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Limitopa v Independent State of Papua New Guinea [1989] PGNC 61; [1988-89] PNGLR 364; N794 (29 September 1989)

N794

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

MARTHA LIMITOPA

V

THE INDEPENDENT STATE OF PAPUA NEW GUINEA AND POTI HIRINGE

V

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Goroka Lae & Waigani
Brunton AJ

18 May 1989
14 July 1989
29 September 1989

CONSTITUTIONAL LAW - Underlying law - Professional negligence - Lawyers - Failure to institute action in time - Principles from other common law jurisdictions - principles consistent with customary notions of wrong and recompense - Adoption of - Constitution, Sch 2.3.

LAWYERS - Liability to client - Professional negligence - Whether action in tort - General relationship - Instructions to recover damages for personal injuries - Breach of duty - Action in tort.

LAWYERS - Liability to client - Professional negligence - Duty of care - Instructions to recover damages for personal injuries - Failure to commence action within time - Duty of care measured by standards of whole profession - Breach of duty.

NEGLIGENCE - Duty of care - Particular relationships - Lawyer and client - Failure to commence action within time - Breach of duty.

LAWYERS - Public Solicitor - Solicitors employed by office of - Whether servants or agents of State - Whether part of National Government -Whether State liable for negligence of - Constitution, s 176(5).

CONSTITUTIONAL LAW - The National Government - Administration of justice - Public Solicitor - Public Solicitor’s Office - Whether part of National Government - Whether State liable for negligence of lawyers employed by - Constitution, s 176(5).

DAMAGES - Measure of - Professional negligence - Lawyers - Failure to institute proceedings in time - Damages recoverable as if action instituted in time.

DAMAGES - Award of as judgment - Interest on - From date on which cause of action arose - Professional negligence - Lawyer failing to institute proceedings in time - Breach of duty on failure to file writ - Notional date applicable - Personal injuries claim - Breach deemed two months after instructions received - Motor Vehicles (Third Party Insurance) Act (Ch No 295) - Judicial Proceedings (Interest on Debts and Damages) Act (Ch No 52), s 2.

INTEREST - Award of interest as damages - Damages for negligence - Lawyer failing to commence action for personal injuries within time - Interest from date on which cause of action arose - Relevant date breach of duty -Notional date to be applied - Breach deemed two months after instructions received - Motor Vehicles (Third Party Insurance) Act (Ch No 295) - Judicial Proceedings (Interest on Debts and Damages) Act (Ch No 52), s 2.

DAMAGES - Personal injuries - Particular awards of general damages - Hip injury - Dislocation fracture - Arthritis - Arthrodesis - Leg shortening - Twenty per cent loss of function - Male aged 18 years - Highland village gardener - Award of K18,000 general damages.

Held

On negligence

(1): Because the idea that, if a person undertakes to do something for you, and as a result you suffer a loss, the person who did the wrong should pay, is consistent with general customary notions of wrong and recompense, it is appropriate to adopt into the underlying law, under Sch 2.3 of the Constitution, principles relating to the liability of solicitors for breach of duty towards clients from other common law jurisdictions.

(2) The action against a lawyer by a client for breach of the lawyer’s professional obligations is an action in tort where the duty arises from the relationship of lawyer and client and is not the subject of a special contract; it is an action in contract where the duty is the subject of a special contract.
Vulic v Bilinsky [1983] 2 NSWLR 472 at 478, adopted and applied.

(3) Where a lawyer accepts instructions from a client to pursue a claim for damages for personal injuries, failure to commence the appropriate action within the time allowed by any statutory time limitation gives rise to a cause of action in negligence.
Vulic v Bilinsky [1983] 2 NSWLR 472, followed.

(4) The duty of care of lawyers is to be measured by the standards which apply to the profession as a whole.

(5) Because the Office of the Public Solicitor is established under s 176 of the Constitution and s 176(5) provides that the Public Solicitor is not subject to direction or control by any person or authority, lawyers who work for the Public Solicitor may be servants of the Public Solicitor but are not servants of the State: in the absence of any statutory provision as to the constitution, powers and functions of the Public Solicitor and except in matters designated by the Constitution as the particular functions of the Public Solicitor, the Public Solicitor’s Office is, nonetheless, part of the National Government in a broad sense.

Constitutional Reference No 1 of 1978 [1978] PNGLR 345, followed.

(6) Accordingly, the Independent State of Papua New Guinea is vicariously liable for the negligence of lawyers in the course of their employment with the Public Solicitor.
PNG v Kofowei [1987] PNGLR 5, considered.
On damages and interest on damages

(7) The measure of damages in an action for negligence in failing to commence proceedings within the time prescribed by statutory limitations is the damages that would have been recovered in the statute barred action, less any gratuitous payments if made.
Tutunkoff v Thiele (1975) 11 SASR 148; Trevloar v Henderson [1968] NZLR 1085 and Powys v Brown [1924] NSWStRp 77; (1924) 25 SR (NSW) 65, followed.

(8) For the purposes of awarding interest pursuant to s 2 of the Judicial Proceedings (Interest on Debts and Damages) Act (Ch No 52) on the assessment of damages "for the whole or part of the period between the date on which the cause of action arose and the date of judgment", the date on which the cause of action for professional negligence arose was to be taken as the date when the breach of duty by the lawyers occurred, that is when the lawyers failed to file a writ or lodge the statutory notices.

(9) Doing justice to the circumstances and taking into account the reasonable expectation of clients that lawyers will look to their responsibilities to the client in a reasonable and business-like manner, interest should be calculated from a notional date on which a writ would have issued had the original action been properly instituted.

(10) Taking into account the requirement for notice of claim under the Motor Vehicles (Third Party Insurance) Act (Ch No 295) which a prudent lawyer would give on receipt of instructions, a further two months should be fixed as the notional time in which a writ would have issued.

On quantum of damages

(11) Where a male highlander and village gardener aged 18 years suffered hip injuries requiring surgical setting and following the onset of painful arthritis, arthrodesis of the hip, with consequent shortening of the leg and a 20 per cent loss of function, general damages for pain and suffering and loss of amenities should be assessed at K18,000.

Cases Cited

British Transport Commission v Gourley [1955] UKHL 4; [1956] AC 185.
Constitutional Reference No 1 of 1978 [1978] PNGLR 345.
Howell v Young (1826) 5 B & C 259; 108 ER 97.
Kiak v Tora Enterprises Pty Ltd [1986] PNGLR 265.
Koieba v Motor Vehicles Insurance (PNG) Trust [1984] PNGLR 365.
Kuruo Birim v Jovane Mohamad [1981] PNGLR 545.
Lochgelly Iron & Coal Ltd v M’Mullan [1933] UKHL 4; [1934] AC 1.
Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] 1 Ch 384.
Papua New Guinea, Independent State of v Kofowei [1987] PNGLR 5.
Pinzer v Bougainville Copper Ltd [1985] PNGLR 160.
Powys v Brown [1924] NSWStRp 77; (1924) 25 SR (NSW) 65; 42 WN 10.
Treloar v Henderson [1968] NZLR 1085.
Tutunkoff v Thiele (1975) 11 SASR 148.
Vulic v Bilinsky [1983] 2 NSWLR 472.

Statement of Claim

This was the hearing of two separate proceedings in each of which the plaintiff claimed damages for professional negligence, namely, the failure of lawyers in the Public Solicitor’s Office to institute proceedings for damages for personal injuries within the statutory limitation periods.

Counsel

S Malaga, for the plaintiffs.
J K Puringi, for the defendant.
Cur adv vult

29 September 1989

THE CAUSE OF ACTION

BRUNTON AJ: Two separate and unrelated actions, arising out of separate but similar facts, were brought before the National Court at its sittings in Goroka during May 1989. Counsel appearing for the parties agreed that the facts were not in dispute and that the issues of law would be tried by counsel exchanging written argument, which were presented to the Court.

The plaintiffs in each case had issued a writ of summons against the defendant State claiming damages for professional negligence against a servant or agent of the State, namely the Public Solicitor.

The statements of claim in each case alleged that the plaintiff had been the victim of a motor vehicle accident, and had engaged the services of the Public Solicitor to prosecute a claim for negligence arising out of the accident against the Motor Vehicles Insurance (PNG) Trust. After giving instructions to the Public Solicitor, there was a failure of the lawyers in that Office to comply with time limitations that are required by law.

MARTHA LIMITOPA

In the case of Martha Limitopa it was alleged that writs had not been filed within the period of three years as specified in the Wrongs (Miscellaneous Provisions) Act (Ch No 297) and a period of six years as specified by the Statutes of Frauds and Limitations Act (Ch No 330). The accident had occurred in 1980 and writs were finally filed by a private practitioner in 1987.

The Insurance Trust eventually paid the plaintiff, Martha Limitopa, K9,087.60 in what appears as an ex gratia compromise, which was sanctioned by Amet J on 7 October 1988.

However, the plaintiff claimed against the State, that, had she been able to sue the Motor Vehicles Insurance (PNG) Trust, she would have been paid K13,264.00 in damages, and that therefore the State was liable to pay the plaintiff, by way of damages for professional negligence, K4,176.40 plus interest, being a total of K6,543.

POTI HIRINGE

In the case of Poti Hiringe it was alleged that the Public Solicitor had failed to give notice of a claim to the Motor Vehicles Insurance (PNG) Trust within the time specified in a letter of the Insurance Commissioner pursuant to s 54(6) of the Motor Vehicles (Third Party Insurance) Act (Ch No 295), and that the Public Solicitor had failed to take all necessary steps to prosecute the actions.

Again, the Motor Vehicles Insurance Trust made what must be seen as an ex gratia payment to this plaintiff for K27,000. However, the plaintiff says that had he had the opportunity of trying his action in a court he would have received an additional sum amounting to K30,140, plus interest.

ADMISSIONS OF LIABILITY

At the trial of these matters in Goroka the Court was told that the issues of liability were admitted, and that the Court was required to adjudicate solely on the issues of damages and interest. Indeed, the Court was told that the sole "sticking" point between the parties was the issue of whether or not interest was payable on the amounts of damages claimed by the plaintiffs. The Court was told that counsel would make their submissions on the damages and interest issues in writing.

In both cases, the written submissions of the State showed that the State disputed liability. Counsel are bound by their statements to the Court from the Bar Table. At first the defendant said that the form of the action was wrong.

The defendant did not make clear his complaint. If it was that the plaintiffs should have brought their action in contract, then the submission was wrong.

"It has been the assumption for many years that a solicitor’s liability arises only in contract: see Cordery on Solicitors, 6th ed (1968), p 187 et seq; Clark v Kirby-Smith [1964] Ch 506 and Groom v Crocker [1939] 1 KB 194. But more recently there has been a substantial change of attitude by the courts, since the decision in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] UKHL 4; [1964] AC 465. Groom v Crocker and Clark v Kirby-Smith were both heavily doubted in Esso Petroleum Co Ltd v Mardon [1976] EWCA Civ 4; [1976] QB 801. An action can be brought in negligence as well as in contract": Midland Bank v Hett, Stubbs & Kemp [1979] 1 Ch 384 at 388, per Oliver J.

As to the question whether an action against a lawyer who has ignored a time limitation to the detriment of a client should be founded in contract or tort, the principles were discussed by Miles J, sitting as a judge of the Common Law Division of the Supreme Court of New South Wales, in Vulic v Bilinsky [1983] 2 NSWLR 472 at 481-482. In summary, his Honour said:

1. There is no rule of law that the existence of a contract between two persons is a complete barrier to the co-existence of a tortious duty of care.

2. If professional persons are exempt from liability in tort, their situation is an anomalous one which does not arise out of general principles of liability.

3. The rule in Jarvis v Moy, Davies, Smith, Vandervell & Co [1936] 1 KB 399 at 405 that:

"... where the breach of duty alleged arises out of a liability independently of personal obligation undertaken by contract, it is tort, and it may be tort even though there may happen to be a contract between the parties, if the duty in fact arises independently of that contract. Breach of contract occurs where that which is complained of is a breach of duty arising out of the obligations undertaken by the contract",

begs the questions about whether or not an obligation exists.

4. A more useful test is found in Aluminium Products (Qld) Pty Ltd v Hill [1981] Qd R 33 at 48, per Connolly J. namely: "there is a liability in tort where the duty arises from the relationship and is not the subject of a special contract but that it is contractual where the later situation obtains".

5. It is essential to identify as particularly as possible the terms of the contract between the solicitor and client as they relate to the circumstances of the case. Where the alleged fault is covered by the terms of the contract there may be little difficulty in identifying the obligation as a contractual one. ... At the other extreme where the client trips on the solicitor’s worn carpet and suffers injury, one would hardly expect the client to lay the action in contract.

6. Where the facts persuade a court to recognise a duty on the part of a lawyer, but it is not clear whether the duty is contractual or a duty of care (negligence), then once a breach of duty is established, it is unfair for a client to be denied a remedy.

Miles J made a number of other useful observations that were relevant to this case. When a layman instructs lawyers to get recompense for an injury sustained, that is a general instruction to take reasonable steps to prosecute the client’s case, and lawyers are subject to restrictions. They are not allowed to throw caution to the wind and sue indiscriminately nor to incur unlimited expenses (at 482 D-E).

Time limitations imposed by the law create obligations for lawyers. A duty to protect the client’s right of action arises. In Vulic v Bilinsky, Miles J said (at 483 C-D):

"The standard of care required to discharge the duty to take reasonable steps to preserve the plaintiffs right of action against [the defendant] required at least informing the plaintiff that he had a limited period in which to sue, alternatively it required issuing proceedings within time."

New South Wales law is not part of the Underlying Law of Papua New Guinea. There does not appear be a rule of law applicable and appropriate in any of the Papua New Guinea reports. The idea that, if a person undertakes to do something for you, and as a result you suffer a loss, the person who did the wrong should pay, appears to me to be consistent with general customary notions of wrong and recompense.

Under Sch 2.3 of the Constitution, I adopt the principles in the judgment of Miles J as they apply to cases in which lawyers have negligently allowed time limitations to slip by to the detriment of their clients.

In my view a lawyer who allows a client’s right of action to become forfeited by effluxion of time so that the action is time-barred can be sued for negligence, and that in this case the action was well founded.

In the case of Martha Limitopa, it was clear from the State’s written submissions that a writ of summons was never prepared and served by the Office of the Public Solicitor; that was a matter of professional negligence, and liability in negligence was established against the lawyers responsible (who in this action have remained unnamed) and their employers.

Similarly, in the case of Poti Hiringe, the written submissions of the State showed that by a letter dated 2 April 1985 the Insurance Commissioner granted to the Public Solicitor an extension of 28 days to allow that office to proceed with a claim against the Motor Vehicles Insurance (PNG) Trust, on behalf of Poti Hiringe. The Public Solicitor’s Office allowed that time to expire, and thereafter the Trust considered the extension "null and void", and did not reply to letters written in 1986 (which requested further extensions) or follow the matter up. The failure of the Public Solicitor’s Office, in the first place, to comply with the limitation of the extension of the time granted by the Insurance Commissioner in its letter of 2 April 1985 was professional negligence; the lawyers concerned and their employers were liable.

In both cases, the default of the Public Solicitor’s Office was more than merely "careless" or "heedless" conduct as described by Lord Wright in Lochgelly Iron & Coal Ltd v M’Mullan [1933] UKHL 4; [1934] AC 1 at 25. Whether or not the professional acts or omissions of a lawyer were reasonable must be judged on the standards that apply to the whole profession. The duty of care that a lawyer has is not measured against standards that may be considered reasonable for labourers, or carpenters, or nurses, or community school teachers, or research biochemists. In the context of the legal profession, civil negligence cases are the bread and butter of much of the profession. The time limitations under the Motor Vehicles (Third Party Insurance) Act, the Wrongs (Miscellaneous Provisions) Act, and the Statute of Frauds and Limitations Act, for lawyers, are run-of-the-mill obligations imposed on the conduct of actions. Lawyers ignore them at their peril. The default in not adhering to these time limitations was not just a matter of heedlessness or carelessness, but fundamentally unlawyerly conduct, and a clear breach of the duty of care, and the standard of care that the profession recognises as being owed to a client. Indeed, I am surprised at the temerity of the State Solicitor in submitting that the defaults could be otherwise.

The other important issue raised in the submission of the defendant was whether or not the State was liable (at all) in contract or tort for the professional misfeasance of the Public Solicitor’s staff.

Whether or not the State is vicariously liable for torts committed by its servants and agents (see Wrongs (Miscellaneous Provisions) Act, s 1(1)(a)) would depend first upon whether a lawyer working for the Public Solicitor’s Office is either a servant, agent or officer of the State under the Wrongs (Miscellaneous Provisions) Act: see Independent State of Papua New Guinea v Kofowei [1987] PNGLR 5.

The Appropriation Act shows that the salaries of the lawyers who work for the Public Solicitor’s Office are paid by the State in the same way as the salaries of the lawyers who work for the Public Prosecutor, at the State Solicitor’s Office. The lawyers in the State Solicitor’s Office are public servants employed in the Department of Justice. The lawyers in the Public Prosecutor’s Office are "officers and employees of the Public Service": see Public Prosecutor (Office and Functions) Act (Ch No 338), s 3(1). The Office of the Public Solicitor is established under s 176 of the Constitution, but there is no Act of Parliament which further defines the functions of the Public Solicitor, that are set out in s 177 of the Constitution. Further, the lawyers in the Public Solicitor’s Office cannot be said to be occupants of offices in the National Public Service "which are directly responsible to the National Executive Council or to a Minister". The other paragraphs and subsections of that provision do not apply to the persons employed in the Public Solicitor’s Office: Constitution, s 193(1)(a). This is because, in the performance of his functions under the Constitution, the Public Solicitor is not subject to direction or control by any person or authority: Constitution, s 176(5).

Lawyers who work for the Public Solicitor may be servants of the Public Solicitor, but are not servants of the State.

Although the lawyers who work in the Public Solicitor’s Office are not servants of the State, they are nevertheless part of the State.

The basis of all authority and power under the Constitution is the People. It was the People who gave form to the nation-state by the proclamation in the Preamble to the Constitution:

"WE, THE PEOPLE, do now establish this sovereign nation and declare ourselves, under the guiding hand of God, to be the Independent State of Papua New Guinea."

The nation-state is a sovereign independent State by the name of the Independent State of Papua New Guinea.

The constitutional components of the Independent State of Papua New Guinea referred to as "the State" (Interpretation Act (Ch No 2) s 1(1)), "the State" or "Papua New Guinea": Constitution, Sch 1 2(1), are both normative and institutional.

The normative, or conceptual components of the State are found in Pt II: The National Legal System; Pt III: Basic Principles of Government; Pt IV: Citizenship, of the Constitution.

The major institutional components of the State are found in Pt V: The Head of State; Pt VI: The National Government; Pt VIA: Provincial Government and Local Level Government; Pt VII: The State Services and Pt VIII: Supervision and Control.

The headings to the different Parts of the Constitution are part of the Law (Sch 1.3(2) of the Constitution), and so it is legitimate to look at them to ascertain the broader nature of the Constitution.

The Supreme Court in Constitutional Reference No 1 of 1978 [1978] PNGLR 345 has established that the Public Solicitor is not a "State Service" within the meaning of Pt VII of the Constitution, and for the purposes of s 219(1)(a)(iii) of the Constitution, the Public Solicitor is not an "other governmental body". But it is part of the National Government in a broad sense.

With respect, I agree with the view expressed by Pritchard J in Constitutional Reference No 1 of 1978, at 368:

"It is therefore clear in my mind that the use of the word ‘government’ throughout the Constitution, certainly throughout Div VI, [his Honour meant Pt VI] is far removed from the ‘government of the day’ concept, but envisages the Concise Oxford Dictionary definition of ‘govern’ meaning ‘Rule with authority, conduct the policy, actions and affairs of State’. Adopting this concept, and accepting the heading ‘The National Government’ as part of the law, Div VI [sic] sets up the following bodies and offices as its component parts":

His Honour then listed six components:

1. The National Parliament

2. The National Executive

3. The National Judicial System

4. The Public Prosecutor

5. The Public Solicitor

6. The Judicial and Legal Services Commission.

Pritchard J went on to say (at 369):

"In my view these six bodies are thus the arms of the National Government, the first three mentioned being clearly spelt out as the ‘principal arms’ in s 99, the other three being, for lack of a better word, ‘lesser’ or ‘ancillary’ arms."

Later in his judgment (at 384) his Honour said:

"... the Public Solicitor, Public Prosecutor and the Judicial and Legal Services Commission are created as part of the National Government under Pt VI of the Constitution, not one of them is created under any of the three principal arms, each one is separate and each has a distinct responsibility to the people as a part of the whole of the National Government, the vast majority of their functions being directly related to the administration of justice and the judicial system." (My emphasis.)

In the absence of a statute like the Public Prosecutor (Office and Functions) Act which makes State Prosecutors, officers and employees of the Public Service, and in the absence of a statute which gives the Public Solicitor’s Office corporate status capable of suing and being sued in its own name, in matters other than those designated by the Constitution as the particular functions of the Public Solicitor, it is clear that the Public Solicitor is part of the National Government. Accordingly, in those matters and for purposes which are not described in s 176(2) of the Constitution, the Public Solicitor is part of the State. In particular, tortious actions and actions in contract brought against individual lawyers employed in the Public Solicitor’s Office in the course of their employment, may by virtue of the doctrine of vicarious liability of an employer be brought against the State. There may be other actions that arise in relation to the Public Solicitor’s Office which are not part of the constitutional obligation of that office — for example, actions arising from motor vehicle accidents in which the Public Solicitor’s lawyers are involved in the course of their duty; or actions in occupier’s liability, should, for example, a member of the public suffer injuries on the premises of the Public Solicitor’s Office.

Although there was no evidence before me that the lawyers of the Public Solicitor’s Office were "officers" within the meaning of the Interpretation Act, s 3, it is clear that if they were then they would be "officers" within the meaning of the Wrongs (Miscellaneous Provisions) Act. But these lawyers are also agents of the State in the broad sense that they exercise powers which ultimately belong to the People — "all power belongs to the People", which is vested in the Independent State of Papua New Guinea: see PNG v Kofowei [1987] PNGLR 5.

Despite all this, the State is bound by the admissions of its counsel from the Bar Table that it did not dispute liability. A retraction of those admissions, albeit in the written submissions, cannot be countenanced.

Nevertheless, the written submissions by the State created in my mind the need to clarify the issues upon which the Court was meant to adjudicate, and both counsel were requested to attend at the National Court sittings in Lae on 14 July 1989. After some prevarication Mr Puringi conceded:

"We do not dispute liability on the basis of the writs before the Court. We dispute the amounts they [the plaintiffs] have come up with on damages. We dispute the claim for interest."

The costs of the hearing on 14 July 1989 at Lae were to be borne by the defendant.

MARTHA LIMITOPA

The plaintiff relied on the case Tutunkoff v Thiele (1975) 11 SASR 148, which says that once a plaintiff establishes that he or she would have won a statute-barred action, save for the default of a lawyer, then the plaintiff can recover all the damages that could have been recovered in the statute-barred action. Relying on New Zealand and New South Wales cases, in the analogous situation of a lawyer’s default in land transactions, the plaintiff claimed that the measure of damages should be the difference between what the plaintiff could have won in a contested action, and what was eventually received: Treloar v Henderson [1968] NZLR 1085, and Powys v Brown [1924] NSWStRp 77; (1924) 25 SR (NSW) 65.

In essence the State had no answer to these cases. The State’s reply was to say baldly that the plaintiff could not prove that she would get more at a trial than she had received in the ex gratia payment from the Motor Vehicles Insurance (PNG) Trust. The State made no submissions at all on the issue of interest on the damages.

The plaintiff, on the other hand, had put in tables particularising the nature of its claim for damages in respect of the plaintiff — widow and six children. My understanding was that the quantum of these damages was not disputed at the hearing although now the State says that the plaintiff must prove her damages. The total damages claimed was K13,264, less the payments received from the Insurance Trust of K9,087.60, being a net claim for K4,176.40.

The plaintiff also claimed interest on the sum of K4,176.40, at 8 per cent, over the nine years since the death of the deceased. The plaintiff relied on the case, Pinzger v Bougainville Copper Ltd [1985] PNGLR 160, to establish its claim for interest.

Section 1 of the Judicial Proceedings (Interest on Debts and Damages) Act (Ch No 52), reads:

"Subject to Section 2, in proceedings in a court for the recovery of a debt or damages the court may order that there be included in the sum for which judgment is given interest, at such rate as it thinks proper, on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause of action arose and the date of the judgment."

The rate of interest was fixed at 8 per cent in 1989 by the Supreme Court in Pinzer v Bougainville Copper Ltd, at 173. The Act stipulates that interest may be awarded

"for the whole or part of the period between the date on which the cause of action arose and the date of the judgment". (My emphasis.)

"The date on which the cause of action arose" in a case of professional negligence would be the date when the lawyers breached their duty towards the client. I will return to this point shortly. Overall, s 1 of the Act is discretionary. A judicial discretion has to be exercised in a principled manner. In Pinzer v Bougainville Copper Ltd, the Supreme Court (at 172) preferred the words of Lord Goddard in British Transport Commission v Gourley [1955] UKHL 4; [1956] AC 185 at 208:

"Damages which have to be paid for personal injuries are not punitive, still less are they a reward. They are simply compensation, and this is as true with regard to special damage as it is with general damage."

This is the basic principle. To apply that principle to interest, the Supreme Court adverted (at 173) to a decision from New South Wales in which it had been said that interest is not designed to compensate the plaintiff for loss arising out of the cause of action, but to provide compensation when a sum of money has been outstanding for a period of time. This is really part of the broader principle to achieve restitutio in integrum.

The plaintiff submitted that the grave delay in the payment of any moneys in this case provided a special circumstance for the interest to be paid from the date of the death of the deceased. The practice described in Kemp and Kemp, The Quantum of Damages, 4th ed (1975), vol 1, at 7, is that interest should be awarded on fatal accident damages from the date of service of the writ to the date of trial. This was part of the practice of the English common law at Independence, and there can be no reason why it should now not be part of the Underlying Law. On the other hand, the action before the Court is not a fatal accident case: it is a claim for professional negligence. In Tutunkoff v Thiele (1975) 11 SASR 148 at 155, Bray CJ said that damages should be assessed not at the date when they would have been paid if the first action had proceeded to judgment, but at the date of the judgment in the action against the lawyer. There is an artificiality about this reasoning; it favours the lawyers as against the aggrieved client and it does not specifically address the issue of interest on damages. The plaintiffs original claim for interest on the damages payable for the fatal accident would run from the day the writ issued. But in this case no writ issued because of the neglect of the defendant’s servants or agents.

The legal principles in analogous situations have been addressed in old cases. Bayley J in Howell v Young (1826) 5 B & C 259 at 266 said, in a case in which an attorney was sued for taking insufficient security on behalf of his client:

"Whatever be the form of action, the breach of duty is substantially the cause of action."

In the same case, Holroyd J focused more accurately on the rule (at 266):

"The breach of ... duty took place as soon as the defendant took the insufficient security."

More recently in his book entitled Professional Negligence (1985), Dr David Partlett, wrote (at p 364):

"In professional liability the accruing of the cause of the action will occur when the economic loss arises and this, regardless of the characterisation as tort or contract, depends on the reasonable expectations of the parties."

Adapting these rules to this jurisdiction, and to this case, the breach of duty arose when the lawyers failed to file a writ or lodge the statutory notices. It may be said that it was only when time had run out that the right to sue accrued. But that is an inaccurate and artificial view of things. Lawyers owe a duty to their clients to look after their clients’ interests in a professional manner. Within the day-to-day pressures of work, lawyers have a duty to expedite their responsibilities towards their clients in a reasonable and business-like manner. This certainly does not mean that lawyers can wait five years and three hundred and sixty-four days before they file their writs for negligence without fear of an action accruing against them. Clients have a reasonable expectation that lawyers will look after their affairs promptly, given the reality of business conditions as they exist from time to time.

The justice of cases like this (Constitution, s 158(2)) that is, professional negligence, calls for a rule which would impute a notional date to the issue of the writ, had the action been in the hands of reasonably competent lawyers. No case law was cited by either counsel suggesting an appropriate rule for interest in professional negligence actions. Accordingly, by virtue of Sch 2 of the Constitution, I adapt the English practice of interest in fatal accident cases to professional negligence, and rule that interest on the sum, that is the difference between what would have been paid and what was paid, should be calculated from a notional date on which a writ would have issued had the original action been properly instituted.

The practice in Papua New Guinea is to make a claim on the Motor Vehicles Insurance (PNG) Trust by giving a "notice of intention to make a claim" to the Trust in accordance with s 54(6) of the Motor Vehicles (third Party Insurance) Act. Although there may be cases in which a writ is not issued until much later, for example, where the Trust appears to be having difficulty in ascertaining the facts of the claim but does not seriously dispute liability, or where it is necessary to wait for injuries to stabilise, good practice requires the writ of summons to be taken out promptly, once it is clear that the defendant is not going to pay without delay. Prudent lawyers would probably issue a writ a month or so after the notice under the Act to protect their client’s interests and to drive home the point that they were seriously pursuing the action against the defendant.

In this case, according to the State’s submissions, instructions were received by the Public Solicitor’s Office a month after the accident. The notice under s 54(6) of the Act should have issued immediately, and I fix a further two months as a notional time in which a writ should have issued.

Interest should run therefore from three months after the death of the deceased to the date of this trial.

On the question of damages payable, the plaintiffs counsel submitted that damage was payable in accordance with the following schedule:

TABLE 1

Percentage reduction to account for contingencies Damages less per cent - Name of age Dependant Estimated Less age of payments dependant made at date under the of death Basic Projected years of dependency of Final dependant damages Relationship of dependant to deceased Estimated economic loss per week for each dependant Initial damages capitalised on three per cent interest tables

Protection Act

Kina Kina Kina Kina Kina Kina

Martha Limitopa (42)? 22 Widow 5 K4,720

Nil — — K 4,720.00

Pupune 15 1 Son 5 K 257

Nil — — K 257.00

Moni 13 3 Daughter 5 K 749

Nil — — K 749.00

Sapove 11 5 Son 5 K1,213

Nil — — K 1,213.00

Kenoti 9 7 Son 5 K1,650

Nil — — K 1,650.00

Bioku 8 8 Son 5 K1,859

Nil — — K1,859.00

Inanan 3 13 Daughter 5 K2,816

Nil — — K2,816.00

K13,264.00

Less payments received from

Insurance Trust K9,087.60

K4,176.40

No percentage reduction to account for contingencies was made in this schedule on the initial damages capitalised on the 3 per cent interest tables. But it is necessary that some reduction be made for contingencies when assessing a damages claim of this sort. No figures were suggested to me by either counsel so I will have to do my best in assessing the percentage applicable. In respect of each of the dependants, the following percentage reduction to account for contingencies is to be made:

TABLE 2

Name Age Percentage reduction to account for contingencies Reduction in kina Final damages
Martha Limitopa 42(?) 12 566.40 4,153.60
Pupune 15 nil 257.00
Moni 13 nil 749.00
Sapove 11 nil 1,213.00
Kenoti 9 5 82.50 1,567.50
Bioku 8 5 92.95 1,766.05
Inanan 3 10 281.60 2,534.40
12,240.55

Less payments received
from the Insurance Trust 9,087.60
total outstanding 3,152.95

The interest is calculated at 8 per cent during the period 5 July 1980 (three months after the death of Fave Warue) to 29 September 1989 being nine years, two months and 24 days.

The compromised action, Martha Limitopa v The Motor Vehicles Insurance Trust, WS 68/1988, sanctioned a settlement for K9,087.60 and was signed by the Registrar on 8 November 1988. That sum was broken down into portions to be paid in respect of each dependant.

Interest should therefore be calculated on the basis of the difference between the final damages (Table 2) and the compromise by the Court on 8 October 1988, as follows:

TABLE 3

Name Final damages (Table 2) Less portion of compromise, 8 October 1988 Difference on which interest payable
Martha Limitopa 4,153.60 2,252.86 1,900.74
Pupune 257.00 205.66 51.34
Moni 749.00 599.20 149.80
Sapove 1,213.00 970.20 242.80
Kenoti 1,567.50 1,319.80 247.70
Bioku 1,766.05 1,487.02 279.03
Inanan 2,534.40 2,252.86 281.54
totals 12,240.55 9,087.60 3,152.95
Interest in respect of each of the dependants is calculated thus:

TABLE 4

Martha Limitopa K1,900.74 x 9 years, 2 months, 24 days x 8% K1,403.89
Pupune Fave K51.34 x 9 years, 2 months, 24 days x 8% 37.98
Moni Fave K149.80 x 9 years, 2 months, 24 days x 8% 110.62
Sapove K242.80 x 9 years, 2 months, 24 days x 8% 179.31
Kenoti K247.70 x 9 years, 2 months, 24 days x 8% 182.99
Bioku K279.03 x 9 years, 2 months, 24 days x 8% 206.08
Inanan K281.54 x 9 years, 2 months, 24 days x 8% 207.92

Total interest K2,328.79

The plaintiff had claimed a total of K6,543 for interest. This figure was in error, because it was based upon the sums sanctioned in the compromise with the Motor Vehicles Insurance (PNG) Trust ordered on 8 November 1988. The plaintiff was only entitled to interest on the sums that were the difference between what could have been claimed but for the defendant’s negligence, and what was paid in the compromise with the Motor Vehicles insurance (PNG) Trust.

In summary, the plaintiff is entitled to the following sums of damages and interest from the defendant.

TABLE 5

Name of defendant Damages Interest Total
Martha Limitopa 1,900.74 1,403.89 3,304.63
Pupune 51.34 37.98 89.32
Moni 149.80 110.62 260.42
Sapove 242.80 179.31 422.11
Kenoti 247.70 182.99 430.69
Bioku 279.03 206.08 485.11
Inanan 281.54 207.92 489.46
5,481.74

The sum of K974.57 is to be paid to the Registrar of the National Court to be invested on behalf of:

Bioku Fave as to the sum of K485.11 and

Inanan Fave as to the sum of K489.46 until they attain the age of eighteen years which shall be deemed to occur as to Bioku Fave on 5 April 1990 and Inanan Fave on 5 April 1995.

POTI HIRINGE

Damages

The plaintiff claimed to have forgone damages as a result of the ex gratia payment made by the Motor Vehicles Insurance (PNG) Trust. The payment made by the Trust was in the following terms:

General damages K15,000

Interest from date of the issue of the writ 1,000

Loss of marriage prospects 500

Future economic loss 10,000

Future medical expenses 500

K27,000

But it was asserted by the plaintiff that, because of the defendant’s negligence, he had not been able to litigate the claim he had for negligence arising from his motor vehicle accident, and that he had suffered in the apportionment of damages, in general damages and in future economic loss.

Taking into account the sum of K15,000 apportioned in the ex gratia payment for general damages, the plaintiff made three alternative submissions in respect of the short-fall he claimed in general damages. First, he claimed an additional K14,000 on the basis of Kiak v Tora Enterprises Pty Ltd [1986] PNGLR 265; alternatively he claimed K4,000 on the basis of Koieba v Motor Vehicles Insurance (PNG) Trust [1984] PNGLR 365. Finally, he made a further alternative claim which was based on the difference between the first two alternatives, of K9,000.

The plaintiff was in hospital twice. The first occasion was immediately after the accident when the dislocation to his left hip joint was reduced under general anaesthesia. He was in traction for ten days before being discharged on 27 April 1981.

Secondly, he was readmitted to the Goroka Base Hospital in 1985 because of a severe osteoarthritis of the left hip joint. This was treated surgically. The head of the left femur was removed and a metal pin driven through the upper end of the femur (and trochanter) into the iliac bone of the pelvis. The femur was thus fused to the ilium solidly in a process known as arthrodesis. Arthrodesis leaves the hip immovable.

In 1986, Dr Cleazy saw him and reported, "He has a painless leg, in a good position, but his hip being unmoveable will interfere with heavy work." Dr Cleazy saw the plaintiff again in 1987 and stated that the shortening in the pre-operative report (three inches while lying down) had been fully overcome. Dr Cleazy confirmed that the immobility of the hip must interfere with heavy work and would be a considerable nuisance in mountainous terrains. He estimated that the plaintiff had a 20 per cent loss of function in the left leg.

In May 1989 Dr Linan Menda examined the plaintiff and found the left leg to be about one inch shorter:

"the left hip locked and not able to move to any useful extent and any attempt to do so or negotiation of Highlands terrain is very painful, this confirming him to be very dependent on relatives, therefore (he) has become an ‘old young man’."

This evidence, before me on affidavit, was not controverted.

When comparing the injuries, treatment, and pain and suffering of this plaintiff with the plaintiff in Koieba v Motor Vehicles Insurance (PNG) Trust, there is not the same evidence before me of the "awful time" (at 368) experienced by Caedmon Koieba, although the distress of this plaintiff must have been considerable. But the plaintiffs case seems to be worse than that in Kuruo Birim v Jovane Mohamad [1981] PNGLR 545.

I would assess the value of the general damages in this case as being K18,000, taking into account the two periods of hospitalisation, the trauma of traction, operations, the likely pain and discomfort of the arthritis between 1981 and 1985, the 20 per cent loss of function of his leg and the discomfort in the Highlands of having a "cemented" hip-joint.

The plaintiff also claimed he had suffered a short-fall in future economic loss, as a result of having to accept an ex gratia payment, rather than suing for damages in the courts. The plaintiff is about 18 years old. He has a life expectancy of about 38 years and a working life of about 30 years. He submitted, using 3 per cent interest tables, on a weekly production value of K30 that he would have lost K31,140.

The plaintiff was injured in 1981. There was no evidence before me as to what his income was at the time of the accident. By affidavit sworn by an agricultural officer with the Department of Primary Industry it was established that, in 1987, the gardens of the plaintiff produced an estimated average weekly income of K39.25. This evidence was not controverted, and there was nothing before me to indicate that it was an unreasonable figure. At first blush, on its own, the 1987 material cannot provide a basis for calculating the future economic loss because the Court does not know what the plaintiffs income was in 1981. Therefore it is not possible to say whether or not the 1987 survey of the garden showed a loss of income to the plaintiff.

The evidence of Dr Linan Menda, in a medical report attached to the affidavit Mr Neill swore on 25 May 1989, says that the injuries to the plaintiff made him "very dependant on relatives" and that he has become an "old young man". It may be inferred from this material that although the gardens assessed by the Department of Primary Industry in 1987 were owned by the plaintiff, the work in the gardens was probably not done by the plaintiff. There is no evidence before me that the plaintiff is married. In the light of known customary obligations it may properly be inferred that to the extent to which the work in the garden was done by others, the plaintiff would have been obliged to the persons who did the work. The custom would have ensured that, even if he did not pay the gardeners in cash, he would have had to satisfy them in other ways; he would have had to keep them happy in order to keep them working. He would have had to give up something that, had he been 100 per cent fit, he would not normally have had to give up. In economic terms, what would have been the percentage of his estimated average weekly income that he would have had to forgo because of his disability? This is one of those questions to which there is no ready answer. The court must do its best with the material before it. Dr Menda has said that the plaintiffs injuries made him "very dependent on his relatives". This is some guide. The plaintiff is a partial cripple. His main income comes from vegetable gardening in the Henganofi area. He is very dependent upon his relatives. The relatives probably do most of the gardening work for him. It can be estimated that the plaintiff probably loses 85 per cent of the value of the produce of his garden in satisfying the traditional obligations that would bind him as a result of his dependency on others to do the gardening work, which, but for his injuries, he would have done himself.

At the time of injury the plaintiff was about 18 years old. He had a life expectancy of about 32 years, and a productive life of 25 years. The value of his future economic loss would be calculated, using 3 per cent interest tables, and a K30 weekly income, as:

922.181 (K1 over 25 years) x K30 x 85% = K23,515.62

less 10,000 = K13,515.62

The defendant should pay the plaintiff K13,515.62, being the short-fall in future economic loss occasioned by the need to compromise the original action, plus K3,000 (the short-fall in general damages), being K16,515 in all.

Interest

The plaintiff has claimed "interest on whatever the amount of [the] difference the Court decides for general damages". This is the sum of K3,000. The interest rate is now fixed at 8 per cent. In the case of Martha Limitopa, I fixed a notional date from which the interest should run, because it was not possible to say precisely when the lawyers breached their duty to Martha Limitopa, or by what date Martha Limitopa could have reasonably expected her lawyers to have filed a writ on her behalf.

In this case the lawyers failed to give notice pursuant to s 54 of the Motor Vehicles (Third Party Insurance) Act. By its letter of 2 April 1985 the Insurance Commissioner allowed the Public Solicitor an extension of 28 days from the date of that letter in which to lodge a claim under s 54(6)(a) of the Act. No action was taken by the Public Solicitor’s Office within the period. Because the Public Solicitor, and the lawyers handling the plaintiffs case in his office, owed a duty to the plaintiff to lodge a claim by 30 April 1985, and because the plaintiff had a reasonable expectation that her lawyers would lodge the claim by that date, interest should run from 30 April 1985 to 29 September 1989, being a period of four years, four months.

K3,000 x 8% x 4 years 4 months = K1,040
Total damages to be awarded to Poti Hiringe are K16,515 plus interest of K1,040, being in all K17,555.

ORDERS

(1) The defendant to pay to the plaintiff Martha Limitopa damages and interest in the total amount of K5,481.74 less, in respect of the infants Bioku Fave and Inanan Fave, a total of K974.57 which is to be paid to the Registrar of the National Court, in the respective amounts of K485.11 and K489.46. These moneys are to be held on trust for the said infants until they attain the age of 18 years which should be deemed to occur in respect of Bioku Fave on 5 April 1990, and in respect of Inanan Fave on 5 April 1995.

(2) The defendant to pay to the plaintiff, Poti Hiringe, K17,555 as damages and interest.

(3) The defendant to pay the costs of both plaintiffs.

_________________

Lawyer for the plaintiff: William Neill.
Lawyer for the defendant: State Solicitor.