N11476

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 826 OF 2021

BETWEEN:
HOBERT GOPMI
Plaintiff

AND
ROBIN CALISTUS
CHIEF EXECUTIVE OFICER
LAE DISTRICT DEVELOPMENT AUTHORITY
 First Defendant

AND
KENNEDY LOGEN
PROJECT CORDINATOR
LAE DISTRICT DEVELOPMENT AUTHORITY
Second Defendant

AND
LAE DISTRICT DEVELOPMENT AUTHORITY
Third Defendant

AND
LAE CITY AUTHORITY
Fourth Defendant

LAE: DOWA J
19 OCTOBER, 10 NOVEMBER 2023; 8 SEPTEMBER 2025

CIVIL PROCEEDINGS-Plaintiff claims damages for outstanding debt for civil works contract-whether the proceedings are competent for  naming party which ceased to exist by operation of law- whether the requirements of Public Finances (Management) Act met- failure to meet requirements renders contract invalid and unenforceable -Whether where contract is performed principles of quantum meruit applies-whether claim is barred under Frauds and Limitations Act-where part payments are made, and debt acknowledged-liability is established – 

DAMAGES – Plaintiff has onus to prove damages with credible evidence-entitled to damages -damages awarded.

Cases cited
Delphi Corporate Investigations Ltd v Bernard Kipit (2003) N2480 
Fly River Provincial Government v Pioneer Health Services Limited (2003) SC705
Habolo Building & Maintenance Ltd v Hela Provincial Government [2016] SC1549
Leontine Ofoi v Kris Bongare (2007) N3248
Public Curator of Papua New Guinea v Kara [2014] PGSC 58; SC1420
Samot v Yame (2020) N8266
Steven Turik v Mathew Gubag (2013) N5132
Teine v University of Goroka (2019) SC1881
The State v Barclay Bros (PNG) Ltd (2004) N2507
Wialu v Andreas [2020] PGSC 60; SC1970
Yooken Paklin v The State (2001) N2212 

Counsel
E. Tienare for the plaintiff
N. David for the defendants

JUDGMENT

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

2.	The Plaintiff claims against the Defendants the sum of K80,000.00 being outstanding claim for cleaning and beautifying works undertaken by the Plaintiff and his people from Markham Road to Butibam Road in the city of Lae between January 2016 and February 2016.The Plaintiff alleged that he was engaged by the first Defendant in his capacity as the  Chief Executive Officer of Lae District Development Authority which eventually became Lae City Authority by virtue of District Development Authority  (Amendment) Act 2015.

3.	The Defendants filed a defence pleading that; i) that Lae District Development Authority does not exist by virtue of the District Development Authority (Amendment) Act 2015; ii) that there was no compliance of the procurement requirements and iii) the claim became time barred under the Frauds and Limitations Act 1988. 

4.	The trial was conducted on 19th October 2023. The Defendants did not attend Court although they were aware of the trial. Leave was granted to the Plaintiff to proceed ex parte. Counsel for the Defendants eventually turned up in Court belatedly but did not participate in the proceedings. The Plaintiff presented his evidence through counsel, and the matter was adjourned for submissions which were eventually presented in writing. 

Evidence-The Plaintiff

5.	The Plaintiff relies on the following affidavits tendered without objection:

a.	Affidavit in support of Hobert Gopmi filed 24th November 2021
b.	Affidavit in Support of Hobert Gopmi filed 3rd February 2022
c.	Affidavit in Support of Hobert Gopmi filed 24th February 2022
d.	Affidavit of WilsonPari filed 29th April 2022
e.	Affidavit of Esron Tar filed 29th April 2022
f.	Affidavit in Support of Hobert Gopmi filed 29 June 2022
g.	Affidavit of Steven Profane Alois filed 3rd October 2022
h.	Affidavit in Support of Hobert Gopmi filed 24th March 2023

6.	This is the summary of the Plaintiff’s evidence. The Plaintiff is a resident of Lae City, residing at Markham Compound, Bumbu Settlement, Lae. He is a community leader. In January 2016, the Plaintiff was contracted by the first Defendant on behalf of the Defendants to clean and beautify the city. He was engaged by the Defendants to do grass cutting, drain digging and road cleaning starting from Markham Road 2C down to Dekenai Construction site adjacent to Sir Ignatus Indoor Stadium and all the way to China Town along the Butibam Road.  The Plaintiff mobilised his people and performed the tasks as per the instructions of the first and second Defendants from 1st of February to 22nd February 2016. On 23rd February 2016 the second Defendant inspected the works. On 24th February 2016, the Plaintiff invoiced the Defendants a total sum of K 90,000. The Defendants did not pay despite promises. On 5th September 2019, the Defendants paid K 10,000.00 and the balance of K 80,000 remains outstanding. The Plaintiff made several attempts to get the debts settled but was unsuccessful. The Defendants have on many occasions admitted the debt both verbally and through correspondence but did not pay. Their main excuse was they did not have the funds to pay.
	
The Defendant’s Evidence

7.	The Defendants offered no evidence but filed written submissions.

         Issues

8.     The issues for consideration are:

1.Whether the Defendants are liable 
2. How much is the Plaintiff entitled to. 

Consideration of the Issues

The Plaintiff’s claim 

9.	The facts are not disputed.  In January 2016, the Plaintiff was engaged in a verbal agreement to do city cleaning works. The Plaintiff led a group of workers numbering up to 20 under him who provided services, like grass cutting and drainage cleaning from 1st to 22nd February 2016 in the Lae city at the request and instructions of the second and third Defendants.  On 24th February 2016, the Plaintiff presented two invoices, 054 for K 60,000.00 and 058 for K30,000.00. The total amount for the invoices issued was K90,000.00.  The Defendants made a part payment of K 10,000.00 by Cheque No 003175 on 5th September 2019 and the balance of K 80,000.00 remains outstanding. 

The Defendants’ Contentions
			
10.	The Defendants oppose the Plaintiff’s claim for the following reasons:

i)	 Lae District Development Authority does not exist by virtue of the District Development Authority (Amendment) Act 2015.
ii)	 The Plaintiff’s claim became statute barred under the Frauds and Limitations Act 1988.
iii)	 There was no compliance of the procurement requirements under the Public Finance (Management) Act 

i.	Lae District Development Authority v Lae City Authority

11.	The Defendants submitted that the cause of action arose in 2016 when Lae District Development Authority ceased to exist by virtue of the passing of the District Development Authority (Amendment) Act 2015. In its place Lae City Authority was established under the Lae City Authority Act 2015. 

12.	I have considered the submissions of the Defendants and reject same. The Defendants did not present any evidence in support of their defence. The Plaintiff was engaged by Lae Urban Local Level Government. The Remittance Advice of the part payment made on 5th September2019 show the cheque was issued by Lae Urban Local Level Government. That is, Lae Urban LLG was still functioning in 2019 performing municipal functions.  The Defendants were not called to clarify. 

13.	Secondly, the Plaintiff commenced proceedings against Lae District Development Authority in time. When he was confronted with the dilemma that the Lae DDA ceased to exist by virtue of the amendment to the District Development Authority (Amendment) Act 2015, he sought to add Lae City Authority which replaced Lae District Development Authority. The amendment was granted and is in order. The liabilities of Lae Urban LLG and Lae DDA passed onto Lae City Authority who is responsible for procuring and settlement of municipal services provided by persons like the Plaintiff in the city. In my view, the proceedings are competent and to find otherwise is to deny the Plaintiff and cause grave injustice to him.

ii)	Whether the claim is statute barred under the Frauds and Limitations Act 1988.

14.	 The Defendants submitted that since the Plaintiff added Lae City Authority as a party to the proceedings belatedly it is time barred under the Frauds and Limitations Act 1988.

15.	I find the proceeding was filed in time.  The amendment was done to add the name of the entity (Lae City Authority) that replaced Lae District Development Authority by operation of law. The amendment to the District Development Authority Act did not excuse Lae City Authority from the obligations and liabilities of the former Lae DDA, especially those of Lae Urban LLG.

16.	Furthermore and more importantly, the cause of action accrued on 5th September 2019 at the instance of the part payment of K 10,000.00 by virtue of Section 7 (1) of the Frauds and Limitations Act. Section 7 (1) of the Act reads:

“7.	FRESH ACCRUAL OF ACTION ON ACKNOWLEDGEMENT OR PART-PAYMENT.

(1) 	Subject to Subsection (2) and Sections 8, 9 and 10–
(a) 	where–
(i) 	a right of action has accrued to recover a debt or other liquidated pecuniary claim; or
(ii) 	a claim is made to, or to any share or part in, the personal estate of a deceased person; and
(b) 	the person–
(i) 	liable in respect of that debt or other liquidated pecuniary claim; or
(ii) 	accountable in respect of that personal estate,
acknowledges or makes a part payment in respect thereof,
the right to the debt or other liquidated pecuniary claim, or the claim to, or to a share or part in, the personal estate of the deceased person, is deemed to have accrued on, and not before, the date of the acknowledgement or the date of the last payment, as the case may be....”
17.	The law under sections 16 (1) and 7 (1) of the Frauds and Limitation Act is settled. An action for a simple contract shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued, and the cause of action can accrue on a specific date or recur on subsequent dates or a series of occurrences where the debt is acknowledged or part payment is made: see Wialu v Andreas [2020] PGSC 60; SC1970, Habolo Building & Maintenance Ltd v Hela Provincial Government [2016] PGSC 67; SC 1549; and Public Curator of Papua New Guinea v. Kara [2014]. PGSC 58; SC1420.

18.	In the present case, the evidence shows the works contract price was K90,000.00. The contract was performed and completed on 24th February 2016. The Defendants made a part payment of K 10,000.00 on 5th September 2019. It is clear, the date for the cause of action commenced on 5th September 2019. The amended Writ of Summons was filed on 24th March 2023 which is within six (6) years from 5th September 2019. The Plaintiff’s claim is therefore not time barred. 
 
iii). Whether there was compliance of the procurement requirements 

19.	The Defendants submitted that the first and second Defendants did not have authority to procure or make financial commitments in engaging the Plaintiff. The Defendants argued that the contracts are null and void by virtue of section 47B of the Public Finances (Management) Act 1995.
 
20.	I have considered the submissions of the Defendants and reject them. Firstly, the Defendants did not present evidence to establish that the contract for cleaning works was procured without complying with the procurement requirements under the Public Finances (Management) Act. The Defendants did not present evidence to show that the first and second Defendants did not have authority to engage the Plaintiff for minor cleaning works within the city precincts.

21.	Even if the contract was illegal for noncompliance of the Public Finances (Management) Act, it would not bar the Plaintiff from being paid under the principles of quantum meruit because the Plaintiff acted on the contract and performed his obligations under the contract.  He would still be entitled to an award of damages for the performance of the contract on the principles of quantum meruit.

22.	Quantum meruit is a common law cause of action. It has been applied in cases such as  Fly River Provincial Government vs. Pioneer Health Services Limited (2003), SC705, Teine vs. University of Goroka (2019) SC1881, The State vs. Barclay Bros (PNG) Ltd (2004) N2507, Delphi  Corporate Investigations Ltd vs. Bernard Kipit (2003) N2480 and Leontine Ofoi vs. Kris Bongare (2007) N3248 and Steven Turik vs. Mathew Gubag (2013) N5132:

23.   In Turik vs. Gubag, Cannings J set out the following elements of quantum meruit:

1.	‘A’ has done something of benefit for ‘B’.

2.		the thing done by ‘A’ relates to an arrangement of some sort with ‘B’ (the arrangement might be but is not necessarily a contract and might be an illegal contract).

3.		it would be unjust to allow ‘B’ to retain the benefit without some remuneration or reward for ‘A’.

24.	In the present case, the Plaintiff was given a contract to do grass cutting, drain digging and road cleaning starting from Markham Road 2C down to Dekenai Construction site adjacent to Sir Ignatus Indoor Stadium and all the way to China Town along the Butibam Road.  The Plaintiff mobilised his people numbering up to 20 people and performed the tasks as per the instructions of the first and second Defendants from 1st of February to 24th February 2016.The Plaintiff performed his obligations under the contract, but the Defendants failed to pay them.

25.	Based on the forgoing reasons I find the Plaintiff has proved his claim on the balance of probabilities. I find the Defendants are liable to pay the debt. 

2. How much is the Plaintiff entitled to. 

26.	Whilst the issue of liability is settled, the Plaintiff is still required to prove its damages with credible evidence.  Ref:  Yooken Paklin v The State (2001) N2212 and Samot v Yame (2020) N8266.

27.	The Plaintiff claims K 90,000.00 in the statement of claim, being the outstanding debt. It is a liquidated claim. There is evidence of acknowledgement of debt and part payment. The Plaintiff has produced copies of the invoices, 054 and 058 totalling K 90,000.00. He was paid K 10,000.00 on 5th September 2019. The Plaintiff produced a copy of the Remittance Advice for the part payment and submitted for an award for the outstanding balance of K 80,000.00. The Defendants have not presented rebuttal evidence; thus, the Plaintiff’s evidence remains unchallenged. I accept the Plaintiff’s evidence. The Plaintiff is now entitled to judgment for the balance of K80,000.00 which the Court shall award.

Interest
	
28.	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 against the State and State entities be charged between 2 % and 8%. I will award interest at a lower rate of 2% per annum. Interest at 2% on K 80,000.00 from date of filing of Writ (24th November 2021) to date of Judgment (8th September 2025), (for 1383 days), is K 9,670.23. Interest is calculated as follows:

•	K80,000.00 x 2% 	=K 1,600.00 per annum
•	K 1,600 ÷ 365 days = K 4.38 per day
K 7.73 x 1383 days =K6,057.54

29.	The total judgement shall be K86,057.54.

COST

30.	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 his claim so he shall be awarded the cost of the proceeding.

          ORDERS

31.     The court orders that:

1.	Judgment is entered for the Plaintiff in the sum of K86,057.54 inclusive of interest. 
2.	Post judgment interest shall accrue at the rate of 2% until settlement.
3.	The Defendants shall pay the Plaintiff’s costs to be taxed, if not agreed. 
4.	Time be abridged

Lawyer for the plaintiff: Public Solicitor 
Lawyers for the defendants: David & David & Co