Campbell v North West GKM Pty Ltd [2003] PGNC 87; N2403 (14 February 2003)

N2403

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO: 225 OF 1995

BETWEEN:

GARRY CAMPBELL
-Plaintiff

AND:

NORTH WEST GKM PTY LTD.
-First Defendant

AND:

NORTH WEST BOUGAINVILLE DEVELOPMENT CORPORATION
-Second Defendant

KOKOPO: Lenalia, J.
2002: 19 Dec. 2002, 14 Feb. 2003

CIVIL LAW – Default Judgment – Liquidated demand – No assessment of damages required – where there is liquidate sum – Salaries and Pro-Rata Leave entitlements – Repatriation and air-fares.

CIVIL LAW – Interest on debts and damages – Interest accrues from date of filing of Writ – Date of judgment – Inordinate delay in making submissions – Duty to mitigate – Interest sums from filing of Writ to date of entry of judgment – Deduction on interest for gross delay on part of Plaintiff.

CASES CITED:

The following cases are cited.
Pinzer -v- Bougainville Copper Ltd [1985] PNGLR 160
Martha Limitapa –v- Independent State of Papua New Guinea [1988-89] PNGLR 364
Wallace -v- Motor Vehicles Insurance (PNG) Trust [1991] PNGLR 341
Parsons -v- Mather & Platt Ltd [1977] 2 All ER

Counsel:
T. Tamusio, for the Plaintiff
No appearances for the Defendants

14 February 2003

LENALIA, J. The brief facts of the case show that the Plaintiff is a citizen of New Zealand. He came to Papua New Guinea in November of 1988 and was employed as a Boiler Maker Foreman at Arawa by the Second Defendant. The same claimed that he was terminated without notice and he commenced proceedings against the two Defendants for unlawful termination claiming damages for salaries for the months of December 1994 and January 1995.

He also claimed for payment of one month salary in lieu of notice, pro-rata leave entitlements, repatriation and leave entitlements and air fares from Bougainville to New Zealand. He also has claimed for daily allowances, general damages for distress and frustration plus the interest according to the Judicial Proceedings (Interest on Debts and Damages) Act, Ch. No. 52.

The Plaintiff obtained a default judgment entered in his favour way back on 8th of August 1997. Mr. Tamusio of counsel for the Plaintiff submitted to this Court that soon after the entry of the default judgment was made in favour of their client, he made submissions through the Assistant Registrar’s office here at Kokopo but somehow such submissions had been misplaced. I shall shortly return to this argument later.

Other than the above explanation, no other reasons have been given to this Court how and why there had been a gross delay on the part of the Plaintiff to enter the judgment on the Registry’s office for immediate settlement.

On my observation of the whole claim, a default judgment had been entered in favour of the Plaintiff and the matter before me is a liquidated demand and the National Court Rules require that where a relief claim against a defendant is a liquidated sum, the judgment entered must be only for the amount claimed in the Statement of Claim. Order 12rr.26, 27 (1)(2), National Court Rules 1983.

The amounts claimed in the Writ and the various sub-headings in the Statement of Claim include such particulars as a two months salaries for the months of December 1994 and January of 1995, payment of one month salary in lieu of notice, pro-rata leave entitlements, repatriation and air fares from Bougainville to New Zealand, loss of salary from February 1995 to July in 1997, a daily allowance and for general damages for distress and frustration.

My view is what the plaintiff has claimed for were what lawfully due to him under their contract of employment and the Plaintiff says in his supplementary affidavit that despite his hard work in moving the buildings owned by the two Defendants to another sight at Ton Village and his assistance to the General Managers of the two Defendants his services were not recognized and he was laid off with a cheque of K5,184.36 which was subsequently bounced. That payment was for two months salary only.

I have a few matters to further discuss on this claim. First, on the claim for damages on distress and frustration. The amount submitted by Mr. Tamusio as K6,000.00 over 100% which will give the amount arrived at is in my view very excessive. In any event O.12 r27 (1) of the Rules precludes this Court from entering and ordering more than what the Plaintiff has claimed for in the Writ. O. 12 r 27 (1) provides:

"(1) Where the plaintiff's claim for relief against a defendant in default is for a liquidated demand only, the plaintiff may enter judgement against that defendant for a sum not exceeding the sum claimed in the statement of claim on that demand and for costs". (emphasis added).

In the Writ, the Plaintiff claimed a sum of K1,000.00 for general damages on distress and frustration and general disappointment. I do not see any logic in raising the rate to anything higher than what the Plaintiff has claim for and I would not accept that part of their submission.

The second matter needs to be addressed is the interest component placed on the Plaintiff’s claim. The interest claimed on the amount due to the Plaintiff is being put at K77,360.42. This amount is by far the second greatest component of the total claim. I make specific mention of the inability of the Plaintiff and his lawyers to quickly trace the misplaced submissions, which was supposedly submitted through the Registry Office and somehow were misplaced.

It took the Plaintiff from 8th August 1997 from when the Default Judgment was entered to 19th December 2002 when the final assessment was done to compile a replacement submissions for a liquidated claim. The law on interest is regulated by a number of statutory authorities. First, the Judicial Proceedings (interest on Debts and Damages) Act, Ch. No. 53 which contains only three sections. The wording of Subsection (1) of Section 1 of the above Act provides that in a proceedings before a Court for recovery of debt or damages, the Court may order interest. I quote s.1 and Subsection (1) in the following terms:

"1. Interest on certain debts and damages.

(1) Subject to Section 2, in proceedings in a court for the recovery of a debt or damages the court may order that there be included in the sum for which judgement is given interest, at such rate as it thinks proper, on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause of action arose and the date of the judgement".

Correspondingly, the National Court Rules 1983 also provide for interest to be paid at a yearly rate of eight percent (8%). Order 12 r.6 (1)(2) of the Rules say:

"6. Interest.

(1) Where the Court directs the entry of judgement for the payment of money and makes an order for the payment of interest under the Judicial Proceedings (Interest on Debts and Damages) Act 1962, interest shall, unless the order otherwise provides, be payable on so much only of the money as is from time to time unpaid.

(2) The rate of interest for the purposes of Sub-rule (1) is 8% yearly".

On liquidated demands, O.12 r.27 Sub-rule (2) express the same notion and provides that the interest at an unspecified rate which accrues to a claim from the date of filing a Statement of Claim to the date of entry of judgment and such rate of interest is to be reckoned at the rate of eight percent (8%) annually.

The Plaintiff claimed interest on the sum o fK137,729.67. That is at least by adding all sums claimed interest was fixed at 8 percent in 1989 by the Supreme Court in Pinzer -v- Bougainville Copper Ltd, [1985] PNGLR 160.

From my reading of O.12 r6, there is judicial discretion to order interest "on so much only" for the amount or amounts unpaid from time to time. The reason why interest is awarded in a claim is not designed to compensate the Plaintiff for loss arising out of the cause of action but to provide compensation to the plaintiff for receiving his money later than he should have done: Martha Limitopa -v- Independent State of Papua new Guinea [1988-89] PNGLR 364.

An award of interest made pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act (Ch. No. 52) is not a loss or an injury suffered but it is compensation to the plaintiff for being kept out of his money for sometime. It is not an incident of the Plaintiff’s cause of action but rather something given to the Plaintiff by statute: Motor Vehicles Insurance (PNG) Trust -v- Reading [1988-89] PNGLR 608. see also Jefford -v- Gee [1970] 2 Q.B.

I note with interest the quotation made in Wallace -v- Motor Vehicle Insurance (PNG) Truast [1991] PNGLR 341 at 351 where Her Honour Doherty, J. quoted from another English authority on which it was quoted that "The giving of interest is not by way of penalty, but is merely doing the Plaintiff full justice, by having his compensation for delay": Parsons -v- Mather & Platt Ltd [1977] 2 All ER 715 at 719.

Considering the facts and evidence being put before this court no reasonable explanation has been given to the Court why the lawyer for the Plaintiff has made their submissions for the Default Judgment entered in August of 1997 to the date when it was listed for assessment on damages namely 9th December 2002 some five (5) years four (4) months and eleven days afterward.

Plaintiff had a duty to mitigate his loss and to ensure that there was no unnecessary prolongation of the date for entry of judgment. Mr. Tamusio has explained in his submissions that, the reason for the delay was caused by the Registry Office but I still hold that, that is not good enough and I will exercise the discretion given this Court to order interest on the whole or part of the period from the date the Writ of Summons was filed.

Judgment is entered for the Plaintiff in the following terms:

1. (a) Salaries for December 1994 & January 1995 K 5,184.36

(b) One month salary in lieu of notice K 2,592.18

(c) Pro-rata Leave Entitlements K 2,386.23

(d) Repatriation air fares to New Zealand K 3,401.50

(e) Loss of Salary at K2,592.18 per month

February 1995 to July 1997 K 77,765.40

(f) A daily allowance rate of K50.00 K 45,400.00

from February 1995 to 27 July 1997

(K50.00 x 908 days)

(g) General Damages for distress and Frustration K 1,000.00

___________

K129,953.13

==========

(h) The interest shall be awarded on the above amount from the date the statement of claim was filed to the end of 1998 only.
(i) The Court orders costs payable to the Plaintiff.

Orders accordingly.
____________________________________________________________________
Lawyer for the Plaintiff : T.R. Tamusio & Associate Lawyers