Akai v Reeves [2020] PGNC 19; N8185 (10 February 2020)

N8185

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO.526 OF 2001

BETWEEN:
MICKY AKAI
Plaintiff

AND:
JOHN STANLEY REEVES
First Defendant

AND:
MICHAEL NEWALL WILSON
trading as WARNER SHAND LAWYERS
Second Defendant

Waigani: Dingake J
2019: 22^nd November
6^th & 9^th December

DAMAGES – assessment of damages on a claim on professional negligence - claim against a lawyer and the law firm who failed to prosecute plaintiff’s claim against Insurer timeously, leading to the matter being dismissed, and the plaintiff unable to recover the amount lost in insuring house - house destroyed by fire - failure of the defendants to prosecute the plaintiff’s claim timeously leading to dismissal of his claim, protracted litigation that ensued for decades - plaintiff suffering frustration, inconvenience, anxiety, stress, pain and suffering of which he is entitled to be compensated –judgment granted in favour of plaintiff by awarding general damages, cost of house and interest – costs follow event

Cases Cited:

Andale More & Manis Andale v Henry Tokam & The State (1997) N1645
Albert Areng v Gregory Babia & National Housing Corporation (2008) N3469
Kevin Patai v Niugini Lumber Merchants Pty Ltd & Ors (1997) N1602
Komaip Trading v George Waugulo and The State [1995] PNGLR 165
Lucas Diritala v Joe Jeffrey (2009) N3927
Magiten v Tabai (2010) N3916
Obed Lalip for himself and on behalf of Marae Kulap and Anor v Fred Sikiot and The State (1996) N1457
Paschal Feria v Ben Lange & The State (2009) N3574
Rodao Holdings Ltd v Sogeram Development Corporation Limited (2007) N5485
Rimbunan Hijau (PNG) Ltd v Ine Ibi & Others (2017) SC 1605
The State v Hodson [1987] PNGLR 241

Counsel:

Mr. Wesley Donald, for the Plaintiff
Mr. Robert Asa, for the Defendants

10^th February, 2020

1. DINGAKE J: This is a judgment on assessment of damages on a claim by the plaintiff against the defendants, for professional negligence.
2. The question of liability was settled on or about September, 2014, in proceedings titled SCA No. 108 of 2010. Thereafter, attempts by the parties to settle has not been successful.
3. This claim is against a lawyer and the Law Firm (the defendants) who failed to prosecute the plaintiff’s claim against the Insurer timeously, leading to the matter being dismissed, and the plaintiff unable to recover the amount of K68,378.00,being the policy cover for the house and its contents against the Insurer, in proceedings WS No. 32 of 1989.
4. It is a matter of grave concern to this Court that a matter first filed in 1989 in this Court still lingers on in the system and remains unresolved to date, and the potential prejudice to the parties, is simply astounding.
5. The material background facts to this matter turn on a narrow compass. Sometime in 1988 the plaintiff’s house, which he had insured with South Pacific Insurance Company (PNG) Limited, for K68,378.00 was destroyed by fire.
6. The Insurance Company repudiated liability, and the plaintiff instituted proceedings against it in WS No. 32 of 1989, which was eventually dismissed for want of prosecution and which precipitated this current litigation.
7. The house that was destroyed was situated at Pilapila Village, North Coast, Rabaul, East New Britain Province.
8. It is trite learning that judgment on liability resolves all questions of liability in respect of the matters pleaded in the Statement of Claim, and that the plaintiff is only entitled to lead evidence and recover such damages, as pleaded, as he may be able to prove. (Andale More & Manis Andale v Henry Tokam & The State (1997) N1645; The State v Hodson [1987] PNGLR 241; Kevin Patai v Niugini Lumber Merchants Pty Ltd & Ors (1997) N1602; Komaip Trading v George Waugulo and The State [1995] PNGLR 165 and Obed Lalip for himself and on behalf of Marae Kulap and Anor v Fred Sikiot and The State (1996) N1457).
9. By Writ of Summons with a Statement of Claim endorsed thereto, the plaintiff claimed the following:
   • (1) Damages.
   • (2) The sum of K68,378.00 being the sum claimed in the proceedings titled WS No. 32 of 1989 between himself and Southern Pacific Insurance Company (PNG) Ltd.
   • (3) Special damages.
   • (4) Interest pursuant to Statute.
   • (5) Costs of the proceedings.
   • (6) Such further orders deemed fit by the Court.
10. At the trial the plaintiff relied on the following affidavit evidence:
    1. Affidavit by Mickey Akai sworn on 22^nd of May, 2018 and filed on the 2^nd of July, 2018;
    2. Affidavit of Mickey Akai sworn on the 31^st of August, 2018 and filed on the 3^rd of September, 2018;
    3. Affidavit of Dennis Kivung sworn on 10^th of June, 2019 and filed on the 5^th of July, 2019;
11. Both the plaintiff and Mr. Dennis Kivung were cross examined at the trial. The plaintiff’s evidence was credible and unshaken. I find him to be a truthful witness.
12. The defendants did not file any affidavit evidence nor call witnesses, in opposition.
13. I have considered with extreme care the evidence relied upon by the plaintiff in support of his claim. The valuation report commissioned in 2008 by the plaintiff, by a private valuer, Moody Real Estate Ltd, places the value of the destroyed house, then (2008), at K411,458.59. This evidence has not been challenged by the defendants. The defendants have not objected to its admission or challenged it in anyway in their final submissions. It follows in my view that it stands to be accepted as truthful, which I hereby do. It is also instructive that the defendants led no evidence to rebut the evidence of the plaintiff. (Rimbunan Hijau (PNG) Ltd v Ina Enei& Others (2017) SC 1605).
14. The affidavit of Dennis Kivung, sworn on the 10^th of June, 2019, and filed on the 5^th of July, 2019 puts the value of the new house similar to the one that was destroyed at K49,885.04.
15. The plaintiff was unable to provide the Insurance documents as evidence because same was destroyed by fire.
16. On the evidence, I accept as probable, that the insurance cover of K68,378.00 was intended to put the plaintiff in the same position as he was before the house was destroyed in 1988. I similarly accept the evidence of the private valuer, Moody Real Estate Ltd, that puts the value of the house at K411,458.59 in 2008, as the probable replacement value.
17. I have also considered the evidence of Dennis Kivung referred to earlier. At the trial his capacity to come up with replacement costs at current prices was discredited. As it turned out, he was not a qualified Architect or building planner and seems to have relied on prices obtained at Port Moresby not where the destroyed house is located. For the above reasons, it is unsafe to rely on his evidence. The mere ownership of a construction company, as Mr. Kivung does, without more, does not give Mr. Kivung the knowledge or skill to do a bill of quantities which is a specialized skill.
18. The net result is that I find, that in all the circumstances of this case, having regard to the evidence and the justice of this matter, the replacement value of the house as at 2008 was K411,458.00. It is probable that the replacement value may have gone up since then and as to what the current (at the time of the trial in 2019) replacement value may be, this court has no evidence of the possible replacement value, and I would not engage in guess work.
19. I notice in the relief sought that the plaintiff claims “Damages” and later on “Special Damages”. Read contextually, “Damages” under para 10.1 of the Statement of Claim, must clearly be a reference to general damages. The defendants sought to suggest that since the plaintiff did not qualify the first damages, then, no general damages are being sought. I do not accept this argument by the defendants.
20. On the evidence tendered, I am satisfied that the failure of the defendants to prosecute the plaintiff’s claim timeously leading to the dismissal of his claim, the protracted litigation that ensued for decades, did cause the plaintiff frustration, inconvenience, anxiety, stress, pain and suffering of which he is entitled to be compensated. It would, in my mind, be unjust and unconscionable to leave him without a remedy.
21. The plaintiff claims general damages of between K500,000.00 or K5 Million, according to his lawyer’s submission. In their submissions filed on the 9^th of December, 2019, the defendants, correctly in my view, concede and say that, “we do accept that the plaintiff suffered some form of distress, pain and suffering”.
22. I have read, with profit, a number of cases that provide useful guidelines on how to approach the issue of general damages in similar cases to the present. These cases include:
    • (1) Rodao Holdings Ltd v Sogeram Development Corporation Limited (2007) N5485;
    • (2) Albert Areng v Gregory Babia & National Housing Corporation (2008) N3469;
    • (3) Lucas Diritala v Joe Jeffrey (2009) N3927;
    • (4) Paschal Feria v Ben Lange & The State (2009) N3574;
    • (5) Magiten v Tabai (2010) N3916
23. I have allowed myself to be guided by the above authorities. I have particularly taken into account the sentiments of my brother Cannings J in the case of Magiten cited above.
24. Having regard to the importance of a house in the life of any person and the time it has taken to seek justice, and the accompanying distress, frustration, inconvenience, pain and suffering, I consider an award of general damages in the amount of K200,000.00 to be fair and reasonable. The inconvenience and frustration necessarily suffered by the plaintiff in this case is not comparable at all to the cases I have referred to earlier, all of which were decided in the context of their circumstances.
25. I do not consider that special damages sought herein were clearly pleaded and or proved. The affidavit of the plaintiff sworn on the 31^st of August, 2018, deposes to various agreements in terms of which he says that he borrowed money from various people to fund his legal costs, air tickets, transportation, accommodation and meals with the undertaking in most instances, to pay back the money with 100% interest. I find no need to order legal costs in the manner requested. Costs are recoverable against a losing party as a general rule. There is also no justification why in the event such costs are recoverable from the defendants they should attract interest at the scale requested or at all. The plaintiff has also failed to provide any credible evidence of any costs incurred as claimed with respect to transportation, meals and accommodation, amongst others, in the form of receipts, related to this particular matter, and no other activity unrelated to this case.
26. The plaintiff is entitled to interest on all the sums granted in his favour and it is in the interest of justice that such interest should be reckoned from date of filing of this matter as a practical attempt to restore the plaintiff to the position he would have been had it not been for the negligence.
27. With respect to costs, I see no reason why costs should not follow the event.
28. In the result, judgment is granted in favour of the plaintiff, and against the defendants, in the following terms:
    1. General damages in the amount of Two Hundred Thousand Kina (K200,000.00);
    2. The replacement value of the house and or insured property in the sum of Four Hundred and Eleven Thousand, Four Hundred and Fifty-eight Kina, Fifty-nine Toea (K411,458.59);
    100. Interest at the rate of 8% on (a); and (b) above reckoned from the date of filing of WS No. 526 of 2001.
    5. Costs of suit.

_______________________________________________________________Donald & Company Lawyers: Lawyers for the Plaintiffs
Warner Shand Lawyers: Lawyers for the Defendants