N10623
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 385 OF 2022

BETWEEN:
LILLIAN WHILLS trading as Lillian Whills
Trans Inc. (6-252753)
Plaintiff

AND:
GUARD DOG SECURITY SERVICES
LIMITED (1-7402)
Defendant

Lae:   Dingake J
2023:    15th August

DAMAGES – claim for liquidated damages based on non-payment of outstanding invoices, damages and costs – Plaintiff claims she entered into a contract with Defendant, partly written, and also oral and or based on conduct - Plaintiff hired her 25 Seater Toyota Coaster bus to the Defendant at the rate of K350.00 per day - Defendant denies claim and avers that some invoices presented for payment were paid in error - whether there was a binding agreement between the parties as alleged by the Plaintiff; and if so, whether same was breached by the Defendant, resulting in Plaintiff suffering damages and or loss of income – evidence indicates and court establishes that a binding agreement between plaintiff and defendant existed – liability is established against defendant for non-payment of outstanding invoices, interests and costs – quantum of damages is awarded to the plaintiff to be paid by the defendant

Cases Cited:
Vanimo Forest Product Limited v Ossima Resources Limited [2013] SC1275
William Mel v Coleman Pakalia [2005] SC790
Jonathan Mangope Paraia v The State [1995] N1343
PNG Aviation Services Pty Ltd v Geob Karri (2009) SC1002
Tony Ratengmai v Ernest Dor & Another (2013) N4949
Joe Mambo trading as Mambo Maintenance v Board of Management of Modilon General Hospital (2013) N4952
Andrew Moka v MVIL (2004) PGSC 38; SC729

Counsel:
Mr. Terry Berem, for the Plaintiff
Ms. Manoel Maburau, for the Defendants

JUDGMENT

15th August 2023

1.	DINGAKE J:   The Plaintiff in this matter has sued the Defendant for, inter alia, liquidated damages in the sums of K123,550.00 being total outstanding invoices, damages and costs as particularized in the Writ of Summons endorsed with the Statement of Claim filed on the 7th of September, 2022.

2.	The Defendant denies liability and the consequent damages claimed.

3.	I heard this matter on the 15th August, 2023 and at the end of the hearing the parties agreed that after a finding of liability, the Court may also proceed to make an assessment on damages.

4.	The Plaintiff’s pleaded case is that she entered into a contract with the Defendant, partly written, and also oral and or based on conduct in terms of which, the Plaintiff hired her 25 Seater Toyota Coaster bus bearing Registration No. LBW 582 to the Defendant at the rate of K350.00 per day. 

5.	The Plaintiff alleges that for the first seven (7) days, the contract was written, but that after the lapse of seven (7) days the parties agreed orally and or by conduct that the Plaintiff may continue using the bus at the same rate as long as it needed it.

6.	The Plaintiff pleads that the Defendant is in breach of the agreement in so far as it failed to pay some of the invoices sent to it for the hire of the vehicle.

7.	In its defence, the Defendant denies the claim and avers that some invoices that were presented for payment were paid in error.

8.	At the trial held on the 10th of May 2023, and 15th of August 2023, the parties called witnesses who gave sworn oral evidence. Their Affidavits were tendered as evidence and marked as exhibits and the witnesses were cross-examined by both parties.

9.	The Plaintiff called two (2) witnesses in support of her case, namely, Lillian Whills and John Moni. Both witnesses tendered their Affidavits as evidence, marked Exhibit P1, P2 (for Lillian Whills) and Exhibit P3 (for John Moni).

10.	The Defendant also called two (2) witnesses to support its side of the story, namely, Elias Warvakai and Walter Ririka. Both witnesses tendered their Affidavits as evidence, marked Exhibits D1 and D2 respectively.

11.	The issue before the Court is whether there was a binding agreement between the parties as alleged by the Plaintiff; and if so, whether same was breached by the Defendant, resulting in the Plaintiff suffering damages and or loss of income.

12.	The net effect of the evidence of the Plaintiff is that the parties hereto entered into a hire agreement in terms of which the Plaintiff hired the bus described earlier to the Defendant, initially for seven (7) days, at the rate of K350.00 per day. The agreement started on the 30th of December 2020, and was supposed to end on the 7th January 2021. All these details are recorded in Exhibit “P2”.

13.	The Plaintiff’s witnesses testified that the agreement on the same terms was continued by conduct and or orally after the expiry of the initial seven (7) days.

14.	According to Mr. Moni, after the lapse of seven (7) days, it was verbally agreed with Walter Ririka and Manoel Maburau, that the bus would be used by the Defendant as long as there was need for it.

15.	The bus that was hired by the Defendant according to Lillian Whills was purchased at Ela Motors for K175,000.00 after seeking a loan of K125,000.00 from Credit Corporation Finance Limited.

16.	Mr. Moni testified that the bus had no mechanical issues when it was hired by the Defendant and also had a third-party insurance cover. He testified that the bus was returned on the 24th of April 2022. He said that it was only when the bus was returned that it became apparent to him that it may have been involved in an accident. He said no-one told him of the accident, that apparently took place on the 17th of February 2021.

17.	According to Lillian Whills, the Defendant despite using the bus after the expiry of seven (7) days and or having the bus in its custody and control, has refused and or declined to pay some invoices sent to it, only paying K56,000.00 and the balance of K123,550.00 remains outstanding.

18.	The evidence of the Defendants confirmed the written agreement in terms of which the bus was hired for seven (7) days. Mr. Ririka confirmed, under cross-examination, that the bus was used beyond the seven (7) days initially agreed and that it was involved in an accident on the 17th of February 2021. Under cross-examination, Mr. Walter Ririka indicated that the accident was caused by the negligence of the Defendant’s driver. He also conceded that the applicable hire rate after the expiry of the initial seven (7) days was K350.00 per day. Mr. Ririka testified that Mr. John Moni was informed of the accident.

19.	On the evidence, I have no hesitation in finding, as a fact, that the parties hereto entered into a contract of hire as pleaded by the Plaintiff, initially for seven (7) days, and that subsequently, by conduct, the contract was renewed. I say so because the Defendant continued to use the bus and according to the evidence of Mr. Moni, which I believe, because it is consistent with the conduct of the parties, the parties agreed verbally that the bus would be used by the Defendant as long as there was need.

20.	I am aware that Mr. Ririka, on behalf of the Defendant, testified that he informed Mr. Moni of the accident, which is denied by Mr. Moni. In my opinion, whether or not the Plaintiff was informed of the accident does not in any way suggest that the parties did not enter into a binding contract based on conduct and orally.

21.	In law, in order for a contract to be valid, the following factors must be in existence:

i.	Offer and acceptance.
ii.	An intention to create legal relations.
iii.	Consideration
iv.	Legal capacity.
v.	Consent.

22.	It is trite learning that the above elements of a binding contract can either be in writing or by conduct.

23.	In this case, I find as a fact, that the contract was initially in writing, but later by conduct and orally the parties agreed to continue or renew the initial contract. I am satisfied that all the above elements that constitute a valid contract have been proven, on a balance of probabilities.

24.	I am fortified in the view I hold that a contract can be inferred from the conduct of the parties by the remarks of the Supreme Court in the case of Vanimo Forest Product Limited v Ossima Resources Limited [2013] SC 1275, where the Court stated:

“3.	The renewal of a contract can be inferred from the conduct of the parties. Hence, there was a body of relevant and incontrovertible evidence to support the conclusion that the appellant by its conduct affirmed renewal of the contract. The conclusion reached by the trial judge was open in law and fact. The appeal was dismissed accordingly.” 

25.	Having regard to my findings of fact above, the Defendant is clearly in breach of the agreement between the parties and is accordingly liable for any proven damages the Plaintiff may have sustained.

26.	I turn now to assess the damages claimed.

27.	It is trite law that the Plaintiff has the onus of proving her loss on a balance of probabilities. It is not enough to make assertions not backed by proof or make assertions that are otherwise unreasonable. (William Mel v Coleman Pakalia [2005] SC 790.

28.	It is also the law, in this jurisdiction, that the fact that damages cannot be assessed with accuracy does not relieve the wrong doer of the necessity of paying damages. The Court is enjoined by our jurisprudence to do the best based on the available evidence (Jonathan Mangope Paraia v The State [1995] N1343).

29.	Assessment of damages consequent to established breach of contract is intended, as far as practically possible, to put the Plaintiff in the same position as if the contract was performed. (PNG Aviation Services Pty Ltd v Geob Karri (2009) SC 1002.

30.	It is also trite learning that evidence that is presented by a party at a trial, if not challenged or otherwise contradicted, unless it is plainly untenable, may be accepted by the Court as truthful.

31.	I am fortified in the view expressed above by the remarks of my brother Cannings J, in a case urged upon me by the Plaintiff, being the case of Tony Ratengmai v Ernest Dor & Another (2013) N4949, when he said:

“If one side of a case presents evidence on a disputed fact and the opposing side presents no evidence to contradict it the court is obliged to make a finding of fact that is supported by that evidence unless the evidence is so incredible that it would not be reasonable to accept it (Re Fisherman’s Island [1979] PNGLR 202, Rabaul Shipping Limited v Peter Aisi (2006) N3173) …” 

32.	On the evidence, it seems that the Defendant refused to pay the invoices submitted to it, when it was clearly liable to pay.

33.	In this case, the Plaintiff’s evidence on the loss and damage occasioned to her was not challenged or discredited during cross-examination. In fact, it was largely undisputed. Critically, the evidence that the Defendant only paid K56,000.00 and that the outstanding invoices totaling K123,550.00 remains unpaid was not disputed. 

34.	It is a matter of record or established evidence that the Plaintiff consistently submitted to the Defendant during the period, the invoices to be paid, and the Defendant, although having the bus in its possession, felt that it was not obliged to pay as agreed.

35.	It is also instructive to note that whilst the Plaintiff has established by cogent and credible evidence that the Defendant settled some invoices presented to it for payment, the Defendant simply says those payment were wrongly made, without saying how.

36.	With respect to the claim of outstanding loan amount of K97,025.62, that the Plaintiff claims she couldn’t pay had the Defendant not breached the agreement and or had the accident not taken place. I do not think the Defendant should pay same, for the reason stated below.

37.	I note from the evidence that a letter of demand dated the 17th of May 2022, was issued by Credit Corporation Finance Limited (CCFC) to the Plaintiff to settle the outstanding balance or else recovery action would be commenced. 

38.	It is clear on the evidence, that the Plaintiff was unable to pay on account of the Defendant’s breach. On the evidence the amount of K97,025.62.00 remains outstanding and the Plaintiff can utilize the damages recoverable from the suit to pay. I will deny this claim. To sustain this claim and then grant the other reliefs sought by the Plaintiff as I intend to do would amount to over compensation.

39.	The Plaintiff is also claiming general damages for hardship, suffering and distress, occasioned by the breach of the contract. Such damages are permissible in our law. (Joe Mambo trading as Mambo Maintenance v Board of Management of Modilon General Hospital (2013) N4952.

40.	The quantum of damages for breach of contract depends on the circumstances of each case. In this case, the Plaintiff was in business and a creditor, whose reputation was obviously damaged as illustrated by the letter of demand dated the 17th of May 2022, issued by Credit Corporation Finance Limited. 

41.	In the circumstances of this case, I am inclined to award K30,000.00, taking into account the period of time the Defendant needlessly refused to pay in terms of the contract whilst holding on to the Plaintiff’s vehicle causing serious hardship, suffering and distress to the Plaintiff. 

42.	I must add that the K30,000.00 damage is inclusive of any inconveniences, stress, anxiety and incidental costs that the Plaintiff endured when she fell into arrears resulting in a letter referred to above being issued.

43.	I have also, consistent with the authority of the Supreme Court in the case of Andrew Moka v MIVL (2004) PGSC 38; SC729, taken into account the effect of inflation on the value of money.

44.	I have considered whether in the circumstances of this case, I must use my discretion to award exemplary damages. I am not persuaded that it is appropriate to order exemplary damages in this case; and I decline to do so.

45.	With respect to out-of-pocket expenses, the Defendant has offered out of expenses of K500.00, which I consider reasonable. I will order same to be paid.

46.	In conclusion having found the Defendant liable, and having proceeded to assess the quantum of damages, I order that the Defendant must pay the Plaintiff’s claims as follows:

a)	Outstanding invoices				- K123,550.00
c)	Damages for hardships, suffering & stress	- K  30,000.00
e)	Out of pocket expenses				- K       500.00
									   K154,050.00

f)	Interest at the rate of 8% per annum from the 17th of February 2022 to the date of the full settlement of the judgment debt.

g)	Costs – against the Defendant to be agreed and or taxed.
_______________________________________________________________
Berem Lawyers: Lawyers for the Plaintiff
Guard Dog Security Services Ltd In-house Lawyer: Lawyers for the Defendant