Gumu v Papua New Guinea Banking Corporation [2001] PGNC 16; N2288 (7 December 2001)

N2288

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. 1421 OF 2001

BETWEEN:

TAU GUMU
Plaintiff

AND:

PAPUA NEW GUINEA BANKING CORPORATION

Defendant

WAIGANI : Kandakasi J
2001 : 21st September
7th December

PRACTICE & PROCEDURE – Application to dismiss proceedings on the basis of it being time barred – Failure of Employer to lodge and facilitate compensation to injured worker – Employee discovers failure after the lapse of six years time limit – Action is for damages for breach of statutory duty – Cause of action accrued from the date of the discovery of employers breach – Also employee under disability and as such time did not run against him until disability no longer existing or stabilising – Action not time barred – Frauds and Limitations Act s.16 & 22 - Workers Compensation Act ss.41 & 42.

LIMITATION OF CAUSE OF ACTION – Injured worker – Employer failing to lodge and facilitate workers compensation – Employee discovering failure after lapse of six years time limit under the Frauds and Limitations Act – Employee also under disability – Employer being sued for breach of statutory duty – Cause of action accrued from date of discovery of failure of employer – Employer’s conduct amounting to fraud – Most unfair and inequitable to allow failing employer to successfully move for dismissal on the basis of time bar – Frauds and Limitations Act s. 16 & 22 – Workers Compensation Act ss. 41 & 42.

Cases Cited:

Eddis & Anor v. Chichester Constable & Ors [1969] 2 All ER 912.
Sheldon & Ors v. RHM Outhwaite & Ors [1995] 2 All ER 558.
Kitchen v. Royal Air Forces Association & Ors [1985] 2 All ER 241.
Ramsden v. Lee [1992] 2 All ER 204.

Counsel:

Mr. Allan Baniyamai for the Plaintiff.
Ms. Miriam Solomon for the Defendant.

7th December 2001

KANDAKASI, J: The defendant is applying to strike out the proceedings on the basis that it amounts to an abuse of the process of the Court because it is time barred. The application is made under Order 8 rule 27 (1) of the National Court Rules ("the Rules") relying on section 16 of the Statute of Frauds and Limitations Act. The plaintiff says his claim is not statutory time barred and is therefore not an abuse of process. Hence the issue for determination is this. Is the plaintiff’s claim statutory time barred and is therefore an abuse of process?

The relevant facts are set out in the affidavit of the plaintiff filed on the 10th of September 2001. The defendant employed him as bank officer. He was attached to the customer services section. This required long and constant hours of standing. He experienced some pains on his right leg and knee as early as 1978. That worsened after a fall at his work place in 1979. As the years went by, his condition did not improve. He went in and out of the hospital constantly from 1991 to 1994. In 1993 his leg was amputated above the knee.

The defendant was well aware of the conditions of the plaintiff since 1979 and particularly so when the plaintiff’s leg was amputated. However, it had failed to lodge the relevant notice under s.42 of the Workers Compensation Act for appropriate worker’s compensation. As a result, the plaintiff’s insurance claim was denied. Discovery of this was not made until about 1998.

The plaintiff’s cause of action is hence founded on a breach of the Bank’s statutory duty, in failing to give notice of the plaintiff’s injury to the office of Workers Compensation from 1993 to 1994 when his right leg was amputated above the knee. The plaintiff is claiming damages for the breach of the defendant’s statutory duty under s.42 of the Workers Compensation Act. This the plaintiff claims is important and has to be distinguished from the common law tort of negligence because s.16 of the Frauds and Limitations Act concerns a cause of action based on the principles of common law and equity.

To appreciate this argument it is necessary to consider the provisions of Workers Compensation Act Chapter 179 (WCA) which provides for the payment of compensation to workers and or their dependants in respect of injuries sustained in the course of a worker’s employment. The term "injury" under the WCA is defined in a broader sense under section 1. It is defined to include even a disease contracted by a worker during his employment and the acceleration, aggravation, exacerbation, deterioration or recurrence of any pre-existing injury or disease.

The main scheme and thrust of the WCA is aimed at the employer providing for an insurance cover and basically taking care of the interests of its employees, during the currency of the employment contract between them. Under division 4 of the WCA, the process of compensation starts with the relevant workers compensation insurer. Section 41 (2) (a) in conjunction with subsection 42 (5) requires an employee to give notice of his injury to his employer ‘as soon as practicable.’ Such a notice can be either in writing or oral. Section 42 (1) requires the employer to give notice of the worker’s injury to the Registrar of Workers Compensation within 7 days in the case of a death of an employee or worker or where the worker is totally or partially incapacitated for more than one day.

In the present case, the plaintiff claims that the Bank failed to give any notice of injury contrary to s.42 (1) of the WCA. This amounted to a breach of the Bank’s statutory duty.

Section 16 (a) of the Frauds and Limitations Act provides (inter alia) that, actions founded on a simple contract or tort or for sums recoverable by virtue of any enactment cannot be commenced after a period of six years from the date the cause of action accrued. There is no guidance in the Act as to the circumstances in which a cause of action may accrue.

In this case, the defendant contends that the plaintiff’s injury occurred in or before 1993 or 1998 and thus the claim is statute barred within the terms of section 16 (1) of the Frauds and Limitations Act. The plaintiff’s response is that he only became aware of the defendant’s failure to lodge the required notice under section 42 (1) of the Workers Compensation Act in 1998. Therefore the plaintiff claims that the cause of action accrued in 1998.

I find that, the defendants failure to give the required notice under WCA and notify the plaintiff of that failure, led the plaintiff to believe that the necessary requirements were being taken care of and that he need not do anything in relation to his right to compensation. As such, he did not know that he had a cause of action against the defendant until he became aware of the defendant’s failure to lodge the required notice under section 42 (1) of the WCA in 1998. Knowledge of the Bank’s failure is the most important, if not the material fact in this action. It is the failure of the Bank that is the basis of the action. Without it, there would not be an action. Time must be computed from 1998 onwards.

Equity and justice dictate that, the defendant should not be and cannot now be allowed to benefit from its own failure. It was the defendant which create the false impressions and as such it would be unconscionable to permit it to succeed on its own failure.

This is analogous to cases in which it has been held that, if there is fraud by the employer, time did not begin to run until the discovery of the fraud. See: Eddis & Anor v. Chichester Constable & Ors [1969] 2 All ER 912, Sheldon & Ors v. RHM Outhwaite & Ors [1995] 2 All ER 558. "Fraud" in this context is not confined to deceit or dishonesty but covers actions of the defendant such as concealing its failure to take steps it should have for the plaintiff until its discovery by the plaintiff. See: Kitchen v. Royal Air Forces Association & Ors [1985] 2 All ER 241. This also accords well with principles governing the issue of time bar for infants. An infant does not have a cause of action accruing for him until after he attains age of majority and is in a position to decide whether or not to either commence or pursue a cause of action.

In Kitchen’s case, the plaintiff’s husband was electrocuted whilst using a domestic electrical equipment at home on the 22nd of May 1945. A law firm was instructed to pursue her claim for damages against the electrical company in November 1945. The solicitors did not institute an action within twelve months as was required under the Fatal Accidents Act. Upon receiving a letter from the plaintiff herself, the electrical company approached the solicitors and agreed to make a donation of 100 pounds for the benefit of the plaintiff. It was agreed that the solicitors should not disclose source of the funds to the plaintiff. The sum of five pounds was deducted by the solicitors for their charges and the balance was applied to assist the plaintiff. The plaintiff was not made aware of the source of the funds.

On September 30th 1985, the plaintiff sued the solicitors for negligence in handling her claim for damages against the electrical company and was awarded damages. The defendant solicitors appealed and argued that the action was time barred but the court held that the act to conceal the source of the donation had amounted to concealment by fraud of the plaintiff’s right of action for negligence against the solicitors and thus the cause of action was not time barred.

In the present case, I find that the actions of the defendant in failing to disclose to the plaintiff that they had not lodged the relevant notice under section 42 (1) of the WCA until discovery of it in 1998 by the plaintiff himself amounts to concealment by either deliberate or constructive fraud and the cause of action is not statutory time barred. The actions of the defendant would amount to fraud in the way discussed in Kitchen’s case and it would be unconscionable to allow the defendant to benefit from it.

Further, even if the action is statute barred in terms of s.16 of the Statute of Frauds and Limitations Act, the Court has a discretion in my view, to allow the action to be maintained by virtue of s.22 of the Frauds & Limitations Act because of the fact that the plaintiff was under a disability. His medical conditions which required hospitalization and an eventual amputation of one of his legs prevent him from taking any meaningful step until be was able to. He was only able to do that by or after 1998. He took action from that day forward inclusive of this action.

There is no evidence of what if any the defendant has done to alleviate the situation in any way. Yet it now relies on the issue of statutory time bar to defeat this action. In the English case of Ramsden v. Lee [1992] 2 All ER 204 the court in a similar setting allowed the action to be maintained. It did so on a finding that there was no prejudice to the defendant in refusing a similar application.

For these reasons, I refuse the application to dismiss the proceedings. Instead I order a dismissal of the application with costs.
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Lawyer for the plaintiff : Stevens Lawyers
Lawyer for the defendant : Posman Kua Aisi Lawyers