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Kalit v Zurenuoc [2018] PGNC 565; N7711 (7 September 2018)

N7711

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 193 OF 2013

BETWEEN:
KELLY KILYALI KALIT
Plaintiff

AND:
MANASUPRE ZURENUOC in his capacity as the
Chief Secretary to Government
First Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

Waigani: Dingake J
2018: 20 Apr, 11 & 25 May, 8 Jun & 7 Sept

CONTRACT – breach of consultancy contract – liability established – plaintiff entitled to amount owing in the agreement plus damages

Cases Cited:
Papua New Guinea Cases

Bruno Denfop v Wu-Jui Mario (2015) N5869
Christopher S Kondai v Lon Sike (2014) N5594

Keith Bernard v Andrew Marshall (2015) N6030
Mairi Hoi v Arthur Somare (2012) N4749

Monica Angogi v Fred Yadiwilo (2014) N5605

Timothy Con v Jant Ltd (2014) N5721

Overseas Cases

Bonham Carter v Hyde Park Hotel Ltd (1948) TLR 177

Counsel:

Mr. Mark Uoo Leo, for the Plaintiff
Ms. Mona-lisa Irakau, for the Defendant

7^th September, 2018

1. DINGAKE J: INTRODUCTION: In these proceedings the plaintiff claims that the defendants are in breach of a Consultancy Contract he entered into with the defendants, which contract was executed on or about the 20^th of July, 2010.

Pleadings

2. The plaintiff pleads that the contract was for a term of two (2) years commencing from the 1^st of January, 2010 to 30^th June, 2012.
3. It would seem that the contract was entered into when the plaintiff was seconded to the Office of the Chief Secretary by the PNG Vision 2050, on or about the 1^st of January, 2010.
4. The plaintiff pleads that in 2011, during the subsistance of the Consultancy Contract, he successfully applied for the Position of Executive Director, Strategic Policy. He avers that he asked for the balance of his entitlement as a consultant to be paid to him, and also sought approval for the deduction of K50,000.00 from the balance of his contract in payment for the office vehicle that was assigned to him.
5. The plaintiff pleads that his request was approved by the then Chief Secretary, Ms. Elias, on the 11^th of August, 2011.
6. The plaintiff avers that the Consultancy Contract was terminated by mutual consent following the successful application for the position of Executive Director, Strategic Policy, but his contract entitlements have not been paid.
7. The plaintiff pleads further that on the 23^rd of August, 2011, the first defendant terminated the Consultancy Contract for reasons of non compliance with the Public Finances Management Act and the Financial Instructions.
8. The plaintiff avers that despite the first defendants undertaking to release the outstanding consultancy related payments this has not been done.
9. In consequence of the alleged breach of the Consultancy Contract, the plaintiff issued a writ of summons and a statement of claim against the defendants, claiming, on the main, the following:
   • (i) Sum of Two Hundred and Ninety Thousand, Two Hundred and Seventy Three Kina, Seventy Toea (K290,273.73);
   • (ii) General Damages for stress, anxiety, frustration etc assessed at K30,000.00;
   • (iii) Interest pursuant to statute, at eight percent (8%) per annum from the date of filing of the writ until payment in full;
   • (iv) Costs of the entire proceedings to be paid on a solicitor-client basis.

Liability

10. Liability for breach of contract against the defendants was established, following a trial on the 10^th of April, 2017. The only issue, that remains, the subject matter of this judgment, is the quantum of damages.
    

The Evidence

11. The evidence of the plaintiff consisted of:

11.1 Kelly Kiyali Kalit’s affidavit filed on the 24^th of April, 2015; and

11.2 Joseph Sukwianomb’s affidavit filed on the 27^th of April, 2015.

12. The evidence of the defendants’ consist of the affidavit of:

12.1 Sir Manasupe Zurenuoc filed on the 19^th of August, 2015.

13. I turn now to summarize the totality of the material evidence tendered in this matter.
14. Sometimes in November, 2009, the plaintiff and the defendants entered into a Consultancy Contract which was to start on the 1^st of January, 2010, and end on the 30^th of June, 2012.
15. The contract was to be renewed thereafter by mutual consent. It was executed on the 21^st of July, 2010.
16. Subsequent to the execution of the Consultancy Contract, the plaintiff applied successfully and was offered the Position of Deputy Secretary (Executive Director) Strategic Policy Planning with the Department of the Prime Minister and NEC.
17. The plaintiff was notified by the Public Service of Papua New Guinea that his application for the post of Executive Director was successful on the 9^th of August, 2011.
18. On the 10^th of August, 2011, he wrote to the then Chief Secretary, Margaret L. Elias, seeking approval for the balance of his Contract to be paid as soon as possible because he would be financially worse in his new position as Executive Director. He also asked the Chief Secretary, Margaret Elias, to approve the deduction of K50,000.00 from his outstanding contract entitlement for the vehicle that he was using in view of his agreement to forego financial benefits associated with provision of his services as a consultant. His request was approved.
19. The motor vehicle in question was bought on the 14^th of December, 2010 at the price of K96,452.26.
20. It is common cause that the Consultancy Agreement was terminated on the 23^rd of August, 2011.
21. The plaintiff avers that he worked for July – August, 2011, but was not paid and claims payment for balance of contract and twelve (12) weeks leave entitlement.
22. The affidavit of Joseph Sukwianomb filed in support of the plaintiff’s claim reinforces some aspects of the plaintiff’s evidence and adds nothing new relevant to assessing the quantum of damages.
23. The affidavit of Manasupe Zurenuoc upon which the defendants place reliance also confirms that a Consultancy Agreement was entered into and later terminated as it was found not to comply with relevant laws and also the value of the motor vehicle that was assigned to the plaintiff.
24. It is trite law that it is the duty of the plaintiff to prove his loss (Bonham Carter v Hyde Park Hotel Ltd (1948) TLR 177 at page 178).

Analysis and Findings of Fact

25. On the basis of the above evidence the following facts have been pleaded and proven:

22.1 That the plaintiff entered into a Consultancy Contract with the defendants starting on the 1^st of January, 2010 and ending on the 30^th of June, 2012. This agreement was executed on the 21^st of July, 2010.

22.2 The consultancy contract stipulates that subject to certain stipulated conditions the plaintiff shall be entitled to a consultancy fee of K265,900.00 per annum. Each monthly payment of the Basic Consultancy.

22.3 The consultancy contract was terminated on 23^rd of August, 2011.

22.4 The plaintiff also sought approval, upon being appointed to the position of Executive Director referred to earlier, that his balance of contract be paid; and that K50,000.00 be deducted from the balance due to him for the vehicle he was using. There is evidence that the aforesaid requests were granted by the then Chief Secretary, Margaret L. Elias.

22.5 The consultancy contract provides that the consultant may be provided with a motor vehicle for purposes of executing his duties.

22.6 The consultancy agreement records that upon termination of the consultancy contract/agreement the defendants shall pay the balance of the plaintiff’s contract.

22.7 The deduction of K50,000.00 was not provided for in the Consultancy Contract and was clearly a separate agreement.

26. The above factual findings and the other proven claims must be considered in the context of material provisions of the consultancy contract.
27. The contract obliges the Consultant to keep accurate and systematic records in respect of the services and to observe stipulated working hours of the Department with reasonable flexibility. Significantly, it records that it may be varied by letter of addendum to the agreement based on mutual agreement.
28. There is no dispute that the plaintiff is entitled to the balance of the contract. This much is clear from the Consultancy Agreement. On the evidence it would seem that the plaintiff is entitled to be paid the balance of the contract reckoned from when the contract was terminated on the 23^rd of August, 2011. I therefore agree with the submission of the defendants that the balance of the contract should be equal to the plaintiff’s monthly payment multiplied by the unexpired period of the contract which is eleven (11) months. This translates into K22,158.30 x 11 = K243,741.30.
29. There is no evidence that the plaintiff worked for the months of July and August, 2011. The consultancy contract obliged him to keep accurate records of the services rendered. He is obliged in law to prove every claim he makes. He failed to attach any record to show that he rendered services in July and August, 2011. It follows in my view that the claim for July and August, 2011 has not been proven on a balance of probabilities.
30. With respect to recreational leave, no record or evidence has been tendered for any accrued leave of which the plaintiff is entitled to be paid. The plaintiff in his affidavit simply states that he is entitled to twelve (12) weeks leave entitlement without attaching any proof. The consultancy contract entitled the plaintiff to take recreational leave of up to six (6) weeks per annum by prior agreement with the Secretary, Department of Prime Minister and NEC. It does not indicate whether it is paid. To the extent the consultancy contract obliged him to keep accurate records he should have produced records/evidence before the Court indicating that he earned the leave he claims. He did not. This claim is not proven.
31. With respect to the vehicle, I have already found this was a separate agreement not expressly provided for in the Consultancy Contract.
32. It follows in my view that the amount to be deducted from the balance due to the plaintiff is the agreed amount of K50,000.00. The plaintiff is therefore entitled to K243,741.30 + K50,000.00 = K293,741.30.
33. With respect to general damages for anxiety, stress and frustration, the plaintiff has not proven the amount he seeks being K30,000.00.
34. I have considered the principles enunciated in the case of Mairi Hoi v Arthur Somare (2012) N4749 and other cases dealing with general damages. (Keith Bernard v Andrew Marshall (2015) N6030; Christopher S Kondai v Lon Sike (2014) N5594; Monica Angogi v Fred Yadiwilo (2014) N5605; Timothy Con v Jant Ltd (2014) N5721; Bruno Denfop v Wu-Jui Mario (2015) N5869.
35. I noticed that the range for award of general damages start from K3,000.00 – K20,000.00 for distress, hardship and frustration.
36. I accept however, that logically, the plaintiff must have been frustrated and distressed by failure to pay him the balance of his contract. Given the circumstances of this case, I consider that an award of K5,000.00 would be fair and just.
37. In the result it is ordered as follows:

35.1 The defendants shall pay the plaintiff the amount of K243,741.30 + K50,000.00 = K293,741.30, being the amount of balance of the unexpired period of the contract.

35.2 General Damages in the amount of K5,000.00.

35.3 The defendants to pay the plaintiff costs on the ordinary party to party scale.
_______ ____________________________________________________
Greg Manda Lawyers: Lawyers for the Plaintiff
Office of the Solicitor General: Lawyers for the Defendants