PNG-Taiheiyo Cement Ltd v Kembua (trading as Double Portion Electrical Contractors) [2024] PGNC 214; N10878 (8 July 2024)

N10878

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 274 OF 2020

BETWEEN
PNG-TAIHEIYO CEMENT LIMITED
- Plaintiff-

AND:
TISFU KEMBUA trading as DOUBLE PORTION ELECTRICAL CONTRACTORS
- Defendant -

Lae: Dowa J
2023: 13^th April
2024: 8^th July

CIVIL-Breach of Contract of service-Plaintiff engaged the defendant to repair inductive motor-failed to repair with due diligence -poor workmanship-resulting in rescinding contract and engagement of third party at extra costs-whether the plaintiff proved liability on the balance of probabilities-Plaintiff has burden to prove damages with credible evidence- liability established and damages awarded.

Cases Cited:
NKW Holdings -v- Paladin Solutions PNG Ltd, (2020) N8339
Keam investments v Toyota Tsusho (PNG) Ltd (2019) N7859
Titus Tumba v Samson (2002) N8721
Waguvisa Resource owners, General Co-operative Society -v- Kambua (2016) N6160
Rodao Holdings Ltd -v- Sogeram Development Corporation Ltd (2007) N5485
Yooken Paklin v The State (2001) N2212
Peter Wanis v Fred Sikiot The State (1995) N1350
Enaia Lanyat v State (1996) N1481
Obed Lalip v Fred Sikiot and The State (1996) N1457
Jonathan Mangope Paraia v The State (1995) N1343
Samot v Yame (2020) N8266.
Kolaip Palapi and Others v Sergeant Poko and Others (2001) N2274

Counsel:
S Kesno, for the Plaintiff
No appearance for the Defendant

DECISION

8^th July 2024

1. DOWA J: This is a decision on both issues of liability and damages. The Plaintiff is seeking damages for breach of a contract by the Defendant for failing to repair its 110-kilowatt induction motor, resulting in extra cost for alternative repairs.
   

Facts

2. The Plaintiff is a company operating and based in Morobe Province. It is the owner of the machinery, described as 110-kilowatt induction motor. The Defendant is a local electrical contractor operating in Lae Morobe Province. In October 2017, the Defendant was engaged by the Plaintiff to repair the Plaintiff’s induction motor at the repair cost of K 34,980.00. The Defendant attempted to do the repairs but were unsuccessful after several failures. The Plaintiff retrieved the motor from the Defendant after waiting for more than a year and engaged another electrical company to do the repairs for K 71,300. The Plaintiff alleges that the Defendant breached the terms of contract resulting in the Plaintiff company suffering financial loss in business and for the extra cost for the repairs.
   
3. In particular, the Plaintiff alleges that because of the delay and poor workmanship it has cost the Plaintiff extra cost and loss of business. The Plaintiff now seeks in this proceeding damages and various reliefs including the refund of the deposit made for the repairs.
   

Defense

4. The Defendant filed a Defence denying the Plaintiffs claim. However, the Defendant did not participate further in the proceedings and called no evidence in support of the Defence.
   

The Hearing

5. The matter was fixed for hearing on 13^th April 2023. The trial proceeded in the absence of the Defendant. The Defendant was served Notice of trial and a minute of the Court order issued on 28^th February 2023. Although the Defendant was personally served Notice of Trial, he did not attend Court. Looking at the history of the court file, the Defendant made no appearances in Court after the only appearance made on 25th September 2020. The Defendant also failed to comply with directions given for him to file his affidavits. For these reasons, the Court granted leave to the Plaintiff to proceed with the trial in the absence of the Defendant.
   
6. The Plaintiff gave evidence by affidavit without cross-examination.

The following affidavits were tendered in Court:

1. Affidavit of Teguh Kristianto sworn 15^th and filed 22^nd August 2022
2. Affidavit of Amado Liosala sworn 15^th and filed 22^nd August 2022.
   

7. The Defendant offered no evidence.
   
8. After the conclusion of the receipt of evidence, the Plaintiff was directed to file its submissions by 27^th April 2023, but the submissions were not filed. The Court will proceed with its decision regardless.
   

Issues

9. The issues for consideration are:
   
   1. Whether the Defendant is liable for breach of the terms of the Contract for Repairs.
   2. Whether the Plaintiff is entitled to rescind the contract and seek damages for breach of contract.
      

Law

10. It is a trite law of contract that the following elements be present for a contract to be valid and enforceable:
    
    1. Offer
    2. Acceptance
    100. Intention to create legal relation.
    4. Passing of consideration
    5. Capacity of parties
       

Refer to NKW Holdings -v- Poladin Solutions PNG Ltd, (202) 8339, Keam investments v Toyota Tsusho (PNG) Ltd (2019) N7859, Titus Tumba v Samson (2002) N8721.

Burden of Proof

11. Although the Defendant has not participated further in the proceedings, the Plaintiff is still required to prove liability and damages with credible evidence. Ref: Yooken Paklin v The State (2001) N2212, Peter Wanis v Fred Sikiot and The State (N1350), Enaia Lanyat v State (1996) N1481; Obed Lalip v Fred Sekiot and The State – N147; Jonathan Mangope Paraia v The State (1995) N1343, and Samot v Yame (2020) N8266.

The Plaintiff’s evidence

11. The Plaintiff relies on the evidence deposed in the Affidavits of Amado Llosala and Teguh Kristianto, both employees of the Plaintiff company. Their evidence is identical and is set out in the following paragraphs.
    
12. The Plaintiff is a company operating a cement factory and is based in Lae in the Morobe Province. It is the owner of the machinery, described as 110-kilowatt induction motor. Between September and October 2017, the Plaintiff’s induction motor malfunctioned. The Plaintiff sought quotations from local electrical companies for the repairs. The Defendant who is a local Electrical Contractor operating in Lae, Morobe Province was chosen after he provided a suitable quote for the repair job.
    
13. On or about 6^th October 2017, the Plaintiff entered a contract with the Defendant to repair the Plaintiff’s induction motor in the following terms:
    
    1. The repair cost would be K 34,980.00 as per quote.
    2. Six months warranty after the repairs
    100. The Defendant would be responsible for any damages or burnt winding caused by mechanical faults
    4. The Defendant was responsible for making good any damage or burnt winding caused by mechanical faults.
    5. The Defendant would rewind and repair the motor in a proper and skillful before payment of the balance of the repair cost.
       
14. On 31^st October 2017, the Plaintiff paid K 13,672 representing 40% of the repair costs. On 19^th December 2017, the Plaintiff paid an additional K 4,101.60 at the Defendant’s request. On 21^st May 2018, the Defendant after completing the repairs brought the motor to the Plaintiff for a test but it failed the test, and the defendant brought the motor back to rectify the fault.
    
15. On 18^th June 2018, the motor was brought to the Plaintiff after the second repairs but again it failed, and the motor was brought back to the Defendant’s workplace for rechecking.
    
16. The repairs were not done immediately thereafter. After a long wait, the Plaintiff retrieved the motor from the Defendant’s workshop in January 2019. The Plaintiff noted that the Defendant failed to repair the motor in a proper and skillful manner. The repair work done was of poor workmanship and skill and of low standard. It was clear to the Plaintiff that the Defendant lacked the necessary competency, skill and equipment to properly repair the motor. After retrieving the motor, the Plaintiff engaged Niugini Electrical, another electrical company for the repairs. The motor was eventually repaired by the second electrical company at a cost of K 72, 164.84.
    
17. The Plaintiff alleges that the Defendant breached the terms of the repair agreement. The Plaintiff alleges that because of the prolonged delay and poor workmanship it has cost the Plaintiff extra cost and loss of business time and income. The Plaintiff now seeks in this proceeding damages and various reliefs including the refund of the deposit made for the repairs.
    
    1. Issue No. 1: Whether the Defendant is liable for breach of the terms of the Contract for Repairs.
       
18. I have considered the pleadings and evidence presented for the Plaintiff and find there is overwhelming evidence that the Plaintiff and the Defendant entered a valid and enforceable contract for the Defendant to repair the Plaintiff’s induction motor. The terms of the contract are clear and is supported by documentary evidence. There is evidence that the Defendant agreed to repair the motor at the contract price of K 34,980.00. There is evidence that the defendant was paid K 17,773.60 as initial deposit. There is evidence that that the defendant failed to repair the motor despite several failed attempts to rectify the initial failures. There is evidence that the motor was not repaired at all after a long delay of fifteen months. This resulted in the Plaintiff engaging Niugini Electrical, a third party who successfully repaired the motor within five months at the cost of K 72,164.34. This demonstrated a clear breach of the terms of the contract, both express and implied that the Defendant would repair the motor within a reasonable time with due diligence and quality workmanship and skill. The Defendant failed to deliver on his promise and meet his obligations under the contract. The Plaintiff has established liability on the balance of probabilities
    
19. For the forgoing reasons, I find the Defendant liable for breach of contract.
    

Issue No.2 Whether the Plaintiff is entitled to rescind the contract and seek damages for breach of contract.

20. The evidence shows the Defendant failed to repair the motor after the several attempts. It was at his workshop for more than fifteen months. The Plaintiff was entitled to rescind the contract and retrieve the motor from the Defendant’s premises as it became plainly clear that the defendant was unable to repair the motor. The next issue for consideration is whether the Plaintiff is entitled to any damages and if so, how much.
    

22. Whilst the issue of liability is settled, the Plaintiff is still required to prove damages with credible evidence.

23. In Samot v Yame (Supra), His Honour, David J referring to legal principles to be applied in assessing damages said this at paragraph 46 of his judgment:

“ The Supreme Court in William Mel v Coleman Pakalia (2005) SC790 and the National Court decision of Cannings, J in Steven Naki v AGC (Pacific) Ltd (2006) N5015 summarise or identify a number of legal principles that are applicable in assessing damages where liability is established either following a trial or after the entry of default judgment and these are:

• 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. (Yooken Paklin v The State (2001) N2212, National Court, Jalina J.)
  
• Corroboration of a claim is usually required and the corroboration must come from an independent source. (Albert Baine v The State (1995) N1335, National Court, Woods J; Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331, National Court, Lenalia J.)
  
• The principles of proof and corroboration apply even when the defendant fails to present any evidence disputing the claim. (Peter Wanis v Fred Sikiot and The State (1995) N1350, National Court, Woods J.)
  
• 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. (Yange Lagan and Others v The State (1995) N1369, National Court, Injia J.)
  
• 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. (Obed Lalip and Others v Fred Sikiot and The State (1996) N1457, National Court, Injia J.)
  
• 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. (MVIT v Tabanto [1995] PNGLR 214, Supreme Court, Kapi DCJ, Hinchliffe J, Sevua J; Waima v MVIT [1992] PNGLR 254, National Court, Woods J; MVIT v Pupune [1993] PNGLR 370, Supreme Court, Kapi DCJ, Jalina J, Doherty J; Tabie Mathias Koim and 28 Others v The State and Others [1998] PNGLR 247, National Court, Injia J.)
  
• 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. (Jonathan Mangope Paraia v The State (1995) N1343, National Court, Injia J.)
  
• 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. (Kolaip Palapi and Others v Sergeant Poko and Others (2001) N2274, National Court, Jalina J.)
  
• 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 (Dia Kopio v Employment Authority of Enga and Others (1999) N1865, National Court, Hinchliffe J; Coecon v National Fisheries Authority (2002) N2182, National Court, Kandakasi J.)”
  

24. I will adopt and apply these principles in the present case when considering each head of damages sought by the plaintiff.

25. The Plaintiff claims the following in the statement of claim.

1. Refund of monies paid to the Defendant in the sum of K17,773.60.
2. General Damages for breach of contract

100. Special Damages of K 72,164.84

4. Loss of income
1. Interest at 8% pursuant to Judicial Proceeding (interest on debts and damages) Act, Chapter 52.
   
   5. The cost of proceedings.
      
1. Refund of K 17,773.60
   

26. The Plaintiff claims a refund of K 17,773.60 being monies paid in advance for the repair work. There is evidence for two lots of payment totaling K 17,773.60. I find this claim is in order and the Plaintiff is entitled to the refund.

b) General Damages

27. The Plaintiff seeks general damages. General damages are for pain and suffering. Although this head of damages is pleaded, no submissions have been made. Also, there is insufficient evidence for an award under this head of damages. Thus, no award shall be made for general damages.

c) Special Damages-K 72,164.84

28 The Plaintiff claims special damages in the sum of K 72,164.84. Special damages are a remedy available to a party for expenses that are necessarily incurred or consequential to a breach of contract or for a tortious conduct. In the present case, the Plaintiff claims expenses incurred for repairs done to the induction motor by Niugini Electrical after the Defendant failed to do the repairs. There is evidence of both a quotation and invoice showing that the motor was repaired by the third party at the cost of K 72, 164.84. The question I ask is, should the Defendant reimburse the Plaintiff the full amount paid to Niugini Electrical? What is the justification. The Plaintiff has not provided any submissions on this issue except for the pleadings and the evidence for the engagement of the third party. Had the Defendant successfully repaired the motor, the Plaintiff would have paid only K 34,980.00. Because of the Defendant’s failure, it became necessary for the Plaintiff to engage the third party which cost the Plaintiff K 72,164.84. That is, K 37,184.84 more than the amount the Plaintiff contracted with the Defendant. In my view, the Plaintiff should only recover the payments made over and above the contract price initially agreed with the Defendant and no more. In other words, the Defendant should only be responsible for the difference of K 37,184.84. I will therefore allow K 37,184.84 under this head of damages to be settled by the Defendant.

d) Loss of income

29. The Plaintiff claims loss of income. The Plaintiff pleads that because of the delay by the defendant to repair the motor, the Plaintiff suffered inconvenience, loss of time and production, resulting in eventual loss of income. The Plaintiff did not provide any submissions under this head of damages. Furthermore, apart from the general allegations, the Plaintiff did not particularize the loss in the pleadings nor presented any evidence to support the claim. No award shall be made under this head of damages.

Total award

30. The total award shall be in the sum of K 54,958.44 comprising K 17,773.60 (refund) and K 37.184.84 (difference from Niugini Electrical payment).

Interest

31. The Plaintiff claims interest and is entitled to interest on the total judgment of K 54,958.44, at 8% from date of Writ of Summons to date of judgment. Interest from date of Writ, 18^th May 2020 to 8^th July 2024 (1514 days) at the rate of K12.05 per day is K 18, 237,17. The total award shall be K73,195,61.

Cost

32, The Plaintiff claims cost. The Court has a discretion to award cost. As the Plaintiff has succeeded in its claim, it is entitled to cost.

Orders

33. The Court orders that:

1. Judgment is entered for the Plaintiff in the sum of K73,195.61 inclusive of interest.
2. The Plaintiff shall pay post judgment interest at 8% which shall accrue 30 days from date of judgment until settlement.

100. The Defendant shall pay the Plaintiff’s cost of the proceedings to be taxed, if not agreed.

4. Time for entry of this judgment shall take place on a date to be settled by the Registrar which shall take place forthwith.

_____________________________________________________________
Kesno Lawyers: Lawyers for the Plaintiff
No Appearance by the Defendant