Steven Turik v Mathew Gubag

• Jurisdiction: Papua New Guinea
• Citation: (2013) N5132
• Date: 05 April 2013
• Court: National Court
• Year: 2013

Full : WS NO 957 of 2011; Steven Turik v Mathew Gubag (2013) N5132

National Court: Cannings J

Judgment Delivered: 5 April 2013

CONTRACT—written agreement—alleged breach of contract—circumstances in which a cause of action in quasi-contract may arise—quantum meruit

The plaintiff claimed that he had a written agreement with the defendant under which he would be the sales agent on behalf of the defendant, who wanted to sell a piece of land, and negotiate with potential buyers and upon completion of the sale be paid by the defendant a commission of at least 10% of the sale price. The plaintiff claimed that after considerable time and effort he found a potential buyer and negotiated with him to sell the land for K230,000.00; then while negotiations were ongoing after the plaintiff mentioned to him what was happening the defendant without the plaintiff’s knowledge negotiated directly with the buyer and sold him the land for K180,000.00. The plaintiff asked the defendant for 10% of the sale price. The defendant refused to pay so the plaintiff commenced proceedings against the defendant claiming K18,000.00 commission and damages for breach of contract. The defendant denied liability on two grounds, first that there was no contract and secondly if there was a contract he had not breached it, instead it was the plaintiff who breached the contract as he failed to find a buyer.

Held:

(1) There was a written contract under which the plaintiff was to be paid a 10% commission upon successful completion of a sale that he had negotiated.

(2) There was no breach of contract by the defendant as the obligation to pay a 10% commission to the plaintiff only arose upon a sale that had been negotiated completely by the plaintiff, and here the plaintiff had only engaged in preliminary negotiations with the buyer.

(3) However, the plaintiff established a cause of action in quasi-contract in that he performed services pursuant to a contract and his completion of the contract was thwarted by the actions of the defendant and it would be unjust to allow the defendant to benefit from the contract and the services performed without paying just remuneration to the plaintiff.

(4) The appropriate remedy is to award the plaintiff a quantum meruit (the amount that is merited), ie a reasonable amount of money to remunerate him for services actually performed, which was assessed at half the amount (K18,000.00) that would have been earned if the plaintiff had completely negotiated the sale: K9,000.00.

(5) Interest calculated at the rate of 8% per annum on the quantum meruit from the date of service of the writ was awarded to the plaintiff, in the sum of K856.80; in addition the court, having regard to the fact that neither party was legally represented at the trial, fixed costs payable by the defendant at K1,000.00.

(6) The total judgment sum was K9,000.00 (quantum meruit) + K856.80 (interest) + K1,000.00 (costs) = K10,856.80.

Case cited

The following cases are cited in the judgment:

Delphi Corporate Investigations Ltd v Bernard Kipit (2003) N2480

Egga Pua v Otto Benal Magiten (2005) N2892

Leonard Gaua v Joe & Theresia Amir (2010) N3891

Leontine Ofoi v Kris Bongare (2007) N3248

National Housing Commission v Queensland Insurance (PNG) Ltd [1988-89] PNGLR 474

Paradise Farms Ltd v Bank South Pacific Ltd (2010) N3825

Patterson v NCDC (2001) N2145

Sonny Atua v Grace Kemmah (2012) N4687

Steven Naki v AGC (Pacific) Ltd (2005) N2782

The State v Barclay Bros (PNG) Ltd (2004) N2507

Tinange Tamase v MVIT [1992] PNGLR 244

Veltro Ltd v Steven Liu Huang (2006) N4608

STATEMENT OF CLAIM

This was the trial of an action for breach of a contract for services.

1. CANNINGS J: The question in this case is whether the court should order the defendant Mathew Gubag to pay any money to the plaintiff Steven Turik pursuant to an agreement that the plaintiff claims they entered into in January 2010.

2. The plaintiff claims...