N11595

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 1263 OF 2017

BETWEEN:
NASAME NONOFA trading as HAVERU BUILDING & MAINTENANCE
Plaintiff

AND:
DESMOND ANTAKITE Sued as the Council President of Kainantu Local Level Government Council
First Defendant

AND:
KAINANTU LOCAL LEVEL GOVERNMENT COUNCIL
Second Defendant

LAE: DOWA J
11, 25 OCTOBER 2023; 19 NOVEMBER 2025

CONTRACT – Government Contract -building construction-breach of contract- frustrated by nonpayment of outstanding invoices-defence raises competency issues-whether plaintiff has capacity to sue-whether second defendant exists-whether Court can revisit liability 

Held
Default judgment resolved all issues of liability-judgment entered.

Cases cited
Coecon Ltd (Receiver Manager) v The National Fisheries Authority of PNG (2002) N2182
 PNGBC v Jeff Tole (2002) SC694
Ace Guard Dog Security Services Ltd v Lailai (2004) SC757
 Albert v Aine (2019) N7772
  
Counsel
T. Makale, on behalf of plaintiff, in person
M. Karu, for the defendants

JUDGMENT

1.	DOWA J:	This is a decision on assessment of damages. Liability was resolved by default judgment entered against the Defendants on 18th March 2022 by his Honour, Cannings J.

2.  	The Plaintiff is self-employed, a building contractor and trades under the business name Haveru Building and Maintenance, (HBM).

3.	He alleges it was engaged by the First Defendant to build a Village Court House and Ward Council office at Kamano No.2, Kainantu District, Eastern Highlands Province. 

4.  	The building contract was made orally in part and partly in writing.  The contracted sum was for K60,000.00.  It was agreed that the Defendants would provide materials and the Plaintiff was to provide labour for the construction.

5.	The Plaintiff drafted a building contract for the parties to execute but it was not signed by the parties.

6.	Between May and July 2016, the two buildings were constructed and an invoice for K60,000.00 was tendered for payment.

7.	Despite repeated requests, the Defendants failed to settle.  The Plaintiff alleges, he incurred a further K13,000.00 in chasing up the payment of the invoice.

8.	The Plaintiff instituted these proceedings to recover the outstanding debt. 

Defence’s position

9.	Despite the default judgment, the Defendants submitted that the defendants are not liable for reasons that the second Defendant does not exist, and the Plaintiff company does not exist.

	Issues for Consideration

10.	The issues for consideration are:

a)	Whether the Court should revisit the issue of liability. 
b)	How much is the Plaintiff entitled to in damages. 

Whether the Court should revisit the issue of liability. 

11.	The law on the effect of default judgment is settled in this jurisdiction.  A trial Judge must satisfy himself with the principles summarised in the cases; Coecon Ltd (Receiver Manager) v The National Fisheries Authority of PNG (2002) N2182, PNGBC v Jeff Tole (2002) SC 694, and Albert v Aine (2019) N7772.  In Albert v Aine, Kandakasi DCJ at paragraphs 7 & 8 of his judgment said:

 “7. 	Fourthly, the law on the effect of the entry of default judgment is clear. In Coecon Limited (Receiver/Manager Appointed) v. The National Fisheries Authority of Papua New Guinea (2002) N2182, I summarised the principles that govern an assessment of damages after the entry of default judgement in the following terms:

“A survey of the authorities on assessment of damages after entry of judgement on liability mainly in default of a defendant’s defence, clearly show the following:
1.	The judgement resolves all questions of liability in respect of the matters pleaded in the statement of claim.
2.	Any matter that has not been pleaded but is introduced at the trial is a matter on which the defendant can take an issue on liability.
3.	In the case of a claim for damages for breach of contract as in this case, such a judgement confirms there being a breach as alleged and leaves only the question of what damages necessarily flow from the breach.
4.	The plaintiff in such a case has the burden to produce admissible and credible evidence of his alleged damages and if the Court is satisfied on the balance of probabilities that the damages have been incurred, awards can be made for the proven damages.
5.	A plaintiff in such a case is only entitled to lead evidence and recover such damages as may be pleaded and asked for in his statement of claim.”

12. 	The Supreme Court in PNGBC v. Jeff Tole (2002) SC694 adopted and applied this summation of the principles. Later, the decision of the Supreme Court in William Mel v. Coleman Pakalia (2005) SC790, did the same. Additionally, however, the Court in that case went further by noting several decisions of the National Court in which the principles were adopted and applied. It then added the following:

“Turning back to the issue raised above as to the role of the trial judge after entry of default judgment, we consider the following to be the correct approach:

the trial judge should make a cursory inquiry so as to be satisfied that the facts and the cause of action are pleaded with sufficient clarity;

if it is reasonably clear what the facts and cause of action are, liability should be regarded as proven;

only if the facts or the cause of action pleaded do not make sense or would make an assessment of damages a futile exercise should the judge inquire further and revisit the issue of liability.” 

13.	Counsel for the Defendants submitted that the Plaintiff does not have capacity to sue submitting that the business name Haveru Building and Maintenance was registered with IPA in 2017 after the subject building contract was performed in 2016. I noted from the evidence filed by the Plaintiff show that Haveru Building and Maintenance is only a business name. The evidence shows one Nasame Nonofa as the owner of the business name HBM Haveru Building and Maintenance.  By virtue of an order of this Court given on 19th November 2020, Nasame Nonofa is the Plaintiff. Nasame Nonofa has capacity to sue. He was trading under an unregistered business name in May 2016 when he was awarded the contract. The business name HBM was registered with IPA in 2017. Business names don’t have capacity to sue. Nasame Nonofa being owner of business name HBM has capacity to sue in his name regardless. The fact that the HBM was registered after the contract was awarded is immaterial. 

14.	The first Defendant deposed in his affidavit that he is the President of Kamano No.2 Local Level Government. The evidence shows Kamano No. 2 is once part of Kainantu Local Level Government. The Defendants did not raise this issue in Defence. The Defendants were given extended time to file their Defence which they did not. It is not in the interests of justice to raise the issue at the last minute. From the history of proceedings, it is noted that the initial default judgment was entered on 7th June 2019 by Makail J. On 12th November 2020, the default judgment of 7th June 2019 was set aside, and the Defendants were directed to file their defence after an amened Writ was served on them. The Defendants defaulted in filing their defence, resulting in the second Default Judgment being ordered by Cannings J on 18th March 2022, more than a year after judgement was entered. The Defendant’s application to set aside the second default judgment was refused on 14th April 2022. The Defendants are abusing the process by raising the issue again. 

15.	Besides, there is overwhelming evidence and even concession from the Defendants that work was done by the Plaintiff for the Defendants.

17.	I adopt and apply the principles of law enunciated in Coecon Ltd (Receiver Manager) v The National Fisheries Authority of PNG (supra) and Albert v Aine (supra) that the default judgement of 18th March 2022 resolved all questions of liability in respect of the matters pleaded in the statement of claim.

18.	For the reasons given above I am not inclined to revisit liability. I will proceed to assessment of damages.

How much is the Plaintiff entitled to in damages. 

19.	Whilst the issue of liability is settled in the Plaintiff’s favour, 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 (N1350), Enaia Lanyat v State (1996) N1481; Obed Lalip v Fred Sekiot and The State (1996) N1457; Jonathan Mangope Paraia v The State (1995) N1343, and Samot v Yame (2020) N8266.

20.   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.)”

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

a)	K 60,000.00 -outstanding debt on contract price. 
b)	K 13,740.00 -Special damages
c)	Interest at 8%
d)	Costs

K 60,000.00-Contract price/Invoice

22.	The Plaintiff submits that he was contracted by the Defendants to construct   a Village Court House and a Ward Council Office at Omanuga at Kamano No 2, Kainantu District, EHP. The instructions were from the first Defendant as President of the Local Level Government Council. The initial contract was for K 100,000.00 which was then reduced to K 60,000.00. 

23.	The Plaintiff relies on the following affidavits:

	a. Affidavit of Torepha Makale filed 11th September 2018-Exhibit P1
	b. Affidavit of Arency Nofona filed 11th September 2018-Exhibit P2
	c. Affidavit of Pina Sana filed 11th September 2018-Exhibit P3
	d. Affidavit of Gilbert Akevi filed 11th September 2018-Exhibit P4
	e. Affidavit of Torepha Makale filed 21st July 2020-Exhibit P5

24.	In response to the Plaintiff’s evidence, the Defendants rely on the following affidavits:

	a. Affidavit of Desmond Andakite filed 17th March 2022-Exhibit D1
	b. Affidavit of Maik Karu filed 13th April 2022 -Exhibit D2

25.	The affidavits of the deponents to the respective parties were tendered by consent and were not cross examined. In the absence of cross-examination to assess the demeanour and credibility of the deponents, the Court will apply common sense and logic based on proven facts.

26.	There is overwhelming evidence that the Plaintiff trading under HBM was given a contract to construct buildings for a Village Court and Ward Office at Omunga village, Kamano No 2 LLG, Kainantu District. The instructions came directly from the first Defendant in his capacity as LLG President. The price agreed was K 60,000.00 for labour only. Although a written contract was prepared, it was not executed by the parties due to reasons only known to the first Defendant. What is clear though, is the work was done. There is evidence of photographs depicting the images of  the two buildings constructed. The works began in May 2016 and completed in July 2016. There are various correspondences showing the genuineness of the work and the invoice rendered for the job immediately after completion.

27.	The Defendants did not deny the work nor the invoice. The defendants were only raising the legal and competency issues which I have addressed. 

28.	 I am satisfied that the Plaintiff through HBM performed the work and are entitled to an award for the full sum of K60,000.00. I am inclined to make an award for the sum of K60,000.00.

Special Damages-K17,740.00

29.	The Plaintiff claims K17,740.00 in special damages for expenses incurred in pursuing payments between August 2016 and February 2017, including the costs for attending the opening ceremony on 15th November 2016. The expenses are for food and travel between Lae and Kainantu, as the Plaintiff and his workers are based in Lae. No invoices have been presented for the travels except for the dates of travel. I will make no award for special damages. 

General Damages

30.	The Plaintiff submits for general damages for pain and inconvenience. The pleading on this claim is not clear. The evidence is insufficient to make an award and is refused.

	Award

31.	The total award shall be K60,000.00.

         Interest

32.	The Plaintiff is claiming interest.  I will allow interest at the rate of 2% on the amount assessed as it involves a Local Level Government Council, a state entity.  Interest is to commence from date of writ of summons, (24/11/2017) to date of judgment (19/11/ 2025) for a period of 2,915 days.  Interest is calculated as follows:

	K 60,000 x 2/100				=       K   1,200.00 per annum
	K 1,200 /365 days				   =    K          3.29 per day
	K 3.29 x 2,915 days				         K   9,590.35

33.	The total award inclusive of interest is	K69,590.35. 

Costs

34.	The Plaintiff is claiming cost.  The Court has a discretion to award costs by virtue of its ancillary powers under Order 12 Rule 1 of the National Court Rules. I will allow costs in favour of the Plaintiff incurred after 14th April 2022. That is because cost of proceedings up to 14th April 2022 were already awarded to the Plaintiff by an order of this Court made on 14th April 2022. 

	Orders

35.      The Court orders that:

1.	Judgment is entered for the Plaintiff in the sum of K69,590.35 
  inclusive of interest.

2.	Post Judgment interest shall accrue at the rate of 2% until settlement.

3.	The first and second Defendants are jointly and severally liable to settle the judgment debt.

4.	The Defendants shall pay the Plaintiff’s costs of the proceedings incurred after 14th April 2022 to be taxed. if not agreed. 

5.	Time is abridged.
________________________________________________________________
Lawyers for the defendants: Daniels & Associate Lawyers