N11492

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

W.S NO. 777 OF 2020

BETWEEN:
JIM TAPAKO INVESTMENT LTD
Plaintiff

AND
COCA-COLA AMATIL (PNG) LTD
Defendant

LAE: DOWA J
11 APRIL, 12 JUNE 2024; 22 SEPTEMBER 2025

CIVIL PROCEEDINGS-Plaintiff claims damages for breach of contract-and for conversion and unlawful deprivation of 7x20ft Containers- whether claim of breach of contract and for conversion proved- Plaintiff proved on the balance of probabilities breach of contract and tort of conversion-Damages- claimant has burden to prove damages with credible evidence- -assessed and damages awarded. 

Cases cited
Covec (PNG) Ltd v Kama (2020) SC1912
Yooken Paklin v The State (2001) N2212 
Peter Wanis v Fred Sikiot and The State (1995) N1350 
Jonathan Mangope Paraia v The State (1995) N1343
 Samot v Yame (2020) N8266
 NKW Holdings -v- Poladin Solutions PNG Ltd, (2020) N8339
Keam investments v Toyota Tsusho (PNG) Ltd (2019) N7859
Titus Tumba v Samson (2020) N8721

Counsel
J Langah for the plaintiff
N. David for the defendant

JUDGMENT
            
1.	DOWA J:  This is a judgment on both issues of liability and damages.

Background Facts

2.	The Plaintiff is a trucking company. It claims against the Defendant the sum of K768,937.33 in damages under various heads of damages for breach of contract, tort of conversion, loss of cargo containers and loss of business. The Plaintiff entered a two-year contract with the Defendant to transport its Coca-Cola products from Lae, Morobe Province to the Highlands Provinces along the Okuk Highway. Under the cartage contract the Defendant requested the Plaintiff to provide six trucks and eleven (11) containers. The Plaintiff alleges it performed its obligations under the contract by providing the six trucks with eleven containers. The Plaintiff alleges that the Defendant breached the contract by terminating the contract three months early. On termination the Defendant failed to return the seven of the Plaintiff’s containers and continue to use them in its business.

3.	Aggrieved, the Plaintiff filed these proceedings seeking damages for breach of contract and for conversion, and loss of income. 

4.	The Defendants filed a Defence generally denying the claim. 

Mediation 

5.	The matter was initially referred for mediation, but the parties were unable to resolve, and the matter was returned to Court for trial on issues identified during the mediation. 

Trial

6.	The trial was conducted on 11th April 2024. The Plaintiff called two witnesses. The Defendant offered no evidence. The matter was adjourned to 12th June 2024 for submissions. The Court directed the parties to file their written submissions by 31st May 2024. The Plaintiff filed its submissions on 31st May 2024. The Defendant did not file its submissions. When the matter returned to Court on 12th June 2024, counsel for the Defendant made no appearance. Only the Plaintiff did and presented its submissions. Decision was reserved which I now deliver. 

Evidence-The Plaintiff

7.	The Plaintiff relies on both oral and the following affidavit evidence:

a.	Affidavit of James Perna filed 11th April 2023
b.	Affidavit of James Pena filed 10th August 2029
c.	Affidavit of Jim Tapako filed 10th August 2023 

8.	This is the summary of the Plaintiff’s evidence. The Plaintiff entered a cartage contract on 27th June 2017 with the Defendant to transport its CCA products to the Highlands Provinces. The contract period was for two years. As part of the terms of the contract the Plaintiff made available six (6) trucks and eleven (11) containers. During the contract period the Plaintiff used 21 vehicles for the haulage. The Defendant terminated the contract around April 2019 when it ceased to engage the Plaintiff’s trucks for the haulage duties. The last load was on 3rd April 2019. After the termination the Plaintiff requested for the return of its containers. Four were returned and seven (7) were in circulation and use by the Defendant. On 8th October 2019, the Plaintiff sent a letter charging the Defendant K50 per day for the unreturned containers commencing June 2019. The Plaintiff also suggested to the Defendant to pay off the containers at K4,000.00 each. 

9.	The Defendant did not respond to the Plaintiff’s letter issued 8th October 2019. The Plaintiff sent further reminders, but the Defendant did not respond except for a promise that the containers would be returned once identified and returned from circulation. The Plaintiff then issued demand letters warning the Defendant of recovery proceedings if it fails to settle.

Evidence -The Defendant

10.	The Defendant offered no evidence.

Issues

11.	 The issues for consideration are:

i.	Whether the Defendant is liable for breach of contract. 
ii.	Whether the Plaintiff provided eleven (11) containers at the request of the Defendant.
iii.	Whether the Defendant continue to use the seven (7) containers after the return of the four (4) containers
iv.	Whether the Plaintiff is entitled to charge the Defendant for the containers
v.	What is the appropriate rate to be charged for the use of the containers
vi.	Is the Plaintiff entitled to damages for the containers 

Burden of Proof

12. 	The burden of proving the claim rests on the Plaintiff and he must discharge the burden on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and expect to be awarded damages claimed. Refer: Yooken Paklin v The State (2001) N2212, Peter Wanis v Fred Sikiot and The State (1995) N1350,  Jonathan Mangope Paraia v The State (1995) N1343 and Samot v Yame (2020) N8266.

i.	Whether the Defendant is liable for breach of contract 

13.	The Plaintiff submitted that it entered a valid contract with the Defendant to provide haulage services of the Defendant’s Coca-Cola products to the highlands for 24 months commencing 27th June 2017. The Plaintiff submits the Defendant prematurely terminated the contract on or about 3rd April 2019 after the last cartage. The Plaintiff submitted that the Defendant breached the terms of the contract by failing to give fourteen (14) days notice of termination.

14.	The Plaintiff’s claim is for breach of hire contract. It is a trite law of contract that the following elements be present for a contract to be valid and enforceable:

a)	Offer
b)	Acceptance
c)	Intention to create legal relation.
d)	Passing of consideration
e)	Capacity of parties

Refer to NKW Holdings -v- Poladin Solutions PNG Ltd, (2020) 8339, Keam investments v Toyota Tsusho (PNG) Ltd (2019) N7859, Titus Tumba v Samson (2020) N8721.
15.	The relevant terms of the haulage agreement in respect of the issues raised in the proceedings are:
i. The Plaintiff was to transport the Defendant’s products to the Highlands Provinces at various rates
ii. The contract term was two years commencing 27th June 2017. 
iii. The Plaintiff was required to commit six Semi-Trailer Trucks
iv. The parties have liberty to terminate the contract by giving each other 14 days written notice.
16.	In the present case, the evidence shows the Plaintiff committed six (6) trucks with eleven (11) containers. It performed its obligations under the contract using 21 of its vehicles. The last load was made on 3rd April 2019. The Plaintiff’s trucks were not called upon to deliver cargo for the reminder of the contract period. The Plaintiff enquired with the Defendant and was informed that the contract was terminated. The Defendant opted to use Mapai and Traisa Transporting companies for its cartage requirements.
17.	While the Defendant is at liberty to engage other contractors to undertake deliveries for the designated routes under Clause 10.1 of the Contract, the Defendant has not provided evidence in response. What is clear though is the Defendant has failed to give fourteen (14) days notice of its intention to terminate the cartage contract with the Plaintiff as required by Clause 12.1 of the Contract. To that extent and in the absence of rebuttal evidence to the contrary, I find the Defendant has, by its conduct, breached the terms of the contract prematurely and is liable.

ii.	Whether the Plaintiff provided eleven (11) containers at the request of the Defendant

18.	There is undisputed evidence that the Plaintiff committed six (6) trucks under the contract. It used a total of 21 trucks and 11 containers during the term of the contract. The details of the containers used are set out in the statement of claim as well as in the Affidavit of Jim Tapako. I accept the evidence of Mr. Tapako that the Plaintiff provided and used 11 containers during the term of the contract.

iii.	Whether the Defendant continue to use the seven (7) containers after the return of the four (4) containers

19.	The Plaintiff submitted that of the eleven (11) containers, only four were returned to the Plaintiff and the balance of seven (7) remain with the Defendant. 
20.	The Plaintiff’s evidence shows on termination of the cartage contract; the Plaintiff’s containers were in circulation carting cargo for the Defendant. Commencing July 2019, requests were made for the return of the containers. Only four were collected and returned. This resulted in the Plaintiff charging the Defendant K50.00 per day for unreturned containers commencing June 2019. The Defendant has not challenged the evidence of the Plaintiff. In the absence of evidence to the contrary, I accept the evidence of the Plaintiff and find that seven (7) of the Plaintiff’s 20ft containers were not returned and remain in the possession of and use by the Defendant. 
21.	Part of the Plaintiff’s claim is based on tort of conversion. In Covec (PNG) Ltd v Kama (2020) SC1912, the Supreme Court stated the relevant principles to be applied when determining damages for conversion:

‘’128. The principle that obtains from these authorities then is this: A defendant may pay for the market value only of the materials after they become chattels at time of conversion if he acted fairly and honestly in a bona fide belief that he had the right to do what he did, wholly ignorantly, without sinister intention, or where the plaintiff passively stands by and does not protest the act of trespass or conversion from continuing. This is the milder rule. If, on the other hand, the defendant’s conduct is willful, or is designed to deprive, frustrate or embarrass the plaintiff in exercising his full rights to his land or chattels, or the defendant persists in his wrongful conduct in the course of active opposition or litigation between him and the plaintiff, the plaintiff is entitled to recover the market value of the converted chattels together with the cost of severing the mineral. This is the strict rule.’’(underlining mine)

22. 		In the present case, it has been established that the Defendant has been deliberate and willful, depriving the Plaintiff of ownership and possession of its containers and is entitled to reasonable compensation.

23.	Based on the findings and reasons given above, I am satisfied on the balance of probabilities that the Defendant is liable in damages for breach of contract by terminating the contract prematurely, and for conversion and use of the Plaintiff’s seven 20ft containers. 

	Damages
24.	Whilst the issue of liability is settled, the Plaintiff is still required to prove damages with credible evidence.  Ref: Yooken Paklin v The State (2001) N2212, Peter Wanis v Fred Sikiot and The State (1995) N1350, Jonathan Mangope Paraia v The State (1995) N1343, and Samot v Yame (2020) N8266.

25.   In Samot v Yame (Supra), His Honour, David J referring to legal principles to be applied in assessing damages said this at paragraph 46 of his judgment:
“ 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:
•	    The plaintiff has the onus of proving his loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and then expect the court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person’s case, that person has the onus of proving the allegation. (Yooken Paklin v The State (2001) N2212, National Court, Jalina J.)

•	    Corroboration of a claim is usually required and the corroboration must come from an independent source. (Albert Baine v The State (1995) N1335, National Court, Woods J; Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331, National Court, Lenalia J.)

•	The principles of proof and corroboration apply even when the defendant fails to present any evidence disputing the claim. (Peter Wanis v Fred Sikiot and The State (1995) N1350, National Court, Woods J.)

•	The same principles apply after default judgment is entered and the trial is on assessment of damages – even when the trial is conducted ex parte. A person who obtains a default judgment is not entitled as of right to receive any damages. Injury or damage suffered must still be proved by credible evidence. (Yange Lagan and Others v The State (1995) N1369, National Court, Injia J.)

•	If the evidence and pleadings are confusing, contradictory and inherently suspicious, the plaintiff will not discharge the onus of proving his losses on the balance of probabilities. It is conceivable that such a plaintiff will be awarded nothing. (Obed Lalip and Others v Fred Sikiot and The State (1996) N1457, National Court, Injia J.)

•	Where default judgment is granted, for damages to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded. (MVIT v Tabanto [1995] PNGLR 214, Supreme Court, Kapi DCJ, Hinchliffe J, Sevua J; Waima v MVIT [1992] PNGLR 254, National Court, Woods J; MVIT v Pupune [1993] PNGLR 370, Supreme Court, Kapi DCJ, Jalina J, Doherty J; Tabie Mathias Koim and 28 Others v The State and Others [1998] PNGLR 247, National Court, Injia J.)

•	The fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying damages. Where precise evidence is available the court expects to have it. However, where it is not, the Court must do the best it can. (Jonathan Mangope Paraia v The State (1995) N1343, National Court, Injia J.)

•	The court must be alert to vague claims, unsupported by corroborating evidence, as they might be false claims. The court must only uphold genuine claims. (Kolaip Palapi and Others v Sergeant Poko and Others (2001) N2274, National Court, Jalina J.)

•	The person who has been wronged has a duty to mitigate their losses; though it is the defendant who has the onus of proving failure to mitigate (Dia Kopio v Employment Authority of Enga and Others (1999) N1865, National Court, Hinchliffe J; Coecon v National Fisheries Authority (2002) N2182, National 
•	Court, Kandakasi J.)”

Consideration

26. 	How much in terms of damages is the Plaintiff entitled to? The Plaintiff claims the following heads of damages in the statement of claim:

a)	K205,437.33 for the balance of the Contract term
b)	K535,500 for conversion and use of the containers. 
c)	K28,000.00 for the loss of containers. 
d)	Interest at 8%
e)	Costs

K 205,437.33-for balance of the contact term
27.	The Plaintiff claims K205,437.33 being for the balance of the contract term. According to the Plaintiff, the contract which commenced 27th June 2017 was prematurely terminated on 3rd April 2019, with three (3) months and one (1) day remaining. Based on the earnings of the first 20 months and 4 days, the Plaintiff submitted it was earning an average income of K67, 801.10 per month and for the remaining 3 months and 1 day, the Plaintiff would have earned K205, 437.33 but suffered loss due to the termination. 
28.	I have considered the evidence and submissions; I am not inclined to accept the figures and manner of calculation. Clause 2.1 of the Contract provides that the Plaintiff as Contractor would deliver the containers to destinated locations as and when required. There is no certainty that the income would constantly or consistently flow as suggested by the Plaintiff. While the past income forms a good reference point, I would consider a lesser amount than the average monthly income submitted by the Plaintiff to allow for contingencies. In my view a nominal sum of K60,000.00 be reasonable and sufficient compensation for the three months loss of earnings calculated at K20,000.00 per month and would award same.

iv.	Whether the Plaintiff is entitled to charge the Defendant for the containers-K535,500-

29.	The Plaintiff claims K535,500.00 for conversion and loss of income from the use of the containers. The Plaintiff submitted that it has been deprived of the use of the containers to earn income and suffered loss of income as a result. The Plaintiff claims K50.00 per day for each of the seven (7) containers that remain in circulation and custody of the Defendant commencing June 2019. K535,500 is for the period between 27th June 2019 and 12th June 2024. According to the Plaintiff’s submission this figure continues to accrue until judgment. 
30.	Is the Plaintiff entitled to charge the Defendant at the rate claimed. The Plaintiff’s containers were brought into the Defendant’s yard during the term of the cartage contract. When the contract ended the containers should have been returned. The evidence shows the containers were not immediately returned although an undertaking was given on 12th July 2019. A demand for the return of the containers was made in August 2019. Only four were returned. The Plaintiff was deprived of the immediate use of the seven (7) containers while the Defendant had the benefit and use of the containers in its business. In my view, the Plaintiff is entitled to some form of compensation for the deprivation and conversion of its containers.
31.	That said, I am, however, not inclined to make an award in terms of the rate and amounts submitted by the Plaintiff. The daily rate of K50.00 claimed by the Plaintiff is not based on a lease agreement nor a standard or conventional rates. Nevertheless, the fact that damages can not be easily assessed should not deprive the Plaintiff for the loss it suffered, nor should it relieve the wrongdoer of the necessity of paying damages. (Jonathan Mangope Paraia v The State (1995) N1343, National Court, Injia J.)
32.	Therefore, the Plaintiff is entitled to damages for the deprivation and conversion of the containers. In my view, a conservative daily rate of K10.00 per container is reasonable. The Plaintiff pleaded that the loss be calculated from date of termination, that is 3rd April 2019 to date of judgment. In my view, the date of loss commences on 27th June 2019 being the final day of the term. This is because the Plaintiff is already awarded damages for breach of contract which ended 26th June 2019. The total number of days from 27th June 2019 to 22nd September 2025 being date of judgment is 2,277 days. Applying the daily rate of K10.00 per day for the seven containers amounts to K159,390.00 which is calculated as follows:
		K10.00 per day x 2,277 days x 7 containers = K 159,390.00

33.	I will assess and award K159,390.00 for the loss of income.

	Loss of the Containers
34.	The Plaintiff submitted a claim of K4,000.00 per container totalling K28,000.00 for the seven containers.  This is not an unreasonable claim. However, there is no evidence presented for the purchase price nor the standard value of the containers. There is no evidence of the condition of the containers. Allowing for the depreciation and other contingencies I will allow the claim at 75 %. I will make an award of K21,000.00 for the containers. 
Total Award
35.	The total award shall be K240,390.00.

Interest
	
36.	The Plaintiff claims interest at 8%. The Court has a discretion to award interest on the rate claimed or lesser sum. Section 3 of the Judicial Proceedings (Interest on Debts and Damages) Act provides that interest in claims be charged between 2 % and 8%. I will award interest at the standard rate of 8% per annum. Interest at 8% on K240,390.00 from date of filing of writ (30th September 2020) to date of Judgment (22nd September 2025), for 1817 days, is K19,231.20. Interest is calculated as follows:

•	K240,390.00 x 8% 	=K19,231.20 per annum
•	K19,231.20 ÷ 365 days 	=K52.69 per day
K52.69 x 1817 days	=K95,737.73 

37.	The total judgment inclusive of interest shall be K336,127.73

COST

38.	Cost is a matter of discretion.  Generally, cost follow the event, that is, a successful party is entitled to cost.  The Plaintiff has succeeded in its claim so it shall be awarded the cost of the proceeding.

          ORDERS

39.     The court orders that:

1.	Judgment is entered for the Plaintiff in the sum of K 336,127.73 inclusive of interest. 
2.	Post judgment interest shall accrue at the rate of 8% until settlement.
3.	The Defendant shall pay the Plaintiff’s costs to be taxed, if not agreed. 
4.	Time be abridged

Lawyers for the plaintiff: Albright Lawyers	   	
Lawyers for the defendant: David & David & Co