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Daniel v Air Niugini Ltd [2019] PGNC 105; N7820 (24 April 2019)

N7820

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NOs. 632, 633, 634, 635, 636, 637, 648 & 649 OF 2016

BETWEEN
NORMAN DANIEL, BORIS AGEDA, BENJAMIN LOPA, ELIJAH YUANGI, DAVID SEKEN, JOSEPH KUMASI & VINCENT TONGIA
Plaintiffs

AND
AIR NIUGINI LIMITED
First Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

Waigani: Makail J
2019: 11^th & 24^th April

DAMAGES – Enforcement of undertaking as to damages – Injunction granted on undertaking given by plaintiffs to pay damages – Factors relevant to enforcement of undertaking as to damages – Damages must be a direct result of grant of injunction

DAMAGES – Enforcement of undertaking as to damages – Claim for loss of profit – Proof of – Lack of evidence – Conduct of party – Party seeking to enforce undertaking failed to comply with injunction – No loss proven – Claim dismissed

Cases Cited:
Papua New Guinean Cases

Bui Minig v. Joycelyn Minig (2013) N5327
Morobe Provincial Government v. Tropical Charters Limited (2011) N4240
Norman Daniel & Ors v. Air Niugini & The State: SCM Nos 3, 4, 5, 6, 7, 8, 9 & 10 of 2017 (Unnumbered & Unreported Judgment of 4^th August 2017)
Norman Daniel & Ors v. Air Niugini & The State: OS (JR) Nos. 632-637 & 648-649 of 2016 (Unnumbered & Unreported Judgment of 7^th February 2017)
Pastor James Molu v. Dokta Pena (2009) N3817
White Corner Investments Ltd v. Regina Waim Harro (2006) N3089
Wei Xiang Cheng v. Agmark Limited (2008) N3338

Overseas cases

Cheltenham Gloucester Building Society v. Ricketts & Ors [1993] 1 WLR 1545

Counsel:

Mr. O. Dekas, for Plaintiffs
Mr. C. Joseph, for First Defendant/Applicant
No appearance, for Second Defendant

RULING ON ENFORCEMENT OF UNDERTAKING AS TO DAMAGES

24^th April, 2019

1. MAKAIL J: The background of these cases is well documented and need not be restated. Parties can be referred to the National Court and Supreme Court decisions of Norman Daniel & Ors v. Air Niugini & The State: OS (JR) Nos. 632-637 & 648-649 of 2016 (Unnumbered & Unreported Judgment of 7^th February 2017) and Norman Daniel & Ors v. Air Niugini & The State: SCM Nos. 3, 4, 5, 6, 7, 8, 9 & 10 of 2017 (Unnumbered & Unreported Judgment of 4^th August 2017) for further information.

Enforcement of Undertaking as to Damages

2. It suffices to say that after the plaintiffs were unsuccessful in obtaining an order in the National Court to have the decision of the first defendant (“Applicant”) to terminate them quashed and reinstate them to their positions as pilots and an unsuccessful appeal to the Supreme Court to have that decision set aside, the applicant has now returned to the National Court to seek enforcement of an undertaking as to damages which each plaintiff have given to the National Court upon grant of an interim injunction.

Relevant Principles

3. Case law established that an undertaking as to damages is given to the Court and not to the other parties to the proceedings: Morobe Provincial Government v. Tropical Charters Limited (2011) N4240. It is not a common law cause of action but rather invoked at the discretion of the Court at the request of one party to seek damages as a result of the grant of the injunction: Cheltenham Gloucester Building Society v. Ricketts & Ors [1993] 1 WLR 1545 and adopted in White Corner Investments Ltd v. Regina Waim Harro (2006) N3089; Wei Xiang Cheng v. Agmark Limited (2008) N3338; Pastor James Molu v. Dokta Pena (2009) N3817 and Bui Minig v. Joycelyn Minig (2013) N5327. In Wei Xiang Cheng (supra) the Court listed other factors relevant to the exercise of discretion. One of them is whether the conduct of the defendant as the party seeking to enforce the undertaking would make the enforcement inequitable.

Types of Damages

4. As to damages while counsel for the applicant submits that the applicant is entitled to damages as a direct result of the grant of injunction, both counsel were unable to identify the types of damages that may be awarded, although they seemed content that damages for loss of profit or business losses is one of them. In the case of Wei Xiang Cheng (supra), damages for loss of profit was awarded by the Court and in Morobe Provincial Government’s case (supra) the Court appeared to accept loss of profit as one of the types of damages the Court may award as a direct result of the injunction. However, the Court rejected it because of lack of evidence. There were other types of damages which were dismissed as being either misconceived or lacked evidence. These were costs of back filling, land rentals and medical expenses. Another case of enforcement of an undertaking as to damages is Pastor James Molu (supra). The Court held that the plaintiff was liable to pay damages to the defendant without specifying those damages.

5. The different types of damages awarded or considered by the Court in those cases are more or less the traditional forms of damages recognised by the common law and applied in this jurisdiction under at least two broad categories, these being, general damages and special damages. However, as those damages are, as of right, available at common law, they are not in the case of enforcement of an undertaking as to damages and are broadly discretionary such that the Court should be slow in awarding them. The underlying factor is that, damages must be a direct result of the grant of the injunction.

Claim for Loss of Profit

6. In this case relying on the affidavit of its payroll coordinator Ms. Margaret Neme filed on 3^rd October 2017 in each of the eight proceedings, the applicant claims loss of salary and allowances paid to each of the eight plaintiffs. It claims a total sum in excess of K2 million. The applicant’s counsel submits that this sum represents damages for loss of profit as a direct result of the grant of the injunction. Counsel for the plaintiffs did not deny the payments or contest the sum paid to each plaintiff as salary and allowances. The payments can be summarised as follows:

6.1. Norman Daniel – K273,789.70,
6.2. Boris Agenda – K505,684.86,
6.3. Benjamin Lopa – K529,746.20,
6.4. Elijah Yuangi – K77,044.77,
6.5. David Seken – K65,017.83,
6.6. Abel Kanego – K17,174.73,
6.7. Joseph Kumasi – K588,577.73, and
6.8. Vincent Tongia – K375,702.99.

7. However, counsel strongly opposes the application on the ground that it is inequitable to order the plaintiffs to pay damages because the applicant had failed to engage or “roster” them for duties during the period of the injunction. Counsel for the applicant counters this argument by citing reasons that the plaintiffs failed to submit to further medical checks/tests after having being out of active duties for sometimes and that they were “rostered” for duties but did not actually fly planes.

Proof of Losses

8. Adopting the view expressed by the Court in Wei Xiang Cheng’s case (supra) that damages for loss of profit may be awarded in enforcing an undertaking as to damages, the evidence of Ms. Neme goes to show that a total sum in excess of K2 million was paid by the applicant to the plaintiffs for their salaries and allowances during the period of the injunction. However, she does not show how the payment of this sum has resulted in the applicant making a loss. Unlike the case of Wei Xiang Cheng (supra) where the financial controller of the defendant gave evidence of the loss of profit and annexed profit and loss statements for two consecutive years to support the claim, in this case, there is no evidence of a profit and loss statement to show that the payment of the plaintiffs’ salaries and allowances during the period of the injunction has resulted in the applicant making a loss. In the end, the claim for loss of profit is not proved and will be dismissed.

Conduct of Applicant

9. There is a further reason not to enforce the undertaking as to damages, and that is this, in equity the conduct of the applicant disentitles it to an order for enforcement or damages. The injunction was granted as a temporary measure to restrain the applicant from terminating the plaintiffs and conversely, allowing them to return to work. While the applicant says that it had restored the plaintiffs’ pay, it failed or refused to engage or “roster” them for duties. In fact, it concedes that none of the plaintiffs flew a plane during that time. How could it now claim that it suffered monetary loss (salaries and allowances) when it did not allow them to work? It does not make sense and goes against the core of its claim. It goes to show that it is not sincere in making the application.

10. As to its assertion that the plaintiffs refused or failed to undergo medical checks/tests before their engagement, it is neither a term nor a condition of the grant of the injunction. If it was an issue for the applicant, it was open to it to apply during the currency of the injunction to vary it and make the plaintiffs’ engagement or return to work subject to medical checks/tests. It did not and must live without it. For this further reason, the application will be refused with cost.

Order

11. The orders are:

1. The application to enforce the undertaking as to damages is dismissed.

2. The applicant shall pay the costs of the application, to be taxed, if not agreed.

Ruling and orders accordingly.
________________________________________________________________
Murray & Associates Lawyers: Lawyers for Plaintiffs/Respondents
Ashurst Lawyers: Lawyers for First Defendant/Applicant
Solicitor-General: Lawyers for Second Defendant