Rural Development Bank Ltd v Maha [2012] PGNC 109; N4735 (24 July 2012)

N4735

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1528 OF 2006

BETWEEN

RURAL DEVELOPMENT BANK LIMITED
Plaintiff

AND

VEARI MAHA
First Defendant

AND

HALSHAW GLOBAL LIMITED
Second Defendant

Waigani: Makail, J
2012: 10th & 24th July

ASSESSMENT OF DAMAGES - Breach of loan agreement - Written agreement - Failure to repay loan - Claim for principal, interest and expenses - Principal loan fixed in agreement - Rate of interest fixed in agreement - Provision for recovery of expenses in agreement - Assessment of - Damages assessed based on principal, interest and expenses in agreement - No extrinsic evidence needed.

Facts

This is an ex-parte trial on assessment of damages. Default judgment was entered against the first defendant on 17th August 2007. The claim arises from a breach of two loan agreements between the plaintiff and the first defendant. The plaintiff makes no claim against the second defendant and has abandoned it. It is, therefore, dismissed. The principal and interest rate are fixed in the agreements while there is also provision for recovery of expenses in the agreements.

Held:

1. Where an agreement is in writing, it should speak for itself to the exclusion of any extrinsic evidence. It follows where it is breached, damages that flow from the breach is assessed based on the written agreement: Curtain Bros (Qld) Pty Ltd -v- The State [1993] PNGLR 285 applied.

2. As the principal loan and rate of interest are fixed in agreements, damages is assessed based on principal and rate of interest fixed in the agreements.

3. In addition, as there is provision for recovery of expenses in agreements, expenses such as loan service fees and legal costs were included in the total outstanding loan.

4. Judgment is entered for the plaintiff in the total sum of K265,974.75 with 8% interest from the date of issue of writ to date of judgment and costs.

Cases cited:

Curtain Bros (Qld) Pty Ltd -v- The State [1993] PNGLR 285

Counsel:

Mr J Nalawaku, for Plaintiff
No appearance, for Defendants

JUDGMENT
24th July, 2012

1. MAKAIL, J: This is an ex-parte trial on assessment of damages. Default judgment was entered against the first defendant on 17th August 2007. The claim arises from a breach of two loan agreements between the plaintiff and the first defendant. The plaintiff makes no claim against the second defendant and has abandoned it. It is, therefore, dismissed. As for the first defendant, on 23rd December 2003, the plaintiff and the first defendant entered into the first loan agreement. The first defendant borrowed K36,084.60 to fund a fishing project in his village. He was required to repay the loan at K1,800.00 inclusive of 17.5 % interest per month over a period of 2 years.

2. On 25th March 2004, the parties entered into a second loan agreement. This time, the first defendant borrowed K60,000.00 as further funds for the fishing project. The total loan was recalculated and the revised amount borrowed was K96,288.40. He was required to repay the revised amount at K3,450.00 inclusive of 17.5 % interest per month over a period of 3 years.

3. On Solomon Kiage's affidavit sworn and filed on 25th August 2011 and his supplementary affidavit sworn and filed on 01st February 2012, the undisputed evidence is that, after the first defendant borrowed the money, he failed to repay it. On 19th February 2006, the plaintiff issued a notice of demand to him to repay it. Despite that, he failed. The two loan agreements are in writing and annexed to the affidavit of Solomon Kiage. The terms of the agreements are set out in the agreements. The law is that where the agreement is in writing, it should speak for itself to the exclusion of any extrinsic evidence: Curtain Bros (Qld) Pty Ltd -v- The State [1993] PNGLR 285. It follows where it is breached, damages that flow from the breach is assessed based on the written agreement. In other words, there is no need to call extrinsic evidence to prove the terms of the agreement.

4. As the principal loan and rate of interest are fixed in agreements, damages should be assessed based on the principal and rate of interest fixed in the agreements. The revised loan amount is K96,288.40 to be repaid at K3,450.00 inclusive of 17.5 % interest per month over a period of 3 years. In addition, as there is provision for recovery of expenses in the agreements, expenses should be included in the total outstanding loan. According to the statement of account as at 31st January 2012, interest accrued on the principal loan including expenses on the loan such as loan service fees and legal fees stood at K265,974.75. On the evidence, I am satisfied the plaintiff has proven its claim. Judgment is entered for the plaintiff in the total sum of K265,974.75 with 8% interest from date of issue of writ to date of judgment and costs.

Judgment accordingly.
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Namani & Associates: Lawyers for Plaintiff