N4226

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

WS NO. 759 OF 2007

BETWEEN:

THAI ITAO trading as THIBEN BUILDING & MAINTENANCE
Plaintiff

AND:

ELIAS KAMARA
First Defendant

AND:

KAIRAK INVESTMENTS LIMITED
Second Defendant

Kokopo: Sawong, J.
2010: 7, 10 September
2011: 18 March

CONTRACT – breach of contract for service – default judgment entered against defendant on liability – assessment of damages for breach – defendants do not dispute or contest evidence of plaintiffs claims on costs – costs awarded to plaintiff as claimed

Cases Cited
Papua New Guinea Cases

Yange Lagan v The State [1995] N1369
Jonathan Mangope Paraia v The State, [1995] N1343,
Obed Lalip & Others v Fred Sheekiot & The State [1996] N1457
Yooken Paklin v The Independent State of Papua New Guinea (2001) N2212
 Misack Pokonoming v Jeffrey Simiri, WS 1596 of 2005, 26/10/07, Cannings J,
New Guinea Civil and Petroleum Limited v West New Britain Development Corporation Limited (2008) N3292
Firman Manua v Southern Highlands Provincial Government (2008) N3508

Overseas Cases

Ashcroft v Curtain [1991] 1 WLR 1731; 1971 3AK ER 1208
Bonham Carter v Hyden Park Hotel Ltd [1948] 64 TLR 177 at 178
Livingston v Raywards Coal Co [1880] 5App Cases 25.

Counsels

Mr. P. Yange, for the Plaintiff
Mr. N. Motuwe, for the Defendants

18 March, 2011

1.	SAWONG, J.: This proceeding was instituted on 9th July, 2007. On the 18th September, 2009 default judgment was entered against the defendants for damages to be assessed.

2.	The Plaintiff claims damages from the defendants arising from breach of verbal contracts he reached with the defendants for construction of two (2) buildings for them namely a residential H90 (a four bedroom house) at Malabunga village in Gaulim of the Gazelle District and a cocoa buying point shed building at Kerevat, also in the Gazelle District of East New Britain Province. Both parties filed affidavits in the trial for assessment of damages. 

3.	The plaintiff relies on the affidavits of Frank Otio, sworn and filed on the 19th March, 2010, Exhibit P1, the affidavit of John Bulut sworn 16th March, 2010 and filed 19th of March, 2010, Exhibit P2, his own affidavits sworn 25th March, 2009 and filed 26th of March, 2009, Exhibit P3 and the affidavit sworn and filed 19th March, 2010, Exhibit P4. Exhibit P1 and P2 were tendered and accepted into evidence by consent without the need to cross examine the deponents. The reason for that was that the defendants did not file the relevant notices under the Evidence Act to cross examine those deponents. Therefore there is no dispute or contest to the contents of those affidavits and the materials contained therein. Exhibit P3 and P4 were tendered and accepted into evidence after the cross examination of the plaintiff.

4.	The substance of the plaintiffs evidence is contained in those affidavits together with his oral evidence. In summary the plaintiff comes from the Eastern Highlands Province. He completed Grade 6 in the village and then subsequently attended the Finshafen Vocational School and graduated with a Certificate in Carpentry. After graduating from the Vocational School, he was employed as a carpenter for about 15 years. He subsequently came to East New Britain Province in 1998 where he married a Tolai woman and they have five (5) children whose ages range between 6 to 17 years. 

5.	Whilst in East New Britain, he has been doing maintenance work and building of houses including those own by Corporate Entities such as PNG Power Limited, Tropicana, Tradewell Limited and others. In total he builds six (6) new houses and 13 maintenance or renovation work. He stated further that individuals and business entities engage him and his men and that they would normally pay him a contract sum for the completion of the task given and not a fortnightly wages.
 
6.	He confirms meeting the First Defendant and his former wife at Warangoi where they discuss and agreed for him to construct a four (4) bedroom house at Malabunga. The labour costs were agreed at K25,000.00. It was further agreed that the defendants would provide the materials for the building and that the plaintiff would construct the building with his carpenters. Based on that agreement, the plaintiff engaged four (4) other men for the construction work. He goes on to say that when the four (4) bedroom house was about 80% complete, they ran out of building materials. The First Defendant did not supply the materials needed to complete the job. 

7.	Thereafter, the plaintiff verbally requested a part payment of K15,000.00 for the work done to-date. While waiting for payment of that amount, the First Defendant then engaged the Plaintiff to work on the construction of a cocoa buying point and shed at Kerevat, thus diverting him altogether. On that arrangement, the defendant agreed to pay the plaintiff a sum of K25,000.00. Unfortunately, upon completion of that shed, the defendants did not pay the promised sum of K25,000.00.

8.	During his oral evidence and in cross examination, the Plaintiff stated that he did not receive any money from the Defendants for labour costs for the construction of both of the buildings. These are confirmed by the invoices he issued and sent to the defendants for the two buildings totaling K45,000.00 being K20,000.00 for the 80% of the work done on the house at Malabunga and K25,000.00 for the shed at Kerevat.

9.	The plaintiff also gave evidence about the difficulties and hardship he endured as a result of non payment of the monies for the work he and his men did on the two (2) buildings. These hardships included his inability to pay his son's school fees and his inability to provide food and basic needs for his family. He also told the court that he walked from Gaulim to Kerevat to construct the shed at Kerevat. He also complained of his inability to provide wages and needs of his workmen, as the defendants did not pay for his labour costs.

10.	His evidence is supported by two (2) independent witnesses. The first is Frank Otio, the New Guinea Islands Regional Manager for the Department of Labour and Industrial Relations. In his affidavit he says that the Plaintiff took his and his workers complaint to Mr. Otio to arbitrate payment of his unpaid labour costs.
 
11.	Mr. Otio then took the plaintiff and they physically visited the project sites  at Kerevat and Gaulim. There he took photographs of the buildings that had been constructed by the plaintiff and his workmen. Mr. Otio stated at paragraph 4 of his affidavit that he could not enter the building at Kerevat but took photographs of it. He could not enter the premises because the building was occupied by tenants who were conducting business in it. Thereafter, they went to Gaulim where he took photographs of the building in its entirety as the plaintiff and his men were still occupying a make shift house at the site and were in-charge of the building.

Photographs B1 to B9 which are annexed to Mr. Otio's affidavit are the photos of the building. After he visited the project sites, he wrote to the defendants on the 25th of April, 2006 to attend upon his office on the 2nd of May, 2006 for a meeting to mediate the complaint for unpaid labour costs by the plaintiff against the defendants. 

12.	Mr. Otio then says that the defendants did not attend so he caused a further letter to be sent to the defendants setting another date for a meeting. But the defendants did not attend that second schedule meeting. 

13.	The next piece of evidence for the plaintiff came from the affidavit of John Bulut. John Bulut is a carpenter himself and presently runs his own business as SJB Building and Maintenance Construction. He outlines his background beginning with trade skills training at Morata Vocational School in 1989, followed by employment with Fletcher Morobe for a period of 12 years starting as a general carpenter to a Foreman and then subsequently to a Supervisor. He was also subsequently employed by Nawae Constructions with their projects in Alotau, Milne Bay Province in 2001. In 2002, he was employed by Downer Construction 

Limited and was involved with the building of residential units at the Kabaleo Teachers College wherein he supervised carpenters engaged in that project. 

14.	After the completion of the Kabaleo project in 2003, he started his own building construction and maintenance business. He stated that during the period 2003 and 2008, he built almost other minor projects 5 H90 buildings like the one built by the plaintiff and his men at Gaulim. He also outlines the labour costs he charged during that period, depending on the size and construction of the houses. 

15.	He gives evidence that in the year 2004, he charged K33,000.00. In 2005, he charged K57,000.00 for a particular house. In 2006, he charged K43,000.00 and in 2007 K58,000.00. All of this labour costs varied according to the number of materials, time and quality of the houses built although they were all H90 houses. Mr. Bulut goes on to say that he met the plaintiff at Kerevat whilst the plaintiff was building the defendants cocoa buying shed and also states that he saw that particular building. He also states that when he was requested to provide a quote of the buildings that the plaintiff and his men had constructed, he gave the quotations contained in Annexure B of his affidavit. He states that the labour quotes he provided are for the period 2004 and 2005 and also making reference to the incomplete house at Gaulim.

16.	In Exhibit B, Mr. Bulut gives an estimate of the costs of labour for the two (2) buildings and states that for the three (3) bedroom house at Gaulim, the labour costs would be K55,000.00 and for the Kerevat shed, the labour costs would be K72,000.00, making a total of K127,000.00.

17.	In summary, the essence of Mr. Bulut's evidence is that it reflects the true market value of the labour costs in the building industry by a person who has over 20 years of experience in that industry covering the period which the two (2) buildings were constructed.

18.	The defence evidence consisted of the affidavit of Elias Kamara sworn and filed on the 20th of May, 2010, his oral sworn evidence, the affidavit of Carolyne Sildom, sworn on 31st May, 2010 and filed 3rd of June, 2010, and the affidavit of Samson Clayton Well, sworn and filed on the 20th of May, 2005.

19.	The essence of the first defendant's evidence is that firstly he says that there was an agreement between his previous wife and the plaintiff to build the house at Malabunga for K5,000.00. He then says that he paid the plaintiff and his two (2) carpenters on a fortnightly basis. Unfortunately, he did not produce any documentary evidence to show any payments. In his affidavit, he does not say anything about paying the plaintiff for his labour costs for the building at Kerevat.

20.	Carolyn Sildon's evidence is similar to the evidence of Elias Kamara. Samson Clayton Well's says that he and the plaintiff were paid on a fortnightly basis.

21.	The parties have filed a statement of agreed and disputed facts and issues. This was filed on the 5th of August, 2010. The essence of the dispute between the parties is essentially one of how much should the plaintiff be paid for his labour costs. The plaintiff says he is entitled to be paid K50,000.00 or more as labour costs for the construction of the two (2) buildings whilst the defendants says that the plaintiff is only entitle to K5,000.00 for the construction of the two (2) buildings.

22.	The issue then is, how much is the reasonable labour costs to be awarded or should be awarded to the plaintiff as his labour costs for the construction of the two (2) buildings.

23.	In determining the issue of assessment of damages, it is clear that in a civil action the purpose of an award of damages is to put the innocent party in the same position, as far as possible, as they would have been in if the wrong-doer had not committed the wrongful act. See Livingston –v- Raywards Coal Co [1880] 5App Cases 25.

24.	The onus is on the plaintiff to prove his losses on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and then expect the Court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person's case, that person has the onus of proving the allegation. See Yooken Paklin –v- The Independent State of Papua New Guinea (2001) N 2212. 

25.	If the evidence and pleadings are confusing, contradictory and inherently suspicious, the plaintiff will not discharge the onus of proving his losses on the balance of probabilities. It is conceivable that such a plaintiff will be awarded 
Nothing: Obed Lalip & Others –v- Fred Sheekiot & The State [1996] N 1457.

26.	The fact that the damages cannot be assessed with certainty does not relieve the wrong-doer of the necessity of paying damages. Where precise evidence is available, the Court expects to have it. However where it is not, the Court must do the best he can. See Jonathan Mangope Paraia –v- The State [1995] N 1343, Misack Pokonoming –v- Jeffrey Simiri, WS 1596 of 2005, 26/10/07, Cannings J, New Guinea Civil and Petroleum Limited –v- West New Britain Development Corporation Limited (2008) N 3292.

27.	In Firman Manua –v- Southern Highlands Provincial Government (2008) N 3508, my brother Makail J, in determining a trial on the assessment of damages in a suit involving breach of service contracts, made the following remarks:

"It is the law that not withstanding the fact that default judgment is entered against a defendant or defendants, the plaintiff or plaintiffs still bears the burden to prove by appropriate evidence his or all their losses or damages.
See the cases of Yange Lagan –v- The State, [1995] N 1369 and Jonathan Mangope Paraia –v- The State, [1995] N 1343. As Lord Goddard, CJ said in Bonham Carter –v- Hyden Park Hotel Ltd, [1948] 64 TLR 177 at 178:

"Plaintiffs must understand that, if they bring action for damages, it is for them to prove their damage; it is not enough to write down particulars and, so to speak, throw them at the head of the Court, saying; This is what I have lost, I ask you to give me these damages. They have to prove it." 

28.	For a recent example where the above principles were applied, see Ashcroft –v- Curtain [1991] 1 WLR 1731; 1971 3AK ER 1208. In McGregor on Damages, (Sweet & Maxwell, 13th Edn. 1972, London) the learned author puts the same principles in another way:

"The plaintiff has the burden in 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 him who denies it, so that where a given allegation forms an essential part of a person's case, the proof of such allegation falls on him. 

Even if the defendant fails to deny the allegations of damage or suffers default, the plaintiff must still prove his lost. 

In other words where default judgments is entered in an unliquidated demand, (as is in this case), the facts which arise to the question of liability are settled. The effect of a default judgment in this case is that there is a valid contract of service and that there was a breach of that contract. All the facts and the legal issues relating to liability are no longer an issue. Assessment of damages involves consideration of the terms of contract and assessing the damages that flow from the breach of the terms of the contract. Thus, applying the above stated principles to the present case, the question I asked is, not withstanding the fact the default judgment has been entered against the defendants and that it has offered no evidence and response to the plaintiff's evidence, have the plaintiffs proven their losses for damages?".

29.	In the present case, I find the following facts are not in dispute. Firstly default judgment on liability has been entered against the defendants. The effect of this is that there was a valid contract of service between the plaintiff and the defendants and that the defendants breached that contract. There only remains the issue of assessment of damages flowing from that breach. It is clear that the defendants engaged the plaintiff to construct two (2) buildings, one at Malabunga village, namely, a H90 residential building and a shed at Kerevat. I also find as a fact that the plaintiff did together with two (2) of his employees constructed the buildings at those locations. I find as a fact that the residence at Malabunga village was not completed in full but the building at Kerevat was completed. I also find as a fact that the defendants provided the building materials for the plaintiff and his carpenters to construct those buildings.

30.	There is therefore no doubt that the plaintiff is entitled to be paid for his labour costs. The real issue is how much should he be paid for his labour costs. On this aspect, I have carefully considered the evidence from the Plaintiff and his witnesses and the evidence from the defendants and their witnesses.

31.	In his pleadings in the Writ of Summons, the plaintiff claimed K20,000.00 for the incomplete house at Gaulim and K25,000.00 for the completed ware house at Kerevat, making a claim of total sum of K45,000.00. But that is merely a claim. The onus was on him to prove by relevant creditable admissible evidence proving that claim.

32.	In that regard, I refer to the plaintiff's evidence annexure H which is an Invoice No. TB 02/06 dated 6th of January, 2006. In that piece of evidence, the plaintiff set out two (2) matters. First he stated the total labour costs of the construction for the Kerevat premises at K25,000.00. Secondly, he says that the part payment for work done so far is K15,000.00 and the K10,000.00 is to be paid after the building was completed. He therefore rendered a Invoice for K15,000.00. Subsequently, on the 4th of March 2006, he sent another Invoice and this time it was for the K10,000.00. It is clear that the plaintiff and his worker's completed this building. He would therefore be entitled to be paid the agreed amount for this, namely K25,000.00.

33.	Then he raised an Invoice dated 6th of January, 2006 being Invoice No. TB 01/06 being for the construction of the residence at Gaulim. The plaintiff stated the labour costs of the construction was K35,000.00 and the Invoice was for work done so far being K20,000.00 and the balance of K15,000.00 was to be paid after the building was completed. That invoice was directed to Mr. Kamara and Kairak Investments Ltd who are the defendants. This building was not fully completed. Therefore, the plaintiff cannot claim the full amount agreed upon. He should only be paid for the work done, namely K20,000.00.

34.	In summary then, the plaintiff's evidence is that pursuant to the terms of the contract between him and the defendants, he and his carpenters constructed the two buildings. He has not been paid for his labour. He sent invoices for his labour costs to the defendants, but the defendants have not paid the invoices. The invoices remain unpaid. 

35.	The plaintiffs' evidence on this aspect (labour costs) is supported by the evidence of John Bulut, who gave figures of how much he would have charged for costs of labour for constructing those two buildings. Those figures are similar to figures stated by the plaintiff.

36.	Counsel for the defendants did not destroy the plaintiff's evidence on this aspect. That being the case, it remained intact. There was for instance no evidence from the defendants that they had not receive those invoices and that the invoices were fabrications. The defendants merely asserted that the agreement they had reached was for the defendants to pay a sum of K5,000.00 to the Plaintiff for labour costs. 

37.	I do not accept that assertion because by looking at the photographic evidence of the constructions of the two (2) buildings that were done by the plaintiff on the two (2) buildings and his own oral evidence supported by the invoices they all fall against the assertions made by the defendants.

38.	Furthermore, the plaintiff's evidence is, to some extent, supported by the evidence of the labour officer. But more importantly, his evidence is supported by the evidence of John Bulut who gives an indication of what he would charge for labour for constructing the two (2) buildings the time he made the report. 

39.	I have in the final analysis, looking at all the evidence from the beginning to the end, and putting together all the bits and pieces, am satisfied on the balance of probabilities that the plaintiff has proved his claim. I am satisfied that the plaintiff and his labourers constructed those buildings. I am equally satisfied that he and his labourers were not paid by fortnightly wages. They were not paid at all for their labour costs of the construction.

40.	I therefore award damages totaling K45,000.00 to the plaintiff. So far as the claim for anguish in convenience and hardship, having considered the evidence, I am satisfied that the plaintiff has made out his cost on this aspect of his case also. I therefore award him a lump sum amount of K5,000.00.

41.	In the premises, I make the following orders:-

1)	That judgment be entered for the plaintiff against the First and Second defendants, Elias Kamara and the Kairak Investments Limited for the sum of K50,000.00.

2)	I award interest at 8% from the date of filing of the Writ of Summons to the date of judgment.

3)	The defendants, Elias Kamara and Kairak Investments Limited shall jointly and severally pay the Plaintiffs costs, such costs to be taxed, if not to be agreed.

________________________________________
Warner Shand Lawyers: Lawyers for the Plaintiff
Motuwe Lawyers: Lawyers for the Defendants