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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO. 900 OF 2019
BETWEEN:
LUTHER KAIPAS trading as ATIRI ROADS & BUILDING MAINTENANCE CONTRACTORS
Plaintiff
AND:
ZEBEDEE AIZE, Project Technical Officer, University of Goroka
First Defendant
AND:
JOHN RAU, Director, Planning & Resources Management, University of Goroka
Second Defendant
AND:
DONALD GUMBIS, Pro-Vice Chancellor, Policy & Planning, University of Goroka
Third Defendant
AND:
UNIVERSITY OF GOROKA
Fourth Defendant
Goroka: Mugugia, AJ
2021: 18th, 19th November
2022: 30th March, 12 May
JUDGMENT – claim for purported unpaid balance for additional work done - credibility of evidence – no credible evidence
provided by the Plaintiff to establish liability against the Fourth Defendant – claim not made out by the Plaintiff to establish
liability – liability not established – Fourth Defendant not liable.
Case Cited:
Kunnga v. Independent State of Papua New Guinea (2005) N2864
Counsel:
K. Lafanama, for the Plaintiff
K. Pilisa, for the Defendants
JUDGMENT
12th May, 2022
1. MUGUGIA, AJ: The Plaintiff’s main claim in this proceeding is for K18,500.00 which is alleged to be the unpaid balance for additional work
done. A two days trial was conducted on 18 and 19 November 2021. The matter was adjourned to the new year (2022) for submissions.
The parties completed presentation of their submissions on 30 March 2022. This is my decision.
2. On or about 22 October 2015, the Plaintiff (Mr Kaipas) entered into a “Service Agreement for Minor Works” (contract) with the Fourth Defendant (UOG) to do “minor works” at the UOG campus at Goroka. The First Defendant (Mr Aize) signed the contract on behalf of the UOG for an amount of K31,900.00. The time frame of the contract was 28 October 2015 to 30 November 2015. The Plaintiff signed the contract on 4 November 2015.
3. The Plaintiff says that a slight tremor had triggered a land slip, and the UOG gave the Plaintiff additional emergency work that was not part of the contract. The Second Defendant (Mr Rau), on behalf of the UOG, verbally agreed with the Plaintiff to construct a third layer of gabion wall (verbal agreement), with no specific agreement regarding cost and materials. The Plaintiff says that the UOG agreed to settle in full any accruing bills of this additional work. Upon completion of the additional work on 29 November 2015, the Plaintiff raised an invoice of K26,000.00 for only the additional work done, and submitted it to the UOG for payment. The UOG made a payment of K7,500.00 but failed to pay or unjustly retained the balance of K18,500.00. The Plaintiff says that the UOG failed to honour its obligation to settle. The Plaintiff is claiming the unpaid balance of K18,500.00 from the UOG which he says is part payment of the contract. The Plaintiff also claims general damages for breach of contract, damages for suffering, mental distress and anxiety and special damages.
4. The Defendants admit that additional work was required. The Defendants say that after the completion of the initial scope of work, a layer of half gabion basket was required, and that was why the Plaintiff was asked if he was willing to take on the additional work. No additional labour was required, and no additional materials were required. The materials required for this additional work was provided by the UOG. The Plaintiff obtained the additional materials at his own costs, and he has exaggerated the work required. The Plaintiff has inflated his claim for payment of the additional work. The Defendants say that the main contract, that is, the “Service Agreement for Minor Works” was performed and paid for. Even the additional work was performed and paid for. The Defendants deny the invoice of K26,000.00, and say that it would be disproportionate and excessive to the actual work done. The defence case is that the Plaintiff raised a brand new invoice after one year, making a claim on a contract and additional work he had already been paid for. The Defendants deny that there is an outstanding balance of K18,500.00.
TRIAL - Tendering of Affidavits
5. The Court admitted the evidence of the parties. The following Affidavits were tendered in Court by Ms Lafanama for the Plaintiff and marked as Exhibits:
(i) Affidavit of Luther Kaipas filed on 3/09/2020 Exhibit “P1”
(ii) Additional Affidavit of Luther Kaipas filed on 14/09/2021 Exhibit “P2”
(iii) Additional Affidavit of Joshua Peter filed on 17/09/2021 Exhibit “P3”
(iv) Additional Affidavit of Jonathan Kameku filed on 17/09/2021 Exhibit “P4”
(v) Further Affidavit of Luther Kaipas filed on 17/09/2021 Exhibit “P5”
(vi) Additional Affidavit of Greg Bafarewe filed on 22/09/2021 Exhibit “P6”
(vii) Additional Affidavit of Luther Kaipas filed on 22/10/2021 Exhibit “P7”
6. The Defendants’ Affidavit in Response of John Rau sworn on 5 October 2021 was tendered in Court by Mr Pilisa and marked as Exhibit “D”.
7. Mr Kaipas and Mr Rau were cross-examined.
ISSUE FOR TRIAL
8. The issue to be determined here is whether the UOG is liable to pay the Plaintiff K18,500.00?
ASSESSING EVIDENCE
9. The parties contest the factual allegations on whether the balance of K18,500.00 remains unpaid. There is a need to consider the credibility of the parties’ evidence.
10. In Kunnga v. Independent State of Papua New Guinea (2005) N2864, Cannings J considered the following matters to determine which group of witnesses was clearly not giving truthful evidence:
ANALYSIS OF THE PLAINTIFF’S EVIDENCE
11. Throughout the trial, Mr Kaipas gave evidence in the pidgin language. I noted that all of his affidavits which were relied on did not contain Certificates of Translation. This questions the credibility of his evidence. It is doubtful whether the evidence in the affidavits were given by Mr Kaipas.
12. I have considered the affidavits relied on by the Plaintiff at the trial. The Plaintiff rendered an invoice dated 23 June 2016 for K15,000.00. This invoice has a page number 31 (page 31 invoice). It reads as follows:
“Invoiced for additional work and constructed a gabion wall at the new housing project site. (1) We excavate trenches (holes) 30 meters K3,500.00 (2) Collect river stones in wheelbarrow K3,200.00 (3) Tie wire, cement bags (material costs) K3,800.00 (4) Labour costs K4,500.00 [signed] K15,000.00.”
13. The page 31 invoice is at odds with an invoice for K26,000.00, that is also dated 23 June 2016 but on a page that seems to be numbered page 58 (page 58 invoice). This invoice repeats the items in the page 31 invoice and adds ten more items that are described as “rate per gabion”.
14. The page 58 invoice seems to be an attempt to get more money for the additional work than is justified. It is not accepted. The Plaintiff in seeking K26,000.00 noted there was pressure on him to settle a debt to some lender.
15. Mr Kaipas had confirmed in examination in chief that he was paid K7,500.00 on 28 October 2016. He gave evidence in cross examination that there was no agreement between him and the UOG for the UOG to pay K15,000.00.
16. The Affidavit of Luther Kaipas filed on 3 September 2020 [Exhibit “P1”] is relevant to the issue at hand. I set out below my observations on the evidence contained in this affidavit.
17. Annexure “A” which is the Certificate of Registration of Business Name shows that Atiri Roads and Building Construction was registered under the Business Names Act on 19 November 2018. The Plaintiff as named in the Amended Writ of Summons filed on 8 September 2021 is “Luther Kaipas trading as Atiri Roads and Building Maintenance Contractors” not Atiri Roads and Building Construction which was registered on 19 November 2018. There is no evidence of when the business name changed to Atiri Roads and Building Maintenance Contractors. If it is the same business then the “Service Agreement for Minor Works” which was entered into by the Plaintiff and the UOG on 22 October 2015 was entered into when the Plaintiff’s business was unregistered.
18. Mr Kaipas’s evidence is that after the completion of the additional work, he issued a quotation of K26,000.00 to the Defendants sometimes in 2016. Annexure “E” is a list of handwritten items with the total amount of K26,000.00 written at the end of the list. It is stamped with the stamp of “Atiri Roads & Building Contractors”. There is also a handwritten list of items dated 23 June 2016. It reads “Invoiced for Additional Work”. The total amount of K15,000.00 is written at the end of the list. It is also stamped with the stamp of “Atiri Roads & Building Contractors”. I find three problems with these evidence: Firstly, the stamp is that of “Atiri Roads & Building Contractors” not the registered business name “Atiri Roads and Building Construction” which was registered on 19 November 2018. Secondly, if it is the same business, these so-called quotations were issued in 2016 when the Plaintiff business name was unregistered. Thirdly, there is no confirmation of receipt of these so-called invoices by the UOG in this affidavit. I find that the evidence produced by the Plaintiff is not credible.
19. Mr Kaipas gave evidence that from the invoice issued in the sum of K26,000.00, only a payment of K7,500.00 was made on 28 October 2016, and a cheque number 419 dated 19 October 2016 was made payable to his company. Annexure “F” is a copy of the cheque. Upon a closer look at the cheque, I noted that it is a Bank of South Pacific Limited cheque dated 19 October 2016, Cheque No. 000419, in the amount of K7,500.00. The drawer is the UOG, and the payee is Atiri Roads and Building Contractors. Under the Claimant’s Reference/Details of Payment, these words are stated: “Being for payment for additional works for building of gabion basket at new staff house site.” There is a signature at the end where it states “Payment – Cheque Received by:...” It is dated 28 October 2016. I find that the UOG paid to Mr Kaipas the amount of K7,500.00 for the additional work.
20. Mr Kaipas gave further evidence that he made numerous attempts to follow up on the outstanding payment. However, the UOG ignored his requests. Eventually, he was given a letter from the Third Defendant dated 22 February 2018, advising him that they will not make any further payments to him. Annexure “G” is the letter. In essence, the Third Defendant Mr Gumbis says in this letter to the Plaintiff that the UOG had fully met its obligation under the agreement with the payment of the full contracted amount of K31,900.00 to the Plaintiff. Also, an additional amount of K7,500.00 was paid for alleged extra works been done as a sign of good will gesture. Mr Gumbis goes on to say in this letter that the UOG paid to the Plaintiff a total of K39,400.00 comprising of Cheque No. 1391- K7,975.00, Cheque No. 1418 – K23,925.00, and Cheque No. 0419 – K7,500.00 under the said engagement.
21. Mr Kaipas claims that upon completion of the additional work on 29 November 2015, the Plaintiff raised an invoice of K26,000.00
for only the additional work done, and submitted it to the UOG for payment. As per the Certificate of Registration of Business Name in the Plaintiff’s own evidence, the Plaintiff business name was registered on 19 November 2018. It is clear that the Plaintiff had done the additional work when it
was unregistered.
22. There were inconsistencies between the Plaintiff’s oral evidence and affidavit evidence. The Plaintiff’s evidence
was vague. I find the Plaintiff’s evidence not truthful.
ANALYSIS OF THE DEFENDANTS’ EVIDENCE
23. The Defendants relied on the Affidavit in Response of John Rau sworn on 5 October 2021 which was tendered in Court and marked as Exhibit “D”. Mr Rau was cross-examined.
24. The Defendants’ evidence is that the materials required for the additional work was 12 gabion baskets to be constructed ontop of the existing gabion baskets. It was a small job that did not require any formal scoping to be done. The Plaintiff did not need additional labour. All the materials were provided by the UOG at no cost to the Plaintiff.
25. The submission is that no amount of payment was specified or agreed on by the parties for the additional works. The Plaintiff submitted an invoice of K15,000.00. The UOG’s technical officers deliberated and resolved to pay the Plaintiff as ex gratia payment for the additional work, which was paid. Reference is made to Annexure “E” in Exhibit “D”. The UOG had calculated K3,600.00 as the correct payment for the additional work. The National Works Department’s standard rate for labour only for creating gabion baskets is K300.00 per basket. The evidence in Exhibit “D” is that the labour rate for the 12 gabion baskets is calculated as follows:
K300.00/basket X 12 baskets (1 basket = 2m X 1.0m X 1.0m) = K300.00/basket X 12 (1.0 X 1.0 X 2.0m long) = K3,600.00.
26. The Defendants’ evidence is that the UOG was not aware of the said K26,000.00 invoice. The UOG only has records of the K15,000.00 lodged and the UOG considered it too excessive and without any justification for such an amount for constructing 12 gabion baskets as additional works. The UOG only became aware of an invoice for K18,500.00 submitted two years after the project. This invoice was considered too excessive and did not equate to the additional works.
27. Mr Rau confirmed in evidence that he had never instructed Mr Kaipas to purchase project materials. The following payments totaling K39,400.00 were made to the Plaintiff:
(a) K7,975.00 paid on Cheque No. 001391 dated 17 November 2015 (First Payment);
(b) K23,925.00 paid on Cheque No. 001418 dated 17 December 2015 (Second Payment); and
(c) K7,500.00 paid on Cheque No. 000419 dated 28 October 2016 (For additional 12 gabion baskets).
28. Annexed to the affidavit of Mr Rau is a letter dated 17 August 2016 from Mr Aize to the Plaintiff that notes: “We have received your letter of claim and invoice and invoice of K15,000.00 for the “Additional Works” your firm completed.” The letter then analysed the work specified in the contract and concluded that some work had not been completed and concluded, “the plaintiff needs to refund K1,387.12 to the UOG for the incomplete works and not the other way around”.
29. The purported verbal agreement does not specify a value for the work of putting in a third tier of gabion basket. Mr Aize does calculation in his assessment of the value. Mr Rau decided that K7,500.00 (half of the initial amount claimed - K15,000.00) be paid to the Plaintiff.
30. The affidavit by Greg Bafarewe [Exhibit “P6”] states he is the Regional Valuer for Goroka in the office of the Valuer General. His valuation is on the basis of the value added by the ground improvements and the value saved due to the ground improvements saving the duplex from possible damage due to landslip. However, the valuation does not distinguish the work scoped and done in the contract and the additional work. The valuation includes in its assessment the invoice for K8,368.00 which includes items the Plaintiff had to provide as part of the contract. The valuation put at K31,000.00 cannot be relied upon as a value of the additional work.
31. The Defendants have produced in evidence confirmation of all the payments made to the Plaintiff, and even pictures and photographs of the site and where the additional work was done.
32. Mr Rau confirmed the contents of his affidavit in examination in chief. He gave credible evidence when cross-examined. I find the Defendants’ evidence credible and very convincing. I find that the UOG is not liable to make any more payments to the Plaintiff.
CONCLUSION
33. There is no credible evidence provided by the Plaintiff to establish liability against the UOG. Liability has not been established.
The Plaintiff has not made out his claim to establish that the UOG is liable to pay him K18,500.00. There was no breach of contract
by the UOG. The UOG is not liable for the other relief sought by the Plaintiff.
COURT ORDERS:
34. I make the following orders:
1. The University of Goroka is not liable to pay the Plaintiff K18,500.00.
2. The University of Goroka is not liable for the other relief sought by the Plaintiff.
3. Each party to bear their own costs.
4. Time be abridged to the date of entry of these orders.
The Court orders accordingly.
________________________________________________________________
K. Lafanama: Lawyer for the Plaintiff
K. Pilisa: Lawyer for the Defendants
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