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Investrar Ltd v Esem No 1 Ltd [2024] PGNC 263; N10931 (30 July 2024)

N10931

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS NO. 297 OF 2020 (IECMS)


BETWEEN
INVESTRAR LIMITED
Plaintiff


AND:
ESEM NO. 1 LIMITED
First Defendant


AND:
YANG LIMITED
Second Defendant


Waigani: Carey J
2024: 12th June & 30th July

DAMAGES — Assessment of Damages — Property damages suffered --– Rental property suffers damages


This is a claim for damages by the Plaintiff arising from a default judgment against the First and Second Defendant. The Plaintiff claims financial losses.


Held:

  1. The Plaintiff’s claim for loss of rental income is refused.
  2. The Plaintiff’s claim for repair and maintenance cost of K181,907 is granted against the First Defendant.
  3. The Plaintiff’s claim for General Damages in the amount of K220,000 is granted against the First and Second Defendant.
  4. The Plaintiff is not entitled to Exemplary Damages.
  5. Interest to be paid to the Plaintiff by the First Defendant at 15% compounded from the date of commencement of proceedings until finally paid.
  6. The First and Second Defendant shall pay the Plaintiff's legal costs of the proceedings, to be taxed, if not agreed.
  7. Time for entry of the orders is abridged to the date of settlement by the Registrar of the National Court which shall take place, forthwith.

Cases Cited:


Papua New Guinean Cases
Coecon Ltd (Receiver/Manager Appointed) v National Fisheries Authority [2002] N2182
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
Peter Wanis v Fred Sikiot & The State [1995] N1350.


Overseas Cases
Livingston v Raywards Coal Co [1880] 5 App cases 25


Legislation:
Judicial Proceedings (Interests on Debts and Damages) Act
Stamp Duties Act.


Counsel:
Mr. McRonald Nale, for the Plaintiff
Mr. Bill Frizzell, for the Second Defendant


JUDGMENT

30th July 2024


  1. CAREY J: This matter is in relation to the Assessment of Damages subsequent to Investra Limited (Plaintiff) filing a Writ of Summons on 26th October 2020 against Esem No.1 Limited (First Defendant) and Yang Limited (Second Defendant) and default judgment entered against the First and Second Defendant.
  2. Default judgment was awarded on 26th October 2021.

BACKGROUND


  1. The Plaintiff is a shareholder in the First Defendant which owns a Unit development located at allotment 16 section 406, NCD.
  2. The Second Defendant was a shareholder in the First Defendant but ceased on or about 23rd November 2023 which shares allowed the First Defendant possession of Unit 5 which is directly above Units 1 and 2.
  3. The Plaintiff sought damages as follows:

“a) Total Loss of rental income: K1,604,400.00 and accruing

b) Total repair and maintenance costs: K181,907.00 and accruing

c) General Damages: K220,000

d) Exemplary Damages:

  1. K15,000,000.00 against the First Defendant; and
  2. K4,500,000.00 against the Second Defendant

e) Costs and Interests:

  1. Costs to be tax if not agreed;
  2. Interest at 15% compounded from date of commencement of proceedings until fully paid.”
  1. The Plaintiff relied on the following affidavits:

a) Stanley Kila sworn on 16th July 2022;


b) Jeffrey Kennedy sworn on 19th July 2022; and


c) Jeffrey Kennedy sworn on 13th February 2024.


  1. The Second Defendant relied on the following affidavits:
    1. Bill Frizzell sworn on 4th March 2024;
    2. Yih Sim Keh sworn on 4th June 2024; and
    1. Bill Frizzell sworn on 4th June 2024.

ISSUES


  1. (a) Whether the objections raised by the Second Defendant are valid?
(b) What were the losses and damages suffered by the Plaintiff?
  1. The Stamp Duties Act, s. 19 states:

“19 Unstamped instruments produced in evidence.


(1) Subject to this Act, an instrument shall not—

(a) be pleaded or given in evidence, except in criminal proceedings; or

(b) be admitted to be good, useful or available in law,

unless it is duly stamped in accordance with the law in force at the time when—

(c) it was first executed; or

(d) it came into the country,

whichever is the later.”

  1. Applying s.19 of the Stamp Duties Act confirms that the residential leases indicated in the affidavit of Jeffrey Kennedy sworn on 19th July 2022 are rejected as evidence.
  2. The Assessment of Damages principles are established in Coecon Ltd (Receiver/Manager Appointed) v National Fisheries Authority [2002] N2182.
  3. The award of damages should put the innocent party in the position they would have been if the wrongdoer had not committed the wrongful acts. See Livingston v Raywards Coal Co [1880] 5 App cases 25.
  4. The Plaintiff submits that liability was established on the basis that the default judgment was entered against the First and Second Defendant on 26th October 2021.
  5. The Plaintiff admits that Exemplary Damages are not pleaded in the Writ of Summons.
  6. 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...”


  1. As such, the Plaintiff is not entitled to Exemplary Damages.
  2. Principles of proof and corroboration apply. See (Peter Wanis v Fred Sikiot & The State [1995] N1350.
  3. The Plaintiff’s claim for loss as pleaded does not provide any corroboration to support a decision in the affirmative.
  4. Further, the Plaintiff’s argument seeking same fails regarding future loss based on the submission.
  5. The Repair and Maintenance costs submitted by the Plaintiff are proven and accepted K181,907.00.
  6. The First Defendant is liable for the repair and maintenance costs as indicated in the Constitution of the Body Corporate.
  7. The Second Defendant is not liable given that this is not a jointly and severally liable reality but one in which breaches of the Constitution of the Body Corporate by the particular Defendant must be stipulated.
  8. The General Damages argued by the Plaintiff indicates K220,000.00 which is supported by evidence.
  9. Therefore, I accept that General Damages are to be awarded against the First and Second Defendant in favour of the Plaintiff.
  10. Section 1 of the Judicial Proceedings (Interests on Debts and Damages) Act, indicates that the awarding of interests is discretionary except against the State which must not exceed 8%.
  11. In the exercise of my discretion, I award Interest to the Plaintiff to be paid by the First Defendant at 15% compounded from date of commencement of proceedings until fully paid.

ORDERS

  1. The Plaintiff’s claim for loss of rental income is refused.
  2. The Plaintiff’s claim for repair and maintenance cost of K181,907 is granted against the First Defendant.
  3. The Plaintiff’s claim for General Damages in the amount of K220,000 is granted against the First and Second Defendant.
  4. The Plaintiff is not entitled to Exemplary Damages.
  5. Interest to be paid to the Plaintiff by the First Defendant at 15% compounded from the date of commencement of proceedings until finally paid.
  6. The First and Second Defendant shall pay the plaintiff's legal costs of the proceedings, to be taxed, if not agreed.
  7. Time for entry of the orders is abridged to the date of settlement by the Registrar of the National Court which shall take place forthwith.

Ordered accordingly.


Jema Lawyers: Lawyers for the Plaintiff
Warner Shand Lawyers: Lawyers for the Second Defendant

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