The State [1985] PNGLR 303, following the case of Jarvis –v- Swan Tours Ltd [1973] 1 QB 233, awarded K6,000.00 for distress, frustration and general disappointments. Jarvis's case concerned a Plaintiff who went on holidays, but was very disappointed and distressed when the attractive terms offered in the holiday brochure did not eventuate.

12. In Peter Na'al –v- Michael Debege [2000] N1958, Kapi DCJ (as he then was) found the plaintiff, a Public Servant who had gone abroad for studies found that he was not paid his entitlements while he was on studies. His wife and children could not join him in Australia. His wife re-married as a result. His salary was stopped. He sued claiming damages for hardship, frustration, anxiety and distress. Kapi DCJ awarded K15,000.00 for distress, anxiety and hardship suffered.

13. In Peter Aigilo –v- Sir Mekere Morauta and The State, [2001] (No. 2) [2001] N2702, Kandakasi, J awarded K20,000.00 to the plaintiff, a former Police Commissioner, whose contract of employment was breached by the State when he was terminated as the Police Commissioner.

I would accept that this head of damages is applied in this jurisdiction. I would award K15,000.00 under this head of damages.

EXEMPLARY DAMAGES

14. The plaintiff further claims exemplary damages for the actions of the defendant. In my view an award of exemplary or punitive damage is intended as a measure of public indignation at police officers and other servants and agents of the State whose actions amount to breach of human rights. Again in my view a claim for exemplary damages has no bearing in the circumstances of this case. Consequently I will not allow any claim for exemplary damage

INTERESTS

15. In his statement of claim, the plaintiff claims interests. I find that the relevant legislation, ie, the Judicial Proceedings (Interests on Debts and Damage) Act chapter 52 does not stipulate that interest must be specifically pleaded and expressly sought by the plaintiffs. The relevant provision is section 1 and this provision empowers the court to award interest. It does not say that interest must be specifically pleaded or expressly sought by a plaintiff. Section 1 is expressed in the following terms;

"Subject to section 2, in proceedings in a court for the recovery of a debt or damages the court may order that there be included in the sum for which judgment is given interest, at such rate as it think proper, on the whole or part of the debt or damage for the whole part of the period between the date on which the cause of action arose and the date of the judgment".

16. Bredmeyer J in Cheong Supermarket Pty Ltd –v- Perry Muro [1987] PNGLR 24, pointed out that this section confers a four-fold discretion on the judge: 

(1) whether to grant interest at all; (2) to fix the rate; (3) to grant interest on the whole part of the debt or damages for which judgment has been given (4) to fix the period for which interest will run.

17. Following on from that judgment, I will exercise my discretion in this way:

(1) Any plaintiff should in the normal course of events receive interests. There is nothing that takes this case out of the ordinary in that regard. And I will award interest to the plaintiff here and order that interest be included in the sum for which judgment is given. 

(2) The rate of interest commonly used is 8%. I do not see any reason to depart from that rate. Interest will therefore be computed at a rate of 8% on the principle sum awarded to the plaintiff here. 

(3) Interest is payable on the whole or the total sum of judgment for which judgment is given.

(4) I will fix the commencement date for an appropriate period as the date on which the cause of action was filed in court. In this case I will order that interest will commence on the 11th December 2006, which is the day when the defendant repossessed his building and locked out the plaintiff. Interests will accrue at a rate of 8% commencing from 11th December 2006 and ends on the day when the full and final payment is made.

COSTS

18. The general rule, is that costs follow the event, ie, the successful party has his cost paid for by the losing party on a party to party basis. The question of cost is a discretionary matter. There are no special circumstances in this case that warrant this court from departing from the general rule. I will order costs of this action to be paid by the defendant. This costs are to be taxed in accordance with the National Court Rules Schedule on costs, if not agreed between the parties. 

JUDGMENT

19. There shall be judgement for the plaintiff in these terms:

a) Claim for repairs and maintenance to the building at Section 2 Lot 22 in the town of Kokopau, Buka Passage.-  = K44,188.86
b) Costs of labour = K15, 863.15
c) Loss of business =K10,000.
d) Damages for frustration, distress and inconvenience caused= K15,000. 

TOTAL AWARD: K85, 052.01

20. The plaintiff is therefore awarded a total of K85,052.01 together with cost and interests to compensate him for his losses. Any outstanding rentals owed to the defendant by the plaintiff shall be paid out from this award.

Judgment Accordingly

Thomas Tamusio Lawyers: Lawyers for the Plaintiff
Latu Lawyers: Lawyer for Defendants