Micson Ltd v Giru Ltd [2020] PGNC 334; N8549 (1 October 2020)

N8549

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 888 OF 2019 (CC3)

BETWEEN
MICSON LIMITED
Plaintiff

AND
GIRU LIMITED
Defendant

Waigani: Thompson J
2020: 23^rd September, 1^st October

CONTRACT - Claim for breach of hire car rental agreement - claim for damages for loss of profits -onus of proof on Plaintiff - necessity to plead elements of cause of action - necessity to prove damages in accordance with established principles.

COUNSEL:

Mr M. Paiya, for the Plaintiff
Mr M. Kuman, for the Defendant

1^st October, 2020

1. THOMPSON J: The Plaintiffs’ claim is for breach of a Car Rental Agreement entered into between the Plaintiff and the Defendant on 5 March 2018. As a result of the breach, the Plaintiff says that it has suffered loss of car hire and loss of income, as well as repair costs, totaling K452, 385.54.

2. Default interlocutory judgment was entered against the Defendant on 11 December 2019, and this is the hearing of the assessment of damages.

3. The duty of a Judge on an assessment of damages following default judgment, are well-settled (William Mel v Coleman Pakalia and ors (2005) SC790). The judgment resolves all questions of liability in respect of the matters pleaded in the Statement of Claim. A matter that has not been pleaded and which is introduced at the trial, is a matter on which the Defendant can take issue on liability. In a claim for damages for breach of contract, the judgment confirms the breach as alleged, and leaves only the question of damages flowing from that breach.

4. The Plaintiff has the burden of producing admissible and credible evidence of his damages. The Plaintiff is only entitled to give evidence and recover such damages as have been pleaded in the Statement of Claim. (PNGBC v Jeff Tole (2002) SC 694).

5. The essential provisions of the Agreement were for the hire of a vehicle registration No. LBG 311 and another vehicle registration No. BEB 283 at a rental of K700.00 plus GST per day per vehicle. The term of the Agreement ran from the date of the vehicles’ pick-up until their return to the Plaintiff. No modifications could be made to the Agreement except in writing signed by both parties. There were no other relevant terms of the Agreement.

6. It was common ground that the vehicles were picked up on 5 March 2018, and that vehicle BEB 283 was returned to the Plaintiff on 10 July 2018. The other vehicle LBG 311 was involved in a motor vehicle accident on 28 July 2018, and was taken to the workshop of Landmark Automotive Engineering Services (“Landmark”). There was no direct evidence of whether or not the vehicle remained in the workshop.

7. There was no pleading or evidence of the type and extent of the damage sustained by the vehicle, or the estimated cost of repairs for such damage.

8. In the Statement of Claim, the Plaintiff pleaded that it had paid K11, 961.40 (in para 8) or K10,861.40 (in para 14) to Landmark for repairs. It also pleaded a figure of K194, 600.00 for car hire, and K205,800.00 for loss of business, with no particulars of how those figures were arrived at.

Evidence

9. The evidence produced by the Plaintiff in support of the claim comprised an unclear photocopy of the Agreement and some invoices and receipts to and from various companies for various vehicle parts from 20 May 2019 to 24 May 2019. None of the invoices or receipts were to or from the Plaintiff. The last receipt showed that the Defendant had paid K1,600.00 to Landmark for some work on vehicle LBG 311. There was also a Statement/Invoice dated 25 June 2019 issued by Weston Investments Limited (“WIL”) to the Defendant. The Invoice claimed K194,600.00 for hire rental charges, K205,800.00 for loss of business, K10,861.40 for monies “spent on Landmark workshop”, and K41,126.14 for GST, making a total of K452,385.54. A TIN number was shown on the invoice.

10. It was common ground that the Defendant paid K50,000.00 to the Plaintiff in October 2018.

11. In relation to the hire car charges, it became apparent that the figure in the Invoice had not taken into account the payment made by the Defendant, and should have been reduced to K144,600.00. The Defendant admitted to owing K140,000.00 for those charges.

12. In relation to the monies “spent on Landmark workshop”, there were no invoices or receipts showing that the Plaintiff had spent any monies on the Landmark workshop. There was some evidence that the Defendant had spent monies on the Landmark workshop.

13. In relation to the loss of income, it was shown as the daily hire car charges from 01 August 2018 to 28 February 2019 for the vehicle LBG 311. The reason for these two dates was not given.

14. In relation to the GST, it appeared to have been calculated as 10% of the figures for the hire car charges, loss of income and Landmark costs.

15. No invoices issued by the Plaintiff, were produced in evidence. It was merely submitted from the Bar table that WIL was a subsidiary of the Plaintiff, and that although there was no evidence that the Plaintiff was a registered tax payer pursuant to S 8 of the GST Act, the Plaintiff company was entitled to use WIL’s invoice and TIN number. No explanation was given for why the Agreement was with Micson Ltd but the invoices were issued by WIL.

Findings

16. The standard of proof is on the balance of probabilities.

13. The Statement of Claim did not contain any pleading of a legal or other relationship between Weston Investments Limited and the Plaintiff. No evidence was produced of any such relationship. Evidence could not in any event be given of any matter not pleaded. The Statement/Invoice dated 25 June 2019 issued by WIL, must be disregarded.

17. No evidence was produced in relation to the claim for loss of business, and so this part of the claim was not made out.

18. No evidence was produced that the Plaintiff had paid either K10,861.40 or K11,961.40 to the Landmark workshop. This part of the Claim was therefore not made out.

19. No evidence was produced to show that the Plaintiff had either paid or had a liability to pay K41,126.14 for GST. This part of the Claim was therefore not made out.

20. In relation to the principal claim for unpaid hire car charges, the default interlocutory judgment resolves the question of liability in respect of the matters pleaded in the Statement of Claim, namely, that the parties entered into an Agreement on 5 March 2018 for the hire of two vehicles for K700.00 per day inclusive of GST. The Plaintiff produced further evidence that the Agreement was in fact for K700.00 per day plus GST. As this particular part of the claim had not been pleaded in the Statement of Claim, the Defendant was able to, and did, take issue with it. The Plaintiff did not produce any evidence that it was a registered person pursuant to S8 of the GST Act, or evidence of its Tax Identification Number, and so did not provide any evidence that it had paid or was liable to pay GST.

21. The Plaintiff has failed to establish on the balance of probabilities that it had an entitlement to claim GST, and so the evidence was insufficient to enlarge the figure pleaded in the Statement of Claim, which was “an agreed amount of K700.00 per day inclusive of GST”.

22. Consequently, the amount of the hire car charges from 5 March to 31 July 2018 at K700.00 per day is K193,900.00. After deduction of K50,000.00 already paid, the outstanding balance is K143,900.00.

23. I therefore make the following orders:

1. The damages ordered to be assessed by the Court on 11 December 2019, are assessed in the sum of K143,900.00.

2. Judgment is entered for the Plaintiff against the Defendant in the sum of K143,900.00, plus interest at the rate of 8% pa from the date of Judgment to the date of payment, pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act.

3. The Defendant is to pay the Plaintiff’s costs on a party/party basis, to be agreed or taxed.
________________________________________________________________
Paiya Lawyers: Lawyers for the Plaintiff
Kuma Lawyers: Lawyers for the Defendants