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Dumu v Rapilla [2024] PGNC 86; N10738 (18 April 2024)

N10738

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 100 OF 2022 (IECMS)

BETWEEN:
THOMAS DUMU
Plaintiff

AND:
SIMEON RAPILLA
First Defendant

AND:
ACEM GEOTECHNIQUES LIMITED
Second Defendant

Waigani: Shepherd J
2023: 1^st August
2024: 18^th April

DAMAGES – Negligence - assessment of damages after entry of default judgment – plaintiff claimed for replacement cost of vehicle, loss of income, stress and anxiety - legal principles for assessment of damages.

Cases Cited:

Angoman v Independent Public Business Corporation of Papua New Guinea (2011) N4363
Coecon v National Fisheries Authority (2002) N2182
Cheong Supermarket Pty Ltd v Muro [1987] PNGLR 24
Harding v Teperoi Timbers Pty Ltd [1988] PNGLR 128
Kinsim Business Group Inc. v Hompwafi (1997) N1634
Likui Trading Ltd v Selma (2011) N4530
Mappa v PNG Electricity Commission [1993] PNGLR 179
Mel v Pakalia (2005) SC790
Nambawan Super Ltd v Petra Management Ltd (2017) N6748
Papua New Guinea Banking Corporation v Tole (2002) SC694
Opi v Telikom PNG Limited (2020) N8290
Ora v Qun (2011) N5344
Paklin v The State (2001) N2212
Palaru v Kaule (2023) N10393
Paraia v The State (1995) N1343
PNG Ports Corporation Ltd v Canopus No. 71 Ltd (2010) N4288
Samot v Yame (2020) N8246
Sorowa v Taison (2021) N9299
Vali v Motor Vehicles Insurance Ltd (2022) N9661
Wabata v Ohue (2018) N7157
Wanis v Sikiot (1995) N1350

Counsel:

Ms Karen Nugi, for the Plaintiff

DECISION

18^th April 2024

1. SHEPHERD J: This is a decision on assessment of damages. The plaintiff claims that his vehicle, a taxi, was damaged beyond repair and that he suffered consequential loss of income, stress and hardship as the result of a collision involving his taxi and the second defendant’s vehicle, the accident having been caused by the first defendant who was the driver of the second defendant’s vehicle.

BACKGROUND

2. The plaintiff previously operated a taxi service business in Port Moresby which he says was generating an income of K500 per week prior to the vehicle accident in question.
3. On 30 March 2019 there was a collision between the second defendant’s vehicle, a Toyota Landcruiser registration no. BDB-42 and the plaintiff’s taxi, a Toyota Vista sedan registration no. T-6423. The collision occurred near the traffic lights at Erima, National Capital District. At the time of the accident the taxi was driven by the plaintiff’s driver. The Landcruiser was driven by the first defendant, who was the second defendant’s employed driver.
4. The plaintiff claims that the accident was caused by the negligent or dangerous driving of the first defendant who had driven at high speed through the traffic lights when showing red and had then collided with the plaintiff’s taxi. The first defendant was charged by the traffic police with dangerous driving.
5. The plaintiff asserts that his taxi was effectively written off as a result of the vehicle accident. He was unable to obtain replacement parts because spare parts were no longer available for the model of Toyota Vista sedan that he owned, which was 20 years old. He was advised by auto dealers to purchase a used vehicle of similar model. The plaintiff could not do so as he had no funds with which to purchase a used vehicle.
6. The plaintiff contends that as a result of the loss of use of his taxi, which was damaged beyond repair, he was without his pre-accident income of K500 per week for more than three years.
7. This proceeding was filed by the plaintiff on 21 April 2022 after the plaintiff’s efforts to obtain compensation from the first and second defendants for the loss of his taxi and only source of income proved fruitless.
8. Copies of the writ were duly served by the plaintiff on the second defendant’s registered office at 8-Mile, National Capital District on 25 April 2022 and were accepted by a staff member of the second defendant,^[1] who accepted service on behalf of both the first defendant and the second defendant. At date of service of the writ on 24 April 2022 the first defendant was still employed by the second defendant.
9. A notice of intention to defend for both defendants was filed by Luthers Lawyers on 24 May 2022.^[2]
10. The defendants did not file a defence within time and judgment on liability with damages to be assessed was granted by Kandakasi DCJ pursuant to Order 12 Rules 25, 27 and 32 of the National Court Rules on 19 August 2022 and entered on 29 August 2022.^[3]
11. The case was then transferred to me to preside at trial on assessment of the plaintiff’s damages.
12. On 11 July 2023 I issued a directional order^[4] which set this case down for trial for assessment of damages on 1 August 2023 at 2.00 pm, the trial to be by affidavit evidence subject to the defendants’ right of cross-examination. As there was no appearance for the defendants on 11 July 2023, I further ordered that the plaintiff was to forthwith file a notice for trial to be served on the office of Luthers Lawyers by 18 July 2023 and for an affidavit deposing to that service to be filed by 21 July 2023.
13. The plaintiff’s notice for trial was filed on 18 July 2023^[5] and an affidavit in respect of service of that notice by the plaintiff on the office of Luthers Lawyers the same day was filed on 20 July 2023.^[6]
14. The trial on assessment of the plaintiff’s damages was conducted by me on 1 August 2023. The first and second defendants were not present at trial and there was no appearance on their behalf by their lawyer on the record, Mr Mathew Wenge of Luthers Lawyers. As I was satisfied that notice of trial giving the date and time of trial had been served on the office of Luthers Lawyers on 18 July 2023, the trial proceeded in the absence of the defendants or any representation on their behalf.
15. I observe that if a defendant does not make an appearance at trial after being on notice, the trial may proceed in the absence of the defendant by the plaintiff proving its claim according to the burden of proof appropriate to the case: Ora v Qun (2011) N5344 (Hartshorn J).

PRELIMINARY

16. It is well settled law that when a default judgment has been entered, the facts as pleaded and their legal consequences in terms establishing the cause of action as pleaded must be regarded as proven: Papua New Guinea Banking Corporation v Tole (2002) SC694 (Amet CJ, Sheehan & Kandakasi, JJ)
17. It was said by the Supreme Court in Mel v Pakalia (2005) SC790 (Los, Jalina, Cannings, JJ) that when default judgment has been entered, on a trial for assessment of damages the judge should make a cursory enquiry so as to be satisfied that the facts and the cause of action are pleaded with sufficient clarity. It is only if the facts or the cause of action as pleaded do not make sense or would make an assessment of damages a futile exercise should the judge enquire further and revisit the issue of liability.
18. After perusing the plaintiff’s statement of claim and the affidavits produced in evidence for the plaintiff at trial, I am satisfied that matters of causation for the accident have been clearly pleaded and that the facts deposed to by the plaintiff and his driver Mr Sent Paraka in their respective affidavits have confirmed liability on the part of the first defendant and vicariously on the part of the second defendant for the damages now claimed by the plaintiff.

EVIDENCE AT TRIAL

19. The plaintiff relied on four affidavits at trial:

(1) Affidavit of Thomas Duma filed on 11 August 2022 (Exhibit P1)

(2) Affidavit of Thomas Duma filed on 28 September 2022 (Exhibit P2)

(3) Affidavit of Merolyn Thomas filed on 28 September 2022 (Exhibit P3)

(4) Affidavit of Sent Paraka filed on 28 September 2022 (Exhibit P4)

RELIEF CLAIMED

20. The principal relief claimed by the plaintiff in his statement of claim is as follows:

(1) Repair/replacement cost of his motor vehicle at K27,833.

(2) Loss of income at K500/week for 132 weeks – K66,000.

(3) Damages for stress, mental anguish and hardship.

LAW

21. The fundamental principle which governs the whole of law of damages, in whatever area damages are awarded, is the principle of compensation. The Court must strive to award that sum of money which will compensate for a party’s loss or injury. It means that the amount of money to be awarded as damages must be such an amount which, so far as money can, puts the injured party who suffered loss or damage in the same position as that party would have been had they not suffered the injury or damages for which they are being compensated: Kinsim Business Group Inc. v Hompwafi (1997) N1634 (Bidar AJ).
22. This principle, known as ‘restitutio in integrum’ derives its origin from ancient Roman law and means ‘restoration to original condition’. In practical terms it means that the amount of compensation awarded should be that amount of money as will put a successful plaintiff in the position that would have been the case if the wrongful act such as a tort or breach of contract had not been committed.
23. The ‘restitutio’ principle is not an absolute principle. It is qualified by other principles, such as:

(a) The plaintiff has the onus proving loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and then expect the court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it. If an allegation forms an essential part of a person’s case, that person has the onus of proving the allegation: Paklin v The State (2001) N2212 (Jalina J)

(b) The principles of proof and corroboration apply even when the defendant fails to present any evidence to dispute the claim: Wanis v Sikiot (1995) N1350 (Woods J)

(c) The fact that damages cannot be assessed with certainty does not relieve the wrongdoer of the necessity of payment of damages. Where precise evidence is available the Court expects to have it. However, where it is not, the Court must do the best it can: Paraia v The State (1995) N1343 (Injia J).

(d) A plaintiff is under a duty to mitigate or lessen the consequences of the wrongful act, and damages are not available for loss which is attributable to a plaintiff’s failure to mitigate, although it is the defendant as wrongdoer who has the onus of proving failure to mitigate: Coecon v National Fisheries Authority (2002) N2182 (Kandakasi J).

(e) The plaintiff is only entitled to damages which naturally arise from the wrongful act, not from loss which is too remote: Kinsim Business Group Inc. v Hompwafi (supra).

24. In any assessment of damages a court will consider awarding compensation for direct expenses, known as special damages, such as the proven actual or likely cost of repair of damaged property and out-of-pocket expenses. Damages can also be awarded by a court for past and future loss of income resulting directly from the wrongful act and for loss of amenities caused by pain and suffering, both physical and mental.
25. I will apply these principles when determining each head of damages sought by the plaintiff.

DETERMINATION

(1) Repair/replacement cost of vehicle

26. The plaintiff has given evidence that in April 2018 he purchased his vehicle, a second-hand Toyota Vista, manufactured in 1999, and had it registered in June 2018 with Airport Taxi Services as a taxi cab with plate number T-6432. He says that the taxi was the only income-earning asset he had.
27. The plaintiff deposes that between June 2018 until date of the accident on 30 March 2019, a period of 9 months, he employed Mr Sent Paraka to be the driver of his taxi.
28. Attached to the plaintiff’s affidavit filed on 28 September 2022 (Exhibit P2) are a series of colour photographs that depict the impact damage which the plaintiff says was caused to his taxi when it was struck by the Landcruiser. Visual inspection of these photographs indicates that there was substantial damage to the front of the engine head and radiator of the taxi, as well as major panel damage to the doors on the right-hand side of the taxi.
29. The plaintiff contends that when he and his wife Merolyn Thomas went to auto repair shops to obtain quotations for the cost to purchase replacement parts for the repair of the taxi, they were advised that because of the advanced age of the vehicle no replacement parts were available and that the only practical alternative was to purchase a used vehicle of similar make and model. The plaintiff has produced in evidence three quotations from different automotive dealers giving the cost of what the plaintiff says are used vehicles of comparable make and model. Details of those quotes are as follows:
    1. 2 Fast Motors Ltd, Klinki Street, Hohola, NCD - quote dated 23 August 2022 – K29,999 for Toyota Mark II – year of manufacture 2001 - 3 month warranty
    2. KR Motors Ltd, Waigani NCD – quote dated 23 August 2022 – K33,000 for Toyota Camry – year of manufacture 2001 – 3 month warranty on engine & gearbox
    100. Port Moresby Motors, Boroko, NCD – quote dated 23 August 2022 – K29,000 for Toyota Camry – year of manufacture (not stated) – warranty (not stated)
30. The average of these three quotes comes to K30,666, which is what the plaintiff claims is the amount for which he should be compensated by the defendants by way of damages for the replacement of his vehicle, which is otherwise a “write-off”.
31. I accept on the evidence adduced for the plaintiff that it was not possible for him to have his vehicle repaired because of its age and the non-procurability in Port Moresby of replacement parts which, had they been available, would have included an entire reconditioned engine, gear box, radiator, fan motor, front bonnet, headlights, parking lights and signal lights. In addition, although not deposed to by the plaintiff, it is obvious that even if replacement parts were procurable, there would still have been the unknown cost of fitting those parts to the vehicle, panel-beating costs and the costs charged by an auto-electrician so as to return the vehicle as close as possible to its pre-accident condition to enable it to again be fit for use as a taxi.
32. Despite the fact that the plaintiff gave no evidence as to the purchase price of the vehicle when he acquired it in April 2018, the law on damages is clear. The plaintiff is entitled under the ‘restitutio’ principle to damages for that amount of money which will compensate him for the value of his taxi had the accident not occurred in March 2019.
33. I observe that the plaintiff had owned the taxi for 9 months when the accident occurred. As the taxi was effectively a “write-off” because no replacement parts were available for its repair, I will allow the plaintiff’s claim for the average cost of a replacement vehicle at K30,666 but subject to a depreciation factor of 15 % to allow for the 9 months’ use of the taxi the plaintiff had already had when the accident occurred. I consider that a depreciation factor of 15% is reasonable in the circumstances. This is because the value of most domestic and commercial vehicles reduces over time. It is not as if the taxi was a vehicle that was rare or of special interest to others where the value of the vehicle could be expected to increase over time. The taxi was a common model of vehicle manufactured by the Japanese company Toyota, popular in Port Moresby, and was a vehicle which the plaintiff used for business purposes to generate income for himself and his family.
34. The plaintiff’s claim for damages for the replacement cost of the taxi is assessed by the Court at K26,066 calculated as follows:

K30,666 (average replacement cost) – 15% (depreciation for 9 months’ use) = K30,666 – K4,600 = K26,066.

(2) Loss of Income

35. I am mindful that Woods J ruled in Mappa v PNG Electricity Commission [1993] PNGLR 179 that businesses such as shops, trade stores and operators of PMVs and other forms of public transport must produce appropriate business records when loss of business profits is being claimed. This is what his Honour said at p. 171:

If you wish to have the advantages of a modern world of business, then you must comply with modern matters like tax laws. This would require appropriate business records to show whether any profit over and above business running costs was earned. And then, if a profit was earned, there are the requirements to pay taxes.

... Thus, if a person is making profits over and above the running and operating costs, which of course would include salary, then a person must file the appropriate tax returns, show such profits, and pay the appropriate tax. The evidence is quite clear that the plaintiff did not keep any proper business records of income and expenditure and did not disclose any profit for taxation purposes. Therefore, as no proper business records and no tax returns have been produced to the Court to show any profit from the operation of the vehicle, this Court cannot find that there has been any such loss. The mere assertions and the deposit of sums of money in a bank is not sufficient evidence.

36. In the present case the plaintiff has explained in his evidence that after he purchased the Toyota Vista in April 2018, it was on the road and fully registered by June 2018. For the plaintiff to use the vehicle as a taxi, it seems that the vehicle was registered with the Road Traffic Authority under the Road Traffic Act as part of a fleet of taxis operated, but not necessarily owned, by a company named Airport Transport Service. Annexure “A2” of the plaintiff’s affidavit filed on 28 September 2022 (Exhibit P2) is a copy of an annual Passenger Transport License No. 0000487 dated 12 December 2018 which indicates that Air Transport Service was licensed by the Road Traffic Authority to operate a series of taxis, including the plaintiff’s taxi registration no. T-6432, for a period of 12 months expiring on 11 December 2019.
37. The plaintiff has further explained that he employed Mr Sent Paraka to be the driver of the taxi. The arrangement was such that Mr Paraka paid the plaintiff each Sunday as from date of registration of the taxi in June 2018 until the subject accident occurred on 30 March 2019 the sum of K550 per week as a fixed weekly amount for the use of the taxi. Mr Paraka kept the balance of the weekly takings from passengers of the taxi as his “wages”. Out of the K550 which the plaintiff received from Mr Paraka weekly, the plaintiff was required to pay K50 each week to Airport Transport Service as his contribution towards that company’s operating expenses and taxi licensing fees. This left the plaintiff with a regular business income of K500 each week for that 9 month period which was applied by the plaintiff for the financial support and maintenance of himself, his wife and their three sons aged 7, 6 and 3 years.
38. The plaintiff’s evidence as to the arrangement between himself and Mr Paraka is corroborated by Mr Paraka in his affidavit filed on 28 September 2022 (Exhibit P3).
39. Annexure “F” to the plaintiff’s affidavit filed on 28 September 2022 (Exhibit P2) is a letter from Airport Transport Ltd’s manager Mr Albert Ong which relevantly states:

This letter serves to confirm that Mr Thomas Dumu was ... a legal taxi operator under Airport Transport Services back then in 2019. Mr Thomas Dumu’s vehicle Toyota Vista sedan T6432 had an accident on the 30^th of March 2019 and the taxi was written off.

With that we have an office at Gordons where they used to come and pay their weekly services fee of K50.00 and we use[d] to issue them receipts upon payments.

40. I accept as truthful and proven the plaintiff’s evidence as to the income of K500 gross per week which he says his modest taxi business generated for him for the 9 month period from June 2018 to March 2019.
41. However, the plaintiff’s calculation of his estimated post-accident loss of business income arising from the subject accident differs somewhat from the submissions in that regard which were made for him at trial by his counsel.
42. The plaintiff, in the prayer for relief in his statement of claim, was initially claiming damages for loss of income of K66,000 based on an amount of K500 per week from the date of the accident on 30 March 2019 to 31 March 2022^[7], a period which is pleaded as being 132 weeks. In fact, the duration of that period if it were to have been correctly calculated, inclusive of start and end dates, comes to 1,099 days or 157 weeks and 3 days.
43. At trial the plaintiff’s counsel repeated that the plaintiff was continuing to claim damages for loss of income of K66,000 (as pleaded), but said, without explaining why, that the claim was now for a period of 3 years. If that were correct, then a loss of income at K500 per week projected over 3 years or 36 months from the end of March 2019 to the end of March 2022 would amount to a sum of K78,000, not K66,000. Counsel for the plaintiff did not, however, endeavour to persuade the Court that any calculation of loss of the plaintiff’s business income should extend beyond 3 years up to the date of trial on 1 August 2023.
44. The plaintiff’s evidence as to his own calculation for his claim for loss of income is contained at para. 11 of his second affidavit filed on 28 September 2022 (Exhibit P2), where he states:
    11. I have therefore suffered loss of earnings at K500 per week since the time of accident which is 30^th March 2019. That is from 31^st March 2019 to August 30, 2022, is a total of 3 years 5 months, that is a total of 176 weeks. That is a total of K88,000 (176 weeks x K500). And I claim that for the loss of income.
45. A correct calculation of the period from 31 March 2019 to 30 August 2022 gives a total of 1,250 days or 178 weeks and 4 days, which at a loss of K500 per week would give a total of K89,285 for that duration.
46. However, for the reasons that I now give, I am not minded to assess the plaintiff’s claim for his estimated post-accident loss of income at the rate of K500 per week for the various periods claimed by him in his evidence or for the 3-year period claimed for him by his counsel in submissions.
47. Firstly, while I accept that the plaintiff’s taxi business returned him a gross income of K500 per week, if the accident had not occurred then it is self-evident that the plaintiff would have had to continue to maintain and service his taxi to keep it in good mechanical order in order to continue to generate income from it. The plaintiff would also have been required to pay for annual registration and compulsory third-party insurance premium for the taxi to Motor Vehicle Insurance Ltd. These expenses would have obviously had to have been paid from the K550 the plaintiff was receiving each week from his driver, Mr Paraka. The plaintiff has deposed that after payment of the fee of K50 he had to pay to Airport Transport Service each week for the licensing of his taxi, this left him with the sum of K500 per week.
48. However, counsel for the plaintiff did in fact acknowledge that the taxi had ongoing expenses which the plaintiff would have needed to pay if the accident had not happened. It was said at para. 31 of counsel’s written submissions to the effect that the plaintiff’s claim based on a loss of income at K500 per week could, in the alternative, be reduced to K400 per week to allow for the servicing costs the plaintiff would needed to have outlaid to keep the taxi on the road. I consider that K400 per week is a more realistic figure and is an amount which more accurately reflects the likely net business income the plaintiff was receiving each week from the use of his taxi.
49. The Court’s assessment of the plaintiff’s damages under this head will therefore be based on the plaintiff having a reasonably held expectation of continuing receipt of an approximate net business income of K400 per week had the accident not happened.
50. Prior to an amendment to the Income Tax Act 1959 in 2023, the tax threshold beyond which most forms of income became taxable was K17,500 per year. As I have accepted that the plaintiff was earning a net income of about K400 per week, this would have equated to approximately K20,800 for the plaintiff’s first year of operation of this taxi business. I note that the plaintiff did not produce in evidence at trial any books of account for his taxi business, nor did he produce any bank statements in support of his modest business income, as would normally be required for proof of loss of income in accordance with the requirements outlined in Mappa v PNG Electricity Commission (supra). However, I further note that the plaintiff’s taxi business had only been operating for 9 months at the date of the accident and that the plaintiff was not due at that point to have filed his first tax return in respect of his taxi business operations. The plaintiff therefore had no tax returns he could have produced in evidence at trial to substantiate his claim for loss of income at the rate of K500 per week. Furthermore, an annual income of K20,800 would probably not have attracted the interest of the Internal Revenue Commission in this instance because the plaintiff would no doubt have been entitled to numerous tax deductions which would have taken his net business income below the taxable threshold.
51. Secondly, the evidence of the steps which the plaintiff took to mitigate his loss of weekly income as a result of the accident is vague. The plaintiff says in his affidavit filed on 28 September 2022 (Exhibit P2) to the effect that he had no savings at his disposal to purchase a replacement for the taxi after the accident. He says that although he did find a job post-accident as a security guard that paid about K75 to K100 per week, corroborated by his wife’s affidavit, this did not provide sufficient income to support himself and his family. But the plaintiff gave no further details in his evidence as to who employed him as a security guard, the location where he worked as a security guard or even the period of that employment. The plaintiff and his wife do say in their evidence that because life was so financially hard for themselves and their family after the accident, in late 2019 the plaintiff had to sell a vacant block of land he owned at Bushwara Settlement on the outskirts of the NCD at a distress value of K12,000, whereas had the plaintiff not been in such difficult financial straits he thinks he would have been able to sell his block of land for K20,000. But the sale of his block of land for K12,000 enabled him to at least pay overdue school fees for his two eldest sons. But beyond this, there is no further evidence of what steps the plaintiff took to mitigate the loss of income previously generated by his taxi business other than that his wife says in her affidavit that she resorted to selling vegetables at market, again with no details provided.
52. The plaintiff has given clear evidence that he was operating a taxi business for 9 months prior to the accident. He was therefore familiar with the taxi industry in Port Moresby. The plaintiff’s driver, Mr Paraka, has said in his affidavit to the effect that when he was driving the plaintiff’s taxi, passenger payments generated about K900 to K1,200 per week, sometimes more, out of which he paid the plaintiff K550 every week, leaving Mr Paraka with between K350 to K650 or more per week, depending on passenger usage of the taxi. I therefore find it odd that the plaintiff was unable to use his contacts within the taxi industry in Port Moresby to obtain a position as a driver of someone else’s taxi after the accident occurred. There is no evidence of any post-accident attempt made by the plaintiff to gain employment as the actual driver of a taxi at any time prior to the filing of his writ on 1 April 2022 or at any later time prior to the date of trial.
53. I note that in Wabata v Ohue (2018) N7157, a claim which also involved the loss of use of an income-producing taxi for a plaintiff but in circumstances where the vehicle had been confiscated rather than seriously damaged, the plaintiff claimed damages of K37,950 for loss of income from his taxi based on his own estimate of average takings of K150 per day for a period of 253 days. Cannings J discounted this claim by 50% and awarded damages of K18,975 because there was no documentary evidence produced at trial to support the claim.
54. In Palaru v Kaule (2023) N10393 the plaintiff sought damages, among others, for loss of income in respect of a PMV that had been written off as a result of a collision. The plaintiff sought damages of K345,660 for income which was claimed to have been lost projected over a period of 4 years based on the plaintiff’s contention that the bus had been generating K300 per day. This is what Collier J said at para. 55 of that case:

In the absence of documentary evidence to substantiate the plaintiff’s claim of K300 per day for loss of profit, I consider it appropriate to discount that amount by 50%.

To the extent that the plaintiff intended to continue his business, and would have endeavored to obtain a replacement vehicle, in the absence of any evidence on this point and noting the duty of the plaintiff to mitigate his loss, I consider that 6 months lost profit is a reasonable amount, being in the (discounted) amount of K21,600.

55. In the result, and after careful assessment of the evidence adduced for the plaintiff in this instance, including the brief nature of the evidence of the steps taken by the plaintiff to mitigate his loss of income after the accident, and also taking into account damages for loss of business income awarded by this Court in similar cases, I consider that an award of K20,800 based on a loss of approximately K400 per week projected over a period of 12 months from the date of the accident would be a reasonable and proper sum to compensate the plaintiff for his loss of business income.

(3) Damages for hardship, stress and mental anguish

56. Damages for distress, frustration, vexation, injured feelings, hardship and other similar sequelae suffered by a plaintiff because of actionable wrongful conduct by a defendant are part of general damages: Harding v Teperoi Timbers Pty Ltd [1988] PNGLR 128 (Kidu CJ).
57. By way of comparable awards, I have considered those made in Angoman v Independent Public Business Corporation of Papua New Guinea (2011) N4363 (K5,000); Likui Trading Ltd v Selma (2011) N4530 (K15,000); Samot v Yame (2020) N8246 (K6,000); Sorowa v Taison (2021) N9299 (K6,000); and Vali v Motor Vehicles Insurance Ltd (2022) N9661 (K5,000).
58. Here the plaintiff claims K6,000 for the stress, mental anguish and financial hardship he suffered as a result of the loss of his taxi business caused by the accident. Counsel for the plaintiff has submitted that a sum of K6,000 would be an appropriate amount to be awarded to the plaintiff by way of compensation for the grief and distress he experienced at the damage beyond repair caused to his taxi and the consequential loss of his business income. Counsel has pointed out that the plaintiff is a family man residing in Port Moresby where an income is needed by him in order to support his family. It is not as if the plaintiff is a subsistence farmer in a rural area where agriculture can meet many of the needs for day-to-day living. Counsel has submitted that the plaintiff’s only source of income in a relatively costly urban environment was cut off due to the dangerous or negligent driving of the first defendant, for which the second defendant is vicariously liable, liability in that regard having already been established by the default judgment granted by Kandakasi DCJ on 2 August 2022. Efforts by the plaintiff to seek an out-of-court settlement with the second defendant were not successful. The plaintiff has had to experience additional stress by having to litigate his claim in this Court.
59. Having regard to comparable awards for stress, anxiety and hardship, I agree with the submissions made counsel for the plaintiff for this category of general damages. The plaintiff is accordingly awarded the sum of K6,000 for stress, mental anguish and hardship.
    

SUMMARY OF DAMAGES AWARDED

60. The total of general damages awarded to the plaintiff in this suit is assessed at K52,866 comprising:

Replacement cost of taxi: K 26,066

Loss of business income: K 20,800

Stress, mental anguish and hardship: K 6,000

Total of Damages: K 52,866

INTEREST ON DAMAGES

61. A plaintiff is, at the discretion of the Court, entitled to an award of interest on damages.
62. Section s.4 (1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015 states:

4 (1) Subject to Section 5, in proceedings in a court for the recovery of a debt or damages, the court may order a rate as it thinks proper to be applied to the sum for which judgment is given interest, 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 action arose and the date of the judgment.

63. Section 5 of the Act prohibits the awarding of interest on interest. What this means is that when there is an interest component which is included in a judgment, post-judgment accrual of interest under s.6 of the Act does not include allowance for further interest on the pre-judgment interest component. Post-judgment interest will however accrue from time to time on the unpaid amount of the damages component of a judgment debt.
64. Section 4(1) of the Act confers a four-fold discretion on the Court: (1) whether to grant interest at all; (2) to fix the rate of interest; (3) to grant interest on the whole or only part of the damages for which judgment is given; and (4) to fix the period for which interest will run: see Cheong Supermarket Pty Ltd v Muro [1987] PNGLR 24 (Bredmeyer J): Nambawan Super Ltd v Petra Management Ltd (2017) N6748 (Cannings J).
65. The conventional rate of interest, unless the Court otherwise orders, is 8% per annum: Order 12 Rule 6(2) of the National Court Rules. This is the rate of interest sought by the plaintiff in the prayer for relief in his statement of claim.
66. I consider that the circumstances of this case are such that an award of interest on the damages to be awarded to the plaintiff is warranted and that a fair and proper rate of interest to be applied to those damages is 8% per annum, notwithstanding the many fluctuations in commercial banking rates which have occurred since the date of accrual of the plaintiff’s cause of action, being the date of the accident in March 2019.
67. As to when interest at 8% per annum should commence, I consider that as the defendants did not contest assessment of the plaintiff’s damages at trial, interest should be calculated from 31 March 2019, the day following the subject accident. This was the date on which the defendant’s financial loss and stress commenced as a direct result of the wrongdoing of the first defendant. Interest will be calculated on the plaintiff’s damages from and inclusive of 31 March 2019 up to today, 18 April 2024, a total of 1,846 days.
68. Interest on the plaintiff’s damages is therefore the sum of K21,390 calculated to the nearest whole number. It is computed by applying the formula: D x IR x (N/325) = I, where D is the principal amount of the damages, IR is the applicable percentage rate of interest per year, N is the number of days for which interest is calculated expressed as a percentage of years and I is the amount of interest.

K52,866 x 8% x (1,846/365 days) = K21,390

69. Post-judgment interest will, pursuant to the discretion of the Court allowed by s.6(1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015 and Order 12 Rule 6(1) of the National Court Rules, be jointly and severally payable by the first defendant and the second defendant at the rate of 8% per annum on such of the judgment amount of damages assessed at K52,866 as remains from time to time unpaid.

COSTS

70. The general rule is that costs follow the event, which means that the successful party is awarded a contribution towards its legal costs paid for by the losing party on a party/party basis on the scale set out in Table 1 of Schedule 2 of the National Court Rules. However, an award of costs is always within the discretion of the Court. As the scale of party/party costs has not been revised since the National Court Rules came into operation in 1983 it is, in my view, way out of step with fees presently charged by lawyers to their clients. The Court may therefore, depending on the circumstances of the case, award costs to a successful litigant on a solicitor/client basis (also known as costs on a lawyer/client basis) or on an indemnity basis.
71. An award of solicitor/client costs is compensatory. An award of costs on an indemnity basis is punitive. As to the distinction between solicitor/client costs and indemnity costs, see Opi v Telikom PNG Limited (2020) N8290 (Shepherd J).
72. There are many circumstances when an award of solicitor/client costs is warranted, such as where there is no defence on the merits, where the other party failed to explore and exhaust all prospects of having the matter settled without court action or delay, where there has been defiance by the other party in complying with court orders or where the successful party has generally had to incur unnecessary expenses through unmeritorious litigation: PNG Ports Corporation Ltd v Canopus No. 71 Ltd (2010) N4288 (Kandakasi J).
73. I am satisfied that in the present case the plaintiff will have incurred substantial legal costs for this litigation, the plaintiff’s payment of which may well have had to be deferred pending the outcome of this assessment by the Court of the plaintiff’s damages. In view of the defendants’ absence at trial, much of the plaintiff’s legal costs could have been avoided had the defendants been minded several years ago to enter into settlement negotiations or mediation of the plaintiff’s claim. The defendants will therefore be ordered to pay the plaintiff’s costs of this proceeding on a solicitor/client basis, subject to any earlier interim orders as to costs already made in this suit.

JUDGMENT

74. The terms of the formal order of the Court on assessment of the plaintiff’s damages are as follows:

(1) Judgment against the defendants, jointly and severally, is entered for the plaintiff in the sum of K74,256 comprising:

(a) General damages: K52,866

(b) Interest on above damages at 8% per annum
from 31 March 2019 to 18 April 2024: K21,390

Total of damages and pre-judgment interest: K74,256

(2) Post-judgment interest on general damages shall accrue at the rate of 8% per annum on so much of the general damages of K52,866 as remains from time to time unpaid.

(3) Subject to earlier orders as to costs made in this proceeding, defendants shall be jointly and severally liable to pay the plaintiff’s costs of and incidental to this proceeding on a solicitor/client basis, such costs to be taxed if not agreed.

(4) The time for entry of this judgment is abridged to the time of signing by the Court which shall take place forthwith.

Judgment accordingly
________________________________________________________________

PANG Legal Services: Lawyers for the Plaintiff

Luthers Lawyers: Lawyers for the First & Second Defendants

^[1] See affidavit of service of Thomas Duma filed on 17 May 2022: Court document no. 2
^[2] Court document no. 4
^[3] Court document no. 8
^[4] Court document no. 17
^[5] Court document no. 18
^[6] Court document no. 20
^[7] The plaintiff’s writ was filed the next day, 1 April 2022.