Infratech Management Consultancy v Independent State of Papua New Guinea [2018] PGNC 293; N7368 (18 June 2018)

N7368
PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1467 OF 2007

BETWEEN

INFRATECH MANAGEMENT CONSULTANCY

Plaintiff

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Defendant

Waigani: Polume-Kiele J
2017: 5 July
2018: 18 June 2018

PRACTICE AND PROCEDURE - Assessment of Damages – Breach of Contract
Cases Cited

Papua New Guinea Cases

Coecon Limited (Receiver/Manager Appointed) v. National Fisheries Authority (2002) N2182
PNGBC v Jeff Tole (2002) SC694
William Mel v. Coleman Pakalia & The State (2005) SC790
Alex Awesa v Southern Highlands Provincial Government (2015) SC146
Teddy Suan v Peter Dumba (2013) N5428
Banduwara Waranumbo v Hyper Construction Limited (2012) N4882
William Mel v Coleman Pakalia (2005) SC990
Lagan –v- The State [1995] N1369
Boyd Construction v Sister Elizabeth Koai (2017) N6702
Yooken Paklin v The State (2001) N2212)
Albert Baine v The State (1995) N1335
Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331
Peter Wanis v Fred Sikiot and The State (1995) N1350
Obed Lalip and Others v Fred Sikiot and The State (1996) N1457
MVIT v Tabanto [1995] PNGLR 214
Waima v MVIT [1992] PNGLR 254
MVIT v Pupune [1993] PNGLR 370
Tabie Mathias Koim and 28 Others v The State and Others [1998] PNGLR 247
Jonathan Mangope Paraia v The State (1995) N1343
Michael Buna v The State (2004) N2696
Rodao Holdings Ltd v Sogeram Development Corporation Ltd (2007) N5485
Kolaip Palapi and Others v Sergeant Poko and Others (2001) N2274
Tetley v The Administration (1971) No 647
Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24)

Overseas Cases

Hadley v Baxendale (1854) 9 Exch 34
Victoria Laundry v Newman [1949] 2 KB 528

Counsel

Mr I Molloy, with Mr Terry Injia, for the Plaintiff
Mrs R Gela, for the Defendant

RULING
18 June, 2018

1. POLUME-KIELE J: This is a claim for assessment of damages for breach of contract. Trial on assessment of damages was conducted on the 5^th of July 2017 following entry of default judgment on the 28 June 2008 for failure by the defendants to file a defence to the claim.
   
2. I now hand down my ruling on assessment of damages.

BACKGROUND FACTS

3. The Plaintiff was engaged by the Defendants to provide consultancy services pursuant to a contract entered into on the 23 of January 2003 for a term of 21 months. The value of the contract is in the sum of K2, 079,000.00. The contract commenced on or about 7^th April 2003 and was to end on or about 29^th July 2006.
   
4. This claim is for the outstanding sum of K8, 385,651.22 plus interest and costs. A total of 79 invoices were rendered for payment (paragraph 9 of statement of claim). The first Invoice No. 303001 was issued on the 7^th of April 2003 for a total sum of K623, 700.00. The last Invoice No. 704002 dated 17^th April 2007 was for a total sum of K227, 989.19. Between these two dates, various other monthly invoices (75) were rendered for payment. The statement of claim (paragraph 9) pleads breach of contract, for the delayed payment of the value of outstanding invoices in the sum of K11, 251, 270.34; of which a part-payment in the sum of K2, 865,619.12 was made by the Defendant. These claims are reproduced in Table 1^[1] particulars of which are disclosed as:

Table 1: Outstanding Invoices

Invoice No/Date	Schedule F8.2 Amount	Schedule F8.3 Exchange rate adjustment	Variations	Extension of time	Contract Interest	GST	Total	Comments
303001- 07/04/03	567,000.00					56,700.00	623,700.00	Mobilisation
303003/07/04/03		86,751.00				8,675.10	95,426.10
411001- 22/11/04			17,000.00			1,700.00	18,700.00	Bond glade Proposal review
411002- 30/11/04	144,667.27					14,466.73	159,134.00
411003-30/11/04		36,745.59				3,674.55	40,420.04
412001-31/12/04	144,667.27					14,667.73	159,134.00
412002-31/12/04		37,251.82				3,725.18	40,977.00
501001-27/01/05	144,667.27					14,466.73	159,134.00
501002-27/01/05		36,080.02				3,608.00	39,688.02
502001-28/02/05	140,000.00					14,000.00	154,000.00
502002-28/02/05		37,710.08				3,771.00	41,481.08
503001-31/03/05	139,221.82					13,922.18	153,144.00
503002-31/03/05		36,336.90				3,633.69	39,970.59
504001-29/04/05	138,444.55					13,844.45	152,289.00
504002-29/04/05		38,764.47				3,876.45	42,640.92
505001-31/05/05	66,889.09					6,889.91	73,578.00
505002-31/05/05		16,120.45				1,612.05	17,732.50
506001-30/06/05	66,889.09					6,688.91	73,578.00
506002-31/06/05		16,307.56				1,630.76	17,938.32
507001-31/07/05	38,889.09					3.888.91	42,778.00
507002-31/07/05		8,944.49				894.45	9,838.94
508001-31/08/05	35,000.00		66,820.00			10,182.00	112,002.00	Building Measure, Topo Survey
508002-31/08/05		21,962.57				2,195.26	24,158.83
509001-26/09/05	35,000.00		122,550.00			15,755.00	173,305.00	Marketing Study, Struct Reports
509002-26/09/05		34,345.90				3,434.59	37,780.49
510001-31/10/05	35,000.00		122,550.00			15,755.00	173,305.00	Marketing Study, Struct Reports
510002-31/10/05		32,177.84				3,217.78	35,395.62
510007-04/11/05				340,165.62		34,016.56	374,182.18	EOT 1 Approved by State Solicitor
510008-04/11/05		65,683.93				6,568.39	72,252.32
511001-30/11/05	27,221.82		81,700.00			10,892.18	119,814.00	Marketing Study, Struct Reports
511002-30/11/05		21,620.98				2,162.10	23,783.08
512001-07/12/05	27,221.82		81,700.00			10,892.18	28,180.25
512002-07/12/05		25,618.41				2,561.84	28,180.25
512003-07/12/05					151,477.52	15,147,75	151,477.52	Late payment interest contract
512004-07/12/05		35,627.51				3,562.75	39,190.26
601001-31/01/06	22,555.45					2,225.55	24,781.00
601001-31/01/06		4,759.20				475.92	5,235.12
602001-28/02/06	19,444.45					1,944.45	21,389.00
602002-28/02/06		3,175.30				317.53	3,492.60 4
602003-28/02/06				700,595.70		70,059.57	770,655.27	EOT 2
602009-28/02/06		114,407.28				11,440.73	125,848.01
603001-31/01/06	19,444.45					1,944.45	21,389.00
603002-31/03/06		2,621.13				262.13	3,492.60
604001-01/05/06	19,444.45					1,944.45	21,389.00
604002-01/05/06		3,988.08				398.81	4,386.89
605001-31/05/06	19,444.45					1,944.45	21,389.00
605002-31/05/06		4,017.24				401.72	4,418.96
606001-30/06/06	19,444.45					1,944.45	21,389.00
606002-30/06/06		3,671.13				367.11	4,038.24
606003-05/06/06			1,707,000.00			170,700.00	1,877,700.00	Prolongation Claim No.1
606004-05/06/06		391,585,58				39,158.58	430,744.16
606005-05/06/06			1,050,000.00			105,000.00	1,155,000.00	Variation No.7
606006-05/06/06		227,325.00				22,732.50	250,057.50
606007-05/06/06			141,000.00			14,100.00	155,100.00	Variation No.8
606008-05/06/06		32,895.30				3,289.53	36,184.83
606009-05/06/06			137,100.00			13,710.00	150,810.00	Variation No.9
606010-05/06/06		34,110.48				3,411.05	37,521.53
607001-31/07/06	19,444.45					1,944.45	21,389.00
607002-31/07/06		4,005.58				400.56	4,406.14
607005-31/07/06				478,973.41		47,897.34	526,870.75	WOD EOT 3
607006-31/07/06		88,274.80				8,827.48	97,102.28
608001-31/08/06				106,150.86		10,615.09	116,765.95	WOD EOT 4
608002-31/08/06		19,085.93				1,908.59	20,944.52
609001-30/09/06				77,671.36		7,767.14	85,438.50	WOD EOT 5
609002-30/06/06		14,975.04				1,497.50	16,472.54
610001-31/10/06				80,260.41		8,026.04	88,286.45	WOD EOT 6
610002-31/10/06		18,756.86				1,875.69	20,632.55
611001-30/11/06				77,671.36		7,767.14	85,438.50	WOD EOT 7
611002-30/11/06		19,930.47				1,993.05	21,923.52
612001-08/12/06				80,260.41		8,026.04	88,286.45	WOD EOT 8
612002-08/12/06		21,373.35				2,137.53	23,510.68
701001-31/01/07				80,260.41		8,026.04	88,286.45	WOD EOT 9
701002-31/01/07		19,174.21				1,917.42	21,091.63
702001-28/02/07				72,493.27		7,249.33	79,742.60	WOD EOT 10
702002-28/02/17		19,109.23				1,910.92	21,020.15
703001-31/03/07				80,260.41		8,026.04	88,286.45	WOD EOT 11
703001-31/03/07		23,700.90				2,370.09	26,070.99
704001-17/04/07					618,510.60	61,851.06	618,510.60	Interest claim # 2
704002-17/04/07		207,262.90				20,726.29	227,989.19
C/F Total	1,890,001.44	1,866,254.51	3,527,420.00	2,174,763.22	769,988.12	1,007,644.77	11,626,593.47

5. Due to the failure to pay, on the 24^th of April 2007, a letter of demand and notice of a claim was given to the Solicitor General; this notice was acknowledged at about 3.45 p.m. by a Veronica Siri, Legal Secretary. Thereafter on the 18^th of December 2007; a Writ of Summons was filed and served on the State on the 8^th of January 2008. Acknowledgement of Service was received by Betty Makis, Senior Legal Secretary, Solicitor General’s Office at 9.46 a.m. The State however failed to file a defence by the requisite period prescribed under s 9 (i) (a) of the Claims By and Against the State Act 1996.
   
6. Default judgment was entered against the defendants on 28 June 2008.

Issues for determination

7. In order to determine what is an appropriate damages to be awarded, I view that the relevant matters for consideration are in relation to the following:
   
   • (i) Whether there are any outstanding payments due and payable to the Plaintiff on invoices rendered for payment?
   • (ii) If the answer is yes, whether it been proven on the balance of probabilities that the damages have been incurred, if so, what awards can be made for the proven damages;
   • (iii) Furthermore, whether the Plaintiff should recover any damages not pleaded in the statement of claim?
     

Evidence for the Plaintiff

8. On trial on assessment of damages, a number of documents were tendered into evidence by consent of the parties. These documents comprises the affidavits of Mr Mark Flynn (Managing Director of the Plaintiff) which are referred to and marked as:
   
   • Exhibit P1 – sworn on the 3^rd of June 2008 and filed on the same date; (Document No. 7);
   • Exhibit P2 – sworn on the 27^th of June 2008 and filed on the same date; (Document No. 12);
   • Exhibit P3 – sworn on the 1^st of July 2008 and filed on the 4^th of July 2008; (Document No. 13);
   • Exhibit P4 – sworn on the 12^th of September 2008 and filed on the 18^th of September 2008; (Document No. 17);
   • Exhibit P5 – sworn on the 11^th of February 2014 and filed on the 14^th of February 2014 (Document No. 51).
     

Mr Mark Flynn was not subjected to cross-examination.

9. However, Dr Goldsmith, an expert witness gave evidence for the plaintiff. The evidence was by sworn testimony and also under Oath. In his evidence, Dr Goldsmith states that the Defendant did not call any evidence to challenge the evidence of the plaintiff. Dr Goldsmith relied on a number of affidavits to support the Plaintiff’s claim. Firstly, his own affidavit, sworn on the 10^th of May 2012 and filed on the 22^nd of May 2012, which is referred to and marked as Exhibit P6; which also included a number of Appendixes which are marked and referred to as:
   
   • Exhibit P7;
   • Exhibit P8;
   • Exhibit P9; and
   • Exhibit P10.
     
10. During trial, the plaintiff assessed his damages to be in the sum of K11, 145,016.97 (Exhibit P10), with additional claims see Table 2^[2] reproduced and the additional claims indicated in Table 2a^[3] and Table 3^[4] below.

Table 2: Claims as indicated in Exhibit P10”

Invoice No/Date	Schedule F8.2 Amount	Schedule F8.3 Exchange rate adjustment	Variations	Extension of time	Contract Interest	GST	Total	Comments
303001- 07/04/03	567,000.00					56,700.00	623,700.00	Mobilisation
303003/07/04/03		86,751.00				8,675.10	95,426.10
411001- 22/11/04			17,000.00			1,700.00	18,700.00	Bond glade Proposal review
411002- 30/11/04	144,667.27					14,466.73	159,134.00
411003-30/11/04		36,745.59				3674.55	40,420.04
412001-31/12/04	144,667.27					14,667.73	159,134.00
412002-31/12/04		37,251.82				3,725.18	40,977.00
501001-27/01/05	144,667.27					14,466.73	159,134.00
501002-27/01/05		36,080.02				3,608.00	39,688.02
502001-28/02/05	140,000.00					14,000.00	154,000.00
502002-28/02/05		37,710.08				3,771.00	41,481.08
503001-31/03/05	139,221.82					13,922.18	153,144.00
503002-31/03/05		36,336.90				3,633.69	39,970.59
504001-29/04/05	138,444.55					13,844.45	152,289.00
504002-29/04/05		38,764.47				3,876.45	42,640.92
505001-31/05/05	66,889.09					6,889.91	73,578.00
505002-31/05/05		16,120.45				1,612.05	17,732.50
506001-30/06/05	66,889.09					6,688.91	73,578.00
506002-31/06/05		16,307.56				1,630.76	17,938.32
507001-31/07/05	38,889.09					3.888.91	42,778.00
507002-31/07/05		8,944.49				894.45	9,838.94
508001-31/08/05	35,000.00		66,820.00			10,182.00	112,002.00	Building Measure, Topo Survey
508002-31/08/05		21,962.57				2,195.26	24,158.83
509001-26/09/05	35,000.00		122,550.00			15,755.00	173,305.00	Marketing Study, Struct Reports
509002-26/09/05		34,345.90				3,434.59	37,780.49
510001-31/10/05	35,000.00		122,550.00			15,755.00	173,305.00	Marketing Study, Struct Reports
510002-31/10/05		32,177.84				3,217.78	35,395.62
510007-04/11/05				340,165.62		34,016.56	374,182.18	EOT 1 Approved by State Solicitor
510008-04/11/05		65,683.93				6,568.39	72,252.32
511001-30/11/05	27,221.82		81,700.00			10,892.18	119,814.00	Marketing Study, Struct Reports
511002-30/11/05		21,620.98				2,162.10	23,783.08
512001-07/12/05	27,221.82		81,700.00			10,892.18	28,180.25
512002-07/12/05		25,618.41				2,561.84	28,180.25
512003-07/12/05					151,477.52	15,147,75	151,477.52	Late payment interest contract
512004-07/12/05		35,627.51				3,562.75	39,190.26
601001-31/01/06	22,555.45					2,225.55	24,781.00
601001-31/01/06		4,759.20				475.92	5,235.12
602001-28/02/06	19,444.45					1,944.45	21,389.00
602002-28/02/06		3,175.30				317.53	3,492.60
602003-28/02/06				700,595.70		70,059.57	770,655.27	EOT 2
602009-28/02/06		114,407.28				11,440.73	125,848.01
603001-31/01/06	19,444.45					1,944.45	21,389.00
603002-31/03/06		2,621.13				262.13	3,492.60
604001-01/05/06	19,444.45					1,944.45	21,389.00
604002-01/05/06		3,988.08				398.81	4,386.89
605001-31/05/06	19,444.45					1,944.45	21,389.00
605002-31/05/06		4,017.24				401.72	4,418.96
606001-30/06/06	19,444.45					1,944.45	21,389.00
606002-30/06/06		3,671.13				367.11	4,038.24
606003-05/06/06			1,707,000.00			170,700.00	1,877,700.00	Prolongation Claim No.1
606004-05/06/06		391,585,58				39,158.58	430,744.16
606005-05/06/06			1,050,000.00			105,000.00	1,155,000.00	Variation No.7
606006-05/06/06		227,325.00				22,732.50	250,057.50
606007-05/06/06			141,000.00			14,100.00	155,100.00	Variation No.8
606008-05/06/06		32,895.30				3,289.53	36,184.83
606009-05/06/06			137,100.00			13,710.00	150,810.00	Variation No.9
606010-05/06/06		34,110.48				3,411.05	37,521.53
607001-31/07/06	19,444.45					1,944.45	21,389.00
607002-31/07/06		4,005.58				400.56	4,406.14
607005-31/07/06				478,973.41		47,897.34	526,870.75	WOD EOT 3
607006-31/07/06		88,274.80				8,827.48	97,102.28
608001-31/08/06				106,150.86		10,615.09	116,765.95	WOD EOT 4
608002-31/08/06		19,085.93				1,908.59	20,944.52
609001-30/09/06				77,671.36		7,767.14	85,438.50	WOD EOT 5
609002-30/06/06		14,975.04				1,497.50	16,472.54
610001-31/10/06				80,260.41		8,026.04	88,286.45	WOD EOT 6
610002-31/10/06		18,756.86				1,875.69	20,632.55
611001-30/11/06				77,671.36		7,767.14	85,438.50	WOD EOT 7
611002-30/11/06		19,930.47				1,993.05	21,923.52
612001-08/12/06				80,260.41		8,026.04	88,286.45	WOD EOT 8
612002-08/12/06		21,373.35				2,137.53	23,510.68
701001-31/01/07				80,260.41		8,026.04	88,286.45	WOD EOT 9
701002-31/01/07		19,174.21				1,917.42	21,091.63
702001-28/02/07				72,493.27		7,249.33	79,742.60	WOD EOT 10
702002-28/02/17		19,109.23				1,910.92	21,020.15
703001-31/03/07				80,260.41		8,026.04	88,286.45	WOD EOT 11
703001-31/03/07		23,700.90				2,370.09	26,070.99
704001-17/04/07					618,510.60	61,851.06	680,360.66	Interest claim # 2
704002-17/04/07		207,262.90				20,726.29	227,989.19
Total	1,890,001.44	1,866,254.51	3,527,420.00	2,174,762.22	769,988.12	1,007,644.77	11,145,016.97

Table 2a: Subsequent Invoices claimed after filing of Writ and introduced during trial

Invoice No/Date	Schedule F8.2 Amount	Schedule F8.3 Exchange rate adjustment	Variations	Extension of time	Contract Interest	GST	Total	Comments
704005-30/04/07				80,260.41		8,026.04	88,286.45	EOT Claim No.12
704006-30/04/07		25,538.86				2,553.89	28,092.75	Exchange Rate Increase, 31.82%
705001-31/05/07				80,260.41		8,026.04	88,286.45	EOT Claim No.13
705002-31/05/07		24,543.63				2,454.36	26,997.99	Exchange Rate Increase, 30.58%
706001-30/06/07				77,671.36		7,767.14	85,438.50	EOT Claim No.14
706002-30/06/07		24,963.58				2,496.36	27,459.94	Exchange Rate Increase, 32.14%
803005-31/03/08				709,398.46	709,398.46	70,939.85	780,338.31	Extension of Time – Claim No. 15
804006-31/03/08		234,952.77				23,495.28	258,448.05	Exchange Rate, 33.12%
803007-03/04/08								Interest on Claim No.3
804008-03/04/08								Interest assessed separately
806001-26/05/08								Interest Claim No. 4
806002-26/05/08								Interest assessed separately
Total		309, 998.84		947,590.64	709,398.64	125,758.96	1,383,348.44

11. Table 3 represents a claim for interest calculated to run from 30^th of April 2011 to 14^th of June 2017. However, there is no indication as to what this interest is and the basis for such a claim. Whether it is a claim for interest on the delayed invoice payments or interest calculation pursuant to the Interest on Judgment (Debts and Damages) Act Chapter 52, these matters are not clearly identified. However, the plaintiff has assessed his damages to be in the sum of 18, 186,000.66 as indicated in Table 3 below.

Table 3- interest claim - interest from 30/04/2011 to 14/06/2017

claim no	claim date	interest start date	claim amount	interest rate %	last total	interest to	interest amount	new total	payment date	payment amount
				10.95	8,251,291.40	31.05.11	76,737.00	8,328,027.26
				10.95	8,328,027.26	30.06.11	74,952.25	8,402,979.50
				10.95	8,402,977.50	31.07.11	74,147.71	8,481,127.21
				11.45	8,481,127.21	31.08.11	82,476.06	8,563,603.27
				11.45	8,563,603.27	30.09.11	80,591.72	8,644,194.99
				11.7	8,644,194.99	31.10.11	85,897.25	8,730,092.24
				11.7	8,730,092.24	30.11.11	83,952.39	8,814,044.63
				11.7	8,814,044.13	31.12.11	87,585.04	8,901,629.67
				11.7	8,901,629.67	31.01.12	88,455.37	8,990,085.04
				11.7	8,990,085.04	20.02.12	57,635.07	9,047,726.11
				13.2	9,047,720.11	29.02.12	29,448.37	9,077,168. 58
					9,077,168.58	31.03.12	101,763.76	9,178,932.34
					9,178,932.34	30.04.12	99,585.13	9,278,517.47
					9,278,517.47	31.05.12	104,021..08	9,382,538.55
					9,382,538.55	30.06.12	104,794.12	9,484,332.66
					9,484,332.66	31.07.12	106,328.46	9,590,661.13
					9,590,661.13	31.08.12	107,520.51	9,698,181.63
					9,698,181.63	30.09.12	105,218.63	9,803,400.26
				13.2	9,803,400.26	31.10.12	109,905.52	9,913,305.78
					9,913,305.78	30.11.12	107,552.58	10,020,858.36
					10,020,858.36	31.12.12	112,343.43	10,133,201.79
					10,133,201.79	31.01.13	113,602.91	10,246,804.70
					10,246,804.70	28.02.13	103,759.43	10,350,564.12
					10,350,564.12	31.03.12	116,039.75	10,466,603.87
					10,466,603.87	30.04.13	113,555.48	10,980,159.36
					10,580,159.36	31.05.13	118,613.73	10,698,773.09
					10,698,773.09	30.06.13	116,074.36	10,814,847.45
					10,814,847.45	31.07.13	121,244.81	10,936,092.26
					10,936,092.26	31.08.13	122,604.08	11,058,696.34
					11,058,696.34	30.09.13	119,979.28	11,178,675.62

					11,178,675.62	31.10.13	125,323.67	11,303,999.30
					11,303,999.30	30.11.13	122,640.65	11,426,639.95
					11,426,639.95	31.12.13	128,103.59	11,554,743.54
					11,554,743. 54	31.01.14	129,539.75	11,684,283.29
					11,684,283.29	28.02.14	118,315.37	11,802,598.66
					11,802,598.66	31.03.14	132,318.45	11,934,917.11
					11,934,917.11	30.04.14	129,485.68	12,064,402.79
					12,064,402.79	31.05.14	135,253.52	12,199,656.31
					12,199,656.31	30.06.14	132,357.92	12,610,071.59
					12,332,014.23	31.07.14	138,253.70	12,332,014.23
					12,470,267.93	31.08.14	139,803.66	12,610,071.59
				13.2	12,610,071.59	30.09.14	136,810.64	12,746,882.23
					12,746,882.23	31.10.14	142,904.77	12,889,787.01
					12,889,787.01	30.11.14	139,845.36	13,029,632.37
					13,029,632.37	31.12.14	146,074.67	13,175,707.04
					13,175,707.04	31.01.15	147,712.31	13,323,419.35
					13,323,419.35	28.02.15	134,913.31	13,458,332.66
					13,458,332.66	31.03.15	150,880.81	13,609,213.47
					13,609,213.47	30.04.15	147,650.64	13,756,864.12
					13,756,864.12	31.05.15	154,227.64	13,911,091.76
					13,911,091.76	30.06.15	150,925.82	14,062,017.57
					14,062,017.57	31.07.15	157,648.70	14,219,666.27
					14,219,666.27	31.08.15	159,416.09	14,379,082.37
					14,379,082.37	30.09.15	156,003.20	14,535,085.56
					14,535,085.56	31.10.15	162,952.25	14,698,037.81
					14,698,037.81	30.11.15	159,463.64	14,857,501.45
					14,857,501.45	31.12.15	166,566.84	15,024,068.29
					15,024,068.29	31.01.16	168,434.20	15,192,502.50
				13.2	15,192,502.50	29.02.16	159,333.97	15,351,836.48
					15,351,836.48	31.03.16	172,108.81	15,523,945.28
					15,523,945.28	30.04.16	168,424.17	15,692,369.46
					15,692,369.46	31.05.16	175,926.51	15,868,295.97
					15,868,295.97	30.06.16	172,160.14	16,040,456.11
					16,040,456.11	31.07.16	179,828.89	16,220,285.00
					16,220,285.00	31.08.16	181,844.95	16,402,129.95
					16,402,129.95	30.09.16	177,951.88	16,580,081.83
					16,580,081.83	31.10.16	185,878.62	16,765,960.44
					16,765,960.44	30.11.16	181,899.19	16,947,859.63
					16,947,859.63	31.12.16	190,001.76	17,137,861.39
					17,137,861.39	31.01.17	192,131.86	17,329,993.25
					17,329,993.25	28.02.17	175,483.99	17,505,473.23
					17,505,473.23	31.03.17	196,253.19	17,701,730.42
					17,701,730.42	30.04.17	192,051.63	17,893,782.07
					17,893,782.07	31.05.17	200,606.46	18,094,388.53
Total					18,094,388.53	14.06.17	91,612.14	18,186,000.66

Evidence for the Defendant

12. The Defendants submit that a contract was entered into between the Plaintiff and the Defendants on or about the 19^th of March 2003. This contract was for a term of 2 years. The value of the contract value is in the sum of K2, 079,000.00. The contract commenced on or about 7^th of April 2003 and was schedule to be completed on or about 7^th of April 2005.
13. The defendants say further that all invoices have been paid in full. In fact, they say that the Plaintiff has been paid over and above the contract amount. The Defendants submit further that payments in the sum of K8, 249,551.62 refer to Exhibit P6, Annexure “C” – Technical Audit Report; page 11 and Exhibit P7, Appendix “C” – Interest and Claim Value of the affidavit of Dr Goldsmith.
    
14. As a related matter, the Defendants say also that two proceedings had been filed by the Plaintiff. OS 155 of 2009 – Infratech Management Consultants v Brian Kummins & the State and WS 1467 0f 2007 - Infratech Management Consultants v Brian Kummins & the State, this claim.
    
15. The proceedings OS 155 of 2009, is a claim for damages, legal costs and on account of invoices rendered including interest claims on the proceedings WS 1467 of 2007. It appears that sometime in October 2009, OS No.155 of 2009 was settled. This payment was agreed to be made to the plaintiff in compliance with an NEC Decision 164/2008. In support of this argument, the Defendants referred to the affidavit of Dr Goldsmith to confirm such payments being made in the sum of K8, 249,551.62, more relevantly, Exhibit P6, Annexure “C” – Technical Audit Report; page 11). A perusal of the affidavit of Dr Peter Goldsmith sworn on 10^th May 2012 and filed on 22^nd May 2012) - Annexure “C” - Technical Audit Report - paragraph 9.0 Summary. OS 115 of 2009 and WS 1467 – Infratech Management Consultants Ltd v The Independent State of Papua New Guinea), in Exhibit P7 (Appendix C – Interest and Claim Value), contains a schedule of payment made by the Defendants; a total value of which is in the sum of K8, 249,551.67. These details I consider, are material facts to the issue of assessment. The schedule of payments are referred to in Table 4^[5] below and also in Exhibit P7 (Appendix C – Interest and Claim Value):

Table 4: Schedules of Payments

Date	Amount
17/12/2004	73,417.12
11/02/2005	645,708
02/03/2005	354,291.02
28/09/2005	92,202.00
18/11/2005	1,400,000.00
23/11/2005	100,000.00
02/06/2006	200,000.00
18/03/2009	1,083,932.55
08/12/2009	4,000,000.00
11/02/2010	300,000.00
Total payment on claim:	K8,249,551.67

Law on Assessment of Damages

16. Essentially, the principles established in the case of Coecon Limited (Receiver/Manager Appointed) v. National Fisheries Authority (2002) N2182, governing assessment of damages after entry of judgment on liability in default of a Defendant’s defence applies to this present case. This principle was subsequently endorsed by the Supreme Court in PNGBC v Jeff Tole (2002) SC694, William Mel v. Coleman Pakalia & The State (2005) SC790 and more recently, in Alex Awesa v Southern Highlands Provincial Government (2015) SC146. I hereby adopt these principle and set these out below:
    
    • (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 but 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; and
    • (5) The 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.”
      
17. To understand the basis of these claims, I now consider the five principles that apply to a claim where default judgment has been entered against a defendant and I am of the view that all five principles apply to this present case. My reasons for saying so are outlined below:
    
    • Default judgment was entered on the 28 June 2008 for failure of the Defendants to file a Defence to the claim. Hence, all questions of liability in respect of the pleadings has been resolved.
    • The next phase is to consider whether the plaintiff has introduced any new matter for which the defendant can take issue on in relation to liability? In this regard, the defendants say that all invoices have been paid. Thus these are new matters and thus are entitled to raise issues on liability. In this present case, I am minded to refer to Exhibit P10 (affidavit of Dr Goldsmith - Exhibit “P6”) contains number of invoices which are dated after the 17^th of April 2007. In that invoices dated 30^th April 2007 to 26^th May 2008 are invoices that were only introduced and became available during trial. These invoices are new claims and were matters not pleaded in the Statement of Claims (see Table 2a - paragraph 12 above).
    • Since this is a claim for damages for breach of contract; the plaintiff has the onus to adduce or introduce during the conduct of trial, evidence in regard to the specific provisions of the terms and conditions of the contract that were breached which entitles the plaintiff to damages. Furthermore, as there has been some payments made after the writ of summons had been filed and following entering into a consent order for settlement of the claim in WS 1467 of 2007, whether such payment would be taken into consideration thus allowing for adjustments for part-payments after the entry of default judgment (see paragraph 16 above) in assessing damages? So the next question to ask is, what then is the value of the outstanding invoices at the time of trial?
    • Fourthly, the plaintiff chose to lead evidence through its expert witness, Dr Goldsmith. This offends the established principle in Coecon Limited (supra); which states that: “a plaintiff 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”. Further, it also offends the statement in Lagan –v- The State [1995] N1369. “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.”
    • Lastly, the parties consented to tender into evidence a number of affidavits filed by Mr Mark Flynn, the Managing Director of the plaintiff; whose affidavits are also identified in paragraph 9 (ii) above. Including that of the expert witness, Dr Goldsmith identified in paragraph 9 (i) above. Both Mr Flynn and Dr Goldsmith acknowledge that a total sum of K8, 249,551.67 had been paid by the Defendant, State. Given these circumstances, it is only proper for this Court to consider whether the plaintiff be entitle to recover any damages not pleaded in the statement of claim?

Assessment of Damages

18. In an assessment of damages, the plaintiff must prove his damages. Damages will not be granted automatically (Boyd Construction v Sister Elizabeth Koai (2017) N6702. The Court held that the plaintiff has the onus of proving his loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim (Lagan v State (supra) and then expect the court to award what is claimed (William Mel v. Coleman Pakalia & The State (supra)). The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person’s case, that person has the onus of proving the allegation. (Yooken Paklin v The State (2001) N2212).
    
19. In addition, corroboration of a claim is usually required and the corroboration must come from an independent source. (Albert Baine v The State (1995) N1335, Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331). The principles of proof and corroboration apply even when the defendant fails to present any evidence disputing the claim. (Peter Wanis v Fred Sikiot and The State (1995) N1350).
    
20. Similarly, the same principles apply after default judgment is entered and the trial is on assessment of damages – even when the trial is conducted ex parte. A person who obtains a default judgment is not entitled as of right to receive any damages. Injury or damage suffered must still be proved by credible evidence. (Yange Lagan and Others v The State (1995) N1369). If the evidence and pleadings are confusing, contradictory and inherently suspicious, the plaintiff will not discharge the onus of proving his losses on the balance of probabilities. It is conceivable that such a plaintiff will be awarded nothing. (Obed Lalip and Others v Fred Sikiot and The State (1996) N1457).
    
21. Where default judgment is granted, for damages to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded. (MVIT v Tabanto [1995] PNGLR 214, Waima v MVIT [1992] PNGLR 254, MVIT v Pupune [1993] PNGLR 370; Tabie Mathias Koim and 28 Others v The State and Others [1998] PNGLR 247)
    
22. On the other hand, in circumstances where damages cannot be assessed with certainty, this does not relieve the wrongdoer of the necessity of paying damages. Where precise evidence is available the court expects to have it. However, where it is not, the Court must do the best it can. (Jonathan Mangope Paraia v The State (1995) N1343); (see also Michael Buna v The State (2004) N2696) which is also generally relevant to this principle. Thus where the Court is faced with such circumstances as this present situation, I will do the best I can to assess damages on the given facts adduced during trial.

Analysis of damages

23. In assessing damages, this Court is minded to refer to the relevant term of the contract (Clause 31 (h) which provides for invoices for payment; in that invoice must be paid within 60 days from the date on which these invoices were issued. Any sums unpaid at the expiry of such period of 60 days shall bear interest thereafter, such interest to accrue from day to day at rates detailed in Part II (Section C). Perusal of the Part II (Section C) provides for the following:
    
    • Clause 31 (a) Payment for services: Consultancy Fees will be paid on a Lump Sum Basis, as detailed in Schedule F8. Rise and fall will not apply;
    • Clause 31 (h) – Agreed compensation for overdue payment – Parties had agreed that interest is based at lowest overdraft value of interest charged by the Consultants’ Bank in Papua New Guinea. Having noted this, it is apparent that the claim assessed in Column 3 of the Outstanding Invoices does not state the overdraft value of interest charged by the Consultant’s Bank in Papua. It is a claim on the Foreign Exchange Rate Variation. Furthermore, a perusal of the Contract Agreement, indicates that the Currency of the Contract is the Local Current, meaning the Contract Value will be paid in the PNG Kina. Even then, if there has been an amendment or variation to the Contract term on this matter, no evidence of such an amendment or variation to the Currency of the Contract was presented before the Court;
    • Furthermore, under Clause 34, the reference to the “Rate of Exchange”– only applied for tendering purposes and ran for 7 days only and prior to the closing date for tenders. There is no reference in relation to the continuation of the contract and no evidence was presented to substantiate the claim for rate of exchange adjustment;
    • Clause 31(a) provides for agreed compensation for overdue payment on lowest overdraft value of interest charged by the Consultant’s bank in Papua New Guinea. Column 6 of Table 2 records three claims for contract interest; Invoice No. 512003 dated 07/12/07 for a sum of K151, 477.52; Invoice No. 704001 dated 17/04/07 for a sum of 618,510.60 and Invoice No. 803005 dated 31/03/08 for a sum of K 780,338.31. The total claim for contract interest is in the sum of K2, 188,695.23 I note that although the contract provides for agreed compensation for overdue payment. I find no evidence introduced by the plaintiff as to the methodology of calculating this interest on overdue payment. No evidence was adduced during trial as to what is the lowest overdraft value of interest charged by the Consultant’s bank;
    • There is no dispute in relation to the part payment of the sum of K2, 865, 619.12 prior to the filing of the writ of summons.
    • Aside from this confirmation, a perusal of the affidavits of Dr Goldsmith Exhibit P7 (Appendix C – Interest and Claim Value), confirms that payments made to the plaintiff which now adds up to the sum of K8, 249,551.67 (paragraph 15). This is also confirmed in the affidavit of Mark Flynn sworn on the 21^st of June 2012 and filed on the 22^nd of June 2012 (Document No. 35) more particularly Annexure F, the last page which is a reference to schedule of payments totalling the sum of K8, 249, 551.67. Given this confirmation, it is therefore accepted that at the time of trial, a total payment in the sum of K8, 249,551.67 has been made by the Defendants to the plaintiff. Thus I accept that any outstanding invoice claims have been settled by the Defendants in full. There is however the matter of interest accruing on the delayed payments.
      
24. Faced with dilemma; I am thus required to ask; do these payments indicate that at the time when the claim was filed most (if not all) of the invoices had been paid. If so than what are the actual number of invoices pending settlement which would ordinarily attract the penalties such as of calculation of interest based on the lowest overdraft value of interest charged by the Consultant’s Bank in Papua New Guinea?
    
25. In addressing this issue, it is clear that this is no evidence of calculation of interest based on the lowest overdraft value of interest charged by the Consultant’s Bank in Papua New Guinea. Due to the lack of such evidence, how can this Court assess damages? Do I accept on face value, the evidence of Dr Goldsmith and Mark Flynn as it is presented? Surely, this would go against the principles established that the onus to prove damages is placed on the Plaintiff on the balance of probabilities?
    
26. So given this revelation, what invoices had been outstanding and how do we assess damages and interest due and owing on the invoices? Or alternatively, if interest is to be calculated on the overdue invoices, what is the period upon which interest would accrue if not all of the invoices have been paid in full?
    
27. Overall, the evidence suggests that the claim comprises wholly of interest accrued during the delayed period in payment of invoices and after entry of default judgment. However, how these interest is calculated or the basis for such is not disclosed; including when it runs. It appears that a rate of 10.95% to 13.20% is charged but there is no correlation between the calculation of interest, exchange rate adjustment and the contractual basis for such a claim.
    
28. Further, whether such interest accrue is calculated pursuant to Clause 31 (a) or (h) of the Contract, this is unclear as no evidence was introduced in relation to this claims. All the plaintiff has presented is a log of claims which they say has not been paid at all or that there has been a delay in payment.
    
29. All the plaintiff has presented is a log of claims which they say has not been paid at all or that there has been a delay in payment. In trying to understand, which invoices exactly has been paid in full or if it is a delayed payment, I am of the view that it is proper to be guided by the terms of the contract to determine the basis of the claims.
    
30. Since if no evidence was adduced to confirm the basis of the claim, I have taken the liberty to refer to a copy of the contract that was attached to the affidavit of Mark Flynn sworn on the 3^rd of June 2008 (Annexure “S”) and filed on the same date, Exhibit P1 to determine whether the plaintiff has proven his damages as per the terms of the contract and its breach to assess his damages. How these interest is calculated or the basis for such is not disclosed; including the period interest is said to commence or runs. It appears that a rate of 10.95% to 13.20% is charged but there is no correlation between the calculation of interest, exchange rate adjustment and the contractual basis for such a claim. Further, whether such interest accrue is calculated pursuant to Clause 31 (a) or (h) of the Contract, this is unclear as no evidence was introduced in relation to this claims.
    
31. It was a term of the contract that payment for the consultancy shall be made as a lump on satisfactory completion of the services in accordance with the terms of reference as described in Schedule F1, and as shown on the completed form of Tender (Section D) of the Contract.
    
32. It was also a term of the contract that monthly rate be used - Schedule F8.1 (vi). Progress payment may be made during the consultancy period; up to 5% of the lump sum will be retained until completion of the services.
33. A perusal of Exhibit P7 – revealed that three payments were made after entry of default judgment. These payments were made on the 18/03/2009 for a sum of K1,083,932.55; the 08/12/2009 for a sum of K4,000,000.00 and on the 11/02/2010, for a sum of K300,000.00) The last payment being made on the 11^th of February 2010.
    
34. Similarly, the affidavits of Mr Mark Flynn sworn on the 21^st of June 2012 and filed on the 22^nd of June 2012 (Document No. 35) more particularly Annexure F, the last page which is a reference to schedule of payments totalling the sum of K8, 249, 551.67. This confirms payment.
    
35. So the question to ask is if, payments have been made then what sum or which invoices remain due and payable?
    

Consideration of Damages

36. In considering whether one or all of the principles are applies to this case, I have conducted a cursory enquiry of the pleadings in the statement of claim. I note that on or about the 8^th of December 2009, a payment in the sum of K4 million was made by the State (Defendant). This is referred to in the Schedule of Payment in Exhibit P7, Appendix “C”. In the circumstances, if the Defendants claim that all outstanding invoices have been settled by the State. What claim then is due and owing to the plaintiff as alleged in WS 1467 of 2007?
    
37. In the present case, the entry of default judgment means, the Plaintiff, Infratech Management Consultants Limited has established its claim as pleaded and the consequences which follows must be proven by substantive evidence. In that, the plaintiff must demonstrate the types of damages that it has suffered and or sustained and what (if any) compensation that it is entitled to receive in damages. The next step is for the Court to determine such entitlement.
    
38. The relevant question then is, has the Plaintiff established his claim on the required standard? That question can be answered first by reference to a clear statement of what the required standard of proof is and secondly the evidence the Plaintiff has placed before the Court.
    
39. In attempting to assess damages, I must firstly remind myself that the stand of proof required in civil case is for the plaintiff to establish through the introduction of and adducing relevant and credible evidence of his claim on a balance of probabilities. In addition, it also means that the Court be satisfied by the evidence that on a balance of probabilities, the evidence introduced for the plaintiff is sound; the claim has substance and is not is trivial. All these factors are necessary to assist the Court determine the issues more easily and reach a resolution without much delay.
    
40. In applying this process to the assessment of the outstanding invoices (in the Table 2) contained in paragraph 15 above). I make the following finding:
    
    • (1) At the time that the writ was filed on the 18^th of December 2007, Seventy-nine (79) invoices only had been rendered for payment, the value being in the sum of K11, 251,270.34.
    • (2) By the 10^th of February 2009, a total payment of (K8, 251,675.65) had been paid by the State out of the outstanding value of the invoices (at date of filing of writ and after entry of default judgment);
    • (3) If the plaintiff is entitled to any damages, it would confined to any of the 79 invoices were rendered for payment and had remained unpaid, that is as pleaded in the Statement of Claim.
    • (4) Furthermore, part-payment in the sum of K2, 865,619.12 had been paid prior to the filing of the writ on the 17^th of December 2007.
    • (5) By the 10^th of February 2009, a total of K8, 251,675.65 made by the State in relation to the 79 invoices rendered.
    • (6) Further, as the affidavits also make mention of the proceedings OS No.115 of 2009, it is necessary to conduct a cursory inquiry as to the relevance of OS No.115 of 2009 to these proceedings. In this matter, it appears that on or about 23^rd of October 2009, a sum of K4, 000,000.00 was paid by consent of the parties as settlement of all the outstanding sum of the outstanding invoices including interest claimed by the plaintiff in WS 1467 of 2007. Given the terms of these orders, I am minded to say that if anything is due and owing, in terms of outstanding invoices, it has already been settled by the 8^th of February 2010. Hence, commencing 9^th of February 2010, there would be no further delay payment in respect of the 79 invoices rendered to the State for settlement. Therefore there is no delayed payment of invoices which has remained outstanding and due for payment for assessment
    • (7) Consequently, by the 11^th of February 2010, there were no other invoice amount due and owing to the Plaintiff. Furthermore, any claim not pleaded in the Statement of Claim are not properly before this court.
    • (8) Furthermore, any further claims for interest accrued on the delayed payment is misconceived as there would be any other rendered invoices due and pending payment as at 11^th February 2010, that is the date after the final payment made by the State on the 10^th of February 2010.
      
41. If there is however, any rendered invoices due and owing, I note that the calculation (sum) contained in Table 2, more particularly Invoice No. 607001 dated 31/07/06 for a sum of K19, 444.45 is the last invoice rendered by the plaintiff to the defendants for payment. All other calculation after the 31^st of July 2006 are claims for interest accrued on the delayed payment of the invoices. Hence, the question to ask here is, if the plaintiff is entitled to a claim for interest accrued on the delayed payment of the rendered invoices, whether the plaintiff has proven his damages on the balance of probabilities?
    
42. I consider that whilst there is sufficient evidence to suggest that the plaintiff had faced difficulties in payment of invoices rendered during the term of the contract and upon completion of the contract. The plaintiff has not proved on the balance of probabilities that delayed payment of the invoices has placed him at a most disadvantage position. In terms of whether, the plaintiff had incurred some expenses in pursuing his claim, no such details have been adduced during trial, except off course, the costs of this litigation.
    
43. The plaintiff was not subject to cross-examination. It elected to rely on the evidence of a third party, an expert witness, Dr Goldsmith. The plaintiff is at liberty to call expert witness. However, I do not see the relevance of this expert witness as his qualification is in relation to engineering expert, the claim is in relation to delay payment of invoices which is financial in nature. The claim is not technical (in term of engineering or structural design of a building or construction). Faced with these situation, I find problems in accepting the entire claim due to lack of corroboration because the plaintiff (through its Managing Director, Mark Flynn) has not corroborated such claims. Further, it appears that no adjustments have been made in relation to payments made in relation to this claim including the proceedings OS 115 of 2009. I also note that there are also references to payment of the invoices in the affidavit of Mark Flynn sworn on the 21^st of June 2012 and filed on the 22^nd of June 2012 ( Annexure “B” (Document No.35.) provide some corroboration to payments of invoices in the sum of K8.249,551.67.
    
44. Given the circumstances that there are some evidence to the claim, I apply the principle in Paraia’s case which states: “the fact that damages cannot be assessed with certainty does not relieve a wrongdoer of the necessity of paying damages, based on a reasonable estimate”. I will now look at the affidavits tendered into evidence by consent and the oral evidence of Dr Goldsmith, an expert witness. These are the affidavits of its Managing Director, Mark Flynn. The evidence of Mr Flynn was not tested by cross-examination:
    
    • Exhibit P1 – sworn on the 3^rd of June 2008 and filed on the same date; (Document No. 7) – in this affidavit, he attaches a copy of the Contract of which I make particular reference to matters which are relevant to the assessment of damages and these are as follows:
    • Clause 31 (h) states: “Payment for Services: All sums due from the State to the Consultant... shall be paid within sixty days of the submission by the Consultant of his accounts therefor to the State. Any sums remaining unpaid at the expiry of such period of sixty days shall bear interest thereafter... such interest to accrue from day to day at the rates detailed in Part II (Section C);
    • Part II (Section C) reads: Clause 31 (a) – Payment for Services – Consultancy Fees will be paid on a Lump Sum Basis, as detailed in Schedule F8. Rise and fall will not apply;
    • Clause 31 (h) – Agreed compensation for overdue payment: Lowest overdraft value of interest charged by the Consultant’s Bank in Papua New Guinea;
    • Clause 33 – Time of Payment – Local currency, 60 days
    • Exhibit P2 – sworn on the 27^th of June 2008 and filed on the same date; (Document No. 12) – relates to Schedule of Invoices and payments of the contract including administrative and management costs of pursuing this claim
    • Exhibit P3 – sworn on the 1^st of July 2008 and filed on the 4^th of July 2008; (Document No. 13); - provides details of invoices submitted to the State for Professional services rendered (see table in paragraph 15 above)
    • Exhibit P4 – sworn on the 12^th of September 2008 and filed on the 18^th of September 2008; (Document No. 17) – this affidavit is more in line with the non-payment of outstanding invoices; and
    • Exhibit P5 – sworn on the 11^th of February 2014 and filed on the 14^th of February 2014 (Document No. 51) – relates to tax returns and notices of assessment to the Internal Revenue Commission in which the plaintiff states that due to non-payment of invoices, it has nothing to declare to the Internal Revenue Commission.
      
45. Thus as soon as default judgment is entered, any claim due and pending has to be determined within the special principles regarding damages for breach of contract as held in Rodao Holdings Ltd v Sogeram Development Corporation Ltd (2007) N5485. In this case, his Honour Cannings J in his assessment of the claim by the plaintiff noted the general principles for assessment of damages which I adopt and these are:
    
    • The plaintiff has the onus of proving his loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and then expect the court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person’s case, that person has the onus of proving the allegation. (Yooken Paklin v The State (2001) N2212, National Court, Jalina J.)
    • Corroboration of a claim is usually required and the corroboration must come from an independent source. (Albert Baine v The State (1995) N1335, National Court, Woods J; Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331, National Court, Lenalia AJ.)
    • The principles of proof and corroboration apply even when the defendant fails to present any evidence disputing the claim. (Peter Wanis v Fred Sikiot and The State (1995) N1350, National Court, Woods J.)
    • The same principles apply after default judgment is entered and the trial is on assessment of damages – even when the trial is conducted ex parte. A person who obtains a default judgment is not entitled as of right to receive any damages. Injury or damage suffered must still be proved by credible evidence. (Yange Lagan and Others v The State (1995) N1369, National Court, Injia J.)
    • If the evidence and pleadings are confusing, contradictory and inherently suspicious, the plaintiff will not discharge the onus of proving his losses on the balance of probabilities. It is conceivable that such a plaintiff will be awarded nothing. (Obed Lalip and Others v Fred Sikiot and The State (1996) N1457, National Court, Injia J.)
    • Where default judgment is granted, for damages to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded. (Poko and Others (2001) N2274, National Court, Jalina J.)
      
46. I adopt for purposes of assessing damages the five principles established (see Hadley v Baxendale (1854) 9 Exch 34; Victoria Laundry v Newman [1949] 2 KB 528; Tetley v The Administration (1971) No 647 and Coecon (supra) which was cited in Rodao Holdings Ltd v Sogeram Development Corporation Ltd Rodao Holdings Ltd v Sogeram Development Corporation Ltd (supra) as applicable to this current matter. These special principles are considered appropriate to circumstances of PNG which principles are:
    
    • (i) The general principle that the purpose of an award of damages is to put the innocent party in the same position, as far as money can do, as if the guilty party had not committed a wrongful act, is qualified substantially when assessing damages for breach of contract.
    • (ii) The qualification is that the innocent party only gets the amount of his actual losses that were reasonably foreseeable at the time the contract was formed.
    • (iii) What is taken to have been reasonably foreseeable at the time the contract was formed depends on two things: (a) the sort of knowledge that any reasonable person would be expected to have; and (b) knowledge of special circumstances outside the ordinary course of things.
47. I have taken into account all of the above principles in assessing the types of remedies covered by the default judgment. Given these matters, the next matter to determine is what damages should be awarded for the plaintiff?
    
48. Having already accepted that the purpose of an award of damages is to put the innocent party in the same position as he was prior to the breach and that the innocent party only gets the amount of his actual losses that were reasonably foreseeable at the time the contract was formed, I will now assess the type of remedies for which the defendant is liable under the default judgment:
    
    • (i) Remuneration for the interest payable (Clause 31 (h) on outstanding invoices at time of filing or rendering of the 79 invoices for payment commencing with the first monthly Invoice No. 303001 dated 30^th March 2003 up to the last Invoice No. 704002 dated 17^th April 2007. Any other invoices rendered after the date of the filing of the writ (17^th December 2007) are not before this Court and any claims for such invoices are misconceived.
49. I now propose to deal with the assessment by considering the first issue raised in paragraph 12 which is whether the plaintiff has proven on the balance of probabilities that the damages have been incurred, if so, what awards can be made for the proven damages:
    
    • (i) Firstly, invoices that were introduced during trial which are reproduced and referred to in Table 2a (Exhibit “P10”) No. 704006 dated 30/04/2007 inclusive of invoices up to and including No. 806002 dated 26/05/08 were not pleaded in the statement of claim. Whilst I note that the plaintiff has claimed the value of K1, 383,348.44 as damages, I find that these invoices are new claims. I therefore make no award for this head of damages.
    • (ii) Secondly, in Column 3, Schedule F8.3 (Exchange Rate) (Table 2a) are claims for exchange rate adjustment. I note that whilst this log of claims is pleaded, this claims do not conform to Clause 34 of the contract which provides for “Currency of Agreement” – and it specifically states that “the payment of the contract to be made in the local currency, which is in PNG Kina”. Here Clause 34 provides for the contract to be paid in PNG Kina. These claims appears to be claims for exchange rate adjustment which is not a term of the contract and therefore misconceived. Given the lack of evidence to substantiate the claim for exchange rate adjustment in the sum of K 1,866,254.51, I find that the claim for exchange rate adjustment has not been proven on the balance of probabilities. I therefore make no award for exchange rate adjustments.
    • (iii) Further, the contract is for a period of 24 months. If an extension was granted to the plaintiff to extend the contract, again, no evidence was adduced during trial to form the basis for the claim for extension of time in the sum of K2, 174,763.22. I find that the plaintiff has not produce evidence to substantiate this claim on the balance of probabilities. I make no award for such claim.
    • (iv) The claim for interest on the delayed invoice payments, is in my respectful view a matter for assessment. However, the basis for such a claim is in accordance with Clause 31 (h) and Part II of the Contract. Interest in this case is in accordance with Part II of the Contract (that is, interest to be calculated on the lowest overdraft value of interest charged by the Consultant’s bank in Papua New Guinea). Instead, the plaintiff has adduce a log of claim based on the Exchange Rate Adjustment assessed by the Bank of South Pacific. This information is not in compliance with the Part II of the Contract. Whilst I note that the plaintiff has failed to produce any evidence of such an overdraft facility with a bank in PNG. It is my view that the plaintiff is entitled to interest calculated on the lowest overdraft value of interest charged by the Consultant’s bank in Papua New Guinea. The contract provides for interest accrued on delayed payment of invoices rendered. I will come to this head of damages later in this judgment.
    • (v) Further, I find that all outstanding invoices have been paid in full as detailed in Table 4 of this judgment. I therefore, find that all outstanding invoices had been paid by 10^th of February 2009. Furthermore, since all outstanding invoices had been settled by 10^th of February 2009, any claim for interest accrued on any outstanding invoices ceases. Consequently, I find that any claim for interest accrued on delayed payment of invoices from 30^th April 2011 to 14^th June 2017 is misconceived, frivolous and vexatious and an abuse of the courts process. I make no award for this head of damages.
    • (vi) However, I find that a claim under Clause 31 (h) is available to the plaintiff. This claim however is to be paid pursuant to Part II of the Contract. In this case, the claim arose due to the delayed payment of invoices which had been rendered for payment. According to the number of invoices rendered commencing with the issuance of Invoice Nos. 303001 dated 7^th April 2003 to Invoice No 704002 dated 17^th April 2007. A total of 79 invoices altogether (Table 1). Whilst I note that these invoices had been rendered for payment, I find that the plaintiff has not adduced or introduced evidence on the lowest interest charged for an overdraft facility. Given this lack of evidence, I propose to use assess damages using the log of claims in Table 1 and Schedule of payments in Table 4 as a guide, and will attempt to calculate the lowest interest charged for an overdraft facility and make an award accordingly. In this regard, I find that the correct period is 60 days after the issuance of the first invoice dated 7^th of April 2003, which would mean that interest accrued would run from 7^th June 2003 to 28^th June 2008, date of entry of default judgment. Any claim thereafter would be considered a judgment debt if awarded. I also note that the plaintiff in Table 1 has claimed for interest accrued and this are captured in Invoice No.512003 dated 7^th December 2005 for a sum of K166, 625.50 and Invoice No.704001 dated 17^th April 2007 for a sum of K680, 360.66. I will assess damages on interest accrued along this assessment.
      
50. I now come to the second issue and that is whether there is any outstanding invoice due and payable to the Plaintiff?
    
51. Going by the schedules of payment in Table 2 above, the first invoice was issued on the 7^th of April 2003 and the last invoice was issued on the 17^th of April 2007, which would also effectively mean that the contract had been completed by then. Because the 24 months term has expired. Going by the evidence of the plaintiff, it is my view that all outstanding invoices under the contract have been paid in full; in the amount of K8, 345, 551.67. The only outstanding issue is the settlement of rendered invoices (if any) and interest accrued on any delayed payment of invoices on invoices that had not been paid at the time that the writ was filed and served on the defendants.
    
52. A perusal of the invoices also indicate that the contract may have been completed on or about the 31^st of July 2006 as the F8.2 Amount invoice had ceased. Subsequent invoices issued from the 31^st of July 2006 was a claim for Exchange Rate Adjustments and Extension of Time and Variations Claims. Any difference in numbers can be adjusted when calculating amount of damages where appropriate.
    
53. The statement of claim pleads loss of outstanding sum of K8,385,651.22 and interest on the contract sum at a rate of 10% as per clause 31 (h) and loss of business including interest at 8% under the Judicial Proceedings (Interests on Debts and Damages) Act Chapter No.52; costs and such other orders as the Court deems fits. As a related matter calculation of interest at 8% has now been amended. Interest is now at 2%.
    

Damages for Delayed Payment of Outstanding Invoices

54. Finally, the third issue for determination is whether the plaintiff has proven on the balance of probabilities his damages, what awards can the Court make in relation to his claims. To answer this issue, my findings in relation to outstanding Invoices introduced during trial reproduced and referred to in Table 2a (Exhibit “P10”) Invoice No. 704006 dated 30/04/2007 inclusive of invoices up to and including No. 806002 dated 26/05/08 are as follows:
    
    • Any outstanding invoices not pleaded in the statement of claim are new claims and therefore are not matters for assessment and are not properly before this court. I leave this matter here;
    • Clause 34 – Currency of Agreement: provides for the payment of the contract to be made in the local currency, which is in PNG Kina. Given the lack of evidence to substantiate the claim for exchange rate adjustment in the sum of K 1,866,254.51, I find that the claim for exchange rate adjustment has not been proven on the balance of probabilities. I make no award for this claim.
    • Clause 24 – Commencement of contract provides for the period of contract to be 21 months. No evidence has been adduced by the plaintiff that an extension was granted to extend the contract which would form the basis for the claim for extension of time in the sum of K2, 174,763.22. Given the lack of evidence to substantiate this claim on the balance of probabilities, I find that this has not been proven on the balance of probabilities. I make no award for this claim. In fact all outstanding invoices has been paid in the sum of K8.249, 551.67. No further claim for contract amount is awarded.
    • Clause 31 (h) provides for agreed compensation for overdue payment at lowest overdraft value of interest charged by the Consultant’s bank in Papua New Guinea. However, no evidence has been provided by the plaintiff as to an overdraft facility upon which a charge for interest can be calculated. Instead, the plaintiff has lodged a claim for exchange rate adjustment, which incidentally is not a term of the contract. I find that again the plaintiff has no proven on the balance of probabilities the claim for this head of damages for exchange rate adjustment.
    • (vii) However, I propose to consider a claim for interest on delayed payments which is a term of the contract and the basis for this cause of action. . I find that a claim for interest for delayed payment of invoices rendered for payment under Clause 31 (h) and paid in accordance with Part II of the Contract is available to the plaintiff. Whilst I note that there is a claim for interest for the period from the issue of the writ to 14^th June 2017, I find that this period is misconceived. However, I find that the correct period is from 60 days after the issuance of the first invoice dated 7^th of April 2003 to 28^th June 2008, date of entry of default judgment as any claim thereafter would be considered a judgment debt. I have attempted to calculate interest for delayed payments in line with the claim in Invoice No.512003 dated 7^th December 2005 for a sum of K166, 625.50 and Invoice No.704001 dated 17^th April 2007 for a sum of K680, 360.66. In accepting these claims, I will now make an award for interest accrued on delayed payment, for the period commencing from the 18^th of April 2007 to the 28^th June 2008, I make an award for interest accrued on delayed payment in the sum of K2, 500,000.00.
      
55. Aside from this claim for interest accrued on the overdue payment, the plaintiff is entitled to make a claim for interest under the under the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52.
    
56. The plaintiff in this present case, claimed interest in his statement of claim and therefore it is open to this court to make an order for payment of interest. The issue as to whether the Court may order that there be included in the sum for which judgment is given interest, at such rate as it thinks proper, on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause of action arose and the date of the judgment., that is a matter of discretion of the Court (Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24). The issue as to whether to grant interest at all and to fix the rate whether on the whole or part of the debt or damages for which judgment has been given; and to fix the period for which interest will run are discretionary matters for the court.
    
57. In this regard, I accept that a plaintiff should in the normal course of events receive interest. The maximum rate that can be awarded is, by virtue of Section 1(2); 2% payable on the whole of the sum of damages for which judgment is given. Further, the appropriate period in which interest runs would be for the period from the filing of the writ, to the date that full payment of the outstanding invoices was made by the State which is noted to be the 11^th of February 2010.
    

Summary of claims

Value of contract

• The value of the contract was in the sum of K2, 079,000.00. However, upon a further perusal of the evidence, it has become apparent that further payments have been made since the entry of default judgment on the 28^th of June 2008. These payments have now increased the total amount of payments made by the State to a sum of K8, 249,551.67. So essentially when the matter went to trial on the 5^th of July 2017, no outstanding invoices had been due and owing. Given this confirmation that the defendants have paid all outstanding invoices. I make no award for the amount of damages claimed.
  

Remuneration for interest accrued on late payments:

• Two claims are pleaded for late payment of interest on contract. These being:
  • Invoice No. 512003 dated 7^th December 2005 for a sum of K161, 625.27;
  • Invoice No. 704001 dated 17^th April 2007 in the amount of K680, 361.06
  • Given that the plaintiff is entitled to an award for interest accrued on the delayed payment under Clause 31 (h) of the contract, I will allow interest accrued on delayed payment of invoices from 18^th of April 2007 ceasing on 11^th February 2010, the date upon which it is presumed that all invoices had been settled by the defendants. A total of 2 years 10 months. I make an award of K2, 500,000.00 as interest accrued on delayed payment of invoices rendered to the defendants for settlement.
  • Overall, these three assessment brings the total value of interest accrued on delayed payments on invoices rendered to the defendants for payment in the sum of K3, 341,986.33.

Special damages

• There is no claim for special damages. Therefore, no award is made for special damages
  

Interest Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52.

• Interest will be awarded at the rate of 2% per annum on the total amount of damages (K3, 341,986.33.) under Section 1(1) of the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. In determining the period as to when interest would run, I have taken into consideration the fact that payments have been made by the defendants in settlement of the invoices rendered which totalled the sum of K8, 249,551.67 by the time this matter went to trial, there was a need by the plaintiff to analyse its claims and make adjustments accordingly. The fact that the plaintiff chose to run this trial up to the 5^th of July 2017, I fix the commencement date of the period in respect of which interest will accrue as the date of trial which is the 5^th July 2017 to the date of judgment, 18 June 2018. A total period of 352 days, which is 11 months 13 days. Interest is calculated by applying the formula D x I x N = A, where:
  • D is the amount of damages assessed;
  • I is the rate of interest per annum;
  • N is the appropriate period in numbers of years;
  • A is the amount of interest.
  • Thus K3, 341,986.33x 0.2 x 0.11 = K7, 352.36

Costs

The plaintiff is entitled to his costs on a party-party basis. Costs to be taxed if not agreed.

Order of the Court

(1) Judgment for the plaintiff in the sum of K3, 349,338.69 (being an award of damages for a sum of K3, 341,986.33 plus interest at the rate of 2% calculated to be in the sum of K7, 352.36).
(2) Costs for the plaintiff on a party-party basis. Costs to be taxed if not agreed.

Orders accordingly.

Ashurt Lawyers: Lawyers for the Plaintiff
Solicitor General: Lawyer for the Defendants

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^[1] Table 1: Outstanding Invoices

3
^[2] Table 2: Claims as indicated in Exhibit P10”
^[3] Table 2a (additional claims)
^[4] Table 3 – Claim for interest accrued on delayed payment
^[5] Table 4: Schedules of Payments