N11135
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 74 OF 2022

BETWEEN:
JOHN HURIA trading as TRADE-ACTION PLUMBING & CONSTRUCTION
Plaintiff

AND
SAMUEL KENAI trading HAWKEYE SECURITY SERVICES
Defendant

LAE: DOWA J
4 DECEMBER 2024; 20 JANUARY 2025

CONTRACT – contract to construct an office complex-contract part written and part oral- where terms are uncertain, court can still consider intention of parties by reference to other acceptable evidence and conduct of parties-and where work is done claim can be considered on quantum meruit -considerations for appropriate and reasonable damages. Duty to mitigate loss-Judgment for the Plaintiff.

Cases cited
Delphi Corporate Investigations Ltd vs. Bernard Kipit (2003) N2480
Fly River Provincial Government vs. Pioneer Health Services Limited (2003) SC705
Leontine Ofoi vs. Kris Bongare (2007) N3248
Peter Wanis v The State (1995) N1250
Steven Turik vs. Mathew Gubag (2013) N5132
The State vs. Barclay Bros (PNG) Ltd (2004) N2507
Teine vs. University of Goroka (2019) SC1881
Tirima -v- Angau Memorial Hospital Board (2005) N2779
Woodward v Woodward [1987] PNGLR 92
Yooken Paklin v The State (2001) N2212

Counsel
K. Keindip plaintiff in person
F Kee for the defendant

DECISION

1.	DOWA J:    This is a decision on both issues of liability and damages.

Background facts 

2.	The Plaintiff is self-employed, running a plumbing and construction business under the business name of Trade-Action Plumbing and Construction in the city of Lae, Morobe Province. The Defendant is also self-employed carrying on business under the trade name, Hawkeye Security Service, based at Speedway, Lae city, Morobe Province.

3.	Around March 2019, the Plaintiff was engaged by the Defendant to construct and build its Office Complex and related building works (the works) at Speedway suburb, Lae City, Morobe Province. The terms of the contract for works were partly oral and partly in writing. The Plaintiff commenced work in March 2019 and completed the same in July 2019. The Plaintiff issued periodical invoices to the total sum of K 108,262. The Plaintiff alleges the Defendant paid only K65,000.00 and the balance of K 43, 262.00 is outstanding. The Plaintiff commenced this proceeding to recover the outstanding balance.

Defence

4.	The Defendant filed a Defence, denying liability.

Trial

5.	On 4th December 2024, Counsel for both parties agreed for the Court to consider all evidence filed in Court and decide on the issues of both liability and damages. Counsel for the parties were both directed to file their submissions by 13th December 2024. The matter was fixed for decision on 20th January 2025. Although the parties have not filed their written submissions, I will deliver the decision regardless.

Evidence

6.	The Plaintiff relies on the following Affidavits:

a.	Affidavit of John Huria sworn and filed 10th November 2023
b.	Further Affidavit of John Huria sworn and filed 7th March 2024

7.	This is the summary of the Plaintiff’s evidence. The Plaintiff deposes he is a building constructor trading under the business name Trade-Action Plumbing and Construction. In March 2019 he was contracted by the Defendant to construct the Defendant’s Office complex and related works at Speedway, Lae in the Morobe Province. The works contract was partly oral and partly in writing. The major terms of the agreement were that. 

a.	the total cost of the construction work would be K 108,262.00
b.	the Defendant shall pay a deposit before the work commences
c.	the Plaintiff work and send periodic invoices for settlement
d.	On completion of the project, the Defendant shall pay the balance.

8.	The Plaintiff commenced the works in March 2019 and completed the project in July 2019. The Plaintiff rendered periodic invoices during the construction period. The Defendant made installment payment of K 55,000.00 by 16th June2019. On completion of the work, the final invoice for K 53,275.48. The Defendant paid only K 10,000.00. The balance of K 43,262.00 remains due and outstanding. Despite numerous promises, the Defendant has not made any payment at all.

Defendant’s evidence

9.	The Defendant relies on his Affidavit sworn 7th and filed 8th December 2023. Mr. Kenai deposes that he is the Managing Director of Hawkeye Security Service. He deposes he did not engage the Plaintiff in a formal contract and nothing in writing. He deposes a fixed amount was agreed and it was paid when the work was completed. The Plaintiff continued to send invoices after the completion which were not substantiated with evidence. 

Issues

10.	The issues for consideration are:

1.	whether the Defendant is liable to pay the balance of the contract price
2.	Whether the Plaintiff is entitled to any damages.

Consideration

11.	The Plaintiff has the burden to prove his claim on the balance of probabilities with credible evidence. Yooken Paklin v The State (2001) N2212.

12.	There is overwhelming evidence supported by photographs that work was done. A nice modern office was constructed. It took almost five (5) months to complete the job. But what was the contract price. The Plaintiff says the costs was assessed at K 108,262.00 and that is the contract price. This alleged contract figure was not reduced into writing. The evidence shows the defendant in a text message told the Plaintiff to just go ahead with the project as he wanted the job done quickly and not to worry about the costs. Did the Defendant understand the financial implications of the text message. What was the contract price the parties agreed on.

13.	Generally, the Court will be hesitant to enforce a contract where the terms are vague or uncertain. However, where the Court can resolve the uncertainty through other acceptable evidence or conduct of parties then it should find that the parties have acted upon and intended to have an agreement to have legal effect, be it in writing or oral. 

14.	In the case Woodward v Woodward (1987) PNGLR 92 the Supreme Court stated the principle of law in the following terms: 

“Whilst this Court would not disagree with the general rule that if the terms of an agreement are so vague or indefinite that it cannot be ascertained with reasonable certainty what is the intention of the parties there is no contract enforceable at law, if the court can resolve this uncertainty by reference to other acceptable evidence or the subsequent conduct of the parties it should attempt to find that parties have acted upon and intend an agreement to have legal effect.”

15.	In the present case, although the contract price was not reduced in writing, there is more than enough evidence that suggests that the Plaintiff would do the work and render the invoices for settlement. The Defendant did not specifically deny the contract price of K 108, 262.00. The Defendant did not, on his part, state the amount of the contract price in his evidence. The Defendant deposed they agreed on a figure but did not state what the figure was. In his text messages to the Plaintiff, he told the Plaintiff to just proceed with the project and not to concern himself with payment. This is the text:

“John, I am taking both as 1 extension project. Thats why deposits in lots as paid so far will be accorded similarly. Its k20k so far now and next will be another k10k progressively until balance met upon completion of the extension project
It doesn’t matter, I just want this project to be completed soonest possible I will be happy to pay the total amount progressively by stages you need.
I have said to k6k this time but paid u k10k now because of this new arrangement, let’s just get the job done John.”

16.	In response to the above message, the Plaintiff responded with the following text message:

“Ok thanks mr will source funds to construct it.”

17.	After the completion of the project, the Plaintiff sent the following text message to the Defendant:

“Mr Samuel Kenai good night, we have completed your project already, would you please pay the balance k43,262,00 outstanding.
.
Thankyou God bless and good night.

Outstanding I did give Jimmy the invoice”

18.	In response, the Defendant responds with the following text:

“Apinun John, I have instructed Jimmy for you to do an audit on the materials involved against the…”
 
19.	Clearly the intention and conduct of the parties show that the Plaintiff would proceed with the project at his own cost and render invoices for the Defendant to settle. 

20.	I note the Plaintiff sent invoices in the form of quotations to the total sum of K 105,301.48.

21.	 I also note from the photographs presented that substantial work was done. It took almost five months to complete the project involving material and labour costs. In my view the cost claimed by the Plaintiff is not unreasonable except that it was not expressly set out in writing from the start.

22.	In my view the Plaintiff has discharged the burden of proof, and I am prepared to find liability against the Defendant in damages to be assessed.

23.	Even if I am wrong about this, the Plaintiff’s claim be considered on the principles of quantum meruit. The Plaintiff has done a substantial work in constructing an extension of the Defendants office. It took them five months.  The work involved much labour and material, and the Court cannot ignore that. 

24.	Quantum meruit is a common law cause of action. It has been applied in cases such as  Fly River Provincial Government v Pioneer Health Services Limited (2003) SC705, Teine v University of Goroka (2019) SC1881, The State v Barclay Bros (PNG) Ltd (2004) N2507, Delphi  Corporate Investigations Ltd v Bernard Kipit (2003) N2480 and Leontine Ofoi v Kris Bongare (2007) N3248 and Steven Turik v Mathew Gubag (2013) N5132:

25.	In Turik v Gubag, Cannings J set out the following elements of quantum meruit:

1.	‘A’ has done something of benefit for ‘B’.

2.		the thing done by ‘A’ relates to an arrangement of some sort with ‘B’ (the arrangement might be but is not necessarily a contract and might be an illegal contract).

3.		it would be unjust to allow ‘B’ to retain the benefit without some remuneration or reward for ‘A’.

Damages

26.	Whilst the issue of liability is settled, the Plaintiff is still required to prove its 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 (1996) N1457; Jonathan Mangope Paraia v The State (1995) N1343, and Samot v Yame (2020) N8266.

27.	 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.)”

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

29.	As for assessment, again in the absence of a definite contract figure, the Court will make an award that is reasonable. The contract sum claimed by the Plaintiff is K108, 262.00. The evidence of the invoices/quotations provided shows a figure of K105, 301.48. Given the uncertainty surrounding the contract price, I would allow for only 80% of the invoices of K105,301,48.  80 % of K105,301.48 amounts to K84,241.18.

30.	The Plaintiff has been paid K65,000.00. The balance is K19,241.18. There shall be an award of K19, 241.18.

Interest

31.	The Plaintiff claims interest. Interest shall be awarded at 8% from the date of filing the Writ of Summons to the date of judgment (1052 days) which amounts to K4,436.54. The total award shall be K 23,677.72

Costs

32.	Cost is a discretionary matter. Although the Plaintiff succeeded in his claim, I am reluctant to award costs. The Plaintiff contributed to the uncertainty   by not insisting on a contract price before undertaking a major job. He did not insist on the terms being reduced into writing. For these reasons each party shall pay their own costs. 

Orders 

33.	The Court orders that:

a.	Judgment is entered for the Plaintiff in the sum of K23,677.72 inclusive of interest.
b.	The Parties shall bear their own costs.
c.	Time be abridged
_______________________________________________________________
Lawyers for the plaintiff: Gamoga & Co Lawyers
Lawyers for the defendant: Lakakit & Associates Lawyers