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Goi v First Investment Finance Ltd [2019] PGNC 156; N7865 (17 May 2019)

N7865


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS NO. 1108 OF 2016


BETWEEN:
WAKE GOI
Plaintiff


AND:
FIRST INVESTMENT FINANCE LIMITED
Defendant


Waigani: David, J
2018: 13 September & 11 October
2019: 17 May


CONTRACTS – breach of commercial loan chattel mortgage – plaintiff assisted by defendant to purchase PMV bus – bus repossessed – assessment of damages – loss of investment – loss of income – general damages for distress, frustration and humiliation - liability established after trial.
Cases Cited:
Papua New Guinea Cases


Brian Hodson v The Independent State of Papua New Guinea (1985) PNGLR 303
The Independent State of Papua New Guinea v Hodson (1987) PNGLR 241
Cheong Supermarket Pty Ltd v Pery Muro (1987) PNGLR 24
Harding v Teperoi Timbers Pty Ltd (1988) PNGLR 128
Joe Naguwean v The Independent State of Papua New Guinea (1992) PNGLR 367
Graham Mappa v PNG Electricity Commission (1995) PNGLR 170
Kerekal Farming and Trading Pty Ltd v Queensland Insurance (PNG) Limited (1995) PNGLR 401
Jonathan Mangope Paraia v The State (1995) N1343
Peter Na’al v Michael Debege (2000) N1958
Peter Aigilo v The Independent State of Papua New Guinea (2001) N2102
Paulus Kei v Tony Hasu (2004) PNGLR 50
William Mel v Coleman Pakalia (2005) SC790
William Patitts v The State (2006) N3088
Steven Naki v AGC (Pacific) Ltd (2006) N5015
Rodao Holdings Ltd v Sogeram Development Corporation Ltd (2007) N5485
Andrew Kewa v Johnny Lus & Securimax Security Limited, WS No.415 of 2003, Unreported Judgment of Manuhu, J delivered on 14 March 2007
James Liwa v Markis Vanimo (2008) N3486
Maktol Oke v Jeffery Kera (2010) N3850
Likui Trading Ltd v Joseph Selna (2011) N4530
Fred Angoman & Papaco No.1 Limited v Independent Public Business Corporation of Papua New Guinea & Glen Blake as the Managing Director of the Independent Public Business Corporation of Papua New Guinea (2011) N4363
Komasa v Jossy (2012) N4863


Overseas Cases cited:


Livingstone v Rawyards Coal Co (1880) App Cas 25


Counsel:


Peter Hai Pato, for the Plaintiff
Grace Waide, for the Defendant

JUDGMENT

17th May, 2019

  1. DAVID, J: INTRODUCTION: This case is about a breach of a contract known as the commercial loan chattel mortgage executed by the parties on 29 November 2012 (the contract). The plaintiff entered into the contract with the defendant, a licensed financial institution for the defendant to provide finance for the purchase of a brand new white lavender Toyota Coaster, 26 seater bus, engine number 14B-1867479, chassis number JTGFY418502014224 and bearing registration number P1181J (the bus) for the plaintiff to operate a Public Motor Vehicle (PMV) business. The defendant breached the contract when it repossessed the bus without issuing any default notice, sold it and as a result the plaintiff lost income from the PMV business. This is the Court’s decision on assessment of damages, liability having been established following the entry of judgment in favour of the plaintiff on 22 November 2017 after trial (Wake Goi v First Investment Finance Ltd (2017) N7059).

DAMAGES CLAIMED

  1. In the statement of claim endorsed on the writ of summons filed on 8 September 2016, the plaintiff claims:
    1. K100,000.00 for loss of investment;
  2. K25,000.00 per month for loss of income for 8 years from July 2013 to 2021;
    1. General damages; and
  3. Interest at 8% pursuant to the Judicial Proceedings (Interest on Debts & Damages) Act.

EVIDENCE

  1. The plaintiff’s evidence consists of oral and documentary evidence.
  2. The plaintiff and Joseph Otto gave oral evidence.
  3. The documentary evidence consists of the following documents:
    1. Affidavit of Wake Goi sworn and filed on 28 March 2018 (Exhibit A);
    2. State Lease in respect of Allotment 100 Section 482 Hohola, Port Moresby, National Capital District (Exhibit B);
    3. State Lease in respect of Allotment 100 Section 148 Hohola, Port Moresby, National Capital District (Exhibit C);
    4. State Lease in respect of Allotment 21 Section 80 Goroka, Eastern Highlands Province (Exhibit D);
    5. Affidavit of Joseph Otto sworn on 28 February 2018 and filed on 28 March 2018 (Exhibit E);
    6. Affidavit of Rex Yape Parim sworn and filed on 28 March 2018 (Exhibit F).
  4. The plaintiff and Joseph Otto were subjected to cross-examination.
  5. The defendant relied on the oral and affidavit evidence of its sole witness, Michael O’Rourke whose affidavit was sworn and filed on 17 May 2018 (Exhibit 1). Mr O’Rourke was cross-examined.

SUMMARY OF PLAINTIFF’S EVIDENCE

Wake Goi

  1. He currently is the Member of Parliament for the Jimi Open Electorate in the Jiwaka Province. He is also an experienced businessman.
  2. The defendant assisted him with K73,040.10 pursuant to the contract to purchase the bus from Ela Motors, Goroka which was sold to him for K147,422.00 to operate a PMV business. He paid to the defendant the balance of the purchase price of K100,000.00 by a cheque No.000448 dated 10 October 2012 drawn in favour of the defendant from his personal account operated at the Bank South Pacific Limited, Goroka Branch. True copies of the cheque and receipt number 004062 issued by the defendant on 10 October 2012 are annexed to the plaintiff’s affidavit as annexures “C” and “D” respectively.
  3. The bus was registered as a PMV thereafter. True copies of the Certificate of Registration and CTP Insurance issued on 27 November 2012 and PMV Licence No.0376 dated 19 November 2012 are annexed to the plaintiff’s affidavit as annexures “A” and “B” respectively.
  4. He effectively commenced the PMV business on 18 January 2013 as the bus was in service at Ela Motors Goroka for the whole of December 2012. The PMV operations were conducted between Goroka, Eastern Highlands Province and Lae, Morobe Province.
  5. He operated a PMV business along the same route before becoming the Member of Parliament for Jimi Open after the July 2007 elections. From 2000 to 2007, he had a fleet of three 15 seater Toyota Hiace buses and a Mazda “dyna” truck. He sold all the vehicles after becoming a Member of Parliament. He decided to recommence the PMV business and bought the bus when he lost his seat.
  6. Without the defendant giving him any notice of repossession nor providing any good reasons, the defendant engaged the Goroka police to seize the bus which they did at a road block on 9 July 2013 and impounded it effectively causing his PMV business operations to cease. The bus was only six months old when it was repossessed.
  7. As a result of the repossession of the bus, he lost his K100,000.00 investment in the bus and lost income for 8 years from 8 July 2013 to 9 July 2021. From his experience as a PMV operator from 2000 to 2007, he knows that the bus could have operated for 8 years. He therefore claims K100,000.00.
  8. The PMV fare for the Goroka-Lae route is K30.00. This fare has been maintained since 2000 when he started his PMV business. One trip to Lae and back in one day fetched a total of K1,500.00 at K750.00 each way. About K300.00 was used for refuelling and K50.00 allowed for lunch for the driver and the offsider. The bus did not operate on Sundays. So the income received for a day’s operation was K1,150.00. As the bus did not operate on Sundays, in one week the total income was K6,900.00. In a month, the total income received was K27,600.00.
  9. He maintained and serviced the bus every two months @ K500.00. Every fortnight, he paid; the driver K400.00 and the offsider K300.00 as their salaries; and an allowance of K475.00 to his family. In a month, he spent a total of K2,600.00. His net income in a month was therefore K25,000.00. Asked in cross-examination as to how many personnel he employed, he said he had two drivers and two offsiders rotating on his roster.
  10. He was not able to save the income received as he had to make the loan repayments to the defendant and used the balance to fund his trips with his lawyer to and from Port Moresby to attend to a criminal case processed through the District (Committal) Court and National Court in which he was charged for misappropriation of K13.1 million based on a complaint laid by the person who unseated him during the 2012 National Elections and also to attend to an election petition case. Annexure E are true copies of the Information laid on 18 March 2013 and Summary of Facts. Whatever money that was left was used to pay the services of Pilisa Lawyers of Goroka. His personal BSP account statements from January 2013 to July 2013, true copies of which are annexed to his affidavit as annexure F, do not show the monthly income of K25,000.00 for those reasons.
  11. The projected net income he could have received over 8 years from 9 July 2013 to 9 July 2012 is K2,400,000.00, i.e., K25,000.00 per month multiplied by 96 months. Contingencies such as depreciation, wear and tear of the bus resulting in the bus operating only in Goroka and not able to travel long distances like Lae, road blocks by landslides, tribal fights, increased costs of maintenance and service and other disturbances etc, could have reduced the projected income by 25%. In that case, he could have made K1.8 million in 8 years and he claims that amount.
  12. When his only source of income was taken away from him, he struggled to look after his family consisting of 7 children, his wife and himself. Annexure G are true copies of birth certificates pertaining to his children. He suffered immense financial pressure to pay for his and his lawyer’s frequent trips to and from Port Moresby and to pay for legal fees as well. He was virtually reduced to rags as a result of the actions of the defendant. He suffered severe anxiety, mental depression and humiliation especially when people knew who he was prior to 2013. Asked in cross-examination whether he received any medical attention to treat him for depression, anxiety etc, he said he did at the Paradise Hospital.
  13. His suffering eased a bit when the charge for misappropriation was dismissed by the National Court on 31 July 2015. Annexure H are true copies of the National Court order issued on 31 July 2015 and notice of discharge dated 31 July 2015.
  14. Asked in cross-examination by Ms Waide of counsel for the defendant as to why he did not produce in evidence any financial records of his PMV business, he said he did keep financial records, but they were destroyed after the elections. When pressed in cross-examination as to how he kept records for his business, he said he managed his business without engaging any accountant and paid his expenses from income received. He conceded that there were no business records before the Court to support the details of income received from the PMV business.
  15. Asked in cross-examination as to whether he received any other money apart from that generated from the PMV business, he said he did and mentioned that the PNGIMR rented the property at Goroka (Exhibit D) evidenced by the deposit of K1,700.00 on 12 June 2013 appearing on the BSP bank statement for June 2013.
  16. There was no requirement of law to register a company or business to operate a PMV business.
  17. He also claims interest at 8% per annum.

State Leases (Exhibits B, C and D)

  1. The plaintiff owns three residential properties. Two are in Port Moresby namely, Allotment 100 Section 482 Hohola (Exhibit B) and Allotment 100 Section 148 Hohola (Exhibit C). The other is in Goroka namely, Allotment 21 Section 80 Goroka (Exhibit D). All the properties are mortgaged to the Bank of South Pacific Limited.

Joseph Otto (Exhibit E)

  1. He and his wife Agatha are a self-employed PMV operators. They reside at Goroka and operate their business from there. The plaintiff is a family friend.
  2. They started their business in 2009 with a Toyota Hiace 15 seater bus in Mt. Hagen, Western Highlands Province. When they moved to Goroka in 2012, they bought two 25 seater Toyota Coaster buses. The buses operated along the Highlands Highway from either Goroka to Lae and back or from Goroka to Mt. Hagen and back. Currently, they have a fleet of four vehicles namely, three 25 seater Toyota Coaster buses and a “dyna” truck. Annexure A are copies of Certificates of CTP Insurance Policy and Registration for two of their Toyota Coaster buses namely for P1369K and P1359K. They now only have a Toyota Coaster bus and the “dyna” truck. They sold the other Toyota Coaster bus to offset their loan which had fallen into arrears.
  3. Since 2012, the PMV fare for the Goroka-Lae sector has been K30.00 per adult passenger and remains the same to date. The daily income for a trip to Lae and back per bus is K1,500.00 @ K750.00 each way. The daily expenses include K300.00 for fuel and K40.00 for lunch for the driver and offsider. The daily take home income is K1,160.00. The buses do not operate on Sundays when they are grounded to enable them to worship. The total weekly income is K6,960.00. The total monthly income is K27,840.00.
  4. The total monthly operating expenses in 2012 and 2013 was about K2,100.00. These included; maintenance and service costs of K400.00 per month for the first year and every three weeks at the same cost for the second year onwards; and fortnightly wages for bus drivers @ K500.00 and offsiders @ K350.00. In cross-examination, the witness said the cost of maintenance and service monthly was between K300.00 to K400.00.
  5. Currently, every fortnight, they pay their drivers K800.00 and offsiders K500.00. They pay each of them a bonus of K100.00 if the income for a fortnight exceeds their normal takings.
  6. Asked in cross-examination whether they operated a bank account for their business, he said none.
  7. Asked in cross-examination whether they had receipts for expenses paid such as for fuel, he said none.
  8. A 25 seater Coaster bus can operate for more than 10 years although the cost of maintenance may be higher. One of the buses purchased in 2012 was sold to Sintex Elementary School (now a Primary School) in Goroka after 4 years in 2016. The school is still using it as a school bus after 8 years.

Rex Yape Parim (Exhibit F)

  1. In 2000, he was the driver of the plaintiff’s 15 seater Toyota Hiace bus. The bus he drove was sold in 2007. At the time, the plaintiff also owned two other 15 seater Toyota Hiace buses and a Mazda “dyna” truck all operating as PMVs.
  2. He was the driver of the bus when it was confiscated by the police in Goroka during the course of a run on 9 July 2013. Annexure A is a true copy of his Class 6 Licence which authorised him to drive PMVs then.
  3. He also states that:
    1. The PMV operations using the plaintiff’s new 26 seater Toyota Coaster bus commenced in January 2013;
    2. The bus operated the Goroka-Lae route;
    3. The one way fare per adult passenger was K30.00;
    4. Lunch for him and the offsider was K50.00 per day;
    5. Fuel for a return trip to Lae and back was K300.00;
    6. Every fortnight, he was paid K400.00 and the offsider was paid K300.00;
    7. Service and maintenance of the bus was done by the plaintiff himself;
    8. The bus was confiscated by the police on 9 July 2013 at a road block in Goroka.

SUMMARY OF DEFENDANT’S EVIDENCE

  1. Michael O’Rourke is the Assistant General Manager of the defendant company and he has held that position for 18 years. He has been in the employ of the defendant since 2000. He was previously employed by AGC Pacific and Nambawan Finance.
  2. He deals with all loan applications for the purchase of trucks or PMV buses due to his vast experience. In 2011, he approved 127 applications. In 2012, he approved 111 applications. In 2013, he approved 80 applications. The terms for PMV loans are usually for 18 months as it was assessed a few years ago that it was in the best interests of both the defendant and the customer due to high costs of operating PMVs in the Highlands region and many loans had been written off before. The deposit or equity required for a loan was usually 40% of the purchase price.
  3. The plaintiff was a customer of the defendant before. He was not a new owner of a bus service.
  4. If the plaintiff were an experienced bus owner operating a bus service, he would be aware of the requirements of having and maintaining good financial records like a cash book, invoices, wages and salary book, etc. None has been produced in evidence nor is there evidence of deposits made into a bank account of daily takings.
  5. He is aware of the requirements of law in this country which requires all business operators to register a business whether that be a company or business name with the Investment Promotion Authority and to be tax compliant by registering with the Internal Revenue Commission. That includes the mandatory registration of a Taxpayer Identification Number (TIN). There is nothing in the plaintiff’s evidence which can independently verify that he has operated his bus business by complying with the laws of this country. There are no exceptions to is knowledge.
  6. When he first assessed the plaintiff’s loan application to purchase the bus, he noted his financial capacity to repay his loan. Annexure A is a true copy of the customer commercial loan application form (the loan application).
  7. In the loan application, the plaintiff showed that he had several properties and was earning rental money from those properties which was enough to repay the loan and to take care of his other living expenses. Amongst his list of assets were:
    1. House at Goroka worth K1.5 million;
    2. House at Rainbow worth K2.2 million;
    3. House at Tokarara worth (K900,000.00;
    4. 2 x Land Cruisers (an open back and a 10 seater Troop Carrier) worth K160,000.00.
  8. It was on the basis of these declarations on the loan application that the defendant approved his loan to purchase the bus.
  9. The plaintiff was not left destitute by reason of the repossession of the bus.
  10. Joseph Otto has not provided any bank statements or financial records to independently confirm that the amounts of earnings he claims to have earned from running a bus business are in fact verifiable. There are no bank statements, cash book, receipt book or some form of confirmation showing that he made such money. Businesses are required to keep these records for purposes of financial auditing or tax payments.
  11. He has been in the finance business for over 30 years. Any business, whether big or small, must have its financial records to prove that it is making profits or to confirm its expenditures.
  12. In his experience of dealing with customers who own PMV buses especially in the Highlands region, after about 18 months to 24 months of consistent operations, PMV bus owners start to struggle with their repayments. This is because they advise that road conditions are very poor which in turn affects the running of the buses and consequently their cash flows. Sometimes they even request the defendant to replace their buses due to the vehicles deteriorating very quickly. He has realised that most PMV vehicles deteriorate at about 35 to 40% during the life of the vehicles.
  13. As a company, they set their allowances for deterioration at about 40% once it is delivered to the customer. While these figures may vary, on average when a customer requests for an additional vehicle and the defendant makes an assessment on the value and condition of the vehicle, they find that the vehicles deteriorate faster in the Highlands region.
  14. Based on his experience as a financier of buses among other things, he does not believe that buses operating as PMV buses can last for 10 years.
  15. Rex Yape Parim has not shown any pay slip or records kept by the plaintiff to demonstrate that the plaintiff was paying him that much.

FINDINGS OF FACT


  1. From all the evidence before the Court, I find that the following principal facts are either not disputed or have been established:
    1. The plaintiff obtained a loan totalling K73,040.10 from the defendant, a financial institution, to purchase the bus and to operate it as a PMV under the contract.
    2. Under the terms of the contract, the defendant contributed K100,000 towards the total purchase price of the bus of K147,422.00.
    3. The plaintiff took delivery of the bus, registered and operated it as a PMV.
      1. The bus operated the Goroka-Lae route;
      2. The bus did not operate on Sundays.
    4. Following default on the loan account, the Goroka police, acting on the defendant’s instruction, seized the bus at a road block on 9 July 2013 and impounded it.
    5. The seizure of the bus by the police effectively caused the plaintiff’s PMV business operations to cease.
    6. The bus was only six months old when it was repossessed and sold.
    7. Except for some bank statements, no proper business records or tax returns have been produced by the plaintiff himself or his witnesses including cash books, receipt books or some form of confirmation showing income generated and the expenses met.

DISPUTED FACTS


  1. From all the evidence before the Court, I find that the principal disputed facts are:
    1. The one way PMV fare per adult passenger for the Goroka-Lae route was K30.00;
    2. One trip to Lae and back in one day fetched a total of K1,500.00 at K750.00 each way for 25 paying adult passengers.
    3. Lunch for the bus driver and the offsider was K50.00 per day;
    4. Fuel for a return trip to Lae and back was K300.00;
    5. Every fortnight, the plaintiff paid the bus driver K400.00 and the offsider K300.00;
    6. The plaintiff serviced the bus every two months at a cost of K500.00, i.e,. K250.00 per month;
    7. Every fortnight, the plaintiff paid an allowance of K475.00 to his family.
    8. The plaintiff lost income it could have generated for 8 years from the date of repossession in July 2013 to July 2021.
    9. The plaintiff suffered severe anxiety, mental depression and humiliation because he was a Member of Parliament from 2007 to 2012 and within a year from 2012, he lost the bus.

LEGAL ISSUE


54. The main legal issue that requires my consideration and determination is whether the plaintiff has proven on the balance of probabilities each of the heads of damages claimed in the statement of claim.


LEGAL PRINCIPLES


55. The Supreme Court in William Mel v Coleman Pakalia (2005) SC790 and the National Court decision of Cannings, J in Steven Naki v AGC (Pacific) Ltd (2006) N5015 summarise or identify a number of legal principles that are applicable in assessing damages where liability is established either following a trial or after the entry of default judgment and these are:


56. I now apply these principles in the following manner.


LOSS OF INVESTMENT – K100,000.00

57. The defendant, through its counsel Ms Waide, while making her oral submissions conceded that the plaintiff was entitled to be paid the liquidated amount claimed of K100,000.00 for loss of investment. The suggestion in the defendant’s written submission that an amount of K64,091.00 should be awarded to the plaintiff which was the amount the defendant used to settle the loan account after tender is disregarded as a result. The plaintiff is awarded the liquidated sum of K100,000.00 for loss of investment.


LOSS OF INCOME

Plaintiff’s submissions

58. The plaintiff through Mr Pato contended that he has produced sufficient evidence corroborated by Messrs Otto and Parim that in a month he made from the PMV operations a total net income of K25,000.00 represented by income of K27,600.00 less expenses of K2,600.00. So in 8 years for the period between July 2013 to July 2021 at an average monthly income of K25,000.00, the PMV operations would have generated a total income of K2,400,000.00.

59. Mr Pato referred me to the decisions of Paulus Kei v Tony Hasu (2004) PNGLR 50, James Liwa v Markis Vanimo (2008) N3486, Andrew Kewa v Johnny Lus & Securimax Security Limited, WS No.415 of 2003, Unreported Judgment of Manuhu, J delivered on 14 March 2007, William Patitts v The State (2006) N3088 and Komasa v Jossy (2012) N4863 to assist me in making an appropriate award.

60. Mr Pato urged me to follow either of the approaches taken in Paulus Kei v Tony Hasu (award be subject to income tax) or Komasa v Jossy (award be at 75% of total loss in the absence of proper business records) and make an award of K1.8 million based on an average monthly net income of K25,000.00 for a period of 8 years commencing in July 2013 and ending in July 2021.
Defendant’s submissions


61. The defendant through Ms Waide of counsel contended that while the plaintiff relied on the evidence of Messrs Otto and Parim in an attempt to corroborate or support his claim, the evidence fell short of substantiating the claim on the balance of probabilities and therefore the claim must fail.


62. The plaintiff through himself or his witnesses failed to adduce independent corroborative evidence such as financial statements from accountants supported by bank statements, receipts, invoices and other documents or business records which would show assets acquired, income due and liabilities incurred by the business to prove his claim for loss of income of K1.8 million. The defendant draws support from the decisions of Graham Mappa v PNG Electricity Commission (1995) PNGLR 170, Kerekal Farming and Trading Pty Ltd v Queensland Insurance (PNG) Limited (1995) PNGLR 401, Paulus Kei v Tony Hasu, Maktol Oke v Jeffery Kera (2010) N3850.


63. As to the length of time a PMV bus operates, it was argued that there was evidence to demonstrate that regular maintenance meant regular costs incurred, but no amounts were given on or there was nothing credible on which the Court could make a fair assessment.


64. In addition, it was argued that the plaintiff failed to take into account depreciation. Counsel urged the Court to accept Mr O’Rourke’s evidence that the rate of deterioration of buses in the Highlands region was very high that as a mitigating factor, the defendant does not grant loans for terms beyond 18 months. It was highly unlikely that a PMV bus can have a profitable life span of more than 8 years and still be making a profit of K25,000.00 per month.


Reasons for decision


65. I have considered the parties’ evidence, submissions and the cases they have referred me to.


66. The owners of PMV business and trade stores operated by simple Papua New Guineans are required to keep records of their business including appropriate tax returns and produce them in evidence to support a claim for loss of income or profit from such operations. The decision in Graham Mappa v PNG Electricity Commission demonstrates that position.


67. In Graham Mappa v PNG Electricity Commission, following an award of K7,800.00 in damages by the National Court in a claim for damages for loss of income following damage caused to the plaintiff’s Isuzu 25-seater bus when it was involved in a collision with the defendant’s vehicle, the defendant appealed to the Supreme Court against the award. In allowing the appeal, the Supreme Court found that the appellant did not establish his damages by the calling of sufficient evidence. The only evidence led by the plaintiff was a statement that his business earned K1,200.00 per week. The Supreme Court found that there was no documentary evidence such as bank records, tax returns or balance sheets or other evidence to support his claim apart from some comparison with another similar business run by someone else. Woods J. at 171 summarised the position in the following terms:


“[I]f you wish to establish matters like loss of profits from the operation of a modern business, then it is necessary to comply with the modern law, for example, producing such records as are required by the law. If you wish to have the advantages of a modern world of business, then you must comply with modern matters like tax laws. This would require appropriate business records to show whether any profit over and above business running costs was earned. And then, if a profit was earned, there are the requirements to pay taxes. The courts have been referring to these requirements in recent years, especially in the operation of shop or trade store businesses. And the Supreme Court, by its ruling, is implying that the same must apply to the operation of a PMV or suchlike public transport business.”


68. In Graham Mappa v PNG Electricity Commission at 172, it was also held that mere assertions and the depositing of sums of moneys in a bank is not sufficient evidence.
69. The Supreme Court in William Mel v Coleman Pakalia in 2005, a more recent case since Graham Mappa v PNG Electricity Commission endorsed the principle enunciated by Injia, J (as he then was) in Jonathan Mangope Paraia v The State (1995) N1343 that where damages cannot be assessed with certainty, it does not relieve the wrongdoer of the necessity of paying damages and the Court must do the best it can. Since its enunciation, this principle has been applied in numerous decisions of the Supreme Court and National Court. This I think is in congruence with Section 158(2) of the Constitution which states that in interpreting the law, the courts shall give paramount consideration to the dispensation of justice. Dismissing the claim based on the principle in Graham Mappa v PNG Electricity Commission considering the peculiar circumstances of the present case will defeat the objective of an award of damages which is to give the claimant compensation for damage, loss or injury he has suffered. In this regard, I note the speech of Lord Blackburn in Livingstone v Rawyards Coal Co, (1880) App Cas 25 at 29 where His Lordship defined the measure of damages as:


“that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation.”


70. Although there is no other documentary evidence like business records or tax returns apart from the plaintiff’s bank statements for the months of January 2013 to June 2013 and the evidence of Mr Otto who operated similar business and the driver of the bus, I will not dismiss this head of claim as is suggested by the defendant as in my view it will not be in the interest of justice to do so. He should be penalised in some other way.


71. I agree with the defendant’s submissions on depreciation. It is common knowledge that the condition of the Highlands Highway is in a very bad state and impacts heavily on the cost of maintenance and upkeep of vehicles using the highway and the general lifespan and roadworthiness of a vehicle.


72. I am also inclined to use the practice by the defendant to grant PMV loans for terms not more than 18 months as was stated by Mr O’Rourke as a guide.

73. In the absence of evidence to the contrary and based on the whole of the evidence given for and on behalf of the plaintiff and applying common sense and logic given the distance from Goroka to Lae and back and reasonableness of the amounts claimed and subject to what I observe below, I would make the following findings of fact:

  1. The one way PMV fare per adult passenger for the Goroka-Lae route was K30.00;
  2. Lunch for the bus driver and the offsider was K50.00 per day;
  3. Fuel for a return trip to Lae and back was K300.00.
  4. Every fortnight, the plaintiff paid the bus driver K400.00 and the offsider K300.00;
  5. The plaintiff serviced the bus every two months at a cost of K500.00, i.e,. K250.00 per month;
  6. Every fortnight, the plaintiff paid an allowance of K475.00 to his family.

74. As to the daily takings for a return trip from Goroka to Lae and back, the maximum paying passengers minus the offsider and the driver would be limited to 24. Hence, I find that one return trip to Lae and back in one day would fetch a total of K1,440.00 at K720.00 each way for 24 adult paying passengers. (No evidence was given as to what fare was charged for students, minors or children). After subtracting the costs of fuel (K300.00) and lunch (K50.00) from the K1,440.00 received daily, the daily income would be K1,090.00.

75. Based on the daily income of K1,090.00, in a 6 day week, the net income generated would be K6,540.00. In a month, the income generated would be K26,160.00.

76. The monthly net income would be arrived at by subtracting from K26,160.00 the sum of K2,600.00 which consists of K1,400.00 for the wages of the driver and offsider, K250.00 for service of the bus; and K950.00 as allowance for the family. The monthly net income would therefore be K23,560.00

77. So in a year or 12 months, the income generated from the PMV operation would have been K282,720.00 (K23,560.00 x 12 months).
78. I reject the submission by the plaintiff that he should be awarded damages for loss of income for a period of 8 years. The evidence produced by the plaintiff is insufficient and does not justify that. I would consider an award to cover a period of more than 18 months. I think an award to cover a period of 4 years less 50% for contingencies (lack of proper business records, not paying income tax, wear and tear, depreciation, etc) would be reasonable. The income that would have been generated for 4 years based on an annual income of K282,720.00 would be K1,130,880.00. The amount I would award is 50% of K1,130,880.00, i.e., K565,440.00.


GENERAL DAMAGES
Plaintiff’s submission


79. Mr Pato argues that the plaintiff should recover damages for anxiety, distress and humiliation he has suffered in pursuing the recovery of the bus arising from the breach of the contract. It is suggested that a fair compensation should be K60,000.00.


Defendant’s submission


80. Ms Waide concedes that while damages for anxiety, distress and humiliation have been awarded by courts in the past, the plaintiff has not been left destitute so a nominal sum of K1,000.00 should be awarded as fair compensation.


Reasons for decision


81. Damages for distress, frustration, vexation, injured feelings etc, are part of general damages: Brian Hodson v The Independent State of Papua New Guinea (1985) PNGLR 303; The Independent State of Papua New Guinea v Hodson (1987) PNGLR 241; Harding v Teperoi Timbers Pty Ltd (1988) PNGLR 128; Joe Naguwean v The Independent State of Papua New Guinea (1992) PNGLR 367. I agree that damages should be awarded to compensate the plaintiff for the anxiety, distress and humiliation caused to him by the defendant’s breach of the contract: Brian Hodson v The Independent State of Papua New Guinea (1985) PNGLR 303; Harding v Teperoi Timbers Pty Ltd (1988) PNGLR 128. It is clear from the plaintiff’s own evidence that he suffered anxiety, distress and humiliation as a result of the repossession of the bus which coincided with the accusation that he had misappropriated K13.1 million which resulted in him being charged for misappropriation and processed through the District (Committal) Court and the National Court and eventually acquitted.


82. In Brian Hodson v The Independent State of Papua New Guinea, Los, J said damages for breach of a contract of employment may include in an appropriate case, a component for distress, frustration, the upset and general disappointment caused by relegation to a position of lesser responsibility. This position was affirmed on appeal by the Supreme Court in The Independent State of Papua New Guinea v Hodson.


83. In Brian Hodson v The Independent State of Papua New Guinea, a sum of K6,000.00 was awarded as damages for distress, frustration and general disappointment. That assessment was appealed as the appellant was not given the opportunity to address the court at trial on the question of damages for distress, frustration and general disappointment. The appeal was upheld and the matter remitted to the trial judge for reassessment.


84. In Harding v Teperoi Timbers Pty Ltd at 132, Kidu, CJ took the same position as that taken in Brian Hodson v The Independent State of Papua New Guinea and The Independent State of Papua New Guinea v Hodson when he said:


“If the contracting party breaks his contract, damages can be given for the disappointment, the distress, the upset and frustration caused by the breach.”


85. In Harding v Teperoi Timbers Pty Ltd, a nominal amount of K1,000.00 was awarded as damages for distress, frustration and general disappointment.


86. In Joe Naguwean v The Independent State of Papua New Guinea, a nominal amount of K1,000.00 was awarded as damages for frustration, distress and/or disappointment following a breach of contract for employment.


87. In Peter Na’al v Michael Debege (2000) N1958, an amount of K15,000.00 was awarded for distress, frustration and disappointment arising from a breach of contract of employment and terms of scholarship while on studies in Australia.


88. In Peter Aigilo v The Independent State of Papua New Guinea (2001) N2102, the Court awarded K20,000.00 as damages for distress, frustration and hardship following the plaintiff’s unlawful termination of his employment contract.


89. In Rodao Holdings Ltd v Sogeram Development Corporation Ltd (2007) N5485, damages of K50,000.00 was awarded for distress, frustration and inconvenience arising from a breach of a management agreement under which the plaintiff was to manage the defendant’s affairs, particularly regarding a timber and marketing agreement it had with another company.


90. In Likui Trading Ltd v Joseph Selna (2011) N4530, the National Court awarded damages of K15,000.00 for hardship, inconvenience, anxiety and distress arising from a breach of a rental agreement.


91. In Fred Angoman & Papaco No.1 Limited v Independent Public Business Corporation of Papua New Guinea & Glen Blake as the Managing Director of the Independent Public Business Corporation of Papua New Guinea (2011) N4363, the plaintiff sued the defendants, for breach of a contract of sale of land relating to a property at Boroko and sought specific performance of the contract which had been executed between the second plaintiff and Investment Corporation of Papua New Guinea, the registered proprietor, 10% deposit paid, stamp duty requirements met and statutory approval for the conveyance obtained or in the alternative damages. The sale was not completed due to issues surrounding outstanding water rates. While awaiting completion, the property became vested firstly, in the Privatisation Commission pursuant to the Privatisation Act 1999 and later in the first defendant, Independent Public Business Corporation of Papua New Guinea, following the repeal of the Privatisation Act 1999 and the enactment of the Independent Public Business Corporation Act 2002. The second defendant refused to complete the sale. The property was placed on public tender for sale. Kariko, J awarded K5,000.00 having found that the plaintiffs suffered some stress and anxiety while following up the sale initially with Investment Corporation of Papua New Guinea and later with its successors.


92. I agree with the defendant’s submission that the plaintiff was not left destitute as he was receiving income elsewhere from rental income, but on the other hand, I also agree with the plaintiff’s submission that he is entitled to damages for the stress, depression, anxiety and humiliation he suffered while following up on the repossession of the bus arising from the breach of the contract which coincided with the allegations made against him for misappropriation.


93. I have considered the comparable awards and am of the view that an award of a sum of K10,000.00 is reasonable in the circumstances of this case. I will therefore allow K10,000.00 for this head of damages claimed.


INTEREST
94. The plaintiff seeks interest at a rate of 8% annually pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act.


95. The awarding of interest under the Judicial Proceedings (Interest on Debts and Damages) Act is discretionary: Cheong Supermarket Pty Ltd v Pery Muro (1987) PNGLR 24. In the exercise of my discretion, I will award interest at the rate sought of 8% annually on the total amount awarded from the date of filing of the writ of summons to the date of judgment.


JUDGMENT

96. Judgment is entered for the plaintiff for K880,668.00 as follows.

  1. Damages for loss of investment: K100,000.00
  2. Damages for loss of income: K565,440.00
  3. Damages for anxiety, depression K 10,000.00

and humiliation:

  1. Interest at 8% per annum on total K145,228.00

damages awarded of K675,440.00

from 8 September 2016 to 17 May 2019:

  1. Costs shall follow the event.
  2. Time is abridged.

Judgment and orders accordingly.
______________________________________________________
Parker Legal: Lawyers for the Plaintiff
In-house Lawyer: Lawyers for the Defendant

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