Suri v Mega Corporation Ltd [2001] SBHC 30; HC-CC 045 of 2001 (1 June 2001)

HIGH COURT OF SOLOMON ISLANDS<

Civil Case No. 045 of 2001

v

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MEGA CORPORATION LIMITED AND ATTORNEY GENERAL

Court of Solomon Islands

Before: F.O. Kabui, J

Civil Case No: 045 of 2001

lass="MsoNoMsoNormal" style="margin-top: 1; margin-bottom: 1"> Hearing: 29^th May 2001<

Judgment: 01^st June 2001

C. Ashley for the Applicant

P. Tegavota for the 1^st Respondent

F. Waleanisia for the 2^nd Respondent

JUDGMENT

(Kabui, J): By Originating Summons filed on 23^rd

rd April 2001, the Applicant seeks the determination of the following questions-

1. &nbssp;&nnbsp; Whether ther ther the 1st Respondent, as employer of the Applicant's husband (now deceased), paid and maintainployeiabilnsurance pursuant to and in accordance with section 20 of the Empe Employmeloyment Acnt Act, and

2. & p;&nssp; Wsp; Whetherether under the provisrovisions of section 6 of the Workmen's Compensation Act, the 1^st Respondent is only liable to pay to the Applicant the amount of $43,200.00 as instructed by the 2^nd Respondent or the prescribed amount of $80,000.00, for the death of the Applicants husband who died in the cause of his employment.

3.  p;&nbbsp; Whether the the the 1^st Respondent, as the owner of the vehicle driven by the Applicant's husband decea paidmaintained 3^rd Party Insurance for the said vehicle pule pursuanrsuant to t to the provisions of the Motor Vehicles (3^rd Party Insurance) Act.

4. &nbssp;&nnbsp; bsp; Whether under he pr provisiovisions of section 5 of the Motor Vehicle (3^rd Party Inse) the 1^st Respondent is exempted from paying a further amount of $60,000.,000.00 for the death of the Applicant’s husband who died in a motor vehicle during the course of his employment.

By Notice of Motion filed on 28 May 2001, the 2nd Respondent, in response, see, seeks the following orders-

1. ;&nbssp; bn order to to to strike out the Applicants Originating Summons in so far as it affects the 2nd Respondent fn-comce wider 5the (Civil Procedure) Rules, 1964 and/or,

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2. & p;&nssp; Asp; An orde order to strike out tout the 2nd Respondent from the proceedings pursuant to Order 17 r.11 of the (Civil Procedure) Rules, 1964.

3. & Cost Co/ts.

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4. &nbssp; Any othy other orders that the court deems necessary.

The effect of the 2^nd espondent's Notice of Motion is for an Order by the Court turt to strike out the Applicant’s Originating Summons forthwith or in the alternative, an Order to strike out the 2^nd Respondent as a party to the Applicant's Originating Summons.

The Facts

The Applicant is the wife of the deceased who died as a result of an accident which took on 18^th A April 1998 in the Isabel Province. The deceased was employed by the 1^st Respondent as a log truck driver whose total earning was $1,200.00 per month. A report to the Commissioner of Labour was completed and signed on 11^th May 1998. A return of the accident form was also completed and signed that same date. A medical certificate of cause of death had been completed and signed on 20^th April 1998. The deceased is survived by four children and his wife. The assessment of compensation payable was done by the Commissioner of Labour which came to $43,200.00. This amount was forwarded to QBE Insurance on 23^rd June 1998 and was paid to the Magistrate, in Honiara, by a cheque dated 30^th June 1998. The sum of $8,000.00 was paid into accounts for the four children to be opened by the Gizo Magistrate Court and the balance was distributed amongst the deceased’s relatives and the wife’s family. Funeral expenses were met by the 1^st Respondent though the wife was not aware of the details of these expenses.

The 2^nd Respondent’s Notice of Motion

Counsel for the 2 Respondent, Mr. Waleanisia, argued that in terms of Order 58, rule 2 of the High Court (Civil Procedure) Rules 1964 (the High Court Rules), there could be no case for the Applicant to bring to Court because the issues were of facts rather than being of law. That is to say, the issue in this case was whether or not the sum of $43,200.00 was the correct compensation for the death of the deceased and nothing more, an issue of fact. Counsel relied upon the case of Brownless Zaku and Others v Public Service Commission and Joseph Harold and Others v Public Service Commission (Civil Cases Nos. 063 and 079 of 1999). In my view, the cases cited by Counsel can be distinguished on the facts. Palmer, J. struck out the Originating Summons in both those cases because the applicant’s cause of action lie in the writ of certiorari and not under Order 58 rule 2 of the High Court Rules. This is not the case here where the issues are whether or not under section 6 of the Workmen's Compensation Act (Cap. 78), the already paid $43,200.00 was the correct amount of compensation and whether or not the sum of $60,000.00 be further paid to the Applicant under the provisions of the Motor Vehicle (Third Party) Insurance Act. These issues are contained in paragraphs 2 and 4 in the Originating Summons. They will involve the interpretation of section 6(a) of the Workmen’s Compensation Act (Cap. 78) and the relevant sections of the Motor Vehicle (Third Party) Insurance Act (Cap. 83). However, I do agree with Counsel that paragraphs 1 and 3 of the Originating Summons are questions of facts rather than of law. I strike them out accordingly. Paragraph 2 and 4 will remain part of the Originating Summons. I will not strike them out.

The other argument by Counsel as that the 2nd Respondent be struck out as a party to the the Originating Summons filed by the Applicant. There was no affidavit evidence to support this argument. The fact is that the calculation of the sum of $43,200.00 was done by Mr Age on behalf of the Commissioner of Labour in accordance with section 6(a) of the Workmen's Compensation Act. Someone would have to defend the calculation of the sum of $43,200.00 and its correctness under section 6 of the Act. If the Commissioner of Labour cannot do it personally, he would have to instruct a Government lawyer to do it for him on behalf of the Government for the Labour Division is part of a Government Ministry, (see the provisions of the Crown Proceedings Act (Cap. 8) ).

In my view, the Attorney-General is a relevant party in this Originating Summons. In the result, I must reject the 2nd Respondent's Notice of Motion. The application is dismissed.

The Applicant’s Originating mons

ass="MsoNoMsoNormal" style="margin-top: 1; margin-bottom: 1"> As I have already ruled, paragraphs 1 and 3 in the Originating Summons are no longer matters for consideration by the Court. Paragraph 2 in the Originating Summons requires the consideration of section 6(a) of the Workmen's Compensation Act. The relevant part of section 6(a) states-

“(6) Wherth resultm fro ithe injury-

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if the workman leaves any dependants wholly dependent on his earnings, the amount of compensation shall be a sum equal to thirty-six months' earnings or such sum as the Minister may prescribe by order whichever is less:

Provided th no case shall the amount of compensation under this this paragraph be less than such sum as the Minister may prescribe by order:

ass="Mss="MsoNormal" style="margin-left: 72.0pt; margin-top: 1; margin-bottom: 1"> Provided further that where in respect of the samedent compensation has been been paid under the provisions of section 7 or section 8 there shall be deducted from the sum payable under this paragraph any sums so paid as compensation:

(bsp; ...................<....

(c) &nbbsp;& ........................”

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class="MsoNoMsoNormal" style="mar="margin-tgin-top: 1op: 1; margin-bottom: 1"> Counsel for the Applicant, Mr. Ashley, argued that in terms of Legal Notice No. 104 of 1996, the minimum limit of compensation payable under section 6(a) was $11,500.00. The maximum, he said, was $80,000.00. He justified his argument by saying that the sum of $80,000.00 being the maximum limit was covered by insurance cover under section 20 of the Employment Act (Cap. 72). He said the correct amount to be paid was $80,000.00. This argument completely disregards the 36 months earnings formula in section 6(a) of the Act.

Counsel for the 1^st ndent, Mr. Tegavota, however argued that there were two meto methods of working out the correct sum of compensation. The first, he said, was the method of taking 36 months earnings of the deceased and multiplying that by the rate per month which in this case was the figure of $1,200.00 per month giving a total of $43,200.00 (section 12 of the Act). Second, he said, was any sum prescribed by the Minister which in this case were $11,500.00 being the minimum and $80,000.00 being the maximum. However, he pointed out that the amount to be paid was the lesser amount but must be within the limits prescribed by, Legal Notice No. 104 of 1996. In this case, he said, the sum of $43,200.00 being the lesser amount was within range and was the correct compensation amount. Counsel for the 2^nd Respondent took up the same line of argument and agreed with Counsel for the 1st Respondent. My finding is that section 6(a) of the Workmen’s Compensation Act remains substantially the same as section 6(a) of the Workmen’s Compensation Regulation 1952. In 1952, the compensation range was between £600.00 and £100.00 respectively. In 1964 the range was between £3,000.00 and £200.00. In the Laws of the British Solomon Islands Protectorate 1969, Volume V. Chapter 77, the respective figures were $6,000.00 and $400.00. By the Workmen’s Compensation (Amendment) Act, 1979, section 6 was further amended to say that such sum would be as prescribed by Order of the Minister. By Legal Notice No. 29 of 1979, the Minister prescribed under section 6(a) of the Act $9,000.00 and $1,000.00 respectively. By Legal Notice No. 137 of 1991, these figures were increased to $60,000.00 and 2,000.00 respectively. The current figures by virtue of Legal Notice No. 104 of 1996 are $80,000.00 and $11,500.00 respectively.

What then is the intention of Parliament

No affidavit evidence was filed y the Commissioner of Labour to explain the practice in then the implementation of section 6(a) and other similar provisions in the Act. Such an affidavit would have been filed by the Attorney-General thus making the Attorney-General a necessary party in this case. In the absence of that evidence, I have consulted the relevant Hansard Report in 1964. One thing is clear over the years. The 36 months earnings formula has remained unchanged to date since 1952- 49 years today. Does it make sense to retain it today? It perhaps does make sense if one takes as an example an employee whose monthly earnings is, say, $3,000.00. Applying the formula in section 6(a) of the Act, the resulting sum would be $108,000.00. Under this formula the dependants of that employee would be paid the sum of $80,000.00 because it is the lesser sum. If, on the other hand, like here, the monthly earnings was $1,200.00, the resulting sum was $43,200.00 being the lesser sum. That would also make sense because the sum payable would depend largely upon the rate of pay per month for each employee. Employees in senior positions with higher rate of pay would be likely to attract higher compensation payments subject to the limit imposed by the Order of the Minister. If, in this case, the deceased was earning $2,200.00 per month, the sum payable would have been 36 months x $2,200.00 which would be $79,200.00. If he had been receiving $2,250.00 per month, the sum would have been $81,000.00 but because of the effect of Legal Notice No. 104 of 1996, the sum would have to be reduced by $1,000.00 so that only $80,000.00 would have been paid being the lesser sum. The difference of rates of pay is the factor that determines the size of the compensation payable under Legal Notice No. 104 of 1996 to the dependants of any deceased employee within the meaning of the provisions in the Workmen's Compensation Act. There is therefore a direct link between the 36 months earnings formula and the limits specified in Legal Notice No. 104 of 1996. That is to say, the rates of pay per month is calculated by this formula and then is measured against the yard stick in Legal Notice No. 104 of 1996 and any future Legal Notice for that matter.

The minimum sum of $11,500.00 ascribed in Legal Notice No. 104 of 1996 caters for persons wons whose pays are small per month such as part-time employees or employees in the lower wage bracket. Again, for example, if an employee whose monthly pay is $200.00 per month died in the course of employment, the formula as in section 6(a) would be 36 x $200.00 which yields the sum of $7,200.00. In such a case, the defendants would receive the sum of $11,500.00 being the minimum allowable under the law. In this category of employees, the minimum limit of $11,500.00 that matters and not the rate of pay. The flat minimum of $11,500.00 is considered to be the appropriate compensation for death in the lower category of workers in Solomon Islands. The Minister is now able to adjust the maximum limits by making fresh Orders as circumstances change in the employment sector. Previously, such adjustment would have had to go to Parliament. Payments under section 6(a) and other relevant provisions in the Workmen’s Compensation Act are covered by insurance under section 20 of the Employment Act (Cap. 72).

Paragraph 4 in the Originating Summons also requires the consideration of section 5 of the Motor Vehicle (Third Party) Insurance Act (Cap. 83)

The relevant part of section 5 is subsection 2 which states

“5 nbsp; ........... ....

(a) .. .............

(b) .. ............

(2) &nbbsp; Tsp; The amount of iliability insured under a third-party policy, issued on or after 2^nd April 1984 may be limited to sixty thousand dollars in the of ae cident or series of accidents arising out ofut of one one eventevent.

(3) & p; sp; . ..................

(pt">(a) & sp; ..................

(b) &nbsp &nbs;&nnbp;&nbsp& sp; ..................

0pt">(4) &(4) nbsp; p; &nbp; .......... ....span>span>

(b) & sp; ..................

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: 1"> The fact is that the 1^st Respondent had not taken out a third party insurance policy cover for its logging truck driven by the deceased on the date the deceased met his death. Counsel for the Applicant argued that the third party insurance policy cover was a compulsory requirement under section 3 of the Act except those exceptions in (a), (b), (c) and (d) under that section. In pursuance of section 23 of the Act, the Minister by Order (Legal Notice No. 71 of 1973) restricted the operation of the Act to such areas in Solomon Islands not exempted under section 84 of the Traffic Act (Cap. 131). By virtue of Legal Notice No. 81 of 1983, Parts 11 and 111 of the Traffic Act only applied to the places specified in that Legal Notice. The Island of Isabel is not specified in Legal Notice No. 81 of 1983. The implication is that the Island of Isabel was exempted under section 23 of the Third Party Insurance Act. Counsel for the Applicant however argued that even if the 1^st Respondent had not insured its log truck against third party risk under the provisions of the Motor Vehicle (Third Party) Insurance Act, that omission would not remove liability at common law for negligence. Counsel for the 1^st Respondent argued that since the Island of Isabel was not included in Legal Notice 81 of 1983, it followed that the 1st Respondent was not required to insure its log truck operating on the Island of Isabel on private roads against third party risk under the provisions of the Motor Vehicle (Third Party) Insurance Act. However, Counsel conceded that liability at common law could arise even in the absence of the existence of a third party insurance policy cover for log trucks operating on the Island of Isabel. In conclusion, Counsel maintained that the 1^st Respondent was not liable to pay the sum of $60,000.00 under section 5 of the Motor Vehicle (Third Party) Insurance Act.

In my view, the 1st Respondent was not obliged by law to take out a party insurance policy covy cover under the provisions of the Motor Vehicle (Third Party) Insurance Act because the Island of Isabel is not listed in Legal Notice No. 81 of 1983.

The argument by Counsel, for the Applicant that common lability was enough to make the lst Respondent pay $60y $60,000.00 under section 5 of the Motor Vehicle (Third Party) Insurance Act cannot be correct. The sum of $60,000.00 is the maximum insurance cover subject to assessment of damages by the Court if assessment is not agreed by the parties to the action for damages for personal injury sustained in a road accident. The sum of $60,000.00 is not a lump sum payment calculated by a specified formula so that it can be paid upon the completion of such calculation. As I have said, no such payment can arise in this case for the reason I have stated above. In the result, I answer paragraphs 2 and 4 in the Originating Summons in the negative. This case has raised issues of common concern under the Workmen's Compensation Act and as such they are of some public importance. I feel that in this regard the parties must meet their own costs.

(F.O. Kabui)

Judge