Walup v National Housing Corporation [2019] PGNC 247; N8065 (21 October 2019)

N8065

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 1402 OF 2015

BETWEEN
TOPI WALUP for himself and on behalf of four others whose names are in the schedule
Plaintiffs

AND
NATIONAL HOUSING CORPORATION
Defendant

Waigani: Makail, J
2019: 17^th & 21^st October

CONTRACT – Breach of contract – Oral contract – Contract for provision of security services – Contract between employer and employee – Failure to pay wages by employer – Proof of – Employment Act – Section 15

ASSESSMENT OF DAMAGES – Special damages – Lost wages – Daily expenses – Special damages require specific pleadings and strict proof – General damages for stress, anxiety and hardship – Proof of – Lack of Medical or psychiatric report to justify a higher award

Cases Cited:
Joses Taru & 28 Ors v. New Ireland Shipping Limited (2008) N3501

Madring v. Santi Forestry (PNG) Ltd (2015) N5908

Counsel:
Mr. A. Token, for Plaintiffs
No appearance, for Defendant

JUDGMENT

21^st October, 2019

1. MAKAIL, J: This is a trial on liability and assessment of damages. It arises from a breach of an oral contract for provision of security services to the defendant between January 2008 and December 2012. The plaintiffs filed a writ of summons and statement of claim and subsequently amended them on 18^th November 2015. They seek the following relief:

1. General damages.
2. Special damages.
3. 8% interest.
4. Costs.
   

2. Although the defendant filed a defence to the original writ of summons and statement of claim, it did not file an amended defence to the amended writ of summons and amended statement of claim. Technically, it has no defence against the claim in its amended form but as no default judgment was entered against it, liability remains to be proven.

Liability

3. The first issue is whether there is a contract between the parties. The onus is on the plaintiffs to prove a contract between them and the defendant.

4. The plaintiffs rely on an affidavit of Topi Walup sworn on 30^th June 2017 and filed on 3^rd August 2017. In that affidavit, Mr. Walup deposes that:

• In or about 2008, the defendant was facilitating, managing and overseeing the construction of a Public Servants Housing Project at Gerehu Stage 3B. At that time, the defendant engaged a private contractor namely Kwajo Limited to construct houses at the project site at Gerehu Stage 3B.
  
• Due to delays in timely funding, the contractor withdrew its services and left the project in abeyance. The buildings were then exposed to security risks.
  
• In January of 2008, Mr. Peter Karake, the Project Manager of Public Servants Housing Project at Gerehu Stage 3B, together with Mr. Apen Kipakali, Managing Director of National Housing Estate Limited engaged the plaintiffs to provide security services to the project site.
  
• That was when they entered into a contract with Mr. Karake and Mr. Kipakali who were agents of the defendant.
  
• They refer to a letter from Mr. Karake to the defendant dated 17^th August, 2014 annexed as annexure “A” to Mr. Walup’s affidavit (supra) as confirmation of their engagement.
  
• They were engaged to provide security services on a 24hour full-time basis at an hourly rate of K2.50 per hour. They commenced work in January 2008 and ended in December 2012. They were engaged for almost five years. For all these years, they were not paid their wages.
  
• They further refer to a letter by Mr. Karake to the defendant dated 22^nd November, 2012 wherein Mr. Karake demanded the defendant to settle their outstanding claims. The letter is annexed to Mr. Walup’s affidavit (supra) and marked as annexure “B”.
  

5. On the evidence presented, I am satisfied that there was an oral contract between the plaintiffs and Mr. Karake and Mr. Kipakali as agents of the defendant for provision of security services to the defendant at the public servants housing project site at Gerehu Stage 3B. In consideration for the services, the defendant would pay and the plaintiffs would receive wages from the defendant.

Performance of Contract
6. Was the contract performed by the plaintiffs? Yes, the plaintiffs performed the contract when they provided security services at the project site from January 2008 to December 2012.

Breach of Contract

7. Was the contract breached? Yes, when the defendant failed to pay wages to the plaintiffs in consideration for the services they rendered to it.

8. The plaintiffs have made out a case for judgment on liability to be entered against the defendant with damages to be assessed.

Quantum of Damages

9. The plaintiffs seek:

1. General damages.
2. Special damages.
3. 8% interest.
4. Costs.

Special damages –Lost Wages
10. For special damages, the plaintiffs make a claim for loss of wages. At common law lost wages is a form of special damages. As special damages, it must be specifically pleaded and strictly proven. In this case, I am satisfied that the claim for lost wages has been specifically pleaded at paragraph 17(1) of the amended statement of claim in the following terms:

“Loss of wages at rate of K2.50 /hour for 12 hours per day on a fortnightly basis for 5 years”.

11. The information provided by the plaintiffs above is sufficient to enable the defendant to respond to the claim for lost wages.

12. In terms of proof, the plaintiffs refer to the letter by Mr. Kipakali to the defendant dated 22^nd November 2012 which is annexed as annexure “A” to Mr. Walup’s affidavit (supra) and submit that they were to be paid at a rate of K2.50 per hour.

13. The plaintiffs were engaged from January 2008 to December 2012. Hence, they claim outstanding wages for a period of five years in the total sum of K136,500.00, calculated as follows:-

1. Topi Walup

K2.50 hourly rate x 84 hours normal hours of work per fortnight x 26 fortnights per year x 5 years = K27,300.00.

2. Iso Walup

K2.50 hourly rate x 84 hours normal hours of work per fortnight x 26 fortnights per year x 5 years = K27,300.00.

100. Frank Samson Angop

K2.50 hourly rate x 84 hours normal hours of work per fortnight x 26 fortnights per year x 5 years = K27,300.00.

4. Junior Pyakai

K2.50 hourly rate x 84 hours normal hours of work per fortnight x 26 fortnights per year x 5 years = K27,300.00.

5. Stanley Loaya

K2.50 hourly rate x 84 hours normal hours of work per fortnight x 26 fortnights per year x 5 years = K27,300.00.
14. The plaintiffs rely on the case of Joses Taru & 28 Ors v. New Ireland Shipping Limited (2008) N3501 and Section 15 of the Employment Act to support their calculation of the lost wages and the final sum claimed.

15. I accept that the decision in the above cited cases and Section 15 of the Employment Act support the view that in a case of an oral contract of service, an employer shall make written record of the terms and conditions of the contract and where there is a dispute as to the terms and conditions of the contract and the employer fails to produce the record, a statement by the employee as to the terms and conditions of the contract is conclusive evidence of those terms and conditions.

16. In this case, the defendant has failed to produce record of the terms and conditions of the oral contract to contradict the evidence of the plaintiffs. It follows that the plaintiffs’ evidence is uncontroverted and will be accepted as to the terms and conditions of the contract. Consistent with the decision in Joses Taru & 28 Ors (supra) and Section 15 of the Employment Act there will be an award of K136,500.00 for the plaintiffs’ lost wages.

Special Damages – Daily Expenses

17. The next damages sought by the plaintiffs as special damages at paragraph 17(2) of the amended statement of claim is “K50 daily spending for food, toiletries, etc for 5 years”. The plaintiffs make a claim for this to recover what they spent for their daily upkeep during the time they worked and were not paid. They claim a total sum of K91,000.00 for 5 years or a nominal sum of K50,000.00.

18. I am not satisfied that damages under this head of claim should be awarded because an award for lost wages will adequately cover for such loss and further, to make such an award will amount to double dipping. This head of damages is dismissed.

Special Damages – Bus Fare

19. The final claim for an award as special damages is for bus fare sought at paragraph 17(3) of the amended statement of claim. The plaintiffs seek a total sum of K1,000.00. However, as it must be strictly proven and that there is no evidence to establish the basis of the claim, it is dismissed.

General damages

20. The next head of damages sought is general damages for stress, anxiety and hardship. The plaintiffs submit that the non-payment of wages by the defendant has caused them so much stress, anxiety and hardship during the five years. Considering the case authorities on point, the plaintiffs submit that each be paid K10,000.00 for stress, anxiety and hardship. Hence, they seek a total sum of K50,000.00. The plaintiffs rely on the case Madring v. Santi Forestry (PNG) Ltd (2015) N5908 where the Court awarded K4,000.00 for stress, anxiety and hardship.

21. There is no evidence of medical or psychiatric report to establish the severity of the stress, anxiety and hardship to justify a higher award of K10,000.00 for each plaintiff. But I agree with them that they did encounter a difficult time in their lives when they were asked to provide a service for the benefit of the defendant and did not get paid.

22. The defendant will be ordered to pay some damages for putting them through this ordeal. Taking into account the absence of a medical or psychiatric report and the sum awarded in the above cited case (K4,000.00) and the length of period they were without pay (5 years), I award K5,000.00 to each plaintiff. The total sum awarded is K25,000.00.

Conclusion

23. A summary of the awards per plaintiff is as follows:

1. Plaintiff - Topi Walu

General damages – K 5,000.00

Special damages for lost wages – K27,300.00 ----------------

Total K32,300.00

---------------

2. Plaintiff - Iso Walup

General damages – K 5,000.00

Special damages for lost wages – K27,300.00 ----------------

Total K32,300.00

---------------

100. Plaintiff - Frank Samson Angop

General damages – K 5,000.00

Special damages for lost wages – K27,300.00 ----------------

Total K32,300.00

---------------

4. Plaintiff - Junior Pyakai

General damages – K 5,000.00

Special damages for lost wages – K27,300.00 ----------------

Total K32,300.00

---------------

5. Plaintiff - Stanley Loaya

General damages – K 5,000.00

Special damages for lost wages – K27,300.00

----------------

Total K32,300.00
----------------

Interest

24. As to interest, I will order that each plaintiff will be awarded 8% interest. For each plaintiff it will be calculated on the total judgment sum of K32,300.00 (K5,000.00 + K27,300.00) from the date of issue of writ to date of final settlement pursuant to the Judicial Proceedings (Interest on Debts & Damages) Act.

Order

25. The judgment of the Court is:

1. Judgment on liability is entered against the defendant with damages to be assessed.
2. Judgment in the total sum of K27,300.00 in favour of each plaintiff as special damages for lost wages.
3. Judgment in the total sum of K5,000.00 in favour of each plaintiff as general damages for stress, anxiety and hardship.
4. 8% Interest is awarded on the total judgment sum of K32,300.00 in favour of each plaintiff from the date of issue of writ to date of final settlement pursuant to the Judicial Proceedings (Interest on Debts & Damages) Act.
5. The defendant shall pay the plaintiffs’ costs of the proceeding, to be taxed, if not agreed.

Judgment and orders accordingly.
___________________________________________________________
Public Solicitor : Lawyers for Plaintiffs
Principal Legal Officer : Lawyers for Defendant