Nimbil v Western Highlands Provincial Government [2013] PGNC 129; N5290 (23 May 2013)

N5290

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 590 of 1996

BETWEEN:

ROSA NIMBIL
Plaintiff

AND:

WESTERN HIGHLANDS PROVINCIAL GOVERNMENT
Defendant

Mount Hagen: Poole, J
2013: 23rd May

EVIDENCE – Calculation of economic loss – calculation to take into account taxation payable – Calculation on a broad general basis not necessarily tied to strict mathematical precision (BTC v Gourlly [1955] UKHL 4; [1956] AC 185 followed.) – Onus on plaintiff to satisfy Court even if defence does not dispute damage.

Cases cited:
Papua New Guinea Cases

Nil

Overseas Cases

Liesbosch Dredger v S.S. Edison [1933] AC 449C 459
BTC v Gourlly [1955] UKHL 4; (1956) AC 185

Counsel:

Mr.P. Kopunye, for Plaintiff
Ms Inia, for Defendant

23rd May, 2013

1. POOLE, J: Background: The Plaintiff is an uneducated woman from Dumbolo village near Banz in Jiwaka Province. Although she has no schooling, she is evidently an intelligent and enterprising woman who saved enough money from gardening and cooking to buy a PMV in 1989.

2. From then on, in addition to her village business activities, she organized and ran a successful PMV operation which grew until, by February 1995, she had a fleet of four PMVs, one of which was 15 seater Toyota (Registration No. P.5546) that was about 7 months old.

3. On the 27th April 1995, PMV No. P083S, was returning to Mt Hagen from Kudjip. It was carrying passengers and their personal possessions when, close to Anglimp on the Highlands Highway, it was involved in a collusion with vehicle being driven in the opposite direction to the PMV. It was owned by the Western Highlands Provincial Government. The PMV was damaged too badly to be economical to repair.

4. The Plaintiff instituted proceedings, by Writ of Summons and Statement of Claim filed on 1st July 1996, by which she claims Damages (including for economic loss) and Interest. On the 13th September 1996, the court entered Default Judgement on liability for the Plaintiff and this matter has proceeded on the basis of assessment of damages.

5. The undisputed facts of this cause may be briefly stated as follows:

• The Plaintiff's PMV was being driven by Kum Kip who, until the 27th April 1995 had never been in a traffic accident and had been driving PMVs for some 15 years.
  
• The Defendant's vehicle (HAB 343) collided with the Plaintiff's motor vehicle.
  
• The PMV was so badly damaged in the accident that it was beyond economic repair.
  
• The Plaintiff maintained 4 bank accounts in which she deposited money earned by the PMVs and from which she withdrew money for major business expenses.
  
• The Plaintiff paid VAT on purchase but did not submit income tax returns for her income, claiming that this was not known about in the village.
  
• The Plaintiff did suffer some loss – but the question of quantum is challenged and liability for the accident which caused the loss was, also, not admitted.
  

6. The facts in dispute are:

• Whether there is any, and if so, what, degree of contributory negligence attributable to the Plaintiff;
  
• What income was the P.M.V earning at the time of the accident?
  
• What was the value of the P.M.V when destroyed; and
  
• Upon what basis should any loss of income be calculated?
  

7. The Plaintiff is seeking damages for the loss she says she suffered as a result of her P.M.V being destroyed in the accident. The Defendant has not filed or served any documents disputing damages but, in matters of Assessment of Damages, the onus always rests with the Plaintiff to satisfy the Court that, because of negligence of the Defendant, a consequence was that the Plaintiff's property was damaged and that damage gave rise to a loss which can be measured in monetary terms. How this loss may be calculated with an acceptable degree of certainty is a matter which must vary with the facts of each case, and be decided on the merits of each case.

8. The Plaintiff's evidence is that hers was a "village business", and she had four bank accounts. She stated she was not accustomed to keeping business records in the same manner that people trained in record keeping would maintain them, but she "still had a sense of responsibility to save money in the bank and deal with all the payments in cash".

9. Her evidence was that she kept the daily cash takings from her four drivers and made all payments for wages and expenses, repairs and maintenance from that. When the cash accumulated to a reasonable sum she would deposit it in one of the bank accounts.

10. She carefully kept all dockets and receipts, but many of these were lost when her house was burnt during a police raid.

11. On the 27th April 1995, in two separate accidents at two different places, two of the Plaintiff's P.M.V's were destroyed, and the Plaintiff was put to the job of having to calculate just what she had lost in each accident.

12. The Court's findings on the quantum of damages the Plaintiff sustained in the accident the subject of this action are as follows:

1. The Plaintiff claims damages in the sum of K20,000 being the stated pre-accident value of her P.M.V.

2. The Plaintiff's evidence included that the Toyota 15 seater bus lost in this accident, was only some 7 months old. She also gave evidence in her affidavit that the bus had a pre-accident value of K20,000.00.

13. The value of a PMV when destroyed is its value "as a going concern at the time and place of the loss" (per Wright LJ in Liesbosch Dredger v S.S. Edison [1933] AC 449C 459).

14. In cases, such as this, where an article is damaged so badly as to be, in effect, destroyed, the measure of damage is the cost of replacement, rather than repair. The value of the damaged motor vehicle, if sold for scrap, is also taken into account, as the owner has a duty to mitigate (or reduce) his or her loss by recovering what he or she can by sale of the wrecked vehicle.

15. The Plaintiff also is claiming for loss of earnings which, but for the wreck of her PMV, she would have earned. She has carefully kept primary business records by way of her bank passbooks, invoices and receipts and these have been used as the basis for calculations of her claim for loss of earnings.

16. During the hearing of this matter, the Plaintiff told the court she had paid tax when she bought her P.M.Vs – she had been told some of what she was paying was tax. When questioned further about taxation on her earnings, however, she stated that she didn't know about this and that people in her village didn't understand such things.

17. It became clear that the Plaintiff's claim had not taken into account taxation liability on earnings and, in considering such a claim, the Court must take into account – tax liability on earnings and can allow only the net income after tax has been paid.

18. In reaching a determination, the Court, however, may do so on a broad, general basis without necessarily being tied to strict mathematical precision. (See BTC v Gourlly [1955] UKHL 4; (1956) AC 185).

19. I accept as the purchase price of the vehicle, taking into account depreciation and wear and tear and the cost of registering it so that it was a growing concern at the time of loss, and doing the best with the limited evidence, I am prepared to allow a value of K18,000 to the vehicle, as damages recoverable by the plaintiff for destruction of the vehicle.

20. The assessment of the damages arising from the loss of income from the 15 seater bus requires examination of the somewhat disorganized business records of the Plaintiff.

21. The Plaintiff's lawyer, in his submissions, adopted the approach of subtracting the average gross income after the 27th April 1995 (when two of the fleet of four PMVS were destroyed) from that earned before the loss of the vehicles and attributing half of the difference to each vehicle lost.

22. Such a method of calculation is an over simplification because it fails to take into account that three of the vehicles were 15 seater buses and the one was a 25 seater. Further, as the vehicles were engaged on different routes, there may have been considerable differences in weekly profitability.

23. It is necessary to look in more detail at the evidence to get a clearer picture of the income the Plaintiff got from the 15 seater bus which was destroyed, and, in particular, after careful consideration of the evidence I find:

• The Plaintiff's uncontradicted evidence is that she took good care of her vehicles and expected to keep her vehicles in service for a minimum of 3 and a maximum of 6 years.
  
• Her 25 seater bus earned from K250 to K300 per day and the 15 seaters from K180 – K200 each. The 25seater, therefore, earned approximately 33% more than a 15 seater.
  
• The Plaintiff's figures are that the 25 seater also cost about 33%more in running expenses than a 15 seater.
  
• The Plaintiff's evidence is that she gained a net monthly income, before the accident, of approximately K2600 to K3000 per month – of which it is proper, on the basis of the different gross earnings and costs between 15 seaters and 25 seater buses, to attribute approximately K870 per week to the 25 seater bus.
  

24. If the bus which was destroyed to be run in service for 4½ years and earns an average of K190 per week, the loss of income would be a gross (before tax) figure of K44, 460.00 and, while the figures are very general, I find, on the basis of the evidence presented, that to be a reasonable figure for the loss of income. This is calculated on the basis that the PMV was in service until the middle of the period the Plaintiff said she kept her vehicles in service.

25. As previously noted, however, the Court in awarding damages for loss of further earnings, must do so on the basis that all proper tax is paid on it. While I appreciate that the evidence of tax may vary from year to year in a business, if the calculation of earnings is done on a general basis, so should the deduction for taxation. I reduce the figure of K29, 640.00 by 20% for tax payable, which yields a figure of K35,618.00.

26. In summary, I find the Plaintiff's damages as:

• The loss of the 15 seater P.M.V, as claimed K20,000.00
• The loss of earnings from the 15 seater

PMV, over 4½ years, and after allowing for taxation

K35,618.00

K55,618.00

27. The formal Orders of the Court are:

1. The Plaintiff has judgement/or damages arising from the negligence of the Defendant. Such damages being;

(a) Special damages in the sum claimed of K20,000.00 for the loss of Toyota P.M.V reg. no. P5546.

(b) damages for loss of income, after allowance for tax, in the sum of K190 per week over 4½ years, in the sum of K35,618.00.

2. The Defendant shall pay interest the judgement at the rate of 8%.

3. The Plaintiff's costs shall be paid by the Defendant, such costs to be taxed if not agreed.

4. Time is abridged to the time of sealing of these Orders by the Registrar, which shall take place forthwith.

_________________________________________________________
P.C Kopunye Lawyers: Lawyers for the Plaintiff
Yobone Lawyers: Lawyers for the Defendant