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Inspac (PNG) Ltd v Monier Ltd [2023] PGSC 22; SC2375 (31 March 2023)

SC2375

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO.177 OF 2021

BETWEEN:
INSPAC (PNG) LIMITED
Appellant

AND:
MONIER LIMITED
First Respondent

AND:
MARTIN PALA in his capacity as CHAIRMAN, THE WORKERS COMPENSATION TRIBUNAL
Second Respondent

Waigani: David J, Kangwia J & Miviri J
2022: 25^th August
2023: 31^st March

INSURANCE LAW - doctrine of subrogation – appellant is insurer and first respondent is the insured in respect of basic statutory workers’ compensation insurance – opinion obtained from first respondent’s broker that pursuant to the provisions of the Workers’ Compensation Act, any and all medical attendances, travel and associated costs of overseas treatment would be indemnified by the insurer – insurer refused indemnity for such costs including medical attendances by doctors and others overseas who were not registered to practice in Papua New Guinea - first respondent’s employee injured in a workplace accident or during course of employment – injuries sustained to his leg, spine and face – doctors in Port Moresby recommended overseas treatment - employee medevacked to the Philippines for treatment - claim for workers claim the right of subrogation does not arise until the insurer admits liability to the insured and has paid the insured all amounts due in respect of the loss - right to be exercised in the name of insured – in the absence of a formal assignment of the right of action, the insurer cannot sue third party in its own name, but in the name of insured – on receiving of proper indemnity against costs, insured required to permit his name to be used in such proceedings – insurer’s right of subrogation not properly exercised – appeal dismissed with costs – Workers Compensation Act, s.69.

Cases Cited:

None

Treatise Cited:

Halsbury’s Laws of England, Volume 25, Fourth Edition, 2003 Reissue
Osborn’s Concise Law Dictionary, Tenth Edition

Legislation Cited:

Workers Compensation Act
National Court Rules

Counsel:

Soa Gor, for the Appellant
Emmanuel Asigau, for the First Respondent
No appearance, for the Second Respondent

JUDGMENT

31^st March, 2023

1. BY THE COURT: INTRODUCTION: This is a decision following the hearing of the substantive appeal. By Notice of Appeal filed on 21 December 2021, the Appellant, Inspac (PNG) Limited (the Appellant) appeals the whole of the judgment of Kandakasi DCJ and orders His Honour made on 16 November 2021 in National Court proceedings CIA No.16 of 2021: Monier Limited & Inspac (PNG) Limited v Martin Pala in his capacity as Chairman of the Workers’ Compensation Tribunal (the National Court proceedings).

2. The appeal lies without leave pursuant to s.14(1)(a) and (b) of the Supreme Court Act as the grounds involve questions of law and of mixed fact and law.

3. Having been satisfied that the Second Respondent, Martin Pala in his capacity as Chairman, The Workers Compensation Tribunal (Second Respondent) had due notice of the substantive hearing of the appeal fixed to take place here in Waigani on 25 August 2022 at 09:30 am, the Office of the Solicitor-General, Lawyer for the Second Respondent, having been served by the Appellant on 12 July 2022 with copies of the order made by the Court on 4 July 2022 and Notice of Hearing filed on 5 July 2022 fixing the date and time for hearing, we proceeded to hear the appeal in the absence of any representation made for and on behalf of the Second Respondent: Affidavit of Service of Ruth Haenere sworn on 13 July 2022 and filed on 14 July 2022.

BACKGROUND

4. The Appellant is an insurance company that provided workers’ compensation insurance cover to the First Respondent, Monier Limited (the First Respondent). On 1 October 2020, Vincent Tangaro who was an employee of the First Respondent sustained injuries while at work. Mr. Tangaro was treated by one Dr. Dinesh KM at the Pacific International Hospital. Due to the nature of the injuries sustained by Mr. Tangaro, it was recommended that Mr. Tangaro be medevacked to a specialist health facility to cater for his injuries. Based on the medical advice, Mr. Tangaro was medevacked to the Philippines for treatment. The Appellant refused to cover the costs associated with the medevack and treatment of Mr. Tangaro. As a result of the Appellant’s refusal, an application was made to the Workers’ Compensation Tribunal (the Tribunal) pursuant to s.69 of the Workers’ Compensation Act to determine if the Appellant was liable to reimburse the First Respondent for the costs expended on behalf of Mr. Tangaro. On 5 May 2021, the Second Respondent delivered a ruling on the application on behalf of the Tribunal. It was determined that the medical expenses incurred for the treatment of Mr. Tangaro were necessary, that s.69 of the Workers Compensation Act was not limited in scope and therefore the Appellant, as the insurer, was liable to reimburse expenses incurred by the First Respondent in connection with Mr. Tangaro’s treatment in the Philippines.

5. On 7 June 2021, the Appellant filed the National Court proceedings naming the First Respondent as the first appellant there without first obtaining the First Respondent’s consent and permission. The Appellant was named as the second appellant in the National Court proceedings. On 31 August 2021, the First Respondent as the first appellant in the National Court proceedings filed a notice of motion seeking to dismiss the National Court proceedings pursuant to Order 12 Rule 40, Order 18 Rule 12(4)(a)(i) and Order 12 Rule 1 of the National Court Rules and the inherent jurisdiction of the National Court for; being an abuse of the process of the National Court; being frivolous and vexatious; and for being incompetent. The contested motion was moved and determined by the National Court on 16 November 2021. Two issues in contention were; first whether the National Court proceedings were filed within time; and secondly, whether the National Court proceedings were competent when the First Respondent here and first appellant in the National Court proceedings were joined as an appellant without its consent. The trial judge found that; first, the National Court proceedings were filed within time, ie, they were filed within one month after the day when the decision of the Second Respondent was pronounced; and that second, the naming in the National Court proceedings of the First Respondent, there as the first appellant, without its consent and approval was irregular, improper hence, the National Court proceedings were incompetent and proceeded to dismiss them with costs in favour of the First Respondent there as first appellant on an indemnity basis, to be taxed, if not agreed.

GROUNDS OF APPEAL

6. The grounds of appeal are:

1. The trial judge fell into error of law, and or mixed fact and law by summarily dismissing the National Court proceedings when the Appellant joined the First Respondent as a party to the National Court proceedings on the principle of subrogation, which issue can properly be argued at trial.
   
2. The trial judge erred in law, and or mixed fact and law, by summarily dismissing the National Court proceedings when the evidence was that the Appellant’s interests as a party aggrieved by the decision of the Second Respondent of 5^th May 2021 should have been properly argued at trial.
3. The trial judge erred in law, and or mixed fact and law, by summarily dismissing the National Court proceedings when the appropriate relief was to remove the First Respondent as a party, and allow the Appellant’s claims to be tried.
   

ISSUES

7. The main issues that emanate from the grounds of appeal are:

1. Did the trial judge fall into error when he summarily dismissed the National Court proceedings when it is alleged that the Appellant had joined the First Respondent as a party in the National Court proceedings on the basis of the doctrine of subrogation, which issue could have been argued at the trial?
   
2. Did the trial judge fall into error when he summarily dismissed the National Court proceedings when it is alleged that the evidence was that the Appellant’s interests as a party aggrieved by the decision of the Second Respondent of 5 May 2021 could have been properly argued at the trial?
   
3. Did the trial judge fall into error when he summarily dismissed the National Court proceedings when the appropriate relief would have been to remove the First Respondent as a party and allow the Appellant’s claims to be tried?
   

8. When the issues are crystallised, we are of the view that the only principal issue to consider and determine in this appeal is whether the trial judge erred in summarily determining the National Court proceedings on the basis of want of compliance with the doctrine of subrogation.

SUBMISSIONS

9. The Appellant submits that as insurer that provided (subject to the terms of the contract of insurance between the parties) Basic Standard Workers’ Compensation Insurance Cover to the First Respondent at all material times, the doctrine of subrogation entitled it to join the First Respondent as an appellant in the National Court proceedings. In addition, the Appellant argued that the proper thing that the trial judge ought to have done was to have allowed the question of subrogation to proceed to trial for determination.

10. The First Respondent contends that the Appellant’s argument that the question of subrogation ought to have been properly left for trial is misconceived and should be rejected. It argues that this was because the issue of whether or not the Appellant’s right of subrogation was properly triggered did not form part of the Appellant’s ground of appeal or at all.

11. The First Respondent in essence also argues that the question of whether or not the Appellant could rely on the doctrine of subrogation to name the First Respondent as an appellant in the National Court proceedings went to the competency of those proceedings and was therefore properly before the trial judge through the First Respondent’s application for dismissal.

CONSIDERATION AND REASONS FOR DECISION

12. Osborn’s Concise Law Dictionary, Tenth Edition defines the term “subrogation” as follows:

“The substitution of one person or thing for another, so that the same rights and duties which attached to the original person or thing attach to the substituted one. If one person is subrogated to another, he is said to “stand in the other’s shoes,” e.g., creditors are subrogated to the executors’ right of indemnity against the estate where a business is carried on under the authority of the will; a person paying the premium on a policy of insurance belonging to another may be subrogated to that other; and an insurer is subrogated to the rights of the insured on paying his claim.” (Our underlining and emphasis)

13. The nature of the right of subrogation is discussed by the learned authors of Halsbury’s Laws of England, Volume 25, Fourth Edition, 2003 Reissue at paragraph 196 where it was said:

“In the strict sense of the term, subrogation expresses the right of the insurers to be placed in the position of the insured so as to be entitled to the advantage of all the rights and remedies which the insured possesses against third parties in respect of the subject matter. The precise nature of the third party’s liability to the insured is immaterial; subrogation applies even to a statutory liability. If the third parties are insured, the ultimate liability for the loss falls on their insurers. The right does not arise until the insurers have admitted liability to the insured, and have paid him all amounts due in respect of the loss.” (Our underlining and emphasis)

14. The right to be exercised in the name of the insured is discussed by the learned authors of Halsbury’s Laws of England, Volume 25, Fourth Edition, 2003 Reissue at paragraph 199 where it was said:

“In the absence of a formal assignment of the right of action, the insurers cannot sue the third party in their own names; they must bring the proceedings in the name of the insured. On receiving a proper indemnity against costs, the insured is required to permit his name to be used in such proceedings.”

15. This appeal has no merit as:

1. The Appellant concedes that it did not obtain the consent and permission of the First Respondent for its name to be used as an appellant in the National Court proceedings.
2. There is no evidence to demonstrate that the First Respondent received from the Appellant an indemnity against costs.
3. It is not disputed that the Appellant did not admit liability to the First Respondent.
4. The Appellant did not pay the First Respondent all amounts due in respect of the loss the First Respondent has incurred for the medical treatment of Mr. Tangaro in the Philippines.
   

16. What this boils down to is that the jurisdiction of the National Court was not properly invoked by the Appellant as the insurer in its purported exercise of the doctrine of subrogation. The National Court proceedings were not competent and therefore were ripe for dismissal.
17. We find no error in the trial judge summarily dismissing the National Court proceedings.

CONCLUSION

18. For the reasons we have outlined above, the appeal should be dismissed.

19. Costs follow the event, i.e., the Appellant shall pay the First Respondent’s costs of and incidental to this appeal, which shall be taxed if not otherwise agreed.

ORDER:

20. The Court orders that:

1. The appeal is dismissed.
   
2. Costs follow the event, i.e., the Appellant shall pay the First Respondent’s costs of and incidental to this appeal, which shall be taxed if not otherwise agreed.

________________________________________________________________

Fiocco & Nutley: Lawyers for the Appellant
Pacific Legal Group: Lawyers for the First Respondent
Solicitor-General: Lawyer for the Second Respondent