N5208

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 431 OF 2010

ELSIE JOSEPH AND FRED LAA TRADING AS VEVENI CONTRACTORS
Plaintiffs

AND

IPAI MANIHA, STEVEN SAPALO & DANIEL KAI SIPA REPRESENTING THE DAULO PROJECT MANAGEMENT TEAM
First Defendant

AND

IPAI MANIHA IN HIS CAPACITY AS THE CHAIRMAN OF THE DAULO DISTRICT PLANNING & BUDGET PRIORITIES COMMITTE AND FOR THE DAULO DISTRICT ADMINISTRATOR
Second Defendant

AND

DAULO DISTRICT LOCAL-LEVEL GOVERNMENT
Third Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Forth Defendant

Goroka: Ipang AJ
2012: October 29
2013: March 11 & April 25

DAMAGES – Trial on assessment of damages – claim for alleged breach of building construction contract – even though default judgment has been entered – plaintiff still bears the onus to prove damages suffered.

Cases Cited:

Mel v Pakalia [2005] PGSC 36
Coecon Ltd v National Fisheries Authority & Ors (2002) N2182
MVIT v Tabanto [1995] PNGLR 214
Waima v MVIT [1992] PNGLR 254
MVIT v Pupune [1993] PNGLR 370
Tabie Mathia Koim & 2 Ors v State & Ors [1998] PNGLR 247
Pokau v Wettie [2010] PGNC 88; N4086 (27.11.07)
Yooken Paklin v State (2001) N2212
Elsie Joseph & Fred Laa trading as Veveni Contractors WS. 431 of 2010 (17.05.10) Unreported.

Counsel:

Ms. M Irai, for the Plaintiff
Mr. J. Doa, for the Defendants

JUDGMENT

25 April, 2013 

1.	IPANG, AJ: On the 26th October, 2011 default judgment has been entered for the plaintiff. Liability is now not an issue. On the 29th September, 2012 plaintiff's trial on assessment of damages commenced. Plaintiffs were then directed to file additional submission on the taxation. On the 25th of March, 2013 Ms. J. Doa for the Defendants made an oral submission and then file a written submission.

2.	Much of the back ground facts giving rise to the institution of this legal proceeding are well covered in the proceeding the plaintiffs instituted when they sought for interlocutory application. Refer to Elsie Joseph & Fred Laa trading as Veveni Contractors v Ipai Maniha & Ors (WS. 431 of 2010) (17 May, 2010) unreported. However, for the purpose of this judgment, I will briefly re-state the facts again.

Facts:

3.	On the 15th of July, 2009 the plaintiff Veveni Contractors entered in to an agreement with the Daulo District Administration to construct the Law & Justice Sector building at Asaro in the Daulo District of Eastern Highlands Province. The lump sum cost for K332, 000.00.

4.	In or around August, 2009 the plaintiffs commenced the construction of the project. The time period for the completion of the project was 12 weeks, which the project estimated completion date was at the end of October, 2009. It is no doubt, time was of essence.

5.	In one of his Progressive Site Inspection Report dated 22nd August, 2009 Daniel Sipa, the Project Supervisor reported that the progress of the project was impressive and the progressive payments were paid to the plaintiffs.

6.	Whilst the project progressed smoothly, the Project Supervisor Mr. Daniel Sipa drastically altered the Project Design. This is confirmed and verified in is Project Report dated 22nd of September, 2009. The changes made to the Project Design increased the total cost of that to K1, 063, 000.00.

7.	The following facts as noted by His Honour Yagi, J in Elsie Joseph & Fred Laa (supra);

•	Following the variation agreement, there was about one (1) month delay by the defendants in terms of drawing up of the variation agreement. Despite the delay, the plaintiff continued working thereby incurred extra costs. It was a mutual understanding that extra costs incurred by the plaintiff would be reimbursed by the defendants.

•	The plaintiff was prevented by the defendant from performing his contract obligations under the phase 2 works program because the defendants failed to supply the building materials.

•	The period of the variation contract has lapsed without completion of the works as a direct result of the defendants' failure. From the phase 2 works about K50, 000.00 has been retained by the defendants and not paid to the plaintiff.

•	The defendants intend to utilize the plaintiffs' labour work force to complete phase 2 of the contract works.

•	The defendants have yet to pay the outstanding contract claims to the plaintiff.

•	The plaintiff fears that a considerable amount of contract funds may be used to pay the third party.

•	The defendants acted unfairly and improperly in terminating the contract, which would result in the plaintiff incurring serious debts leading to bankruptcy.

Issue:

8.	Whether plaintiff is entitled to claim for damages and that also include loss of business

Relevant Law:

9.	As I have initially stated on the outset that the plaintiff has the onus of proving his or her case on the balance of probabilities. It is not sufficient to make assertations in a statement of claim and expect the court to award what is claimed. The person who asserts bears the onus of proving the allegation or damages suffered. See Yooken Paklin v State (2001) N2212.

10.	To assess damages, the court must consider the Statement of Claim and be satisfied that the facts and the cause of action are pleaded with sufficient clarify. If the pleaded facts or cause of action do not make sense, the judge can revisit the issue of liability. See Mel v Pakalia [2005] PGSC 36 and Coecon Ltd v National Fisheries Authority & ors (2002) N2182.

11.	Where default is granted, for damage to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded. Cases which have stated this are; MVIT v Tabanto [1995] PNGLR 214; Waima v MVIT [1992] PNGLR 254; MVIT v Pupune [1993] PNGLR 370 and Tabie Koim & 2 Ors v State & Ors [1998] PNGLR 247.

Plaintiff's Claim:

12.	Plaintiff has not filed an extract of their submission on damages. However, the following are what the plaintiff is claiming:-

•	Losses in respect of Work Done	K1, 063, 000.00	
•	Losses in respect to Net Profi	K 102, 934.00	
•	Losses in respect to Salaries	K	888, 216.00	
•	Losses in respect to School Fees Income	K	15,600.00	
•	Losses in respect to Food Income	K	16,800.00	
•	Losses in respect to House Rent Income	K	31,500.00	
•	Losses in respect to Goodwill	K	392, 192.53	
•	Loss of income for Loan Repayment	K	50,398.30	
•	Legal Costs	K	400,000.00	
•	Statutory Interest	K	236, 851.27	
•	Commercial Bank Interest	K	585,216.03	
Total Claim	K3, 782,708.13	

The above are basically what the plaintiff claimed.

Applying the Law on Default Judgment to the Plaintiffs' Claim:

13.	In the cases of Mel v Pukalia [2005] PGSC 36 and Coecon Ltd v National Fisheries Authority & Ors (2002) N2182, the courts in these cases held that to assess damages, the court must consider the Statement of Claim and be satisfied that the facts and the cause of action are pleaded with sufficient clarity.

Courts have also held that you cannot claim what is not pleaded.

14.	I agree with Ms. J. Doa of counsel for the Defendants and find the following claims and the amounts were not pleaded in the Writ of Summons (WS) by the plaintiff:-

(a)	Losses in respect to Income (work done)	K1,063, 000.00	
(b)	Losses in respect to Net Profit	K102, 934.00	
(c)	Losses in respect to Salaries	K888,216.00	
(d)	Losses in respect to School Fee Income	K15,600.00	
(e)	Losses in respect to Food Income	K16,800.00	
(f)	Losses in respect to House Rent Income	K31,500.00	
(g)	Losses in respect to Goodwill	K392,192.52	
(h)	Losses in respect to Loan Repayment	K 50,398.30	
These claims and the total amount not pleaded	K2, 560,640.82	

In Summary:

15.	I will award the amount of K121, 963.17 being for the outstanding monies due under Phase 1 and Phase 2 of the project plus the 8% interests pursuant to statute and costs. Costs to be agreed if not to be taxed.

121, 963.17 x .08 x 3.4 = K33173.98

Total judgment in the sum of K155,137.15
______________________________________
Warner Shand Lawyers: Lawyer for the Plaintiff
Solicitor General: Lawyer for the Defendants