N11628
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS No. 411 OF 2024-IECMS CC3

BETWEEN:
JASAMIRE LIMITED
Plaintiff

VS

SHANE NINAI
First Defendant

AND

ORO MINERS LIMITED
Second Defendant

WAIGANI: CARMODY J
21 OCTOBER, 5 DECEMBER 2025

DAMAGES – Breach of contract – unpaid rent - assessment of damages – exceptional circumstances requiring additional evidence.

Facts:

The parties entered into a lease agreement with respect to the plaintiff’s rental unit. The first defendant was the tenant and the managing director of the second defendant company. The second defendant company was the lessee. Some months into the term of the lease the second defendant ceased making rental payments. The first defendant vacated the premises before the expiration of the term of the lease agreement. The plaintiff sued for unpaid rent. A new tenant rented the premises for part of the “unexpired portion of the Term”. Default judgment was entered. Damages were to be assessed.

Held:

The plaintiff was entitled to damages equivalent to the unpaid rental periods subject to any rent paid by the new tenant. Where the new tenant’s rental is lower than that under the lease agreement with the second defendant company the plaintiff is entitled to damages in the amount of the difference between the two figures.

Cases cited
Solomay Finance Ltd v Linda Kuri (2017) N7057
Rex Paki v Motor Vehicles Insurance (PNG) Ltd (2010) SC1015
Rodao Holdings Ltd v Sogeram Development Corporation Ltd (2007) N5485
Timothy Patrick v. Pepi Kimas (2010) N3913 
Hadley v. Baxendale (1854) 9 Exch 341

Counsel
Mr S. Kamasunga for the plaintiff
No Appearance for the defendants

JUDGMENT

1.	CARMODY J: On 22 July 2025 judgment by default was entered against the defendants with respect to liability, with damages to be assessed. The plaintiff filed written submissions in relation to damages on 29 September 2025. The trial proceeded on 21 October 2025. There was no appearance by either defendant. The trial was by way of affidavit and oral submissions by counsel for the plaintiff. Judgment was reserved.

2.	The plaintiff’s claim was for breach of contract. The plaintiff sought unpaid rent for the balance of a term of a lease agreement, interest, and costs on an indemnity basis.

3.	This is the judgment with respect to the assessment of damages. It is delivered in the absence of any material from the defendants. 

Background

4.	The plaintiff company owns property and rental units in Port Moresby. 

5.	The first defendant is the managing director of the second defendant company.

6.	On 17 July 2023 a lease agreement (“the Agreement”) was entered into between the plaintiff as landlord, and the second defendant, with the first defendant to occupy the premises as the tenant. The term of the Agreement was from 1 August 2023 to 31 July 2025 (being two years). Monthly rent was K28, 600 inclusive of GST.

7.	Rental payments of K28,600 were made in full and on time from September 2023 to March 2024.  In April 2024 the defendants only paid K27, 800.00 leaving K800.00 outstanding.

8.	The first defendant failed to pay rent from May to August 2024 by which date rental payments in the amount of K115, 200 were outstanding. 

9.	On 31 July 2024 the plaintiff issued a Notice of Closure of property. The first defendant vacated the property around 31 August 2024. The balance of the term of the lease was until 31 July 2025, being 10 months.

10.	The plaintiff made a number of attempts to obtain payment from the defendants. At one point the first defendant agreed to enter into a payment plan and then failed to execute the document evidencing the agreement. 

11.	On 11 November 2024 the plaintiff commenced this proceeding to recover outstanding rental payments by way of damages for breach of contract and indemnity costs. On 11 April 2025 the plaintiff filed an amended writ of summons and statement of claim. 

12.	On 22 July 2025 this Court entered default judgment with respect to liability against the defendants with damages to be assessed. On 21 October 2025 the trial on assessment of damages was conducted by affidavit and submissions. The defendant failed to file a defence and failed to appear.

The Plaintiff’s Claim

13.	In the plaintiff’s amended statement of claim the plaintiff seeks the following:

(a)	Judgment against Defendants for K429, 800.00 as debt due and owing for the outstanding rental to the end of the term of the Lease Agreement.

(b)	Costs of the entire proceeding on an indemnity basis.

(c)Interest pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act 2015.

THE ISSUES

14.	The issues this Court must determine are:

(i)	Has there been a breach of the Agreement?

(ii)	If yes, what damages should be paid to the plaintiff?

(iii)	Should costs be awarded on an indemnity basis?

Has There Been a Breach of the Agreement?

15.	The affidavit of Justin Chong Sen Tan filed 5 August 2025, the director of the plaintiff filed a comprehensive affidavit with supporting documentation including the Agreement, invoices, and relevant communications. He deposes to:

a)	The Agreement having been entered into;
b)	The security deposit being paid;
c)	Rental payments being made from September 2023 to May 2024;
d)	A rental payment of K27,800  having been made in April 2024 with a shortfall of K800;
e)	That from that date on no further payments had been made by the defendants despite demands to do so;
f)	Attempts by the plaintiff to have the outstanding debt paid and an agreement by the first defendant to enter into a payment plan having failed;
g)	The failure of the first defendant to sign the payment plan.

16.	Mr Tan’s affidavit attaches various annexures establishing the truth of the above statements. I accept his evidence.
 
What Damages should be paid to the Plaintiff?

17.	The plaintiff seeks damages of K429,800.

18.	In Hadley v. Baxendale (1854) 9 Exch 341 the Court stated:

“We think the proper rule in such a case as the present is this: where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.” 

19.	Hadley v Baxendale (supra) has been applied in PNG as part of the underlying law – see Rodao Holdings Ltd v Sogeram Development Corporation Ltd (2007) N5485 and Solomay Finance Ltd v Linda Kuri (2017) N7057. As a consequence of the breach of the agreement the plaintiff is entitled to the damages which it ought to receive had the Agreement been fully complied with.

20.	In assessing the quantum of damages the starting point is the Agreement. That document is an annexure to the affidavit of Mr Tan. The relevant clauses are:

2. RENT
The Tenant shall pay to the Landlord the rent at the rate specified in Item 8 in the manner specified in Item 9.
(That amount is K28,600 inclusive of GST per month.)

3. TERM
The term of the Lease shall be for the period specified in Item 10 commencing from the date specified in Item 10. (That period is two years commencing on 1 August 2023.)

(d) Termination:
(v) Without affecting any other right or remedy the Landlord may have, whether under this Lease or otherwise, if the Landlord terminates this Lease or if the Tenant repudiates this Lease the Landlord may sue the Tenant for damages for the loss of rental payable by the Tenant for the then unexpired portion of the Term, subject to the obligation to refund to the Tenant any amount received from any other Tenant of the premises during that unexpired portion of the Term.

21.	With respect to the “Termination” clause, at the trial I asked counsel whether there was any evidence as to whether a new tenant had rented the premises for “the unexpired portion of the Term”. Counsel was not able to assist.

22.	This is a significant issue as it will impact on the quantum of damages. For that reason I took the unusual step of requiring the plaintiff to file a further affidavit deposing as to whether a tenant took up the lease for all or part of the unexpired portion of the lease.

23.	On 25 November 2025 the plaintiff filed a further affidavit deposed to by Mr Sen. He deposed to the premises remaining vacant for five months after the departure of the first defendant. A new tenant entered into a lease from 1 February 2025. One invoice for the current tenant is annexure “B” to the affidavit “B”. The rent including GST is K26,000. 

24.	The first defendant vacated the premises around 31 August 2024. The premises remained vacant until 1 February 2025. That is a period of 5 months at the agreed rental amount of K28,600. Damages are awarded in the amount of K143,000.

25.	To that must be added the period prior to the first defendant vacating the premises during which rent was not paid. That was the period from May to August 2024 being four months at the agreed rental of K28,600. Damages are awarded in the amount of K114,400.

26.	In addition there was the part payment in April 2024 of K27,800.00 leaving K800.00 outstanding. Damages are awarded in the amount of K800.

27.	A new tenant took over the lease on 1 February 2025. The second defendant company’s lease expired on 31 July 2025. That is a period of 6 months. The new tenancy is for a rental figure of K26,000 inclusive of GST. There is, therefore, a shortfall of K2,600 with respect to the K28,600 which was to be paid by the second defendant company. That is a 6-month period of K2,600 per month. Damages are awarded in the sum of K15,600.

28.	A total of K273,400 is awarded in general damages for loss of rent.

29.	I note the discrepancy between the K429,800 claimed by the plaintiff and the K273,400 I have determined to be the appropriate figure. I note the proceedings were commenced on 11 November 2024 at which stage the plaintiff would not have known whether any tenants might be secured to take over the lease. As it eventuated a tenant was secured which reduced the plaintiff’s claim considerably.

Whether or not costs should be on indemnity basis?

30.	At the trial for assessment of damages I asked the plaintiff’s Counsel what exceptional circumstances existed as to justify costs being awarded on an indemnity basis? The plaintiff’s counsel did not provide any reasons or evidence to support the claim for costs on indemnity basis.

31.	The question of indemnity costs has been explored by the Courts on a number of occasions over the years. In Rex Paki v Motor Vehicles Insurance (PNG) Ltd (2010) SC1015, the Supreme Court stated:
“The award of costs on an indemnity basis is discretionary. An order for costs on an indemnity basis may be made where the conduct of a lawyer or a party to the proceedings is so improper, unreasonable or blameworthy that he should be so punished by such an order.”
32.	Similar observations have been made in other decisions – see Timothy Patrick v. Pepi Kimas (2010) N3913 and Concord Pacific Ltd v Thomas Nen [2000] PNGLR 47.

33.	No evidence was led as to the basis for an indemnity costs order. Costs will be awarded on the standard party-party basis.

CONCLUSION

34.	The plaintiff provided all necessary evidentiary documents in support of its claim.

35.	On the basis of the above reasons, I make the following Orders:

i.	The defendants pay the plaintiff damages of K273,400.

ii.	The defendants shall pay interest at 8% per annum on the total judgment sum of K273,400 from the date of filing of the writ of summons until final settlement pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act 2015.

iii.	The defendants shall pay the plaintiff’s costs of the proceeding on a party-party basis, to be taxed, if not agreed.

iv.	The time for the entry of these Orders is abridged to take place upon the signing of the orders which shall take place forthwith.

v.	The file is to be closed.

The Court orders accordingly
________________________________________________________________
Lawyers for the plaintiff: Fiocco & Nutley