McLean v Carmichael [1969] PGSC 27; [1969-70] PNGLR 333 (13 July 1970)

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DAMAGES - Loss of expectation of life - Reasonable sum in Papua and New Guinea - Quantum - Law Reform (Miscellaneous Provisions) Ordinance 1962, s. 9.

DAMAGES - Death - Loss of dependency - Benefits accrued to plaintiff from death - Life policy payment - Succession to deceased’s estate - Whether taken into consideration - Law Reform (Miscellaneous Provisions) Ordinance 1967, s. 13.

In assessing under the Law Reform (Miscellaneous Provisions) Ordinance 1962, s. 9, damages for loss of expectation of life, the range of earnings of all inhabitants, irrespective of race, of the Territory of Papua and New Guinea should be taken as the monetary standard and, social position and worldly possessions being irrelevant, the sum assessed should be applicable, with variation in a small compass, to all persons in the Territory.

The deceased, an Australian aged twenty-eight years at his death in 1967, was residing in the Territory, was of good health, and was employed as a coastal shipping manager under contract. The deceased, together with his wife, conducted a small farm; he was energetic, and was looking forward to taking over a plantation, and had before him the prospect of a long and happy life.

That damages for loss of expectation of life recovered by the deceased’s estate should be assessed at $800.

In assessing damages for the pecuniary loss sustained in consequence of a death, any gain (including insurance money, the estate left by the deceased, the acceleration or lost accumulation thereof that may have been effected had the deceased survived and to which the claimant may have succeeded) is, under the Law Reform (Miscellaneous Provisions) Ordinance 1967, s. 13, irrelevant.

In an action commenced by Ruth Marie Ferreira McLean (the plaintiff) in the Supreme Court of the Territory of Papua and New Guinea against William Henry Carmichael, Burns Philp (New Guinea) Ltd. and Australasian Petroleum Company Pty. Ltd. (the defendants), the plaintiff was awarded judgment against the defendants for damages to be assessed. The plaintiff’s claim was for damages in respect of the death of her husband Neil Robin McLean whose death was caused by the negligence of the defendants.

This report is limited to the assessment of damages for loss of expectation of life and to the question of what benefits from the death are within the Law Reform (Miscellaneous Provisions) Ordinance 1967, s. 13.

FROST J: This is an inquiry as to the amount of damages the plaintiff is entitled to recover under a judgment against the defendants for damages in respect of the death of her husband Neil Robin McLean who, on 14th October, 1967, died by electric shock caused by an electrical installation negligently installed by the defendants.

The action is brought under the Law Reform (Miscellaneous Provisions) Ordinance 1962, Pt. IV, which is the Territory counterpart of the Fatal Accidents Acts of England, for pecuniary loss consequent on death, so that it is necessary to consider the financial circumstances of the parties.

At the time of death the deceased was aged twenty-eight years and the plaintiff thirty-three years. They were married in March 1966. The deceased was in excellent health as is the plaintiff; her husband was of robust constitution and engaged in strenuous sports. He was employed by the defendant, Burns Philp (New Guinea) Ltd., as coastal shipping manager under a two year contract which was to expire on 20th March, 1969, at a salary of $300 per month. The plaintiff also worked, being employed as a clerk in a senior capacity by the Royal Papua and New Guinea Constabulary at a salary of $141 per fortnight. The couple had the leasehold of a small farm at Seventeen-Mile near Port Moresby which they worked as a market garden and this took all their spare time, for they went there nearly every day. They ran a car, which in view of the use it was put to, involved rather heavy running expenses. Under the deceased’s will, the plaintiff received $23,471 of which $20,000 was payable under a policy of insurance on his life.

[His Honour considered the financial circumstances of the deceased and the plaintiff, his widow, and continued:] The plaintiff’s case consisted of two main claims, the first for loss of expectation of life and the second for the pecuniary loss the plaintiff has suffered in consequence of her husband’s death. Before the Law Reform (Miscellaneous Provisions) Act, 1934 of England, it was recognized that an injured person was entitled, if liability was proved or admitted, to recover damages for loss of expectation of life. The effect of that Act was that if the death of a person was caused by a wrongful act or neglect which would have entitled him (if death had not ensued) to an action for damages in respect thereof, that cause of action survived after his death for the benefit of his estate. The corresponding section in the Territory is s. 9 of the Ordinance, and as there is no statutory provision that this cause of action is not to survive, the plaintiff as administratrix is entitled to sue for damages in respect of loss of expectation of life.

After the passage of the English Act widely varying amounts were awarded under this head until the decision of the House of Lords in Benham v. Gambling[cdxcv]¹ in which the House reduced the damages that had been awarded in respect of the loss of expectation of life of a child aged two and a half from śl,200 to ś200. Viscount Simon L.C.[cdxcvi]², in whose judgment all the Law Lords agreed, said that the question resolved itself “into that of fixing a reasonable figure to be paid by way of damages for the loss of a measure of prospective happiness”. It was plain that he considered that each case must be individually considered in view of his words that “before damages are awarded in respect of the shortened life of a given individual under this head, it is necessary for the Court to be satisfied that the circumstances of the individual life were calculated to lead, on balance, to a positive measure of happiness, of which the victim has been deprived by the defendant’s negligence”. But “no regard must be had to financial losses or gains during the period of which the victim has been deprived. The damages are in respect of loss of life, not of loss of future pecuniary prospects . . . the degree of happiness to be attained by a human being does not depend on wealth or status.” His Lordship concluded that “very moderate figures should be chosen”.

Thereafter in England, with rare exceptions, ś200 was taken as the invariable figure for the ordinary adult death. “The House had lowered the figure from what would presumably otherwise have been the standard because of the extreme youth of the child and then raised it because of his most favourable circumstances”: Naylor v. Yorkshire Electricity Board[cdxcvii]³. In that case the House again considered the matter. Taking the facts from the headnote, the deceased was a young man of twenty years of age who was killed by an electric shock while employed by the appellant as a jointer’s mate. He was a happy, healthy young man who would probably have become a jointer at the age of twenty-one had he lived. He had become engaged to be married one week before he was killed. In an action by his mother, as administratrix of his estate, for damages on behalf of his estate there was unchallenged economic evidence that since 1941 (the year in which Benham v. Gambling[cdxcviii]⁴ was decided) the purchasing power of the pound had declined by two and a half times. Ashworth J. awarded ś500 (which was in fact the current equivalent of ś200 in 1941) for loss of expectation of life which, on appeal, the Court of Appeal increased to ś1,000. The House of Lords upheld the appeal and restored the trial judge’s award of ś500. The House held that the variation in the sum to be awarded is in small compass and reaffirmed that in all cases a very moderate figure should be chosen. The respondent submitted that it was wrong to take the figure of ś200 as if the current equivalent had been settled for all time, and that the sum to be awarded was to be measured in the light of all relevant circumstances, which was the argument which had been accepted by the Court of Appeal.

Viscount Dilhorne, referring to Benham v. Gambling[cdxcix]⁵, said[d]⁶: “This House did not say what sum should be awarded in all cases or say what was the minimum or maximum figure that should be given. It gave guidance as to the approach to be made when assessing damages for this loss and, while it recognized that the particular circumstances of the deceased might properly lead to a variation in the amount awarded, it held that it should be a very moderate figure”, and he held that the judgment of Ashworth J. should not be interfered with. Lord Morris of Borth-y-Gest took the same view. He recognized that each case should be individually considered[di]⁷, but in stating that it was proper to refer to what had been assessed in other cases[dii]⁸, he seems also to have recognized that a conventional sum was necessarily involved. Indeed, there can be little variation in the sum to be awarded if a very moderate figure is to be chosen, as is indicated in the speech of Lord Guest when he said that a “slightly higher” award may be justified in the case of an adult than for a very young child[diii]⁹. However, both Lord Devlin and Lord Upjohn expressly held that in the ordinary case the damages to be awarded for loss of expectation of life must necessarily be a conventional sum.

The following passage from the speech of Lord Devlin, in which he refers to the respondent’s argument, I think should be set out in full[div]¹⁰:

“The difficulty about the argument is that it is only in a most exceptional case that the principles laid down in Benham v. Gambling[dv]¹¹ admit of any flexibility in the result. Every assessment of general damage for physical injury, whether it causes loss of life or of a limb or of a faculty, has got to start from the basis of a conventional sum. If it did not, assessments would be chaotic. Every judge has within his knowledge not only the figure of Ł500 as the conventional sum appropriate to loss of life, but a number of other conventional sums appropriate to losses of limbs and faculties. But the conventional figure for loss of a limb or a faculty is only the starting-point for a voyage of assessment which may, and generally does, end up at a different figure. To a great reader the loss of an eye is a serious deprivation; the value of a leg to an active sportsman is higher than it is to the average man. Then there is usually some additional financial loss, actual or potential, to be taken into account.

“But while the loss of a single faculty may be more serious for one individual than for another, the loss of all the faculties is, generally speaking, the same for all. Thus for loss of expectation of life the conventional figure has become the norm, unless the case is definitely abnormal. What, then, apart from the special case, would justify an increase or reduction in the price of happiness? No one—least of all any lawyer—can tell. The directions laid down in Benham v. Gambling[dvi]¹² are such that, except in a strictly defined minority of special cases, the starting-point for the assessment must also be the finish. In Rose v. Ford[dvii]¹³ Lord Wright, having said that damages must be fair and moderate, foresaw that special cases might ocur ‘such as that of an infant or an imbecile or an incurable invalid or a person involved in hopeless difficulties’. Viscount Simon L.C. in Benham v. Gambling elaborates on this. Except for the extremities of childhood and old age, prospective length of years makes no difference. Social position and worldly possessions are also irrelevant.

“Nevertheless the figure of ś500 is, when compared with awards arising out of comparatively slight physical injury, extremely low. It is not immediately obvious why, as Viscount Simon L.C. says[dviii]¹⁴, ‘damages which would be proper for a disabling injury may well be much greater than for deprivation of life’. Compensation for the diminution of happiness due to the amputation of a leg cannot logically be less than compensation for happiness lost altogether. Nor is it immediately obvious why loss of happiness that is caused by prolonged unconsciousness should command higher compensation than a similar loss caused by death. The fact is that the whole of this branch of the law has been settled on what Lord Wright in Rose v. Ford[dix]¹⁵ called ‘the basis of convenience rather than of logic’. The law has endeavoured to avoid two results, both of which it considered would be undesirable. The one is that a wrongdoer should have to pay large sums for disabling and nothing for killing; the other is that the large sum appropriate to total disablement should come as a windfall to the beneficiaries of the victim’s estate. To arrive at a figure which avoids these two undesirable results is a matter for compromise and not for judicial determination. . . . It would, I think, be a great improvement if this head of damage was abolished and replaced by a short Act of Parliament fixing a suitable sum which a wrongdoer whose act has caused death should pay into the estate of the deceased. While the law remains as it is, I think it is less likely to fall into disrespect if judges treat Benham v. Gambling[dx]¹⁶ as an injunction to stick to a fixed standard than if they start revaluing happiness, each according to his own ideas.”

Since the decision of the House of Lords, the same issue was considered by the Court of Appeal in Cain v. Wilcock[dxi]¹⁷. In that case an award of Ł500 for loss of expectation of life for a child aged two and a half years was challenged in that no allowance was made for the tender years of the child. The Court of Appeal held that ś500 could not be regarded as other than a moderate award and dismissed the appeal. Willmer L.J. said, and I follow the headnote, that the Court should not enter into minute calculations in cases of this character; generally speaking it would be wise to stick, except in very exceptional circumstances, to that which may be regarded as the conventional, although admittedly artificial figure.

In the States of Australia, except Queensland, the right to claim damages for curtailment of expectation of life has been abolished by legislation (see, for example, Administration and Probate Act 1958 (Vic.), s. 29(2)(c)(iii)). There are two reported decisions of the Supreme Court of Queensland in recent years, both decided before Naylor v. Yorkshire Electricity Board[dxii]¹⁸. In Gillies v. Hunter Douglas Pty. Ltd.[dxiii]¹⁹, at the time of his death, the plaintiff’s former husband was aged twenty-nine years, and they had one daughter aged seven and a half years. He was employed as a senior salesman on a gross salary of ś1,300 per year, with the use of his employer’s car; he had a secure future. The Court (Mack J.) assessed damages for loss of expectation of life at ś750. In Smith v. Cupples[dxiv]²⁰, Stable J. assessed damages of ś1,000 under the same head, the deceased being a constable first class in the Queensland Police Force, aged thirty-five years. The damages awarded in Queensland are thus in excess of the Australian equivalent of the conventional sum of ś500 in England.

I now turn to the facts of the present case. All the indications are that the deceased had before him the prospect of a long and happy life. He was happily married and wanting a family. He loved outdoor sport, he was energetic and looking forward to taking over the plantation which, apart from the material gains which are irrelevant on this branch of the case, was certainly a large enough venture to satisfy his ambition. I am to apply the law as laid down by the House of Lords, and whilst the sum awarded in Naylor v. Yorkshire Electricity Board[dxv]²¹ is some guidance, the quantum of damages must be arrived at having regard to the very different circumstances of the Territory. In a population of over two million there are fewer than 60,000 persons of European and Asiatic origin, and their incomes are at least as much and in many cases higher than for comparable work in Australia. The great majority of the indigenous people are villagers engaged in subsistence agriculture, although more and more are gaining small cash incomes. For those in the public service or private industry, the rate of remuneration is only a fraction of the rate for Europeans. Mr. Wood submitted that I should have regard only to the circumstances of the deceased as an expatriate Australian, and that the cases of the villager and the native-born person in employment should be left for consideration when they arise. Mr. White submitted that I should take a single conventional sum for the Territory and, bearing in mind that the level of incomes for native-born persons is increasing even if the steps forward are in some cases small, it should be not more than of the order of $1,000.

The conclusion I have reached is that in arriving at a reasonable sum, whilst I must leave out of account for this purpose the case of the tribesman living in his remote valley, I should take as a monetary standard the range of earnings of all people who live in the Territory, irrespective of race. As both “social position and worldly possessions are . . . irrelevant” (Lord Devlin[dxvi]²² ), the sum I arrive at, I recognize, will then be one applicable, with variations in a small compass, to all persons in the Territory. The deceased is thus not to be treated as an Australian and his case judged on Australian standards, but rather as one of the more affluent members of a single community which includes at the other end of the material scale unskilled workers, who earn much less than the incomes for comparable work in Australia, the villager and the unemployed. The need for restraint is shown by the fact that it is entirely irrelevant that the deceased met his death in this case by an accident which is normally covered by insurance. I consider that in the present case a reasonable sum is $800, for I consider that any higher sum would not, in the circumstances of the Territory, be regarded as a very moderate one.

Before leaving this part of the case, I should refer to Lord Devlin’s suggestion that Parliament should fix a suitable sum to be paid into the estate of the deceased for this type of claim. In my opinion in the circumstances of the Territory to which I have referred, an even stronger case exists for such a legislative provision. In enacting the Law Reform (Miscellaneous Provisions) Ordinance 1967 which provides for a solatium limited to $600 to be awarded to the parents of a child wrongfully killed, the Territory legislature has already dealt with a similar problem. But it is doubtful whether it was recognized that the South Australian statute (Wrongs Act Amendment Act, 1940, as amended) on which the 1967 Ordinance was modelled, was enacted on the very different legal basis that the action for damages for loss of expectation of life had been abolished in South Australia (Survival of Causes of Action Act, 1940, s. 3(b)). Accordingly, whether or not Lord Devlin’s suggestion is adopted in the Territory, it would seem that consideration should be given to the repeal or widening of the provisions of the 1967 Ordinance as in South Australia for otherwise the parents of a deceased child will remain entitled to receive both the statutory solatium and also damages for loss of expectation of the child’s life, whilst, on the law as it now stands, the wife or husband is limited to the latter claim only in respect of the death of a spouse.

I turn now to the plaintiff’s claim for pecuniary loss in consequence of the death of her husband. The claim is to be decided upon the same principles as are applicable in England, with one exception to which I shall immediately refer. In assessing damages under this head, the Territory Ordinance, following the English legislation, provides that there shall not be taken into account sums payable under a contract of insurance on the death of the deceased, etc. but goes further in exempting “any benefit or gratuity in cash or in kind received as a result of the death by a person for whose benefit the action is brought”: Law Reform (Miscellaneous Provisions) Ordinance 1967, s. 13. In my opinion, in effect, s. 13 is the same as s. 7 of the Law Reform Act, 1936 of New Zealand which provided that “in assessing damages in any action under the Principal Act there shall not be taken into account any gain whether to the estate of the deceased person or to any person for whose benefit the action is brought, that is consequent on the death of the deceased person”. The Supreme Court (Ostler J.) held that the words “any gain . . . to any person for whose benefit the action is brought, that is consequent on the death of the deceased person” were so wide and clear that it was impossible to hold that they could have any other than their literal meaning and must have been intended by the legislature to include any gain to the plaintiff from the deceased’s estate: Alley v. Buckland[dxvii]²³. I consider that the Territory provision has the same meaning and consequently not only are the insurance moneys left by the deceased irrelevant, but also the estate actually left by the deceased and any acceleration thereof or which he might have accumulated had he lived his life out, and to which the plaintiff would have probably succeeded.

[His Honour then dealt with the plaintiff’s claim for pecuniary loss in consequence of the death of the deceased, and assessed damages in respect thereof.]

[cdxcv][1941] A.C. 157.

[cdxcvi][1941] A.C., at pp. 166-167.

[cdxcvii] [1968] A.C. 529, at p. 548 per Lord Devlin.

[cdxcviii][1941] A.C. 157.

[cdxcix][1941] A.C. 157.

[d][1968] A.C., at p. 540.

[di][1968] A.C., at p. 544.

[dii][1968] A.C., at p. 545.

[diii][1968] A.C., at p. 547.

[1968] A.C., at pp. 549-550.

[dv][1941] A.C. 157.

[dvi][1941] A.C. 157.

[dvii] [1937] A.C. 826, at p. 850.

[dviii][1941] A.C., at p. 168.

[dix][1937] A.C., at p. 841.

[dx][1941] A.C. 157.

[dxi][1968] 1 W.L.R. 1961.

[dxii][1968] A.C. 529.

[dxiii][1963] Q.W.N. 31.

[dxiv][1962] Q.W.N. 47.

[dxv][1968] A.C. 529.

[dxvi][1968] A.C., at p. 549.

[dxvii][1941] NZGazLawRp 56; [1941] N.Z.L.R. 575.

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Supreme Court of Papua New Guinea

McLean v Carmichael [1969] PGSC 27; [1969-70] PNGLR 333 (13 July 1970)

Papua New Guinea Law Reports - 1969-70