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Saki v Official Administrator of Unrepresented Estates [1983] SBCA 3; [1984] SILR 146 (6 December 1983)

[1984] SILR 146

IN THE COURT OF APPEAL OF SOLOMON ISLANDS

Court of Appeal Civil Case Appeal of 1983

SAKI

-v-

OFFICIAL ADMINISTRATOR OF UNREPRESENTED ESTATES

Solomon Islands Court of Appeal
(Kelly V.P., Kapi and Jones J.J.A)
Court of Appeal Civil Appeal of 1983

6th December 1983

Damages for loss of expectation of life and loss of future earning capacity ("lost years") for the estate of a deceased person under the Law Reform (Miscellaneous Provisions) Act 1934 - how assessed.

Facts:

The appellants admitted liability in the High Court on an action brought by the personal representative of P. a single man who was killed in an accident. Damages under the 1934 Act for the estate were assessed at $18000.00 for loss of future earning capacity applying a multiplier of 15 and $1500.00 for loss of expectation of life. The Appellants appealed against the assessments.

Held

1 .Applying the principles of Cheung -v- Tanda claims by the estate for loss of expectation of life and loss of future earning capacity could properly be brought in the Solomon Islands.

2. That on the evidence adduced the award of the learned trial judge was not so grossly excessive as to warrant interference by the court.

Accordingly the appeal was dismissed.

Cases considered and cited:

Gammell -v- Wilson [1982] A.C. 37
Adsett -v- West [1983] 3 WLR 437
Pickett -v- British Rail Engineering Ltd [1980] AC 136
Davies -v- Powell Duffryn Associated Collieries Ltd [1942] AC 601
Taylor -v- O’Connor [1970] All ER 365
Gavin -v- Wilmot Breeden Ltd [1973] 3 All ER 935
Fitch -v- Hyde-Cates [1982]39 ALR 581
Dolley -v- Goodwin [1955] 1 WLR 533

I. Molloy for the appellant K.
K Brown for the respondent

Kelly VP: This is an appeal from a judgment of the High Court awarding damages of $19.500.00 to the respondents on a claim under the Law Reform (Miscellaneous Provisions) Act 1934 (U.K.). In the action there was also a claim under the Fatal Accidents Acts 1846-1959 (U.K.) but for reasons to which I shall subsequently refer no order was made on that claim.

The appeal was heard immediately following that in Cheung v. Tanda ([1983] SBCA 1; [1983] SILR 193; No.1 of 1983) and a number of grounds of appeal which were common to the two appeals were not again argued. I have dealt with those common grounds in my reasons for judgment in Cheung v. Tanda and for the purpose of this appeal I adopt those reasons. The matter which falls for consideration is then the quantum of the award, it being submitted on behalf of the appellant that the sum awarded for loss of future earning capacity was in all the circumstances manifestly excessive.

The deceased died in a motor accident on 19th December 1981. He was then 18 years of age and unmarried. He was in regular paid employment as a specialized timber truck driver and had commenced work with his employer in 1979. He was described by the manager of the company as a “way above average worker” and “one of the best drivers” they had in Solomon Islands. At the date of his death he was receiving an average of $250.00 per month as take home pay. Having regard to subsequent pay increases and a promotion which the deceased might have been expected to receive the learned judge adopted a figure of $400.00 per month as the take home pay of the deceased at the date of trial and counsel for the appellant accept this figure. The learned judge took this figure as representing overall a fair average, apparently referring to both the pre-trial and post-trial periods and, whilst this may be a little on the generous side in the pre-trial period. I would think that the approach of the learned judge was reasonable in the circumstances since mathematical certainty is not to be expected in dealing with claims of this nature (see for example. Gammell v. Wilson [1982] AC 37, per Lord Scarman at p. 78).

The learned judge then went on to consider the amount to be deducted for the expenses of maintaining the deceased himself. He found that when the deceased was earning $250.00 per month he had a surplus disposable income of at least $60.00 per month made up of something like $40.00 per month which he gave to his parents and an average of $20.00 per month which he saved. The learned judge then adopted a figure of 25 per cent of the deceased’s income as being surplus and applying this to the figure of $400.00 per month he found that the surplus disposable income of the deceased was $100.00 per month and so took $1.200.00 per annum as the multiplicand for the purpose of the loss of earning capacity calculation.

Counsel for the appellant submitted that the savings of $20.00 per month should not have been, included in arriving at the surplus, as these may only have been for future living expenses. To my mind to accede to this submission would be to engage in an unwarranted degree of speculation. It is true that in Gammell -v-. Wilson (supra) Lord Fraser of Tullybelton referring to the process by which the courts assessed damages for the “lost years” considered it, at p. 72, as “so extremely uncertain that it can hardly be dignified with the name of calculation; it is little more than speculation”. Be that as it may, I can see no basis in this case for an assumption that part or all of the relatively moderate savings made by the deceased should be regarded as being attributable to his future maintenance and in my view the learned judge was not wrong in treating those savings as part of the surplus for the purpose of his calculations.

The learned judge did not have regard in fixing the multiplicand to the possibility of the deceased marrying. In Adsett v. West [1983] 3 WLR 437, McCullough J., at pp. 445-451, examined a number of authorities in which the deceased had been single and the possibility of marriage had been considered and he concluded, at p. 451, that in the instant case because the deceased was single at the date of his death he should regard him as such for the purpose of the “lost years” except insofar as there were compelling reasons to do otherwise. In the event, on the evidence in that case as to the likelihood of marriage, McCullough J. did make an increase in the percentage of the deceased’s income which he treated as surplus for the purpose of his calculations to take account of this. However, on the evidence in the present case in my opinion the learned trial judge was correct in disregarding the possibility of marriage. In any event as it would seem that if regard were to be had to this it would be likely to result after marriage in a decrease in the percentage of his income which the deceased would have spend on his own maintenance and so, since sums expended on the maintenance of dependants-are not to be taken into account, in an increase in his surplus disposable income, it would not be an assumption which would assist the appellant.

After taking into account contingencies, the learned judge gave the deceased an initial 25 years purchase, which, discounted at four percent, gave a multiplier of 15 and so produced a final figure of $18,000.00 for the “lost years”. Counsel for the appellant submitted that it was unreal to assume that the deceased would have continued to work for 25 years in paid employment and that the future loss was so speculative that the award should be limited to “a few thousand dollars”.

The observation of Lord Salmon in Pickett v. British Rail Engineering Ltd [1980] AC 136, at pp. 153-154, are very much in point in this regard. Lord Salmon there said:-

“Damages for the loss of earnings during the ‘lost years’ should be assessed justly and with moderation. There can be no question of these damages being fixed at any conventional figure because damages for pecuniary loss, unlike damages for pain and suffering, can be naturally measured in money. The amount awarded will depend upon the facts of each particular case. They may vary greatly from case to case. At one end of the scale, the claim may be made on behalf of a young child or his estate. In such a case, the lost earning are so unpredictable and speculative that only a minimum sum could properly be awarded. At the other end of the scale, the claim may be made by a man in the prime of life or, if he dies, on behalf of his estate; if he has been in good employment for years with every prospect of continuing to earn a good living until he reaches the age of retirement, after all the relevant factors have been taken into account, the damages recoverable from the defendant are likely to be substantial. The amount will, of course, vary, sometimes greatly, according to the particular facts of the case under consideration.”

In this case, although the deceased was only a young man and had been in employment for only two years, important factors are the nature of that employment and his qualifications and ability. He was a specialized driver of above average ability and there would be no reason to suppose that he would at some time in the future/have abandoned that employment and, for instance, returned to village life. There is no evidence to suggest that this would have been likely and indeed one would think, that the probabilities would have been against it. Bearing in mind the necessity to assess the damages with moderation, they must also be assessed justly. As Lord Scarman said in Gammell v. Wilson (supra) at p. 78:-

“If sufficient facts are established to enable the court to avoid the fancies of speculation, even though not enabling it to reach mathematical certainty, the court must make the best estimate it can.”

In Adsett v. West (supra), at p. 448, after referring to that portion of Lord Scarman’s opinion in which the above passage appears, McCullough J. observed:-

“Where does the assessable shade into the purely speculative? The question is incapable of any more satisfactory answer than that it must be a matter for the judgment of the tribunal of fact.”

Had I been considering the matter at first instance I may have been disposed to adopt a multiplier, before discounting, of somewhat less than 25. However, in my view it could not be said that in the exercise of his judgment the learned judge erred in selecting the multiplier which he did and so arriving at the figure of $18,000.00. Counsel for the appellant submitted that a higher discount rate than four per cent, say six per cent, should have been used. The position here is the same as in Cheung v. Tanda and in this case also I am not prepared to say that the learned judge was wrong in selecting four per cent.

I may say that this case serves to reinforce the view which I expressed in Cheung v. Tanda that consideration of statutory amendment to abolish this head of damage, as has been done in some other jurisdictions, is desirable.

There was no challenge to the conventional sum of $1,500.00 included in the judgment for loss of expectation of life if damages may properly be awarded under this head, which in accordance with my reasons in Cheung v. Tanda I consider to be the case.

For the reasons given by the learned judge there was no point, in view of the amount awarded under the estate claim, in his embarking on the task of calculating the dependencies of the parents of the deceased as it is apparent that any sum so calculated would have been extinguished by the amounts which the dependants would receive through the estate of the deceased under the estate claim.

The approach of an appellate court to an award of damages is indicated in Pickett’s Case (supra), at p. 151, where Lord Wilberforce, after pointing out that the Court of Appeal had been unable to find that the trial judge erred in principle in any way, went on to say:-

“It is important that judges’ assessments should not be disturbed unless such error can

be shown, or unless the amount is so grossly excessive or insufficient as to lead to the conclusion that some such error must have taken place.”

This is, in effect, a restatement of what had been said by Lord Wright in Davies v. Powell Dyffrys Associated Collieries Ltd [1982] AC 601, at p. 617.

In my opinion no basis exists for interference by this court with the award made by the learned trial judge. I would therefore dismiss the appeal with costs to be taxed.

Kapi JA: A number of grounds of appeal on points of law in this case were the same as those raised in Cheung v. Tanda (No.1 of 1983). I have dealt with those grounds in my Reasons for Judgment in Cheung v. Tanda and, for the purposes of this appeal, I adopt those reasons. I note that I have reached the same conclusion as Kelly, V.P. in Cheung v. Tanda, by a different route.

On all other grounds I am in complete agreement with the reasons given by Kelly, V.P. and I would dismiss the appeal with costs to be taxed.

Jones JA: On 19th December 1981 Nicholas Peresini died in a motor accident. An action on behalf of his estate and his dependants was brought in the High Court by the Official Administrator of Unrepresented Estates. The defendant was Samuel Saki. Judgment was signed under Order 14.

In assessing damages in the claim under the Law Reform (Miscellaneous Provisions) Act 1934, the learned Chief Justices applied the principles which he had set out in the case Vincent Tanda v. Cheung Civil Case 52/83. This case came on appeal by Cheung in Civil Case No.1 of 1983. In that appeal the Appeal Court upheld the views expressed at first instance. I summed up my own views as follows:-

“I am of the view that in a claim under the Law Reform (Miscellaneous Provisions) Act 1934 the common law of Solomon Islands provides for a conventional sum for loss of expectation of life and also damages for lost earnings during the years the deceased would have lived but for the accident causing his death, these lost earnings to be calculated by deducting from net notional earnings for the lost years the amount deceased would have spent on himself alone to maintain his standard of living.”

I also came to the conclusion that a discount rate of 4% could not, on the available evidence, be faulted.

Mr Molloy argued these points in detail in that appeal. He again represents the appellant in the present appeal and he tells us that he adopts the same argument. There is nothing to be served by repeating either those arguments or my examination, of them. Suffice it to say that since writing that judgment I have found no cause to change my mind.

It remains only for me to consider the grounds of appeal concerning the actual calculation of damages based on the principles I have stated. The main and most arguable ground of appeal is that the sum deducted for future maintenance of the deceased was inadequate. Deceased died at the age of 18 years. He was unmarried. He was in regular employment as a specialist driver with Shorncliffe (S.I.) Ltd for whom he had worked for 2½ years. He lived in company quarters provided free. The manager of the firm gave evidence that he was an above-average worker with excellent prospects of promotion. Acting on this information, the learned Chief Justice calculated a figure of $400 per month net after tax as deceased’s probable income at the date of trial. This figure is not disputed. The figure which Mr Molloy disputes is $300 or 75% of net earnings deducted as maintenance of the deceased at an appropriate standard of living.

Mr Molloy submits that this sum does not include the cost of maintenance of the deceased during his weekly weekend visits to his parents to whom he had been an allowance $30 to $40 a month, and secondly that it was wrong to include in disposable income, the whole of the average $20 which deceased had been saving because he may very well have intended to spend some of those savings on himself at a later date.

The point that deceased’s upkeep during his weekends with his family should be counted as part of his maintenance is well taken in principle. I have given some thought as to what value should be put on it. I cannot see that the cost of these visits would be any more than the cost of his food. I do not know whether that would be home produce or food bought in the market or shops. Judging from the evidence, I think I can safely assume that the greater part of it would be home produce. Deceased’s father PW 2, told the court “the money was sometimes for food, for clothing for the kids and for school fees.” PW 3, deceased’s mother, said that deceased sometimes gave sugar, bread or meat and rice but he usually gave them money. She said the money was used to pay food and clothing for the children.

On a general view of the evidence it does not seem to me that there is justification for the deduction of any worthwhile amount for the deceased’s weekend maintenance.

The question of deceased’s savings is one on which there had been some divergence of opinion. In Taylor v. O’Connor [1970] 1 All ER 365, the House of Lords considered that the deceased’s lost savings would ultimately come to the respondent or the daughter and awarded damages for the whole of deceased’s lost savings. But in Gavin v. Wilmot Breeden Ltd [1973] 3 All ER 935 the Court of Appeal deducted £3 per week from savings of £10 per week because it considered that there was a likelihood that such an amount would have been used at some future time for the deceased husband’s benefit.

On the other hand, in Gammell v. Wilson [1981] 1 All ER 578 at 593 Lord Scarman said, “The loss to the estate is what the deceased would have been likely to have available to save, spend or distribute after meeting the cost of his living at a standard which his job and career prospects at the time of death would suggest he was reasonably likely to achieve.” This, he said, was the principle established by the House of Lords, in Pickett v. British Railway Engineering Ltd [1979] 1 All ER 774. No mention was made of Gavin (above) which did not go to the House of Lords. In Fitch v. Hyde-Cates (unrep. 6th April 1982) the High Court of Australia, quoted and followed Lord Scarman’s dictum in Gammell (above). By reference to Taylor v. O’Connor (above), a pre-independence statement of the common law, I believe I am bound to hold that all recurrent savings form part of deceased’s disposable income for the benefit of his estate in a claim under the Law Reform (Miscellaneous Provisions) Act 1934.

Mr Molloy also submits that it is wrong to assume that the deceased would have saved the same percentage of his income for the rest of his life. One does not of course know. In logic, there is no justification for thinking otherwise. It is the principle of the graph. There is no factual basis for assuming the correctness of a graph except at the measured points upon which it is based; on the other hand there is neither factual nor logical basis for assuming random variations. It is of course possible that the deceased would find alternative means of disposing of his surplus income. It is also possible that as his income increased so would his savings.

Mr Molloy suggests that with his increased salary the deceased would have been likely to spend a greater proportion on himself. I can see no basis for this argument. While he might be expected to improve his standard of living with increased earnings, I can see no ground for the belief that this would involve spending on a higher percentage of his income. It would be equally valid to hold that with an increased salary he would increase the percentage of his savings or the percentage given as an allowance to his parents. There is no logical justification for speculating a future change in these percentages, except on the basis of some real factual likelihood.

This brings me to consideration of one such factual likelihood. It is the real likelihood that a normal young man, especially a healthy young man with good financial prospects, will marry. If he marries his expenses will increase. The effect of this will not be to increase the cost of his own maintenance. Indeed the sharing of a household with his wife would in many cases decrease the cost of his own maintenance. The effect of likelihood of marriage of a young man was considered and applied in Dolley v. Goodwin [1955] 1 WLR 533, where it was said that it would probably lead-to a decrease in the allowance he made to his mother. This was relevant to a claim under the Fatal Accidents Acts. In the present such a claim did not fall to be finally assessed because, as the learned Chief Justice pointed out, it would clearly have been far less than the claim under the Law Reform (Miscellaneous Provisions) Act and therefore extinguished by it. I do not think there is anything to be gained in the circumstances of the present case, in speculating whether and by how much marriage would reduce deceased’s personal maintenance expenditure for the benefit of his estate, or its likely effect on his savings.

Mr Molloy also submits that in respect of the claim under the Law Reform (Miscellaneous Provisions) Act 1934 the learned Chief Justice does not mention contingencies. This is true. However, in Vincent Tanda v. Michael Cheung (above), he took the view that a reduction for contingencies would be cancelled out by a likely increase in earning capacity. This I think is equally applicable to the present case. The learned Chief Justice calculated the probable take-home pay of the deceased at the date of trial at $400 per month. On the evidence it seems to me that there was every likelihood of an increase in his salary at varying intervals in the future. I would therefore not be prepared to say that this submission would make a measurable difference to the final assessment.

I come now to the final ground of appeal which is the general ground that the sum awarded for loss of future earning capacity was in all the circumstances manifestly excessive. This is a blanket ground of appeal. Under it Mr Molloy has argued one final point, namely that the assessment of 25 years working life is too high. Twenty five years would bring the deceased to the age of 43 or 44. I would have thought that this was quite soon enough to retire. I would have thought that without taking contingencies into account one might assume a much longer working life. Mr Molloy suggests that while the deceased would have been capable of working for 25 years more there is no certainty, in fact some doubt, that employment would be available for this period. This might be a good argument in different circumstances, but I do not find it persuasive in the present circumstances of a young man in a good job, with good prospect of promotion in a sound company.

Although I have taken a view different from that of the learned Chief Justice in some comparatively minor points of principle and calculation, I am not persuaded that the final figure for damages is not a fair and reasonable assessment. In matters such as this with so many variables few of which are capable of exact calculation the aim is to achieve a fair and sensible final figure which as far as human ingenuity can devise will represent proper compensation for the injury suffered. Or in Lord Scarman’s words in Gammell (above at 593):

“Subtle mathematical calculations based as they must be on events or contingencies of a life which he (the deceased) will not live, are out of place: the judge must make the best estimate based on the known facts and his prospects at time of death.”

This, I think, the learned Chief Justice has done and would dismiss the appeal.