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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO 1736 OF 2005
DANIEL JIFOK
Plaintiff
V
KAMBANG HOLDINGS LIMITED
TRADING AS LUTHERAN SHIPPING
Defendant
Madang: Cannings J
2008: 21 February,
12 May, 10 September
JUDGMENT
NEGLIGENCE – assessment of damages – motor vehicle incident – defendant’s forklift negligently collided with plaintiff’s PMV bus – plaintiff claims damages for: damage to bus; business losses; general damages.
The defendant’s forklift negligently collided with the plaintiff’s PMV bus. Liability was established and a trial was held on assessment of damages. The plaintiff claimed for three heads of damage: damage to the bus; business losses; and general damages.
Held:
(1) There was insufficient evidence to support the claim that the bus was written off as a result of the incident. Damage to the bus was estimated at K10,000.00.
(2) The claim for business losses was grossly exaggerated. The amount assessed was K9,000.00.
(3) General damages was assessed at K5,000.00.
(4) The total amount of damages awarded was K10,000.00 + K9,000.00 + K5,000.00 = K24,000.00.
(5) In addition, interest of K5,376.00 is payable, making the total judgment sum to be K29,376.00.
Cases cited
The following cases are cited in the judgment:
Abel Kopen v The State [1988-89] PNGLR 655
Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24
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
Rodao Holdings Ltd v Sogeram Development Corporation WS 521/2001
TRIAL
This is a trial on assessment of damages.
Counsel
B Meten, for the plaintiff
Y Wadau, for the defendant
10 September, 2008
1. CANNINGS J: This case arises out of a collision between a forklift and a PMV. It occurred on Modilon Road, Madang, in January 2002. The forklift, owned by the defendant, Lutheran Shipping, bumped into the back of the PMV, which was stationary, having stopped to drop off a passenger. No one was injured but the PMV, a Nissan Urvan bus, owned by the plaintiff, Daniel Jifok, came off second-best. The rear bumper bar and a number of body panels were damaged. Not only that, the plaintiff claims that the engine and gearbox seized as a result of the collision. He is claiming damages for:
2. Liability was established through entry of default judgment and a trial has been held to assess damages.
IS THE PLAINTIFF ENTITLED TO A NEW BUS?
3. The plaintiff is claiming that as a result of the collision with the forklift, the engine and gearbox in his bus seized up and were damaged beyond repair. It would cost more to replace the engine and gearbox than buying a new bus. His lawyer, Mr Meten, submits that the plaintiff is entitled to damages that would enable him to purchase a new bus, estimated to cost K59,800.00.
4. This is a spurious claim for two reasons. First, it is difficult to believe that a collision with the rear end of a bus would cause its engine and gearbox to seize. It was not a high-speed collision. Secondly, the evidence is deficient. The plaintiff says that he drove the vehicle to his house after the collision and then had two mechanics strip the motor and they advised him that it was beyond repair. The mechanics have each sworn affidavits. However, as Mr Wadau, for the defendant pointed out, neither has given his qualifications and neither can be regarded as independent and their evidence is unreliable.
5. As for corroboration of the claim, there is none. There is no police report of the incident. There is no insurance claim, report or assessment. There is no evidence by any person who witnessed the incident. Not even the driver of the plaintiff’s bus or the forklift driver have given evidence. There are no photographs of the damage to the bus.
6. It is difficult to know the exact extent of the damage. This task has not been aided by the defendant’s decision not to call any evidence. I accept that the bus was damaged, however, as that has been conceded by the defendant. In the circumstances I will assess damage to the bus at K10,000.00.
IS THE PLAINTIFF ENTITLED TO DAMAGES FOR BUSINESS LOSSES?
7. 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, National Court, Woods J). 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, necessarily, 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, National Court, Injia J; Misac Pokonoming v Jeffery Simiri WS 1596/2005, 26.10.07, Cannings J).
8. Mr Meten submits that at the time of the incident, the plaintiff:
9. He submits that, because the defendant did not replace the bus, as it should have, the period for which the plaintiff should be compensated is from the date of the incident (January 2002) to the date of the default judgment (August 2006), which is four years, seven months. The total loss of net profit is K593,615.00. Mr Meten concedes that a 25 per cent contingency should be applied to that figure, resulting in a claim for lost profits of K445,211.25.
10. There are three problems with this claim.
11. First, there is no set of accounts, audited or unaudited, to verify the figures. In fact there is no evidence at all to support the figures.
12. Secondly, Mr Meten’s figures do not add up:
(However, 25% of K593,615.00 is K148,403.75 and K593,615.00 minus K148,403.75 is K445,211.25.)
13. Thirdly, the period of four years, seven months to repair the bus is not reasonable. I have already rejected the evidence that the engine and gearbox were damaged beyond repair. The only thing the plaintiff has proven is that the bus’s rear section (bumper and panels) were damaged. It does not take four years to repair such damage.
So, what should I allow?
14. Mr Wadau submits that the plaintiff has not even proven that he owns the bus as no registration or insurance documents have been adduced in evidence. This is a fair point but the plaintiff has given sworn evidence that he is the owner of the bus and that he was using it as a PMV and the defendant has brought no evidence to counter those propositions, so I will accept them at face value. I will assess lost profits at K3,000.00 per month. That is a big reduction from the amount claimed but the plaintiff has simply not proven his figures. He presented a spreadsheet prepared by officers of the National Development Bank showing how the figures add up (there appear to have been some transcription errors when these figures were put into Mr Meten’s submission). But all that proves is that someone can prepare a spreadsheet. It says nothing about the integrity of the raw data.
15. As for a reasonable period to effect repairs, I have looked at what Woods J allowed in the Kopen and Mappa cases (3 weeks and 13 weeks respectively) and compared the facts of this case with the facts in those cases. I will allow a period of three months.
16. The amount of lost profits I award is therefore K3,000.00 per month x 3 months = K9,000.00.
IS THE PLAINTIFF ENTITLED TO GENERAL DAMAGES?
17. Mr Meten submits that K50,000.00 should be awarded to compensate the plaintiff for the pain, suffering and frustration caused as a result of the collision and the defendant’s failure to settle the case. In support of this claim he refers to my decision in a recent Madang case, Rodao Holdings Ltd v Sogeram Development Corporation WS 521/2001, in which I awarded the plaintiff K50, 000.00 damages for distress, inconvenience and frustration. However, the facts of that case are very different to this case. In Rodao, the cause of action was breach of contract, the parties were engaged in a business transaction, the overall amount of the claim was several million kina and the case was more complex than this case.
18. Nevertheless, I agree that some award for general damages should be made. It is a head of damage claimed in the statement of claim. I will award K5, 000.00.
SUMMARY OF DAMAGES AWARDED
19. I make no deduction from the amounts assessed on account of contributory negligence or failure to mitigate losses. Lutheran Shipping has not filed a defence so neither of these issues has been raised. The amounts awarded are those assessed:
| Damage to bus | K10, 000.00 |
| Business losses | K9, 000.00 |
| General damages | K 5,000.00 |
| Total damages | K24, 000.00. |
INTEREST
20. In the statement of claim the plaintiff claimed interest under the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. Section 1 is the appropriate provision. It states:
(1) 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.
(2) Where the proceedings referred to in Subsection (1) are taken against the State, the rate of any interest under that subsection shall not exceed 8% yearly.
21. As Bredmeyer J pointed out in Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24, this section confers a four-fold discretion on the Judge: (1) whether to grant interest at all; (2) to fix the rate; (3) to grant interest on the whole or part of the debt or damages for which judgment has been given; and (4) to fix the period for which interest will run.
22. I exercise that discretion in the following way:
1 A plaintiff should in the normal course of events receive interest. There is nothing that takes this case out of the ordinary in that regard. The Court will order that interest be included in the sum for which judgment is given.
2 The rate of interest commonly used is 8%. In view of current economic conditions in the country I think 8% is the proper rate of interest.
3 Interest should be payable on the whole of the sum of damages for which judgment is given.
4 Often, the commencement date for the appropriate period will be when the cause of action accrued, but in this case it took the plaintiff more than three years to file proceedings so I have decided that a more appropriate commencement date is when the writ was served, 25 November 2005. The end of the period is the date of judgment, 10 September 2008. The appropriate period is 2.8 years.
23. I calculate the amount of interest by applying the following formula:
Where:
Thus:
COSTS
24. The general rule is that costs follow the event, ie the successful party has its costs paid for by the losing party on a party-to-party basis. The question of costs is a discretionary matter. There are no special circumstances in this case that warrant departure from the general rule.
JUDGMENT
25. I direct entry of judgment in the following terms:
(1) damages, payable by the defendant to the plaintiff, of K24,000.00;
(2) interest payable by the defendant to the plaintiff, of K5,376.00;
(3) being a total judgment lump sum of K29,376.00 to be paid within 30 days after the date of entry of this judgment;
(4) costs of the proceedings shall be paid by the defendant to the plaintiff on a party-party basis, to be taxed if not agreed.
Judgment accordingly.
___________________________________
Narokobi Lawyers: Lawyers for the plaintiff.
Young Wadau Lawyers: Lawyers for the defendant.
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