N5324

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 297 0F 2011

MADANG COCOA GROWERS EXPORT CO LIMITED
Plaintiff

V

NOILAI GUNAR
First Defendant

GEE GUNAR
Second Defendant

MADANG PROVINCIAL GOVERNMENT
Third Defendant

Madang: Cannings J
2013: 17, 23 May, 16 August

COMPENSATION – assessment of amount of compensation to which plaintiff is entitled under previous judgment – tort of conversion – liability restricted to terms of judgment on liability.

The plaintiff succeeded at an earlier trial in establishing that it was entitled to exclusive possession of a warehouse, that its right of possession was unlawfully interfered with by the defendants and that its property was removed from the warehouse without permission. A cause of action tantamount to the tort of conversion was established against the defendants who were ordered to return the property, failing which they would be liable to pay to the plaintiff a reasonable sum by way of compensation to enable the warehouse and the plaintiff's property to be put back in the condition it was in at a certain date. The question of the amount of compensation was referred to mediation but the mediation failed and the question returned to court for trial. The plaintiff claimed the total sum of K6,343,754.60, comprising ten components. The defendants submitted that the bulk of the claim was misconceived as the plaintiff was claiming compensation in respect of new causes of action over and above that which had been determined by the order of the court at the trial on liability, and that in respect of the components of the claim that properly fall within the scope of the order there was no credible evidence. The defendants submitted that nothing should be awarded.

Held:

(1)	Eight components of the claim (totalling K5,760,270.60) were misconceived as they fell outside the scope of the order for payment of compensation.

(2)	Two of the components of the claim (restoration of offices, K295,000.00, and equipment and furniture, K146,515.00) fell within the scope of the order for payment of compensation but there was insufficient evidence to justify awarding the amounts claimed. On the other hand the plaintiff succeeded in proving some losses, and the Court awarded K50,000.00 in respect of each component.

(3)	Interest was awarded on the total amount of compensation (regarded as damages) under the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52 at the rate of 8% per annum calculated from the date by which the defendants were ordered to return the plaintiff's property, 31 July 2012, to the date of judgment, a total of K8,320.00.

(4)	Liability for the total amount of compensation and interest of K108,320.00 was apportioned as: first defendant (2.5%) = K2,708.00, second defendant (7.5%) = K8,124.00, third defendant (90%) = K97,488.00.

Cases cited

The following cases are cited in the judgment:

Fuliva v Wagambie (2013) N5221
London Association for the Protection of Trade v Greenlands Ltd [1916] 2 AC 15
Madang Cocoa Growers Export Co Ltd v Noilai Gunar, Gee Gunar & Madang Provincial Government (2012) N4703
Madang Cocoa Growers Export Co Ltd v Noilai Gunar, Gee Gunar & Madang Provincial Government (2012) N4881
Madang Cocoa Growers Export Co Ltd v Noilai Gunar, Gee Gunar & Madang Provincial Government (2013) N4956

ASSESSMENT OF COMPENSATION

This was an assessment of compensation in accordance with an order of the National Court.

Counsel

S Asivo, for the plaintiff, with leave of the Court
O Ore, for the first defendant
B W Meten, for the second defendant
Y Wadau, for the third defendant

16th August, 2013

1. CANNINGS J: The plaintiff, Madang Cocoa Growers Export Co Ltd, claims the sum of K6,343,754.60 pursuant to an order of this Court made on 25 June 2012 in proceedings commenced against three defendants, Noilai Gunar, Gee Gunar and Madang Provincial Government, regarding the occupation and use of the Number 2 Didiman Warehouse in Madang.

2. The plaintiff succeeded at an earlier trial (Madang Cocoa Growers Export Co Ltd v Noilai Gunar, Gee Gunar & Madang Provincial Government (2012) N4703) in establishing that:

•	it was the lawful occupant of the warehouse pursuant to an agreement with the Provincial Government;

•	the Provincial Government without consulting the plaintiff allocated the warehouse to Gee Gunar and used part of it for its own purposes;

•	in early 2011 Gee Gunar, in collaboration with Noilai Gunar, unlawfully entered the warehouse, removed the plaintiff's property and set up business there.

3. I ordered all defendants to vacate the warehouse by 31 July 2012 and that the plaintiff had the right to exclusive occupation and use of it from 1 August 2012 to 31 July 2014. As to the plaintiff's property I ordered:

The defendants who, or whose associates, removed the plaintiff's property from the Number 2 Didiman Station Warehouse, Madang, in the period since 31 December 2010, are obliged to return that property, in the condition in which it was in on 31 December 2010, to the plaintiff by 31 July 2012, failing which the relevant defendants shall pay to the plaintiff a reasonable sum by way of compensation to enable the warehouse and the plaintiff's property to be put back in the condition they were in at 31 December 2010.

4. The defendants did not return the plaintiff's property and did not vacate the warehouse and allow the plaintiff exclusive occupation of it by 31 July 2012. This led to the plaintiff commencing contempt proceedings against the defendants, which resulted in Gee Gunar and Madang Provincial Administrator Bernard Lange being convicted of contempt of court (Madang Cocoa Growers Export Co Ltd v Noilai Gunar, Gee Gunar & Madang Provincial Government (2012) N4881), and punished by six-month and twelve-month terms of imprisonment respectively (which have been suspended on various conditions including payment by them of compensation to the plaintiff: Madang Cocoa Growers Export Co Ltd v Noilai Gunar, Gee Gunar & Madang Provincial Government (2013) N4956).

5. Because the defendants did not return the plaintiff's property by 31 July 2012 the plaintiff became entitled to compensation in terms of order No 5 of 25 June 2012. I did not specify the amount of compensation or who had to pay it and referred any dispute about such matters for mediation in accordance with the Alternative Dispute Resolution Rules. The mediation failed so the question of assessment of compensation has returned to court.

6. I granted leave to the plaintiff to file a statement of claim, which it did on 7 November 2011, and the defendants have filed defences. The plaintiff claims the total sum of K6,343,754.60, comprising ten components. The defendants submit that the bulk of the claim is misconceived as the plaintiff is claiming compensation in respect of new causes of action over and above that which had been determined by the order of the court at the trial on liability, and that in respect of the components of the claim that properly fall within the scope of the order there was no credible evidence. The defendants submit that nothing should be awarded. I will assess compensation by considering each of the ten components in turn.

1	UNLAWFUL DESTRUCTION OF PROPERTY: K295,000.00

7. The plaintiff claims that expenditure of this amount is necessary to restore the warehouse to working condition following damage caused by the defendants. The plaintiff relies on evidence of Simon Yanoda, Managing Director of Kwila Builders Ltd, who has testified that Kwila Builders was engaged in 2005 to fit out the warehouse and, having completed a scope of works, he estimates that K295,000.00 is necessary to bring the warehouse back to operating condition. 

8. I uphold the defendants' arguments that the evidence is deficient. I note that the value of the work done by Kwila Builders in 2005 was only K34,500.00. I will assess the amount of compensation in respect of the damage to the office fit-out as K50,000.00.

2	LOSS OF VALUE OF PROPERTY: K146,515.00

9. The plaintiff claims this amount in respect of missing office equipment including computers, printers, scanners, digital cameras and consumables.

10. I uphold the defendants' arguments that the evidence is deficient. However, I reject their urgings to award nothing. The plaintiff has claimed since the commencement of these proceedings that its office equipment was removed unlawfully and I have accepted that claim. That is why in the judgment of 25 June 2012 I held that the plaintiff had proven a cause of action tantamount to conversion. I will assess the amount of compensation in respect of office equipment that has been removed unlawfully as K50,000.00.

3	LOSS OF PROFITS: K1,703,125.00

11. The plaintiff claims that this is the amount of profits lost in respect of the period from October 2005 to December 2006 and that this loss of profits was due to the inadequate storage facility at the warehouse.

12. This claim is unfathomable. It bears no relation to the order of 25 June 2012 and is rejected entirely.

4	LOSS OF PROFITS: K1,338,172.00

13. The plaintiff claims that this is the amount of profits that it lost in the period from 1 January 2011 to the date of filing of its statement of claim, 25 October 2012 and that the profits were lost because the warehouse was non-operational, and it was non-operational because the defendants had unlawfully entered, damaged and occupied it.

14. I reject this claim as it goes above and beyond the order for compensation of lost property of 25 June 2012. It attempts to introduce an entirely new claim, which must be disallowed. Furthermore the evidence in support of the claim is weak and non-credible. Nothing is awarded.

5	LOSS OF PROFITS: K243,304.00

15. This is a claim for lost profits in respect of the period from 1 November 2012 to 28 February 2013, the date that the defendants "invited" the plaintiff back to the warehouse.

16. This claim suffers the same fate as other claims for lost profits. The order of 25 June 2012 awarded no compensation for lost profits. Nothing is awarded.

6	GENERAL DAMAGES, DISTRESS AND HARDSHIP: K50,000.00

17. This is a claim against the third defendant, the Provincial Government, for the distress and hardship caused to the plaintiff due to its inefficiency and administrative incompetence that resulted in it remaining in partial occupation of the warehouse for more than seven years after it was required to give up exclusive possession to the plaintiff.

18. This claim goes well outside the scope of the order of 25 June 2012. The fact that leave was granted to the plaintiff to file a statement of claim does not mean that it was being invited to plead causes of action in addition to those prosecuted by the originating summons by which these proceedings were commenced. Nothing is awarded.

7	BREACH OF CONSTITUTIONAL RIGHTS: K50,000.00

19. The plaintiff claims this amount for unjust deprivation of property contrary to Section 53 of the Constitution.

20. This is another attempt by the plaintiff to introduce a new cause of action over and above liability established under the order of 25 June 2012. Nothing is awarded.

8	LOSS OF ENJOYMENT OF ASSETS AND OFFICES: K50,000.00

21. This is a claim for exemplary damages.

22. This is another attempt by the plaintiff to introduce a new cause of action over and above liability established under the order of 25 June 2012. Nothing is awarded.

9	INTEREST: K2,325,669.60

23. This is a claim for interest on the total of the preceding eight claims.

24. A claim for interest is at this stage of the process of assessment of compensation premature. Nothing is awarded at this point.

10	GENERAL DAMAGES & LOSS OF SALARIES: K141,969.00

25. The plaintiff claims that on 18 September 2012 the Provincial Administrator Mr Lange entered into an agreement with the plaintiff to compensate it in the sum of K583,484.00, part of which represented "unpaid salaries" for the plaintiff's staff in the sum of K141,969.00. It seeks specific performance of that agreement.

26. The question of whether there was such an agreement and if there was whether it is enforceable are not issues now before the Court. This component of the total claim is rejected.

SUMMARY

27. Only two of the ten components of the plaintiff's total claim are properly before the Court. The sum of K50,000.00 compensation is awarded for each of those two components. The total amount of compensation awarded is K100,000.00.

INTEREST

28. Interest will be awarded at the rate of 8 per cent per annum on the total amount of compensation, which will be regarded as "damages" for the purposes of Section 1(1) of the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. Interest is calculated from the date by which the defendants were ordered to return the plaintiff's property, 31 July 2012, to the date of this judgment, a period of 1.04 years, by applying the following formula:

•	C x I x N = A

Where:

•	C is the amount of compensation assessed;
•	I is the rate of interest per annum;
•	N is the appropriate period in numbers of years;
•	A is the amount of interest.

Thus K100,000.00 x 0.08 x 1.04 = K8,320.00.

APPORTIONMENT OF LIABILITY

29. The total amount of compensation and interest is K108,320.00. The question now arises how liability for payment of this sum should be apportioned amongst the defendants. If the Court does not specify the apportionment, all defendants will be jointly and severally liable for the total amount. The plaintiff will be able to pursue satisfaction of the judgment against any one or more of them (London Association for the Protection of Trade v Greenlands Ltd [1916] 2 AC 15, Fuliva v Wagambie (2013) N5221). I do not think that would be a fair outcome so I will apportion liability in a manner that reflects my assessment of who is primarily responsible for what has happened to the plaintiff. I apportion responsibility and liability as follows:

•	1st defendant, Noilai Gunar = 2.5%;
•	2nd defendant, Gee Gunar = 7.5%;
•	3rd defendant, Madang Provincial Government = 90%.

COSTS

30. The general rule is that costs follow the event, ie the successful party has its costs paid for by the losing party. In this case there is no clear winner. The plaintiff has on the one hand succeeded in obtaining an award of compensation but on the other hand has succeeded in convincing the Court that only 1.58% (K100,000.00 out of K6,343,754.60) of its claim had merit; 98.32% of the claim was without merit. The defendants have succeeded in showing that the bulk of the claim had no evidentiary basis and was misconceived. In these circumstances it is appropriate that the parties bear their own costs.

ORDER

(1)	The first defendant is liable to pay forthwith to the plaintiff the total amount of compensation and interest of K2,708.00.

(2)	The second defendant is liable to pay forthwith to the plaintiff the total amount of compensation and interest of K8,124.00.

(3)	The third defendant is liable to pay forthwith to the plaintiff the total amount of compensation and interest of K97,488.00.

(4)	The parties shall bear their own costs of the proceedings.
___________________________________________________

Thomas More Ilaisa Lawyers: Lawyers for the First Defendant 
Meten Lawyers: Lawyers for the Second Defendant
Young Wadau Lawyers: Lawyers for the Third Defendant