Motor Vehicles Insurance (PNG) Trust v Etape [1994] PGSC 12; [1994] PNGLR 596 (1 July 1994)

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APPEAL - Supreme Court - Quantum and liability - Claim for economic loss not pleaded with particularity - Leave granted on factual matters.

John Etape, in a damages claim for personal injuries, was awarded a total judgment of K91,553, which included K51,000 for economic loss. The Motor Vehicles Insurance Trust (MVIT) appealed against the economic loss component of the award on the basis that it had not been pleaded in the statement of claim and, also, that the evidence did not support the quantum assessment.

N1>1. As the MVIT did not object at the trial to the plaintiff leading evidence as to economic loss, there was no error of law in allowing it in.

N1>2. As there was no factual evidence on the plaintiff's probability of re-employment to a pre-accident or equivalent position, the trial Judge made an error in finding that there was no probability of such re-employment.

N1>3. Pursuant to s 6 of the Supreme Court Act, the Supreme Court may substitute a finding on evidence before the trial Judge. The evidence showed a diminution of income of K21 per fortnight. In the absence of further evidence, this was the appropriate figure to project forward for anticipated future loss.

N1>4. Total judgment of K37,313 awarded, plus interest at the rate of 4% in accordance with the Judicial Proceedings (Interest on Debts Damages) Act.

KAPI DCJ BROWN KONILIO JJ: This is an appeal from the judgment of Woods J in the National Court, given at Mount Hagen on the 1 June 1992, where the plaintiff succeeded in a damages claim for personal injuries and other financial loss suffered as a result of a motor vehicle accident. The appeal relates to both matters of fact and law and where necessary, leave is granted to pursue the appeal in relation to the factual matters for the reasons which will become apparent.

The appellant says that the trial Judge erred in law by allowing evidence to be given by the plaintiff in respect of economic loss when it had not been pleaded in the statement of claim. Further, the appellant says the trial Judge erred in law in finding an award of K51,000 on the basis of the evidence led in relation to such economic loss. The factual matters which the appellant criticises relate to the trial Judge's finding that the plaintiff was unable to work at all for over 14 months from the date of the accident on the 4 June 1989. It contends that the award of K8,178 for past salary loss was erroneous and, further, the award of K2,494.80 relating to lost housing benefits also was unsubstantiated on the evidence. The appellant seeks orders setting aside the judgment in the total amount of K91,553.53 and asks that this Court substitute a judgment in an amount of K30,330.73, which represents the general damages and specific out-of-pocket expenses.

The appellant points to the statement of claim, the original pleading, as the document which states the extent of the plaintiff's claim for damages. In that document, the plaintiff claimed general damages and particularised the injuries and disabilities alleged. The plaintiff went on to claim special damages, "particulars of which would be provided prior to trial". Para 8 of the statement of the claim was to the following effect:

N2>"8. By reason of the driver's negligence the plaintiff alleges that he has suffered and will continue to suffer loss of enjoyment of life, pain and suffering, loss of amenities of life, continuing disabilities and loss of income earning capacity that he will incur the cost of further hospital and other related treatment."

Putting aside the allegations which relate to his claim for general damages, the appellant says the plaintiff has failed to plead with any particularity a claim for past or future wage loss, a claim for loss of housing entitlements, or a claim for the economic consequences of his alleged loss of earning capacity. As a consequence, the trial Judge had erred in law by entertaining such a claim at the hearing and allowing evidence in that respect

The appellant's argument was that the deficiency in pleading, contrary to the mandatory requirements of O 8 r 33(1)(b) and (c) of the National Court Rules, effectively precluded the trial Judge from an award in relation to these alleged financial losses. Where there is no pleadings covering special damages of this nature, Mr Kandakasi for the appellant says that there can be no award, even if there is some evidence on point.

The appellant quite rightly points out that there has been a complete failure on the part of the plaintiff to comply with the requirements of O 8 r 33, more particularly that no material facts were stated on which the plaintiff sought to rely giving rise to the alleged loss of income-earning capacity. No particulars, whether of wage loss, housing entitlements, or anticipated wage loss were provided. With those submissions we must agree for clearly, on the statement of claim, there is an absence of facts or particulars.

O'Leary AJ, whilst dealing with the New South Wales Supreme Court Rules (which correspond with the rules of the National Court), said in Principles of Practice and Procedure (Butterworths 1976) at 10.307 "besides requiring that certain matters be pleaded specifically, the rules also contain a number of provisions which require a party to furnish in or with his pleadings, particulars of his claim or defence or other matter pleaded".

In Philliponi v Leithead (1958) 76 WN (NSW) 150, the Court noted that the function of particulars "is to let (a party) know what case he will have to meet and to enable him to know what evidence he ought to be prepared with". The object is to "ensure, as far as is practicable, that proceedings between parties will result in a determination of the rights of the parties according to law and to limit, if not eradicate, the number of cases in which technicalities can cause the proceedings to miscarry. Generally speaking, justice will be more readily and speedily attained if each party is fully aware of the precise nature of the allegations made by the other".

Particulars are, in fact, an extension of the pleadings - they control the generality of the pleadings. In Pilato v Metropolitan Water Sewerage and Drainange Board (1959) 76 WN (NSW) 364, McClemens J said at 365:

"Pleadings define the issues in general terms. Particulars control the generality of the pleadings and restrict the evidence to be led by the parties at the trial and give the other party such information as may enable him to know what case he will be met with at the trial and prevent surprise. Evidence enables the tribunal, within the ambit of the general definition of the issues, affected by the pleadings and limited by the particulars, to decide where the truth lies".

We consider those statements of principles enunciated in the decisions relied on by O'Leary AJ in his treatise effectively explain the rationale behind the National Court Rules, which so far as O 8 r 33 are concerned, must be categorised as a code of pleadings. Where the plaintiff, however, is allowed to embark at the trial on matters which are generally included in his allegation of "loss of income earning capacity" by calling evidence relating to his salary loss, for instance, the defendant cannot complain unless he objects at the time before the trial Judge and is overruled. No such objection was made at the trial to the evidence which the plaintiff sought to lead in the absence of particulars.

We would reiterate what this Court said in MVIT v Pupune [1993] PNGLR 370, that where evidence is led without objection, a court is entitled to make findings on the basis of such evidence, provided it is within the general ambit of the plaintiff's claim. Here, the general ambit included both general damages for injuries suffered and a claim for loss of income-earning capacity. Loss of wages in those circumstances may well illustrate the loss of income-earning capacity.

The appellant's claim must fail so far as it relates to the trial Judge's alleged mistake in law in allowing the evidence of loss of wages and associated future earnings, for the Trust had not taken the point at the trial.

There remains, however, the question of whether the trial Judge was correct in assessing damages to the extent that he has for loss of wages, housing benefits, and future reduced earning capacity. Mr O'Connor, for the respondent to the appeal, concedes that the trial Judge has misconstrued the evidence so far as it relates to the wage loss immediately after the accident; Etape v MVIT [1992] PNGLR 191 at 193. He says that the injured plaintiff was in receipt of his salary whilst he was off work until his resumption on 24 March 1990. The evidence of that claim for past wage loss at the rate of K174 per fortnight from 4 June 1989 to 24 March 1990, totalling K8,178, was given by the plaintiff. The plaintiff, in fact, conceded that the company paid him whilst he was recovering. He went back to work in Mount Hagen, not Banz, where he was the branch manager when the accident happened. He gave evidence that he slept in a company house at Banz rent free but that he now pays rent in Mount Hagen. Mr Henry John Cannon, who could be described as Bromley and Manton's auditor in Mount Hagen, gave evidence for the plaintiff. He said that the plaintiff had been working with Bromley and Manton since 1968, when he was at Wapenamanda. He said that since the accident the plaintiff had been unable to carry out his duties as a storeman, but that he has been retained by the company because, as Mr Cannon put it, "The company looks after its honest workers, so keeps him on". So far as his future job prospects are concerned, Mr Cannon said, "He is going nowhere. When he gets any compensation, he would go. I have difficulty in explaining his employment. He only has his employment now because of company loyalty. I would have to say that the plaintiff would have trouble getting re-employed because of his physical condition."

Mr Cannon was not examined by the plaintiff's lawyer in relation to the plaintiff's conditions of employment. There was no evidence from the proper officer of the company, detailing the plaintiff's wages, terms, or conditions of employment insofar as any entitlement to housing was concerned. There was, needless to say, no cross-examination by counsel for the appellant/defendant on those aspects.

In our view, the Court erred in making findings, as it did, on the plaintiff's conditions of employment in the absence of any verification by the company, Bromley and Manton. The appellant's statement of his housing entitlements, for instance, is not the best evidence and cannot bind the company, his employer. We say this having regard to the appellant's argument before us, relying as he does on the tax scale schedule, that the plaintiff's evidence of his salary and entitlements before the accident cannot be reconciled with that schedule. The respondent has conceded the plaintiff was paid his wages whilst off work. The evidence of the plaintiff's wage entitlements after he recommenced in Mount Hagen was by way of a salary slip tendered to the Court on trial. The employer's liability to deduct from source taxation instalments as and when they fall due from salary payable to an employee is a statutory liability which need not concern us in our deliberations on this appeal. Suffice to say that there was evidence of a gross fortnightly wage payment of K155.90 for the fortnight ending the 14 December 1991, and there was evidence of a pre-accident fortnightly wage of K177 per fortnight. The difference, rounded to the nearest kina, is K21 per fortnight.

The degree of probability of future hypothetical events, such as the likelihood of this man been unemployed for the rest of his working life or suffering a diminution of salary as a result of his injuries, must be assessed by the trial Court. On the evidence as it stood, we are not satisfied on the balance of probabilities that the trial Judge was entitled to make the findings of total incapacity for work for the remainder of his working life, as he had. The evidence was to the contrary. The plaintiff was, in fact, employed by Bromley and Manton, and whilst Mr Cannon expressed an opinion that gave rise to the trial Judge's finding, that he would after trial be unemployed, the fact is that he was still working. The Judge's assessment on no evidence of the expected duration of such unemployment must be categorised as an error in law. The appellant points to that part of the judgment where the trial Judge says at p 194:

"With respect to future loss I cannot calculate that at the full loss of income as it is clear that he is able to do some work. However, it is clear that he has lost all opportunity of earning the former salary of K174 (sic) together with the accommodation benefit. On the other hand, I do not think I can assume that he will always be able to earn K143 net a fortnight. I must, therefore, assess an amount to take some account of the former total salary and benefit and the possible lesser income he may be able to earn. I will estimate a figure of K120 per fortnight until he attains the age of 55 years. He is now about 29 years. I will calculate the future loss on the 3 per cent tables for 26 years. This comes to K56,820. I will reduce this to K51,000 to allow for the vicissitudes of life."

The trial Judge, stated that the plaintiff was capable of some work. The evidence, as shown above, points to a diminution of income of some K21 per fortnight.

We consider a correct approach, where there is factual material in support of a diminution of income, as there is in this case, to allow a projection of that amount beyond the date of trial as the anticipated future loss. In the absence of any evidence of the likelihood of re-employment of a man with a good work history, despite his disabilities; in the absence of any evidence before the trial Judge of the possibility of job opportunities arising not only in Mount Hagen but at his home village, Tari in the Southern Highlands; we do not consider it is open to the trial Judge to discount any such possibilities altogether, as he has done in this case. The probabilities of re-employment must be determined on factual material. The judge shoud not speculate about imponderables. There has been an error in the Judge's assessment of the plaintiff's opportunities in the absence of any factual material on the question. Mr Cannon's evidence went only to the plaintiff's continued employment as Mr Cannon's assistant in the Audit Department. It did not bear, for instance, on the possibility of re-employment as a storeman or counter clerk. Nor were questions directed to Mr Cannon in relation to his experience in the business of trade stores in the Highlands sufficient to warrant giving credence to his opinion on this plaintiff's re-employment prospects.

The appellant relies on s 6 of the Supreme Court Act Ch 37, which provides for the Court's powers on appeal. Section 6(2) provides that this Court has all the powers, authority, and jurisdiction of a Judge exercising the jurisdiction of the National Court. In the circumstances, this Court may substitute a finding on evidence before the trial Judge. In this case, we consider the evidence is that it would be proper to project an assumed loss of K21 per fortnight as diminution of income. We, accordingly, propose to allow 25 years, the balance of the plaintiff's working life, at the rate of K21 per fortnight as diminution of income as a result of the plaintiff's injuries suffered in the accident. Applying 3% tables for that period to reach the present value of such a loss gives K9,681. We consider there should be a deduction from that sum to allow for the vicissitudes of life. The trial Judge applied approximately a 10% deduction. We consider that deduction somewhat low in the circumstances of the Highlands where motor vehicle accidents and tribal fights are endemic. We also have no statistics of the likelihood or otherwise of a worker aged 29 at date of trial continuing to remain in paid employment until the age of 55. In the circumstances, however, in the absence of any material on those questions, we do not propose to interfere with the trial Judge's assessment. The future economic loss will, accordingly, be discounted by 10%.

The judgment of the trial Judge is set aside and this Court substitutes damages in lieu as follows:

The Court orders that a judgment in the sum of K37,313 plus interest at the rate of 4%, in accordance with the Judicial Proceedings (Interest on Debts and Damages) Act, be entered for the plaintiff. The appellant shall have its costs of the appeal.

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Supreme Court of Papua New Guinea

Motor Vehicles Insurance (PNG) Trust v Etape [1994] PGSC 12; [1994] PNGLR 596 (1 July 1994)

PNG Law Reports 1994