Parua v Gamato [2017] PGNC 48; N6671 (6 February 2017)

N6671

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 155 of 2016

BETWEEN:

MARGARETH TINI PARUA
t/a PARUA LAWYERS

Plaintiff

AND:

PATILIAS GAMATO in his capacity as ELECTORAL
COMMISSIONER and constituting the ELECTORAL
COMMISSION OF PAPUA NEW GUINEA
First Defendant

AND:

THE INDEPENDENT STATE OF
PAPUA NEW GUINEA
Second Defendant

Waigani: Hartshorn J
2016: 9^th November
2017: 6^th February

Assessment of damages

Cases:
Frank Onga v. The General Manager Engineering Management Pty Ltd (2003) N2321
Jacob Simbuaken v. Neville Egari (2009) N3824
Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1144
National Capital District Commission v. Central Provincial Government (2015) SC1429
Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694
Rabaul Shipping Ltd v. Peter Aisi and Ors (2006) N3173
William Mel v. Coleman Pakalia & Ors (2005) SC790

Counsel:
Mr. G. Geroro and Ms. M. Pint, for the Plaintiff
Ms. L. Kot and Mr. R. Awalua, for the First Defendant
Mr. E. Bua, for the Second Defendant

6^th February, 2017

1. HARTSHORN J: This is an assessment of damages following the entry of summary judgment.

Background

2. The plaintiff is a lawyer. Between or about June 2012 and January 2016, the plaintiff provided legal services for reward for and at the request of the then Electoral Commissioner and the first defendant in their official capacities. This was in respect of electoral matters within the Southern Region of Papua New Guinea based on instructions received.

3. The plaintiff submitted monthly invoices to the Electoral Commission in respect of the work undertaken and the Electoral Commission paid some of these invoices.

4. There remains outstanding the sum of K 7,324,420.83, which has not been paid despite requests and demands.

5. The plaintiff issued this proceeding seeking amongst others, payment of the said sum. Summary judgment was entered on 3^rd August 2016 against both defendants with damages to be assessed.

Assessment of damages – law

6. The Supreme Court in William Mel v. Coleman Pakalia & Ors (2005) SC790 stated:

“The principles that apply to a trial on assessment of damages following entry of default judgment were summarised by Kandakasi J. in Coecon Ltd (Receiver/Manager Appointed) v National Fisheries Authority (2002), National Court, N2182.

His Honour stated:
A survey of the authorities on assessment of damages after entry of judgment on liability mainly in default of a defendant’s defence, clearly show the following:

1. The judgment resolves all questions of liability in respect of the matters pleaded in the statement of claim.
2. Any matter that has not been pleaded that is introduced at the trial is a matter on which the defendant can take an issue on liability.
3. In the case of a claim for damages for breach of contract as in this case, such a judgment confirms there being a breach as alleged and leaves only the question of what damages necessarily flow from the breach.
4. The plaintiff in such a case has the burden to produce admissible and credible evidence of his alleged damages and if the Court is satisfied on the balance of probabilities that the damages have been incurred, awards can be made for the proven damages.
5. A plaintiff in such a case is only entitled to lead evidence and recover such damages as may be pleaded and asked for in his statement of claim.
   

The Supreme Court adopted and applied those principles in Papua New Guinea Banking Corporation v Jeff Tole (2002) SC694, Amet CJ, Sheehan J, Kandakasi J.

Kandakasi J. applied those principles recently in the National Court in Desmond Huaimbukie v James Baugen (2004) N2589. We believe His Honour succinctly and correctly stated the law. We elaborate on the first principle by saying that once default judgment is entered, the facts as pleaded and their legal consequences in terms of establishing the cause of action as pleaded must be regarded as proven. (See Keith Reid v Murray Hallam and Allcad Pty Ltd (1995) N1337, National Court, Kapi DCJ and Andale More and Manis Andale v Henry Tokam and The State (1997) N1645, National Court, Injia J.)........................

Turning back to the issue raised above as to the role of the trial judge after entry of default judgment, we consider the following to be the correct approach: the trial judge should make a cursory inquiry so as to be satisfied that the facts and the cause of action are pleaded with sufficient clarity;
if it is reasonably clear what the facts and cause of action are, liability should be regarded as proven; only if the facts or the cause of action pleaded do not make sense or would make an assessment of damages a futile exercise should the judge inquire further and revisit the issue of liability.”

7. Reference is also made to the following passage from the judgment of Kandakasi J. in Frank Onga v. The General Manager Engineering Management Pty Ltd (2003) N2321:

“As noted in Coecon Limited (Receiver/Manager Appointed) vs. The National Fisheries Authority of Papua New Guinea and The Independent State of Papua New Guinea (supra), a plaintiff can discharge his burden of prove (sic) by calling credible evidence. If he is able to do that in relation to what he alleges then, there is no reason why there should (not) be a finding in his favour unless, the defendant is able to rebut it by other credible evidence. Apparent in this is the fact that, once a plaintiff establishes his case on the balance of probabilities, the burden then shifts to the defendant to rebut it. If the plaintiff (sic) (defendant) fails to discharge that burden, it is open to the Court to act on the evidence of the plaintiff.”

Submissions of the first defendant

8. The first defendant submits that:

1. although he has admitted liability as he owes the plaintiff outstanding legal bills, the amount claimed by the plaintiff is excessive and unreasonable;
2. the plaintiff has not included in her evidence invoices that she sent to the first defendant or the retainer agreement that the plaintiff had with the first defendant;

100. there is no evidence that the plaintiff has complied with s. 62 and 66 Lawyers Act;

4. the court may reduce an amount agreed, or direct that outstanding legal fees be ascertained by taxation pursuant to s. 66(3) Lawyers Act.

9. As to whether the amount claimed is excessive or unreasonable and whether s. 62 and s. 66 Lawyers Act have been complied with, these matters are not able to be raised after judgment has been entered. Secondly, the first defendant has not filed a defence or given any evidence.

10. As to the requirement to plead, in Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694, Kandakasi J stated, “The law on pleadings in our jurisdiction is well settled ..... unless there is foundation in the pleadings of a party, no evidence... of matters not pleaded can be allowed.”

11. In Jacob Simbuaken v. Neville Egari (2009) N3824, after setting out Order 8 Rule 14, Davani J. stated that the reason that certain matters should be pleaded is to avoid surprises and to ensure that all issues that need to be raised are raised long before the matter progresses to trial. Further, each party must plead all the material facts on which he means to rely at the trial otherwise he is not entitled to give any evidence of them at the trial. I respectfully agree with the above statements.

12. Order 8 Rule 14 National Court Rules requires that in a defence the defendant shall plead any matter which he alleges makes any claim not maintainable, or if not pleaded would take the plaintiff by surprise. If he does not so plead all material facts on which he intends to rely at trial, a defendant is not entitled to give any evidence of those facts at the trial.

13. Here, as the first defendant has not pleaded that the amount claimed by the plaintiff is excessive and unreasonable, or that s. 62 or s. 66 Lawyers Act have not been complied with, these matters cannot be raised. The submissions concerning the plaintiff’s lack of evidence goes towards whether the plaintiff has properly proved the amount of her claim.

Submissions of the second defendant

14. The second defendant submits that:

1. the plaintiff has no standing to bring this proceeding as she has not pleaded that she had instructions from the Attorney General to act for the Electoral Commission;
2. the notice given by the plaintiff pursuant to s. 5 Claims By and Against the State Act (Claims Act) was given out of time, no extension of time was applied for and so no cause of action is disclosed;

100. the plaintiff has not provided sufficient evidence to substantiate the liquidated amount claimed of K 7,324,420.83.

15. Here, the second defendant has not filed a defence or given any evidence. Again, I query the raising of the defences concerning the Attorney General and s. 5 Claims Act after judgment has been entered. Secondly, as to whether a cause of action is disclosed in the statement of claim, from a perusal of it I am satisfied that there is. As to it not being pleaded in the statement of claim that the plaintiff has instructions from the Attorney General, that defence is not pleaded and so it cannot be raised. In addition, the first defendant in submissions has admitted liability.

16. As to the s. 5 Claims Act issue, whilst taking into account that the Supreme Court has stated that compliance with s. 5 Claims Act is a condition precedent, in this instance there is a notice that has been given pursuant to s. 5 Claims Act and so to that extent, the condition precedent is satisfied. There is however, no pleading or evidence of the second defendant to the effect that the notice that was given was not given properly in the context of this proceeding.

The claim

17. From a perusal of the statement of claim it is accepted as proved by virtue of the judgment that amongst others, the plaintiff received instructions, performed the services, submitted invoices some of which were paid and there remains outstanding the sum of K7,324,420.83.

18. The evidence of the plaintiff contained in affidavits admitted into evidence without any objection being taken by the defendants, is that professional legal services were rendered to the first defendant from 2014 to 2016 and that there continues to remain outstanding the sum of K7,324,420.83. Bills were issued in itemised form, payment was requested from the first defendant to the Secretary for Finance, Dr. Ken Ngangan, and some previous legal costs were paid by the office of the first defendant.

19. As mentioned, there is no evidence given on behalf of either of the defendants and so no evidence to rebut that of the plaintiff. I am satisfied from the evidence that the plaintiff has established the amount that she claims remains outstanding, on the balance of probabilities.

20. The plaintiff also claims in submissions damages in the sum of K396,500.00 being the cost of loans at higher interest rates that were required to maintain her business operations due to the non-payment of the fees owed; and K50,000.00 for the anxiety, stress and suffering that she has purportedly suffered.

21. These damages are not claimed in the prayer for relief in the statement of claim. I am not aware of any amendment to the statement of claim that seeks these damages. In (d) of the prayer for relief, “Such further orders the Court deems appropriate.” are sought but to my mind this is not sufficient. Order 4 Rule 7 (1) National Court Rules provides that an originating process shall state specifically the relief claimed and that a plaintiff is restricted to what has been included in his originating summons or writ of summons and statement of claim: PNGBC v. Tole (supra); Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1144; National Capital District Commission v. Central Provincial Government (2015) SC1429; Rabaul Shipping Ltd v. Peter Aisi and Ors (2006) N3173.

22. Consequently, I am not satisfied that the plaintiff is entitled to these damages that she seeks.

Orders

23.

a) Judgment is ordered for the plaintiff against the defendants’ in the sum of K7,324,420.83 together with interest at the rate of 2% per annum from 3^rd March 2016 on that amount, or on any amount remaining until payment of that amount and interest in full;

b) The defendants’ shall pay the plaintiff’s costs of and incidental to this proceeding on a party party basis to be taxed if not agreed;

c) Time is abridged

___________________________________________________________
Leahy Lewin Lowing Sullivan : Lawyers for the Plaintiff
Kimbu & Associates : Lawyers for the First Defendant
Office of the Solicitor General : Lawyers for the Second Defendant