Motor Vehicles Insurance Ltd v Tambo (trading as Marapos Hire Cars) [2024] PGSC 73; SC2604 (25 July 2024)

SC2604

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC REV NO. 29 OF 2022 (IECMS)

BETWEEN:
Application by MOTOR VEHICLES INSURANCE LIMITED
Applicant

AND
MICHAEL TAMBO trading as MARAPOS HIRE CARS
Respondent

Waigani: Salika CJ, Kangwia J & Wood J
2024: 27^th March
2024: 25^th July

SUPREME COURT – APPLICATION TO REVIEW – the applicant sought to review a National Court decision in which the plaintiff (following the entry of judgment on liability) was awarded general damages, including an amount of K288,000 for loss of business due to the seizure of a hire car by the police – the plaintiff did not tender all relevant invoices or other relevant evidence to demonstrate the hire of the vehicle by a customer prior to the seizure of the vehicle – the lack of evidence tendered by the plaintiff made the assessment of damages difficult – notwithstanding that judgment on liability had been entered, 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.

Held:
The award of damages for loss of business in the amount of K288,000 in the National Court proceeding was set aside and varied, whereby damages for loss of business were awarded in the amount of K60,000. For this reason, the award of interest on the total amount of general damages awarded by the National Court were also varied.

Cases Cited:
Jonathan Mangope Paraia v The State (1995) N1343
William Mel v Coleman Pakalia (2005) SC790

Legislation
Supreme Court Act

Counsel
Mr W Mininga, for the Applicant
Mr R Mann-Rai and Mr F Pyaso, for the Respondent

25^th July 2024

1. BY THE COURT: This is an application by MVIL for review of the assessment of damages in which the National Court awarded K388,000 under the following heads of claim;
   
   1. General damages for a replacement vehicle; K80,0000
   2. Damages in searching for the seized vehicle; K20,000
   100. Loss of business for the vehicle calculated at K800 per day being K24,000 per month for which the trial judge allowed 6 months for 2 years; K288,000
   4. Interest for 5 years on the K388,000 awarded at 2% per annum; K38,000
   5. The Plaintiffs costs to be paid on a party-party basis to be taxed if not agreed.
      
2. The Application for Leave to Review was granted by the Supreme Court on 10 February 2023.
   
3. At the hearing of the application for review, MVIL pursued only the award on loss of business hence the other heads of claim are not in contention.
   
4. The award the subject of the review application is from the following facts.
   
5. By a Vehicle Hire Agreement, Greg Manda Lawyers hired from Michael Tambo two land cruisers described as a maroon coloured 5 door with registration number BDX 859 and white coloured land cruiser with registration number BEJ 160 from Michael Tambo. The hire was at rate of K800 per day for a period of 3 years commencing 1 January 2013 and terminating on 31 December 2017.
   
6. Under clause 3 of the agreement, payments were to be made for the days the vehicles were used and when the vehicles were not used
   Mr Tambo was at liberty to lease the vehicles to other lessees with prior arrangement with Greg Manda Lawyers.
   
7. On 14 November 2015, police seized the white coloured land cruiser and it was subsequently registered to a third party allegedly without the consent of Mr Tambo. It is unclear from the pleadings and evidence in the National Court proceedings why the vehicle was seized by police.
   
8. Mr Tambo sued MVIL and claimed that its negligent acts and omissions resulted in the deregistration and loss of the vehicle by him.
   
9. In a further amended Statement of Claim, Mr Tambo sought unquantified loss of business, general damages, special damages, exemplary damages, interest and costs.
   
10. At the trial, Mr Tambo relied on seven affidavits from which the National Court on 29 July 2022 awarded the following relief:
    
    1. Damages payable by the defendant, Motor Vehicles Insurance Limited to the plaintiff, Michael Tambo in a lump sum of K388,000.00.
       
    2. Interest for five years payable by the defendant, Motor Vehicles Insurance Limited to the plaintiff, Michael Tambo in a lump sum of K38,800.00.
       
    3. The plaintiff’s costs of and incidental to the proceedings shall be borne by the defendant on a party and party basis which shall, if not agreed, shall be taxed.
       
    4. Time is abridged.
       
11. To appreciate how the trial judge assessed the damages for loss of business payable to Mr Tambo, it is necessary to consider both the written judgment and the transcripts. According to the materials referred to, loss of business for the seized vehicle was calculated as K800 per day being K24,000 per month whereby the Trial Judge allowed a period of six months for 2 years and arrived at the sum of K288,000.
    
12. Under this head of claim, MVIL argues that the award of K288,000 is excessive, unreasonable and not supported by evidence particularly Mr Tambo’s profit and loss statements. It seeks an order that the award of K288,000 for loss of business be substituted with an appropriate amount pursuant to section 16 of the Supreme Court Act which provides:
    
    

16. DECISION, ETC., ON APPEAL

On the hearing of an appeal, the Supreme Court shall inquire into the matter and may–

(a) adjourn the hearing from time to time; or

(b) affirm, reverse or modify the judgement; or

(c) give such judgement as ought to have been given in the first instance; or

(d) remit the case in whole or in part for further hearing; or

(e) order a new trial.

13. In reply to the Application to Review, Mr Tambo’s written submissions filed on 20 March 2024 state that the trial Judge did not make any error in awarding the loss of business component of K288,000. This was also confirmed in the submissions made by Mr Tambo’s lawyer at the hearing of the Application to Review on 27 March 2024. In other words, we consider Mr Tambo effectively agrees that the assessment of the amount of K288,000 is correct.

Analysis of the claim for loss of business

14. As stated above, the Vehicle was hired to Greg Manda Lawyers in Mt Hagen under the Agreement at a fixed hire rate of K800 per day, for a period of three years, commencing on 1 January 2015 and terminating on 31 December 2017. Under clause 3 of the Agreement, payments would be made for the days the Vehicle was used, and when the Vehicle was not used, Mr Tambo was at liberty to lease the Vehicle to other lessees with prior arrangement of Greg Manda Lawyers. On the basis that the Vehicle was seized by the police on 14 November 2015, we consider it important that Mr Tambo would have adduced evidence of the number of days between 1 January 2015 to 13 November 2015 that he claims the Vehicle was hired out to Greg Manda Lawyers.
    
15. In this regard, we refer to the principles that were summarised in the Supreme Court decision of William Mel v Coleman Pakalia (2005) SC790 (per Los, Jalina and Cannings JJ), where the Court stated at pages 13 and 14:
    

‘In assessing damages we will apply the following principles:

• 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 [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.)

(See generally Michael Buna v The State (2004) N2696, National Court, Cannings J.)’

16. We note in the Further Amended Statement of Claim that there was a reference in paragraph 14(b) to ‘Loss of Revenues in terms of his hire car business’ and at paragraph 15(d) to ‘Loss of business to be assessed’, however, there were no further particulars provided in the Further Amended Statement of Claim for alleged loss of business or revenue for the hiring-out of the Vehicle. Furthermore, and critically, none of the affidavits tendered into evidence on behalf of the plaintiff at the trial in the National Court proceeding referred to, or attached to those affidavits, provided any details of the Vehicle having been hired out to Greg Manda Lawyers for the period 1 January 2015 to 13 November 2015.
    
17. In contrast, in Mr Tambo’s Affidavit in Support for Assessment of Damages filed on 30 July 2021 (which was exhibit ‘A’ at the trial), Mr Tambo annexed copies of various invoices for the hire of the second Vehicle to Greg Manada Lawyers and other customers.
    
18. If Mr Tambo had indeed rented out the vehicle to Greg Manda Lawyers for the period 1 January 2015 to 13 November 2015, then evidence of those details should have been referred to in an affidavit by Mr Tambo, in accordance with the above principles, which are summarised in William Mel v Coleman Pakalia (supra). This is important because it would have assisted the trial Judge in assessing the loss of business for hire car fees, not only for the period 1 January 2015 to 13 November 2015, but also for the remainder of the Agreement from 14 November 2015 to 31 December 2017.
    
19. In our analysis of the plaintiff’s evidence in the National Court proceeding, which included our review of the transcripts for the hearings which took place on 7 March 2022, 18 March 2022 or 21 March 2022, there was no evidence adduced by the plaintiff, or submissions made by his lawyers, to explain the lack of evidence to demonstrate whether Mr Tambo had indeed rented out the vehicle to Greg Manda Lawyers for the period 1 January 2015 to 13 November 2015. We consider this to be an extraordinary omission by Mr Tambo.
    
20. We note it was submitted at the trial for Mr Tambo that he should be awarded K5,384,350 for loss of business, being the average calculations for loss of business undertaken by Sunland Consultants Limited & Hanrick Curran Kiddie, Chartered Accountants in the amount of K5, 839,340 and Eccom Business Consultants Limited in the amount of K4,929,360. In contrast, MVIL’s lawyer submitted that based on the income demonstrated in the Annual Returns for previous years, an award of K60,000 would be most appropriate.
    
21. We have reviewed the above-mentioned reports that were prepared by Sunland Consultants Limited & Hanrick Curran Kiddie, Chartered Accountants as well as Eccom Business Consultants Limited, which were tendered into evidence at the trial on the assessment of damages. We do not accept the calculations referred to in those reports for a number of reasons, including that both reports were prepared on the basis that the Vehicle and the second Vehicle would have been hired-out for 365 days each year. This is in sharp contrast to the invoices that are attached to Mr Tambo’s Affidavit in Support for Assessment of Damages filed on 30 July 2021, which on the face of things, show that Mr Tambo hired-out the second Vehicle to Greg Manda Lawyers and other customers on an intermittent basis.
    
22. In any event, we note from the Financial Statements (which are annexed to Mr Tambo’s above-mentioned affidavit), it is stated that revenue for hire cars for the years 2015, 2016 and 2017 was K77,200, K11,000 and K32,340 respectively, however, we consider the evidence is lacking from the Financial Statement for 2015 (as well as the plaintiff’s other evidence tendered at the trial), as to whether the amount of K77,200 related to the Vehicle and/ or the second Vehicle.
    
23. Based on our assessment of the evidence that was before the trial Judge, as well as those written and oral submissions that were relied upon at the hearing of the Application to Review, we consider that the arguments advanced by Mr Tambo to support the damages assessment of K288,000 for loss of business were general in nature. The evidence relied upon by Mr Tambo was lacking and not supported by any critical analysis of the facts in support of a claim for K288,000. In addition, we note in paragraphs 39 to 42 of Mr Tambo’s submissions filed on 20 March 2024, that he submits that the trial Judge awarded K57,600 per year for five years, which Mr Tambo contends is how the calculation of K288,000 is made. However, this is not correct, as we note from the transcript of the trial Judge’s judgment that was delivered on 29 July 2022, the trial Judge stated that the loss of business for the Vehicle was calculated at the rate of K800 per day, being K24,000 per month, which he allowed for six months in a two-year period.
    

Conclusion

24. Based on the above issues, we consider, with respect, that the trial Judge erred in awarding damages in the amount of K288,000 for the loss of business component. The trial Judge’s task was made more difficult by the lack of evidence tendered by Mr Tambo in support of his claim. As stated by His Honour Justice Injia (as he was then) in Yange Lagan and Others v The State (1995) N1369 (supra): ‘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.’
    
25. Notwithstanding this, we note that the Supreme Court in William Mel v Coleman Pakalia (supra) cited with approval the National Court decision in Jonathan Mangope Paraia v The State (1995) N1343, where Justice Injia (as he was then) held that the fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of paying damages. His Honour also stated that where precise evidence is available the court expects to have it. However, where it is not, Injia J held that the Court must do the best it can.
    
26. On our analysis of the evidence that was before the National Court, and having heard the submissions of the parties in relation to the Application to Review, we consider it appropriate that this Court should exercise its jurisdiction pursuant to section 16(c) of the Supreme Court Act, and make a new determination on the assessment of damages on the loss of business claim.
    
27. Given that Mr Tambo’s Financial Statements state that revenue for hire cars for the years 2015, 2016 and 2017 was K77,200, K11,000 and K32,340 respectively, and noting that those figures are stated prior to any deductions or calculations for tax or other work related expenses, we consider it appropriate that Mr Tambo should instead be awarded the amount of K20,000 for each of the three years that the Agreement was in force. In other words, we set aside the award made by the trial Judge for loss of business for the Vehicle in the amount of K288,000 and replace it with the amount of K60,000.
    
28. We note there was no challenge by MVIL to the award of general damages of K80,000 for a replacement vehicle or the award of K20,000 for damages in searching for the seized vehicle, nor do we consider it appropriate or necessary to revisit the award of those two heads of damages. Accordingly, we order that the damages to be awarded to Mr Tambo are general damages in the amount of K160,000, which comprises K80,000 for a replacement vehicle, the award of K20,000 for damages in searching for the seized vehicle and K60,000 for loss of business.
    
29. Because we have substituted the judgment on the loss of business claim of K288,000 with the amount of K60,000, we consider it also appropriate that there should be a re-calculation of the award of interest. As neither party appears to have taken issue with the award of interest by the trial Judge at the rate of 2% per annum, we consider it appropriate in this matter that interest be awarded at the rate of 2% per annum on the amount of the general damages of K160,000 from the date of the commencement of the National Court proceeding, namely 4 August 2016, to the date of the payment of that amount by MVIL.
    
30. Given that we have upheld the Application to Review, we also order that Mr Tambo pay MVIL’s costs of and incidental to the Application to Review in this Supreme Court proceeding on a party and party basis, to be taxed if not agreed.
    

Orders:

31. In the circumstances we make the following orders:
    
    1. The Application to Review filed on 28 February 2023 is upheld.
       
    2. The judgment amount of K388,000 in general damages that was awarded on 29 July 2022 in National Court proceeding WS No. 930 of 2016, is set aside and varied, whereby the general damages payable by Motor Vehicles Insurance Limited to Mr Michael Tambo is K160,000, which comprises K80,000 for a replacement vehicle, K20,000 for damages in searching for the seized Toyota Land Cruiser, registration BDX 859, and K60,000 for loss of business.
       
    3. Motor Vehicles Insurance Limited shall pay interest at the rate of 2% per annum on the amount of the general damages of K160,000 from the date of the commencement of National Court proceeding WS No. 930 of 2016, namely 4 August 2016, to the date of the payment of that amount to Mr Michael Tambo.
       
    4. The order in the National Court on costs is confirmed, whereby the plaintiff’s costs of and incidental to National Court proceeding
       WS No. 930 of 2016 shall be paid by the defendant on a party and party basis, which shall if not agreed, be taxed.
       
    5. The respondent, Mr Michael Tambo, shall pay the costs of and incidental of Motor Vehicles Insurance Limited in relation to the Application to Review in this Supreme Court proceeding on a party and party basis, to be taxed if not agreed.
       
    6. The terms of these Orders are abridged, to the date of settlement by the Court, which shall take place forthwith.

__________________________________________________________________
Bradshaw Lawyers: Lawyers for the Applicant
Mannrai Lawyers: Lawyers for the Respondent