N434

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

LUCIAN VEVEHUPA

V

MOTOR VEHICLES INSURANCE (P.N.G.) TRUST

Waigani
Kapi DCJ

12 August 1983
17 October 1983

DAMAGES - Measure of - Personal injuries - Medical and hospital care - Motor vehicle accident - Hospital treatment in Australia - Treatment under Repatriation Act 1920 (Aust.) - Treatment not free treatment - Liability for free treatment considered.

DAMAGES - Currency in which to be awarded - Currency in which loss felt - Cost of medical treatment provided in Australia - Cost to be recouped in kina.

On a claim for damages for personal injuries as a result of a motor vehicle accident, the plaintiff claimed $A28,159.42 being an amount notified to the plaintiff for the cost of medical treatment by the Repatriation Commission of Australia pursuant to the Repatriation Act 1920 (Aust.) which empowers the Commission to determine that for special reasons payment should be made for treatment under s. 124 (1ab) of the Act. The medical treatment undertaken by the plaintiff was for the fitting of artificial limbs which treatment was not available in Papua New Guinea.

Held

(1) Where as a result of a defendant’s negligence personal injuries are suffered creating a need for medical services and those medical services are provided at full cost the defendant is liable for the full cost of the services provided the costs are reasonable.

(2) Where as a result of a defendant’s negligence personal injuries are suffered creating a need for medical services and those medical services are provided free of charge the defendant is liable for the proper and reasonable cost of supplying those needs subject to the qualifications in Griffiths v. Kerkemeyer (1977) 139 C.L.R. 161.

Donnelly v. Joyce [1974] 1 Q.B. 454 at 461-2, adopted.
Griffiths v. Kerkemeyer (1977) 139 C.L.R. 161, followed.
Kovac v. Kovac [1982] 1 N.S.W.L.R. 656, considered.

(3) Medical services provided to the plaintiff by the Repatriation Commission of Australia pursuant to the Repatriation Act 1920 (Aust.), s. 124(1a), and the Repatriation Regulations (Aust.), r. 70a, the charges for which the Repatriation Commission had indicated its intention to recover from the plaintiff, were not provided free of charge and the defendant was accordingly liable for the reasonable cost thereof.
Taylor v. Bristol Omnibus Co. Ltd [1975] 1 W.L.R. 1054, referred to.

(4) The costs charged for the medical services provided by the Repatriation Commission were in the circumstances reasonable.

(5) The damages recoverable for the cost of medical services should be expressed in kina rather than in Australian dollars because that was the currency in which the plaintiff felt his loss and which it was reasonably foreseeable he would have to spend.
The Despina R. [1979] A.C. 685, at 696-697, adopted and applied.
Miliangos v. George Frank (Textiles) Ltd [1976] A.C. 443, referred to.

Cases Cited

Blundell v. Musgrave (1956) 96 C.L.R. 73; (1956) 30 A.L.J 524; [1956] A.L.R. 1183.
Brown, Robert v. Motor Vehicles Insurance (P.N.G.) Trust [1980] P.N.G.L.R. 409.
Celia, Owners of Steamship v. Owners of Steamship Volturno [1921] 2 A.C. 544; [1921] All E.R. Rep. 173.
Cunningham v. Harrison [1973] 1 Q.B. 942; [1973] 3 W.L.R. 97; [1973] 3 All E.R. 463.
Despina R., The [1978] 3 W.L.R. 804; [1979] A.C. 685; [1979] 1 All E.R. 421.
Donnelly v. Joyce [1974] 1 Q.B. 454; [1973] 3 W.L.R. 514; [1973] 3 All E.R. 475.
Griffiths v. Kerkemeyer (1977) 139 C.L.R. 161; (1977) 51 A.L.JR. 792; (1977) 15 A.L.R. 387.
Iambakey Okuk and The Independent State of Papua New Guinea v. Gerald Sidney Fallscheer [1980] P.N.G.L.R. 274.
Kokonas Kandapak v. The Independent State of Papua New Guinea [1980] P.N.G.L.R. 573.
Kovac v. Kovac [1982] 1 N.S.W.L.R. 656.
Miliangos v. George Frank (Textiles) Ltd [1976] A.C. 443; [1975] 3 W.L.R. 758; [1975] 3 All E.R. 801.
Taylor v. Bristol Omnibus Co. Ltd [1975] 1 W.L.R. 1054; [1975] 2 All E.R. 1107.
Vian Guatal v. The Independent State of Papua New Guinea [1981] P.N.G.L.R. 230.
Wahgi Savings and Loan Society Ltd v. Bank of South Pacific Ltd (Unreported judgment No. SC185 dated 25 November 1980).

Statement of claim

These were proceedings for damages for personal injuries in which the only matter in dispute related to a claim for the cost of medical treatment provided by the Repatriation Commission of Australia.

Counsel

P. White, for the plaintiff.
I. Molloy, for the defendant.
Cur. adv. vult.

17 October 1983

KAPI DCJ: This is a claim for damages arising out of injuries suffered in a motor vehicle accident on 28 October 1976.

The parties have reached a settlement of the claim but there is an outstanding dispute of a figure of $A28,159.42, being an amount allegedly notified to the plaintiff for the cost of medical treatment by the Repatriation Commission of Australia.

As far as is relevant for the purposes of this case, the plaintiff suffered injuries to both legs. He received initial treatment in Popondetta Hospital and then in Port Moresby General Hospital. As a consequence of the injuries he received the lower parts of both lower limbs were amputated. This necessitated further medical treatment. Facilities do not exist in Papua New Guinea for this kind of treatment. For this reason, the plaintiff was admitted to Repatriation hospitals in Brisbane, Greenslopes and Rosemount. The full details of his treatment, and the cost of it, are set out in exhibits before the court.

It is conceded by the defendant that the condition of the plaintiffs injuries was such that it was reasonable for him to go to Australia for treatment. It is also further conceded that the treatment given in the two hospitals was reasonably necessary. I have assumed that negligence by the defendant is admitted. The defendant however disputes that:

(a) it is legally liable to the plaintiff for the cost of this treatment and, alternatively,

(b) the cost of treatment is not reasonable.

(a) Liability

Counsel for the plaintiff submitted that the defendant in the circumstances of this case is liable on two separate bases. First, he submitted that on the authority of Blundell v. Musgrave (1956) 96 C.L.R. 73, that the plaintiff has been notified by the Repatriation Commission of Australia to pay the cost of the treatment given to him under the provisions of the Repatriation Act 1920 (Aust.), and the Regulations. He submitted that under s. 124(1)(a) of the Repatriation Act the plaintiff is liable to pay the full cost of the treatment, and therefore, he submitted, the defendant is liable. In the alternative, he submitted that on the authority of Griffiths v. Kerkemeyer (1977) 139 C.L.R. 161, by reason of the defendant’s negligence, the plaintiff incurred a need for which the medical treatment was necessary, and was given. He submitted that the liability of the plaintiff to pay the Repatriation Commission of Australia is not the legal basis of this claim, but that the accident has given rise to a need, and he submitted that it is the cost of supplying the services for this need which is now the basis of liability.

Counsel for the defendant submitted that the plaintiff can only succeed in this claim if he proves that he is legally liable to pay the cost of treatment to the Repatriation Commission of Australia. He submitted that I should apply the principle as stated in Blundell v. Musgrave and submitted that the principle stated in Griffiths v. Kerkemeyer is only applicable in cases where the services are provided free by a friend or a member of the family.

In considering this point of law, I must apply the common law of England as I find it as at 16 September 1975: Sch. 2.2 of the Constitution. I say this on the assumption that the common law of England is not inconsistent with a constitutional law or a statute, or inapplicable or inappropriate to the circumstances of the country, or inconsistent with custom as adopted under sch. 2.1. When the common law of England has gone through this process and is still found to be applicable, this will be binding on the courts of Papua New Guinea. See Miles J in Vian Guatal v. The Independent State of Papua New Guinea [1981] P.N.G.L.R. 230 at 244. This, of course, is the starting point in the development of the underlying law of Papua New Guinea. It is the duty of this Court to develop this law from time to time after the cut-off point stated in the Constitution: see sch. 2.4 of the Constitution. See also Wahgi Savings and Loan Society Ltd v. Bank of South Pacific Ltd (Unreported judgment No. SC185 dated 25 November 1980). As I said in Iambakey Okuk and The Independent State of Papua New Guinea v. Gerald Sidney Fallscheer [1980] P.N.G.L.R. 274, at 280, in determining the common law of England at the cut-off point, I may have regard to decisions in other Commonwealth countries where the common law of England is applied.

The starting point is the case of Donnelly v. Joyce [1974] 1 Q.B. 454. One of the main issues in that case related to a claim for special damages which was made up of:

(a) travelling expenses of parents to and from hospital;

(b) cost of special socks and boots;

(c) two years’ loss of wages incurred by the plaintiffs mother while caring for the plaintiff.

The main contention was the claim for loss of wages by the plaintiffs mother. The defendant disputed the legal liability to pay. It was submitted, on behalf of the defendant, that the plaintiff could not, in law, recover as damages the amount which his mother lost as a result, for that was not the plaintiffs loss. It was contended that the plaintiff could not succeed unless he showed that there was a legal liability to pay the mother for services rendered to him: see Blundell v. Musgrave. The Court of Appeal rejected these submissions and enunciated the principle in the following words at 461-462:

"We do not agree with the proposition, inherent in Mr Hamilton’s submission, that the plaintiffs claim, in circumstances such as the present, is properly to be regarded as being, to use his phrase, ‘in relation to someone else’s loss,’ merely because someone else has provided to, or for the benefit of, the plaintiff — the injured person — the money, or the services to be valued as money, to provide for needs of the plaintiff directly caused by the defendant’s wrongdoing. The loss is the plaintiffs loss. The question from what source the plaintiffs needs have been met, the question who has paid the money or given the services, the question whether or not the plaintiff is or is not under a legal or moral liability to repay, are, so far as the defendant and his liability are concerned, all irrelevant. The plaintiffs loss, to take this present case, is not the expenditure of money to buy the special boots or to pay for the nursing attention. His loss is the existence of the need for those special boots or for those nursing services, the value of which for purposes of damages — for the purpose of the ascertainment of the amount of his loss — is the proper and reasonable cost of supplying those needs. That, in our judgment, is the key to the problem. So far as the defendant is concerned, the loss is not someone else’s loss. It is the plaintiffs loss."

This is a general statement of the law on liability in circumstances where such services are provided free. I adopt this as the law in this jurisdiction. In the application of this general principle, there can be no distinction between cases where the services or goods are supplied by relatives or friends on the one hand, and those that are supplied by a welfare institution, either private or government, on the other.

This principle was followed in Australia in Griffiths v. Kerkemeyer. The previous decision of Blundell v. Musgrave was not followed. Griffiths v. Kerkemeyer has been followed in a number of cases in Papua New Guinea: see Kokonas Kandapak v. The Independent State of Papua New Guinea [1980] P.N.G.L.R. 573 at 578 and Robert Brown v. Motor Vehicles Insurance (P.N.G.) Trust [1980] P.N.G.L.R. 409 at 422.

The principle in Donnelly v. Joyce was further qualified in Griffiths v. Kerkemeyer. For a full discussion of the principles in Griffiths v. Kerkemeyer, see Kovac v. Kovac [1982] 1 N.S.W.L.R. 656. However, as it will appear in a moment, it is not necessary for me to consider these qualifications in detail in this case. The qualifications enunciated in the Australian cases apply in circumstances where services provided for accident-caused needs are supplied gratuitously. In Kovac v. Kovac Reynolds JA. said, at 659:

"The benefits received in satisfaction of the accident-caused need may involve the provision of money, goods or services. If these benefits are supplied at full cost no problem arises as, assuming the cost to be reasonable, that cost provides a measure of the plaintiffs loss. If they are supplied wholly or partially gratuitously then the second qualification requires consideration. They may be supplied pursuant to a statute dealing with social welfare, they may be supplied under some contractual arrangement or by some charitable organization whether funded by the State or not, or they may be supplied by relatives including a spouse or by charitably motivated friends or neighbours. Gibbs J in Griffiths v. Kerkemeyer (1977) 139 C.L.R. 161, at 169, instances the case where all necessary hospital, medical and nursing services are provided by the State at no expense to the injured plaintiff and offers the tentative view that in such a case the defendant should have a credit in respect of this subvention." (Emphasis added.)

In Cunningham v. Harrison [1973] 1 Q.B. 942, 953, 954, the Court of Appeal stated that where a plaintiff is likely to be provided for by the State free of charge, he cannot claim this as part of his damages. However this was qualified in a later case of Taylor v. Bristol Omnibus Co. Ltd. [1975] 1 W.L.R. 1054. Lord Denning said, at 1058:

"In Cunningham v. Harrison [1973] Q.B. 942, 953, 954, we said that, if and in so far as a disabled person is likely to be provided for by the state free of charge, he cannot claim it as part of his damages. But in this case we have been referred to section 29(5) of the National Assistance Act 1948. It says that a local authority may recover such charges as they may determine. And we are told that in this present case they may make a charge for any services rendered by them. So it would not be right to regard their services as free."

It is to be borne in mind that Donnelly v. Joyce and Griffiths v. Kerkemeyer have not altered the general principles of assessing damages arising from a motor vehicle accident. They deal with a particular area of damages in cases where services are supplied without full cost to the plaintiff, that is to say, gratuitously: see Mahoney JA. in Kovac v. Kovac [1982] 1 N.S.W.L.R. 656 at 674-5. In a case where negligence is not in dispute and medical services are provided at full cost, the defendant is liable to pay the cost of those services, provided they are reasonable. If they are provided free then the qualifications in Griffiths v. Kerkemeyer are relevant.

It follows from this that I need to determine whether or not the medical services provided to the plaintiff by the Repatriation Commission of Australia are free. Under s. 120d of the Repatriation Act 1920 (Aust.), the Commission may establish, control and administer hospitals for the care of persons eligible to receive medical treatment under the Act. This is essentially a free service. It would appear that the plaintiff was admitted for treatment under s. 124(1ab)(b)(i). The Commission may determine, for special reasons, that payment should be made for the services rendered in accordance with s. 124(1a) of the Repatriation Act 1920 (Aust.) and r. 70a of the Repatriation Regulations (Aust.). Exhibit A is a document dated 5 August 1983, addressed to the plaintiff and signed by a delegate of the Repatriation Commission, setting out the fact that he was formally notified on 9 December 1982 that under the provisions of r. 70a of the Repatriation Regulations (Aust.), in the opinion of the Commission, he was entitled to recover or receive from the defendant as damages, the cost of medical treatment supplied by the Commission. The document sets out the up-to-date medical expenses, and indicates their intention to recover from the plaintiff the charges for services rendered to him. I am satisfied that the medical services offered to the plaintiff are not free services. I note that in Taylor v. Bristol Omnibus Co. Ltd., Lord Denning at 1058 accepted as sufficient an indication by the local authority that it may make a charge for services, to find that the services were not free. The issue as to whether the Repatriation Commission can successfully claim the cost of treatment from the plaintiff is irrelevant. That is an issue which can be decided when the appropriate action (if any) is taken by the Commission.

For the reasons stated above, I find that the defendant is liable to pay for the cost of these services.

(b) Reasonableness of the cost

Counsel for the defendant submitted that the cost of treatment as provided by the Commission is not reasonable. The medical expenses can be divided into three categories: the cost of artificial limbs for a total amount of $A1,646.53, medical treatment expenses for an amount of $A2,493.41, and inpatient expenses at both repatriation hospitals — Greenslopes for $A17,316.91 and Rosemount for an amount of $A6,702.57.

The defendant contested the reasonableness of the inpatient expenses for both the Greenslopes and Rosemount hospitals. The figures were disputed on two grounds. First, that the amount per day charged in each hospital was not based on individual care to the plaintiff, but was based on a general assessment of the cost of running the services for all the patients. Secondly, the inpatient expenses could have been reduced had the plaintiff been admitted to a State hospital where the charge, at that time, was $A56.00 per day per patient, rather than to these two repatriation hospitals. As to the first submission, Dr Bryan Edmond Todd, the Director of Medical Services of the Department of Veteran Affairs in Queensland, gave evidence to the effect that the amount of inpatient expense per day per patient was worked out on the basis of all the medical treatment and care provided by the hospital and was calculated on the basis of the number of patients at the time. He gave evidence to the effect that it would be impossible to work out individual costs of nursing aid to each individual patient. Dr Todd gave evidence to the effect that this was a reasonable way of assessing the cost of the services provided to the patient, and the defendant called no other evidence to suggest otherwise. I accept the formula as used by the hospital to calculate the rate for inpatient expenses for the plaintiff.

As to the second submission, this was based on the evidence given by Dr Todd that at the relevant time the State hospitals were charging an amount of $A56.00 per day. He also gave evidence to the effect that the private hospitals were charging $A74.00 per day. Dr Todd further explained that the reason for the lower cost at the State hospitals was due to Commonwealth funding, and that it did not correctly reflect the reasonable expense for such treatment. Submissions were made on the basis that it would have been reasonable for the plaintiff to have gone to a State hospital rather than the Repatriation hospitals. However, there is no evidence before me to suggest that the total cost of treatment by any of the State hospitals or private hospitals would work out to be a lesser amount. No evidence was called from any of these hospitals to contest the figures that have been provided by the Repatriation hospitals. It appears from the evidence that the hospitals in which the plaintiff was treated are the only ones that have an artificial limb appliance centre. I do not find this unreasonable and reject the defendant’s submission.

Neither party in this case made any submission as to the currency in which the judgment may be given. Evidence relating to the cost of treatment was led in Australian currency. Prior to December 1975, the English courts had no jurisdiction to enter judgment in a foreign currency: see Owners of Steamship Celia v. Owners of Steamship Volturno [1921] 2 A.C. 544. This position was changed in the case of Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443. The latter case was further followed in the case of The Despina R. [1978] 3 W.L.R. 804. At 808-9 Lord Wilberforce stated:

"My Lords, I do not think that there can now be any doubt that, given the ability of an English court (and of arbitrators sitting in this country) to give judgment or to make an award in a foreign currency, to give a judgment in the currency in which the loss was sustained produces a juster result than one which fixes the plaintiff with a sum in sterling taken at the date of the breach or of the loss."

At 697 his Lordship went on to say:

"My Lords, in my opinion, this question can be solved by applying the normal principles, which govern the assessment of damages in cases of tort (I shall deal with contract cases in the second appeal). These are the principles of restitutio in integrum and that of the reasonable foreseeability of the damage sustained. It appears to me that a plaintiff, who normally conducts his business through a particular currency, and who, when other currencies are immediately involved, uses his own currency to obtain those currencies, can reasonably say that the loss he sustains is to be measured not by the immediate currencies in which the loss first emerges but by the amount of his own currency, which in the normal course of operation, he uses to obtain those currencies. This is the currency in which his loss is felt, and is the currency which it is reasonably foreseeable he will have to spend."

Given the growth of international relations in business affairs in Papua New Guinea, I would adopt this principle.

In the present case, the currency in which the plaintiffs loss first emerges is the Australian currency. I would have expected, in this case, that on the basis of daily payment of hospital expenses in Australia the plaintiff would have had to use his own money which would be expected to be Papua New Guinea kina, which he would have had to use to obtain the Australian currency for the purposes of this payment. Applying the principle referred to, the currency in which the plaintiff would have felt his loss would be the Papua New Guinea kina. I would therefore enter judgment in the kina equivalent of $A28,159.42. I will hear further argument on the correct rate of exchange to be applied.

Orders accordingly.

__________________________

Lawyer for the plaintiff: Gadens.
Lawyer for the defendant: Young & Williams.