Kisua v Tele [2011] PGNC 299; N4551 (8 September 2011)

N4551

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO.1491 OF 2010

BETWEEN

MICHAEL KISUA
Plaintiff

AND

HENRY TELE
Deputy Chairman – Karato Limited
First Defendant

AND

KARATO LIMITED
Second Defendant

Kimbe: Kawi J
2011: 8th September

CONVERSION AND DETINUE - Conversion and detinue of chattels arising – basis for assessing damages – claim for consequential losses – and loss of business opportunity arising from anticipated business activities

The Plaintiff bought a 27 horse power portable sawmill from the Defendants for K18,000.00. Three days later the Defendants came and repossessed the portable saw mill. The Plaintiff is not a regular person involved in the business of cutting and selling sawn timber.

HELD:

(1) The Plaintiff's damages for consequential losses are limited to the value of the used portable sawmill.

(2) Other associated damages claimed are considered too remote and do not arise as a direct result of the tortuous actions of the defendants.

Cases cited:
Papua New Guinea

Kinsim Business Group Inc –v- The State & Ors [1997] N1634
Peter Goodenough –v- The State [2001] N2157
Enga Enterprises Pty Ltd –v- Danny Porakali, [1995] N1359
Abel Kopen –v- The State [1988-89] PNGLR 659
Graham Mappa –v- PNG Electricity Commission [1992] N1093
Brian Hodson –v- The State [1985] PNGLR 303
Peter Na'al –v- Michael Debege [2000] N1958
Peter Aigilo –v- Sir Mekere Morauta and The State, [2001] (No. 2) 2001 N2702

Overseas

Livingstone –v- Rawyards Coal Co. [1980] 5 App Cave 25 (HL)
Butler –v- Egg Pulp Marketing Board [1966] 114 185
Carriage of goods the Albazero [1977] AC 774 (HL)
Johnson –v- Agnew 1980 AC 367 (HL)
General Tyre & Rubber Co. Ltd –v- Firestone Tyre & Rubber Co. Ltd [1975] 2 ALLER 173 (HL).
Ray Tese Pty Ltd –v- Syntex Australia Limited [1998] 1 Qd R 104
Bonham Carter –v- Hyden Park Hotel Ltd [1948] 64 TLR at page 178
Hillesden Securities Ltd –v- Ryiack [1983] 1 WLR 959,
Straus Electric & Engineering Company Ltd –v- Beresford Entertainment [1952] 2 QB 2QB 243
Stoke-on-Trent Council –v- W & J Wass Ltd [1988] 1WLR 1406
Jarvis –v- Swan Tours Ltd [1972] EWCA Civ 8; [1973] 1 QB 233

Counsel:

Michael Kisua, Plaintiff in person
No appearance for Defendant

JUDGMENT ON ASSESSMENT OF DAMAGES

8th September, 2011

1. KAWI J: This is a trial for assessment of damages. Liability was determined with the entry of default judgment on the 19th August 2010.

The Facts

2. The facts giving rise to this claim are as follows. On or about May 2008, the Plaintiff met a friend of his, who agreed to lend his portable sawmill, a 27 horse power mill to cut timbers and to sell to make money. It was agreed that the Plaintiff would use the machine for one month and then return it back to his friend.

3. Within one month of cutting and selling timber, the Plaintiff made K25,000.00. Of this amount he gave his friend, K10,000.00 while he retained K15,000.00. The portable sawmill was also returned to his friend.

4. Motivated and encouraged by this monthly monetary taking, the Plaintiff decided to purchase his own portable sawmill and go into business.

5. The Plaintiff and his wife began saving money to realize their dreams of owning their own machine. Sometime in June 2010, the Plaintiff went and obtained a quotation of a 27 horse power portable Lucas mill at Farmset Limited here in Kimbe. He was given a quotation of K59,239.00 to purchase a portable 27 horse power Lucas Mill.

6. The Plaintiff next approached the Nationwide Micro bank and enquired of the possibility of getting a bank loan to pay off the Lucas Mill. While the Plaintiff was in the process of organizing a bank loan, he was approached by the First Defendant and other directors of the Second Defendant, who told him that they have a portable Lucas Mill which they were trying to sell for a price not below K20,000.00. The Plaintiff obviously showed interests in purchasing the machine from the Defendants. After some negotiations with the Defendants, they (ie Defendants) agreed to sell their 27 horse power portable sawmill to the Plaintiff for K18,000.00. The Plaintiff paid K18,000.00 to the Defendants and took possession of the portable sawmill. The sawmill was in the possessions of the Plaintiff at his house for 3 days. After three days the First Defendant and his relatives came to the Plaintiff's premises and repossessed the portable sawmill which they had sold to the Plaintiff some three days earlier. Despite repeated requests, the Defendants have since failed to return the portable sawmill back to the Plaintiff.

The Law on Damages

7. The fundamental principle which governs the whole law of damages, is the principle of compensation. Damages to be awarded in momentary terms should be no more and no less than the Plaintiff's actual losses. It simply means that the amount of money to be awarded as damages must be such amount which puts the injured party who suffered loss or damage to the same position as he/she would have been in, if he had not suffered injury or losses for which he now claims.

See Luntz H. Assessment of Personal Injury and Death; 3rd Edition Butterworths page 3, para 1.13.

8. This principle was formulated in the classic and oft quoted code of Livingstone –v- Rawyards Coal Co. [1980] 5 App Cave 25 (HL).

9. At page 39 Lord Blackburn laid down this principle;

"where injury is to be compensated by damage, in settling the sum of money to be given for ...........damages, you should as nearly as possible get at that sum of money which will put the party, who has been injured, or who has suffered, in the same position as he would have been in, if he had not sustained the wrong for which he is now getting compensation."

10. This principle has been applied in many cases and in areas as conversion of chattels. See Butler –v- Egg Pulp Marketing Board [1966] 114 185, Carriage of goods the Albazero [1977] AC 774 (HL), Sale of Land (Johnson –v- Agnew) 1980 AC 367 (HL) and infringement of a patent (General Tyre & Rubber Co. Ltd –v- Firestone Tyre & Rubber Co. Ltd [1975] 2 ALLER 173 (HL).

10. This principle is often referred to as the principle of "Restitutio In Integrum." This is not an absolute principle. It is qualified by other principles, two of which are:

(a) Remoteness of damages – The injured party will get damages which naturally arise from the breach or from the tortuous conduct and not those which are considered as being too remote.

(b) Duty to mitigate loses – where a tort has been committed or a breach of contract has occurred, it is the duty of the injured party to take steps to lessen the injuries consequences of the breach or the tortuous conduct. If he fails to take such reasonable steps, he cannot get damages for losses due to his own failure.

11. In Papua New Guinea these principles of law were applied by Bidar AJ in the case of Kinsim Business Group Inc –v- The State & Ors [1997] N1634.

12. The Plaintiff has an obligation to prove his losses with much certainty and particularly as is reasonable, see Ray Tese Pty Ltd –v- Syntex Australia Limited [1998] 1 Qd R 104.

13. In Bonham Carter –v- Hyden Park Hotel Ltd [1948] 64 TLR at page 178 Lord Goddard CJ said;

"Plaintiffs must understand that if they bring actions for damages, it is for them to prove their damages, it is not good enough to write down particulars and so to speak, throw them at the hand of the court saying, This is what I have lost, I ask you to give me these damages. They have to prove it."

14. Referring to these principles, Salika J (as he then was) in the case of Peter Goodenough –v- The State [2001] N2157 made these comments:

"I adopt these statements, as I am of the view that they are reasonable and logical and should be applied by the courts in Papua New Guinea. Every plaintiff who wishes to be put in the same position as he would have been in had the tort not been committed has an obligation to prove his claim. He has to call evidence relevant to prove his damage. If he fails to provide the relevant evidence, his claim is likely to fail."

THE EVIDENCE OF THE PLAINTIFF

15. The evidentiary material relied upon by the Plaintiff included:

(a) his own affidavit sworn on the 8th April 2011.

(b) Affidavit of his wife Maria Kisua also sworn on the 8th April 2011.

(c) Affidavit of David Kura sworn on the 8th April 2011.

(d) Affidavit of Ben Michael sworn on the 8th April 2011.

16. I consider the affidavit evidence of Ben Michael and David Kura to be independent and quite important as they are from independent people whose companies are involved in buying and exporting local sawn timber to Australia.

17. Ben Michael gave evidence that he is the owner and proprietor of a company known as Romeko Forests Resources Limited, a company that is registered to deal with forestry products including harvesting, processing and purchasing forests products under Part IV of the Forests Act. He further stated that he also buys sawn timber cut from Lucas mill operators mainly individuals and then exports them to Australia. About May 2008, he confirmed that the Plaintiff, Michael Kisua sold "A Grade" sawn timber to his company. He stated that he paid more than K23,000.00 in May to the Plaintiff when he bought A grade sawn timber from him.

18. Ben Michael also gave an estimate calculation of mix hardwood sawn timbers he buys from Lucas mill operators. He emphasize that K650.00 is the rate his company pays to purchase sawn timber from local suppliers. Further he emphasized that it really depends on how many cubic meters of sawn timber a local supplier can cut and sell to him.

19. Thus he gave this precise calculation of how much he can make for a day, a week, fortnightly and monthly using 1.5m3 a day.

Hence 1.5m3/day x 6 days/week = 93/week x 2 weeks = 18m3 x 2
Fortnights = 36m3/m x K650.00 = K23,400.00

20. David Kura is another independent person who gave evidence for the Plaintiff. He is the Managing Director of Yaras Holdings Limited. Yaras Holdings Limited has been operating in West New Britain for the last five (5) years. They have been engaged in the business of cutting and selling sawn timbers to timber operating companies. His company owns one (1) 18 horse power portable Lucas sawmill and one (1) 27 horse power portable Lucas mill.

21. He gave further evidence that 27 horse power Lucas sawmill cuts four cubic meters of sawn timber per day while the 18 horse power Lucas mill cuts 3 cubic meters of sawn timber per day. He gave further evidence that by using a 27 horse power, portable Lucas mill to cut a sell sawn timber over 7 months, would bring in an income of K338,800.00. The approximate production for one (1) year would be about K580,800.

DAMAGES CLAIMED BY THE PLAINTIFF

22. The Plaintiff claims the following damages:

(a) Damages for loss of business.

(b) Reimbursement of K18,000.00

(c) General damages for pain, hardship, anxiety etc..

(d) Special damages.

(e) Interests and costs.

(a) Damages for loss of business

23. The Plaintiff claims K275,000.00 under this head. He submits that had it not been for the trickery and misrepresentation and deceptive conduct of the Defendants, he would have budget his own Lucas sawmill from Farmset Limited and give into business and would be in a better financial position to make the kind of money he projected. He used the projections and formula provided by Romcko Forest Products, a company whom he had sold sawn timbers to base his projections. I do accept the evidence of Ben Michael of Romeko Forest Products Limited, and his estimates and projections.

24. In my view, a claim for loss of business is a claim for consequential loss arising from the actions of the Defendants.

25. In the case of Enga Enterprises Pty Ltd –v- Danny Porakali, [1995] N1359, the defendant detained the plaintiff's vehicle which was then valued at K12,000.00 for about one (1) year. The Plaintiff then sued for a daily hire rate, of K100.00 per day, costs of repairs, damages and interests totaling K64,766.15 on the basis of loss of business opportunities or consequential losses.

26. Doherty, J held that (1) claim for consequential loss are usually considered too remote and to claim consequential loss it must be proved that:-

(a) the Plaintiff is in the regular business of hiring out the chattels that have been converted at the rate claimed; and

(b) the Defendant could anticipate the consequential loss; and

(c) the consequential loss must be a direct result of the tort.

27. A trespass to chattels is actionable without proof of actual damage. Where the goods have been destroyed or the Plaintiff is permanently deprived of them the measure of damages is the value. Where goods exists and have been restored but have depreciated in value, the measure of damages is the costs of repairs, if any, and depreciation.

28. See also Abel Kopen –v- The State [1988-89] PNGLR 659, Graham Mappa –v- PNG Electricity Commission [1992] N1093, Hillesden Securities Ltd –v- Ryiack [1983] 1 WLR 959, Straus Electric & Engineering Company Ltd –v- Beresford Entertainment [1952] 2 QB 2QB 243, Stoke-on-Trent Council –v- W & J Wass Ltd [1988] 1WLR 1406.
Applying these principles I am quite satisfied that the Plaintiff;

is not in the regular business of cutting timbers and selling sawn timbers to timber exporting companies;

has never owned a 27 horse power portable sawmill.

was working extremely hard to make money to buy his own portable saw mill and go into business when he was conned by the Defendants;

The Plaintiff has now been permanent deprived of his sawmill.

29. Applying the principles outlined in the Enga Enterprises case, I am of the view that the Plaintiff's measure of damages under this head is the actual value of the chattel. Hence the Plaintiff bought the portable saw mill from the Defendants for K18,000.00. I would therefore award K18,000.00 to the Plaintiff, being the actual value of portable sawmill, under this head of damages.

30. I note that the Plaintiff and his wife had been working very hard to buy their own portable sawmill to go into business to cut and sell timber. His financial position was such that I would have no doubt that his application for a bank loan of K59,000.00 would have been approved. I will in the exercise of my discretion only allow K25,000.00 as compensation for his tireless efforts towards purchasing his own sawmill.

DAMAGES IN SUFFERING AND HARDSHIP

31. The Plaintiff also claimed damages for hardships, inconvenience anxiety and distress. I do accept that this head of damages is claimable and Los J in this case of Brian Hodson –v- The State [1985] PNGLR 303, following the case of Jarvis –v- Swan Tours Ltd [1972] EWCA Civ 8; [1973] 1 QB 233, awarded K6,000.00 for distress, frustration and general disappointments. Jarvis's case concerned a Plaintiff who went on holidays, but was very disappointed and distressed when the attractive terms offered in the holiday brochure did not eventuate.

In Peter Na'al –v- Michael Debege [2000] N1958 Kapi DCJ found the plaintiff, a Public Servant who had gone abroad for studies found that he was not paid his entitlements while he was on studies. His wife and children could not join him in Australia. His wife re-married as a result. His salary was stopped. He sued claiming damages for hardship, frustration, anxiety and distress, Kapi DCJ awarded K15,000.00 for distress, anxiety and hardship suffered.

32. In Peter Aigilo –v- Sir Mekere Morauta and The State, [2001] (No. 2) 2001 N2702, Kandakasi, J awarded K20,000.00 to the plaintiff, a former Police Commissioner, whose contract of employment was breached by the State when he was terminated as the Police Commissioner.

33. In the present case, the plaintiff did provide evidence to show that he and his wife had saved all their monies to pay for their own 27 horse power portable Lucas mill. This was money he saved to pay for his children's needs and his family's daily upkeep. The Plaintiff's evidence is that at the relevant time, he was unemployed. The little money his wife managed to save from her marketing was all saved towards the purchasing of the portable sawmill. As a result of the Defendants deceit and trickery, the Plaintiff and his family suffered a lot of hardship, anxiety and distress.

34. I accept this evidence and following the cases of Frank Naal and Peter Aigilo, I will make an award of K30,000.00 under this head.

SPECIAL DAMAGES

35. Order 8 rule 34 of the National Court Rules does allow for out of pocket expenses to be claimed. Order 8 rule 35 requires specific particulars of such expenses to be given. Here the Plaintiff claims expenses associated with preparing court documents, photocopying, typing the court papers and transport costs. The amount claimed by the Plaintiff is K4,540.00. I find this amount not to be unreasonable and will therefore award this amount for special damages.

TOTAL AWARD

36. The total amount awarded is therefore;

(a) K18,000.00 consequential loss/loss of business income.

(b) K25,000.00 consequential loss/loss of business income.

(c) K30,000.00 damages for frustration, distress, hardship and anxiety.

(d) K 4,540.00 special damages.

Total: K77,540.00

37. I would award a total of K77,540.00 to the Plaintiff.

38. Pursuant to Section 1 of the Judicial Proceedings (Interests on Debts and Damages Act). I would order that the Defendants pay the Plaintiff interests on his damages at a rate of 8% per annum.

39. I would also fix the period of interests to commence as from the 20th June 2010, being the date when the Plaintiff agreed with the Defendants to purchased the portable sawmill for K18,000.00 to the 20th of June 2011. This gives us a period of one (1) year or 365 days.

40. Interest is therefore calculated as follows:

8/100 x 77,540 = K6, 203.20 (yearly interests)

6,203.20 (yearly interests)
365 days

= K17.00 per day
= K77,540.00
+ K 6,203.20
= K83,743.20

41. I will award a total of K83,743.20 in damages to the Plaintiff, costs is also awarded to the Plaintiff.

_______________________________________________________________

Michael Kisua In person
No Representation for defendant