Kots Investment Ltd (trading as Kots Catering) v Toa [2020] PGNC 339; N8654 (30 November 2020)

N8654

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS (COMM) NO. 1058 OF 2016

BETWEEN:
KOTS INVESTMENT LIMITED trading as Kots Catering
Plaintiff

V

PHILIP TOA, CHAIRMAN OF SIMBU TEACHERS COLLEGE GOVERNING COUNCIL
First Defendant

AND
SIMBU TEACHERS COLLEGE
Second Defendant

AND
HONOURABLE NOAH KOOL, MP GOVERNOR OF SIMBU PROVINCE
Third Defendant

AND
SIMBU PROVINCIAL GOVERNMENT
Fourth Defendant

Waigani: Anis J
2020: 14^th July, 17^th August & 30^th November

ASSESSMENT OF DAMAGES – Judgment entered for breach of contract – assessment of damages – various heads of damages – considerations – whether the plaintiff has proven each head of damages – whether relief available under law – earlier court proceeding – present relief not sought therein – whether this Court can grant relief not sought in similar claim in earlier proceeding – relief breach of contract not sought in earlier proceeding - exercise of discretion

Cases Cited:

Telikom PNG Ltd v. ICCC (2007) SC3144
National Capital District Interim Commission v. Bogibada Holdings Pty Ltd [1987] PNGLR 135
Thomas Wapi v. Sergeant Koga Iali (2014) SC1370

Counsel:

Mr R Awalua, for the Plaintiff
Mr Y Awi, for the First and Second Defendants
Mr J Nime, for the Third and Fourth Defendants

JUDGMENT

30^th November, 2020

1. ANIS J: This was a trial for assessment of damages. It was heard and concluded on 17 August 2020. I reserved my ruling to a date to be advised.

2. Parties have been notified so I rule on it now.

BACKGROUND

3. The defendants did not file their defence so the plaintiff applied for summary judgment. On 9 March 2017, the His Honour Justice Hartshorn granted summary judgment in favour of the 1^st, 2^nd, and 4^th defendants with orders for damages to be assessed. The defendants applied to set aside the summary judgment. On 13 November 2017, His Honour refused the defendants’ set-aside application. Hearing on assessment of damages began on 14 July 2020 followed by presentation of submissions at 1:30pm on 17 August 2020.

4. The claim was one for breach of contract. The plaintiff signed a Memorandum of Agreement dated 18 December 2014 (MOA) with the second defendant to provide catering services to the latter’s staff and students, for a period of 3 years commencing in January of 2015. The plaintiff commenced operation in 2015. Disputes arose shortly after including failure by the defendants to pay the plaintiff’s issued invoices for the months of April, May and June of 2015. The plaintiff and its staff were locked out of the school precincts in June of 2015 by the college and its students. The plaintiff ceased its catering services thereafter and never returned to perform its services as per the terms of the MOA. Three months later, on 25 September 2015, the plaintiff commenced proceeding WS No. 1316 of 2015 (WS 1316). The plaintiff sued the defendants herein in that proceeding. I must clarify here that the first defendant in WS 1316 has been split-up or separated in the present proceeding, and as such, the second defendant, which is the Simbu Teachers College, is included herein separately as a party thus increasing the total number of defendants from 3 to 4. The claim in WS 1316 was for debt recovery or enforcement of the MOA, that is, to recover monies charged by the plaintiff for its invoices for the months of April, May and June of 2015, for catering services that it had provided to the college. Default Judgment was entered on 10 December 2015 for a total sum of K136,342 (inclusive of interest). The said judgment debt has been fully paid by the defendants.

5. About 9 months later, on 1 September 2016, the plaintiff commenced this proceeding, and this is where we are at, that is, for assessment of damages.

EVIDENCE

6. Both parties have filed affidavit evidence without the benefit of cross-examination. The plaintiff filed 2 affidavits, namely, (i), the Affidavit of Amb Aiwa Olmi filed on 12 September 2019 which is marked as Exhibit P1, and (ii), the Affidavit of Bernadette Olmi filed on 26 September 2019 which is marked as Exhibit P2.

7. The defendants filed in total 6 affidavits. They are marked as exhibits D1, D2, D3, D4, D5 and E1. The deponents are John Kaupa (x2) filed on 27 September 2019 and 26 July 2019, which are marked as Exhibits D1 and D2 respectively, Vincent Bundo filed on 27 September 2019, which is marked as Exhibit D3, Ben Mike filed on 22 March 2017, which is marked as Exhibit D4, Jeffery Siki filed on 22 March 2017, which is marked as Exhibit D5, and Joe Kunda Naur filed on 3 September 2018, which is marked as Exhibit E1.

ISSUES

8. The main issues in my view are, (i), the type relief or damage(s) that is or may be permitted, and (ii), subject to the first issue, their assessment or the sum that the Court should award for each of the relief or damage(s).
PRELIMINARY ARGUMENTS

9. The defendants argue that the Court should revisit the issue of liability. They also raise various issues under liability including time bar based on want of notice of intention to sue the defendants and failure to comply with the provisions of the Public Finance (Management) Act 1995.

10. I have considered the various submissions by counsel concerning liability. I dismiss them all. The issue of liability has been determined. This is a hearing on assessment of damages. If the defendants wish to raise issues concerning liability, they should have been raised with the appellant Court, that is, after the defendants had failed to set aside the summary judgment order of the Court.

CLAIM BASED UPON WHICH JUDGMENT IS ENTERED

11. To begin, I refer to the pleadings where based upon which summary judgment was entered in favour of the plaintiff. The relevant pleadings commence at paragraphs 10, 11 and 12 of the Statement of Claim (SoC). They read:

10. The Plaintiff sued the Defendants in the proceedings WS. No. 1316 of 2015, Kots Investment Limited trading as Kots Catering v. Philip Toa & Ors to claim for the outstanding invoices for the months of April and May 2015, and on the 10^th December 2015, the Plaintiff successfully obtained default judgment for a liquidated sum of K121,671 with interest of K14,671 and cost.
    
11. Despite the legal proceedings for the unpaid invoices instructed by the Plaintiff the Defendants only paid the judgment debt of K136,342 as per the Court Order and did not honour the Contract to make per invoices and the mobilization funds.
    
12. The Writ of Summons No. 1316 of 2015 (CT.4) was filed on the 25^th September 2015 to recover unpaid Invoices for the months of April to June 2015 with the outstanding payments with the balance of Contract for 2 ½ years, the mobilization costs yet to be paid.
    

COMMON GROUND

12. Based on these pleadings and evidence adduced in general, I note the following undisputed facts. The MOA ended or ceased towards the end of June 2015. The plaintiff was locked out and never re-entered the college to provide catering services as required under the MOA. So essentially, the contract ceased or was terminated by the end of June of 2015. On 25 September 2015, the plaintiff commenced WS 1316. In that proceeding, the plaintiff, having fully known or appreciative of the situation and the cancellation of the MOA in June 2015, opted to sue the defendants for the invoices of April, May and June of 2015. The relief was eventually granted with an order for default judgment on 10 December 2015. The judgment sum ordered was for a liquidated sum of K121,671 plus interest of K14,671. The judgment sum plus interest have been fully paid by the defendants.

STATUS CONSIDERATION

13. To me, the plaintiff, by its conduct, appeared to have accepted the termination or cancellation of the contract. I say this because following the said termination or cancellation, it had opted to only seek payment of the outstanding invoices that had been incurred and due under the MOA. The plaintiff’s intention was put into action when it commenced WS 1316 against the defendants 3 months later after the contract had ended, in September of 2015. Judgment was obtained in December that year for a total sum of K136,342 (inclusive of interest). The money has since been fully paid by the defendants.

14. Then 9 months later, plaintiff commences the present proceeding against the same defendants. It has obtained summary judgment seeking (i), the balance of the term of the contract, that is, for 2 ½ years that had remained before the contract was terminated, (ii), mobilization costs, and (iii) other damages and costs which it claims were related. And I am now hearing assessment.

CLAIM FOR THE BALANCE OF THE CONTRACT PERIOD

15. In regard to the claim for damages, which is based on the balance of the contractual term of 2 ½ years, I find the relief difficult to grant. In my view, the plaintiff’s own conduct in not suing for breach of contract but for debt recovery or enforcement, under the contract in WS 1316, means or implies that it has or may have forgone the other relief or redress including the claim for breach of contract. The plaintiff, in my view, cannot pick and choose on a piece meal basis as to what cause of action and relief it may claim against the defendants and which of them it may hold back to claim against the same defendants later. It had the option to sue for breach of contract after the contract was terminated or ceased, in June of 2015. In this instance, it chose only to enforce the contract and claim debts that were due under it, after the contract ended. And the defendants have already paid the plaintiff for the 3 invoices together with interest as per the Court’s Order of 10 December 2015 in WS 1316.

16. But now, and with this proceeding, the plaintiff is seeking damages for breach of the said contract against the same defendants. Kandakasi J (as he then was), in Telikom PNG Ltd v. ICCC (2007) SC3144, stated at paragraph 23 of his judgment, and I quote:

23. The principles on abuse of the process of the Court are also necessary for the important purposes of ensuring that no party goes to the Court more than one time over the same issues or relief either after having failed or succeeded in an earlier action or at the same time. There must be only one action out of one cause of action. Such an action must raise all of the issues arising out of the cause of action as well as all of the reliefs open to an affected party. Therefore, it is improper and inappropriate for a party to divide or piece meal his or her cause of action and the reliefs available to him or her. (Bold lettering mine).

17. His Honour, in his decision, also referred to the case of National Capital District Interim Commission v. Bogibada Holdings Pty Ltd [1987] PNGLR 135, where Kapi DCJ (as he then was) stated:

If I were to grant the declaration sought, I would be deciding the whole dispute between the parties in a piecemeal manner. That is to say, the parties would now get certain questions of fact and law decided. That would hardly resolve the dispute between the plaintiff and the first defendant. If the declarations were granted in its favour, the plaintiff would continue with a claim of damages or account of profits in a separate action. This would not only escalate costs to parties but also encourage multiplicity of proceedings before the court. In my view, this should be discouraged in this jurisdiction. Litigants should be encouraged to bring all matters in a dispute in the one action to avoid a multiplicity of proceedings. An appropriate method of resolving all the issues would be by way of a writ. This would allow for proper pleading of all facts and issues of law for determination by the court.” (Bold lettering mine).

18. I also ask myself this. Can I decline to make awards for relief where summary or default judgment has been entered? The answer to that is in the affirmative. The Supreme Court has clarified this in Thomas Wapi v. Sergeant Koga Iali (2014) SC1370. It said at paragraphs 10, 11 and 12:

10. If judgment, including a default judgment, has been entered in a proceeding, this constitutes a determination by the National Court on the question of liability. This determination should not be set aside unless a successful application for that purpose is made.

11. If another National Court dismisses a proceeding in which a default judgment has been entered, it is amongst others, setting aside the judgment and denying the plaintiff of its benefit. It is also, in effect, reviewing the decision to enter default judgment. In that regard we are reminded of the words of Kapi DCJ (as he then was) in Smith v. Ruma Constructions Ltd (2002) SC695 when His Honour, in considering an appeal against a decision to set aside a summary judgment said:

“The approach taken by the trial judge with respect is fundamentally wrong. In essence the learned trial judge reviewed the decision of Woods J. The trial judge had no jurisdiction to do this under an application to set aside judgment under O12 r8 of the Rules. This power belongs to the Supreme Court under the Supreme Court Act or s. 155 (2) (b) of the Constitution.”

12. Given the above, we are of the view that where a judgment, be it default or otherwise, has been entered, and a primary judge determines, after concluding a hearing to assess damages, that the plaintiff has not sufficiently proved his loss or that no cause of action is disclosed in the statement of claim or that the pleadings are defective or that the claim is frivolous or vexatious or is an abuse of process, he is entitled to refuse to make an award of damages. This is in accord with him being able to consider the question of liability for the damages claimed. To dismiss the entire proceeding however, in the absence of any application to set aside, as in this case, the effect of which is to review the decision to enter judgment and to set such judgment aside, is in our respectful view, to fall into error. (Bold lettering mine).

19. I would adopt the approaches stated in these case authorities as my own herein.

20. As I indicate above, I decline to grant this relief, that is, payment for the balance of the contract period. I say this for a number of reasons. Firstly, I consider that to do so would amount to abuse of process. Despite summary judgment being entered in this instance, I do not find this damage available for the reason that the plaintiff had had that opportunity to seek this relief in WS 1316 but had chosen otherwise and had gone for other relief. So, to seek this relief here as a new relief in the present proceeding, is an abuse of process and as such, I decline making any awards for this relief.

21. The second reason is this. The plaintiff did not perform any catering service for the 2 ½ years or for the balance of the contract period. And I note the plaintiff had already been paid for the actual work that it had performed for the first 6 months prior to termination of the contract. And it had chosen, by its conduct, to accept the termination of the contract, that is, when it chose not to seek for its breach in WS 1316. As such and in my view, it cannot now make a U-turn and ask for damages for the balance of the contract period for services not rendered, or to have a second bite at the cherry, so to speak.

MOBILIZATION COSTS

22. The plaintiff also seeks damages under the heading Mobilization Costs. Its total mobilization cost is claimed at K650,000.

23. I note the submissions and evidence on point that were presented by the parties. I refuse to grant the said relief and do so for two reasons. The first is as I have stated above which is that the relief had not been sought in the earlier proceeding which had concluded successfully in favour of the plaintiff against the 4 defendants, and that it is an abuse of the Court process to seek another relief in another proceeding out of the same contract which is the present proceeding on a piece meal basis.

24. The second reason is this. The MOA does not plead provisions for mobilization costs in the manner as claimed by the plaintiff. The closest we can get to this clause may be described as the 4^th dot in the MOA, which states, Simbu Teachers College will pay Kots Investment Limited the amount equivalent to a month of CATERING SERVICES at least one week before the actual services start in order to help them to get better prices and to defray initial costs. The clause permits the defendants to pay a month’s catering service in advance before the commencement date of the MOA. Let me consider the evidence, and I refer to Exhibit P1. In annexure G to Mr Olmi’s affidavit, he attaches a letter by the plaintiff dated 6 February 2015 which had been sent to the defendants. The letter requests an upfront payment of K650,000 which the plaintiff says consists of its mobilization costs. This appears to be the sum that the plaintiff is now seeking in the present proceeding under this relief. So, there is evidence that the plaintiff had requested payment for this relief as early as February of 2015 when the MOA was still in operation. So, I ask myself this. Why did the plaintiff not sue for breach of contract or also include this relief in WS 1316? In my view, the plaintiff, by its conduct, has accepted the fact that the contract ended in June of 2015, and has enforced it by suing for the outstanding invoices under it. It cannot now, in my view, change its position and try to seek the relief of K650,000 in this proceeding.

25. I therefore decline to award this relief to the plaintiff.

OTHER RELIEF

26. The plaintiff also seeks other relief, namely, (i), loss of business, (ii), loss of family home put up as security, and (iii), loss of other security for loan had with Credit Corporation.

27. I refuse to grant these relief for the same reasons. The plaintiff, after the MOA was terminated in June of 2015, only sued for outstanding invoices later in September of 2015. The conduct of the plaintiff, as stated above, meant that the plaintiff had accepted that the contract was concluded, and that its recourse was to only claim for the outstanding invoices which it successfully obtained in WS 1316. It now sues for breach of contract and summary judgment has been entered in its favour. Granting of summary judgment does not automatically entitle a party to judgment. A party must firstly establish, to the satisfaction of the Court, that he is entitle to the relief or remedy that he is seeking in his claim or pleading, under law, and after that, he may go on to prove how much the Court should award in his favour regarding the relief. However, for the reasons stated above in my judgment, I am not satisfied and I decline to make any awards for these other relief.

SUMMARY

28. In summary, I decline to grant any awards or relief to the plaintiff.

COST

29. Awarding of cost is discretionary. In this instance, I will order each party to bear their own costs. I do so for 2 main reasons. Firstly, I consider the fact that summary judgment was entered in favour of the plaintiff which has led to this stage or leg of proceeding, namely, assessment of damages. And secondly, I also take into account my findings herein on damages which are unfavourable to the plaintiff.

ORDERS OF THE COURT

30. I make the following orders:

(1) I decline to make any awards in regard to the relief that are sought in the plaintiff’s writ of summons and statement of claim.

(2) The parties shall bear their own costs.

(3) Time for entry of these orders is abridged to the date and time of settlement by the Registrar which shall take place forthwith.

The Court orders accordingly.
________________________________________________________________
Awalua & Associates Lawyers: Lawyers for the Plaintiff
Awi Lawyers: Lawyers for the First and Second Defendants