Seamont Arel Ltd v Independent State of Papua New Guinea [2004] PGNC 45; N2739 (3 December 2004)

N2739

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 797 OF 2000

BETWEEN:

SEAMONT AREL LIMITED
Applicant

AND:

INDEPENDENT STATE OF PAPUA NEW GUINEA

WAIGANI: SALIKA, J
14 May, 03 December, 2004

CONTRACT – whether there was a valid contract – only one part of the contract produced in Court – other parts not in Court.

Cases Cited:
Curtain Brothers v The State [1993] PNGLR 285

Counsel:
Mr K Naru for the Plaintiff
Mr F Kuvi for the Defendants

The plaintiff in this matter claims damages for breach of contract. He alleged that he contracted with the Defendant on 11 March 1999 for the use of his vehicle to be used at Launakalana Road Regravelling project in the Central Province. He alleged that his vehicle was contracted to work for the Defendant at the rate of K60.00 per hour for a period of 12 months commencing on the 22nd March 1999.

The plaintiff alleged that he commenced work and after 8 days of work he submitted his claim or invoice for K4,800 which was settled by the defendant. He said he continued working for another 11 days and submitted his invoices for a total of K5,200. He said this amount was not settled by the Defendant. He said he continued to seek payment from the defendant but the defendant failed or neglected to settle the claim for K5,200 for work done.

The plaintiff alleged he continued to pursue his claim for work done and he was verbally informed or told to stop work. He said he had only completed 19 days of his contract which is for 12 months. He alleged that the contract was terminated without notice prematurely. He therefore claimed damages for breach of contract. He claimed K166,640.00 as the total amount he would have earned had he been engaged for the full duration of the contract. He also claimed interest on the K166,640.00

In support of his claim the plaintiff gave evidence orally on oath and also relied on his affidavit sworn and filed on the 30 April 2004.

His evidence is that he contracted with the defendant for the use of his vehicle at the Launakalana Regravelling Project. The contract was in the form of a letter dated 11 March, 1999. The letter is in evidence and is the only document relied on by the plaintiff as the document that constituted the contract. It is appropriate to reproduce the letter in full because the plaintiff’s case is dependent upon it. It reads:-

"To Seamont Arel,
PO Box 1070,
BOROKO – NCD.

ENGAGEMENT OF PLANT – LAUNAKALANA REGRAVELLING PROJECT [PROJECT / NO A 596544 – 3500]

The Office of Works (OOW), Central province is proud to inform you that among plant registered in the PTB 3/99, your plant type; ISUZU FSR Reg No BAQ 659 has been selected to work at the above project at hourly rate of K60.00/hr for a duration of 6 months (Phase I) and an extended period of another 6 months (Phase II), a total of 12 months period.

You are requested to make available your plant for formal inspection, as the project will commence on Monday 22nd March, 1999. Your plant is selected on the Basis of PTB 3/99 priority.

For your information.

Mark Tima
Provincial Works Manager (Central)"

The plaintiff said this is the letter that formed the basis of the Contract.

The plaintiff said he did start work with his vehicle immediately and he put in his claim for the first 8 days. He was paid for that work. He worked for a further 11 days an put his claim. That claim was never paid and remains to be paid.

The defendant lawyer cross-examined the witness on the letter and also the procedures involved in obtaining a contract for these types of work. The plaintiff admitted this was his first contract with the Department of Works. He admitted that he treated the letter as the contract. A standard Works Department contract was tendered into evidence as a guide to help the court determine the matter. The plaintiff agreed that the terms of the contract are that you are paid only for the work you do on a daily basis. This is consistent with Clause 5 of the Standard contract and that is hire of the plant will only apply to the actual hours worked. In other words while the plaintiffs plant was registered to work for 12 months, he was only to be paid for the actual hours worked. The plaintiff says his plant was capable of working all the days, that is all 365 days.

The issues are

(1) whether the was a valid contract
(2) If there was whether there was a breach of contract and
(3) Whether the plaintiff is entitled to damages.

Whether there was a valid contract.

The letter of 11 March 1999 speaks of a situation where the plaintiff would have filled a tender application or form and sent to the Department of Works (Central Province). This letter referred to in the evidence is acceptance of the plaintiffs plant to be engaged at an hourly rate of K60 per hour for 12 months. The plaintiffs vehicle appeared to have been registered under PTB 3/99 as Isuzu FSR Reg No BAQ 659. The vehicle was selected to work at the Launakalana Project at an hourly rate of K60.00 per hour or 12 months. The letter then requested the plaintiff to make his plant available for inspection. There is no evidence he took the vehicle for inspection but his vehicle was engaged from 24 May to 4 June 1999 a total of 10 days or a total of 8 hours per day totalling to 80 hours. 80 hours multiplied by K60 per hour is K4,800. It appears that there was an offer and acceptance and work commenced. With that evidence I am satisfied there was a valid contract but I find the letter is only one part of the contract. The other part would have been the standard PTB 3/99 tender document which contained the terms and conditions of the contract.

Was there a breach of the contract:

Evidence is that he was told to stop work because the money allocated for the project was exhausted. Considering that evidence I rule that the contract was breached by the defendant.

Is the plaintiff entitled to damages.

The contract was breached because the money allocated for the project was all exhausted. The contract in this situation was between the plaintiff and Office of Works, Central Province. The defendant in this matter is only sued in its vicarious capacity. The Office of Works contracted on an hourly basis of K60.00 per hour. This effectively means that the plaintiff must do the work and make his claim for work done. As was alluded to earlier the letter of the 11 march 1999 was written because the plaintiff had tendered for the project. The tender document itself has not been produced to the Court either by the plaintiff or the defendant. In the normal course of business the defendant would have had the tender document among its records but it did not produce it. Instead it produced another standard tender document. The plaintiff was shown the tender document and he agreed that he had seen a document like that before and he said he did signed a document like that. He agreed also that the arrangements were for daily hire. If the plaintiff signed a tender document similar to the tender document which was tendered into evidence then clause 5(a) of the standard tender document clearly says that the hire arrangement was for the owners to claim only for actual work done on an hourly basis. The tender document sets out the rules to observe. It was submitted to the court on behalf of the plaintiff that it is a fundamental principle of contract law that where the terms of the contract are contained in writing, no evidence will be allowed to be added to, subtract from, vary, or qualify the written contract. See Curtain Brothers v The State [1993] PNGLR 285.

I subscribe to that principle as authoritatively stated by the Supreme Court. In this case the letter of the 11 March, 1999 is just one part of the contract. The other part of the contract which was the PTB 3/99 is not in evidence and not before the court. That document was signed by the plaintiff but is not in evidence. That document spelt out the terms of engagement and how to be paid. The letter is not the total contract. We have a situation where only one half of the contract is before the court and the one half is not. There was no notice of motion for discovery of documents and so the other part of the contract is not available. The part of he contract that is missing or not in evidence is very important because its that part of the contract that sets out the terms and conditions of engagement. Without that part of the contract, the Court can only speculate. A sample was produced but that’s all it is – a sample and not the actual document. In the circumstances the court cannot be sure as to what the terms of the tender document were. In my view it was the plaintiff’s duty to produce the total contract to make out his claim. He has failed in this regard.

The court however is aware that the plaintiff’s vehicle was engaged for 11 more days – 8 hours each day. He was therefore entitled to claim K5,800.00 for work done.

In the circumstances, I can only say that the onus is on the plaintiff to make out his case in its entirety. He has produced only one half of the contract but the other half is not produced. In the absence of other part of the contract, I award him only the 11 days he worked for, for a sum of K5,800.00

Interest on the K5,800.00 is to be paid at 8% from the time of filing of the Writ to date of judgement.

Costs are also awarded to the plaintiff.

Lawyers for the Plaintiff: Naru Lawyers
Lawyers for the Defendant: Solicitor General