Infratech Management Consultants Ltd v Independent State of Papua New Guinea [2020] PGNC 336; N8578 (7 October 2020)

N8578

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1467 of 2007

BETWEEN:
INFRATECH MANAGEMENT CONSULTANTS LIMITED
Plaintiff

AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Defendant

Waigani: Thompson J
2020: 7^th October

DAMAGES - Assessment of damages following interlocutory judgment – assessment of contractual interest.
Counsel:

I R Molloy with Mr T Injia, for Plaintiff
No appearance for the Defendant

7^th October, 2020

1. THOMPSON J: On 18 December 2007 the Plaintiff issued proceedings against the Defendant for breach of a contract for the provision of Management Consultancy Services. On 4 June 2008 the Plaintiff obtained interlocutory judgment for damages to be assessed. An assessment was heard and a decision subsequently delivered on 18 June 2018. This assessment was overturned on appeal. On 1 November 2019 the Supreme Court entered judgment for the Plaintiff on various matters including the principal, post-judgment interest, and contractual interest from 1 May 2011 to 18 June 2018. The Supreme Court remitted the matter of the amount of contractual interest to the National Court for rehearing by another judge. This was the rehearing on that issue.

2. The principles applicable to an assessment of damages following entry of default judgment are well-settled. The judgment resolves all questions of liability in respect of the matters pleaded. Any matter that has not been pleaded that is introduced at the hearing, is a matter on which the Defendant can take issue. In the case of the claim for damages for breach of contract, the judgment confirms the breach as alleged, and leaves only the question of what damages flow from that breach. The Plaintiff has the burden of producing admissible and credible evidence of the damages. The Plaintiff can only produce evidence and recover damages for what has been pleaded in the Statement of Claim. (William Mel v Coleman Pakalia and ors (2005) SC 790).

3. The default interlocutory judgment of 4 June 2008 and the Supreme Court Judgment of 1 November 2019, resolve all question of liability in respect of the claim for contractual interest. The Plaintiff was therefore required to produce admissible and credible evidence of the damages flowing from the breach of the contract by the failure to pay contractual interest.

4. The Plaintiff produced evidence by numerous affidavits. The Defendant did not give notice of objection to the use of those affidavits, or of its intention to cross-examine the deponents. The Defendant neither filed nor produced any evidence challenging the Plaintiff’s evidence, and did not appear at the hearing.

5. The Plaintiff’s evidence was that the contractual entitlement to interest arose from clause 31 (h) of the contract, which provided that all sums due from the State to the Plaintiff and unpaid after sixty days, “shall bear interest thereafter, such interest to accrue from day to day at the rates detailed in Part ii (Section C)”.

6. Part 11 (Section C) provided that the Agreed Compensation for overdue payment was the “Lowest overdraft value of interest charged by the Consultant’s bank in Papua New Guinea”.

7. The Plaintiff, who was the Consultant in the Contract, gave evidence that its bank in PNG was Bank of South Pacific (“BSP”).

8. The Plaintiff’s expert witness, Andrew Crompton, gave evidence that he was a professional financial advisor with 20 years experience. He gave evidence that the lowest overdraft value of interest charged by BSP was derived from the Indicator Lending Rate from time to time, and then assessed by BSP on a case by case basis for each customer. He therefore obtained the Bank’s Indicator Lending Rate from time to time during the period from 1 May 2011 to 18 June 2018, applied it as a daily rate, and multiplied it by the number of days in each month.

9. The Plaintiff’s evidence was that this methodology was consistent with the methodology used by Dr. Peter Goldsmith which was used in the earlier hearing to determine the calculation of damages, which was accepted by the Supreme Court. It was also consistent with the methodology used by the Plaintiff’s Managing Director, Mark Flynn, who also did a calculation, but with a difference in that he applied the rate monthly rather than daily, to produce a slightly higher figure.

10. I accept Mr. Crompton’s calculations, as they are consistent with the contractual requirement for the interest to accrue from day to day.

11. The evidence produced by the Plaintiff was admissible and credible, and was not challenged by the Defendant. There was no evidence of any lower overdraft value of interest charged by BSP. I am satisfied on the balance of probabilities that the value of the contractual interest from 1 May 2011 to 18 June 2018 has been correctly calculated pursuant to the terms of the Contract between the parties, to amount to K10,233, 267.45.

12. I therefore make the following Orders:

1. The amount payable by the Defendant to the Plaintiff for contractual interest from 1 May 2011 to 18 June 2018, is hereby assessed in the sum of K10, 233,267.45.
2. Judgment is entered for the Plaintiff against the Defendant in the sum of K10, 233, 267.45.
3. The Defendant is to pay the Plaintiff’s costs on the party/party basis, to be agreed or taxed.

__________________________________________________________________Ashurst Lawyers: Lawyers for the Plaintiff