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Investra Ltd v Esem No. 1 Ltd [2025] PGSC 126; SC2823 (10 December 2025)

SC2823

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE ]

SCA NO 105 OF 2024

BETWEEN
INVESTRA LIMITED
Appellant

AND
ESEM NO.1 LIMITED
First Respondent

AND
YANG LIMITED
Second Respondent

WAIGANI: YAGI J, COATES J, KOSTOPOULOS J
27OCTOBER, 10DECEMBER 2025

SUPREME COURT ACT – Appeal from the National Court to the Supreme Court without leave – Errors of law and mixed law and fact against the decision of the trial judge to exclude damages for loss of rent under leases – appeal upheld and new trial ordered.

PRACTICE AND PROCEDURE – National Court – No defence filed by defendant in trial below – Ambush on plaintiff’s case in not disclosing statutory defence to Plaintiff’s claim and compliance of the National Court Rules by second respondent at trial – filing of submissions by second respondent on the evening right before trial below was to commence – mistrial in court below.

STAMP DUTIES ACT – Application of Section 19 – Unstamped Instruments produced in evidence at trial without pleading defence or reasonable notice to plaintiff of statute preventing proof of lease – alternative method to prove leases at trial.

DAMAGES – Award of exemplary damages withdrawn at appeal – loss of rent rejected at trial.

Cases cited
Abiari v. The State [1990] PNGLR 250
Addis v Gramophone Co. Ltd [1909] AC 488
Amos Ere v. National Housing Corporation (2016) N6515
Andy Kapinias v. O&G Niugini Ltd and Ors (2018) N7486
Attorney General v. Lord Mayor Sheffield (1912) 106 LT 367
Commonwealth v. Verwayen (“Voyager case”) [1990] 170 CLR 394
Davie v. New Merton Board Mills [1956] 1 All ER 379
Dr. Onne Rageau v. Kina Finance Ltd (2015) N6175
Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; [2003] 56 NSWLR 298
Independent State of Papua New Guinea v. Central Provincial Government (2009) SC977
Kariko v. Korua (2020 SC1939
Kawage v. State (2022) SC2241
KVDC Gold Ltd v. Periasomy (2010) N4270
Madang Cocoa Growers Export Co Ltd v. National Development Bank Ltd (2012) N4682
Micah v. Lua (2015) SC1445
Motor Vehicles Insurance (PNG) Trust v. Etape [1994] PNGLR 596
Motor Vehicles Insurance Ltd v. Kiangua [2015] PGSC 70; SC1476
Nambawan Super Limited v Paul Paraka trading as Paul Paraka Lawyers [2018] N7686
Ok Tedi Mining Ltd v. Niugini Insurance Corporation and Others (No 2) [1988-89] PNGLR 425
Placer Dome (PNG) Ltd v. Yako (2011) N4691
RE Robinson’s Settlement Gant v. Hobbs [1912] UKLawRpCh 40; [1912] 1 Ch 717 728
Rimbunan Hijau (PNG) Limited v Ina Enei (2017) SC1605
Sammy Lodge Ltd v. Sipison (2024) SC2618
Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634
The Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd [1921] 2 AC 438
Tulapi v Lagea & Ors (2012) N4939
Tulin v. Toyota Tsuhu (PNG) Ltd [2015] PGNC 20; N5895
Wamena Trading Limited v Civil Aviation Authority of PNG (2006) N3058
Webster v. Power (1868) LR PC 69
Yuskan v Abilo [2006] PGNC 122

Counsel
Mr. J. Lome for the appellant
No Appearance for the first respondent
Mr. B. Frizzel for the second respondent

JUDGMENT

BY THE COURT: INTRODUCTION: This is an appeal from the National Court judgment of the trial judge Carey J dated 30 July 2024, WS 297 of 2020 N10931.
The plaintiff is now the appellant in this appeal by filing a Notice of Appeal on 5 September 2024.^[1]
The appeal is heard before the Supreme Court without leave on the basis that it raises questions of law and mixed facts and law from a final judgment of the National Court of Justice.
For ease of reference and convenience, the Court will refer to Investra Limited in this judgment as the appellant, Esem No. 1 Limited as the first respondent and Yang Limited as the second respondent in this Appeal.
The second respondent filed a notice of appearance on 11 September 2024^[2] to participate in the appeal, however, the first respondent did not appear, and did not participate in this appeal and during the trial below.
At times, the Court will refer to the plaintiff and first and second defendants as appropriate for emphasis in the judgment relevant to the trial below.
Any reference to the Appeal Books in this appeal will be identified as AB with the relevant page or paragraph numbering applicable.

BACKGROUND

This appeal arises from a dispute between Investra Limited, a shareholder in Esem No. 1 Limited, which owns a residential unit development at Allotment 16 Section 406, Hohola (Waigani), Port Moresby.
Investra claims to have suffered significant losses due to ongoing water and sewerage leaks originating from Unit 5 owned by the second respondent, Yang Limited, at the relevant times and from alleged failures by the body corporate (first respondent) to maintain the building as required under its constitution governing the Body Corporate of the units.
After default judgment was entered against the first and second respondents in the National Court, the matter proceeded to an assessment of damages below.
The National Court awarded repair costs and general damages but refused the appellant’s claims for loss of rental income and exemplary damages after a special defence was belatedly raised by the second respondent under the s.19 of the Stamp Duties Act relating to the validity of the leases in favour of the appellant for its units.
Investra now appeals the refusal by the trial judge to award these additional damages.
On the 5 May 2013, the appellant and the second respondent became shareholders in the first respondent as unit holders entitling them to ownership of Units 1, 2 and 5, respectively.
It is undisputed from the facts that the appellant purchased the units for commercial purposes to generate rental income.
The second respondent’s unit was located on the floor directly above the appellant’s units in the block of units.
Between 2017 and 2019, there were ongoing water and sewerage leaks from Unit 5 (Yang Limited), causing damage to Units 1 and 2 (Investra Limited) below unit 5.
There are multiple complaints that were made by Investra to Esem No. 1 and Yang Limited in the evidence.
Between the months of June and August of 2019, despite the appellant making numerous requests for the first and second respondents to rectify the problems, the respondents failed to repair the ‘major defects’.
The water and sewerage leakages continued to cause damage to the appellant’s units since August 2017 into Units 1 & 2 causing both a health concern and an inability for the tenants to enjoy quiet possession of the premises leading to the tenants in Units 1 and 2 eventually vacating the units in June and August 2019 respectively.
The appellant claimed the loss of rental income from 2017 until the date of the trial in the National Court and other damages as set out in the evidence found in the AB^[3]:

“As at the date of this Affidavit, the Loss of Rental Income suffered by the Plaintiff are as follows:

Loss of Rental Income:

Month	Unit 1 Rentals per Month (Kina)	Unit 2 Rentals per Month (Kina)
June 2019	12,000.00	-
July 2019	12,000.00	-
August 2019	12,000.00	12,000.00
September 2019	12,000.00	12,000.00
October 2019	12,000.00	12,000.00
November 2019	12,000.00	12,000.00
December 2019	12,000.00	12,000.00
January 2020	12,000.00	12,000.00
February 2020	12,000.00	12,000.00
March 2020	12,000.00	12,000.00
April 2020	12,000.00	12,000.00
May 2020	12,000.00	12,000.00
June 2020	12,000.00	12,000.00
July 2020	12,000.00	12,000.00
August 2020	12,000.00	12,000.00
September 2020	12,000.00	12,000.00
October 2020	12,000.00	12,000.00
November 2020	12,000.00	12,000.00
December 2020	12,000.00	12,000.00
January 2021	12,000.00	12,000.00
February 2021	12,000.00	12,000.00
March 2021	12,000.00	12,000.00
April 2021	12,000.00	12,000.00
May 2021	12,000.00	12,000.00
June 2021	12,000.00	12,000.00
July 2021	12,000.00	12,000.00
August 2021	12,000.00	12,000.00
September 2021	12,000.00	12,000.00
October 2021	12,000.00	12,000.00
November 2021	12,000.00	12,000.00
December 2021	12,000.00	12,000.00
January 2022	12,000.00	12,000.00
February 2022	12,000.00	12,000.00
March 2022	12,000.00	12,000.00
April 2022	4,000.00	-
May 2022	4,000.00	-
June 2022	4,000.00	-
July 2022	4,000.00	-
TOTAL:	K420,000.00	K384,000.00

Grand Total (Unit 1 + Unit 2) = K420,000.00 + K384,000.00
= K804,000.00
Plus GST (10%) = K884,400.00

Further to the above rental losses, the Plaintiff also suffered rental losses from Previous Tenants refusing to pay rental on account of the Major Defects as outlined in Paragraph 12 and 13 above. The total losses suffered under this category is K434,000.00 (not claimed in the writ).

As at the date of this Affidavit the Costs of Repairs carried out by the Plaintiff are as follows:

Unit 1 Repair Costs = K37,950.00 (Major Repairs)
Unit 2 Repair Costs: = K27,500.00 (Major Repairs)
Unit 1 further repairs: = K15,8000.00 (subsequent repairs)
Unit 2 further repairs: = K12,700.00 (subsequent repairs)

Total Costs = K93,950.00”

The total losses claimed by the plaintiff at the trial including repair costs and penalty interest on loan is in the total sum of K 1,518,015.90.^[4]

The Plaintiff total losses and damages is summarised as follows:

Item	Particulars	Amount (Kina)
1	Loss of Rental Income	K1,318,400.00
2	Costs of Repairs	K93,950.00
3	Penalty Interest on Loan Arrears	K105,665.90
4	Total of Losses and Damages	K1,518,015.90

On 18 May 2020, the appellant wrote to the first respondent demanding repair costs and warning of its claims for reimbursement and damages.
The letter stated that the building has “major faults in plumbing,” that water was “dripping through walls and the roof,” and that units were not being leased due to their bad state, threatening that “all plumbing undertaken by Investra Limited ... will be charged to ESEM NO. 1 LIMITED,” with works to begin that week once Investra’s request for access was approved.^[5]
In May 2020, the first respondent repaired roof leaks, but some plumbing issues persisted.
Mr. Kennedy, the Managing Agent for Investra, gave unchallenged evidence in his affidavit which stated that the roof leak was repaired in May 2020, but other “Major Defects” continued to cause damage thereafter, stating that “the rainwater leaking from the Roof ...” was repaired in May 2020 and the remaining Major Defects continued to cause damage to Unit 1 and 2.
Mr. Kennedy also gave critical evidence relevant to the liability against both the first and second defendants in that^[6]:

“Even though the Defendants have refused to repair the sewer and water leaks, the Defendants are aware that the Plaintiff is eagerly taking steps to repairs whatever damaged it can (in order to mitigate its losses). However, the Plaintiff is unable to complete further repair works unless granted access to Unit 5 and the Defendants continue to refuse to give access to the Plaintiff.”

In November 2020, the appellant completed repairs to Units 1 and 2 at its own cost using a contractor; Kwikfix Building & Maintenance to effect the repairs.
Mr Kennedy states: “By late November 2020, the repairs were completed, and the contractor provided a ‘Before and After’ Condition Report,” in which he then identified the completed repairs in the reports.
On 29 October 2020, the appellant filed a Writ of Summons and Statement of Claim in the National Court^[7] against the first and second respondents, claiming loss of rental, repair costs, general and exemplary damages.^[8]
On 24 December 2020, copies of the Writ and Statement of Claim were served on both respondents by leaving documents at their registered addresses as referred to in the affidavit of service sworn by Dereck Ismael 5 May 2021.^[9]
On 21 April 2021, and in the absence of any response from any of the defendants below, the appellant filed a Notice of Motion in the National Court seeking default judgment against both respondents and ancillary orders.^[10]
On 26 October 2021, default judgment was entered against both defendants in the Court below for damages to be assessed with the order entered on the same date.^[11]
It is notable that neither the first or the second defendants filed defences in the proceedings in the National Court and only the second defendant participated at the hearing below through its counsel, Mr. Frizzel at the hearing of the trial.
Between November 2020 and April 2022, the appellant attempted to re-let its units to new tenants after repairs had been completed but continued to experience leaks from Unit 5.
Between January and April 2022, the appellant secured new tenants for Units 1 and 2 at significantly reduced rents due to the ongoing unresolved issues.
On 16 July 2022, Mr. Stanley Kila, the principal of Kwikfix Building and Maintenance, a business that was retained to report then rectify and repair the issues concerning the units, swore an affidavit in support of the appellant’s case at the trial^[12] in which included extensive evidence, graphic photographic evidence of the serious defects and problems with the structure of the block of units, and the cost of repairs carried out by his repair business to evidence the ‘before’ and ‘after’ condition of the repairs.
On 4 August 2022, the appellant filed the affidavit of Mr. Jeffery Kennedy, the Managing Director of the Plaintiff company detailing with extensive evidence on the facts including the leases, photographs, the lease documents and rental loss tables to prove the losses, repairs, and ongoing issues including damages suffered by the appellant.^[13]
With reference to Mr. Kennedy’s comprehensive affidavit referred to above, he sets out the factual basis for loss of rental, including the major defects, describing facts why tenants were vacating the units and refusing to pay rent, the rental rate per unit (K12,000/month), and a detailed schedule quantifying loss of rental income through to July 2022, in addition to the repair costs and other related losses and damages including a catalogue of graphic photographic evidence depicting the loss and damages suffered by the appellant.
On 19 February 2024, the appellant filed a Notice to Rely on Affidavits at the trial putting the respondents on notice regarding the evidence it intended to rely upon to prove its loss at the trial below.^[14]
On 14 February 2024, the appellant filed a further affidavit of Mr. Kennedy which essentially provided updates on continuing losses, tenant complaints, and the inability to let Unit 2 after Feb 2023.
Mr Kennedy confirmed that there was still water leaking from the bathroom and kitchen of the second respondent’s Unit, Unit 5, seeping into the appellant’s Units, Unit 1 and Unit 2. He confirmed that the tenant in Unit 1 had stopped paying rent altogether since December 2023.
Mr. Kennedy confirmed that the tenant in Unit 2 had vacated the unit on 12 February 2023 due to water leaking from Unit 5.
The evidence of Mr. Kennedy remained unchallenged in the court below and remains unchallenged evidence in this appeal.
On 20 February 2024, the appellant filed its submissions on ‘Assessment of Damages’ setting out the facts and the law to support its case on the assessment of damages before the trial judge,^[15] which remained unanswered by the defendants at trial until the evening of the hearing before the trial judge on 12 June 2024.
In the absence of defences and/or any crossclaim between defendants for apportionment of liability, both defendants remain the defendants jointly and severally liable for the Plaintiff’s losses.
On 30 July 2024, the trial judge delivered judgment on an assessment basis wherein he refused the claims for loss of rental income and exemplary damages ultimately only awarding repair costs, general damages, interest and legal costs.
On 5 September 2024, the appellant filed the Notice of Appeal relevant to the present appeal against the National Court’s refusal of its claim for loss of rental income and exemplary damages.
On 11 September 2024, Warner Shand Lawyers filed a Notice of Appearance for the second respondent in the appeal.^[16]
The first respondent has not filed an appearance in this Court nor participated in the hearing of the appeal or during the trial before the trial judge.
On 1 May 2025, the Index to the Appeal Book was filed.
On 12 June 2025, the Appeal Book, in two volumes were filed.
On 9 July 2025, the matter was adjourned for Directions.
On 6 August 2025, the appeal was set down for hearing on 27^th October 2025.
On 9 October 2025, the second respondent filed an Extract of Submissions.
On 13 October 2025, the appellant filed Submissions. On the same day, there was a status conference before the Supreme Court.
The first respondent had not participated nor appeared in any way in this appeal or during the trial before the trial judge.
On 27 October 2025, the Supreme Court heard the appeal and reserved its decision.

GROUNDS OF APPEAL

There are seven grounds of appeal outlined in the appellant’s Notice of Appeal, as set out more fully below:
1. “The lower court erred in law and fact by rejecting the Appellant's claim for loss of rental income totalling K1,604,400.00. This decision was made in contradiction to the undisputed material evidence furnished by the Appellant, which the court failed to consider, including the Statements of Account detailing unpaid rentals found in the Affidavit of Jeffrey Kennedy, filed on August 4, 2022 (Court Document Number 12). This evidence was sufficient to substantiate the claimed monthly rental losses at K12,000.00 per month per unit.
2. The lower court committed legal and factual errors by rejecting the Appellant's claim for loss of rental income amounting to K1,604,400.00, despite substantial evidence to the contrary. The Judge overly emphasized the Lease Agreement and neglected to consider the Affidavit of Mr. Jeffrey Kennedy, filed on August 4, 2022 (Court Document Number 12), which provides crucial material facts and evidence.
3. The Court below erred in law and in fact in refusing the Appellant's claim for loss of rental income in the sum of K1, 604, 400.00 and more contrary to the evidences provided by the Appellant in circumstances where the Judge placed too much emphasis on the Lease Agreement and failed to consider the Affidavit of Mr. Jeffrey Kennedy filed on 4 August 2022 (Court Document Number 12) which deposes to necessary material facts and evidence sufficient to sustain the claim of Loss of Rental income in the sum of Kl,604. 400.00.
4. The Court below erroneously applied Section 19 of the Stamp Duties Act in refusing the Affidavit of Jeffery Kennedy sworn 19th July 2022 containing lease agreements when;
  1. The Defendants, let alone the Second Defendant failed to raise proper objections in law pursuant to Section 35(2) of the Evidence Act as to the use of the Affidavit of Jeffery Kennedy sworn 19th July 2022;
  2. Section 19 of the Stanp Duties Act does not apply to residential leases and that the evidence of residential 1leases provided in the Affidavit of Jeffery Kennedy sworn 19th July 2022 were properly before the Court for determination;
5. The lower court made both legal and factual errors by denying the Appellant's claim for loss of rental income amounting to K1,604,400.00, despite the compelling evidence presented. The Judge's decision was contradictory; he acknowledged that the units in question suffered damages yet failed to recognize the inevitable loss of rental income that would result from the units becoming uninhabitable. This inconsistency overlooks the direct impact of the damages on tenancy and rental income.
6. The lower court committed a clear error in the exercise of its discretion by denying the Appellant's claim for Exemplary Damages. While such damages were not specifically pleaded in the Writ of Summons, the court had the authority and discretion to award them in cases where the defendants' conduct was particularly egregious, exhibiting elements such as malice, fraud, cruelty, or insolence. The failure to exercise this discretion appropriately deviates from the standard set in Rimbunan Hijau v. Ina Enei (2017) SC1605.
7. Despite not being expressly pleaded, the trial judge erred in law and in fact in not awarding "exemplary damages" under the paragraph (g) of the prayer for relief in the Appellant's statement of claim which specifically sought "Any other orders the Court deems appropriate".^[17]

THE HEARING BEFORE THE TRIAL JUDGE ON 12 JUNE AND 30 JULY 2024

On 12 June 2024 the matter came before the trial judge and continued briefly on 30 July 2024.
The transcripts of the hearing on 12 June 2024 and 30 July 2024 before the trial judge are contained in the Appeal Books which reveals issues that are relevant to the judgment of this Court in this appeal.^[18]
The matter was on ‘an assessment of damages basis’ only with liability not disputed and no defence filed by either the first or second defendants in the court below as required by Order 8 Rule 4 of the National Court Rules 1983 (NCR) following a Notice of Intention to Defend filed by the second respondent on 20 February 2024 in the proceedings required by Order 7 Rule 4 of the NCR.^[19]
The Court was not directed to any pleadings or defences to rebut mitigation of the damages claimed by the plaintiff or contributory negligence (Order 8 Rule 15) impacting on the extent and degree of damages claimed by the plaintiff at trial.
Without a defence filed by either of the defendants at the trial below pleading mitigation or contributory negligence and any cross – claim being filed by the defendants as to the apportionment of liability for the plaintiff’s losses between defendants, more particularly, any statutory defence under Section 19 of the Stamp Duties Act 1952 concerning the regularity or validity of the leases put forward as evidence at the trial, these matters remain unavailable as issues at trial if a defence is not filed in accordance with the National Court Rules and with reference to RE Robinson’s Settlement Gant v. Hobbs^[20] requiring disclosure to the opponents of what needs to be proved in Court.
Order 8 Rule 14 was not complied with by either defendant before the trial judge in the Court below by their respective failures to file defences at trial.
It is trite to state that the parties have duties to apply the NCR at trial that need to be followed by the parties as a matter of practice and procedure.
It is clear that the NCR were abrogated by both the first and second defendants before the trial judge in the proceedings including:
1. Any matter or fact of justification or excuse must be pleaded – Attorney General v. Lord Mayor Sheffield.^[21]
2. All defences of illegality or nullity must be pleaded – Davie v. New Merton Board Mills.^[22]
3. Any issue of fraud requires specific not general pleading on a defence and the Court is prohibited from giving relief to a defendant where the fraud is not pleaded Webster v. Power.^[23]

A party cannot merely deny or not admit the plaintiff’s allegations if the opposing parties’ real defence is a matter of law or some special defence – Attorney – General v. Lord Mayor of Sheffield^[24] and must be raised as a valid defence if it is a statutory defence – Motor Vehicles Insurance Ltd v. Kiangua.^[25]

Recently, Hartshorn J in Tulin v. Toyota Tsuhu (PNG) Ltd^[26] made it clear that at trials (referring to the Goods Act 1951) such statutes referred to by any party amounted to a specific pleading point which is a matter that may take the opposing party by surprise.
As a result, Hartshorn J found that the plaintiff was not permitted to rely upon the provisions of the Goods Act 1951 without it being in its pleadings.
The Court went on further to say that that it would not consider the submissions filed by the party in this regard and rejected the submissions.
The second defendant before the trial judge below in this appeal filed late submissions before the trial judge without penalty and/or an adjournment of the hearing having raised defences in breach of the rules and procedures set out in the NCR.
Mr. Nale who appeared for the Plaintiff at trial, was standing in for Mr. Lome, who it seems appeared as the principal counsel in this appeal for the appellant, as a late replacement to Mr. Lome in the matter before the trial judge.
The plaintiff in the trial below had filed its submissions on 20^th February 2024 which his Honour below observed that he had access to the plaintiff’s submission at trial on the Court’s IECMS document control and management system.
Mr. Nale proceeded to particularize the losses incurred by his client before the trial judge with reference to the plaintiff’s submissions and unchallenged evidence of losses suffered by the plaintiff proven by Mr. Kennedy that were filed almost 4 months before the trial was set down for hearing which, we assume, were the subject of orders for the filing and service of submissions before the trial.
The Court also assume a date was set for the defendants in the trial below to file their defences, submissions or any other relevant court documents so the parties could prepare for factual and legal arguments on both the pleadings and the submissions well in advance of the trial, not the night before the hearing which occurred in this instance.
Despite being pressed by this Court to produce the orders of the Court below in relation to dates for the serving and filing of submissions before the trial judge well in advance of the trial, Counsel for the second defendant deflected as he could not recollect, but did not deny, that there was a formal order by the trial judge for case management of the procedural matters before the trial.
Counsel for the appellant could not produce the orders made for the supervision and management of the trial below before the hearing date on behalf of the appellant but asserted positively that case management orders were made by the trial judge in this regard.
In any event, the Court infers that such orders were made by the trial judge for the defendants to file their submission at least weeks before trial rather than after 2 pm on the day before trial.
The inference can easily be drawn as evidenced by the Notice of Motion filed by the second defendant in the National Court on 7 May 2024 seeking that orders made on 8 March 2024 in the proceedings “be extended for compliance^[27] and supported by an affidavit sworn by Mr. Frizzel sworn 7 May 2024 which states, inter alia, at page 7 that:

“...As a consequence of matters deposed herein the second defendant has not been able to file a (sic) affidavit material with the 30 (sic-should read “day”) period required by the orders...”^[28]

As advised by Counsel for the second respondent during this appeal and which appears in the evidence in the Appeal Books^[29], the following Registry IECMS entry appears in the evidence establishing that Counsel elected to file his submissions on behalf of the second defendant during the afternoon of 11 June 2024.
Relevantly, the following Registry entry appears helpfully in red on the document:

“Uploaded on IECMS 5pm 11.06.2024.”

The “pm” appearing on the documents is placed there and underlined with emphasis by this Court to establish that the submissions were filed in the Registry in the afternoon before the trial and is referred to as evidence that the submissions were served very late in the afternoon on the plaintiff by the second defendant as a sealed copy on the eve of the trial on 12 June 2024.
The practice and procedures of the National Court under its Rules, and indeed, professional convention dictates that lawyers should exchange submissions far in advance of the hearing date for conventional, non-urgent trials so that both parties, and the trial judge in civil matters, have an opportunity to deal fully and without prejudice, with matters that may arise from opposing parties in their written submission.
The compliant litigator’s practice ensures that the affected party’s counsel can address the issues in advance particularly when new points of law or fact are raised in submissions in the attempt to introduce new pleading points at trial as has occurred in this trial.
For reasons best known but remaining unexplained by the lawyers acting for the second defendant at the trial, the lawyers served their submissions on the plaintiff’s business address of its lawyers on the eve before the trial was to commence.
Raising points of law or facts by a party at the complete surprise of the opposing party at ‘5 minutes to midnight’ before a trial leads to confusion or matters left pendulous that creates the possibility that matters are not properly addressed by trial lawyers and examined fairly by the presiding judge during trials at National Court level.
It is evident to this Court that the actions taken by the second defendant at trial, in the Court’s view, were professional opportunistic at the very least, or, at its worst, tactically deliberate and tactically unfair in the circumstances.
Ultimately, such circumstances may lead to a miscarriage of justice occurring during trials leading to unnecessary appeals resulting in an administrative, or at the very least, a procedural mistrial resulting after a forced forensic error being made at trial by a party dealing with fresh material.
It also appears that the plaintiff’s evidence at trial including Mr. Kila’s evidence sworn on 16 July 2022, Mr. Kennedy’s first affidavit sworn on 19 July 2022 and his second affidavit sworn on 13 February 2024 were served before the trial in accordance with the NCR well before the matter was heard on 12 June 2024 providing the necessary and obvious notice by the plaintiff to the defendants on what the plaintiff was prosecuting as its case at trial on the assessment of its damages.
The first defendant, as previously mentioned, did not participate or file a defence or evidence to challenge the plaintiff’s case.
The second defendant had a flurry of activity in relying on rudimentary evidence filed only between 4 March 2024 and more mature evidence very late on 4 June 2024, 8 days before the trial.
It is also noted that the submissions filed by the second defendant at trial were a comprehensive analysis consisting of 8 pages touching on the relevant facts and law analysing the statement of claim, objections to the plaintiff’s evidence and challenging the plaintiff’s claims and, more particularly, raising the critical statutory defence pursuant to section 19 of the Stamp Duties Act for the first time at the trial that by necessity of the NCR should have been pleaded in a defence.^[30]
The Court is of the view that the second defendant’s late submission were a veiled attempt to in fact introduce a defence to the Writ of Summons and pleadings filed by the plaintiff in breach of the NCR.
Applying the authorities of Motor Vehicles Insurance Ltd v Kiangua^[31] and the decision of Hartshorn J in the Tulin case referred to previously in this judgment, the section 19 of the Stamp Duties Act defence introduced by the second defendant in its late submissions should have been pleaded and was not, instead below the statutory defence was belatedly introduced or relied upon by the second defendant in the proceedings in its submissions.
It is the view of this Court that the trial judge should not have permitted the defence to have been belatedly introduced or relied upon from the submissions of the second defendant or at all.
The appropriate steps that should have been taken by the trial judge should have been to reject the submissions and, more critically, without a defence, the second defendant’s submissions should not have been read or considered at trial to ensure that a fair trial took place on 12 June 2024.
The second respondent elected not to file a defence at the trial, and it is now committed and bound by that election through its conduct at trial in its failure to comply with the NCR; Sargent v ASL Developments Ltd.^[32]
The late submission by the second defendant on the eve of the trial, when properly examined, can only be characterized as an attempt to introduce material and pleadings that should have been pleaded in a defence filed under the NCR and should have been rejected by the trial judge, rather than rewarding the conduct of the second defendant to defeat the plaintiff’s claim for its loss of rent unfairly.
The Court concludes and finds that the submissions cannot act in substitution of a defence under the NCR.
The submissions at trial were impermissibly received by the Court causing irreparable harm to the plaintiff’s position which resulted in prejudice to the plaintiff’s case on the day of the hearing specifically to its claim for the loss of rent from the units resulting in confusion of the trial judge below.
It is the view of this Court the matters raised at trial concerning Section 19 of the Stamp Duties Act as an admissibility point argued at the hearing of the ‘unstamped instruments’ issue by the second defendant in relation to the leases pursuant to Section 19 of the Stamp Duties Act, remains an incurable error by the trial judge in the trial below following that a defence was not filed by the second defendant to plead the statutory defence and should have been excluded by the Court.
In the alternative and to cure any prejudice, the trial judge ought to have adjourned the matter for the plaintiff to have had the opportunity to call evidence to prove the leases in an alternative manner and provided the plaintiff the opportunity to address the second defendant’s statutory defence introduced very late at the hearing of the trial between the two separate hearing dates.
The trial process remains colourable and cannot stand as the right to be heard has failed the plaintiff.

FINDINGS OF THE TRIAL JUDGE IN HIS JUDGMENT 30 JULY 2024

The critical findings of the trial judge relevant to this appeal are set out and repeated more fully below:
1. By application of s.19 of the Stamp Duties Act the trial judge rejected as evidence in the affidavit of Jeffrey Kennedy sworn on 19 July 2022 without given reasons or allowing argument from the plaintiff’s counsel at the trial to prove the leases at common law or by other evidentiary reasons.
2. Correctly found that the law in the assessment and award of damages should put the innocent party in the position they would have been if the wrongdoer had not committed the wrongful acts.
3. Rejected exemplary damages as they were not pleaded in the plaintiff’s writ of summons.
4. Applied the authority of Tulapi v Lagea & Ors^[33] in rejecting exemplary damages: ,

“In the matter of the Organic Law on National and Local-Level Government Elections and in the matter of disputed returns for The Kagua-Erave Open Electorate; Daniel Bali Tulapi v Aiya James Yapa Lagea and Albert Wens, Returning Officer for Kagua-Erave and Andrew Trawen, The Electoral Commissioner and The Papua New Guinea Electoral Commission (2012) N4939, it was stated:

"This Court is not only a Court of law but also a Court of justice. It must be fair to all parties and must give them sufficient time to prepare their respective cases for hearing unless it is clear that one or both are guilty of laxity. Parties must not unduly prejudice each other. The system of administration of justice that we have adopted is one of fairness and openness; not trial by ambush..."

The plaintiff’s claim for loss as pleaded does not provide any corroboration to support a decision in the affirmative without proper reason to examine the evidence of Mr. Kennedy and explain his reason why the cogent evidence of loss of rent was not established on the evidentiary burden in civil trials on the balance of probabilities.
The rejection of future losses for the same unexplained reasons in his findings remains underwhelming.
Allowed repair and maintenance cost which are not disputed on appeal in the sum of K 181,907.00 against the first defendant under the Constitution of the Body Corporate.
Awarded General Damages in favour of the plaintiff in the sum of K220,000.00 without providing reasons for making such an award by finding that “it was supported by evidence” and failing to explain or identify the evidence that supports the award under this head of damages.
Found that the first defendant was liable for the repair and maintenance costs found in the Constitution of the Body Corporate without referring to the clause in the Constitution.
Determined that the second defendant was not liable jointly and severally for any award made in the judgment as breaches of the Constitution of the Body Corporate “by the particular defendant must be stipulated” was unexplained as no defence was filed by the second defendant to exclude its joint and several liability and both defendants seem to be liable for the losses of the plaintiff on the unchallenged evidence.
Finally, the trial judge exercised his discretion without explanation in applying 15% compound interest to the award against the first respondent rather than the conventional 8 – 10% rate on a simple interest basis.

The above are the critical findings made by the trial judge below that will be examined further in this judgment.
Prophetically, the trial judge’s reliance on the authority of Tulapi v Lagea & Ors in the judgment below touching on the laxity of parties was not applied by the trial judge to the second defendant to ensure a fair trial for the plaintiff in the circumstances.

THE APPEAL

Only two submissions were provided to the Court: one by the appellant and the other by the second respondent.
There were no appearances or submissions made on behalf of the first respondent nor did the first respondent participate during the trial before the trial judge or during the appeal.
The Court has carefully considered the submissions by the parties to this appeal which are summarized below as follows.

Appellant’s Submissions

Counsel for the appellant, Mr. Lome submitted firstly that the trial judge made an error of law when he treated the lease as non – existent because it was not stamped in accordance with Section 19 of the Stamp Duties Act 1952.
The leases that are annexed to the affidavit of Jeffery Kennedy sworn 19^th July 2022 are sufficient evidence in common law and were proven in the Court below without challenge by the defendants.
Secondly, Mr. Lome relied on Wamena Trading Limited v Civil Aviation Authority of PNG^[34] and submits that there was sufficient “other evidence”, being the Affidavits of Jeffery Kennedy, filed 4^th August 2022 and 14^th February 2024 and Stanley Kila filed 4^th August 2022, that proved the existence of lease agreements between the appellant and its tenants in Units 1 and 2.
Counsel then submitted that the evidence contained in a statement of accounts was not considered by the Court and thus rejecting the claim for a loss of rental income and represented an appealable error.
Mr. Lome relied on Rimbunan Hijau (PNG) Limited v Ina Enei^[35] and submitted that the appellant ought to be fairly compensated for the harm caused to it.
The circumstances causing harm advocated by the appellant were that the appellant continued to suffer loss of rental income, it had incurred and will continue to incur repair expenses and the tardiness shown to the court at first instance by the first respondent to defend the claim.
Therefore, Counsel submitted to the Court to exercise its discretion to award exemplary damages, noting that, in arguendo, Counsel for the appellant quite properly withdrew its claim for exemplary damages in a contract matter when confronted with over 100 years of authorities against his proposition to the contrary.

Second Respondent’s Submissions

Counsel for the second respondent, Mr. Frizzell, first submitted that there is no written lease or similar document or recorded oral evidence to support the purported tenancy of Units 1 and 2.
Mr. Frizzell submitted that the material relied upon by the appellant to support the tenancy breached Sections 2, 3 and 5 of the Frauds and Limitations Act 1988 and, therefore, the claims were defeated without a defence filed by his client below.
Counsel submitted there was insufficient evidence for the appellant to make claims for the loss of rental income set out in Annexures H and I of the affidavit of Jeffery Kennedy sworn 19^th July 2022.
Second, Mr. Frizzell submits that there is insufficient evidence that there was any tenancy as both residential leases annexed T and U were not endorsed with stamp duty thus breaching Section 19 of the Stamp Duties Act. Further, there was no recorded oral evidence or corroboration to support the claim for rental loss.
Again, these points are made on appeal without a defence or evidence being tendered at trial by either defendant to challenge these facts.
On the issue of awarding exemplary damages, Mr. Frizzell submitted that the trial judge had rightly refused to award them on the basis that the material relied upon by the appellant in seeking the award was not sufficient. The conduct of the defendants, now respondents in this case, did not warrant an exception to the general rule for exemplary damages stated in Yuskan v Abilo.^[36]
The final point made by Counsel for the second defendant was in his favour after the appellant abandon its claim for exemplary damages after being pressed by this Court as against authorities in the Commonwealth prohibiting such claims.

THE ISSUES ON APPEAL

In arguendo before this Court, Counsel for the appellant quite properly withdrew his claim for exemplary damages in accordance with over 100 years of principles stated in case law in the Commonwealth followed by the Courts against exemplary damages being available or awarded in cases involving contractual disputes.^[37]
Therefore, the Court can now dispose of this appeal point formally by rejecting this claim.
For ease of reference a comparative table of Damages and a Table of Availability by Cause of Action is set out below as a guideline to the legal profession on the various damages available in the common law system of the Commonwealth and equally applying in the courts of this Nation within the jurisdictional variations.

A. Comparative Table of Damages

Type of Damages	Nature & Purpose	Measurement Focus
Compensatory Damages	To compensate for actual loss suffered and restore plaintiff to pre-wrong position.	Plaintiff's actual pecuniary and non-pecuniary loss
Aggravated Damages	Compensatory - for injury to feelings, dignity, mental distress caused by the manner of the wrong.	Plaintiff's subjective injury from insult, humiliation, mental distress
Exemplary/Punitive Damages	Non-compensatory - to punish defendant and deter similar conduct. Marks the court's disapproval.	Defendant's contumelious, high-handed, malicious or insolent conduct

B. Availability by Cause of Action

Cause of Action	Aggravated Damages	Exemplary Damages
Breach of Contract	NOT AVAILABLE	NOT AVAILABLE
Breach of Lease	NOT AVAILABLE	NOT AVAILABLE
Intentional Torts (assault, trespass, false imprisonment)	Available	Available
Negligence (PNG - Rookes categories only)	Limited	Very Limited
Negligence (Australia - conscious wrongdoing)	Available	Limited
Defamation	Available	Statutory limits

The remaining three principal issues on appeal before this Court are:
1. Whether the trial judge erred in refusing to award damages for loss of rental income;
2. Was there sufficient proof of the existence of the appellant’s lease of Units 1 & 2 notwithstanding the evidentiary ruling by the trial judge found that s.19 of the Stamp Duties Act operated to exclude the receipt of leases into evidence;
3. The liability of each of the defendants and the question of proportionality of liability without defences being filed by either defendant at the trial.

THE DUTY OF NATIONAL COURT JUDGES TO GIVE REASONS

Judges give reasons in almost every case which remain incidental and normative in the judicial process as the common law dictates the judicial obligation to explain how and why a decision has been reached is an immutable duty^[38].
For abundant reasons, the Constitution creates obvious dimensions pursuant to Section 59 where it is necessary and implied that a losing party must be able to understand the reason why the proceeding before the Court failed, and conversely, a successful party has a decision in its favour representing the law of the country determined by superior courts of record, like the National Court of Papua New Guinea at trial level.
Instructively, it is the view of the Court that the opinion of the judge particularly at trial level in reviewing the evidence relied upon by the parties is seized with the duty to give reasons exacting the following benefits:
1. it permits the losing party to review whether any appealable or reviewable error has occurred or accept the judge's final analysis.
2. a Defendant or corporation is accountable for its actions that affect the rights of the parties.
3. public scrutiny is an open-court system that prevents acts of arbitrary conduct or decision-making.
4. the rationale of the decision-making judiciary remains robust and based on evidence and the law.
The National Court of Papua New Guinea remains the superior court of record and its decision, and the reasoning process of its judges are followed or provide guidelines in cases that follow ensuring the stability of the rule of law.
The three basis yet distinct reasons for a judge to give reason in his or her judgments are:
1. the parties can review whether their submissions or arguments were understood and accepted when the judge gave his or her reasons.
2. judicial accountability.
3. courts not only resolve the disputes between the parties but also formulate rules that can be applied in future cases or by the public in matters determining their rights and affecting the legal position of their actions.
On disputed factual question, the primary contested issues require the trial judge to set out his or her reasoning in full.
It seems that the trial judge did not provide sufficient reasons in rejecting the leases on an evidentiary objection and was led into error by the second defendant filing submissions without a defence the eve before the trial.
The error occurred beguiled by the second defendant filing its submission on the eve of the hearing compounded by no defence being filed causing a mistrial to result below.
The trial judge should have entered verdicts against both defendants without defences being filed by the defendants in the National Court as a dictate of procedural fairness in the conduct of the trial.

NON–COMPLIANCE OF NCR DURING THE TRIAL PROCESS BELOW LEADING TO A MISTRIAL AT FIRST INSTANCE

The second respondent failed to file a defence at the hearing below and did not comply with the NCR in the case-management of the trial proceedings.
The second defendant then tried to raise a statutory defence under the Stamp Duties Act in its submissions filed the night before the trial.
It is the view of this Court that the plaintiff suffered a significant procedural disadvantage in having to deal belatedly with proving the leases in accordance with the common law position set out in the following cases which express a contrary view otherwise taken by the trial judge or having the opportunity to argue the admissibility of the leases by calling evidence to prove the leases exist.
The trial judge erred in his reasoning to reject the leases on an objection basis without hearing evidence from the plaintiff or simply finding that Mr. Kennedy’s evidence was sufficient proof of the existence of the leases at common law on a substantive issue of law.
In Wamena Trading Limited v Civil Aviation Authority of Papua New Guinea^[39]:

“Not being able to rely on the unstamped leases does not prevent a witness from asserting that such documents exist and have been executed as is asserted in the evidence for the Plaintiff.”

Mr. Kennedy’s evidence establishes that the leases exist in the evidence of his affidavit sworn 19 July 2022.^[40]
The Court also relies on the following authorities in relation to the law as illustrations where the plaintiffs can rely on leases that do not prove that stamp duty has been paid, however, can be proved during trials by relying on other evidence to prove the leases exist as a fact.
Nambawan Super Limited v Paul Paraka trading as Paul Paraka Lawyers^[41]:

“Assuming for present purposes only, that the Lease and Deed in this instance cannot be relied upon by NSL pursuant to s. 19 Stamp Duties Act, there are numerous authorities for the proposition that if an agreement that is required to be stamped pursuant to the Stamp Duties Act and has not been, and therefore cannot be relied upon as evidence pursuant to section 19(1) Stamp Duties Act, this does not preclude the relevant party from relying on other evidence to prove the existence of the unstamped document and its contents.

We refer in this regard to:

a) Wamena Trading Limited v. Civil Aviation Authority of Papua New Guinea (2006) N3058, in which Lay J said at [20]:

"20. Not being able to rely on the unstamped leases does not prevent a witness from asserting that such documents exist and have been executed as is asserted in the evidence for the Plaintiff."

b) KVDC Gold Ltd v. Periasomy (2010) N4270, in which I said at [7]:

"7. If, however, the Gold Agreement does require stamping and is not able to be used in evidence, I am satisfied that there is sufficient collateral evidence given of the Gold Agreement and its terms in the affidavits filed on behalf of both parties: The Judge and Oceanic International, to permit KVDC to rely on that evidence: Tian Chen Ltd v. The Tower Ltd (2002) N2313, New Ireland Development Corporation Ltd v. Jenua Trading Limited (2007) N3240."

c) Madang Cocoa Growers Export Co Ltd v. National Development Bank Ltd (2012) N4682, in which Cannings J said at [9]:

"However, that does not mean that the plaintiff cannot rely on other evidence to prove its existence. Not being able to rely on an unstamped agreement does not prevent a witness from asserting that such an agreement exists and giving evidence as to its terms (Wamena Trading v Civil Aviation Authority (2006) N3058)."

In any event, the trial judge did not revisit the point and allow evidence to be called by the plaintiff to prove the existence of the leases.
The chapeau created by the second respondent raising a statutory defence under the guise of an evidentiary objection so very late in the proceedings as to the admissibility of the leases took the plaintiff’s counsel by surprise and confused the trial judge leading him into error.
The statutory defence was characterised as an evidentiary admissibility point by the second defendant rather than the appropriate treatment of s.19 of the Stamp Duties Act under the NCR requiring this point to have been crafted by the second defendant then to be pleaded in its defence, having raised the issue by the second defendant in a formal defence, rather than raised during the eve of the trial peppered in the submissions of the second defendant at trial.
The critical question that arises in this Appeal is simple in the view of this Court:

‘Did non–compliance with the NCR at first instance by the second defendant lead to a mistrial?’

The Court is of the view that the clear answer to the question posed by the Court is in the affirmative leading to a mistrial before the trial judge.
The non – exhaustive indicia of a mistrial appearing from the transcript during the trial below appeal is as follows:
1. The failure by the second respondent to file and serve a defence to comply with the National Court Rules for the second respondent to participate at the trial is a necessary and obvious requirement under the NCR.
2. The failure by the second respondent to put its case at the trial below offends section 59 of the Constitution to ensure the principles of natural justice were strictly adhered to as the vital rules of the underlying law set out in the NCR developed for the control of judicial and administrative proceedings which, in this instance, required a fair trial under the NCR.
3. The absence of the minimum constitutional requirement of natural justice incumbent on all legal practitioners in the Nation to execute the required standards of legal practice to act fairly and, in principle, to be seen to act fairly when conducting trials as counsel remain guaranteed rights to all disputes determined by the Supreme and National Courts of this Nation.
4. The failure to file a defence by the second respondent created two distinct breaches:
  1. The opponent did not know what defence he or she had to meet at trial until the night before the hearing.
  2. The need for preparation of matters in fact and/or law pleaded in the defence to which are rebutted by defendants so that plaintiffs can call the evidence required to prove their case.
5. The authorities make it clear that any statutes and special defences need to be pleaded in response to writs, summonses or pleadings and must be contained in defences by parties including the Statute of Fraud defences.
6. The service of late submissions by parties creates confusions leading to prejudice to the receiving parties at trials.
7. The adversarial palaver at the trial under the illusion of assisting the court below with its late submissions beguiled the trial judge into a perception that the second defendant was putting fairly before the Court for consideration its position and assessment of the plaintiff’s case on damages and the right to claim loss of rent in a manner that can be best described as advocate’s legerdemain leading the trial judge into error.
8. Submissions cannot be a substitution for pleadings or defences or characterized so by Counsel before the Court.
9. The legitimate expectation of lawyers acting for parties at trials is to be afforded the opportunity by the Court to properly address late points raised by opposing counsel at trials and, if necessary, call evidence to meet the absence of the evidence and conduct themselves according to the rules.
10. The end result was that the hearing mistried in these circumstances.
For the reasons set out in this judgment, the Court finds there has been prejudice suffered by the plaintiff in the trial below resulting in a miscarriage of justice.
The Court finds that the appeal must be upheld.

DISCERNMENT

The Court is now left with options in the exercise of its powers including assessing the claim for loss of rent claimed by the Appellant, referring the matter back to the National Court before an alternate judge to the trial judge to determine the loss of rent issue or refer the matter back to the trial judge to determine the outstanding issue of the loss of rent to complete the judgment on damages and determining liability between the defendant.
Section 6 of the Supreme Court Act states:

(1) An appeal to the Supreme Court shall be by way of rehearing on the evidence given in the court the decision of which is appealed against, subject to the right of the Supreme Court–

(a) to allow fresh evidence to be adduced where it is satisfied that the justice of the case warrants it; and

(b) to draw inferences of fact.

(2) For the purposes of hearing and determining an appeal, the Supreme Court has all the powers, authority and jurisdiction of a Judge exercising the jurisdiction of the National Court.

Unlike a review, an appeal that is filed in the Supreme Court under the Supreme Court Act shall proceed by way of a rehearing.
After the appeal grounds in a matter have surpassed the tests of leave, objections, dismissal and other preliminary issues, and the appeal reaches the hearing stage, the Supreme Court, under the guidance of its inherent jurisdiction, is required by s.6(1) of the SC Act to conduct a rehearing (or a de novo hearing), that is, within the ambit or purview of s.6(1). See cases: Abiari v. The State^[42], Motor Vehicles Insurance (PNG) Trust v. Etape^[43] and Kawage v. State^[44].
Section 6(2) appears to extend the jurisdiction of the Supreme Court to cover or include de novo trials.
Practice and case law have revealed no discussion on these distinctions or applications.
In our view the section exists as an unfettered legislative guide to the Supreme Court when it is exercising its inherent power under s.155(2) of the Constitution on appeal matters in a directory exercise of this Court’s inherent Constitutional powers.
It seems to this Court that the appellant is entitled to pursue its claim for damages for loss of rent as the only outstanding matter requiring a finding of this Court for the award to be determined.
The Court finds that the unchallenged evidence at trial if accepted pursuant to section 6(1)(b) on the facts in order to draw the necessary inferences and by operation of section 6(2) of the SCA exercise the Supreme Court’s powers, authority and jurisdiction of a first trial judge to assess damages exercising the jurisdiction of the National Court is a permissible method that could dispose of the matter for a just, quick and cheap disposal of the entire matter at appeal level.
Section 16 of the SC Act relevantly states:

“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.”

It is the view of this Court that by operation of Sections 6(1)(b) and 6(2) of the SCA this Court on the facts established in the Appeal Books from the trial below is in a position to draw the necessary inferences of fact with all the powers, authority, and jurisdiction of the National Court to affirm, reverse, and/or modify the judgment of the trial judge and determine for itself such judgment as ought to have been given in the first instances trial in the circumstances.
It is clear that the action taken by the second respondent at trial was hopelessly late in presenting its case against the plaintiff in the form of submissions filed and served on the eve of the trial having not filed a defence under the NCR in the circumstances to raise obvious pleading points and statutory defences.
The appeal is not against the award of K181,907.00 for repair and maintenance cost and general damages at K220,000.00, and, moreover, the fact that the second respondent has not cross-appealed on these awards made by the trial Judge, this Court is unable to see the utility in having these awards retried.
It is the Court’s view these awards should be affirmed, and we so find with the necessary modification if necessary.
As previously discussed in this judgment the claim for exemplary damages was abandoned, with the only claim that should be returned for assessment is the loss of rental income based on the evidence provided in the affidavits of Jeffery Kennedy which the Court finds, on the balance of probability, satisfies the evidentiary burden of proving and establishing the loss of rent claimed by the Plaintiff below and in the evidence before this Court under Section 16(c) of the SCA or invoke Section 6 of the SCA as a de novo hearing and assess the rental income loss based on the affidavits of Mr Kennedy as read together with Section 16(c) of the SCA.
The Court finds on the balance of probabilities that the evidence of loss of rental income is already available in the affidavits of Jeffrey Kennedy, which evidence is unchallenged, undisputed, and uncontroverted.
The Court also finds that the second respondent failed miserably, whose conduct we find and consider to be egregious and inexcusable, in respect to its obligations under the National Court Rules.
The evidence showed the Writ of Summons (with the Statement of Claim endorsed therein and filed on 29 October 2020) was served on 20 December 2020 on both business addresses of the defendants in the court below.
The second respondent had taken steps to file a notice of intention to defend but did not carry through its intention by filing a defence to the claim.
The time limited to file a defence lapsed on or about 17 March 2021, given the combined time requirements under Order 4 Rule 11(b), Order 8 Rule 4(a) and Order 2 Rule 3(3) of the NCR.
Clearly, the second respondent had more than adequate and ample opportunity to exercise its right and obligation to file its defence.
Therefore, it can reasonably be inferred that the second respondent, by its conduct, has forfeited or waived its right to rely on the statutory defence, albeit objection, under Section 19 of the SDA, or any defence at all^[45].
It seems to this Court that the learned primary Judge applied Section 19 of SDA strictly and narrowly. He did not read beyond, in particular, subsection (3) of Section 19.
It seems that the learned trial Judge treated Section 19 SDA as an absolute bar.
The Court finds that the Section 19 SDA objection taken by the second respondent is not an absolute bar to an instrument or document such as the lease agreement that is liable for duty payable under the SDA.
Subsection (3) of Section 19 SDA provides a qualification or exception where an unstamped document may be admitted into evidence upon payment of certain fees including the amount of duty payable.
The common types of questions a court would ask at the outset must include this, “What primary right(s) is the plaintiff(s) seeking to assert, protect or enforce against a defendant(s)?” ^[46]
For this Court to determine the asserted right(s) of the appellants who filed a writ of summons and pleadings at the trial, this Court needs to consider the evidence for assistance. See cases: Pako F&C Holdings PNG Limited v. PNG Sustainable Development Program Limited and 1 Or (2025) N11204 and ExxonMobil (PNG) Ltd v. Halimbu Lembo and 2 Ors (2024) N10919.
Judgment was entered against the defendants at the trial; however, the trial judge did not hold the second respondent jointly and/or severally liable for the plaintiff’s loss and damages without proper reasons.
The extensive suite of evidence served by the plaintiff in the trial below remains unanswered and unchallenged by either defendant.
This Court had the opportunity to carefully read and examine the evidence at trial contained in the Appeal Books and the evidence proves, once applying the civil standard necessary on the balance of probabilities, that the leases did exist without the trial judge considering the matter, leaving this issue capable of determination on appeal by this Court.
The Court has found that the leases did in fact exist.
It is also in the interest of justice and fairness relevant to this Court’s findings of the conduct by the second defendant in the trial below, that further expenses and costs for legal and other fees for a new trial, and possibly an appeal from the new trial, must be balanced by the Court with circumspection and caution in deciding that the appellant must not suffer further uncertainty allowing this Court to determine the matter in a just manner and enter a judgment for the loss of rent in the appellants favour as ‘ought to have been given at first instance’ by the trial judge.
This Court must dispose of the only outstanding claim for damages prosecuted by the plaintiff at trial in relation to loss of rent in the exercise of its powers under Section 16 (b) and (c) of the SCA and the liability of the defendants.
When the Courts weigh these matters of procedural fairness, there is no doubt that there were matters raised by the appellants against the respondents in the pleadings that were not rebutted in a defence filed in accordance with the NCR.
In this case there is an overriding principle of public policy that there should be finality in civil litigation that this Court has power to enforce and achieve by affirming, reversing, or modifying the trial judge’s judgment when it is just to do so.
The Court finds that the trial Judge erred when he ruled, as his primary findings, that the leases should be rejected as evidence to prove the plaintiff’s claim for loss of rents without affording the calling of evidence by the plaintiff or exploring the issue further with the second defendant which logically would have resulted in the discovery that the second defendant had not filed a defence in the proceeding changing, in this Court’s view, the entire complexion of the trial before the trial judge.
In addition, it is the Court’s findings that the trial judge did not turn his mind to or indeed address the issue of whether the plaintiff could prove the existence of the leases by other evidentiary methods.
The National Court was required to consider the plaintiff’s position on the leases according to the law.
In failing to do so, the Court finds that the National Court fell into error.
Support for the above proposition in espoused Rage v Rageau (2020) SC1971 at para 18:

His Honour was obliged to discuss the evidence, refer to the law, and apply the law to the facts to get to his decision. The error is compounded by the fact that his Honour failed to properly discuss the submissions by counsel for the appellants... (Emphasis added).

For the reason stated earlier in this judgment as issues that were not properly raised in the National Court the result is that the trial below failed, and it is just for this Court to exercise its powers pursuant to Section 6(2) SCA and assess the appellant’s damages.
For ease of reference and convenience, the Court sets out a Table below representing its findings and its assessment of damages based on the evidence before the Court pursuant to its powers under Sections 16(b)and (c) SCA with its reasons to affirm, reverse, or modify the judgment of the trial judge of 30 July 2024 and enter such judgment as ought to have been given at first instances by the National Court of Justice below.

TABLE OF DAMAGES IN FAVOUR OF THE APPELLANT

Damages claimed by Appellant	Evidence or submissions proving damages in Appeal Books	Determination by the trial judge in the National Court	Determination of this Court on damages	Damages awarded in favour of the appellant
Repair and Maintenance Costs against first defendant K181,907.00	Evidence of Mr. Kila at AB 341-445	Allowed repair and maintenance costs K181,907.00	The decision of the trial judge below is affirmed with modification on liability K181,907.00	Verdict in favour of appellant for repair and maintenance costs against both defendants K181,907.00
General Damages the trial judge did not explain the reasons for General Damages award against both respondents K220,000.00	Submissions of appellant before trial judge AB 459 Reimbursement for penalty interest charged by Westpac on primary loan for purchase of Units 1 & 2 by plaintiff due to late payments of loans due to no to reduced rental income received by Plaintiff	Granted General Damages to appellant without explanation or reasons with reference to the evidence or submissions of appellant below K220,000.00	The decision of trial judge below is affirmed with modification that this Court finds that on the facts or submissions of the appellant the General Damages is limited to a finding that the award is limited to reimbursement of the penalty interest paid by appellant to his lender bank Westpac and not for the claim for unnecessary pain, suffering or hardship as it would offend the principles of consequential losses unavailable in these circumstances K220,000.00	Verdict in favour of the appellant for General Damages for reimbursement of penalty interest paid to Westpac for loan on Units 1 & 2 K220,000.00
Loss of rental for Units 1 & 2 as claimed by appellant K1,604,400 and accruing	Evidence as set out in Plaintiff’s Submissions on Assessment of Damages AB 448-464 filed before the trial judge at the trial below and the facts and evidence referred to in this judgment to support the appellant’s loss of rent for Units 1 & 2 in the circumstances and the applicable law to support the claims	Claim for loss of rent was refused by the trial judge by rejection of the proof of the leases was not considered after the trial judge erroneously rejected the tendering of the leases in breach of Section 19 SDA after objection taken by second defendant in the trial below NIL	The decision of the trial judge below is reversed and on liability in favour of appellant K1,604,400.00	Verdict in favour of the appellant for loss of rental income until the date of trial as set out in this judgment and the reasons therein The unchallenged evidence of the appellant in this Court establishes on the balance of probabilities the appellant’s entitlement to its claims for damages for the loss of rent for Units 1 & 2 as claimed K1,604,400.00
Compound interest claimed by the appellant for all damages awarded by the Court below at the commercial rate of 15% from the date of the start of proceedings until finally paid	Calculation of interest is a right of the successful party on the damages awarded	Compound interest awarded by the trial judge on the damages he awarded in favour of the appellant in the court below excluding loss of rental income at the compound rate of 15% per annum until the verdict is paid by the first and second respondents	The trial judge’s decision is reversed on the rate of interest at the compound rate of 15% per annum	The Court finds that the trial judge did not provide adequate reasons to apply compound interest at almost double the rate conventionally allowed for interest on the damages awarded. This Court reverses and modifies the verdict and orders of the trial judge at the trial and orders that the rate of 8% interest per annum will apply to all the damages awarded by this Court in the sum of K2,006,307.00 from 29 October 2020 until the verdict is paid in full by the first and second respondents in the yearly interest sum of K160,504.56
The first and second respondents to pay the Plaintiff’s legal costs of the proceedings	Costs following the event as a matter of law	the trial judge awarded costs in favour of the appellant for the trial against the first and second respondents	The decision of the trial judge to award costs for the trial in favour of the appellant against both the first and second respondents is affirmed	The cost ordered is affirmed by this Court in relation to the trial before the trial judge in favour of the appellants The first and second respondents are to pay the appellants legal costs of the trial as agreed or taxed

The appeal is upheld resulting in the judgment of the trial judge of 30 July 2024 in the National Court of Justice has been affirmed, reversed, or modified as set out in the reasons for this judgment.
There will be a judgment and verdict in favour of the appellant against the defendants jointly and severally in the sum of K 2,006,307.00.
Interest will continue to apply at the rate of 8% annually until the verdict and judgment is satisfied by the respondents from the date of this judgment on the whole of the judgment.

DISPOSITION AND ORDERS

For all the reasons set out in this judgment, the Court makes the following orders:
1. The appeal is upheld.
2. The decision of the trial judge of 30 July 2024 is affirmed, reversed and/or modified as set out in the table of damages in paragraph 194 of this judgment.
3. There will be a judgment and verdict for the appellant in the sum of K2,006,307.00 against both the first and second respondents.
4. Interest on the verdict of K2,006,307.00 will be applied at the rate of 8% per annum from 29 October 2020 until the verdict is paid in full by the first and second respondents in the yearly interest sum of K160,504.56 or an amount equivalent to 8% per year on the outstanding principal judgment debt.
5. The first and second respondent to pay the costs of the Appeal as agreed between the parties or proceed to taxation of the costs.
6. The first and second respondents shall pay the appellants’ costs of the first trial before the trial judge in adiunctis, as agreed between the parties or proceed to taxation of the costs of the trial below.

We publish our reasons.
________________________________________________________________
Lawyers for the appellant: Jeffersons Lawyers
Lawyers for the first respondent: No appearance
Lawyers for the second respondent: Warner Shand Lawyers

^[1] AB 1-6
^[2] AB 1-8
^[3] AB 59-61
^[4] AB 61-62
^[5] AB 178
^[6] AB 62 para 10 - 15
^[7] WS 297 of 2020
^[8] AB 9-15
^[9] AB 18-24
^[10] AB 16-17 – supported by the affidavit in support of motion by Jeff Lome Lawyers for Plaintiff sworn 17 March 2021 (AB 32-49)
^[11] AB 50-51
^[12] Affidavit of Mr. Stanley Kila dated 16 July 2022 AB 341-445
^[13] Affidavit of Jeffery Kennedy sworn 19 July 2022 AB 52-340
^[14] AB 446-447
^[15] AB 448-464
^[16] AB 7-8
^[17] AB 1-6
^[18] Transcript of hearing before the trial judge 12 June 2024 and 30 July 2024 AB 550-562
^[19] AB 465-466
^[20] [1912] 1 Ch 717 728
^[21] (1912) 106 LT 367
^[22] [1956] 1 All ER 379
^[23] (1868) LR PC 69
^[24] (1912) 106 LT 367
^[25] [2015] PGSC70; SC1476 (17 December 2015)
^[26] [2015] PGNC 20; N5895 (30 January 2015)
^[27] AB 498
^[28] AB 501
^[29] Reference to submission of the second defendant at trial – AB 540 - 549
^[30] AB 542 paragraphs 20-30
^[31] [2015] PGSC70; SC1476 (17 December 2015)
^[32] [1974] HCA 40; (1974) 131 CLR 634
^[33] (2012) N4939
^[34] (2006) N3058
^[35] (2017) SC1605
^[36] [2006] PGNC 122
^[37] Addis v Gramophone Co. Ltd [1909] AC 488 (House of Lords) followed by Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; [2003] 56 NSWLR 298 (Court of Appeal). Rimbunan Hijau (PNG) Ltd v Enei [2017] PGSC 36; SC1605
^[38] See Micah v. Lua (2015) SC 1445; Kariko v. Korua (2020 SC 1939 and Sammy Lodge Ltd v. Sipison (2024) SC 2618
^[39] (2006) N3058
^[40] Exhibits T & U in Mr. Kennedy’s affidavit sworn 19 July 2022 – AB 233-267.
^[41] [2018] N7686
^[42] [1990] PNGLR 250
^[43] [1994] PNGLR 596
^[44] (2022) SC2241
^[45] Commonwealth v. Verwayen (“Voyager case”) [1990] 170 CLR 394
^[46] Andy Kapinias v. O&G Niugini Ltd and Ors (2018) N7486, Amos Ere v. National Housing Corporation (2016) N6515, The Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd [1921] 2 AC 438, Ok Tedi Mining Ltd v. Niugini Insurance Corporation and Others (No 2) [1988-89] PNGLR 425, Placer Dome (PNG) Ltd v. Yako (2011) N4691, Independent State of Papua New Guinea v. Central Provincial Government (2009) SC977, Dr. Onne Rageau v. Kina Finance Ltd (2015) N6175 and National Fisheries Authority v. New Britain Resources Development Ltd (2009) N4068.

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