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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO. 1178 OF 2017 (COMM)
BETWEEN:
YAROSON NAMBIS
Plaintiff
V
SIMON LING
Defendant
Kimbe: Anis J
2023: 15th & 24th November
TRIAL ON ASSESSMENT – default judgment entered by consent with damages to be assessed – claim premised on oral lease agreement – agreement to lease food warmer for an unspecified period – food warmer leased at K600 per month – oral agreement entered into in 2006 – default judgment for breaches alleged to have occurred from July 2006 to October of 2017 – whether Court entitled to raise issue of time bar – s.16(1)(a) – Frauds and Limitations Act – Court’s power under s.155(4) – Constitution - whether assessment should be made and granted on breaches that have occurred past the 6-year limitation period – whether there were series of breaches that have occurred which were pleaded that entitles the plaintiff to seek assessments and awards on those breaches that have occurred within the 6-year period to the time of filing the proceeding - whether plaintiff entitled to be awarded all the relief sought – consideration and ruling
Cases Cited:
Mamun Investment Ltd and 1 Or v. Onda Koim and Ors (2015) SC1409
Soakofa Trading and 1 Or v Bank South Pacific Ltd (2021) SC2068
Public Curator v Konze Kara as Administrator of the estate of Kibikang Kara [2014] 2 PNGLR 428
Habolo Building & Maintenance Ltd v Hela Provincial Government (2016) SC1549
Memkitts Investments Limited v. Paul Depo Aikal and Ors (2021) SC2184
Kuso Maila Anda Ltd v. United Pacific Corporation Ltd (2019) N9822
Counsel:
B Takua, for the Plaintiff
J Kama, for the Defendant
JUDGMENT
24 November 2023
1. ANIS J: This was a trial on assessment of damages. The matter was heard on 15 November 2023, and I reserved my ruling to a date to be advised.
2. This is my ruling.
BACKGROUND
3. This was a claim for breach of contract. The plaintiff claimed that she entered into an oral agreement with the defendant sometimes in June of 2006. The agreement (lease agreement/LA) was that she would lease her brand-new food warmer to the defendant to use in the defendant’s business, and at the end of each month, the defendant would pay her K600 for the lease of the food warmer. The LA and its general terms were not disputed by the parties. The general terms included the following as pleaded in the Statement of Claim filed 3 November 2017 (SoC):
“(1) The Defendant will pay to the Plaintiff K600.00 per month starting every first week of each month.
(2) The rental of K600.00 shall commence on the first week of July 2006.
(3) The Defendant shall return the Food Warmer to the Plaintiff as to when should the Defendant ceases (sic) to operate his business of selling cooked food stuff here in Kimbe.
(4) Should the Food Warmer become faulty in the course of the business; the Defendant shall in person return the Food Warmer to the Plaintiff immediately.”
4. The plaintiff claimed in the SoC that since the date of delivery of the food warmer or as of July of 2006 to October 2017 (which was the month before the date of filing the SoC), the defended failed to pay the lease charges. She calculated a total of 135 unpaid months for her food warmer where she made a claim of K81,000 for these outstanding lease charges. The other relief claimed in the SoC were, K15,400 as general damages, K10,800 for breach of contract, K10,000 for special damages, interest at 8% per annum, and cost of the proceeding.
5. On 17 June 2023, the parties entered into a consent default judgment order which was endorsed by the Court. Despite the pleaded liquidated sums claim in the SoC, the parties agreed that damages should be assessed separately if not settled. Term 2 of the consent default judgment order reads, 2. Pursuant to Order 12 Rule 28 of the National Court Rules 1989, Default Judgment is entered against the Defendant with damages to be assessed.
EVIDENCE
6. The parties filed their respective evidence in this assessment hearing. The plaintiff filed a total of 5 affidavits. The defendant filed 1 affidavit. Each affidavit tendered was given an exhibit number.
ISSUES
7. Liability has been determined in this matter with damages to be assessed. However, entering of default judgment with damages to be assessed is just that; it does not give any automatic right to a plaintiff over the relief that he or she is seeking. That would be a matter for the assessment Court to consider and make a determination.
8. Therefore, the issues, in my view, are 2-fold. First, I will have to decide whether each of the relief sought in the SoC is valid and available under law for assessment purposes, and secondly, I will assess and decide on what quantum of awards I should make.
OUTSTANDING AREARS
9. I had taken the parties to task by querying whether the plaintiff may claim for the outstanding lease fees that were due beyond the 6-year period from the date of filing the SoC on 3 November 2017. In particular, I queried whether the lease fees that were due but which the plaintiff did not collect from July of 2006 to 2 November 2011, constituted series of breaches of contract that had occurred more than 6 years ago.
10. The issue of time bar, in my view, is relevant and may be raised by this Court regardless of whether it is pleaded or regardless of whether it is a hearing on assessment of damages. This is a Court of law and justice. And so long as it seizes of a matter, and in view of its inherent power under s. 155(4) of the Constitution, this Court is obligated to ensure that it fulfils its role and function to the best of its ability according to law in regard to the matter that is before it. And as stated herein, assessment of damages should be considered in the following manner. The first is whether the relief sought is allowable under law including whether it is substantiated by the pleadings, followed by whether the relief is established by evidence and if so and if it requires monetary assessment, the sum or quantum (or what sum or quantum) the Court should award.
11. I referred both counsel to s.16(1)(a) of the Frauds and Limitations Act (FLA), which states:
“16. LIMITATION OF ACTIONS IN CONTRACT, TORT, ETC.
(1) Subject to Sections 17 and 18, an action–
(a) that is founded on simple contract or on tort; or
(b) to enforce a recognisance; or
(c) to enforce an award, where the submission is not by an instrument under seal; or
(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,
shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.”
12. In Mamun Investment Ltd and 1 Or v. Onda Koim and Ors (2015) SC1409, the Supreme Court stated at paras 15 and 16,
15. In the House of Lords case of Cartledge and Ors v. E. Jopling & Sons Ltd [1963] 2 WLR 210, Lord Pearce said at p223:
"Past cases have been decided on the basis that the time runs from the accrual of the cause of action, whether known or unknown,.....
16. His Lordship referred to numerous cases in which it was held that a cause of action accrued and time began to run irrespective of the plaintiff's lack of knowledge. This continues to be the position as is illustrated by the following passage of Lord Hoffman in the House of Lords decision of Law Society v. Sephton & Co [2006] UKHL 22; [2006] 2 AC 543, 2WLR 1091:
"The normal period of limitation prescribed by section 2 of the Limitation Act 1984 for an action founded on tort is six years from the date on which the cause of action accrued. Since a cause of action may accrue without the knowledge of the injured party (Cartledge v Jopling [1963] AC 758) the six year period may expire before he is able to bring proceedings."
13. The Supreme Court, in conclusion and in interpreting s.16(1) of the FLA, accepted the proposition that the cause of action whether it be in a simple contract, tort, or tort of fraud, shall commence from the date or time when the contract was breached or the tort was committed, and not from the time of discovery of the alleged breach of contract, tort or fraud by a claimant.
14. The Supreme Court in Soakofa Trading and 1 Or v Bank South Pacific Ltd (2021) SC2068 also stated at para 19:
19. In the case of a tort actionable per se, the cause of action accrues when the wrongful act is committed: Konze Kara v. Public Curator of Papua New Guinea & Anor (2010) N4055. An example of a tort actionable per se is defamation: see Loani Henao v. David Coyle (1999) N1918.
15. When I turn my attention to the pleadings, the alleged breaches for each month was said to have begun in July of 2006. The plaintiff did not take immediate steps to sue for breach of contract back then. Instead, she waited for 11 years to pass. Then on 3 November 2017, she filed the SoC where she claimed the calculated outstanding lease fees from the month of July of 2006 to the month of October of 2017. A total of 135 months of outstanding lease fees was claimed as owed. Premised on the rate of K600 per month, the total accrued fees claimed by the plaintiff was K81,000. However, and as stated herein, judgment was entered with damages to be assessed.
16. In the defendant’s evidence, which is marked as Exhibit D1, he does not deny the general oral terms of the LA, the plaintiff’s food warmer and the lease rate of K600 that was to be charged per month. However, the defendant argues that the food warmer was retained for only about 9 months in 2006. He said he passed the food warmer to the plaintiff’s adopted son Jeffery Nambis and told him to return it back to the plaintiff with K700 cash.
17. The plaintiff denies the claim that the food warmer was ever returned to her.
18. In commencing my consideration under this sub-heading, I am faced with 2 dilemmas. The first is this. I had inquired with counsel for the plaintiff whether he knew what the lifespan of a food warmer was. Counsel was unable to assist. The defendant’s counsel could not assist either. Without the information, which I find is necessary as part of the assessment process under this sub-heading, I had to look elsewhere for assistance. With my limited research and information, I also sought assistance from the internet and obtained online information regarding companies that were in the business of selling cookware for commercial use including food warmers. One such online company is restaurant equipment online. The general information gathered from my limited research is that a lifespan of a food warmer ranges between 3 to 10 years. And the lifespan for industrial kitchen wares in general ranges between 10 to 12 years.
19. At the hearing, I had put to counsel for the plaintiff that there has to be a cut off mark for this Court to put or draw a line, that is, before it may proceed to assess the outstanding lease fees. I gave the example that the plaintiff cannot wait for a 100 years and then file the proceeding to seek rentals or lease fees for the full 100 years for the use of the same food warmer. Every equipment, machine, or product of any sort would have a lifespan of some sort, which was also the point that was drawn to the attention of the parties. Both counsel made their submissions regarding that. For the plaintiff, he claims that assessment should be calculated for the full 6 years from 2011 to 2017, and that it should continue from 2017 to the date when the Court hands down its final decision on assessment. The defendant submits, amongst others, that the plaintiff should be entitled to nothing or lesser.
20. For the purpose of assessment, I am minded to and will allow the plaintiff’s food warmer with a lifespan period 8 years. I will use this timeframe as part of my assessment tool or criteria under this sub-heading.
21. My second dilemma is this. The plaintiff’s claim, which was granted by default, was premised on breaches that have also occurred on periods that were more than 6 years ago from the date of filing her SoC on 3 November 2017. If I am to compute time premised only or solely on the date when the first action accrued, which was in July of 2006, the action and relief sought would be time-barred under law or under s.16(1)(a) of the FLA. And despite judgment being entered, I would be minded to refuse to make any awards at all to the plaintiff.
22. In the present matter, however, the breaches were recurrent, or they constituted a series of breaches that began as of July of 2006. Recurrent breaches are allowable for purposes of considering whether an action is time barred or not. See cases: Public Curator v Konze Kara as Administrator of the estate of Kibikang Kara [2014] 2 PNGLR 428, Habolo Building & Maintenance Ltd v Hela Provincial Government (2016) SC1549, Memkitts Investments Limited v. Paul Depo Aikal and Ors (2021) SC2184 and Kuso Maila Anda Ltd v. United Pacific Corporation Ltd (2019) N9822.
23. Every time the defendant failed to pay a lease fee of K600 for a particular month commencing as of July of 2006, that amounted to breach of contract where the plaintiff was entitled to sue and claim the K600 for the said month, and if the defendant failed to pay the lease fee for the next month, the plaintiff was entitled to sue for the said next month as well as the preceding month, and so on, but so long as the accrued lease fees and the breaches were occurring within the 6 year-time limitation period under s.16(1)(a) of the FLA.
24. Having clarified the dilemmas, I turn to assessment. My first assessment consideration concerns the term of the LA. For this purpose, I will premise it on the lifespan of the food warmer, that is 8 years, and I compute that, from 3 July 2006, which was the time the food warmer was given to the defendant, to 3 July 2014, which is a period of 8 years. I decline to consider and make an award that is premised on an unspecified term of the LA. I find that, to proceed in that manner, would be unjust, illogical and in breach of the law. Moving on, if I compute time from 3 November 2017 back 6 years, the only accruals that are within the law or its legal confines that the plaintiff may seek, in my view, are the arears that have accrued from 3 November 2011 (i.e., the last day of the 6th year) to 3 July 2014 (i.e., the expiry date of the food warmer and the term of the LA as computed). If computed, this will consist of a period of 2 years and 8 months. The said period, in my view, is allowable for assessment. I, however, decline to compute time beyond 3 July 2014. As of 4 July 2014, the food warmer will have surpassed its 8-year lifespan; and so, no lease fees could be charged or due from that period on, for purposes of this assessment. I note that a similar approach was taken by the Court in Kuso Maila Anda Ltd v. United Pacific Corporation Ltd (supra).
25. I therefore refuse to assess and make an award for those lease fees claimed for the periods from 4 July 2014 to 3 November 2017 or beyond the date of the judgment on assessment. I also refuse to assess and make an award for those lease fees claimed for the earlier periods from July of 2006 to 2 November of 2011.
26. So, in summary, the allowable period I find is 2 years and 8 months, or 32 months. If I multiply that by K600, it will add to K19,200.
27. The defendant also submits to the Court to apply contingency. I dismiss this claim because the award that is assessed herein is not post-judgment or future losses where contingency may be taken into account or applied.
28. I award the final sum of K19,200 to the plaintiff as her outstanding lease fees or charges for the use of her food warmer.
GENERAL DAMAGE
29. The plaintiff further claims general damages for breach of contract. She says she should be paid K15,400 for this damage.
30. The defendant submits that the plaintiff should not be entitled to this damage.
31. I note that submissions of the parties.
32. I decline to make any award under this sub-heading. As indicated to the plaintiff at the hearing, there is insufficient pleading for that. The plaintiff made references to paras 7 and 9 of the SoC to support this claim. The relevant parts of the 2 paras say that the plaintiff “suffer damages” and that the “Plaintiff continue to suffer as a result of the Defendant’s failure to settle.” The pleadings, in my view, are too broad, vague and without particularity. As such, I refuse to proceed to and make any award under this sub-heading.
33. The second reason is this. I refer to the plaintiff’s evidence. I am not satisfied that she has adduced sufficient or cogent evidence to support this claim. All the plaintiff appears to rely on, is premised on the waiting period for the payment to be forthcoming from the defendant. This claim alone, in my view, is insufficient. I also uphold the defendant’s submission that the delay was caused by the plaintiff’s own doing, that is, by waiting for about 11 years before she commenced this proceeding.
34. The third reason is this. General damage is awarded mainly in personal injury cases or in situations where it is difficult to calculate a monetary value to a committed wrong or action or inaction. In the present case, the plaintiff’s main claim is for outstanding lease fees which are pecuniary losses that are easily assessable and quantified as have been done herein.
BREACH OF CONTRACT
35. The plaintiff also claims that she should be paid K10,800 for breach of contract. This relief is contested by the defendant. The defendant submits that the Court should not award anything under this sub-heading; that the relief is similar or a repeat of the first relief.
36. I note the submissions of the parties.
37. I reject this relief, and as such, decline to make any award herein. In regard to the various breaches of the LA, the plaintiff had sued for them accordingly and default judgment has been entered. And presently, this Court has now made an award for each one of the breaches that were not time-barred or that were within the confines of law whereupon a total sum of K19,200 award has been made in favour of the plaintiff.
SPECIAL DAMAGES
38. The plaintiff claims K10,000 for special damages.
39. The parties concede that the only relevant item under this head of damage is the food warmer. Evidence adduced by the parties reveal that no one knew where the food warmer is at this time. The defendant says in his evidence that it was given to the plaintiff’s adopted son and taken back to the plaintiff with a cash of K700. The plaintiff denies that in her evidence.
40. The parties concede that assessment should be premised on the value of the food warmer at the time that it was delivered to the defendant. And the parties agree that the value is K4,600. I am minded to make this award and I do so accordingly.
INTEREST
41. Interest is sought at 8% per annum under the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No. 52. The said Act was repealed in 2015, that is, by Judicial Proceedings (Interest on Debts and Damages) Act 2015.
42. The main contention argued by the parties is whether I should award interest at 8% or 4% per annum on the judgment sum.
43. The Court’s power under this sub-heading is discretionary. In this case, there is no agreed interest rate in pleaded oral LA. For this matter, I am minded to award interest at the rate of 4% per annum. I uphold the defendant’s submission that the plaintiff had delayed and waited for 11 years to file this proceeding. In my view, it was incumbent upon her to come to Court without delay. The plaintiff has also not deposed evidence to say how she had mitigated her losses.
44. Computing the time when interest should run was not pleaded in the SoC. As such and for this matter, I will compute interest to apply from the date of filing this proceeding to the date of this judgment. Interest shall also accrue after 30 days from the date of service of this order on the defendant, to the date when the judgment is fully settled.
45. The judgment sum awarded herein is K19,200. The SoC was filed on 3 November 2017. The date of the decision on assessment of damages is 24 November 2023. So, in total, we have a period of 6 years and 21 days to calculate interest. Four percent of K19,200 is K768, which is the assessed interest per year. I divide that (K768) by 365 days, and I get K2.10 as the daily interest rate for the judgment sum. I then multiply K768 x 6 years to get K4,608. I also multiply K2.10 x 21 days to get K44.10. And finally, I add K4,608 with K44.10 to get K4,652.10 which is the total interest on the judgment sum as at 24 November 2023.
NOTICE OF DEPOSIT
46. The defendant filed a Notice of Deposit on 13 July 2023. In the said notice, the defendant states that he paid a sum of K10,000 into the National Court Trust Account in answer to the claim.
47. I will therefore also make an order directing the Registrar of the National Court to immediately pay out to the plaintiff the sum of K10,000 which shall constitute part-payment of the judgment award. I will also make an order for the Registrar to notify the defendant’s lawyers when the K10,000 part-payment is effected to the plaintiff.
COST
48. An order for the cost of the proceeding remains discretionary.
49. I note the submissions of the parties. Of relevance is the submission by the defendant that the Court should order the defendant to pay only half of the total costs. The premise of the said submission is that the plaintiff had delayed the matter for a very long time before she decided to file the court proceeding. Although I find some merit in that reasoning, I note that an order for cost to follow the event on a party/party basis appears reasonable under the circumstances.
50. I decline to make any order that will further reduce or apportion the cost of the proceeding. I will instead order cost in favour of the plaintiff on a party/party basis to be taxed if not agreed.
SUMMARY
51. In summary, I find that the plaintiff has established some of the pleaded relief. And I have made assessments and findings on them including interest and cost.
ORDERS OF THE COURT
52. I make the following orders:
The Court orders accordingly
________________________________________________________________
Public Solicitor: Lawyer for the Plaintiff
Jerry Kama Lawyers: Lawyers for the Defendant
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