Kawage v Motor Vehicle Insurance Trust Ltd [2010] PGSC 16; SC1066 (30 April 2010)

SC1066

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

S.C.A. N0. 36 0F 2008

BOI KAWAGE
Appellant

v

MOTOR VEHICLE INSURANCE TRUST LIMITED
Respondent

Waigani: Kirriwom, Davani & Kariko JJ
2010: 28, 30 April

APPEAL – damages – personal injuries claim – deed of release signed only by the plaintiff – defendant withdrawing its offer to settle - appeal against dismissal of application for enforcement of deed of release – appeal against dismissal of whole of proceedings –whether application for enforcement properly before the court- whether deed of release compromised the whole of the proceedings – failure to ask counsel to address an issue not part of application not a miscarriage of justice.

Cases cited:

Papua New Guinea cases

Vailala Purari Investment Limited & Others –v- Papua New Guinea Forest Authority and Frontier Holdings (2004) N2594
National Capital District Commission –v- Yama Security Services Pty Ltd (2002) SC707
Caltex (Overseas) Limited –v- Douglas Charles Dent [1978] PNGLR 411

Overseas cases

Green v Rozen and Others [1955] 2 All ER 797

Counsel:

D Gonol, for the appellant
K Peri, for the respondent

30 April, 2010

1. BY THE COURT: This is an appeal against the decision of the National Court on 29 April 2008 at Mount Hagen in the proceedings W.S. No. 120 of 2004 ("the Proceedings") whereby the trial judge dismissed the Proceedings.

Background

2. The Appellant filed the Proceedings on 17 February 2004 claiming damages against the Respondent for personal injuries sustained in a motor vehicle accident on 7th September 2001 along the Okuk Highway between Goroka and Asaro in the Eastern Highlands Province.

3. The Appellant alleged receiving injuries to his head, hands and hip as a result of the accident.

4. On 16 August 2005 and after a request by the Respondent, the Appellant attended the Marian Medical Clinic for a review.

5. Negotiations to settle the claim out of court continued and there was exchange of correspondence between the parties, which included the following:

- On 13 April 2006, the Respondent offered K60,000.00 to the Appellant.

- On 11 May 2006, the Appellant counter-offered K90,000.00 to settle.

- On 20 April 2007, the Appellant followed up on the counter-offer of 11 May 2006.

- On 23 April 2007, the Respondent then replied with its counter-offer of K80,000.00 all up settlement.

- On 9 May 2007, the Appellant accepted the counter-offer but requested that K2,500 in costs be included and requested the appropriate deed of release.

- A deed of release to settle the claim for K80,000.00 in damages and K2,500 costs was prepared by the Respondent ("the Deed") and sent to the Appellant on 18 May 2007.

- The Deed was executed by the Appellant and faxed back to the Respondent on 1 June 2007.

- The same day, 1 June 2007, the Respondent advised the Appellant that the Deed was rescinded or withdrawn on the basis that the amount offered ought to have read K8,000.00.

6. While the Appellant insisted that there had been an agreement to settle the claim by way of the signed Deed, the Respondent ignored the claim. This led to the Appellant filing a notice of motion on 26 November 2007 to have the Deed enforced and judgement entered in favour of the Appellant for the sum of K82,500.00. This motion was argued on 29 February 2008 and it is the decision of the trial judge arising from hearing this application that gives rise to the present appeal.

Grounds of appeal

7. The grounds of appeal are set out in the Notice of Appeal as follows:

1. His Honour erred in holding that the ground upon which the whole proceedings was dismissed was an issue before the Court as a deed was signed between the parties and that the substantive proceedings be dismissed.
   
   1. the only issues that were before His Honour to rule on were those in the Notice of Motion filed by the Appellant (then Plaintiff filed 27th November 2007) in the following:
      
      1. the Deed of Release signed between the plaintiff and the Defendant on the 18th may and 01st June 2007, for a sum of K82,500.00 in favour of the plaintiff, be enforced.
         
      2. Judgment be entered in the sum of K82,500.00 in favour of the Plaintiff.
         
      3. Costs of the proceedings be settled by the Defendants.
         
      4. Any other or further orders, the Honourable Court deems fit.
         
   2. the ground upon which His Honour dismissed the proceedings was never an issue before him to rule on.
      
   3. the application before His Honour was to enter judgment based on a Deed of Release signed on 01st June 2007 between the parties. There was no application before the Court to dismiss the whole proceedings on the ground that a Deed was signed.
      
   4. None of the parties, not even the Court raised the issue, that since a Deed was signed, the whole proceedings be dismissed.
      
   5. Because, the issue of Dismissal of the whole Proceedings on the grounds that the Deed was signed was not in issue and not one of the grounds in the Notice of Motion filed by the Plaintiff on 27th November 2007, or even raised by the Court no evidence was produced by all parties and further no submissions were made before His Honour to rule on.
      
   6. In the circumstances, His Honour erred in that he purported to determine the issue of Dismissal of the whole proceedings based on a Deed being signed which was not in dispute and or was not before him to rule on, thereby denying the appellant a reasonable opportunity to be heard as required by the principles of natural justice.
      
   7. His Honour erred in failing to restrict his ruling to what was before him rather than making the ruling on an issue which was not before him to rule on.
      
   8. His Honour when hearing oral submissions on the 29th February 2008 if he thought dismissing the whole proceedings on the grounds that a deed was signed was in issue he failed to enquire with Counsels in court as to whether or not, the whole proceedings be dismissed on that ground.
      
   9. His Honour erred in that he ventured outside of what was before him and thereby into areas which were not in dispute between parties.
      

2. His Honour erred in dismissing the application properly before him for judgement in the sum of K82,500.00 holding that since a deed was signed, it was not proper to ask for judgement by way of Notice of Motion for summary judgement, and that be done by way of fresh proceedings to be enforced.
   
3. His Honour erred in dismissing the whole proceedings, shutting out the appellants right to claim for common law damages. The appellant has a right to choose whether to pursue enforcement of the Deed of Release or proceed with the common law damages, proceedings of which were already on foot.
   

8. The grounds can be summarised as follows:

1. That the trial judge erred in law in dismissing the application to enforce the Deed; and
   
2. That the trial judge erred in law in the dismissing the Proceedings because:
   
   • (a) There was no application before him to dismiss the Proceedings; and
     
   • (b) The question of whether or not the Proceedings ought to be dismissed was not raised with Counsel to give counsel the opportunity to address on the issue; and
     
   • (c) The dismissal of the Proceedings has deprived the appellant his right to pursue his common law claim for damages.
     

9. In the course of hearing the appeal, counsel for the appellant properly conceded that the trial judge correctly ruled that the proper course to have the court enforce the Deed was for the appellant to file a separate action. Mr Gonol therefore concentrated his submissions on the second ground. We consider the first ground abandoned and in any case have no difficulty in finding no error by the trial judge in respect of his ruling to dismiss the application for enforcement.

The application to enforce the Deed

10. The relevant orders sought in the application before His Honour were in these terms:

1. The Deed of Release signed between the Plaintiff and the Defendant on 18th May and 1st June 2007, for a sum of K82,500 be enforced.
   
2. Judgement be entered for the sum of K82,500.00 in favour of the Plaintiff.
   

11. The Notice of Motion did not state the provision in the National Court Rules upon which the application was being made.

Ruling on the application

12. In his ruling, the trial judge made two main determinations:

1. That in order for the plaintiff to enforce the Deed, he ought to commence a separate or new action, based on Vailala Purari Investment Limited & Others –v- Papua New Guinea Forest Authority and Frontier Holdings (2004) N2594 following the Supreme Court decision of National Capital District Commission –v- Yama Security Services Pty Ltd (2002) SC707.
   
2. That the application was an abuse of process and incompetent. His Honour considered the application as one seeking summary judgement pursuant to Order 12 rule 38 but under the guise of an application to enforce a Deed. Again the trial judge relied on National Capital District Commission –v- Yama Security Services Pty Ltd (supra) for the principles concerning summary judgement.
   

13. As we stated earlier, we do not find any error in the above findings and the appellant did not press argument against them.

Decision to dismiss proceedings

14. After reaching the above views, the trial judge dismissed the application and then went on to order that the Proceedings also be dismissed. His Honour relied on the case of Green v Rozen and Others [1955] 2 All ER 797 for the proposition that the Deed of Release compromised the Proceedings and the court therefore no longer had jurisdiction to further hear the case.

15. The appellant argues that the trial judge erred in law because there was no application before His Honour for the Proceedings to be dismissed, and further His Honour failed to raise the issue with counsels and invite them to address on the matter. The respondent merely agrees with the decision of the trial judge and submits that the action was compromised by the Deed.

16. In our view, the Deed could only compromise the action if the Deed was properly executed by the parties and Proceedings settled out of court. That was the situation in the authorities referred to by His Honour: Green v Rozen & Others (supra) Vailala Purari Investment Limited & Others –v- Papua New Guinea Forest Authority and Frontier Holdings (supra), National Capital District Commission –v- Yama Security Services Pty Ltd (supra), and Caltex (Overseas)Limited –v- Douglas Charles Dent [1978] PNGLR 411. In the present case, the respondent did not sign the deed. The issue of whether the Deed is a good agreement and can be enforced is outstanding. In fact His Honour acknowledged the dispute between the parties as to whether the Deed constituted an agreement to settle the appellant's claim:

"To my mind, there is a serious conflict on questions of fact and law by the Defendant. The three issues that immediately come to mind are first, there is the question of whether or not the parties have entered into a contract by way of a Deed to settle the Plaintiff's claim for damages out of court. Secondly, if so, whether or not the contract was entered into by mistake. If mistake is proven, thirdly whether the contract can be rescinded or set aside on grounds of mistake."

17. It cannot be said that an action is compromised, when the question of whether a compromised settlement has been reached is in dispute between the parties, and particularly so as in the present case where the Deed is only signed by one party.

18. Having properly decided that the appellant ought to have pursued his claim for enforcement of the Deed in a separate action, and that it was an abuse of process and incompetent, His Honour ought to have simply dismissed the application before him. It was then up to the appellant whether or not to take up the advice of the court to "commence a fresh or new proceeding" to enforce the Deed. If the advice was not taken up, the appellant could resume negotiating the out of court settlement, or pursue litigating the Proceedings. If the appellant decided to file a new action to enforce the Deed but lost that suit, he could then revert to the Proceedings and pursue his claim for damages. The order of the court in dismissing the Proceedings has however left him "high and dry", depriving him the right to pursue his claim for damages should he:

- not succeed in a separate action for enforcement of the Deed; or

- decide not to file a separate action for enforcement of the Deed; and

- not reach an out of court settlement with the respondent.

19. It was suggested by the respondent that if it came to any of the above scenarios, the appellant could then file a new WS proceedings. In our view, that is totally unnecessary and would be quite detrimental to the appellant as this would cost further time and money to again go through all the necessary steps to bring the case to trial (noting that the Proceedings had reached the stage where on 23 October 2006 it was set down for trial), and also poses the risk that the renewed action may become statute-barred.

20. On the issue of whether the trial judge could raise an issue that was not part of the application before him, we are of the view that His Honour was entitled to do so. As to whether counsel ought to have been alerted to the issue and invited to address on it, we hold that it would have been proper for this to have been done, especially as the issue was serious, but the failure to have done so does not render a miscarriage of justice in this case.

Conclusion

21. We therefore find that the trial judge erred in law in finding the Proceedings compromised by the Deed, and thereby dismissing the Proceedings. We uphold the appeal so far as it relates to the order dismissing the proceedings WS No. 120 of 2004. We have already found no merit in the ground of appeal alleging error by the trial judge in refusing the application for enforcement, and indeed this ground was not pursued by counsel for the appellant.

Orders

22. Orders of this court are:

1. The appeal is upheld.
   
2. The order of the National Court dismissing the proceedings WS No. 120 of 2004 is quashed.
   
3. The proceedings WS No. 120 of 2004 is re-instated in the National Court.
   
4. The order of the National Court for the appellant (the plaintiff) to pay the respondent's (the Defendant's) cost of the entire proceedings WS No. 120 of 2004 is set aside.
   
5. The respondent to pay the appellant's costs of this appeal, to be taxed if not agreed.
   

___________________________________________________________
Paulus M Dowa Lawyers: Lawyer for the Appellant
Warner Shand Lawyers: Lawyer for the Respondent