N4289

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

WS NO. 576 OF 2008

BETWEEN:

GREGORY PISIMI
Plaintiff

AND:

LESLIE KARI trading as PNG LEGAL SERVICES
Defendant

Waigani: Davani .J
2011: 13th, 25th May

DAMAGES – Default judgment – assessment of damages – professional negligence claim – defendant, a lawyer

DAMAGES – Court's role - plaintiff's earlier claim –– Court must conduct cursory inquiry – plaintiff's chances of success in earlier claim – incumbent on plaintiff to prove losses.

Facts

The plaintiff sues the defendant, a lawyer, for professional negligence, for having allowed an earlier claim or proceedings to be dismissed. The plaintiff claims that the earlier claim was dismissed because the defendant had failed to file a List of Documents in response to a Notice of Discovery issued by the defendant's lawyers in the former proceedings. The plaintiff claims that it was the defendant's lack of attention to the matter that led to the failure by him to file the List of Documents which resulted in the Court dismissing the whole claim.

Issues

1.	Is the plaintiff entitled to the damages he seeks?

2.	If so, what are they?

3.	How much is the plaintiff entitled to?

Reasons 

The plaintiff's claims to have been contracted by the PNG Habours Board (then) to carry out investigations into certain activities with that organization. However, he could not produce copies of a contract either written or verbal, to show what the alleged services were for, how much he was to be paid for and for how long. In the previous proceedings, he failed to give his lawyer those documents to allow his lawyer to file a List of Documents, pursuant to a Notice of Discovery, which then resulted in the claim being dismissed. Even in this trial, he failed to produce or show a contract of services, either written or verbal.

Held 

1.	In a professional negligence claim against a lawyer, a Court must conduct a cursory inquiry into the plaintiff's chances of success in the previous Court proceedings. This would assist the Court in the present proceedings to determine whether the lawyer was negligent at all in failing to perform his duties.

2.	A letter marked 'without prejudice', albeit, an offer to settle, should not be relied on by a plaintiff to say that the amount suggested in that letter, to settle a claim, is the amount that would have been paid as it is an admitted amount. The plaintiff should not say that if it were not for the lawyer's negligence, that he would have been paid that amount. This is because an offer made on a 'without prejudice" basis is excluded from evidence, by law, because its purpose is to enable parties engaged in negotiations to communicate with one another freely without the embarrassment and fear of their communications being put into evidence and the repercussions or liability, that may follow from this disclosure. Additionally, there is no guarantee the claim will be settled at that amount. Therefore, because the plaintiff cannot prove that he is entitled to the damages he seeks, the Court orders that;

i)	The whole claim is dismissed in its entirety.

ii)	The plaintiff shall pay the defendants' costs of the whole proceedings.

Case Authorities

Papua New Guinea Cases

Martha Limitopa and Poti Hiringe v. The State [1988-89] PNGLR 364;
Obed Lalip for himself and on behalf of the Marae Kalap and Francis Minalo v. Fred Sikiot & The State (1996) N1457;
William Mel v. Coleman Pakalia & Ors (2005) SC790;
Otto Benal Magiten v. Bilding Tabai and Lawrence Accanufa trading as Accanufa & Associates Lawyers (2010) N3916;

Overseas cases

Bonham Carter v. Hayden Park Hotel Ltd [1948] 64 TLR 177;
Field v. Commissioner for Railways (NSW) (1957) 99 CLR;
Aschroft v. Curtin [1971] 1 WLR 1731;
Davies v. Nyland (1974) 10 SASR 76;
Pitts v. Adney [1996] NSWR 535;

Texts

. Kauve Pomat & Anor McGregor H, McGregor on Damages (17th Ed), Sweet & Maxwell.

Counsel:

 E. Wurr, for the Plaintiff
L. Kari, for the Defendant

DECISION

25th May, 2011

1.	DAVANI .J: Before me for assessment of damages is the plaintiff's claim against the defendant, default judgment having been entered against the defendant on 7th November, 2008. That order reads;

(i)	 Default judgment is entered on liability with damages to be assessed;

(ii)	Costs to the plaintiff on a party/party basis, to be taxed if not agreed;

(iii)	Time is abridged to time of settlement by the Registrar to take place forthwith.

Background

2.	The plaintiff claims that in 1993, he was appointed to a special investigation committee to investigate the administration of the PNG Harbours Board, now PNG Ports Ltd. He said that he spent 3 months in Port Moresby to conduct this investigation. He said that his fees were set at K80.00 per hour over 6 weeks, an amount of K19,200.00. He claims that between 1993 to 1997, he liaised with the PNG Harbours Board for payment of his fees, to no avail. He said he was paid only K8,000.00 and that there is still K11,200.00 owing to him.

3.	He claims that he had spent about K13,500.00 on 7 trips to Port Moresby from Mount Hagen by Air Niugini, following up on payment of these monies. Theses expenses included accommodation, payment of taxi fares, food, etc.

4.	He said because his personal follow-ups were not successful, he engaged Powes Parkop Lawyers to assist him. He said he decided to engage the present defendant firm because Powes Parkop Lawyers did not make any progress with his claim.

Analysis of evidence and the law

5.	The plaintiff relies on his affidavit sworn and filed on 11th December, 2008. The defendant did not file any affidavits nor did its principal, Mr Leslie Kari, or any other witnesses. Neither did they give verbal evidence.

6.	By Writ of Summons and Statement of Claim filed on 20th May, 2008, the plaintiff makes the claim as set out above, that as a result of his appointment to the investigation committee, that PNG Harbours Board should have paid him K13,200.00 but only paid him K8,000.00. He also pleads that after entry of default judgment, that his lawyer, this defendant, defaulted in the giving of discovery which resulted in an order to dismiss the proceedings. The plaintiff sues the defendant for professional negligence setting out the particulars at par.13 of the Statement of Claim. These particulars read;

"(a)Failed to set the matter down for trial on assessment of damages after entry of default judgment against the defendant;

(b)Failed to file application to strike out Notice of Discovery filed by the defendant after default judgment was entered, for an abuse of process;

(c) Failed to file List of Documents pursuant to the Notice of Discovery filed and served;

(d)Failed to seek instruction to object to the application to dismiss the proceedings for want of filing List of Documents;

(e)Failed to inform status of the proceedings at the material time;

(f)Failed to attend to the Court at the hearing of the application to dismiss the proceedings;

(g)Failed to execute his fiduciary obligation owed to the client;

(h)Failed to comply with lawyers' Professional Conduct Rules; and

(i) Failed to maintain lawyer/client relationship based on trust."

7.	The plaintiff claims and pleads his losses which are pleaded in par.16 of the Statement of Claim. It reads;

"(a) Liquidated sum of K11,200.00 claimed in the Statement of Claim;

(b) General damages;

(c) Interest at 8% per annum – 

i)	From 1993 to 1997 calculated at K19,200.00 for 5 years = K7,680.00

ii)	From 1997 to May 2008 calculated at K11,200.00 for 11 years = K9,856.00.

(d)	Costs of the proceedings;

(e)	Special damages for travel expenses and other associated costs incurred to pursue the claim at K13,500.00;

(f)	National Court Summons fee of K50.00."

8.	The plaintiff makes the following claims in the reliefs sought in the Writ of Summons and Statement of Claim;

"1. Principal sum of K11,200.00;

2. Interest at 8% per annum;

i)	From 1993 to 1997 calculated at K19,200.00 for 5 years = K7,680.00;

ii)	From 1997 to May 2008 calculated at K11,200.00 for 11 years = K9,856.00;

3.	General damages K25,000.00 or alternatively, for damages to be assessed;

4.	Special damages of K13,500.00;

5.	Legal fees K2,000.00;

6.	National Court filing fee K50.00;

7.	Interest at 8% per annum pursuant to Judicial Proceedings (Debts and Damages) Act;

8.	Costs; and

9.	Such other orders the Court deems appropriate."

Issues: What are the issues for consideration by this Court? 

9.	The issues to be determined by this Court are;

(i)	Is the plaintiff entitled to the damages he seeks?

(ii)	If so, what are they? 

(iii)	How much is the plaintiff entitled to?

10.	Although, the claim is for damages only, the Court should firstly consider whether the plaintiff would have succeeded in the claim against the PNG Harbours Board. This was held in Otto Benal Magiten v. Bilding Tabai and Lawrence Accanufa trading as Accanufa & Associates Lawyers (2010) N3916.

11.	The Court held in Otto Benal Magiten (supra) that if a litigant's case is dismissed due to the negligence of his or her lawyer, then, in assessing damage against a lawyer, it is appropriate to conduct a cursory inquiry to establish that the plaintiff had a reasonable prospect of success in the earlier case, to assess the damages that would have been awarded in that earlier case (see also Martha Limitopa and Poti Hiringe v. The State [1988-89] PNGLR 364). It appears such a claim was indeed filed, however, the plaintiff has not put before the Court copy of the Writ of Summons and Statement of Claim to show the potential he had of success. Another factor that is very important is whether he had in fact pleaded the contract, either verbal or written, he had with the PNG Habours Board, in relation to the services he would render to the PNG Harbours Board as an Investigator. Obviously, he would then have to provide a copy of a written agreement between himself and the PNG Habours Board. Or in the pleadings and affidavit in support, reference to a verbal or written contract between the PNG Habours Board and himself. He should have also pleaded in that Statement of Claim, the rate at which he would have been paid and which the PNG Habours Board had agreed to pay him at. However, neither a Writ of Summons and Statement of Claim by the plaintiff against the PNG Habours Board, nor an affidavit to which the agreement is attached, are before me in evidence. The affidavit materials filed by the plaintiff are also devoid of mention of a verbal or written contractual agreement with the PNG Habours Board.

12.	Therefore, relying on evidence elicited in the cross-examination of the plaintiff by Mr Kari, which is that the plaintiff had never provided documentation in relation to a contract or an agreement of the arrangement the plaintiff had with the PNG Habours Board to Mr Kari to assist him in pursuing the claim against the PNG Habours Board, only leads me to the conclusion that the arrangement between the plaintiff and the PNG Habours Board, may have been an ad hoc, "off the record" arrangement not sanctioned by the Board of the PNG Habours Board or that this alleged contractual arrangement is non-existent.

13.	Therefore, the plaintiff has not shown that he had a reasonable prospect of success in those proceedings because he has not demonstrated that in these proceedings.

Issue (i) – Is the plaintiff entitled to the damages he seeks?

14.	The plaintiff must prove his claim for damages on the balance of probabilities. As was held in Bonham Carter v. Hayden Park Hotel Ltd [1948] 64 TLR 177;

"The plaintiff must understand that, if they bring action for damages, it is for them to prove their damages; it is not enough to write down particulars and so to speak, throw them at the head of the Court, saying; this is what I have lost, I ask you to give me these damages" they have to prove it"".

15.	In Aschroft v. Curtin [1971] 1 WLR 1731, the Court said;

"The plaintiff has the burden of proving both the fact and the amount of damages before he can recover substantial damages. This follows from the general rule that the burden of proving a fact is upon him who alleges it and not upon him who denies it, so that where a given allegation forms an essential part of the present case, the proof of such allegation falls on him. Even if the defendant fails to deny the allegations of damages or suffers default, the plaintiff must still prove his loss."

16.	The plaintiff must provide credible evidence to prove his claim. In this case, the plaintiff claims;

-	Liquidated damages – K11,200.00
-	General damages – K25,000
-	Special damages – K13,500.00

17.	The first claim for consideration is for payment of the sum of K11,200.00. In relation to this claim, the plaintiff relies on a letter marked "without prejudice" from Rageau Elemi & Kikira Lawyers to PNG Legal Services, dated 17th December, 2004. In that letter, Rageau Elemi & Kikira Lawyers state the following;

"…

No exact amount has been awarded to your client. We have therefore been instructed by our client to make an offer to settle your client's claim in full in the sum of K11,200.00 inclusive of costs and interest. Please seek your client's instructions and to let us know if your client's claim can be settled in the said amount.

…"

18.	The plaintiff claims that the defendant did not respond to this letter and that it was only through his continuous follow-ups, that he was paid K8,000.00. However, he also states emphatically that the K8,000.00 paid to him is from the amount he claims of K19,200.00 which is why he claims he is entitled to the balance of K8,000.00.

19.	Firstly, it should be noted that the letter is marked "without prejudice". It is in relation to the WS 1161 of 2003 proceedings involving the PNG Habours Board and the plaintiff. Generally, at law, that letter should not have been put before this Court as evidence because the principles on negotiations on a "without prejudice" basis are very clear which is that correspondence or negotiations entered into on a "without prejudice" basis, should not be placed before a Court of law as evidence for any party.

20.	In Field v. Commissioner for Railways (NSW) (1957) 99 CLR, Dixon CJ, Webb, Kitto and Taylor JJ said;

"The law relating to communications without prejudice is of course familiar. As a matter of policy, the law has long excluded from evidence admissions by words or conduct made by parties in the course of negotiations to settle litigation. The purpose is to enable parties engaged in an attempt to compromise litigation to communicate with one another freely and without the embarrassment which the liability of their communications to be put in evidence subsequently might impose upon them. The law relieves them of this embarrassment so that their negotiations to avoid litigation or to settle it may go on unhampered. This form of privilege, however, is directed against the admission in evidence of express or implied admissions. It covers admissions by words or conduct. For example, neither party can use the readiness of the other to negotiate as an implied admission. It is not concerned with objective facts which may be ascertained during the course of negotiations. These may be proved by direct evidence. But it is concerned with the use of the negotiations or what is said in the course of them as evidence by way of admission. For some centuries almost it has been recognized that parties may properly give definition to the occasions when they are communicating in this manner by the use of the words "without prejudice" and to some extent the area of protection may be enlarged by the tacit acceptance by one side of the use by the other side of these words. See Thomas v. Austen [1823] 1LJ (OS) KB 99; Kurtz & Co. v. Spence & Sons (1888) 58 LT 438; Paddock v. Forrester (1842) 3 Man & G 903; Hoghton v. Hoghton (1852) 15 Beav 278; In re River Steamer Co; Mitchel's claim; (1871) LR 6 Ch App 335; Walker v. Wilsher (1889) 23 QBD 335. Needless to say, the privilege is a matter to be raised by objection to the admissibility of the evidence." 

21.	The exceptions to this rule were discussed in Pitts v. Adney [1996] NSWR 535. Here, Walsh .J said;

"It is of importance that the rule protecting from disclosure, discussions taking place in an endeavour to put an end to pending litigation should, in general, be applied. But it is, after all, a rule based upon public policy. It cannot be permitted to put a party into the position of being able to cause a court to be deceived as to the facts, by shutting out evidence which would rebut inferences upon which that party seeks to rely. In McFadden v. Snow (1951), evidence was given on behalf of one party that no reply had been received to a letter. Thus it was sought to establish an admission by silence as to a relevant fact. Kinsella J admitted a letter headed "without prejudice" tendered in disproof of that evidence. He said: "The privilege that may arise from the cloak of 'without prejudice' must not be abused for the purpose of misleading the Court." With respect, I state my emphatic agreement with that observation.

…"

22.	Another exception was discussed in Davies v. Nyland (1974) 10 SASR 76 where Wells J said;

"…

No authority is needed for the proposition that words and conduct that constitute criminal conduct cannot be kept from a jury by attempting to subsume either under a banner without the device "without prejudice". By parity of reasoning, it seems to me to follow, as a matter of principle, that conduct and statements that constitute, or form part of, one or more of the ingredients of a tort may be admitted in evidence, even though the conduct occurred or the statements were made during a discussion directed, in part, to a possible compromise.

…"

23.	In this case, Mr Kari for the defendant did not object to the use of that letter. Notwithstanding, I discuss the principles on "without prejudice" offers, settlements and compromises, only because far too often, I have seen correspondence marked so, before me in evidence, where counsel neither raise objection nor submit on the propriety of such evidence being put before the Court. The plaintiff should not have put this letter into evidence. He is effectively saying that the PNG Harbours Board has "admitted" to liability and will pay K11,200.00. But that is not the case. It is because of that understanding that the plaintiff is persisting in pursuing that claim. That is an incorrect interpretation of the PNG Harbours Board's offer to settle and one the plaintiff should have been corrected on, years ago.

24.	The second claim for consideration by this Court is the payment sought of K25,000.00 in general damages.

25.	The plaintiff has been pursuing this claim since 1993, approximately 18 years ago. His claim for professional negligence was filed in 2008. Although, the plaintiff claims to have suffered, there is no evidence of the pain and frustration suffered, except for general statements he makes of suffering undergone by his family and him because he had pursued this claim from Mount Hagen, leaving Mount Hagen on at least 7 occasions to travel to Port Moresby and return. He also claims to have lost his job because of these follow-ups. However, there is no evidence confirming his form of employment, with whom and a letter of termination from his former employer. I have thoroughly perused the Court file and cannot find any letter or statement or brief from the PNG Habours Board refusing to pay the plaintiff for the services he allegedly rendered. The only documentation on the Court file pertaining to the alleged claim are correspondence from the plaintiff to the PNG Habours Board and from the defendant to the PNG Habours Board. I have great difficulty in understanding why the plaintiff is pursuing a claim that he himself cannot prove exists because he does not have the documentation to prove the claim. Just because he obtained default judgment, does not mean that he is entitled to damages, as of right. He must prove it. As Injia AJ (as he then was) said in Obed Lalip for himself and on behalf of the Marae Kalap and Francis Minalo v. Fred Sikiot & The State (1996) N1457;

"Just because the plaintiff has obtained default judgment, does not mean he is entitled as of right to receive damages. He must prove the damages suffered by credible evidence."

26.	The evidence is that after the plaintiff was paid K8,000.00 on or about September, 1997, he continued to follow up, what could have been a hopeless case. This is because of the absence of documentation before this Court from PNG Habours Board of a contract and/or verbal agreements entered into with the plaintiff.

27.	The order to dismiss proceedings for failure to give discovery of documents by filing and serving a list of documents made on 17th March, 2006, was because Mr Kari did not have the documents to give to Rageau Elemi & Kikira Lawyers, even though he had consistently requested these from the plaintiff, evidence Mr Kari gave to this Court. Even if the plaintiff did not give these documents to Mr Kari, he should produce them to this Court. The conclusion I can draw from this is that the plaintiff does not have these documents. Obviously, Mr Kari could not file a list of documents because he did not have any, a fact presently demonstrated by the plaintiff.

28.	The plaintiff is not entitled to any claim for general damages because as far as this Court is concerned, the claim for professional negligence is based on a claim that is non-existent.

29.	Finally, is the plaintiff entitled to special damages? The plaintiff has not provided any receipts or invoices of monies spent on airfares, accommodation, etc. Although, he claims these receipts were stolen from his vehicle, the records of these expenses are always held by the supplier. The plaintiff has not shown evidence that he has requested the supplier for copies of these invoices or receipts and the suppliers' response to these requests. The plaintiff has the onus of proving this claim on the balance of probabilities. McGregor H, McGregor on Damages (17th Ed), Sweet & Maxwell supports this contention and reads;

"The plaintiff has the burden of proving both the fact and the amount of damages before he can recover substantial damages. This follows from the general rule that the burden of proving a fact is upon him who alleges it and not upon him who denies it, so that where a given allegation forms an essential part of a person's case, the proof of such allegation falls on him. Even if the defendants fail to deny the allegations of damage or suffers default, the plaintiff must still prove his loss."

30.	The plaintiff has not proven the claim for special damages on the balance of probabilities.

Conclusion

31.	The plaintiff's claim for professional negligence is based on a claim, which in my view, is non-existent because of the absence of pertinent, important documentation required to prove such a claim. The absence or lack of these pertinent documents resulted in the dismissal of the action because of the plaintiff's failure to provide a list of documents. A motions judge will make an order to that effect if the documents required to be given in discovery, were pertinent towards establishing the claim, e.g, a contract of services.

32.	Although, this Court should be focused only on the aspect of damages, I have, in a way, revisited the aspect of liability because the assessment of damages in the cause of action pleaded, i.e, professional negligence, is a futile exercise (see William Mel v. Coleman Pakalia & Ors (2005) SC790) as demonstrated above.

33.	I find the plaintiff is not entitled to any damages and will dismiss the whole claim.

Formal orders

34.	These are the formal orders of the Court;

(1)	The whole claim is dismissed in its entirety;

(2)	The plaintiff will pay the first and second defendants' costs of these proceedings.

_____________________________
Public Solicitor's Office: Lawyers for the Plaintiff
PNG Legal Services: Lawyers for the Defendant