Komaip Trading v Waugulo and The State [1995] PGLawRp 663; [1995] PNGLR 165 (4 October 1995)

PNG Law Reports 1995

[1995] PNGLR 165 - Komaip Trading v George Waugulo and The State 

[1995] PNGLR 165

N1367

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

KOMAIP TRADING

V

GEORGE WAUGULO

THE STATE

Mount Hagen

Woods J

16 August 1995

 4 October 1995

DAMAGES - Assessment of damages - Wrongs by the State - Damage to property - Police destruction of a commercial business.

ASSESSMENT OF DAMAGES - Proof of damages - Loss of stock in trade - Loss of profit - Exemplary damages against police officer.

Facts:

The police under the command of the first defendant raided the premises of the plaintiff, a trading company conducting business in wholesale and retail trading, fast food outlet and fuel and type service. During the raid (conducted without a lawful warrant) the business premises were looted and completely destroyed.

Judgement by default was entered against the defendants and the matter came before the court for assessment of damages.

Held:

N1>1.       Whilst no properly certified records of the value of property, stock in trade and no accounts were kept, the court is entitled to rely on the evidence before it as guide in the assessment of damages. Hence a total of K433,940 was awarded in damages for th eloss of stock and cash on hand, nad for structural improvement including plants and equipment, and interest at 8% from date of issuance of the writ.

N1>2.       Since no proper business records were kept, it was not practicable to properly assess and award economic loss or loss of expected profits.

(Ed. note: In this regard see Graham Meppa v PNG Electricity Commission at p of this report).

N1>3.       Exemplary damages is punitive and the State is not vicariously liable, but the the first defendant who was the leader of the perpetrators of the wrongful acts is liable.

Counsel

S Norum for the plaintiff

H Kiele for the State

4 October 1995

WOODS J: This is a claim for damages following the destruction of property in Laiagam by police under the command of the first defendant on 20 October 1991. It is claimed that the police came to Laiagam during some tribal disturbance outside the town and for no good reason they looted and destroyed the premises of a trading company called Komaip Trading which conducted a substantial retail and wholesale shopping business in Laiagam as well as a Kai Bar and also a fuel and tyre service.

The State had failed to properly defend the matter and judgment by default has been ordered against the defendants and this matter has now come before me for an assessment of the damages. The State has appeared on the assessment of damages and there has been nothing presented to this court which suggested in any way that the State or the police had any good legal authority or reason to cause this destruction.

The evidence of the destruction of the property was given by Daniel Ikio the founder of the company and his wife and relatives. The day was a Sunday but they were trading as usual and without any warning a large number of police and vehicles came to the premises and with no warrant they arrested Daniel and proceeded to loot the store and residence and then deliberately set alight premises and caused the destruction of the business premises. Their story of the destruction is supported by the evidence of the resident Magistrate in Laiagam Mr Anthony Willie who came to the scene when he saw the disturbance.

An employee James Neap who was a driver for the business and used to do wholesale deliveries as well as roadside pyrethrum purchases supports the story and his evidence also supports the size and complexity of the business. Daniel Ikio had built up the business over a number of years with the help of his family from a small tradestore to the largest business activity in Laiagam. Unfortunately, however, Daniel Ikio was not a man of any special education but rather a village man who had built the business through hard work and a natural aptitude. He knows nothing about accounting and the requirements of the law relating to business activity. He had before the incident registered the name of the business. He had been visited in 1990 by a distant relative who happened to be an accountant in Port Moresby and who was surprised at the size and complexity of the enterprise and was concerned at the lack of proper accounting practices and the possible evasion of tax liability. This was a Mr Andy Tungal an accountant employed in the Auditor-General’s Office who gave evidence of his visit to Laigam in 1990 and his attempts to get his uncle to adopt proper accounting methods. Mr Tungal discovered in 1990 that Daniel Ikio’s son had been keeping some basic books and records such as stock sheets, cash payments, cash book registers and expenditure on assets, the latter he stated was an acceptable asset register. He also got involved in counting what stock was there in 1990, a stock-taking exercise. From all the above he prepared a set of accounts for the year 1990 and this was presented in evidence. Of course it had never been properly certified, nor had it been signed by Mr Ikio before the incident in October 1991. After the incident in October 1991 the existence of properly certified accounts loomed critical. The destruction of the property also meant the destruction of all the records used by Mr Tungal apart from copies he had kept.

A real estate valuer a Mr Noa Kana was asked to do a valuation of the property although this was some years after the destruction. In so far as he was able to do this he did it from inspecting the site of the destruction and from what he was told about the business.

Whilst therefore there is a lack of properly certified records of the value of the property and the stock in trade and generally of the business, I feel that this court is entitled to place some weight and credibility on the evidence that has been brought. From the evidence of the extent and variety of the business conducted I see no reason to discount the value of K139,000 placed by Mr Noa Kana on the buildings that were destroyed.

For the stock in trade I have no reason to discredit the evidence of Andy Tungal as to how he prepared the 1990 set of accounts which showed that trading stock at the end of 1990 was K354,000. Whilst that does not show what was on hand on the date of the destruction, that figure must give a guide to what would have been there. Normally of course a business of this size would have assessed its worth by an insurance cover duly confirmed by an insurance assessor which would be the normal guide for any loss or destruction like this. In the absence of something like that the court can only make a conservative assessment. I will assess a figure of K250,000 for stock on hand and plant and equipment and furniture and fittings lost in the destruction.

There is no clear evidence that any vehicles owned by the plaintiff were destroyed.

The plaintiff is also claiming that a substantial amount of cash was lost in the fire, it being a Sunday so he had at least two days taking on hand for banking on the Monday. There is no exact record of the amount but by going on the cash flow as shown in bank statements, I will allow an amount of K9,000 for cash on hand lost.

The plaintiff is also claiming economic loss or loss of expected profits. Unfortunately there are no taxation returns to confirm that there were annual profits on which tax had been paid. The law is quite clear that if you wish to operate a modern business you must comply with the modern laws because it is only by such compliance and the payment of your share of taxes that people have a modern world to do business in. Whilst this court must sympathise with the plight of a hardworking man who has built up such a viable business and who has had to face such wilful and criminal destruction by officers of the State, to claim profits you must have disclosed them according to the law.

To summarise the loss and destruction of property.

Buildings - structural improvement	K139,000.00
Stock on hand & plant & equipment etc	K250,000.00
Cash on hand	K 9,000.00
	K398,000.00
Interest @ 8% from date of Writ	K 35,940.00

K433,940.00

The above assessment of damages is the compensation for the breach of the plaintiff’s constitutional rights namely the destruction of their property by officers of the State. I have been asked to consider exemplary damages however as has been ruled in other cases exemplary damages are a matter of special consideration. In cases like this where the police have obviously acted too strongly, unless there is clear Government policy or directive for the police to act the way they have, how can the People as embodied in the Preamble of the Constitution as the State be punitively responsible for conduct which is really conduct in the independent discretion of the individual police officers involved. I will award exemplary damages against the police officer concerned and the apparent leader of the squad of police is named and has not appeared to give his version of the incident to contradict the allegations made by the plaintiff. The actions of the police resulted in the destruction of a successful trading venture. I find it of great concern that with all the Government pronouncements over the past years for people to work hard in the Provinces and build up viable business ventures, when a man like Daniel Ikio with no education does just that and builds what became the largest business venture in one of the most difficult parts of the country, some irresponsible police can destroy it for no apparent reason. This must be shame on the police concerned and the relevant authorities that they allowed this to happen. I will make an additional award of exemplary damages against George Waugulo of K70,000. I wonder why criminal proceedings have not been taken against him and any other officers concerned.

I order judgment against both defendants in the sum of K433,940.00.

I order judgment for a further amount against the first defendant George Waugulo of K70,000.

If the judgments are not paid by 21 days after the taking out of the Order for judgment then interest will run on the judgments at 8% till paid.

Lawyer for the plaintiff: S. Norum

Lawyer for the defendant: Solicitor-General