N7147
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1396 OF 2014

JIMMY FUTOLSI
Plaintiff

V

ANNA TURI
First Defendant

EMMANUEL THOMAS
Second Defendant

FRAZER PITPIT, PUBLIC SOLICITOR
Third Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Madang: Cannings J
2016: 10 October, 30 November, 
2018: 9 March

NEGLIGENCE – lawyer/client relationship – lawyer’s duty to act in accordance with instructions – lawyer’s duty to be aware of statutory limitation periods – whether the State is vicariously liable for negligence of its employed lawyers.

PRACTICE AND PROCEDURE – vicarious liability of the State – Wrongs (Miscellaneous Provisions) Act – whether a claim of vicarious liability should be dismissed because of defective pleading.

PRACTICE AND PROCEDURE – mediation – power of Court at any stage of a proceeding, on its own motion, to order mediation for resolution of any part of proceedings – National Court Act, Section 7B, ADR Rules, Rule 5.

The plaintiff was a client of the Public Solicitor. He claimed that lawyers employed within the Office of Public Solicitor negligently failed to advise him of his legal rights when he (an infant at the time he became a client) and his father approached the Public Solicitor for legal aid, advice and assistance regarding an incident in a school classroom that led to him suffering permanent blindness in one eye. He claimed that two lawyers in the Office of Public Solicitor negligently failed to provide him with proper advice, including failing to advise him of the need to give notice to the State within the period prescribed by the Claims By and Against the State Act 1996 and the need to commence court proceedings within the six-year limitation period set by the Frauds and Limitations Act 1988; and failed to take any pro-active steps to protect his right of action. The plaintiff sued the first and second defendants, as individuals, and the person holding office as Public Solicitor at the time of filing the writ (third defendant) and the State (fourth defendant), which was claimed to be vicariously liable for the negligence of its employees, the first, second and third defendants. The defendants denied liability. A trial was conducted on the issue of liability. 

Held:

(1)	In a case of multiple defendants, in which one defendant is alleged to be vicariously liable for the conduct of others, the task of the Court is to first determine whether liability is established against the primary defendants and if liability is established, to then determine the question of vicarious liability.

(2)	Here, the first, second and third defendants were primary defendants, so the first question was whether the plaintiff had established a cause of action in negligence against any of them.

(3)	To establish a cause of action in negligence a plaintiff must prove the elements of the tort: (a) the defendant owed a duty of care to the plaintiff (b) the defendant breached that duty (acted negligently), (c) the breach of duty caused damage to the plaintiff, and (d) the type of damage was not too remote.  
 
(4)	As to the first, second and third defendants, elements (a), (c) and (d) were non-contentious, so the question was whether in each case the defendant had by act or omission been negligent. 
	
(5)	The plaintiff proved that the first defendant was negligent due to the failure to advise the plaintiff as to statutory time limitations.

(6)	The plaintiff failed to prove that the second defendant was negligent as by the time that the second defendant was engaged the limitation period had lapsed.

(7)	The plaintiff proved that the third defendant was negligent due to the evident failure to educate lawyers as to the need to adhere to statutory time limitations and to ensure that due diligence procedures were in place to prevent time limitations lapsing.

(8)	The plaintiff failed to prove that the fourth defendant was vicariously liable due to inadequate pleading of the elements of vicarious liability. 

(9)	Liability in negligence was established against the first and third defendants and the proceedings against them shall continue. Liability was not established against the second defendant and the proceedings against him were dismissed. Liability was not established against the fourth defendant but the proceedings against it were not dismissed as it would be contrary to the interests of justice to do so and the defects in the statement of claim are capable of being remedied even at this advanced stage of the proceedings. All remaining parts of the proceedings including the liability of the fourth defendant and assessment of damages and costs were on the Court’s own motion referred to mediation. 

Case cited

The following cases are cited in the judgment.

Magiten v Tabai (2008) N3470
Martha Limitopa v The State [1988-89] PNGLR 364
Melinda Baduk v The State [1993] PNGLR 250
Roka Coffee Estate Pty Ltd v Gerebi [1973] PNGLR 486
Takai Kapi v Maladinas Lawyers (2003) N2323

STATEMENT OF CLAIM

This was a trial on liability for negligence.

Counsel

G  Pipike, for the Plaintiff
E Wurr, for the First, Second and Third Defendants
B B Wak, for the Fourth Defendant

9th March, 2018 

1.      CANNINGS J: The plaintiff, Jimmy Futolsi, was a client of the Public Solicitor. He claims that lawyers employed within the Office of Public Solicitor negligently failed to advise him of his legal rights when he (an infant at the time he became a client) and his father approached the Public Solicitor for legal aid, advice and assistance regarding an incident in a school classroom that led to him suffering permanent blindness in one eye. 

2.     He claims that two lawyers in the Office of Public Solicitor negligently failed to provide him with proper advice, including failing to advise him of the need to give notice to the State within the period prescribed by the Claims By and Against the State Act 1996 and the need to commence court proceedings within the six-year limitation period set by the Frauds and Limitations Act 1988; and failed to take any pro-active steps to protect his right of action. 

3.     The plaintiff sues Anna Turi (the first defendant) and Emmanuel Thomas (the second defendant), as individuals. He also sues Frazer Pitpit (now Justice Pitpit) who was the Public Solicitor at the time of filing the writ as the third defendant. He also sues the State (fourth defendant), which is claimed to be vicariously liable for the negligence of its employees, the first, second and third defendants. The defendants denied liability. A trial was conducted on the issue of liability. 

UNDISPUTED FACTS 

4.     A number of undisputed facts have emerged from the evidence:

•	On 13 February 2004 the plaintiff was 12 years old. He was a student at Nitlon Primary School. There was an incident in the classroom. A fellow student poked him in the right eye with a pencil.

•	The plaintiff was initially treated at Gaubin hospital on Karkar Island. The injury was too serious to be properly treated. His parents subsequently took him to Madang, Lae, Goroka and back to Madang seeking treatment.

•	On 16 November 2005 Dr Demok, Ophthalmologist at Modilon General Hospital, diagnosed 100% visual loss in the right eye. 

•	In early 2006 the plaintiff’s father, Futolsi Warub, sought compensation from the Board of Nitlon Primary School. An informal agreement was made for the Board to pay K10,000.00 compensation. The sum of K5,000.00 was paid.

•	In mid-2006 the plaintiff went with his parents to the Office of the Public Solicitor in Madang. The first defendant, Ms Turi, was then the Solicitor-in-Charge of the Madang office. She spoke to the plaintiff’s father and a decision was made to provide legal aid, advice and assistance to the plaintiff and his father. The plaintiff became then a client of the Public Solicitor.

•	On 1 November 2006 Ms Turi wrote an official letter under the Public Solicitor’s letterhead to the Board Chairman of Nitlon Primary School, reminding the Chairman of the undertaking to pay a further K5,000.00 compensation to the plaintiff. 

•	From 2006 to 2011 the plaintiff continued with his schooling on Karkar Island albeit with some difficulty due to the disability from which he continued to suffer. In that period the plaintiff and his father remained clients of the Public Solicitor and his father went to the office regularly to check on the plaintiff’s matter. But no further action was taken by the first defendant or any other officer in the Office of Public Solicitor to progress the claim.

•	In 2012 the plaintiff attended Tusbab Secondary School in Madang town. 

•	In mid-2013 the plaintiff’s father again approached the Office of Public Solicitor in Madang. He filled out a new application form for legal aid. He saw a new lawyer, Emmanuel Thomas (the second defendant), who took on the matter. Mr Thomas wrote a follow-up letter to the Board Chairman of Nitlon Primary School. There was no reply.

•	In 2014 the plaintiff approached GP Lawyers, a private law firm in Madang, and sought advice from them.

•	The writ now before the Court was filed on 10 November 2014.

•	The trial was conducted in late 2016, at which time the plaintiff was 24 years old. 

ISSUES 

5.     In a case of multiple defendants, in which one defendant is alleged to be vicariously liable for the conduct of others, the task of the Court is to first determine whether liability is established against the primary defendants and if liability is established, to then determine the question of vicarious liability.

6.     Here, the fourth defendant, the State, is claimed to be vicariously liable for the negligence of the first, second and third defendants, who are the primary defendants. The first question is whether the plaintiff has established a cause of action in negligence against any of them.

7.     To establish a cause of action in negligence a plaintiff must prove the elements of the tort: (a) the defendant owed a duty of care to the plaintiff (b) the defendant breached that duty (acted negligently), (c) the breach of duty caused damage to the plaintiff, and (d) the type of damage was not too remote (Magiten v Tabai (2008) N3470). 

8.     As to the first, second and third defendants, elements (a), (c) and (d) are non-contentious. The very nature of the relationship between a lawyer and his or her client is that the lawyer owes a duty of care to the client (Martha Limitopa v The State [1988–89] PNGLR 364; Takai Kapi v Maladinas Lawyers (2003) N2323). If the first, second and/or the third defendant were negligent, clearly, their conduct caused the plaintiff damage or detriment, as he lost the opportunity to bring a case in negligence against a number of prospective defendants (such as the student who poked him with the pencil, the teacher(s) who allegedly failed to properly supervise the students, the School Board and the State) and thereby lost the opportunity to receive an award of damages. That sort of damage is not too remote. All elements of negligence except the second are clearly in existence. 

9.     The issues to be determined are:

1.	Was the first defendant negligent?

2.	Was the second defendant negligent?

3.	Was the third defendant negligent?

4.	Is the fourth defendant vicariously liable? 

5.	What orders should the Court make?

1 WAS THE FIRST DEFENDANT NEGLIGENT?

10.    As I pointed out in Magiten v Tabai (2008) N3470 the standard of care lawyers must exercise in dealing with their client’s cases is measured in accordance with the standards of the profession: the lawyer must act skilfully and diligently at all times. Section 3 of the Professional Conduct Rules states:

It is the duty of a lawyer … to be competent in all his professional activities.

11.     Section 8 of the Professional Conduct Rules also helps to circumscribe the duty of a lawyer to his or her client. It states:

(1)	A lawyer shall treat a client fairly and in good faith, giving due regard to—

(a)	the dependence by the client upon him and his special training and experience; and
(b)	the high degree of trust which the client is entitled to place in him.

(2)	A lawyer shall always be frank and open with his client and with all others so far as his client's interest may permit and shall at all times give his client a candid opinion on any professional matter in which he represents that client.

(3)	A lawyer shall take such legal action consistent with his retainer as is necessary and reasonably available to protect and advance his client's interests.

(4)	A lawyer shall at all times use his best endeavours to complete any work on behalf of his client as soon as is reasonably possible.

(5)	If a lawyer receives instructions from a client and it is or becomes apparent to him that he cannot do the work within a reasonable time, he shall so inform his client.

(6)	A lawyer shall not—

(a)	take unnecessary steps or do his work in such a manner as to increase his proper costs to his client; or
(b)	accept instructions which are beyond his competence.

(7)	A lawyer shall, when in his client's best interests, seek his client's instructions to endeavour to reach a solution by settlement out of court rather than commence or continue legal proceedings.

12.     Brunton AJ made the point neatly in Martha Limitopa and Poti Hiringe v The State [1988-89] PNGLR 364:

The duty of care that a lawyer has is not measured against standards that may be considered reasonable for labourers, or carpenters, or nurses, or community schoolteachers, or research biochemists.

13.     Lawyers must act in accordance with their client’s instructions, unless the instructions are unlawful. Lawyers must be aware of all statutory time limitations for commencement of civil actions and advise their clients of the risks associated with commencing actions outside limitation periods. As Brunton AJ pointed out in Limitopa’s case, awareness of statutory limitations periods are run-of-the-mill obligations imposed on lawyers involved in the conduct of civil actions. Lawyers ignore them at their peril. In that case, the State was held vicariously liable for the negligence of the Public Solicitor who failed to meet limitation periods for the commencement of civil proceedings arising from a motor vehicle accident. His Honour stated:

The default in not adhering to these time limitations was not just a matter of heedlessness, or carelessness, but fundamentally unlawyerly conduct, and a clear breach of the duty of care, and the standard of care that the profession recognises as being owed to a client.

14.     Ms Wurr, for the first, second and third defendants, submitted that Ms Turi did not breach those professional standards as she acted in accordance with the plaintiff’s father’s instructions to follow up with the Board Chairman the outstanding K5,000.00 compensation that the Board had undertaken to pay. She did as she was instructed. She was not given instructions to commence court proceedings against anybody, so she was not obliged to inform the plaintiff or his father about statutory time limitations.

15.     I reject this submission. It is fundamentally flawed. A lawyer’s duty is to advise the client of his legal rights and obligations – and not just to wait for instructions. Just as a person who is sick does not go to a doctor just to give the doctor instructions on how to treat their sickness, a person does not go to a lawyer just to give instructions to the lawyer. A person with a legal problem is like a sick person. They go to their lawyer, just as they go to their doctor, to get advice as to how to remedy their problem, and to get treatment. The professional adviser is just that: an adviser, a pro-active giver of advice, not a passive receiver of instructions. 

16.     It would have been obvious to a reasonable lawyer with an acceptable level of competency in the position of the first defendant, that the plaintiff had a right of action in negligence against a range of prospective defendants, in particular the State. There is clear precedent for a student in the position of the plaintiff (being poked in the eye by a fellow student, losing eyesight, and suing the State in negligence) in Melinda Baduk v The State [1993] PNGLR 250. It would have been obvious that such an action would be subject to the six-year limitation period for commencing actions in tort. The six-year period commenced on the date on which the cause of action accrued, 13 February 2004. It ended on 13 February 2010. The plaintiff and his father approached the first defendant and client-lawyer relationship existed as early as mid-2006, leaving ample time – three and a half years – to file a writ. Nothing was done. It was negligent and unlawyerly conduct on the part of the first defendant to allow such a situation to exist.

17.     It would have also been obvious to a reasonable lawyer in the position of the first defendant that, the six-month period for giving notice of the intention to make a claim against the State having expired on 13 August 2004, options under Section 5(2) of the Claims By and Against the State Act for being allowed further time to give notice, should have been explored. Action should have been taken expeditiously to preserve the plaintiff’s right to bring proceedings against the State. 

18.     I find that the first defendant negligently failed to properly advise the plaintiff and his father of the plaintiff’s legal rights and failed to advise them of the need to adhere to statutory time limitations and failed to take pro-active steps to preserve the plaintiff’s right of action. The first defendant was negligent and a cause of action in negligence is established against her. 

2 WAS THE SECOND DEFENDANT NEGLIGENT?

19.     No. By the time that Mr Thomas was approached, in 2013, and in a position to advise the plaintiff of his rights, it was too late to commence proceedings. Mr Pipike, for the plaintiff, submitted that Mr Thomas should have done more than just follow up a six-year-old letter to the Board Chairman. I agree. But I am not persuaded that the conduct of Mr Thomas can properly be regarded as negligent. No cause of action has been established and the proceedings against him will be dismissed. 

3 WAS THE THIRD DEFENDANT NEGLIGENT?

20.     Yes. The plaintiff has proven that the Public Solicitor was negligent due to the evident failure to educate his lawyers on the need to adhere to statutory time limitations and to ensure that due diligence procedures were in place to prevent time limitations lapsing. The third defendant was negligent and a cause of action in negligence is established against him. 

4 IS THE FOURTH DEFENDANT VICARIOUSLY LIABLE?

21.     For the State, to be vicariously liable for the negligence of the first and/or defendant, three elements must be proven: 

(a)	an employer-employee relationship existed between it and the first and/or third defendants (the tortfeasors);

(b)	the tort of negligence was committed by the first and/or third defendants; 

(c)	the tort was committed in the course of the employee’s employment (Roka Coffee Estate Pty Ltd v Gerebi [1973] PNGLR 486).

22.     I am satisfied as to all elements in relation to each of the first and third defendant. I am in a position to order that the State is vicariously liable for their negligence. The problem is, the statement of claim does not satisfactorily plead vicarious liability. The State, according to the statement of claim, has been joined as “nominal defendant”. What does that mean? I uphold the submission of Mr Wak, for the State, that the claim for vicarious liability has not been properly pleaded and that it would not be proper to order that the State is vicariously liable. 

23.     However, it would in my view be contrary to the interests of justice to dismiss the proceedings against the State as the defect in the statement of claim is capable of being remedied even at this advanced stage of the proceedings.

5 WHAT ORDERS SHOULD THE COURT MAKE?

24.     Liability in negligence has been established against the first and third defendants and the proceedings against them will continue. Liability was not established against the second defendant and the proceedings against him will be dismissed. Liability has not been established against the fourth defendant but the proceedings against it are not dismissed. What is the best way for the remaining issues to be progressed and determined?  I have decided that the best way is mediation. 

25.      Under Section 7B(2) (power to order mediation, etc) of the National Court Act and Rule 5(2) (ordering mediation) of the ADR Rules the National Court is empowered, of its own motion, at any stage of proceedings, to order mediation for a resolution of any part of the proceedings provided that at the time of considering whether to order mediation it has regard to the factors prescribed by Rule 5(3). 

26.     I have had regard to those matters. I consider that: (a) mediation will not result in prejudice to the rights of any of the parties; (b) it is reasonably within the ability and power of the parties to comply with a mediation order; (c) mediation will not entail substantial work for the parties; (d) the nature of the relief sought lends itself to mediation; (e) a mediation can be set up soon and this should be convenient to all parties; (f) no party has expressed opposition to the prospect of mediation; (g) mediation has not yet been attempted and it should be attempted at least once before consideration is given to hearing submissions; (h) no party loses the right to have the remaining issues determined by the Court; and (i) it is in the interests of justice to attempt mediation as a method of resolving disputes such as this. I will make a separate order for mediation containing a detailed timetable that must be adhered to. If the mediation fails the remaining issues can come back to court for determination. 

ORDER

(1)	The plaintiff has established a cause of action in negligence against the first and third defendants and the proceedings shall continue against those defendants.

(2)	The plaintiff has failed to establish a cause of action in negligence against the second defendant and the proceedings against him are dismissed

(3)	The plaintiff has failed to establish vicarious liability against the fourth defendant, but the proceedings against it are not dismissed and the question of its liability remains to be determined.

(4)	All remaining parts of the proceedings including the liability of the fourth defendant and assessment of damages and costs are, pursuant to Section 7B(2) of the National Court Act and Rule 5(2) of the ADR Rules, on the Court’s own motion, referred to mediation in accordance with a separate mediation order which shall be issued forthwith. 

Judgment accordingly.
________________________________________________________________
GP Lawyers:  Lawyers for the Plaintiff			
Public Solicitor:  Lawyer for the First, Second & Third Defendants	
Solicitor-General:  Lawyer for the Fourth Defendant