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Stein v Chiu [2022] PGNC 241; N9695 (24 June 2022)

N9695

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1338 OF 2019

BETWEEN
WENDY STEIN
First Plaintiff

AND
CLIME COMMERCIAL LIMITED
Second Plaintiff

AND
SPACIM PIKININI – PNG INC.
Third Plaintiff

AND
DANNY CHIU
First Defendant

AND
KARRIDALE LIMITED
Second Defendant

AND
SO & SO GOOD LIMITED
Third Defendant

AND
LILLY TIRIPU
Fourth Defendant

Waigani: Linge A J
2022: 15^th June

CONTRACT – breach of agreement – agreement to hire boat for a specified amount of money – plaintiff issued invoices to defendants to settle amount owing and due for use of boat – defendants’ failure to settle outstanding amount due and owing amounts to breach of contract – plaintiffs claim sufficiently pleaded with particularity - defendants defence struck out – summary judgment entered for plaintiff – court to assess damages and interest – damages assessed and awarded to plaintiff with costs against defendants

Facts

The plaintiffs lent to the defendants the use of the third plaintiff’s vessel known as MV Kula Spirit to rescue the defendants’ cargo and 24 stranded persons from MV Domole that had hit the Polkington Reef in Milne Bay Province. Normally used by the plaintiffs for Charity work in Milne Bay, when MV Kula Spirit was diverted to assist the distraught MV Domole, the plaintiffs were not able to carry out their charity work. The rate of hire was based on normal boat hire rate of K3,500.00 per day to be paid by the third defendant and K2,000.00 balance to be settled by the first defendant. Also, it was agreed that the defendants were to replace fuel used or provide a replacement boat if need be.

Defendants used the MV Kula Spirit work for the duration of two (2) weeks to transport their 3.5 tons cargo of beach de mer from MV Domole to Alotau. When returned, the MV Kula Spirit was damaged in parts and fuel was not replenished. Plaintiffs claimed for unpaid invoices, damages, and reimbursement of 2000 liters of fuel supplied in the rescue mission and hire. Summary Judgment was entered for the plaintiff and is now for assessment.

Held:

(1) Judgment is entered in favour of the plaintiffs in the sum of K252,590.52 as debt due and owing.

(2) Judgment is entered for the plaintiffs in the sum of K50,000.00 as general damages for frustration, inconvenien gghlce and hardship.

(3) Interest of K 14,145.70

Cases Cited:

Hodsen v State [1985] PNGLR 303
Na-Al v Debege [2000] PGNC 6; N1958
Agilo v Morauta, Prime Minister (No. 2) [2001] PGNC 115; N2103
Rodao Holdings Ltd v Sogeram Development Corporation Ltd [2007] PGNC 239; N5485
Lahari v Koloma [2021] PGNC 407; N9254
Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC 837
Niugini Civil & Petroleum v West New Britain Development Corporation Ltd (2008) N3292; N5775
Jeffrey Balakau v Sir Arnold Amet (2013) N5313
Binnen Construction Limited v Buka Golai Malai & Others (2014) N5775
Peter Andoi t/a Rai Coast Electrical Services v Modilon General Hospital & Ors [2018] N7199
Reid v Murray Hallam & Allcad Pty Ltd [1995] N1337

Counsel:

Ms S. Gigmai, for the Plaintiffs
No appearance, by the Defendants

RULING

24^th June, 2022

1. LINGE A J: This is a ruling on a trial on assessment of damages conducted on the 15 June 2022. Summary Judgment had been entered for the plaintiffs on the 1 June 2022 for K252,59.52 as debt due and owing to the plaintiffs and for damages to be assessed.

Brief Facts

2. On or around 20 August 2018 the plaintiffs agreed with the defendants for the use of the third plaintiff’s vessel known as MV Kula Spirit (the boat) to rescue the defendants’ 3.5 tons cargo of beach-de-mer and 24 stranded persons from MV Domole that had hit the Polkington Reef in the Milne Bay Province.

3. The boat was ordinarily used by the plaintiffs for Charity work in Milne Bay however, the diversion to assist the distraught MV Domole had disrupted the first plaintiff from carrying out her charity work. It was agreed that defendants were to replace fuel used or a replacement boat if need be. The agreed rate of hire was K3,500.00 per day to be paid by the third defendant and K2,000.00 to be settled by the first defendant.

4. After two (2) weeks of rescue work the boat suffered mechanical problems and damaged in parts. The claim by the plaintiffs is for unpaid invoices, damages, and reimbursement of 2000 litres of fuel supplied in the rescue mission and unpaid hire. The defendants were rendered Invoices totalling K 252,590.32 which remained outstanding. Summary Judgment was entered for the plaintiff and is now for assessment of damages.

Submissions

5. Ms Gigmai for the plaintiffs submits that as a result of the breach of contract by the defendants, the plaintiffs suffered hardship in not having the use of the vessel in carrying out its charters and charity operations.

6. She submits further that the lack of response and failure to settle the sum as per the agreement, despite the numerous follow-up requests, leading to the commencement of this proceedings are all effects of the breach of the contract by the defendants.
7. Counsel cited several cases dealing with damages for my consideration. These include Hodsen v State [1985] PNGLR 303; Na-Al v Debege [2000] PGNC6; N1958; Agilo v Morauta, Prime Minister (No. 2) [2001] PGNC115; N2103; Rodao Holdings Ltd v Sogeram Development Corporation Ltd [2007] PGNC 239; N5485; and Lahari v Koloma [2021] PGNC 407; N9254. The general damages awarded in these cases range from K 6,000.00 up to K50,000.00.

8. She submits for the Court’s discretion to consider general damages in the sum of K50,000.00 to be awarded to the plaintiffs for the pain, suffering and hardship incurred due to breach of contract by the defendants and their non-performance in settling the invoices sent to them on 15 May 2019.

Assessment

Debt

9. Assessment in this case is for debt due and payable and damages to the plaintiff pursuant to contract. The distinction between debt and damages is stated in Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC 837 and followed in Niugini Civil & Petroleum v West New Britain Development Corporation Ltd (2008) N3292; N5775; Jeffrey Balakau v Sir Arnold Amet (2013) N5313; Binnen Construction Limited v Buka Golai Malai & Others (2014) N5775.

10. Debt is defined in L.B Curzon, A Legal Dictionary of Law as:

“A sum that one person is bound to pay another. Debt normally has one or other of two meanings. It can mean an obligation to pay money, or it can mean a sum of money owed”.

11. The general principles for assessment are settled. The passage in the Headnotes in Peter Andoi t/a Rai Coast Electrical Services v Modilon General Hospital & Ors [2018] N7199, aptly summarises the principles as:

“The general principles for assessment of debt are the same as those for assessment of damages; the plaintiff has the onus of proving his losses, it is not sufficient to rely on assertions in the statement of claim, corroboration of a claim is required; the fact that debt cannot be assessed with certainty does not necessarily relieve the wrongdoer of the necessity of paying some amount of debt.”

12. The ruling of Kapi DCJ in Reid v Murray Hallam & Allcad Pty Ltd [1995] N1337, as “Assessment of damages involves consideration of the terms of contract and assessing the damages that flow from the breach of the terms of contract.”

13. The defendants used the MV Kula Spirit for its rescue operation to salvage their beach de mer cargo from MV Domole which ran adrift of Polkington Reef in the Milne Bay Province. The defendants did not settle payment for the boat hire to the plaintiffs despite promises to pay. Further, the defendants had not reimbursed the cost of 2,000 litres of fuel.

14. They had breached the oral agreement. It is my finding that the evidence supports the cause of action which is pleaded and identified with sufficient clarity and specificity. It is reasonably clear and make sense sufficient for me to assess the debt.

15. The defendants’ defence was struck out on the 10 March 2022. This assessment follows entry of summary judgment for the plaintiffs on the 1 June 2022 wherein in the exercise of my duty as trial judge I awarded the amount of K 252,590.52 as debt due and owing. The evidence is that Mr. Danny Chiu, the first defendant was served with three (3) invoices which remained unpaid.

Invoice rendered

General Damages

16. The plaintiffs also sought general damages for distress, frustration, inconvenience, and hardship. I find that the plaintiffs suffered hardship by way of not having the vessel back and running within time, causing delay on the plaintiffs in carrying out its charters and charity operations.

17. Further, I find that the lack of response and failure to settle the sum as per the agreement, despite the numerous follow-up requests all add to distress, frustration, and hardship. Such are a direct result and effects of the breach of the contract by the defendants that culminated in this proceeding.
18. As regards the appropriate award for general damages, I consider the ruling in Rodao Holdings Ltd v Sogeram Development Corporation Ltd (supra) and Lahari v Koloma (supra) and thus accept the submission for the plaintiffs for general damages of K50,000.00 to be awarded for distress, hardship and frustration that arises out of a breach of contract.

Interest

19. Interest pursuant to the Judicial Proceedings (Interest on Debt and Damages Act 2015 is calculated at 8%. The formular is a A = D x I x N.

Where: D is the amount of Debt and Damages;

I is the rate of Interest pa;

N is the appropriate period in number of years;

A is the amount of Interest.

Order

20. The orders of the Court are:

1. Defendants to pay the plaintiffs a sum of K252,590.52 as debt due and owing.
2. Defendants to pay general damages of K50,000.00 to the plaintiffs
3. Interest of K 14,145.70
4. Cost of and incidental to proceeding to be borne by the defendants to be taxed if not agreed.
5. Time is abridged to time of settlement of the order.

Ordered Accordingly
_______________________________________________________________
Fiocco & Nutley Lawyers: Lawyers for the Plaintiffs
Kimbu & Associates: Lawyers for the First Defendants