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Koieba v Motor Vehicles Insurance (PNG) Trust [1984] PNGLR 365 (16 November 1984)

Papua New Guinea Law Reports - 1984

[1984] PNGLR 365 - Caedmon Koieba v MVIT 

[1984] PNGLR 365

N490

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

CAEDMON KOIEBA

V

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

Waigani

McDermott J

20-21 August 1984

16 November 1984

DAMAGES - Personal injuries - Particular awards of general damages - Leg injury - Fracture of mid shaft of femur - Pinning and bone graft - Shortening of leg - Fifty per cent loss of use - Continuing disability - Male Anglican priest aged forty (forty-six at trial) - Forced early retirement at forty-nine - Award of K19,000 general damages.

DAMAGES - Measure of - Personal injuries - Economic loss - Calculation of present value of economic loss - Economic loss commencing three years after trial - Discount factor - Appropriate rate five per cent.

INTEREST - Award of interest as damages - On pre-trial component of damages - Rate - Time for which to run - Rate at half current rate - Interest to run from date of accident - Judicial Proceedings (Interest on Debts and Damages) Act (Ch. No. 52).

The plaintiff, an Anglican priest aged forty (forty-six at date of trial) with a family of three school age children was injured in a motor vehicle accident and suffered a complicated fracture of the mid shaft of the right femur which required fixing with a Kuntschner nail and subsequently a bone graft, resulting in permanent disabilities including a 4 cm shortening of the leg with a continuing need for special shoes and a fifty per cent loss of function of the leg with a real chance of osteoarthritis developing. As a result of his injuries the plaintiff is unable to fulfil all of his parish duties and is likely to be compulsorily retired at age forty-nine instead of fifty-five or sixty at which stage he would have to provide his own living accommodation.

Held

(1)      General damages for pain and suffering and loss of amenities should be assessed at K19,000.

(2)      In calculating the present value of future economic loss the appropriate rate of interest should be taken at five per cent.

Koko Kopele v. Motor Vehicles Insurance (P.N.G) Trust [1983] P.N.G.L.R. 223, and Pinzger v. Bougainville Copper Ltd [1983] P.N.G.L.R. 436, followed.

Todorovic v. Waller [1981] HCA 72; (1981) 56 A.L.J.R. 59, not followed.

(3)      Interest on pre-judgment non-economic loss should be awarded at half the ordinary current commercial rate; that is at a figure of eight per cent halved to four per cent.

Cybula v. Nings Agencies Pty Ltd [1981] P.N.G.L.R. 120, Aspinall v. Government of Papua New Guinea (No. 2) [1980] P.N.G.L.R. 50, and Pinzger v. Bougainville Copper Ltd [1983] P.N.G.L.R. 436, followed.

(4)      Interest on pre-judgment non-economic loss should run from the date of the accident.

Cookson v. Knowles [1978] UKHL 3; [1979] A.C. 556; and Dexter v. Courtaulds Ltd [1984] 1 All E.R. 70, followed.

Parker v. Guardian Fire Sprinkler Co. (Qld) Pty Ltd [1982] Qd R. 709; and Jefford v. Gee [1970] EWCA Civ 8; [1970] 2 Q.B. 130, considered.

Cases Cited

Aspinall v. Government of P.N.G. (No. 2) [1980] P.N.G.L.R. 50.

Cookson v. Knowles [1978] UKHL 3; [1979] A.C. 556.

Cybula v. Nings Agencies Pty Ltd [1981] P.N.G.L.R. 120.

Dexter v. Courtaulds Ltd [1984] 1 All E.R. 70.

Jefford v. Gee [1970] EWCA Civ 8; [1970] 2 Q.B. 130.

Koko Kopele v. Motor Vehicles Insurance (P.N.G.) Trust [1983] P.N.G.L.R. 223.

McIntosh v. Williams [1979] 2 N.S.W.L.R. 543.

Mallet v. McMonagle [1970] A.C. 166.

Parker v. Guardian Fire Sprinkler Co. (Qld) Pty Ltd [1982] Qd R. 709.

Pinzger v. Bouganville Copper Ltd [1983] P.N.G.L.R. 436.

Todorovic v. Waller [1981] HCA 72; (1981) 56 A.L.J.R. 59; 37 A.L.R. 481.

Trial

This was an action in which the plaintiff sought damages for personal injuries as a result of a motor vehicle accident.

Counsel

I. Molloy, of the Brisbane Bar, for plaintiff.

D. Ryan, of the Brisbane Bar, for defendant.

16 November 1984

MCDERMOTT J: On 15 February 1978, Caedmon Koieba sustained personal injuries in a motor vehicle accident. He was the rider of a motor cycle and was hit by a Holden sedan. The negligence of the driver of this vehicle is admitted and I am asked to assess damages for the plaintiff.

The plaintiff lost consciousness initially but soon discovered his right leg was broken. He was admitted to the Port Moresby General Hospital and treated for a fracture of the mid shaft of the right femur by open reduction and fixation by a Kuntschner nail. Alas, the treatment or lack of it has caused much pain and suffering only partly conveyed in exhibit C as: “His post operative recovery was complicated with development of wound infection which was treated by removal of stitches, dressings and suitable antibiotics.” He did not come under the care of the surgeon Mr Sharma until fourteen weeks after admission to hospital. It was noted then (30 May 1978), that the plaintiff had three discharging sinuses, marked limitation of the knee and about two inch shortening of the leg. X-rays revealed evidence of osteomyelitis in the femur with sequestra.

Things did not improve. Luckily, the plaintiff’s wife is a trained nurse who, after work, nursed her husband each day: she changed the bed, bathed him and helped him in the same manner at home and in addition, collected fresh dressings from the hospital each day, changed the old dressings and tended the wound but in the plaintiff’s words, “it getting worse, in the month I did not have pain killing injection. I had codeine 2-3 times a day. Many times I had constipation.” He returned to the hospital in August. Mr Hillier, orthopaedic surgeon, saw him on 20 October 1978 and summarised the patient’s problems thus:

“(1)    Chronic osteomyelitis — which will remain unremitting until the K-nail and the pieces of dead bone are removed.

(2)      2½" of shortening of the femur.

(3)      Non-union of the femoral fracture.

(4)      Stiffness of the right knee due to the prolonged recumbence and the inhibition to movement from pain at the fracture site.”

He recommended further surgery. So did Mr Ellis, a visiting orthopaedic surgeon, who saw the plaintiff in November 1978. This was agreed to and an operation was performed by him at Sydney Hospital on 24 November 1978. The surgeon reports, exhibit B:

“The patient’s progress was very satisfactory thereafter except that the fundamental problems remained:

(1)      the leg was short,

(2)      non-union was present,

(3)      established infection had been present for nine months and this made the introduction of the usual bone graft and internal fixation dangerous in that recurrence of infection was very likely,

(4)      the right knee was much limited in movement range.

The local signs of infection settled down quite quickly but radiologically it appeared that another sequestrum was present and this was excised 2-1-79. No granulation tissue and no pus was present around this fragment of bone.”

But that was not the end of it. A bone graft was recommended at the micro-surgical centre, St Vincent’s Hospital, Melbourne and this was done. A bone graft was taken from the left iliac crest and the fracture united well.

The plaintiff is still under the care of Mr Sharma who gave evidence of the last examination on 25 July 1984. The fifty per cent loss of function he noted in November 1979 has not improved. In addition, he found 4cm “roughly 1½ inches” shortening of the right leg, weakness in muscles of the right thigh, restriction in movement of the right knee and hip joint and a lateral bending (scoliosis) of the spine because of the shortening. The chance of osteoarthritis in the spine in percentage terms is put at seventy to eighty per cent and the same percentage chance is given for osteoarthritis to the knee. After all this time, continued physiotherapy is unlikely to improve the muscles though a built up shoe aids the back problem.

The plaintiff himself complains that in 1980 and 1981, he felt healthy but he began to feel weaker. His complaints in 1984 are pain related; back aches, pain in the left hip where bone was taken for graft and from time to time, headaches. Of the latter, Mr Sharma does not think them to be directly related to the injury but related to anxiety about the injuries. He eases the pain with codral-forte and rest, two to three hours nearly every day. Whilst the surgeon thinks there might be too much medication, he is not surprised by the rest because of the plaintiff’s daily routine.

I am satisfied the plaintiff’s current disabilities are related to and consistent with the accident caused injuries.

In assessing his damages, I will consider the following:

(1)      Pain and suffering.

(2)      Loss of enjoyment of life.

(3)      Out of pocket expenses — (a) past (b) future.

(4)      Wife’s services.

(5)      Loss of income (a) past (b) future.

1. PAIN AND SUFFERING

The length of time in which the plaintiff was subject to treatment is significant in this case; eight months inpatient at Port Moresby, two-and-a-half months at Sydney, two months at St Vincent’s and a further one-and-a-half months after discharge whilst in plaster. He seems to have been in traction in Port Moresby but there is no discharge summary to confirm this. The witness says there was a board under his leg. Certainly he was in traction for a period in Sydney, discharged in a plaster cast and later put in plaster at St Vincent’s. I am satisfied he had an awful time of it in Port Moresby. He felt “really good” after his Sydney operation but the graft caused him the “worst pain I ever experienced in my life”. He was then put in plaster from chest to toe. He was at a place called Cheltenham until 25 May 1979 when the plaster was removed. He returned home on crutches in July 1979 and remained on them until the end of that year when they were replaced with a walking stick and a built up shoe. He stopped using the stick, except for long walking periods, in 1981. I am also satisfied that he will suffer pain for the rest of his life — approximately twenty-four years. It is clear that prolonged activity or inactivity causes pain. It is all very well to say he can pace himself, but this only in part relieves the problems caused by the injury.

2. LOSS OF ENJOYMENT OF LIFE

He is saddled with pain, walks with a slight limp, needs a built up shoe and has a fifty per cent loss of function in relation to his employment. There is noticeable scarring more prominent on the right leg than on the left, from which bone was taken for the graft. He was aged forty at the time of the accident and is now forty-six. The plaintiff is an Anglican priest. I am satisfied by his evidence that his inability to fulfil properly the role of parish priest at Hohola with related duties at the Bomana and. Laloki institutions as well as missionary endeavour in Koiari, are matters which affect him deeply. They are integral to his enjoyment of the life he set out to lead a long time ago and for which he is so well trained. It is clear he will have to, retire from active church work much earlier than he anticipated. He will be unable to do the things he wants to do in life. But he is also a family man with three children, seven years, eleven years, and thirteen years and it is obvious he cannot be as active with them as he would wish. Under these heads of damages, I award K19,000.

3. OUT OF POCKET EXPENSES

(a)      Past. Some expenses, hospitalisation and airfares, have been agreed at K14,770-44. There are other expenses as well. It is clear the plaintiff gets comfort from codral-forte. A fifty tablet packet costs K6-7. It is not unreasonable to award K100 for this expense. He has to buy built up shoes from Australia. He has been wearing these since late 1979. The shoes cost A$80 and last about a year. I allow K120. He has seen Mr Sharma three times in the intermediate clinic and has visited out-patients on other occasions, the former costs K8 a visit and the latter 0.50t a visit. I will allow K30. For past out of pocket expenses I award K15,020-44.

(b)      Future. There will be a continuing need for the special shoes but with retirement to village life and a more sedentary lifestyle, the shoes should have a longer lifespan. There will be a continuing need for some medication and check ups. I am not at all sure of the need to include airfares to come to Port Moresby. There is a hospital in Popondetta and I use my general knowledge of this country about availability of visiting specialists. Still he has to get himself into Popondetta. It is all very well to say the plaintiff can get cheaper medication. The fact is he has confidence and comfort in codral-forte. I award K900 for future expenses.

4. WIFE’S SERVICES

In July 1979, Leila Koieba was employed at the Child Minding Centre at U.P.N.G. She earned K75-00 per fortnight. She took one month off work to nurse her husband when he was discharged from hospital. I am satisfied this was a full time nursing job. In addition, daily trips to the hospital for fresh dressings and associated trips to the chemist were paid for by her. I am satisfied that the expenditure of K80 for this assistance was reasonable. I have the distinct impression that Mrs Koieba paid these sums herself and hence their inclusion here. It is not clear to me if the wage rate stated was net or gross but in any event the tax rate would be small. Under this head I award K230.

5. LOSS OF INCOME

Although the plaintiff is an Anglican priest, I have heard evidence from Bishop Gadeba, the Bishop of Port Moresby and from Mr Leonard Emery, Provincial Secretary of this Anglican Province and it is clear to me spiritual considerations can be put aside. The church is run in a most competent and business like manner and there is enough evidence to treat this part of the claim as though it was another employee/employer relationship. I have been told of pay rates, workers compensation insurance, holiday provisions and ancillary allowances and benefits such as housing, given to priests. In addition, I have been told of the retirement age of priests in this Diocese. There is no other work to which the plaintiff can be transferred. Strange as it may seem, his usefulness as a priest is coming to an end.

(a)      Past economic loss. The plaintiff was unable to work from 15 February 1978 — 31 March 1980. I have been provided with figures prepared by Mr Emery, based upon the relevant rates in the conditions of services for indigenous staff. This amounts to K4,850 of which K3,848 was paid by the church’s workers compensation insurer. It has to be repaid, see s. 23(2)(c) of the Workers Compensation Act (Ch. No. 179). I award K4,850 for past economic loss.

(b)      Future economic loss. Rev. Koieba is still the parish priest at Hohola. He is still able to fill this position but it is clear to me from his own evidence and that of the Bishop and the former parish chairman, Hilarion Erai, that these duties are now too much for him. I am satisfied he cannot keep going in the job. There is a parish debt which he wishes to clear before he leaves Hohola. I am satisfied the Bishop will retire the plaintiff because of his disability. This will not happen now but in the future. From what the plaintiff and the Bishop say, I consider it reasonable that compulsory retirement will take place in three years time when the plaintiff is aged forty-nine years. He intended to work, if permission was granted, until he was sixty-five. The normal retirement age is fifty-five but a further five years work can be allowed and possibly a further five years after that. With his training, ability and enthusiasm, I believe the plaintiff would have worked until he was sixty. In view of the Bishop’s remarks about older serving priests, a further period of service by the plaintiff would amount to speculation on my part. I therefore, allow a further working life until the age of sixty. As I intend to use the years purchase tables to assess the future loss, I refer to Luntz Assessment of Damages for Personal Injury and Death (2nd ed., 1983) at 296 where methods to allow for the take up period, as it were, are discussed. By using the method adopted in McIntosh v. Williams [1979] 2 N.S.W.L.R. 543, I take the whole period forty-six to sixty years and a three year period forty-six to forty-nine years and deduct it.

At the present, Rev. Koieba says he receives a net salary of K206.42 per month. This is more than the base rate in the conditions of service but is the rate approved by the Parish Council which on 8 November 1981 agreed to pay the parish priest at what is known as “married urban rate” even though he was only entitled to the single urban rate because of Mrs Koieba’s full time employment. When tax is taken into account, this sum ties in with the gross figures provided by Mr Emery in exhibit J into which is built the Port Moresby living allowance and the furlough allowance. I find the wage loss to be K206-42 per month. I have been asked to consider increases in salary on the basis of the increases discernible in exhibit J. These increases are not wage increment or promotion increases, which could legitimately be considered, rather they represent a margin for inflation. To assess the present loss on this basis would be to make allowance for inflation twice — as a wage increase and as a factor in deciding the discount rate: see Luntz at 244 citing Todorovic v. Waller [1981] HCA 72; (1981) 37 A.L.R. 481 where future rises due to inflation in wages cannot be taken into account after the date of verdict.

A rectory is provided for the plaintiff and his family. Mr Saliau registered valuer says it has a rental value of K80 per week furnished. The church supplies all basic furniture. The plaintiff will lose this house because of his forced early retirement. He will then return home to the Popondetta area where he will have to provide his own future accommodation. He would have had to do this in any event, on retirement. I accept that this house will have to be more substantial than a bush material one which would last two to three years. During argument, I expressed some doubt that the loss of the house could be claimed. I have reread the evidence on this aspect. I consider it to be a real loss. I interpose here, because it is somewhat analogous, that I do not consider the loss of airfares to Popondetta to be a real loss at all. The plaintiff gets them because of his work in Port Moresby. The fares enable him to return home for holidays. Now, he will live at home permanently.

The weekly loss includes the housing component and I assess the loss at K127-60.

The discount rate here has varied over a number of years. It has come down from a high of eight per cent to five per cent which has been used in a number of cases. Following Todorovic the appropriate rate in Australia is three per cent. It is as much a policy figure as anything else. But, it is a figure arrived at after a review of varying rates in a number of preceding cases and the evidence in support of the adoption of various discount rates. In the present case, I can only reiterate my remarks in Koko Kopele v. Motor Vehicles Insurance (P.N.G.) Trust [1983] P.N.G.L.R. 223, December 1983, that is, the matter of interest rates is still open and for the same reason — there is simply no evidence before me for a movement in the discount either way. There I used a rate of five per cent and I have done so in numerous settlements which I have approved on behalf of infants, both before and after that judgment. I note that this rate was accepted by Bredmeyer J. in Pinzger v. Bougainville Copper Ltd [1983] P.N.G.L.R. 436. Of course, further application of this rate gives more certainty to an acceptable discount rate but this does not mean I accept Lord Diplock’s view in Mallet v. McMonagle [1970] A.C. 166 at 176 where he leaves out of account the risk of further inflation on the one hand and capital appreciation of properties and equities on the other hand.

The only interest rate about which evidence has been given is a high of fourteen-and-a-half per cent a rate on overdrafts and fully drawn advances in the period from 1 October 1980 (prime rate then eleven per cent) until 1 December 1983 (prime rate eleven per cent). I only mention this rate here to highlight the fact that the discount rate is very much lower than the rate of interest currently available on sound investments which would be somewhat lower than these rates. This opens the question of tax on income earned on the higher interest receipts on the damages awarded if invested at attractive rates. The problem is well analyzed in Luntz at 284-286. There is no evidence before me on any of these matters which could affect the choice of another discount rate. I will use a discount rate of five per cent in this case.

The loss, using factors of 9.8986 and 2.7232 respectively from Parry’s Valuation and Conversion Tables 1972 is therefore:

I accept that the “vicissitudes of life” have to be considered and this amount will be discounted to K47,000.

I am asked to award damages for loss of retirement benefits. This is not easy to assess because the scheme is to change in 1985. At the moment, the employee and employer contribute equally. It is to change to a greater but unequal contribution by both. This will mean less net weekly income for the plaintiff. I have been provided with a table of entitlements which will cover the period up until a retirement of sixty years and over. At that age, it will be K4167.04 (it seems my evidence as to the plaintiff’s age and that of Mr Emery differ. I have used what I consider to be payable at the age of sixty). This is not a large sum but I really am in a speculative area and both counsel agree on that. He will get K1240.26 when he retires in three years time. This leaves a difference of K2926.78. This figure is also subject to a discount for contingencies. I do not consider myself to be in a position to do justice to the parties by picking an arbitrary figure and that is what I would have to do.

The plaintiff’s damages are as follows:

I now turn to the issue of awarding interest on the award for pre-trial pain, suffering, loss of amenities and other special damages. First the amount:

I have not included the hospital accounts as I have no evidence as to whether they have as yet been paid, hence no “loss” to the plaintiff. The rate of interest is not specified in the Judicial Proceedings (Interest on Debts and Damages) Act (Ch. No. 52). It has been fixed at four per cent in other cases that is half of the ordinary current commercial rate of eight per cent; Cybula v. Nings Agencies Pty Ltd [1981] P.N.G.L.R. 120 (but note this was a 1979 trial) and used also in Aspinall v. Government of P.N.G. (No. 2) [1980] P.N.G.L.R. 50, and more recently in Pinzger’s case. There is a lot to be said for consistency. I have been provided with current prime rate or overdraft rate figures for the period 1.10.80-1.12.83 which gives a mean of 12.66 per cent. I am asked to find a commercial rate of ten per cent. I do not know what the prevailing rate was on the date of the accident, 15.2.78. It is clear to me further adherence to a rate of eight per cent may be questionable. However, I should have evidence of a deposit rate not the bank’s lending rate. In other words, if a plaintiff has been kept out of his money, what could he have earned on it? In my view, my discretion is properly exercised in arriving at a figure of eight per cent halved to four per cent.

From when will the interest run? In the cases already referred to, the interest has run from the date of the writ but with respect I cannot see why this should be so. The Act says “... the period between the date on which the cause of action arose and the date of judgment”. In my view, the plaintiff’s pain, suffering and other loss commenced on the day he was thrown from his motor cycle. I have been referred to Cookson v. Knowles [1978] UKHL 3; [1979] A.C. 556, particularly the remarks of Lord Diplock, with whom there was no disagreement on the point, who stated interest on pre-trial loss was to be assessed from the date of death (it was a claim under the Fatal Accidents Act 1966 (Cth)) until the date of trial at half the short term interest rates current during that period. But these remarks were said to be applicable to personal injury actions as well. And in Parker v. Guardian Fire Sprinkler Co. (Qld) Pty Ltd [1982] Qd R. 709, McPherson J., after reviewing all the authorities commencing with Jefford v. Gee [1970] EWCA Civ 8; [1970] 2 Q.B. 130 concluded that the weight of authority indicated the proper date from which to calculate interest at the half rate on pre-trial loss was from the date when the cause of action arose and not from the date when the writ issued. I can see nothing in Jefford v. Gee which limits the interest period from writ to trial. Finally, in Dexter v. Courtaulds Ltd [1984] 1 All E.R. 70, the Court of Appeal reaffirmed the date from which the interest runs as the date of the accident. Mr Ryan used this case as indicative of the importance of certainty in this area. But as I understood his argument, there should be certainty of interest rates. I may be mistaken on this point, but it is clear that the Jefford v. Gee principle should be applied in all the straightforward personal injury cases, and fatal accident cases for that matter. As Lawton L.J. said at 74 “... there may be special circumstances in which it would not be fair to apply the broad principles enunciated in Jefford v. Gee. If there are special circumstances, which make it unfair to apply those principles, they are circumstances which would be known to the plaintiff and his advisers. They may not be known to the defendant.”

The interest will therefore be four per cent on K13,482 from 15 February 1978 until today that is for six years nine months and is K3,640.14.

Judgment for the plaintiff is K90,640.58, costs to follow the judgment. I certify this to be a proper case to brief overseas counsel.

Judgment accordingly.

Lawyers for the plaintiff: Beresford Love Francis & Company.

Lawyers for the defendant: Young & Williams.