Rabaul Shipping Limited v Peter Aisi First Assistant Secretary, Safety Officer Maritime Division Department of Works and Jerome Ainus Assistant Engineer Survey Maritime Division Department of Works and Cyril Mudalige Principal Ships Surveyor Maritime Division Department of Works and Independent State of Papua New Guinea (2006) N3173

• Jurisdiction: Papua New Guinea
• Judge: Lay J
• Judgment Date: 06 October 2006
• Court: National Court
• Citation: (2006)
• Docket Number: WS 239 OF 2003
• Year: 2006
• Judgement Number: N3173

Full Title: WS 239 OF 2003; Rabaul Shipping Limited v Peter Aisi First Assistant Secretary, Safety Officer Maritime Division Department of Works and Jerome Ainus Assistant Engineer Survey Maritime Division Department of Works and Cyril Mudalige Principal Ships Surveyor Maritime Division Department of Works and Independent State of Papua New Guinea (2006) N3173

National Court: Lay J

Judgment Delivered: 6 October 2006

N3173

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 239 OF 2003

BETWEEN

RABAUL SHIPPING LIMITED

Plaintiff

AND

PETER AISI FIRST ASSISTANT SECRETARY, SAFETY OFFICER MARITIME DIVISION DEPARTMENT OF WORKS

First Defendant

AND

JEROME AINUS ASSISTANT ENGINEER SURVEY MARITIME DIVISION DEPARTMENT OF WORKS

Second Defendant

AND

CYRIL MUDALIGE PRINCIPAL SHIPS SURVEYOR MARITIME DIVISION DEPARTMENT OF WORKS

Third Defendant

AND

INDEPENDENT STATE OF PAPUA NEW GUINEA

Fourth Defendant

Kokopo: Lay J

2006: 6 October

DAMAGES-assessment-role of judge-effect of judgment for liability-challenge to Plaintiff’s claim-Defendants obligation to employ Rules of Court for discover-failure to prove loss claimed.

Facts

The Plaintiff obtained default judgment upon a statement of claim which pleaded that by the Defendants negligent delay in surveying its vessel; the Plaintiff had been prevented from commercially employing its vessel for a period of 57 days (“the stoppage”). The Plaintiff claimed loss of net income for the stoppage. On the hearing for assessment of damages the Plaintiff’s Financial Controller gave evidence that from the Plaintiff’s records he had compiled the gross profit for the 4 months trading before, and the 4 months trading after, the stoppage. The average daily gross profit multiplied by the 57 days was K218,325.56. The Defendants submitted that (a) the Plaintiff had not provided evidence of the facts pleaded in the statement of claim (b) the Defendants evidence showed they had not been negligent, (c) the Plaintiff did not corroborate it’s evidence by production of primary accounting documents such as cheques, receipts and orders (d) the Plaintiff’s witness’s evidence was merely accountants assertions and assumptions (e) the calculations did not provide for contingencies (f) the Merchant shipping Act s55(1) was a complete indemnity against damages claims.

Held

1. On an assessment of damages after entry of default judgment there is no need to provide evidence of the facts pleaded in the statement of claim which are proven by entry of the judgment.

William Mel v Coleman Pakalia, Commissioner of Police, the State SC790 referred to.

2. No weight could be given to the Defendants evidence which sought to contest the finding of negligence established by the judgment.

3. Where the Plaintiff gives evidence which is not inherently improbable, neither the circumstances surrounding the claim nor the Plaintiffs evidence give rise to a suspicion in the mind of the judge that the quantum of the claim is inflated, not bona fide or not in keeping with the expectations of a reasonable person, there is no obligation on a Plaintiff operating a substantial business in a main town to provide primary source accounting documents to prove its claim. If the Defendants want to see those documents they can do so in discovery.

Fisherman Island [1979] PNGLR 202 referred to, and applied; Albert Bairu v The State (1995) N1335; Kopung Brothers Business Group v Sakawar Kasieng (1997) N1631; Peter Wanis v Fred Sikiot & Anor (1995) N1350; Yange Lagan & ors v The State (1995) N1369; MVIT v Tabanto [1995] PNGLR 214; MVIT v Pupune [1993] PNGLR 370, Tabre Mathias Korm & 28 ors v The State and ors [1998] PNGLR 247 and John Tuink Salamon & ors v The State and Others (1994) NI272; Benny Balopa v The State & ors NI374 referred to and distinguished on their facts.

4. The Plaintiff’s witness’s evidence is evidence of the actual financial performance of the Vessel over an 8 month period, it is not mere assertions or assumptions.

5. Calculations and accounts of actual financial performance over an 8 month period include adverse contingencies occurring in that period. Therefore an extrapolation of the daily average will also contain that contingency factor.

6. The Defendants had led no evidence that the Plaintiff should have mitigated its loss, therefore the usual measure of damages applies.

The Solholt [1983] 1 Lloyds Rep 605 and McGregor on Damages 15th Ed para 289 referred to.

7. The Plaintiff claimed loss of “net income”, but proved loss of “gross profit”. There was no evidence by which the court could establish the net income figure. The Plaintiff had therefore failed to prove its claim. The Plaintiff could only have the relief pleaded.

London Passenger Transport Board v Moscrop [1942] 1 All ER 97, Blay v Pollard and Morris [1930] 1 KB 628, Ume More & Ors v University of Papua New Guinea [1985] PNGLR 401 referred to. Chaplin V. Hicks [1911] 2 KB 786, in Biggin & Co Ltd. v Permanite Limited [1951] KB 422, Wilhelm Lubbering versus Bougainville Copper Ltd. [1997] PNGLR 183; Yange Lagan v The State (1995)N1369 distinguished.

8. If the Plaintiff had succeeded Interest claimed pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act would be given at 8 percent from issue of the writ as no other rate or earlier commencement date was pleaded.

Peter Goodenough v The Independent State of PNG (2001) N2157 referred to.

6 October 2006

1. LAY J: This was the hearing of an action for assessment of damages. The writ of summons was filed on 6 March 2003. Judgement on liability and for assessment of damages was entered on 6 February 2004. The various other applications which have come before the Court are not relevant for present purposes.

The Statement of Claim pleaded as follows:

STATEMENT OF CLAIM

1. The Plaintiff is a company incorporated under the laws of Papua New Guinea and has its registered place of business at Section 62 Allotment 8 George Brown Street, Rabaul, East New Britain.

2. The First Second and Third Defendants were at all material times employees of the Fourth Defendant and were therefore acting in their individual capacities as servants and or agents of the Fourth Defendant.

3. The Fourth Defendant, the Independent State of Papua New Guinea, is responsible for the acts and or omissions of the First, Second and Third Defendants as its servants or agents by virtue of Section 1 of the Wrongs (Miscellaneous Provisions) Act Ch 297.

4. In or about June 2002 the Plaintiff as required under the Merchant shipping Act Ch 242 Section 69(2) paid the requested fee and requested the services of a surveyor to carry out the survey of its motor vessel “Condor”” in the prescribed form.

5. The First Defendant being the Safety Officer under Section 69(3) of the Merchant shipping Act Ch 242 owed a duty to the Plaintiff, upon receiving the request of the Plaintiff in the prescribed form, to promptly appoint a surveyor to attend to the said vessel. However he failed to appoint a surveyor as requested.

6. The Third Defendant being the Principle Ships Surveyor was fully aware of Plaintiff’s request however he failed to appoint a surveyor to carry out the required survey and or carry out the survey himself, without advising the Plaintiff of any reason for the delay.

7. As a result of the First, Second and Third Defendant’s single and or collective negligence the Plaintiff has suffered loss of income from June 2002 to October 2002 and damages arising out of the failure to appoint a surveyor for the motor vessel “Condor” particulars of which are as follows:

PARTICULARS

(a) Loss of net income from the months of June-October 2002”

AND THE PLAINTIFF CLAIMS:

1. An order that the Fourth Defendant is vicariously liable for the Plaintiffs loss of net income as a result of the acts and or omissions of the First, Second and or Third Defendant

2. An order that the First Second and Third Defendants are each and severally liable for the Plaintiff’s loss of net income as a result of their individual and or collective negligence

3. Interest pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act Ch 52.

Pursuant to National Court Rules O.9 r.15(b) Judgment was entered in the following terms:

1. The collective amended defence filed on 10 October 2003 by First, Second, Third and Fourth Defendants is struck out.

2. Default judgment is entered in favour of the Plaintiff.

2. Counsel for all parties have treated the hearing as an assessment of damages ordered by the Court. I do not propose to make any issue out of the wording of the judgment but treat it on the same basis as counsel.

3. The Plaintiff relied upon the affidavits of Chaska Ramamurthy sworn on 10 February 2005 and 21 April 2005 and the Defendants upon the affidavits of Jerome Acinus and Cyril Modaline both sworn on 21 January 2005 and filed on 27 January 2005 and the affidavits of Titus Kabuki and Wooli Embodied sworn and filed on 27 January 2005.

4. Mr Ramamurthy said that he has been the Financial Controller of the Plaintiff for some nine (9) years and from the Plaintiff’s records available to him he calculated the gross returns for the Condor for the four (4) full operational months prior to dry docking of the vessel and for the full 4 months after the resumption of trading and after doing the same for direct expenses arrived at a figure representing the daily average gross profit for the operation of the Condor of K3,830.28 per day. In separate proceedings on 26 July 2002 the National...