Kuri v Motor Vehicles Insurance Ltd [2004] PGNC 48; N2759 (21 December 2004)

N2759

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1258 OF 2004

SANAGE KURI

V

MOTOR VEHICLES INSURANCE LTD

MT HAGEN: CANNINGS J
12 NOVEMBER, 21 DECEMBER 2004

RULING ON MOTION

PRACTICE AND PROCEDURE – application to dismiss proceedings on ground that they are time-barred – motor vehicle accident – negligence – claim for damages for bodily injury arising from motor vehicle accident – writ of summons and statement of claim filed more than eight years after alleged incident – Motor Vehicles (Third Party Insurance) Act, Section 54(6) – Insurance Commissioner allowed notice of claim to be lodged more than seven years after incident – Frauds and Limitations Act, Section 16 – relationship between two Acts – identification of date on which cause of action accrued – effect of Commissioner’s approval.

Cases cited:
Rundle v MVIT [1988-89] PNGLR 20
Pierce v MVIT [1988-89] PNGLR 480
MVIT v Dixon Popo (1992) N1048
Carol Laime v MVIT [1995] PNGLR 224
Tau Liu v Paul Tohian and The State (1997) N1615
MVIT v Insurance Commissioner (1998) N1725
Sakaire Ambo v MVIT (1999) N2162
Sakaire Ambo v MVIT (2002) SC681

Counsel:
Ms M Konge for the plaintiff
Ms J Naipet for the defendant

CANNINGS J:

INTRODUCTION

This is a ruling on a motion by the defendant to dismiss proceedings commenced by the plaintiff on the ground that they are time-barred.

BACKGROUND

The plaintiff, Sanage Kuri, alleges that he was injured in a motor vehicle accident on the Paiakona-Mt Hagen Road in the Western Highlands Province on 16 March 1996. He says that he was a passenger in a public motor vehicle (PMV) and that the accident was caused by the negligence of the driver. He says that the PMV was insured by the defendant, which is liable to pay him damages for the injuries he sustained.

He claims that he suffered a fractured dislocation of the right ankle and that he continues to suffer a 15% loss of efficient function.

16 March 2002 was the sixth anniversary of the alleged accident. By that date the plaintiff had not given notice of his claim to the defendant. Nor had he filed any court proceedings.

It appears that the plaintiff did nothing tangible about pursuing the matter until September 2002, when he gave notice of his claim to the defendant. The defendant rejected it as it was outside the six-months period prescribed by Section 54(6) of the Motor Vehicles (Third Party Insurance) Act.

On 27 September 2002 the plaintiff sought an extension of time from the Insurance Commissioner.

More than a year later, on 13 December 2003, the Commissioner, Salamo Elema, granted the extension. In a letter to the plaintiff, which was copied to the defendant, the Commissioner stated:

Pursuant to Section 54(6)(a) of the Motor Vehicles (Third Party Insurance) Act Chapter 295, approval is granted for you to proceed with a notice to Motor Vehicles Insurance Ltd within 28 days from the date of this letter.

In a letter dated 22 December 2003 a relative of the plaintiff gave notice in writing to the defendant of the intention to make a claim. Enclosed with the letter were the Commissioner’s approval, a police road accident report, a medical report and hospital treatment records.

The defendant did not respond to the letter of 22 December 2003.

The plaintiff’s lawyers, Kopunye Lawyers of Mt Hagen, wrote to the defendant on 5 May and 9 and 22 July 2004. The defendant did not respond to them either.

On 20 September 2004 the plaintiff’s lawyers filed a writ of summons. The statement of claim attached to the writ sets out the particulars of the alleged accident and negligence. It claims general damages, economic loss, damages for frustration, distress and anxiety, special and out of pocket expenses, interest and costs.

On 24 September 2004 the plaintiff’s lawyers served the writ on the defendant.

On 12 October 2004 the defendant’s lawyers, Mirupasi Lawyers of Port Moresby, filed a notice of intention to defend and a defence. The defence includes the averment that the plaintiff’s claim is statute-barred pursuant to Section 16 of the Frauds and Limitations Act 1988.

On 18 October 2004 the plaintiff’s lawyers filed an affidavit by their principal, Peter Kopunye, sworn on 15 October 2004. That affidavit sets out the background of the case.

On 25 October 2004 the defendant’s lawyers filed a notice of motion dated 18 October 2004, seeking an order that the proceedings be dismissed for being filed out of time. That is the motion now before the Court for determination.

On 12 November 2004 the motion was argued before me in Mt Hagen. I heard submissions from Ms Naipet, for the defendant, and Ms Konge, for the plaintiff. I allowed further time to file written submissions.

When I was considering the matter it became apparent that documents in another case had been incorrectly placed on the file for this case. Also, Mr Kopunye’s affidavit of 15 October 2004 was missing. That mis-filing had to be remedied. So on 25 November 2004 I mentioned the matter in Court. I gave the parties further time to file a brief submission on the relevance, if any, of Section 22 (extension of limitation period in case of disability) of the Frauds and Limitations Act.

RELEVANT LAW

There are two sets of statutory provisions of direct relevance.

Motor Vehicles (Third Party Insurance) Act

A person who wishes to make a claim for damages for death or bodily injury arising from a motor vehicle accident must make the claim under Section 54 (claims for damages) of the Motor Vehicles (Third Party Insurance) Act. This law requires, generally, that the claim be brought against Motor Vehicles Insurance Ltd (MVIL) and not against the negligent driver or owner of a motor vehicle. Before filing court proceedings the claimant must give notice of the claim to MVIL under Section 54(6).

Section 54(6) states:

No action to enforce any claim under this section lies against the successor company [ie the defendant, MVIL] unless notice of intention to make a claim is given by the claimant to the successor company within a period of six months after the occurrence out of which the claim arose, or within such further period as—

(a) the Commissioner; [ie the Insurance Commissioner appointed under the Insurance Act 1995] or

(b) the court before which the action is instituted,

on sufficient cause being shown, allows.

Frauds and Limitations Act

Part III (limitation periods for actions in contract, tort etc) contains Sections 16 to 20.

Section 16(1) is the key provision. It states:

Subject to Sections 17 and 18, [which are not relevant to the present case] an action—

(a) that is founded on simple contract or on tort; or

(b) to enforce a recognisance; or

(c) to enforce an award, where the submission is not by an instrument under seal; or

(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,

shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.

The defendant relies on Section 16(1) to assert that the present proceedings are time-barred.

Section 16(1) must be read in the context of Part IV (disabilities), which contains Sections 21 and 22.

Section 21 states:

For the purposes of this Part a person shall be deemed to be under a disability—

(a) if he is under the age of 21 years; or

(b) if he is of unsound mind within the meaning of Part VIII (mental disorders and treatment) of the Public Health Act (Chapter 226).

Section 22(1) states:

Subject to the provisions of this section, [which are not relevant to the present case] where—

(a) a right of action in respect of which a period of limitation is specified by this Act accrues to a person; and

(b) on the date when the right of action accrues the person is under a disability,

the action may be brought at any time before the expiration of six years commencing on the date when the person ceases to be under the disability, notwithstanding that the period of limitation has expired.

DEFENDANT’S SUBMISSIONS

Ms Naipet, for the defendant, submitted that the plaintiff’s claim is foreclosed by Section 16(1) of the Frauds and Limitations Act. The Motor Vehicles (Third Party Insurance) Act does not set a limitation period within which proceedings can be commenced. So the Frauds and Limitations Act is applicable. There is no provision in that Act which confers any discretion on the National Court to let matters proceed to trial despite the claim being statute-barred.

The only situation in which a person might be permitted to commence proceedings more than six years after the cause of action accrued, is where the person is under a disability. "Disability" is defined by Section 21 of the Frauds and Limitations Act.

The plaintiff’s condition did not bring him within that definition. The fact that the Insurance Commissioner granted an extension of time in which to make a claim is of no consequence. The Commissioner’s extension was made seven years and nine months after the motor vehicle accident. That is well after the expiry of the six-years period required under the Frauds and Limitations Act. The writ of summons was not filed until more than eight years after the accident. It was more than two years late. The cause of action was the date of the accident.

The plaintiff’s assertion that the period of year starts on the date of the extension by the Insurance Commissioner is baseless. The law is very clear. Claims must be filed within six years after the date when the cause of action accrued. A cause of action can be defined as the fact or combination of facts which give rise to a right of action.

The plaintiff’s assertion that he is suing the defendant for frustration, distress and anxiety due to the delay of the defendant in dealing with the matter is also baseless.

Ms Naipet asserted that, although the plaintiff might say that he is a villager and not aware of the legal requirements, ignorance of the law is no excuse.

Six years is a long time. Allowing a claim such as this to proceed would result in unfairness and prejudice to the defendant. The alleged accident happened more than eight years ago. It would be difficult to conduct independent enquiries and investigations. Witnesses will not give contemporaneous evidence or will have died. Other relevant evidence may have been lost, destroyed or not be readily available for various reasons.

PLAINTIFF’S SUBMISSIONS

Ms Konge, for the plaintiff, asserted that the plaintiff’s claim was based on three alternative causes of actions. She described them as follows:

(a) Under the Motor Vehicles (Third Party Insurance) Act on the basis of the negligent driving of the motor vehicle insured or uninsured with the Defendant by the driver or owner of the motor vehicle.

(b) Negligence based on the tort, act or omission committed by the servants and agents of the Defendant when the said servant and agent of the Defendant failed to acknowledge receipt of the notice of claim or even advising the Plaintiff denying the claim and allowing the claim to sit at the Defendant’s office or not being attended to.

(c) By such negligent tort, act or omission it has caused the Plaintiff frustration, distress and anxiety in waiting and hoping for a settlement of his claim only to be told that his claim became statute barred. [sic]

She submitted that, depending on which of the alternatives is regarded as the appropriate one by the Court, the date of the cause of action would be:

(a) 13 December 2003, the date that the Insurance Commissioner granted approval; or

(b) 22 December 2003, the date on which the plaintiff gave notice of his claim; or

(c) 20 September 2004, the date the writ was issued.

Ms Konge submitted that the plaintiff was not sitting on his rights. He took the steps required under Section 54 of the Motor Vehicles (Third Party Insurance) Act. He was under a disability for the purposes of Section 22 of the Frauds and Limitations Act, pending the Insurance Commissioner’s approval.

The defendant is bound by the Commissioner’s approval. If the defendant wishes to take issue with the approval, that is a separate issue. The defendant must review it by appropriate Court processes. If there is no review, the plaintiff’s claim must be allowed to proceed in accordance with the Commissioner’s approval.

ISSUES OF LAW

This is an unusual case for a number of reasons:

• The plaintiff is relying on a number of alternative causes of action. They all relate to the tort of negligence. The first concerns the negligence of the PMV driver that led to the alleged accident of 16 March 1992. The second and third relate to alleged negligence by the defendant in not properly dealing with the plaintiff’s claim.
  
• The plaintiff did not give initial notice of his claim to the defendant until six years and six months after the alleged accident. The accident was in March 1996 and initial notice was given in September 2002. But that notice was rejected.
  
• The plaintiff then applied for an extension of time to the Insurance Commissioner, who took 15 months to make a decision. The plaintiff sought an extension in September 2002 and it was granted in December 2003.
  
• The Insurance Commissioner granted approval under Section 54(6)(a) for the plaintiff to give notice of the claim, seven years and nine months after the accident. The accident was in March 1996 and the Commissioner gave approval in December 2003. The plaintiff then complied with the terms of the Commissioner’s approval.
  
• The writ was filed eight and a half years after the alleged accident. The accident was in March 1996 and the writ was filed in September 2004.
  

I put the label "unusual" on this set of facts as I expect that it is quite unusual for the Commissioner to grant approval to give notice of a claim more than seven years after the date when the notice should ordinarily have been given. Notice should have been given in September 1996. The Commissioner gave approval in December 2003.

The defendant submits that these unusual circumstances should not dissuade the Court from dismissing the proceedings, as they were commenced more than six years after the date of the alleged accident.

However the unusual nature of the case gives rise to a number of issues of law that require careful determination. These are:

• What is the cause of action in this case?
  
• Are the proceedings subject to Section 54 of the Motor Vehicles (Third Party Insurance) Act?
  
• Are the proceedings subject to Section 16 of the Frauds and Limitations Act?
  
• Does Part IV (disabilities) of the Frauds and Limitations Act apply?
  
• Can Section 54 be complied with more than six years after the date of the accident?
  
• When did the cause of action accrue?
  
• Are the proceedings time-barred?
  

WHAT IS THE CAUSE OF ACTION IN THIS CASE?

The basis of the cause of action is the alleged negligence of the driver of the PMV that was insured by the defendant.

It is important to identify the cause of action in view of the plaintiff’s alternative submissions which, as far as I can understand them, are that he seeks to sue the defendant for its negligence in not replying to his lawyers’ correspondence. The argument seems to be that this was negligent conduct and that has caused him distress, anxiety and frustration.

I see no merit in this submission. If what I have described is intended to be framed as a cause of action then it has been inadequately pleaded in the statement of claim.

The only properly pleaded cause of action in the statement of claim is the alleged negligence of the PMV driver which led to the alleged motor vehicle accident in which the plaintiff was injured.

ARE THE PROCEEDINGS SUBJECT TO SECTION 54 OF THE MOTOR VEHICLES (THIRD PARTY INSURANCE) ACT?

Yes.

The plaintiff is seeking damages arising out of the use of a motor vehicle on a public road. He was obliged to commence proceedings against the defendant under Section 54(1) of the Motor Vehicles (Third Party Insurance) Act. He did that. He obtained the Commissioner’s approval. He gave notice within the time allowed by the Commissioner. He therefore complied with Section 54(6) of the Act.

ARE THE PROCEEDINGS SUBJECT TO SECTION 16 OF THE FRAUDS AND LIMITATION ACT?

Yes.

A number of decisions of the National Court and the Supreme Court conceptualise negligence actions brought under the Motor Vehicles (Third Party Insurance) Act as actions based on statute, rather than on the common law tort of negligence. This is because Section 54 significantly changes the normal legal relationships that would apply when a person, who has suffered damages as a result of the negligence of an owner or a driver of a motor vehicle, wishes to sue the person responsible. (Carol Laime v MVIT [1995] PNGLR 224, National Court, Woods J; Tau Liu v Paul Tohian and The State (1997) N1615, National Court, Woods J; Sakaire Ambo v MVIT (2002) SC681, Supreme Court, Kapi DCJ, Sawong J and Davani J.)

When the dependant of a person who has died in a motor vehicle accident wishes to bring court proceedings, the dependant must commence the proceedings within three years after the death of the deceased. That requirement arises under Section 31 of the Wrongs (Miscellaneous Provisions) Act. The Supreme Court in Sakaire Ambo’s case confirmed that.

But what about a person who suffers bodily injuries? What limitation period are they subject to? In the National Court in Sakaire Ambo’s case, Sevua J held that it is three years (Sakaire Ambo v MVIT (1999) N2162). But when his Honour’s decision was appealed against, the Supreme Court restricted its judgment to the facts of that case, which were to do with the death of the plaintiff’s brother in a motor vehicle accident. The Supreme Court left open the question of the limitation period in the case of someone who is bodily injured.

In the present case Ms Naipet, for the defendant, argued that the limitations period is six years. She said that this period is imposed by the Frauds and Limitations Act. She relied on the decision of Brunton AJ in Pierce v MVIT [1988-89] PNGLR 480. His Honour held that a negligence action brought under the Motor Vehicles (Third Party Insurance) Act by someone injured in a motor vehicle accident, is an action founded in tort. Therefore Section 16(1)(a) of the Frauds and Limitations Act applies.

It seems strange that after many years of operation of Papua New Guinea’s compulsory third party insurance statutory scheme, there seems to be some doubt about what the limitations period is when a person is bodily – as distinct from fatally – injured in a motor vehicle accident. It is also perplexing that the leading case being put forward in a case of this nature is a fifteen-years old decision by the National Court.

Be that as it may, I agree with Brunton AJ’s decision in Pierce. Although a person who is bodily injured must commence court proceedings within the parameters of an Act, the basic principles of negligence – and the need to prove all elements of the tort of negligence – continue to apply. For that reason, an action brought under Section 54 is properly regarded as an action founded on tort. Therefore, in my view, Section 16(1)(a) of the Frauds and Limitations Act applies.

If I am wrong on that point, an alternative characterisation of a Section 54 action is that its purpose is to recover a sum, recoverable by virtue of enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture; in which case Section 16(1)(d) would apply.

In either case a Section 54 action must, generally, be brought within the period of six years commencing on the date on which the cause of action accrued. The exception is where the motor vehicle accident resulted in the death of a person. In that case, his or her dependants must commence proceedings within three years after the date of death, under Section 31 of the Wrongs (Miscellaneous Provisions) Act.

DOES PART IV OF THE FRAUDS AND LIMITATIONS ACT APPLY?

No.

Section 22 of the Frauds and Limitations Act provides scope for the standard six years limitation period to be extended if a person is under a disability on the date when their cause of action accrues.

Ms Konge submits that the term "disability" should be interpreted broadly. It includes a situation where a person is inconvenienced or disabled because of the failure of a proposed defendant to negotiate with them.

Ms Naipet, on the other hand, refers to Section 21 of the Frauds and Limitations Act, which is a deeming provision. Section 21 contains an exhaustive description of the circumstances in which a person will be deemed to be under a disability.

I am inclined to the view that the proper interpretation of "disability" is somewhere between those alternative submissions. Section 21 seems, actually, to be an inclusive definition. If a person is under the age of 21 years or is of unsound mind, he or she will be deemed to be under a disability. But what of a physical disability? The person would, in my view, be under a disability in the relevant sense.

However, it is not necessary for me to say much more on this issue. I am satisfied that the plaintiff was not under any disability in the sense referred to in Section 22. If his evidence is accepted, he was under a relatively minor physical disability for some time after the alleged motor vehicle accident. But this could not reasonably be regarded as impairing his ability to commence Court proceedings.

I conclude that there is no merit in the proposition that the plaintiff was disabled because of the failure of the defendant to negotiate or communicate meaningfully with him. Part IV of the Frauds and Limitations Act does not apply to the present case.

CAN SECTION 54(6) BE COMPLIED WITH MORE THAN SIX YEARS AFTER AN ACCIDENT?

Yes.

I have reached this conclusion by reading the provisions of the Frauds and Limitations Act alongside those of the Motor Vehicles (Third Party Insurance) Act.

The Motor Vehicles (Third Party Insurance) Act is a special piece of legislation. It prescribes a code for bringing what would otherwise be a common law action in tort for damages arising from motor vehicle accidents. Section 54(6) is central to the administration and enforcement of that code. Compliance with it, is an integral and essential component of the cause of action that accrues when a person is injured in a motor vehicle accident.

Section 16 of the Frauds and Limitations Act is a general provision which applies to many different sorts of court proceedings.

It is a principle of statutory interpretation that a specific provision will ordinarily be regarded as qualifying a more general provision. This is expressed in the maxim generalia specialibus non derogant.

There is no suggestion in the specific provision in the specific Act – Section 54(6)(a) of the Motor Vehicles (Third Party Insurance) Act – that it should be read subject to a general provision in a general Act – Section 16(1) of the Frauds and Limitations Act.

I therefore conclude that it is possible for the Insurance Commissioner to extend the time for the giving of notice beyond the six months period, even though the standard six-years limitations period has expired.

This is not to say that such a late grant of approval by the Commissioner ought to be encouraged. As I said earlier, it is one of the many unusual features of this case that the Insurance Commissioner decided to allow notice of the claim to be given more than seven years after it should have been given. That seems quite extraordinary, especially when, it seems, no reasons for that decision were given.

But the Commissioner made a decision. In the absence of any evidence or allegation to the contrary, it must be presumed that it was made in good faith and for good reasons.

I accept Ms Konge’s submission that if the defendant were aggrieved by the Commissioner’s decision it could have sought judicial review of it. There is ample precedent for such a course of action, eg MVIT v Dixon Popo (1992) N1048, National Court, Brown J, and MVIT v Insurance Commissioner (1998) N1725, National Court, Sevua J. In both those cases an order for judicial review was made. The Court in each case found that the Commissioner had erred in exercising the discretion under Section 54(6)(a) of the Act.

There has been no attempt in the present proceedings to challenge the exercise of the Commissioner’s discretion. Unless and until the Commissioner’s decision is set aside, it must be given effect.

WHEN DID THE CAUSE OF ACTION ACCRUE?

I accept the plaintiff’s submission that the relevant date is 22 December 2003.

The cause of action started to arise on the date of the motor vehicle accident, 16 March 1996. But that is not when it "accrued" for the purposes of the Frauds and Limitations Act. The giving of notice of a claim to the defendant is an integral part of the cause of action of a person who has been injured in a motor vehicle accident and takes action under Section 54 of the Motor Vehicles (Third Party Insurance) Act. (Rundle v MVIT [1988] PNGLR 20, Supreme Court, Kidu CJ, Bredmeyer J and Amet J.)

In the present case, notice was given to the defendant, in accordance with the Insurance Commissioner’s approval, on 22 December 2003. Giving of that notice was an essential ingredient or element of the plaintiff’s cause of action. So that is the date when the cause of action accrued.

ARE THESE PROCEEDINGS TIME-BARRED?

No.

The date on which the plaintiff’s cause of action accrued was the date on which he gave notice of his intention to make a claim against the defendant, 22 December 2003.

The plaintiff therefore had until 22 December 2009 to file proceedings against the defendant. He filed the proceedings on 20 September 2004. He was therefore within the six years limitation period provided for by Section 16(1) of the Frauds and Limitations Act.

REMARKS

I repeat that this is an unusual case, arising out of an unusual set of facts. The decision that the Court has arrived at might also be thought to be unusual. The Court is countenancing the commencement of court proceedings in relation to a motor vehicle accident more than eight years after the date of the accident. This has come about because the Insurance Commissioner decided to allow the plaintiff to give notice of his claim to the MVIL many years after it is usually required to be given.

The Court’s decision not to uphold the defendant’s application to dismiss the proceedings does not mean that people who are injured in motor vehicle accidents should delay giving notice of their claim to the MVIL. It does not mean that the plaintiff is entitled to any damages arising from the alleged accident. He still has to prove his case. Nor does it mean that the Court is taking a relaxed attitude to the time limits laid down by law. The Court is simply affording to the plaintiff the full protection of the law, as is his right under Section 37(1) of the Constitution.

ORDER

The order of the Court will be that:

• The defendant’s notice of motion dated 18 October 2004, seeking an order that the proceedings be dismissed for being filed out of time, is dismissed.
  
• The defendant shall pay the plaintiff’s costs of these proceedings, to be taxed if not agreed.
  

Orders accordingly.
_________________________

Lawyers for the plaintiff : Kopunye Lawyers
Lawyers for the defendant : Mirupasi Lawyers