Albert Areng v Gregory Babia and National Housing Corporation (2008) N3469

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 10 September 2008
• Court: National Court
• Citation: (2008) N3469
• Docket Number: WS NO 501 OF 2003
• Year: 2008
• Judgement Number: N3469

Full Title: WS NO 501 OF 2003; Albert Areng v Gregory Babia and National Housing Corporation (2008) N3469

National Court: Cannings J

Judgment Delivered: 10 September 2008

N3469

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 501 OF 2003

ALBERT ARENG

Plaintiff

V

GREGORY BABIA

First Defendant

NATIONAL HOUSING CORPORATION

Second Defendant

Madang: Cannings J

2008: 21 February

14 May, 10 September

JUDGMENT

DAMAGES – breach of contract – failure of vendor of real property to transfer title deed to purchaser – plaintiff claims damages for: loss of expected earnings; loss of value of property; general damages.

The National Housing Corporation sold one of its properties to a tenant but breached the contract of sale by not transferring title to the purchaser until 16 years after he was entitled to it. The purchaser authorised his son to sue the Corporation for breach of contract and liability was established through entry of default judgment. A trial was held to assess damages. The plaintiff claimed for three heads of damage: economic loss; loss of value of the property; and general damages.

Held:

(1) The plaintiff and his father could have improved the property and charged more rent for it, if they had the title to it. Economic loss was assessed at K18,000.00.

(2) The claim for loss of value of the property was rejected as it was not pleaded in the statement of claim and there was no evidence to support it.

(3) General damages for distress, inconvenience, hardship and frustration were assessed at K30,000.00.

(4) The total amount of damages awarded was K18,000.00 + 0 + K30,000.00 = K48,000.00.

(5) In addition, interest of K16,512.00 is payable, making the total judgment K64,512.00.

Cases cited

The following cases are cited in the judgment:

Areng v Babia & NHC (2005) N2895

Areng v Babia & NHC (2005) N2928

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

Desmond Huaimbukie v James Baugen (2004) N2589

John Pias v Michael Kodi (2004) N2690

Jonathan Mangope Paraia v The State (1995) N1343

Komboro George v MVIT [1993] PNGLR 477

MVIT v James Pupune [1993] PNGLR 370

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

Rodao Holdings Ltd v Sogeram Development Corporation WS 521/2001, 23.02.07

Yooken Paklin v The State (2001) N2212

TRIAL

This is a trial on assessment of damages.

Counsel

B W Meten, for the plaintiff

J Kolkia, for the defendant

10 September, 2008

1. CANNINGS J: The plaintiff, Albert Areng, has successfully sued the National Housing Corporation for breach of contract and has come to the court for an assessment of damages.

2. The plaintiff’s father, Michael Areng, was the tenant of a NHC house in Newtown, Madang. Mr Areng and the family moved in during 1974. In 1985 he entered into a contract with the NHC to purchase the house. He finished paying it off at the end of 1989. But the NHC did not transfer the title deed to him. This went on for years. Mr Areng tried to get the title deed but the NHC failed to comply. In 2003 he authorised his son to commence this case against the NHC. The plaintiff sought an order that title be transferred to his father, plus damages for breach of contract.

3. The NHC failed to file a defence and liability was established through entry of default judgment in 2003. The NHC made two unsuccessful attempts to have the default judgment set aside (Areng v Babia & NHC (2005) N2895 and Areng v Babia & NHC (2005) N2928). In 2006 the National Court ordered that the title be transferred; and that has been done, 16 years after it should have been. This judgment is about assessment of damages.

4. I am not satisfied that the first defendant, Gregory Babia (the NHC’s regional manager) has been given proper notice of these proceedings. So I will only assess damages against the second defendant, the NHC.

5. The plaintiff is claiming damages for:

· loss of expected earnings, K87,800.00; and

· loss of value of the property, K100,000.00; and

· general damages, K50,000.00; being

· a total damages claim of K237,800.00, plus interest.

IS THE PLAINTIFF ENTITLED TO DAMAGES FOR LOSS OF EXPECTED EARNINGS?

6. The plaintiff is saying that if title had been transferred to his father when it should have been, they would have been able to get a bank loan, renovate the house and charge more rent for it. Because they had no title deed, the banks turned them away. His father has not been living in the house for a long time, instead choosing to rent it out for K150.00 per month. The plaintiff claims that they would have been able to get K350.00 rent per fortnight, about K700.00 per month.

7. I understand the logic behind this claim but there is not a lot of evidence to support it. As Mr Kolkia, lawyer for the NHC pointed out, even though the NHC presented no evidence, the plaintiff at all times bears the onus of proving his losses on the balance of probabilities. It is not sufficient to make assertions in a statement of claim or in submissions and then expect the court to award what is claimed. The burden of proving a claim is upon the party alleging it, not the party who denies it (Peter Wanis v Fred Sikiot and The State (1995) N1350; Yooken Paklin v The State (2001) N2212).

8. Mr Kolkia submitted that the plaintiff should be awarded nothing for economic loss as he has not proven that his father was engaged lawfully in business and paying taxes on the rental income he was receiving. This is true as no records of the receipt of rent have been adduced in evidence. The court only has the plaintiff’s affidavit and his oral evidence to go by.

9. However, the fact that damages cannot be assessed with certainty does not relieve a 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).

10. I do not think it would be fair or just to award nothing for economic loss. There is sufficient evidence (in the form of a statement by the BSP Madang branch manager) that the plaintiff’s father was unable to obtain a loan to improve the property because he could not produce the title deed. I find that this was the case for a period of 15 years (from 1991, when the property was first rented out) to 2006 (when the NHC transferred the title to the plaintiff’s father). I estimate that, if a loan had been obtained and the house renovated, the net gain for the plaintiff’s father would have been K100.00 per month. I therefore assess economic loss as:

K100.00 per month x 180 months (15 years) = K18,000.00.

IS THE PLAINTIFF ENTITLED TO DAMAGES FOR LOSS OF VALUE OF THE PROPERTY?

11. The same reasoning that underpinned the claim for economic loss applies here: the plaintiff’s father could not get a bank loan as he had no title deed, so he could not improve the property, so he has lost out. The capital value of the property is a lot less today than what it would have been if the NHC had transferred the title when they should have.

12. There are major problems with this claim. It is not a head of damage that is expressly pleaded in the statement of claim. There is a claim for K100,000.00 for “breach of contract”. But that is too vague. The particular head of damage must be set out in the statement of claim, so that the defendant is put on notice as to what it has to respond to. As Mr Kolkia correctly pointed out in his submission, in a civil case, the pleadings drive the evidence. A plaintiff must plead the type of damages he is claiming in the statement of claim and then adduce evidence to substantiate the claim. If evidence is adduced of something that was not pleaded in the statement of claim, that evidence is irrelevant (MVIT v James Pupune [1993] PNGLR 370; Komboro George v MVIT [1993] PNGLR 477; Desmond Huaimbukie v James Baugen (2004) N2589; John Pias v Michael Kodi (2004) N2690).

13. Likewise, if the nature of a plaintiff’s claim only becomes clear during the course of submissions – and there is no evidence to support the claim – the claim will almost invariably be rejected.

14. That is the case here. It only became clear when Mr Meten was presenting his submission that the plaintiff was claiming K100,000.00 for loss of value of the property. There is no evidence to support this claim. Not only that, it is not pleaded in the statement of claim.

15. I refuse the claim and award nothing.

IS THE PLAINTIFF ENTITLED TO GENERAL DAMAGES?

16. Mr Meten submits that K50,000.00 should be awarded to compensate the plaintiff for the distress, inconvenience, hardship and frustration caused to the plaintiff and his father as a result of the NHC’s conduct. He refers to my decision in a recent Madang case, Rodao Holdings Ltd v Sogeram Development Corporation WS 521/2001, 23.02.07, in which I awarded the plaintiff K50,000.00 damages for distress, inconvenience and frustration in a breach of contract case.

17. Mr Kolkia submitted that nothing should be awarded as there is no evidence to support it. I reject that submission as this is one claim that is well documented. It is very clear from the plaintiff’s affidavit and his oral evidence that he and his father have been trying conscientiously to get the title to the property sorted out over many years. Inefficiency and administrative incompetence on the part of the NHC are clearly the reasons it took 16 years to get the title transferred. It is easy to understand how this continued bureaucratic bungling over such a...