N8528

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS  No.  1579 of 2018

BETWEEN:
NINA FLORENCIA GIHENO
Plaintiff

AND:
ERICK MOSSMAN UVOVO,
as Managing Director of Kole Builders & Construction
First Defendant

AND:
KOLE BUILDERS & CONTRUCTIONS
Second Defendant

Waigani: Thompson J
2020:  23rd & 29th September

CONTRACT - Claim for breach of agreement for payment of money - assessment of damages after interlocutory judgment - necessity to plead essential elements of cause of action - necessity to prove damages in accordance with established principles
Counsel

Mr K Pato, for the Plaintiff
Mr J Poponawa, for the First Defendant

29th September, 2020 

1.	THOMPSON J:  On 12 December 2018 the Plaintiff issued proceedings claiming damages for breach of a Contract of Lending entered into between the Plaintiff and First Defendant on 27 March 2013, whereby the Plaintiff loaned the sum of K20,000.00 to Eric Mossman Uvovo (“Defendant”) on 27 March 2013, and the Defendant agreed to “repay the sum of K100,000.00” on 30 June 2013, with weekly interest of 2% to be charged on the repayment amount.  The payment was to be made into the Plaintiff’s ANZ Bank Account No. 11332296.
2.	The statement of claim pleads that the contract was breached when payment was not made on 30 June 2013, and the Plaintiff claims damages for breach of the agreement, loss of business, general and exemplary damages, compound interest at 2 % weekly from 30 June 2013, plus costs.  
3.	On 21 January 2020 default interlocutory judgment was entered against the First Defendant, with an order that the amount owing pursuant to the Lending Agreement including reasonable interest, be subsequently assessed.  This was the hearing of that assessment.  
4.	The principles that apply to an assessment of damages following entry of default judgment, have been set out in many cases including William Mel v Coleman Pakalia and ors (2005) SC 790.  The judgment resolves all questions of liability in respect of the matters pleaded in the statement of claim.  Any matter that has not been pleaded that is introduced at the hearing, is a matter on which the Defendant can take issue on liability.  The Plaintiff is only entitled to lead evidence and recover such damages as may be pleaded in the statement of claim.  
5.	The duty of the Court on such an assessment is well-settled:
  “The Plaintiff has the burden of proving both the facts and the amount of damages before he can recover substantial damages. This follows from the general rule that the burden of proving a fact is upon him who he alleges it, and not upon him who denies it, so that where a given allegation forms an essential part of a person’s case, the proof of such allegation falls on him.  Even if the Defendant fail to deny the allegations of damage or suffers default, the Plaintiff must still prove his loss”.  (Yange Lagan and ors v The State and ors (1995) PGNC 32).
6.	At the commencement of the hearing, the Plaintiff’s lawyer informed the Court that in relation to the relief sought in para 10 of the statement of claim, the Plaintiff would not be pursuing para 10 (b) for payment of 2% weekly compound interest, para 10 (c) for loss of business to be assessed, and para 10 (d) for general damages to be assessed.
7.	The Plaintiff’s lawyer submitted that in place of those claims, the Plaintiff would be claiming in relation to para 10 (b), interest at 8% pa pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act, and that in relation to para 10 (c) and (d), nominal amounts of damages be awarded.
8.	The Statement of Claim did not plead the facts or particulars on which the claims for damages for loss of business, general damages and exemplary damages were based.  The Plaintiff’s lawyer submitted that the fact that damages cannot be assessed with certainty does not necessarily relieve the Defendant of the necessity to pay damages, and that therefore at least nominal damages should be awarded.
9.	 However, a difficulty in assessing damages with certainty, is not the same as an inability to assess damages at all: “Where precise evidence is available, the Court expects to have it.” (Mappa v PNG Electricity Commission (1992) N1093 and many ors).
10.	Here, the Court’s inability to assess damages is not because they could not be assessed with certainty.  It is because the Plaintiff neither pleaded nor proved any facts in support of the claims.  Precise accounting and medical evidence could have been obtained as to the loss of business, the pain and suffering, and so on.  The Plaintiff cannot avoid the necessity to plead and prove such claims by simply asking the Court to make an award of damages even if only on a nominal basis.
11.	In relation to para 10 (b), it is a requirement of pleadings that they clearly set out any statute on which a claim is based.  The Plaintiff has not pleaded the Judicial Proceedings (Interest on Debts and Damages) Act.  It could be implied into para 10 (g) of the statement of claim, which is a claim for “interests pursuant to law”.  The decision to award such interest is at the discretion of the Court.  I would exercise my discretion under that Act not to award further interest to the Plaintiff in this case when her Agreement already provides for a 500 percent return on her loan in 3 months.
12.	In relation to the claim in para 10 (c) for loss of business, the Plaintiff’s lawyer had submitted that she was not a financial institution or in the business of lending money.  No facts or particulars had been pleaded of any loss of business.  The Plaintiff gave no evidence of any such loss, and in any event, evidence cannot be given of matters not pleaded.  (PNGBC v Jeff Tole (2002) SC 694).  There is no pleading in the statement of claim of the facts or particulars giving rise to an entitlement to claim damages for loss of business.  As a result, no damages, whether actual or nominal, can be awarded.
13.	The same finding follows in relation to the claim for general damages under para 10 (d).  There was no pleading or proof of the facts giving rise to an entitlement to general damages.
14.	In relation to para 10 (e), there was no pleading of facts or particulars to show or found an entitlement to such damages.  It was a simple debt owing by the Defendant to the Plaintiff, following a breach of an agreement to pay monies to the Plaintiff.  The Plaintiff said that she pursued her claim for exemplary damages, but gave no evidence in support of it.   In any event, evidence could not be given of a matter not pleaded, and the statement of claim did not plead any facts or material showing an entitlement to exemplary damages.  As a result, no damages could be ordered.
15.	The Plaintiff’s lawyer submitted that an award of punitive damages was necessary to show that people like the Defendant in a position of power, should not be able to take advantage of people like the Plaintiff.  He said that the Defendant was in a position of power because he was employed in a senior position at the Tourism Promotion Authority.  This shows a misunderstanding of the meaning of a position of power.  
16.	The facts show that the Defendant requested a loan from the Plaintiff, who agreed to provide it.  She was not poor, as shown by the fact that she had K20,000.00 cash to lend.  She was not illiterate.  She was a business woman who owned her own company, she wrote and sent business letters and letters of demand, and she engaged lawyers to prepare a formal written Lending Agreement in accordance with her own terms.  There are no grounds pleaded or shown that the Plaintiff was taken advantage of by the Defendant.   As no facts or particulars were pleaded, no award could be made.
17.	In relation to 10 (a), the Plaintiff claimed K100,000.00 under the Agreement.  The Defendant submitted that the Agreement had been varied orally and by the conduct of the parties, to reduce the principal debt to K27,000.00, which he had paid.
18.	The Defendant’s evidence of the variation was not strong, it was denied by the Plaintiff, and it was not in compliance with the written terms of the Agreement.   The evidence was not sufficient to show a variation, but in any event, it had not been pleaded as the Defendant had not filed a Defence.  Evidence cannot be given of a matter not pleaded, so this submission is rejected. 
19.	This leaves the undisputed evidence of the Defendant’s liability to pay K100,000.00 to the Plaintiff on 30 June 2013. 
20.	The Plaintiff says in her affidavits that since 30 June 2013, she received K15,000.00, or K10,000.00, from the Defendant.  The Defendant produced evidence of payments totaling K27,000.00, including K17,000.00 deposited into ANZ Account No. 11332296.   The Plaintiff’s response to this evidence was slightly evasive, in that she did not directly deny receiving those payments.  Instead, she asked the Court to query possible irregularities in the deposit slips.   She did not produce her bank records for the period of the deposits, which would have clarified the irregularities.  She gave no evidence of asking the ANZ Bank to provide her with records when she issued the proceedings in 2018, or by the time of trial when the ANZ Bank had become Kina Bank Ltd, for records from the account at the Pacific Place branch of the ANZ Bank in Port Moresby.  She did not say why she could not produce her own records, and in fact, she subsequently produced one such record.  She did not say why she was able to produce bank records for her company from 2014, or why she was able to produce a bank statement from the ANZ Bank for her account No. 11332296 for the period from 13 June - 30 August 2013, but not for the later periods during which the deposits were made in 2015 - 2017.  She does not say why she admits payment of K10,000.00, when the Defendant did not make such a single payment.  In her affidavit filed on 10 December 2019, she admits that the Defendant paid her in “dribs and drabs” in 2015, and said that he paid K15,000.00.  In relation to the payment made to her company, she produced a bank statement showing that a TPA cheque for K10,000.00 had not been paid into the account.   However, the Defendant’s evidence showed that the cheque had been endorsed for payment to cash.
21.	The onus of proof of facts is on he who asserts them, and the standard of proof is on the balance of probabilities. 
 Conclusion
22.	I reject the Defendant’s claim of a variation to the agreement relating to the principal amount.
23.	I am satisfied on the balance of probabilities that the evidence is sufficient to show that the Defendant paid at least K14,000.00 by way of deposits into the Plaintiff’s personal account No. 1332296.   I am not satisfied that he paid K9,000.00 or K10,000.00 into the Plaintiff’s company or in cash via the TPA cheque.  As the Plaintiff has admitted receiving payments totaling K15,000.00, this figure will be deducted from the amount of the debt.
24.	I therefore find that the amount of monies claimed under para 10 (a) payable by the Defendant to the Plaintiff for breach of the Agreement, was K100,000.00, less K15,000.00 paid, leaving an outstanding balance of K85,000.00.
25.	The claim under para 10 (b) for interest under the Agreement, was not pursued.  The claims for damages under para 10 (c) (d) and (e), are rejected.  The claim for interest under para 10 (g) is rejected.
26.	If the claim had been for a liquidated sum, then under Order 12 Rule 27 if the interest rate is unspecified, interest at 8% pa from the date of filing of the statement of claim to the date of judgment can be calculated.  However, the Plaintiff’s claim was unliquidated, being for various types of damages.  Although it was not specifically pleaded, it would be possible to imply into para 10 (g) a claim for interest under the Act.   However, the right to interest under that Act is discretionary, and I do not consider that it would be proper to award interest in this case.
27.	In relation to costs, the Plaintiff submitted that they should be paid on a solicitor/client basis, because the Defendant had not settled and so the Plaintiff had to come to court.  There is nothing exceptional about that, it is what happens with every unpaid debt.  There was no egregious conduct by the Defendant or its lawyer which could justify penalty costs.
28.	I therefore order:
 	1.	The damages payable to the Plaintiff by the Defendant Eric Mossman 			Uvovo, are assessed at K85,00.00.
2.	Judgment is entered for the Plaintiff against the Defendant Eric Mossman Uvovo for the sum of K85,000.00.
	3.	The Defendant Eric Mossman Uvovo is to pay the Plaintiff’s costs on 			a party/party basis, to be agreed or taxed.
__________________________________________________________________
Posman Kua Aisi Lawyers:  Lawyers for the Plaintiff	  	
Jopo Lawyers: Lawyers for the Defendant