John R. Giheno Holdings Ltd v City Pharmacy Ltd [2022] PGNC 312; N9837 (17 August 2022)

N9837

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 365 OF 2021

BETWEEN:
JOHN R. GIHENO HOLDINGS LIMITED
Plaintiff

AND:
CITY PHARMACY LIMITED
First Defendant

AND:
TONY TOREA in his capacity as the Property Manager
Second Defendant

Goroka: Mugugia, AJ
2022: 5^th &17^th August

ASSESSMENT OF DAMAGES – Claim for general damages and special damages - Whether or not the Plaintiff is entitled to the damages claimed - How much should be awarded to the Plaintiff? – Absence of proper pleadings with sufficient details or particulars – No foundation for the claims in the pleadings – No awards made.

Held:

(1) The Plaintiff’s claim for K12,520.00 for outstanding ‘electricity arrears’ was not specifically pleaded with particulars in the Statement of Claim. There was no foundation for this claim in the pleadings. No award made.

(2) The Plaintiff’s claim for K237,600.00 for ‘rental arrears’ was not specifically pleaded with particulars in the Statement of Claim. There was no foundation for this claim in the pleadings. No award made.

(3) The Plaintiff’s claims for K9,121.80 for ‘costs for airline tickets’ and K7,000.00 for ‘miscellaneous expenses’ were not specifically pleaded with particulars in the Statement of Claim. There is no foundation for these claims in the pleadings. No award for special damages made.

(4) Damages are not payable by the Defendants to the Plaintiff.

Cases Cited:

Naki v. AGC (Pacific) Ltd. (2006) N5015.
Yange Langan v. Independent State of Papua New Guinea, (1999) N1369.
Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694.

Counsel:

D. Wayne, for the Plaintiff
G. Kult, for the First and Second Defendants

JUDGMENT

17^th August, 2022

1. MUGUGIA, AJ: The Plaintiff had entered into a Commercial Lease Agreement (lease agreement) with the First Defendant in 2017. The Demised Premises was part of the Ground Floor known as “Henganofi Building” situated on the land described as Allotment 13, Section 6, Goroka, Eastern Highlands Province. The First Defendant opted not to renew the lease agreement and vacated the premises in December 2020. The Plaintiff initiated this action against the Defendants on 23^rd June 2021, claiming outstanding electricity arrears in the total sum of K78,097.69, and loss of income from rentals under the head of general damages and special damages.

2. After the institution of this action, the First Defendant paid a sum of K65,577.63 for the outstanding electricity arrears.

3. On 10^th December 2021, this Court entered default judgment against the Defendants for failure to file their defence. Default judgment was in these terms:

“Default judgment is hereby entered against the First and Second Defendants.”

4. The trial on the assessment of damages was conducted on 5^th August 2022. Both parties were represented at trial which was by affidavits with no cross examination of witnesses.

5. The Plaintiff tendered the following affidavit evidence:

(i) Affidavit of Malcolm Giheno sworn on 16^th February 2022, and filed on 1^st April 2022 – “Exhibit P1”; and

(ii) Affidavit of Douglas Wayne sworn on 1^st August 2022, and filed on 2^nd August 2022 – “Exhibit P2”.

6. The Defendants tendered these two affidavits:

(i) Affidavit of Nazar Mohamed Shaffee sworn on 19^th February 2022, and filed on 21^st February 2022 – “Exhibit D1”; and

(ii) Affidavit of Nazar Mohamed Shaffee sworn and filed on 24^th June 2022 – “Exhibit D2”.

RELIEF CLAIMED BY THE PLAINTIFF

7. In its Prayer for Relief in the Statement of Claim, the Plaintiff seeks general damages and special damages.

CONSIDERATION

8. Liability has already been determined by entry of default judgment. I am satisfied that the facts and cause of action are pleaded with sufficient clarity. I accept that liability has been established and now proceed with assessment of damages. My focus here is on the issue of whether or not the Plaintiff is entitled to general damages and special damages, and how much should be awarded.

9. In Naki v. AGC (Pacific) Ltd. (2006) N5015, Cannings J gave a summary of the main principles to apply when the Court is assessing damages. They are as follows:

• “In a civil action, the purpose of an award of damages is to put the innocent party in the same position, as far as possible, as they would have been in if the wrongdoer had not committed the wrongful act (the breach of contract).
• The plaintiff has the onus of proving his loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and then expect the court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person's case, that person has the onus of proving the allegation.
• Corroboration of a claim is usually required and the corroboration must come from an independent source.
• The principles of proof and corroboration apply even when the defendant fails to present any evidence disputing the claim.
• The same principles apply after default judgment is entered and the trial is on assessment of damages – even when the trial is conducted ex parte. A person who obtains a default judgment is not entitled as of right to receive any damages. Injury or damage suffered must still be proved by credible evidence.
• If the evidence and pleadings are confusing, contradictory and inherently suspicious, the plaintiff will not discharge the onus of proving his losses on the balance of probabilities. It is conceivable that such a plaintiff will be awarded nothing.
• The fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying damages. Where precise evidence is available the court expects to have it. However, where it is not, the Court must do the best it can.
• Where default judgment is granted, for damages to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded.
• The court must be alert to vague claims, unsupported by corroborating evidence, as they might be false claims. The court must only uphold genuine claims.
• The person who has been wronged has a duty to mitigate their losses; though it is the defendant who has the onus of proving failure to mitigate.”
  

10. When it comes to assessment of damages, the onus is upon a plaintiff to prove his/her/its loss. Injia J (as he then was) cited the following passage from McGregor on Damages in Yange Langan v. Independent State of Papua New Guinea, (1999) N1369:

"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".

GENERAL DAMAGES

11. In its submissions, the Plaintiff categorises ‘electricity arrears’ and ‘rentals (consequential loss)’ as general damages.

Is the Plaintiff entitled to outstanding ‘electricity arrears’?

12. The Plaintiff advanced the argument that electricity arrears in the sum of K12,520.00 remains to be paid. The evidence in “Exhibit P1” is that prior to the entry of default judgment on 21^st December 2021, a cheque payment of K65,577.63 was made by the Defendants on 24^th July 2021 as part payment of the electricity arrears. A sum of K12,520.00 remains outstanding. A Tax Invoice is annexed to this affidavit to show this amount.

13. The evidence in “Exhibit D2” is that from the Statement of Claim, it is asserted by the Plaintiff that the First Defendant failed to pay a number of invoices totaling K78,097.69, and these remain outstanding. This, the deponent says is not correct. He confirms that the first Defendant made a payment of K65,577.63 for the verified electricity invoices. Annexed to this affidavit and marked “NMS-1” are all the invoices (as per the First Defendant’s records) which were issued by the Plaintiff for the period between 1^st April 2017 to 31^st October 2020.

14. “Exhibit D2” corroborates the evidence in “Exhibit D1”.

15. The Defendants contended that the total of K78,097.69 claimed by the Plaintiff is an inaccurate figure. The lease agreement was entered into on 1^st August 2017, however, the Plaintiff is claiming for two (2) invoices for periods prior to that. One invoice is for 1^st June 2016 to 30^th November 2016 for K12,326.69, and the other is for 1^st December 2016 to 3^rd March 2017 for K8,358.77, both totaling K20,685.46. The Defendants cannot be liable for electricity arrears prior to the execution of the Lease Agreement of 1^st August 2017 as the Plaintiff has no cause of action against the Defendants for liabilities incurred prior to 1^st August 2017. Without invoices in evidence by the Plaintiff, it is unclear what is the true amount owing. The true amount owing is what has been verified and paid, i.e., K65,577.63. There is no properly verified evidence that the amount of K12,520.06 is due and owing. The purported invoice of K12,520.06 is not supported in the Plaintiff’s pleadings in its Writ of Summons.

16. The evidence in “Exhibit D1” which is relevant to the assessment of damages is that the First Defendant had requested invoices from the Plaintiff for the claimed amounts. Multiple requests for details of the rental and electricity charges were made to the Plaintiff but no response was forthcoming. Invoices were not received.

17. After verification, the First Defendant paid the sum of K65,577.63 for the electricity arrears for the period between 1^st April 2017 to 31^st October 2020. Annexed to this affidavit is the Bank of South Pacific Limited’s proof of payment.

18. The Defendants’ evidence is that there were no invoices and/or details provided by the Plaintiff’s officer as to the claimed amount of K12,326.69 for the period between 1^st June 2016 and 30^th November 2016, thus, no payment was made for that amount claimed. The First Defendant’s officer did follow up but the Plaintiff still failed to provide the First Defendant with any invoices and/or proper details of the claimed amount, even after numerous requests by the First Defendant. Requests were made by the First Defendant as far back as 6^th August 2020. The amount of K12,326.69 for the period between 1^st June 2016 and 30^th November 2016 was disputed by the Defendants due to no details provided by the Plaintiff.

19. On the reasonable steps the Plaintiff could have taken to mitigate its losses, the Defendants’ argument is that if the Plaintiff was adamant to lease its property out, and assuming there were electricity arrears, the reasonable and prudent thing to do in the circumstances would be to settle any arrears and then rent the premises out.

Assessment

20. The Plaintiff categorised electricity arrears as general damages in its submissions. Evidence of this amount is in “Exhibit P1”. The outstanding electricity arrears in the sum of K12,520.00 is not pleaded in the Statement of Claim. It is not claimed in the Writ of Summons.

21. The principle is that where default judgment is granted, for damages to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded.

22. In the present case, there is no foundation in the pleadings for the outstanding amount of K12,520.00. This is actually a claim for special damages. Special damages are claims for fixed amounts of money, as in this case. The Plaintiff was required to plead it with particularity. I find that this particular claim by the Plaintiff has not been sufficiently particularized in the Statement of Claim. The case authorities make it clear that the Plaintiff cannot give evidence in support of any claim which is not pleaded. I place no weight on the Plaintiff’s evidence. What the Plaintiff should have done was apply to amend its pleadings. It failed to do so, and is confined to the pleadings as they are. I am not satisfied that the claim has been sufficiently pleaded. Therefore, I will not make any award.

Is the Plaintiff entitled to ‘rental arrears’?

23. The Plaintiff’s evidence in “Exhibit “P1” is that the First Defendant exited the subject property on or around December 2020. Commencing February 2021, the property could not be leased out due to the fact that electricity arrears remained outstanding, and no entities were willing to assume liability. As a direct consequence of non-payment of the electricity arrears, the subject property remained vacant commencing February 2021. The Plaintiff incurred economic losses as it was unable to lease the vacant spaces. Tax Invoices for monthly rental of K13,200.00 for February 2021 to December 2021 are annexed to this affidavit.

24. In submissions, the Plaintiff claims that rentals have been accruing from February 2021 to July 2022 (18 months). Its total claim for accrued rental arrears is the sum of K237,600.00 (i.e., 18 months X K13,200.00 per month). The Plaintiff argues that this is a consequential loss. Counsel referred to the case of Enga Enterprises Pty Ltd. v. Porakali (1995) N1359, and submitted that the law on consequential loss applies to the present case.

25. The Defendants’ evidence in “Exhibit D1” is that the Plaintiff is now claiming K145,200.00 in rental arrears which the First Defendant lawfully vacated with the Plaintiff’s approval on 19^th December 2020. The First Defendant denies liability.

Assessment

26. The Plaintiff categorised rental arrears as general damages in its submissions. Evidence of this amount is in “Exhibit P1”. Just like the Plaintiff’s claim for outstanding electricity arrears, the outstanding rental arrears in the sum of K237,600.00 is not pleaded in the Statement of Claim. It is not claimed in the Writ of Summons.

27. I repeat here that the principle is that where default judgment is granted, for damages to be assessed on a given set of facts as pleaded in a statement of claim, the evidence must support the facts pleaded. No evidence will be allowed in support of facts that are not pleaded.

28. In the present case, there is no foundation in the pleadings for the outstanding rental arrears of K237,600.00. Like the claim for outstanding electricity arrears, this is also a claim for special damages. The Plaintiff claims a fixed amount of money (K237,600.00). The Plaintiff was required to plead it with particularity. This particular claim by the Plaintiff has not been sufficiently particularized in the Statement of Claim. I place no weight on the Plaintiff’s evidence. The Plaintiff should have applied to amend its pleadings. It failed to do so. I am not satisfied that this claim has been sufficiently pleaded. Therefore, I will not make any award.

SPECIAL DAMAGES

29. In the Plaintiff’s submissions, the two items under special damages are ‘costs for airline tickets’ and ‘miscellaneous expenses’.

Is the Plaintiff entitled to the ‘costs for airline tickets’ and ‘miscellaneous expenses’?

30. The Plaintiff claims K9,121.80 as costs for his lawyer’s airline tickets. The Plaintiff also claims K7,000.00 for miscellaneous expenses. This is for monies expended on his lawyer’s boarding, lodging, meals, etc. The request by Mr Wayne is that these expenses be considered when assessing damages incurred by the Plaintiff. The evidence in “Exhibit P2” shows ticket fares for the Plaintiff’s lawyer, and expenses for his boarding, lodging and other miscellaneous expenses.

Assessment

31. Should the Plaintiff be awarded K9,121.80 and K7,000.00? I answer both questions in the negative. Set out below are my reasons for decision.

32. The Plaintiff’s claims under this head of damages are special in nature. In Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694, the Supreme Court said, and I quote:

"Where a Plaintiff's claim is special in nature, such as a claim for loss of salaries or wages, they must be specifically pleaded with particulars. Unless that is done, no evidence of matters not pleaded can be allowed or relief granted."

33. The Plaintiff claimed damages in his Prayer for Relief. The Court found that this pleading was inadequate. The Court said, and I quote:

"The onus remained with Mr. Tole to properly plead, and then prove what was in fact pleaded by way of damages. The moment he stepped outside the pleadings, he went outside what was resolved by the default judgment. ... If a Plaintiff seeks to step out of the pleadings, he is obliged to amend the pleadings and then allow the normal process of pleadings to take place before there can be a hearing and judgment on matters not in the original pleadings. ... It is the duty of a Plaintiff to plead his claim with sufficient details or particulars. It is a breach of the Rules....”

34. The Court further said, and I quote:

“Such a pleading gives no advantage to a Plaintiff, since he can not add to his Statement of Claim without an actual amendment to his Statement of Claim. Also, such a pleading casts no onus or obligation on a Defendant to clarify or enlarge a Plaintiff's case, and it simply has no foundation in the Rules."

35. The pleadings enable the parties to decide in advance of the trial what evidence will be needed. The law requires proper pleadings with particulars before any claim or prayer for relief can be granted.

36. I adopt and apply the principles of law to the present case.

37. The affidavit setting the evidence of the Plaintiff’s claims for K9,121.80 and K7,000.00 is “Exhibit P2”. Submissions have been made on these amounts. However, there is no foundation of these claims in the pleadings. These amounts were not claimed in the Writ of Summons. The Plaintiff cannot give evidence in support of his claims which are not pleaded. I place no weight on the evidence in “Exhibit P2”.

38. It is the duty of a Plaintiff to plead his/her/its claim with sufficient details or particulars. The onus was on the Plaintiff to properly plead and prove what was pleaded. This, it failed to do.

39. I find that the Plaintiff’s claims for K9,121.s80 and K7,000.00 were not specifically pleaded with particulars in the Statement of Claim. The Plaintiff cannot obtain relief which has not been specifically sought in its pleadings. I will therefore not make any award for special damages.

CONCLUSION

40. The default judgment resolved the issue of liability on the matters pleaded by the Plaintiff in its Statement of Claim, and prayed for. The Plaintiff did not discharge its onus of properly pleading its claims for general damages and special damages with sufficient details or particulars, and producing credible evidence to establish its claims. I therefore assess no damages as being payable by the Defendants. Damages are not payable by the Defendants to the Plaintiff.

COURT ORDERS

41. I make the following orders:

1. Damages are not payable by the Defendants to the Plaintiff.

2. The Plaintiff’s claim is dismissed.

3. The Plaintiff shall pay the Defendants’ costs of the proceedings on a party-party basis, to be taxed if not agreed.
________________________________________________________________
D. Wayne: Lawyer for the Plaintiff
G. Kult: Lawyer for the First and Second Defendants