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Motor Vehicles Insurance (PNG) Trust v Pupune [1993] PGSC 12; [1993] PNGLR 370 (14 December 1993)

PNG Law Reports 1993

[1993] PNGLR 370 - MVIT v James Pupune�

[1993] PNGLR 370

SC452

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

MOTOR VEHICLES INSURANCE (PNG) TRUST

V

JAMES PUPUNE

Waigani

Kapi DCJ Jalina Doherty JJ

24 August 1993

14 December 1993

PRACTICE AND PROCEDURE - Particulars of damage - Function - Personal injury.

EVIDENCE - Evidence led by the plaintiff at trial although facts not pleaded - Evidence led without objection - Whether the Court can take evidence into account.

DAMAGES - Personal injuries - Minor brain injury - Loss of learning capacity - Method of calculating amount of damages.

Facts

The respondent sustained injuries in a motor vehicle accident and was awarded general and special damages. Details of the items of special damages, including economic losses, were not pleaded.

Held

N1>1.������ Where evidence is admitted of economic loss which was not pleaded, and the evidence was not objected to, the defendant cannot, on appeal, hark back to the pleadings and submit that economic loss was not pleaded. Reasoning in Domsalla v Barr [1969] 3 All ER 487 adopted.

N1>2.������ Loss of earning capacity is based on the earnings of the plaintiff at the time of the injury.

N1>3.������ The trial judge erred in not taking into account mitigating factors contributing to the plaintiff's loss of earnings.

N1>4.������ The trial judge erred in not taking into account the failure on the part of the plaintiff to mitigate his damages.

Cases Cited

Papua New Guinea cases cited

Coady v Motor Vehicles Insurance (PNG) Trust [1987] PNGLR 55.

Dempsey v Project Pacific Ltd [1985] PNGLR 93.

Landao v PNG [1988] PNGLR 279.

Lewis v PNG [1980] PNGLR 219.

Pose v PNG [1981] PNGLR 556.

Other cases cited

Dare v Pulham (1982) 148 CLR 658.

Domsalla v Barr [1969] 3 All ER 487.

Gould v Mount Oxide Mines Ltd [1916] HCA 81; (1916) 22 CLR 490.

Moeliker v A Reyrolle & Co Ltd [1977] 1 All ER 9.

Counsel

P Smith for the appellant.

P Payne for the respondent.

14 December 1993

KAPI DCJ JALINA DOHERTY JJ:� The respondent sued for damages for personal injuries he received in a motor vehicle accident on the Highlands Highway on 2 July 1988. Liability was disputed and the matter went to trial. The trial judge gave judgment in favour of the respondent and, further, found that there was no contributory negligence on his part.

The respondent suffered from a concussion, a fractured base of skull, and laceration of the forehead. He was in a coma for several hours, bleeding from the left ear and suffering proptosis of the left eye. The bleeding and bulging of the eye was due to the build up of leaking fluids inside the skull. A facial nerve was permanently damaged. He lost the use of facial muscles on the left side of the face and his mouth has a slur. The doctor's report states:

"Ten months after the accident he claims to have frequent headache, defective memory and defective consideration which are not uncommon in post head injury persons. Besides that he was found to have persistent left facial nerve paralysis, excessive laceration from the left eye and the forehead scar which he refused plastic surgery.

Therefore he has a slight chance of recovering from the other complaints but facial nerve paralysis is permanent. He has lost 100% of the effective use of his left face and about 50% of the general efficiency."

The Court assessed the damages as follows:

K

The appellant appealed against the whole of the judgment. However, in a supplementary notice of appeal, the appellant abandoned the grounds relating to liability and confined the grounds of appeal to assessment of damages as follows:

N2>"3(a)�� As the plaintiff had not set forth in his Statement of Claim details of each item of special damages claimed, including wages and other economic losses, both present and future, as required by O 8, r 33 (1) the learned trial judge erred in making any award for either:

(i)������ economics loss to date of trial; or

(ii)����� economic loss in the future,

N2>(b)����� In the alternative, having found that the plaintiff's real loss was his future economic loss, the learned trial judge erred in:

(i)������ including in his award for loss of earning capacity a component for pre-judgment economic loss from the date of the accident to the date of trial;

(ii)����� awarding interest on that component for pre-judgment economic loss from the date of the accident to the date of trial;

(iii)���� finding that a proper sum for future economic loss was K60,000 as that figure was manifestly excessive;

(iv)���� in reducing the sum for future economic loss by only 14% to take into account the contingencies of life;

N2>(c)����� The award of K25,000 for general damages is manifestly excessive.

N2>(d)����� His Honour erred in awarding future economic loss in reliance on evidence which he had not accepted."

At the hearing of the appeal, the parties agreed to the following propositions:

N2>1.������ That the trial judge erred in awarding an interest at 8% on pre-judgment economic loss from July 1988 to the date of trial.

N2>2.������ That there was no finding by the trial judge of any past economic loss.

N2>3.������ That the award by the trial judge in relation to loss of earning capacity does not include any past economic loss.

The result of this concession is that the appeal is allowed in respect of grounds 3(b) (i) and (ii). The appeal proceeded on the balance of the grounds of appeal.

THE REQUIREMENTS OF PLEADING UNDER ORDER 8 RULE 33(1).

Order 8 r 33(1)(b) and (g) of the National Court Rules are as follows:

N2>"33.��� Particulars to be given in death or personal injuries cases

(1)����� Where a claim is made by the plaintiff for damages for breach of duty, and the damages claimed consist of or include damages in respect of the death of any person or in respect of personal injuries to any person the statement of claim endorsed on the writ of summons shall set forth full particulars of the claim, including:

...

(b)����� a statement in summary form, of the material facts relied on as giving rise to the cause of action.

...

(g)����� details of each item of special damages claimed, including wages and other economic loss, both present and future ...."

Counsel for the appellant, in essence, submitted that the rule provides for a complete code of pleadings with regard to claims for damages in respect of personal injuries, and it is essential to plead all material facts which give rise to a claim (O 8, r 33(1)(b)). It is further submitted that economic loss is akin to special damages, which must be pleaded in order to be recovered (O 8 r 33(1)(g)). Counsel for the appellant submitted that the respondent did not plead any economic loss; therefore, the trial judge erred in awarding a figure for economic loss.

Counsel for the respondent submitted that the appellant is not entitled to raise this on appeal as counsel for the appellant did not object to the evidence on matters that were not pleaded. He further submitted that counsel for the appellant allowed the issue of economic loss to proceed and contested the issue on its merits at the trial.

Can the appellant raise this issue on appeal? Counsel for the appellant relied on Dempsey v Project Pacific Ltd [1985] PNGLR 93 as supporting the proposition that an appellant may raise and succeed on a major point which was not raised before the National Court. That was a case in which an application to set aside a judgment was refused by the trial judge. On appeal to the Supreme Court, the appellant raised a new matter for the first time on the question of whether the claim was properly for a "liquidated demand". Counsel for the respondent in that case did not raise any objection to the new matter being raised on appeal, and the appeal was decided on the new matter. This case can give very little assistance on the issue at hand.

The issue raised in this case is somewhat similar to Domsalla v Barr [1969] 3 All ER 487. In that case, it was held that it was necessary to plead any special circumstances which will probably lead the plaintiff to sustain in the future losses over and above those which, in the ordinary way, would reasonably be expected to flow from the accident. Edmund Davies LJ said at p 493:

"By adverting to the plaintiff's intention to set up in business on his own account, there has been introduced into the case an entirely new element which had received no adumbration at all in the statement of claim. For that reason, in my judgment, the plaintiff was going outside his pleading, and objection might properly have been taken to the leading of such evidence. The objection, however, was not made, and accordingly it is not right, in my judgment, for this court to say now it will not have regard to such evidence as was called in support of this new, unpleaded matter ...."� (Emphasis added)

It is well established that pleadings and particulars have the following functions:

N2>1.������ they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it;

N2>2.������ they define the issues for decision in the litigation and, thereby, enable the relevance and admissibility of evidence to be determined at the trial; and

N2>3.������ they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. See Dare v Pulham (1982) 148 CLR 658 at 664.

After setting out the functions of pleadings, the High Court went on to say:

"Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings (Gould and Birbeck and Bacon [1916] HCA 81; (1916) 22 CLR 490 at pp 517, 518; Sri Mahant Govind Rao v Sita Ram Kesho (1898) LR 25 Ind App 195, at p 207.)"

In Gould's case at p 517, Isaacs and Rich JJ in a joint judgment said:

"But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest. There is abundant authority for this, even if the matter were required to rest on authority only. See, for instance Nevill v Fine Art and General Insurance Co [1896] UKLawRpAC 58; (1897) AC 68 at p 76; Browne v Dunn 6 R 67 at p 75, the relevant passage being quoted fully in Rowe v Australian United Steam Navigation Co [1909] HCA 25; 9 CLR 1, at p 24."

Counsel for the appellant, by his conduct at the trial, has allowed the issue of economic loss, which was not pleaded, to be litigated. This was clearly indicated by not objecting to evidence relating to matters not pleaded and by contesting the matters relating to economic loss on their merits. It is clear from the authorities we have referred to that, if a party allows an issue which is not pleaded to be litigated fairly, he cannot on appeal hark back to the pleadings and argue that the issue was not pleaded. We agree with counsel for the respondent that the appellant cannot now raise this on appeal. We would dismiss this ground of appeal.

ECONOMIC LOSS

The trial judge in his judgment used the terms "future economic loss" and "loss of earning capacity". It was weakly suggested by counsel in submission that these terms were used interchangeably to mean the same thing: namely, actual economic loss that flows directly from the injuries received by the respondent.

With respect, the trial judge did not clearly clarify the use of the terms "future economic loss" and "loss of earning capacity" in personal injury cases. It is, therefore, necessary in this case to set out the proper principles and clarify the use of these terms. Under the Underlying Law of Papua New Guinea, a claim for damages under the head "economic loss" in personal injury cases may be broken into two heads:

N2>1.������ loss of actual earnings; and

N2>2.������ loss of earning capacity.

This was affirmed by the Supreme Court in Coady v Motor Vehicles Insurance (PNG) Trust [1987] PNGLR 55. The Court adopted the common law principles. On p 57 Kapi DCJ said:

"The first deals with the actual losses which can be calculated mathematically. Whereas, the second category deals with the risk that the plaintiff has lost the earning capacity to obtain an equivalent or a better job in the future."

On the first head of claim in the case before us, the trial judge made the following findings:

"The evidence of the plaintiff's business activities and employment have already been outlined. A claim is made for loss of business profits, loss of car hire charges and for net difference in salary. However there is evidence that the store/bottle business in North Goroka had ceased to exist at about the time of the accident because the premises and goods had been provided to the plaintiff as something of a favour by a prominent business person but that the premises were taken back as they were required for other activities.

I am not satisfied that the loss of this business can be directly attributable to the plaintiff's accident. Similarly the trade store business at the plaintiff's village appears to have been closed for reasons other than those involving the accident. Neither do I find that the hire of the plaintiff's vehicle had to cease as a direct result of the injuries which the plaintiff suffered."

It is clear from this finding that there is no claim for actual economic loss of business profits and salary.

Having dismissed the claim for actual economic loss, the trial judge then considered the second head of economic loss, namely, loss of earning capacity. This claim is different in nature. In Coady (supra) at p 57, Kapi DCJ quoted a passage from the leading English case of Moeliker v A Reyrolle & Co Ltd [1977] 1 All ER 9 to indicate the nature of this claim:

"A plaintiff's loss of earning capacity where as a result of his injury his chances in the future of getting in the labour market work (or work as well paid as before the accident) have been diminished by his injury.... This head of damage generally arises ..., but there is a risk that he may lose this employment at some time in the future and may then, as a result of his injury, be at a disadvantage in getting another job or an equally well paid job."

And at p 58 his Honour further quoted from the same case on the proper approach to assessment of this head of claim:

"The consideration of this head of damages should be made in two stages.

(1)����� Is there a substantial or real risk that a plaintiff will lose his present job at some time before the estimated end of his work in life?

(2)����� If there is (but not otherwise), the court must assess and quantify the present value of the risk of the financial damage which the plaintiff will suffer if the risk materialises, having regard to the degree of the risk, the time when it may materialise, and the factors, both favourable and unfavourable, which in a particular case will, or may, affect the plaintiff's chances of getting a job at all, or an equally well paid job."

In the present case, it was not necessary to ask the first question. At the time of the trial, the respondent had already ceased to operate his business activities. The trial judge, however, considered the possibility of the respondent returning to the business activities he was involved in before the accident. The trial judge found:

"Nevertheless it is clear that all of the injuries have contributed to the plaintiff's inability to resume his promising business life and to complete his commerce studies. Both the mental condition caused by his disfigurement and the brain injuries have contributed to this.... In my judgment the plaintiff's real loss is his future economic loss resulting from the impairment which has effectively ruled out his return to self-employment and the completion of his studies which would have widened his future even further."

The ground of appeal challenges only the amount of damages under this head. This presents difficulties. Browne LJ in Moeliker (supra) said at p 16:

"But if the court decides that there is a risk which is 'substantial' or 'real', the court has somehow to assess this risk and quantify it in damages. Difficult as this is, the courts sometimes have to assess the money value of a chance in other contexts (see, for example, Chaplin v Hicks [1911] UKLawRpKQB 104; [1911] 2 KB 786 and Otter v Church, Adams, Tatham & Co [1953] 1 All ER 168). Clearly no mathematical calculation is possible. Edmund Davies and Scarman LJ said in Smith v Manchester Corpn (1974) 17 KIR 1 that the multiplier/multiplicand approach was impossible or 'inappropriate', but I do not think that they meant the court should have no regard to the amount of earnings which a plaintiff may lose in the future, nor to the period during which he may lose them. What I think they meant was that the multiplier/multiplicand method cannot provide a complete answer to this problem because of the many uncertainties involved. The court must start somewhere, and I think the starting point should be the amount which a plaintiff is earning at the time of the trial and an estimate of the length of the rest of his working life. This stage of the assessment will not have been reached unless the court has already decided that there is a 'substantial' or 'real' risk that a plaintiff will lose his present job at some time before the end of his working life, but it will now be necessary to go on and consider (a) how great this risk is and (b) when it may materialise, remembering that he may lose a job and be thrown on the labour market more than once (for example, if he takes a job and then finds he cannot manage it because of his disabilities). The next stage is to consider how far he would be handicapped by his disability if he was thrown on the labour market, that is what would be his chances of getting a job, and an equally well paid job. Again all sorts of variable factors will, or may, be relevant in particular cases, for example, a plaintiff's age; his skills; the nature of his disability; whether he is only capable of one type of work or whether he is, or could become, capable of others; whether he is tied to working in one particular area; the general employment situation in his trade or his area, or both. The court will have to make the usual discounts for the immediate receipt of a lump sum and for the general chances of life."

In the present case, some of the uncertainties referred to in the judgment of Browne LJ are not applicable, as in this case, the respondent had ceased his business activities and was unable to enter the self-employed business activities he had prior to the accident. In assessing the amount, the trial judge correctly used what the respondent was earning in the business activities as a guide and found that he had a further working life of 30 years.

In considering whether he was capable of returning to his business activities before the accident or other related activities, consideration of his ability to do this was critical. The trial judge considered this in the following passage:

"The plaintiff gave evidence that his head injuries had left him with a reduced ability to concentrate and with an impaired memory. There was evidence of head aches and inability to control emotions and outbursts with his family.... There was evidence that he could not continue his studies because of reduced concentration, lack of memory and problem with writing. Consistent with injury to the left side of the brain there was contractual dysprascia of the right hand causing an inability to make figures or letters properly.

He was examined by Dr Brother Andrew who in his report of the 14th March 1990 was inclined to the view that the most significant disability was the facial scaring and that his "rather slow improvement (it is 18 months since the accident) is not the result of residential brain injury but to the concern and embarrassment of the disfigurement. In my opinion the concern about his appearance with the continual reminder of the accident is interfering with returning to a more active life; and seems in fact to have reduced the motivation in the earlier period when he left hospital".

Dr Andrew has given evidence here and is now inclined to the view, given the advantage of again assessing the plaintiff after a longer period since the accident, that the more significant injury is the brain injury. He said his short term memory and attention span were affected and reduced by about 50% and that from tests conducted he could not draw properly which was significant as the left side of the brain controlled the right hand (the plaintiff being right handed). Dr Andrew stated that the progress that the plaintiff had made from the time of the accident until his examination in March 1990 had not been maintained to the present time and that his condition had now plateaued so that he had gone about as far as he was going to go. He thought his condition was such that his mental state with a poor attention factor would mean that he could again be self-employed or that he could go back to his studies at the College of External Studies (the plaintiff had been doing commerce.)"

The grounds of appeal do not question the finding of the trial judge in this regard. What the appellant complains of is that the assessment is excessive. It appears from the judgment that the trial judge used the multiplier/multiplicand method in assessing the final figure. As we pointed out from the judgment of Browne LJ in Moiliker's case, this method does not provide the full answer to the assessment of this head of claim in cases where the risk of losing a job and entering the job market is only a risk in the future; in this case, it was certain what the respondent was facing at the time of the trial, and this was probably the closest method to assessing the damages. However, a significant factor which should be taken into account, which does not favour the respondent, is the evidence that the loss of business was due to causes other than the injuries received by the respondent. These same causes may well prevent the respondent from ever being successful at all in business. No specific evidence was led at the trial to discount the possibility of factors other than the injuries preventing the respondent returning to his business life.

Another factor which does not favour the respondent is the medical report with regard to the facial scarring. The doctor's report dated the 14 March 1993 stated:

"The most significant disability is the facial scarring. The rather slow improvement (it is 18 months since the accident) is not the result of residual brain injury but to the concern and embarrassment of the disfigurement. In my opinion the concern about his appearance with the continual reminder of the accident is interfering with returning to a more active life; and seems in fact to have reduced the motivation in the earlier period when he left hospital.

Were he to agree to the plastic surgery as recommended by Mr Clezy it would contribute to a better motivation to overcome the slow recovery he is at present making. By two years after the accident he would be expected to be able to return to full employment, sports and his studies if he so wishes, if he had gradually increased his activity which in my opinion the concern for the scarring has delayed."

At the trial, Dr Andrew tried to paint a picture that the effects on the respondent were due to the minor brain injury. This did not completely discount the effect of embarrassment arising from the facial scarring. This is a factor to be taken into account in considering why he had not returned to work at the time of the trial.

The trial judge did not take these matters into account in his assessment of this head of claim. Doing the best we can in the circumstances, we would reduce this head of claim by a factor of 50%. We would allow the appeal and substitute an award for K30,000.

REDUCTION OF 14% FOR CONTINGENCIES OF LIFE

We are not convinced that an error has been demonstrated in this regard. We would dismiss this ground of appeal. In the end result, the net award for loss of earning capacity would be K25,800.

GENERAL DAMAGES

Counsel for the appellant has submitted that the trial judge fell into error in awarding K25,000 on two basis:

N2>1.������ that the respondent has failed to show that his continual state of affairs was due to the brain injury; and

N2>2.������ that the respondent failed to mitigate his damages by refusing to undergo plastic surgery.

Counsel for the appellant does not go so far as to submit that no award should be made. He submitted that, taking into account these matters, the award should be much lower. Several cases have been referred to assist the court in reaching the proper award for this head of claim. We were referred to Lewis v PNG [1980] PNGLR 219; Pose v PNG [1981] PNGLR 556; Landao v PNG [1988] PNGLR 279.

In Lewis' case, the plaintiff suffered brain injury and was left with some permanent disabilities. The plaintiff had confusion, progressive memory disturbance, psychoneurosis, and likely deterioration of the cervical spine. The plaintiff was awarded K25,000 for general damages.

In Pose's case, the plaintiff suffered brain damage resulting in right sided hemiplegia. There was a minor loss of function of the right leg and arm. The plaintiff was awarded K9,000 for general damages.

In Landao's case, the plaintiff suffered a head injury and was unconscious for five days; he continued to have difficulty with walking long distances and keeping his balance. He was awarded K9,000 for general damages.

The last two mentioned cases are more comparable to the facts in the present appeal. Having regard to the injuries in the present appeal and taking into account inflation over the last couple of years, we would assess damages in the present case at K11,000. We would reduce this amount by a third for failure on the part of the respondent to mitigate his damages by refusing plastic surgery. The net award would be K7,333.34.

The formal orders of the court would be: we would allow the appeal, quash the decision of the trial judge, and substitute the order as follows:

We further order that the respondent pay the appellant's cost of this appeal.

Lawyer for the appellant: Young & Williams

Lawyer for the respondent: Blake Dawson Waldron