N4863

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 948 OF 2006

TUSIA KOMASA
Plaintiff

AND

EDGER JOSSY
First Defendant

AND

F&M ENGINEERING LIMITED
Second Defendant

Goroka: Ipang AJ
2012: 03 & 26 September
12 October

CIVIL LAW – Trial on Assessment of Damages – Liability is not an issue – Assessment on Loss of Business Income. 

Cases Cited

William Patsitts For & On Behalf of Sasaovia Business Group –v- Independent State of Papua New Guinea (2006) N3088
Graham Mappa –v- PNG Electricity Commission [1995] PNGLR 170
Kopen –v- State [1988- 89] PNGLR 659
Kerekal Farming & Trading Pty Ltd trading as Uke Transport Pty Ltd –v- Queensland Insurance (PNG) Limited [1995] PNGLR 401
Komaip Trading –v- George Waugulo & The State [1995] PNGLR 165
Lagan –v- The State (1995) N1369

Counsel

Mr. B. Koningi, for the Plaintiff
No Appearances for the Defendants 

JUDGMENT

12, October, 2012

1. IPANG AJ: This is the trial on assessment of damages for special damages for loss of business income by plaintiff for his Timber Produce business in Kainantu, the claim for K70, 000.00 for contract price for the Sawmill Machine and for the direct costs and expenses involved in retrieving the Sawmill Machine from Wampit Area, Bulolo back to Kainantu. 

2.	On the 24th August, 2012 a default judgment was entered against the defendants. Liability is therefore not an issue before this proceeding.

The Plaintiff gave evidence on oath on the 26th September, 2012 and relied on his Affidavit sworn and filed on the 12th September, 2012 which was tendered in Court.

3.	In his Writ of Summons (WS) endorsed with a Statement of Claim on the 6th of July, 2006, the Plaintiff specifically claimed for special damages for loss of business income at K4000.00 per week for 12 months, K70, 000.00 for contract price of the Sawmill Machine and the direct costs and expenses involved in retrieving the sawmill machine from Bulolo at the cost of K12, 000.00. The Plaintiff also claims interests on special and general damages and costs of these proceedings.

The Law & Practice

4.	It is the practice in this jurisdiction that a plaintiff who claims for damages for loss of income or loss of business is obliged to do so by calling or adducing sufficient evidence. To merely rely on a statement or swear an affidavit saying his business earned K2000. per week was considered as not sufficient.

5.	The Court in Graham Mappa –v- PNG Electricity Commission [1995] PNGLR 170 at p.171 stated in no uncertain terms the following: 

"... if you wish to establish matters like loss of profits from the operation of a modern business, then it is necessary to comply with the modern law, for example, producing such records as are required by the law. If you wish to have the advantages of a modern world of business, then you must comply with modern matters like tax laws. This would require appropriate business records to show whether any profit over and above running costs was earned. And then, if a profit was earned, there are the requirements to pay taxes".

6.	The Court in Graham Mappa's case (supra) at p.172 further stated:

"Damages in law must include adherence to the law, such as taxation laws. Thus, if a person is making profits over and above the running and operating costs, which of course would include salary, then a person must file the appropriate tax returns, show such profits, and pay the appropriate tax. The mere assertions and depositing of sum of money in a bank is not sufficient evidence."

7.	The Courts have ruled that if there are no bank records, tax returns or balance sheets or other kind of evidence then this is not sufficient to establish the damages in law. This position was re-enforced in Komaip Trading –v- George Waugulo & The State [1995] PNGLR 165 at p.168, where His Honour Woods, J (as he then was) stated:

 "The law is quite 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."

8.	The Court in Komaip Trading(supra) said:

"... whilst this Court must sympathise with the plight of a hardworking man who had 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."

9.	In Kerekal Farming –v- Queensland [1995] PNGLR 401 at p.405, the Court made the following findings:

"The plaintiff is also claiming loss of profit whilst the vehicle was out of service because of the accident and because of the delay in the defendant meeting the claim. However, the plaintiff has not presented any financial statements to show the income received from the operation of the truck. It has merely been stated that the company had a contract for haulage with Placer and was earning an average of K22, 000.00 per month. Then this is a bank deposit book. However, there is no evidence of the details of any contract or of the breakdown of the details of that income, namely, what were the running costs etc. So how can this Court find an amount for loss of profits, when there are no detailed figures to support such?"

10.	Mr. B. Koningi of Counsel for the plaintiff had initially hinted out to this Court that the Defendants despite been properly served with appropriate Court documents failed to file Notice of Intention to Defend and Defence which has resulted in default judgment. This Court should therefore consider Plaintiff's submission and award the damages claimed. I will have to treat the counsel's submission with caution. In Lagan –v- The State [1995] PGNC 32; N1369 (15 September, 1995) Injia, J (as he then was) adopted the words of Lord Coddard CJ in Bonham –v- Hyden Park Hotel Ltd [1948] 64 TLR 177 at p.178 and I find very much appropriate to adopt here:

"Plaintiff must understand that, if they bring action for damages, it is for them to prove their damages, it is not enough to write down particulars and, so to speak, throw them at the head of the Court, saying: "This is what I have lost, I ask you to give me these damages! They have to prove it."

11.	In Lagan's case (supra) Injia, J (as he then was) quoted from McGregor on Damages (Sweet & Maxwell, 13th Ed. 1972, London at p.935.

"The plaintiff has the burden of proving both fact and the amount of damages before he can recover substantial damages. This follows from the general rule that the burden of proving a fact is upon him who alleges it and not upon him who denies it, so that where a given allegation forms an essential part of a person's case, the proof of such allegation falls on him. Even if the defendant fails to deny the allegation of damages or suffers default, the plaintiff must still prove his loss."

12.	Injia, J (as he then was) said in Lagan (supra) that:

 "the minimum requirement in any action is for the plaintiff himself to give admissible evidence in support of his claim. He is not exonerated from this duty in anyway by the fact that default judgment has been entered and that trial on assessment of damages is proceeding ex parte or that he has authorised another person to give evidence on his behalf. When the primary evidence of the plaintiff is lacking, there is a serious gap in the plaintiff's case, all other evidence being inadmissible as being hearsay or hearsay upon hearsay."

13.	In this instant case, I have not been presented with any properly audited set of accounts nor any copies of income tax returns showing the profit the Plaintiff made from the operation of his Sawmill Business. I am left with two (2) options, to conclude that the plaintiff earned no profit or to draw some rationale that the Sawmill machine had it been in operation, would continue to generate profit each week. 

14.	I will adopt and take the latter approach because of justification by the Plaintiff as deposed in his affidavit that all his business records and documents as well as personal and business properties were burnt together with his house during a tribal fight. Refer to paragraph 32 of the Affidavit. Secondly, plaintiff has evidence from his customers whom he supplied timber materials to justify his business operations. These are contained in paragraph 31 and 32 of Plaintiff's affidavit.

15.	Plaintiff's Counsel has referred to the case of William Patitts for and on Behalf of Sasaova Business Group –v- Independent State of Papua New Guinea N3088 (29 September, 2006). In Patitts' case, the plaintiffs claimed special damages for loss of business income from the confistication and commandeering by the PNG Defense Force members of the plaintiffs PMV Dyna Truck during the period of crisis on Bougainville. His Honour Cannings, J found that the Plaintiffs claim were poorly and vaguely pleaded with no proper business records and as a result awarded plaintiffs half or 50% of the business loss together with interest and costs. 

16.	The Counsel for the Plaintiff in Patitts case (supra) submitted for the K120, 000.00 the amount pleaded in the statement of claim for Court to award on the basis that though there were no proper business records available to substantiate the claim the Court should take in to account that the events happened during the Bougainville Crisis when life was particularly difficult for most Bougainvilleans including the Plaintiff and his business group. On the converse, Counsel for Defendants argued that there is nothing credible on which the Court can make assessment.

17.	Presiding Judge, Cannings, J thus considered:

" I agree, to some extent, with both counsel. I agree with Mr. Tamusio that the effects of the crisis cannot be ignored by the Court. I agree with Mr. Potoura that it can set a poor precedent if the Courts acts on the basis of guesswork and supposition. Having weighed both submissions and taking in to account what I said before about how things happened in the Bougainville Crisis, I will make a compromise award of half the amount claimed, which for the sake of mathematical convenience I round out to K60,000.00" .

18.	In Patitts case (supra) there were no proper business records provided likewise in this instant case there were no proper business records produced but there are sufficient evidence to confirm that the plaintiff had a sawmill business. In Patitts case (supra) Cannings, J awarded 50% for special damages for loss of business income. In this instant case I would award 75% for special damages for loss of business income. That is at the rate of K3000.00 per week for 52 weeks. That is a total of K156, 000.00. I award special damages for the agreed value of the Plaintiffs sawmill machine at K70, 000.00. I also award special damages for expenses and costs incurred for retrieving the sawmill machine at K9, 000.00. Total amount of K235, 000.00.

Interest

19.	Plaintiff claims interests at the rate of 8% pursuant to the Statute (Judicial Proceedings (Interest on Debts and Damages) Act, chapter 52. I grant interests on the whole of the judgment. 

•	K235, 000.00 x 0.08 x 6 = K112, 800.00

Costs

20.	Costs to be paid by the Defendants to be agreed if not to be taxed.

In Summary, I award the following Judgment

21.	I award the sum of K156, 280.00 for special damages for the loss of Business Income. 

22.	I further award K70, 000.00 for the agreed value of the plaintiff's Sawmill Machine.

23.	I award K9, 000.00 as costs and expenses for retrieving Sawmill machine from Wampit in Bulolo.

24.	Interest at K112, 800.00 and Costs to be paid by the Defendants to be agreed if not to be taxed.

25.	The total judgment sum of K347, 800.00 is awarded. I do make further orders that any funds belonging to the Defendants withheld by NJSS Sheriff's Office shall be paid to the Plaintiff to offset this judgment. 

__________________________________________

Koningi Lawyers: Lawyers for the Plaintiff
Lawyers for the Defendants: Nil Appearances