Sinclair v Independent State of Papua New Guinea [2001] PGNC 15; N2287 (12 October 2001)

This action comes before the Court for an assessment of damages and I am grateful to the very able assistance given by Counsel.

With an accepted statement of facts provided by these submissions there has been no need for me to re-summarise them and I have accordingly quoted extensively from both.

The brief facts are that the Plaintiff was formerly employed by Brian Bell & Co. Pty Limited, as operations manager. In July of 1987 he developed a rash and sought medical assistance at Port Moresby General Hospital. The second Defendant a Dermatologist employed by the hospital attended to him and prescribed a treatment of "prednisone" to combat the rash. The dosages of the drug prescribed were progressively increased to meet early resistance to the treatment from an initial 40mg per day to finally 120mg per day. This drug is a cortisone, corticosteroid. The treatment did in fact eventually cure the rash but the Plaintiff was unfortunate to be effected seriously by an accepted and well-recognised side effect of that drug known as "avascular necrosis". The condition is described as when the bone cells die and bones do not regenerate. The longer bones are particularly prone to the condition.

On the evidence before the Court it is clear that this wrong treatment is what brought about the Plaintiffs condition. As a result he was required to undergo the replacement of each hip and the debridement of the shoulder joints. He has development osteoporosis in the left knee. He has also developed osteo-arthritis in the shoulders.

The Plaintiff was born on 13th November 1959 and is presently living in Brisbane Australia. When he first took up a position with Brian Bell in Port Moresby in January 1987, he was initially employed as spare parts controller but was later promoted to Operations Manager. He continued to work with the company until 30th of November 1989 when continuing disabilities brought on by his condition forced his resignation. Returning to Australia he was incapable of working until June 1993 when he obtained a position with a motor firm but because of the amount of walking involved in his work in the spare parts department there, and the pain this generated, he had to relinquish that employment.

In September of 1993 he commenced work with another motor firm again in spare parts, this time as Manager at an after tax salary of AUS$ 26,939.00. But the Plaintiff has not been employed since April 1995 when following the death of his partner and mother of his two children, he became a sole parent pensioner. That pension will continue until the youngest of his two children reaches the age of sixteen in 2009.

On the evidence before the Court the Plaintiff has undergone an extensive hospitalization and surgery to relieve his condition.

In October 1988 a hipdrill and bone graft was carried out. After that operation the Plaintiff was on crutches for some three months unable to put weight on his legs. It was very painful operation and physiotherapy was necessary thereafter. In February 1989 a second hip drill was performed and similarly he was again on crutches for three months following that operation with the attendant pain. In July 1991 Dr Morris, surgeon, performed a third operation. This was a total hip replacement. Again for a lengthy period the Plaintiff was unable to put any weight on his legs and was on crutches. About six weeks after that operation the surgical site became inflamed with a staphlococcal infection. He was transferred for treatment to the infectious diseases ward at Queen Alexander Hospital in Brisbane and was there for some six weeks. Allergic reactions to the drug administered for the infections caused further pain and discomfort. He was confined to a wheel chair for some months after discharge. A fifth operation in April 1992 was performed when the Plaintiff had a further (the other hip) total hip replacement. Subsequently the Plaintiff developed pain in his shoulders and in late 1998 under went shoulder debridement which involved the cleaning out of dead material around the humerus and shoulder joints. A secondary complication has developed in the form of asteo-arthritis.

The medical evidence discloses that the ongoing disability to the Plaintiff shows a (say) 20% diminution in respect of the hips, due to the hip replacements with the possibility that these will require replacement in some seven to ten years. Loss of function of his upper limbs (that is the shoulders) is also in the nature of 20%.

On the evidence before the Court the Plaintiff has suffered considerably from his condition and that some pain will continue to plague him in varying degrees in foreseeable future. Latest reports on his condition show that he experiences pain in his right hip a severe pain in one knee and suffers almost constant pain in his shoulder which limits most physical activities. He has trouble sleeping because of the pain in his shoulders even normal activities like buttoning his shirt or reaching above him as its attendant discomfort. Even simply task like brushing his hair or washing can be painful.

Prior to developing this condition he enjoyed the sporting activities of an active young man and playing with his children. He cannot now participate in those activities. Further the pain and discomfort he suffers and the long term prospect of but slow remission of his condition takes a toll on his efforts adopt a positive view of life.

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In assessing damages for pain suffering and loss of amenities the decisions of this Court and the Supreme Court cited by Counsel disclose a considerable range from K20,000 in Etape v MVIT [1992] PNGLR 191 through to K60,000 in Kerr v MVIT, a Supreme Court award in a case of paraplegia awarded in 1979.

Overall the awards in these cases show the Courts taking into account the particular circumstances of the Plaintiffs before them. Counsel for the Plaintiff contends that this Court should adopt the award of K60,000 in Kerrs case while Counsel for the defence submits that an award of between K25,000 and K60,000 would be appropriate. I accept that though the Plaintiffs case may not merit the highest awards to the Plaintiff has suffered considerably over an extended period, before during and after extensive surgery, and is still not free of discomfort. I consider an award at the higher end is called for. As well the Plaintiffs restrictions on the wider employment of life, support that, and given that the awards cited are now somewhat dated I consider a sum of K50,000 appropriate under this head.

More problematical is the assessment of the future medical and surgical expenses. On the evidence of the orthopaedic surgeons the Plaintiff must anticipate that he will probably need two further hip replacements in his life time and an expectation for further surgery to his shoulders that is for a further debridement and shoulder replacement. The associated hospital, physiotherapy nursing services and domestic help was submitted at a figure of AUS$81,326.00. While accepting that the fee structure submitted for such treatment is a reasonable estimate of present day costs and are costs which indeed are likely to change upwards in the future, the Court is today assessing damages on a once-and-for-all-time basis. Because of this, to award the total sum submitted now would not be appropriate because the award is to cover probable medical cost not for damages in compensation for loss. And because those costs are not yet due and will not be due for a period as long as 10 years, the award today must be discounted to provide a sum that will meet such expenses when required yet will reflect the possibility that they may not in fact be needed at all.

In Pinzger v Bougainville Copper Ltd [1985] PNGLR 160. The Supreme Court considered calculations necessary to establish a present day figure which if appropriately invested would produce the required sum. The Supreme Court concluded that for future expenses, losses and the like, arithmetical discount of 3% was appropriate to the circumstances of PNG. Accordingly the sum of $1326.00 discounted at 3% arithmetically calculates the sum required today to produce that sum in 10 years time. The calculation is as follows. [see 3% table in Luntz: Assessment of Damages: Butterworths 3rd Edition at page 543]

AUS$10,000 discounted at 3% for 10 years - AUS$7441
AUS$80,000 = 7441 x 8 = 59528
1,000 = 744.10 = 744
326 (say 333) = 248
AUS$81,326 AUS$60,520

The use of a 3% discount rate also takes into account inflation and notional future tax returns from on the awarded sum (Pinzger) but does not take into account such matters as early death or that there may be no further need for all of such treatment. Taking into account such issues but also that the medical costs of today are likely to change and change upwards in the future, and balancing such contingencies, I award the sum of AUS$60,000 under this head.

There has been no issue on the Plaintiff’s past medical costs and these are fixed at AUS$15,147.000.

Claim is made for home nursing and housekeeping as to A$12600 by the Plaintiffs partner and the mother of his children; and from the time of her accidental death, the sum A$11700 for the Plaintiff’s mother who assumed such duties.

There has been no evidence that such claims were actual expenses sought, incurred and or met.

In claiming special damages a Plaintiff is seeking restitution for expenses actually incurred not compensation for services by others not claimed by them. While not unaware of the contribution family members will have rendered in the past I decline to award any sum under this head.

This however is a legitimate head of damage recognised by PNG Courts in the Pinzger case and subsequently.

As submitted for the Plaintiff it is not possible to say for how long his mother may be able to render home assistance or indeed whether the Plaintiff might marry, but the evidence does show he will continue to need some home assistance. The claim of AUS$50 per week till the Plaintiff attains 60 (20) years is not unreasonable but once again a today award for such future costs must be discounted to provide for such an expense and that there be some provision for continuances as well.

I consider that after allowing for contingencies, a figure of AUS$30,000 be awarded to provide for this head.

The Plaintiff was without paid employment effectively from July 1989 till June 1993. For this period I accept the Plaintiffs evidence of net loss (after tax) of salary, gratuity and superannuation of K104,701.00. There was also a claim for a discounted sum for loss of accommodation and use of motor vehicle provided by his PNG employer. Since those benefits did not amount to payment in cash and there is no evidence as to expenses for these in Australia for the same period, it is not possible to assess loss in this regard.

For the period from June 1993 on his return to Australia to the present, loss of income can be assessed. In June 1993 the Plaintiff obtained short term work, then from September, full time employment as a Spare Parts Manager. That lasted till May of 1995 when tragically his partner died in a motor accident and the Plaintiff left that employment to become a single parent beneficiary looking after his children.

Projecting an average annual after tax income of AUS$26,939 for the period from May 96 to September 1999 (trial) a sum of AUS$161634 is reached. Less tax $31710 and the beneficiary allowance AUS$38572 for that period a net sum of AUS$91,332.00 is reached.

In MVIT v Pupune [1993] PNGLR 370 and again in MVIT v Elape [1994] PNGLR 596 the Supreme Court determined the proper approach to consideration of future economic loss was as is stated in Moeliker v A. Reyrolle & Co Ltd 1977 1 ALL ER 9 which provides for consideration in two stages.

"(i) Is there a substantial or real risk that a Plaintiff will lose his present job at some time before the estimated end of his working life

(ii) If there is (but not otherwise) the Court must assess and quantify the present value of the risk .... having regard to the degree of risk, the time when it may materialise and factors favourable and unfavourable, which ... will or may effect a Plaintiff’s chances of getting a job at all, or an equally paid job".

The Plaintiff has not worked since 1995 but his reason for becoming a pensioner were not directly related to his injuries. His partner’s death and the need to care for his children were significant reasons for his not continuing in the position he then held. It can be accepted nonetheless that his condition was a factor. Again the physical disability he suffers, estimated at some 21% hips and shoulders, as well as the discomfort does not render him totally immobile. There is no prognosis of his condition worsening over time such that he is rendered totally immobile. Under such circumstances contrary to submissions from the Plaintiff it is not possible to say that that he will never work again. His present status of pensioner may also change to unable him to seek employment within the 10 years presently projected.

On this basis I consider there is reasonable possibility of the Plaintiff working again and obtaining remuneration equivalent to what he has foregone since becoming a pensioner. I assess that possibility at 50%.

Assessing a sum in compensation is difficult face of the uncertainties of the future and simply multiplying out the theoretical income for the period is not appropriate.

"but the Court must start somewhere ... and the starting point should be the amount which the Plaintiff is earning at time of trial and an estimate of the length of his working life."

That calculation may be used as a working estimate of possible loss. After taking such other matter into account as the likelihood of availability of work, the Plaintiffs own skills.

"The Court will then have to make the usual discounts for the immediate receipt of a lump sum and for the general exigencies of life".

The Plaintiff has a working life remaining of 20 years. While he is presently a pensioner it is not appropriate to base future calculations on the pension figures. The only other figures before the Court are those submitted by the Plaintiff in respect of his employment expiring in 1995. That is gross AUS$26939 pa net after tax AUS$5285 = AUS$21654 p.a. AUS$21654 produces a weekly income of AUS$416.

On 3% tables to produce a today award (Pinzgers case) as follows. AUS$ 1 x 20 years = 788 x 416 = AUS$327808.

From that sum must be deducted the pension being received. That is, AUS$738 x 10 yrs = AUS$87380. And less an allowance for contingences of 10% produces an estimation AUS$216386 as a today figure to provide for possible loss over the twenty years period. To account for a 50% possibility of return to work this figure reduces to 108193, say AUS$110,000. I consider that sum a reasonable award for future loss.

Interest as sought by the Plaintiff is granted. That is 8% on the award for pain and suffering and loss of amenities, from filing of the writ till judgement. Interest at 4% is allowed on remaining awards except for future medical expenses, future domestic and nursing expenses and future economic loss.

The expenses and losses assessed have been based (except for pain and suffering) on present day Australia currency values. It was submitted that the damages should take this into account. The rate of exchange between the currencies has eroded over the 10yrs since the Plaintiffs injuries. Ranging from AUS$ 1.5 per K1 in 1991 to new AUS$ . 70 for K1.

I do not consider it necessary or appropriate to recalculate all sums in light of the time to time fluctuations. Those changes may be said to be part and parcel of the exigencies arising from a claim going back 10yrs. But although the awards are largely based on Australian costings, for them to have meaning it is appropriate this judgement be in a Kina equivalent.

	DOLLAR	KINA
General damages for pain and Suffering & loss of amenities.		K 50,000.00
Special damages and past Medical expenses	AUS$ 15147.00	K 21638.00
Future medical expenses past Economic loss	AUS$ 60,000.00	K 85,714.00
Future housekeeping / nursing	AUS$ 30,000.00	K 42,857.00
Past economic loss – Loss of wages Papua New Guinea Australia	AUS$73,290.00 AUS$ 91,332.00	K 104701.00 K 130,474.00
Future economic loss	AUS$ 110,000.00	K 157,142.00
	AUS$414,769.00	K 593,526.00

Lawyer for the Plaintiff - Blake Dawson Waldron
Lawyer for the Defendants - Solicitor General

National Court of Papua New Guinea

Sinclair v Independent State of Papua New Guinea [2001] PGNC 15; N2287 (12 October 2001)