Niugini Civil & Petroleum Ltd v West New Britain Development Corporation Ltd and Michael Gibson and West New Britain Provincial Government (2008) N3292

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 26 March 2008
• Court: National Court
• Citation: (2008) N3292
• Docket Number: WS NO 1418 OF 2004
• Year: 2008
• Judgement Number: N3292

Full Title: WS NO 1418 OF 2004; Niugini Civil & Petroleum Ltd v West New Britain Development Corporation Ltd and Michael Gibson and West New Britain Provincial Government (2008) N3292

National Court: Cannings J

Judgment Delivered: 26 March 2008

N3292

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1418 OF 2004

NIUGINI CIVIL & PETROLEUM LTD

Plaintiff

V

WEST NEW BRITAIN DEVELOPMENT CORPORATION LTD

First Defendant

MICHAEL GIBSON

Second Defendant

WEST NEW BRITAIN PROVINCIAL GOVERNMENT

Third Defendant

Kimbe: Cannings J

2007: 6, 11 December

2008: 26 March

CONTRACT – assessment of debts due under contract – assessment of damages for breach of contract.

The plaintiff commenced proceedings against the defendants, claiming debts due under a contract and damages for breach of contract. Default judgment was entered against the defendants. This was a trial on assessment of debt and damages.

Held:

(1) The debts claimed by the plaintiff have been adequately pleaded and proven and therefore judgment was entered in the sum of K237,349.88.

(2) The claim for damages for breach of contract has been inadequately particularised and suffers from a lack of evidence. However, the sum equal to 10% of the amount of the debt was awarded, ie K23,734.99.

(3) The total amount of debt and damages awarded was K261,084.87.

(4) Interest and costs are also payable by the defendant.

Cases cited:

Albert Baine v The State (1995) N1335

Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24

Jonathan Mangope Paraia v The State (1995) N1343

Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331

Livingston v Raywards Coal Co [1880] 5 App Cases 25

Misac Pokonoming v Jeffery Simiri, WS No 1596 of 2005, 26.10.07

Niugini Civil and Petroleum Ltd v West New Britain Development Corporation Ltd and Others (2005) N2909

Obed Lalip and Others v Fred Sikiot and The State (1996) N1457

Peter Wanis v Fred Sikiot and The State (1995) N1350

Yange Lagan and Others v The State (1995) N1369

Yooken Paklin v The State (2001) N2212

ASSESSMENT OF DEBT AND DAMAGES

This was a trial on assessment of debt and damages following the entry of default judgment in favour of the plaintiff.

Counsel

G Linge, for the plaintiff

E Ragi, layperson, with leave of the court, for the First Defendant

No appearance for the Second or Third Defendants

26 March, 2008

1. CANNINGS J: This is a trial about assessment of debts due under a building contract and assessment of damages for breach of that contract.

2. The contract was between the plaintiff, Niugini Civil & Petroleum Ltd, and the first defendant, West New Britain Development Corporation Ltd. It was for upgrading and extension work on the accident and emergency department and the antenatal facility at Kimbe General Hospital. The contract was entered into in January 2002 and NCP completed the work in November 2002.

3. From January to July 2002, WNBDC paid NCP K500,624.38 for work done under the contract but then a dispute arose. WNBDC refused to pay any more and claimed that NCP still had to do remedial work.

COURT PROCEEDINGS

4. The parties remained at loggerheads until 20 October 2004 when NCP filed the writ now before the court.

5. WNBDC’s executive director, Michael Gibson, was named as second defendant and the WNB Provincial Government, which owns and controls WNBDC, was named as third defendant.

6. The statement of claim sought debts due under the contract totalling K237,349.88 and general damages of K200,000.00 for breach of contract. The breach of contract was claimed to have been committed on 14 May 2004 when the first and second defendants unilaterally varied the contract, thereby unlawfully repudiating it.

7. The case was the subject of various interlocutory proceedings over a period of more than three years. In October 2005 I refused a motion by the defendants to stay the court proceedings and refer the dispute to arbitration (Niugini Civil and Petroleum Ltd v West New Britain Development Corporation Ltd and Others (2005) N2909).

8. Blake Dawson Waldron Lawyers of Port Moresby represented the defendants in that period but they ceased to act for them on 18 July 2007.

9. On 19 July 2007 default judgment was entered in favour of NCP, ie the defendants were found liable for unpaid debts due under the contract and for damages for breach of contract, with the amount of the debts and the damages subject to assessment.

DEBTS DUE UNDER THE CONTRACT

10. The plaintiff claims the amounts set out in the following table.

a Unpaid Progress payment being claim 9 certified by K65,558.52
the first defendant on the 25 February 2005 as due and
owing to the plaintiff

a 5% retention Fee payable/allowable under the contract (cl 10 and K29,799.10
item Q at page 39 of appendix)

a Amount owing as Penalty at 8% (cl 10 and item L at page 38 of K23,972.42
appendix)

a Unpaid Variations (in terms of cl. 10.4 and 10.14.2 item K at K32,803.84
page 38 of appendix)

a Additional costs of completion K85,216.00

Total K237,349.88

11. Mr Ragi, WNBDC’s managing director, who, with the leave of the court (and without objection from Mr Linge, for NCP) appeared for WNBDC at the trial, could not effectively counter those claims and raised no concerted objection to the calculations. I am satisfied that they are in accordance with the contract and are debts fairly payable by WNBDC to NCP.

DAMAGES

12. The plaintiff is claiming K200,000.00 general damages for breach of contract.

13. In determining this claim, some basic rules about assessment of damages must be applied, in particular:

· In a civil action, the purpose of an award of damages is to put the innocent party in the same position, as far as possible, as they would have been in if the wrongdoer had not committed the wrongful act (the breach of contract). (Livingston v Raywards Coal Co [1880] 5 App Cases 25.)

· 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 AJ.)

· 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 or summary 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.)

· 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.)

14. In light of those principles, I have to say that I am not greatly impressed by the evidence in support of this claim. It is vague and unsubstantiated. The pleadings are also deficient as they fail to particularise how and to what extent the plaintiff has suffered due to the breach of contract.

15. What saves the plaintiff from being awarded nothing, however, is the last principle mentioned: the court will do the best it can on the available evidence. I will take a similar approach to the one taken in a recent Buka case, Misac Pokonoming v Jeffery Simiri, WS No 1596 of 2005, 26.10.07. I will award an amount that I consider is fair in all the circumstances, a nominal amount which will compensate the plaintiff for the presumed loss of business income and inconvenience caused by the breach of contract. I assess damages at ten per cent of the amount of the debt that has been proven.

16. Thus K237,349.88 x 10% = K23,734.99.

SUMMARY OF DEBT AND DAMAGES AWARDED

17. Total debts due and payable under the contract = K237,349.88.

General damages = K23,734.99.

Total amount of debt and damages awarded = K261,084.87.

INTEREST

18. In the statement of claim the plaintiff claimed interest as per statute, which I regard as a claim for interest under the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52.

19. Section 1 is the appropriate provision. It states:

(1) Subject to Section 2, in proceedings in a court for the recovery of a debt or damages the court may order that there be included in the sum for which judgment is given interest, at such rate as it thinks proper, on the whole or part of the...