Nambawan Trophy Ltd v Telikom (PNG) Ltd [2020] PGNC 186; N8403 (21 May 2020)

N8403

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1161 of 2011

BETWEEN:
NAMBAWAN TROPHY
LIMITED
Plaintiff

AND:
TELIKOM (PNG) LIMITED
Defendant

Waigani: Hartshorn J.
2020: 21^st May

ASSESSMENT OF DAMAGES – breach of contract – breach of distributorship agreement - onus is upon a plaintiff to prove its loss - plaintiff has the burden of proving both the facts and the amount of damages – plaintiff awarded damages for breach – costs follow event

Cases Cited:
Papua New Guinea Cases

Paraia v. Yansuan (1995) N1343
Yange Langan v. Independent State of Papua New Guinea (1999) N1369
Frank Onga v. The General Manager Engineering Management Pty Ltd (2003) N2321
Nae Limited v. Cameron Construction Ltd (2012) N5346
Agnes Kapipi v. Andrew Andu (2015) N6125

Overseas Cases

Biggin v. Permonite [1951] 1KB 422

Counsel:

Mr. B. Nutley, for the Plaintiff
Mr. T. Tape, for the Defendant

21^st May, 2020

1. HARTSHORN J: This is a decision on an assessment of damages after judgment was entered. Specifically, the damages to be assessed are for breach of contract.

Background

2. Nambawan Trophy Limited (NTL) sued Telikom (PNG) Limited (Telikom) for breach of contract and/or negligence and claimed damages. This concerned a Distributorship Agreement that was entered into between the parties on 19^th August 2008 (Distributorship Agreement).

3. NTL claimed that Telikom breached the Distributorship Agreement and repudiated it, which NTL accepted, with NTL terminating the Distributorship Agreement effective from 10^th October 2010.

4. In essence NTL claimed that when Telikom purportedly assigned the Distributorship Agreement to Black Dolphin Ltd it failed to obtain NTL’s consent and failed to novate or assign the Distributorship Agreement correctly in any event.

5. Following a trial, judgment was entered for NTL against Telikom with damages to be assessed. The Court was satisfied that NTL had properly established that Telikom breached the Distributorship Agreement as pleaded in NTL’s statement of claim, that its right to claim for damages against Telikom was not extinguished by the Business Transfer Agreement between Telikom and Bemobile Ltd, formerly Black Dolphin Ltd, and that Telikom is liable to NTL for the breach and repudiation of the Distributorship Agreement.

Assessment of damages – law

6. The onus is upon a plaintiff to prove its loss. The following passage from McGregor on Damages is cited by Injia J. (as he then was) in Yange Langan v. Independent State of Papua New Guinea (1999) N1369 and was reproduced in Nae Limited v. Cameron Construction Ltd (2012) N5346:

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

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.”

8. Specifically as to damages for a breach of contract, in Agnes Kapipi v. Andrew Andu (2015) N6125 at [11], I said:

“12. I am mindful of the following passage from Chitty on Contracts, volume 1, General Principles, 28th ed. at page 271, to which I referred in PNG Nambawan Trophy Ltd v. Tuban Investments Ltd (2009) N5349 as to the calculation of damages for breach of contract:

“Damages for a breach of contract committed by a defendant are compensation to the claimant for the damage, loss or injury he has suffered through that breach. He is, as far as money can do it, to be placed in the same position as if the contract had been performed. This implies a “net loss” approach in which the gains made by the claimant as a result of the breach (e.g. savings made because he is relieved from performing his side of a contract which has been terminated for breach; savings in taxation; benefits obtained from partial performance; or the salvage value of something left in his hands) must be set off against his losses arising from the breach (after he has taken reasonable steps to minimise those losses).” ”
Consideration

9. NTL relies upon the affidavits of Jim and Allan Gui, and Theodosios Monogenus in support of its damages claim. This evidence is unrebutted. Telikom has not filed any evidence and relies on the evidence filed on behalf of NTL.

10. Telikom submits that NTL has not proved its claim with credible evidence and has failed to connect its losses to the breach of the Second Agreement between NTL and Telikom.

Construction of phone huts

11. NTL claims a total of K2,776,524.76 for the costs of construction, transportation and demolition of 35 mobile phone huts. It relies upon a quotation issued by BCMS Solutions PNG Ltd, expert evidence of Mr. Monogenus and a summary of account. The amount claimed is estimated. Telikom submits that there is no evidence of payment of the amount claimed. What is sought is upon an estimation only.

12. In Yange Langan (supra), the Court said that the plaintiff has the burden of proving both the facts and the amount of damages. The amount sought here is for costs that were incurred, yet the evidence given is an estimation only. Mr. Allan Gui deposes that NTL did construct phone houses and huts of which 19 were used in respect of Telikom. These were then dismantled. This evidence is unrebutted. The evidence of the construction, transportation and demolition of the structures could and should have been available. It is not before this Court however. In Paraia v. Yansuan (1995) N1343, Injia J (as he then was) quoted Devlin J. in Biggin v. Yansuan [1951] 1KB 422 at 438 as follows:

"Where precise evidence is obtainable, the Court naturally expects to have it (but) where it is not, the Court must do the best it can."

13. In this instance, as the evidence is and is based upon an estimate, and as Mr. Allan Gui as deposed to 19 structures being used for Telikom, the amount awarded under the heading of construction of phone huts is K 700,000.00.

Loss of profit, revenue and commission

14. NTL submits that its claim for loss of profit, revenue and commission is based on invoices rendered for commission and inventory accounts of the plaintiff which show a trail of transactions.

15. Telikom submits that amongst others, that no primary documents are in evidence for the purposes of calculating loss of profit and operational costs. Further, there is not sufficient connection with the alleged loss of profit, revenue and commission with the breach of the Second Agreement. It is the case that the primary documents referred to are not in evidence. On the authority of Biggin v. Permonite (supra) and Paraia v. Yansuan (supra), the amount awarded under this heading is K250,000.00.

Other heads of damage

16. In regard to the other heads of damages in the summary of account which is sought by NTL, Telikom submits that certain receipts and invoices in evidence are for the period of the First Agreement and not the Second Agreement. It was the Second Agreement that was breached and losses and damage claimed should flow from that breach. Further, Telikom submits that amongst others, that receipts for payment of certain invoices are not in evidence, some amounts claimed are not supported by invoices and receipts, primary documents are not in evidence and some of the items claimed are not sufficiently connected to the breach of the Second Agreement and are therefore too remote. I concur with these submissions. Again, on the authority of Biggin v. Permonite (supra) and Paraia v. Yansuan (supra), the amount awarded under this heading is K80,000.00.

Orders

17. The Court orders that:

a) The amount of damages to be paid by the defendant to the plaintiff is assessed at K1,030,000.00;

b) The defendant shall pay interest on the said sum of K1,030,000.00 pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act from the date of filing of the Writ of Summons;

c) The defendant shall pay the plaintiff's costs of and incidental to this proceeding;

d) Time is abridged.
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O'Briens Lawyers: Lawyers for the Plaintiff
Kandawalyn Lawyers: Lawyers for the Defendant