N4686

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 841 OF 2004

MUCKSIL OMONON
Plaintiff

V

SUSIE KAIPA KUANGA
First Defendant

HERTZ LEASEMASTER LIMITED
Second Defendant

Madang: Cannings J
2011: 11, 16 December,
2012: 18 May

NEGLIGENCE – motor vehicle collision – whether the plaintiff proved on the balance of probabilities that the driver of other vehicle was negligent – vicarious liability – whether employer vicariously liable for negligence of employee

DAMAGES – measure of – plaintiff claims damages for: damage to vehicle; business losses; stress

A collision between the plaintiff's truck and a utility owned by the second defendant and driven by an employee, the first defendant, resulted in damage to the truck. The plaintiff sued the defendants, claiming damages for negligence. The defendants denied liability on the ground that there was insufficient evidence that the first defendant drove negligently. The second defendant also argued that if a cause of action were established against the first defendant it was not vicariously liable as she was acting outside the scope of her employment. As to assessment of damages the defendants asserted that if they were found liable, the plaintiff should be awarded nothing due to lack of evidence.

Held:

(1)	The driver of the utility was negligent and liable to the plaintiff for damages in respect of the tort of negligence. Further, she was acting within the course of her employment and that was sufficient to make the second defendant, as her employer, vicariously liable.

(2)	Damages were assessed as: damage to the bus (K18,000.00) + business losses (K8,640.00) = K26,640.00.

(3)	In addition the plaintiff was awarded interest of K18,903.74, making the total judgment sum K45,543.74.

Cases cited

The following cases are cited in the judgment:

Abel Kopen v The State [1988-89] PNGLR 655
Albert Areng v Gregory Babia (2008) N3469
Anis v Taksey (2011) N4468
Daniel Jifok v Kambang Holdings Ltd, trading as Lutheran Shipping (2008) N3475
Graham Mappa v ELCOM (1992) N1093
Jonathan Mangope Paraia v The State (1995) N1343
Misac Pokonoming v Jeffery Simiri WS 1596/2005, 26.10.07
Niugini Civil & Petroleum Ltd v West New Britain Development Corporation Ltd (2008) N3292
Otto Benal Magiten v Bilding Tabai (2008) N3470
Roka Coffee Estate Pty Ltd v Gerebi [1973] PNGLR 486
Wango v Andakundi and The State [1992] PNGLR 45

TRIAL

This was a trial on liability and damages.

Counsel

G Anis, for the plaintiff
A Meten, for the first defendant
Y Wadau, for the second defendant

18 May, 2012 

1. CANNINGS J: On Sunday 29 June 2003, there was a collision between:

•	a Daihatsu Delta truck owned and driven by the plaintiff, Mucksil Omonon; and

•	a Toyota Hilux double-cab utility owned by the second defendant, Hertz Leasemaster Ltd, and driven by its employee, the first defendant, Susie Kaipa Kuanga.

2. The collision occurred between 7.00 and 8.00 am at the corner of Baidal Road and the North Coast Highway near Madang Airport. The truck was being driven along the Highway out of town and the utility was being driven along Baidal Road coming from the airport. The plaintiff alleges that the first defendant negligently failed to give way and caused the collision, as a result of which his truck, which he was in the business of hiring to the Department of Works, was damaged and off the road for a considerable period. He has brought a negligence action against both defendants, claiming damages of K867,440.00. The defendants deny liability. They say that it was the plaintiff who caused the collision. The second defendant also argues that if negligence is proven against the first defendant, it should not be liable as the first defendant was not authorised to drive the utility. Both defendants argue that if they are found liable the plaintiff should be awarded nothing as he has not proven his losses. A trial has been held on both liability and damages. The issues are:

1	has the plaintiff proven negligence against the first defendant? and

2	is the second defendant vicariously liable? and

3	if the defendants are liable, what damages is the plaintiff entitled to?

1 HAS THE PLAINTIFF PROVEN NEGLIGENCE AGAINST THE FIRST DEFENDANT?

3. The critical fact for the purposes of determining whether the first defendant is liable in negligence is that, for her role in the collision, she was charged with and convicted by the Madang District Court, on 21 May 2004, of the offence of dangerous driving causing grievous bodily harm, contrary to Section 328(5) of the Criminal Code. She received a two-year suspended sentence. That does not necessarily mean that the plaintiff has proven a cause of action in negligence against her but it is an important fact that cannot be disregarded (Anis v Taksey (2011) N4468). The defendants have adduced no evidence to rebut the natural inference arising from such a conviction, that the first defendant was negligent. That inference is reinforced by the evidence of the plaintiff and by the road accident report prepared by the police, which concluded that the truck had the right of way at the intersection and the first defendant failed to give way.

4. I find that the plaintiff has established all elements of the tort of negligence (Otto Benal Magiten v Bilding Tabai (2008) N3470). The first defendant owed a duty of care to other road users such as the plaintiff. She drove the utility negligently and caused the collision, which led to the injuries (damage to the truck and business losses) which are not of a type that are too remote. Liability is therefore established against the first defendant.

2 IS THE SECOND DEFENDANT VICARIOUSLY LIABLE?

5. Vicarious liability is liability that falls on one person as a result of the acts or omissions of another person with whom the first person is in a special relationship. Employers are in a special relationship with their employees and will be liable, vicariously, for the wrongful acts or omissions of their employees that are committed within the scope of their employment (Roka Coffee Estate Pty Ltd v Gerebi [1973] PNGLR 486, Wango v Andakundi and The State [1992] PNGLR 45).

6. The second defendant accepts that the first defendant was its employee but argues that she was not authorised to drive the utility and was not on official duty at the time. However, no evidence has been brought in support of these assertions. The court must, for the purpose of determining facts, rely on evidence that has been adduced by the parties and reasonable inferences to be drawn from it.

7. The evidence is that the second defendant is engaged in the business of hiring vehicles for profit. Judicial notice can be taken of the fact that it conducts part of its business at Madang Airport. The collision occurred between 7.00 and 8.00 am, a time that can be regarded as falling within the normal hours of business of a motor vehicle hirer. The first defendant was driving her employer's vehicle and it can be reasonably inferred that she was doing so in the course of her employment. Different considerations might arise if there were evidence that she was strictly prohibited from driving company vehicles or that she was on a private run that had nothing to do with her job. But those are not the facts here.

8. I find that the first defendant committed the tort of negligence in the course of her employment and therefore the second defendant is vicariously liable to the plaintiff. This finding does not extinguish the first defendant's liability. It means that both defendants are liable.

3 WHAT DAMAGES IS THE PLAINTIFF ENTITLED TO?

9. The plaintiff is claiming damages of K18,000.00 for repairs to the bus, K829,400.00 in business losses and K20,000.00 for pain and suffering, a total of K867,440.00.

Repairs to the truck

10. The plaintiff has adduced evidence of quotes from two motor vehicle repairers for the cost of repair and/or replacement of the front windscreen, doors, fuel tank assembly and related parts and labour: on 30 June 2003, the day after the collision, Ela Motors quoted K29,382.32 and on 7 July 2003 Coastal Automotive quoted K11,495.00. The plaintiff states that he tried unsuccessfully to get the second defendant to contribute to the cost of repairs. He evidently had no insurance and states that he eventually had the repairs done in 2007 at a cost of K18,000.00 by Sammy's Smash Repairs of Madang. I consider that this is a reasonable claim. The sum of K18,000.00 damages is awarded.

Business losses

11. If a defendant negligently causes damage to a plaintiff's profit-earning asset, the plaintiff is entitled to damages to compensate him for profits lost during the period that is reasonable to repair the asset (Abel Kopen v The State [1988-89] PNGLR 655). Ideally the plaintiff should provide an audited set of accounts to verify his claim. However, if that evidence is not forthcoming, it does not follow that the plaintiff will be awarded nothing. The court will do the best it can on the evidence that is available (Graham Mappa v ELCOM (1992) N1093; Jonathan Mangope Paraia v The State (1995) N1343; Misac Pokonoming v Jeffery Simiri WS 1596/2005, 26.10.07).

12. The plaintiff has given evidence that at the time of the collision his truck was contracted to the Department of Works at a rate of K40.00 per hour for nine hours per day. His claim for damages for business losses is calculated as follows:

K40.00 per hour x 9 hours per day = K360.00 per day x 7 days = K2,160.00 per week x 4 weeks = K8,640.00 per month x 96 months (8 years) = K829,440.00.

13. There are two major flaws with this claim. First it assumes that gross revenue equates with damages. This is not a proper way of assessing damages. A plaintiff is entitled to net profits that have been lost due to a defendant's negligence, not gross revenue lost. Secondly, the period of eight years to repair the truck is grossly excessive. A reasonable period to effect repairs of this nature is 12 weeks (Daniel Jifok v Kambang Holdings Ltd, trading as Lutheran Shipping (2008) N3475). So, to assess damages for business losses I will calculate the plaintiff's gross revenue for a period of 12 weeks and then discount that sum by assuming that the profit margin, after taking account of costs expended in generating revenue, is 50% of costs. I have taken a similar approach in other assessment cases (eg Misac Pokonoming v Jeffery Simiri WS 1596/2005, 26.10.07, Niugini Civil & Petroleum Ltd v West New Britain Development Corporation Ltd (2008) N3292, Albert Areng v Gregory Babia (2008) N3469). It appears arbitrary but I consider that it is justified in the interests of justice as it strikes a balance between on the one hand the duty of the court to put the plaintiff to proof, and on the other hand the right of the plaintiff to be compensated even though its losses cannot be proven with precision.

14. There is sufficient evidence to find as a fact that at the time of the collision the plaintiff was hiring his truck to the Department of Works for K2,160.00 per week. Gross revenue for a reasonable period is thus K2,160.00 per week x 12 weeks = K25,920.00. Net profit is calculated by applying this formula:

C + C/2 = K25,920.00

Where:

C = Costs = K17,280.00
C/2 = Profit = K8,640.00

I therefore award K8,640.00 for business losses.

Pain and suffering

15. The plaintiff wants to be awarded K20,000.00 for pain and suffering but no such award can be made in this case as it is a claim for bodily injury arising out of the use of a motor vehicle, which must be made against Motor Vehicles (Insurance) Ltd, as required by Section 54(1) of the Motor Vehicles (Third Party Insurance) Act Chapter 295. Nothing is awarded.

Summary of damages awarded

•	Repairs to bus = K18,000.00
•	Business losses = K8,640.00
•	Pain & suffering = 0
•	Total damages = K26,640.00

INTEREST

16. Interest will be awarded at the rate of 8 per cent per annum on the total amount of damages under Section 1(1) of the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. Interest is calculated from the date on which the cause of action accrued, 29 June 2003, to the date of this judgment, a period of 8.87 years, by applying the following formula:

•	D x I x N = A

Where:

•	D is the amount of damages assessed;
•	I is the rate of interest per annum;
•	N is the appropriate period in numbers of years;
•	A is the amount of interest.

Thus K26,640.00 x 0.08 x 8.87 = K18,903.74.

COSTS

17. The general rule is that costs follow the event, ie the successful party has its costs paid for by the losing parties on a party-to-party basis. In this case there is no clear winner. The plaintiff has on the one hand succeeded in obtaining an award of damages but on the other hand has succeeded in convincing the court that only 3.07% (K26,640.00 out of K867,440.00) of his claim had merit; 96.93% of the claim was without merit. The defendants have succeeded in showing that the vast bulk of the claim was misconceived. In these circumstances the parties will bear their own costs.

ORDER

18. The Court orders that:

(1)	the defendants pay to the plaintiff damages of K26,640.00 plus interest of K18,903.74, being a total judgment sum of K45,543.74; and

(2)	the parties shall bear their own costs.

Orders accordingly.

_______________________________________________________
Kunai & Co Lawyers: Lawyers for the Plaintiff  
Public Solicitor: Lawyer for the First Defendant
Young Wadau Lawyers: Lawyers for the Second Defendant