Kinsim Business Group Inc v Joseph Hompwafi, John Kalaut and The Independent State of Papua New Guinea

• Jurisdiction: Papua New Guinea
• Judge: Bidar AJ
• Judgment Date: 18 September 1997
• Court: National Court
• Year: 1997
• Judgement Number: N1634

National Court: Bidar AJ

Judgment Delivered: 18 September 1997

N1634

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

W.S. NO. 766 OF 1996

BETWEEN: KINSIM BUSINESS GROUP INC.

PLAINTIFF

AND: JOSEPH HOMPWAFI

FIRST DEFENDANT

AND: JOHN KALAUT

SECOND DEFENDANT

AND: THE INDEPENDENT STATE OF PAPUA NEW GUINEA

THIRD DEFENDANT

Madang

Bidar AJ

10 June 1997

4 August 1997

6-7 August 1997

18 September 1997

DAMAGES — Police raid and confiscation of stock of beer — at liquor trading outlet — Return of some cartons — conversion of others — Assessment of — Restitutio in integrum — subject to other principles — Including remoteness of damage and duty to mitigate loss.

DAMAGES — Evidence — requirement to establish proof by production of business records — Taxation matters etc — Trading assumptions — not proof of modern business practices.

Held

(1) State is liable to pay damages for trespass to goods by members of the Police Force in the execution of their duty.

(2) In the Police raid cases, it is now settled law that individual policemen identified be liable to pay exemplary damages (Abel Tomba and Peter Kuriti's cases and also Obed Lalip & Ors. -v- Fred Sheekiot and the State unnumbered Supreme Court Judgement dated 22/04/97).

(3) In the circumstances, plaintiff did not discharge the onus as to loss of entitlements, business, market and other consequential reliefs claimed.

Cases Cited

John Tuink Salamon & Ors. -v- The State [1994] N1272

Livingstone -v- Rawyards Coal Co. (1980) 5 App. Cas. 25 (HL)

Butler -v- Egg & Egg Pulp Marketing Board (1966) 114 C.L.R. 185

The Albazero [1977] A.C. 774 (HL)

Johnson -v- Agnew [1980] AC 367 (HL)

General Tyre & Rubber Co. Ltd -v- Firestone Tyre & Rubber Co. Ltd [1995] 2 ALL E R 173 (HL)

Enga Enterprises Pty Limited -v- Danny Porakali [1995] N1359

Graham Mappa -v- PNG Electricity Commission [1995] N 1366

Peter Wanis -v- Fred Sheekiot and The State [1995] N1350

Whitfield -v- De Lauret & Co. Ltd (1920) 20 C.L.R. 71

Pike Dambe -v- Augustine Peri & The State [1992] PNGLR 4

Helen Jack -v- Marius Karani & The State [1992] PNGLR 391

Thresia Kandapen -v- The State [1995] N1336

Opa Pu -v- John Dupai & The State Unnumbered National Court Judgement dated 8.3.95

Aimon Aure & Ors. -v- The State & Ors. [1995] N1346

Peter Kuriti -v- The State [1994] N1271

Abel Tomba -v- The State [1997] SC 518

Peter Kuriti -v- The State [1997] Unnumbered Supreme Court Judgement dated 7.4.97

Komaip Trading -v- The State & Ors. [1995] N1367

James Koimo -v- The State [1995] N1322

Texts

Luntz H. Assessment of Personal Injury and Death — 3rd Ed. p. 3 para 1.1.3

Mcgregor, on Damages. 14th Ed. p. 226 para 309.

Mcgregor, on Damages. 15th Ed. para. 1357

Halsburys Laws of England Vol. 12. Para. 1159, 1161, and 1190.

Legislation

Claims by And Against The State Act s. 12.

Counsel

Mr G Langtry: For the Plaintiff

Mr L Pukali: For First and Second Defendants (Until withdrawn).

Mr J. Kawi and R. Saronduo: For the Third Defendant.

JUDGEMENT

BIDAR AJ: In this case, I am concerned only with assessment of damages in an action based on police raid and confiscation of stock of beer on plaintiff's liquor trading outlet.

Liability was determined with entry of default judgement against defendants on the 10 June 1997. Hence, the matter is before me on assessment of damages only.

It follows that it is necessary to state the facts. Plaintiff is a holder of liquor dealer's licence and based at Parom Village, East Sepik Province. On the 1st October 1995, while the Manager and Proprietor of the plaintiff's business group was away in Madang on a business trip, Wewak Police under the command of First and Second Defendants raided the plaintiff's liquor outlet and confiscated 364 cartons of beer. When the manager, and proprietor, Mr John Simi returned he was arrested and charged for illegally trading and indirectly permitting illegal sale of liquor contrary to the provisions of East Sepik Provincial Liquor Licensing Act.

On the 7th December 1995, Mr Simi defended the charges against him successfully and was acquitted by Wewak District Court.

Among other orders, the Wewak District Court ordered Police to immediately return 364 cartons of beer then still under police custody. Police returned 283 cartons of beer. The other 81 cartons were never returned at all.

RELIEF SOUGHT

Paragraph 8, 9, 10 and 11 of the Plaintiff's Statement of Claim sets out the basis of the plaintiff's claim. I reproduce the paragraphs hereunder.

"8. The plaintiff was unable to sell the said 364 cartons of beer between 1st October and 7th December 1995 and therefore lost trading and profit.

9. The plaintiff's losses were caused directly by First Defendant's omission to make reasonable enquires or assessments before exercising his police powers in the circumstances involving a licensed trader with trade goods of huge quantity.

10. The second defendant caused the plaintiff's loss also by not exercising his discretions properly because had he done so, no criminal charges would have been laid and the said stock of beer would have been returned immediately without causing any losses.

11. The plaintiff claims from the defendants jointly and severally as follows:

Loss of SalesK179,816.00Loss of Net Profit7,146.00Unsold Stock Claim12,399.00Loss of Entitlements11,483.00TotalK210,844.0012. The plaintiff further claims exemplary damages and Costs."

From the paragraphs reproduced in the plaintiff's statement of claim, the plaintiff's action is based on trespass to goods, illegal detention of 364 cartons of beer, conversion and detinue with respect to 81 cartons of beer unaccounted and lost while in police custody and loss of profit arising from sale of beer.

Plaintiff also claims consequential damages including claim for unsold stock, loss of entitlements, loss of market etc.

The plaintiff's evidence consist of oral and affidavit evidence by its Manager and Proprietor. He was cross-examined on both oral and affidavit evidence by Counsel for the State. Plaintiff's evidence is that, on the 1st October 1995, Police raided it's liquor outlet at Parom village, Wewak and confiscated 364 cartons of beer, while it's manager and proprietor, Mr John Simi was away in Madang on a business trip. Mr John Simi was subsequently arrested and charged with a count of illegal trading and a count of indirectly permitting illegal sale of liquor, contrary to the provisions of East Sepik Provincial Liquor Licensing Act. He appeared before Wewak District Court on the 7th December 1995 and was acquitted of the charges. Among other orders, the Wewak District Court ordered immediate return of 364 cartons of beer to the plaintiff. Of the 364 cartons of beer, only 283 cartons were returned and 81 cartons were not accounted for. Mr Simi admitted on cross-examination the return of 283 cartons of beer by police. uring the relevant period a Provincial liquor ban in the East Sepik Province, necessitated the plaintiff to sell 283 cartons of beer at a much lower price of K15.00 per carton, thereby rendering a loss of profit. Plaintiff normally sold beer at K38.00 per carton, prior to police raid and Provincial Liquor ban. In cross-examination, Mr Simi told the Court the stock of beer was bought at Lae and shipped to Wewak.

The freight and relevant taxation was included in the 364 cartons of beer. When the stock of beer landed at Wewak Wharf, plaintiff incurred K100 to transport stock of beer to it's liquor outlet at Parom village. On further cross-examination, Mr Simi was unable to produce any business records, bank statements or group tax etc, as he left them back in Wewak.

The second witness for plaintiff was Mr Bruno Kaipa. Mr Kaipa is Financial Controller with Leslie Wungen and Co. and a registered public accountant. His evidence is contained in an affidavit sworn on the 24th July 1997. He prepared a statement of account in relation to plaintiff's records of earnings and losses. The statement of account he prepared was based on information provided to him by the plaintiff's manager, Mr John Simi, and the invoice from SP Brewery. He admitted the statement of account is based on actual sale and losses of 364 cartons of beer and not 283 cartons which were returned to the plaintiff by police. Again, this witness was not able to produce bill of account invoice from SP Brewery and business records for the same reason that they were left back at Wewak.

The State did not call any evidence, the reason was that the policemen, Joseph Hompwafi and John Kalaut, being first and second defendants withdrew during the trial of the action.

On the evidence, it is incumbent upon the plaintiff to produce business records, such as profit and loss accounts, sales records, bank statements, group tax returns etc to prove business operations and viability of the business. Failure to do so does not assist plaintiff's cause, particularly the validity of the claim against the defendants.

There is affidavit evidence by Bruno Kaipa to support...