Micky Akai v John Stanley Reeves and Michael Newall Wilson trading as Warner Shand Lawyers (2014) SC1393

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi, Makail, & Kariko, JJ
• Judgment Date: 05 September 2014
• Court: Supreme Court
• Citation: (2014) SC1393
• Docket Number: SCA NO 108 OF 2010
• Year: 2014
• Judgement Number: SC1393

Full Title: SCA NO 108 OF 2010; Micky Akai v John Stanley Reeves and Michael Newall Wilson trading as Warner Shand Lawyers (2014) SC1393

Supreme Court: Kandakasi, Makail, & Kariko, JJ

Judgment Delivered: 5 September 2014

SC1393

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO 108 OF 2010

BETWEEN

MICKY AKAI

Appellant

AND

JOHN STANLEY REEVES

First Respondent

AND

MICHAEL NEWALL WILSON

Trading as Warner Shand Lawyers

Second Respondent

Waigani: Kandakasi, Makail, & Kariko, JJ

2014: 25th February & 05th September

SUPREME COURT APPEAL – Professional negligence – Solicitor/client relationship – Claim against lawyer – Breach of duty of care – Failure to prosecute claim – Failure to set matter down for trial – Claim dismissed for want of prosecution – Liability denied – Proof of.

LAWYER & CLIENTS – Professional negligence – Solicitor/client relationship – Duty of care – Duty to fairly represent interest of client – Conduct falling short of fairly representing interest of client constitutes breach of duty of care – Lawyer liable for damages – Professional Conduct Rules – Rule 8.

PRACTICE & PROCEDURE – Objection to competency – Leave to appeal – Whether grounds of appeal raised questions of fact – Leave not required – Grounds of appeal raised questions of mixed fact and law – Objection raised at hearing – Notice of competency – Failure to give notice – Appellant adversely disadvantaged and denied right to fair hearing – Objection dismissed – Supreme Court Rule, 2012 – Order 7, rule 15.

Facts

The appellant Mr. Micky Akai sued the respondents for professional negligence. He had earlier retained them to act for him in a claim against South Pacific Insurance (PNG) Limited for damages arising out of the insurance company’s failure to settle a claim for compensation for loss of a house and personal effects due to fire. He alleged that, apart from issuing writ of summons proceedings, the respondents failed to help prosecute his claim with due diligence resulting in its dismissal. He thus claimed damages in terms of the value of his house and personal effects.

The dismissal of his earlier proceeding was on the ground that he failed to establish liability. The trial Court also held, amongst others, that Mr. Akai was responsible for the delay by failing to give adequate instructions to the respondents to prepare for trial. The trial Court also found and that it was an abuse of process to claim the value of the house and personal effects against the respondents as such damages should be claimed against the insurance company.

Mr. Akai appealed against the dismissal of his claim for professional negligence. The respondents objected to the competency of the appeal on two grounds. Firstly, the grounds of appeal raised questions of facts which required leave and Mr. Akai did not seek and obtain leave. Secondly, the grounds of appeal were based on matters that were not raised in the National Court. He was therefore estopped from raising them on appeal.

Held:

1. Notwithstanding the time limit of 14 days to file a notice of objection to competency after service of the appeal under Order 7, rule 15 of the Supreme Court Rules, 2012, the Court has discretion to deal with any competency issue at any stage of the proceeding, prior to final judgment. In this case, Mr. Akai, has been adversely disadvantaged by the respondents’ failure to give the requisite notice and has been denied the right to a fair hearing, especially when the appeal has been fixed for substantive hearing. Hence, the respondents are precluded from raising any objection to the competency of the appeal. Accordingly, the objections are dismissed.

2. In any case, if the Court were to consider the objection it would still dismiss it. Whilst the grounds appeared to challenge the trial judge’s assessment of the evidence and his findings on the disputed facts, when considered in totality, the appeal turns on one issue. That is, whether the respondents were negligent. This is a question of mixed fact and law.

3. The second ground of objection is dismissed as having no merit because Mr.Akai’s counsel canvassed the issues raised in the grounds of appeal in his written submission filed on 20th April 2010.

4. Given that a claim for professional negligence against a lawyer is based on a relationship between a solicitor and his client, the respondents owed a duty of care to Mr. Akai. They had a duty to fairly represent his interest. Martha Limitopa v. The State [1988-89] PNGLR 364 referred to.

5. The trial judge erred when he relied on hearsay evidence and found that Mr. Akai failed to establish the respondents breaching the duty of care to fairly represent him and dismissed the proceeding.

6. The appeal is upheld, with the decision of the National Court being quashed; the proceeding reinstated; judgment on liability entered against the respondents and matter remitted to the National Court for trial on assessment of damages.

Cases cited:

Martha Limitopa v. The State [1988-89] PNGLR 364

Counsel:

L Kari, for Appellant

M Wilson, for First Respondent

S Wanis, for Second Respondent

JUDGMENT

05th September, 2014

1. BY THE COURT: The appellant Mr. Micky Akai sued the respondents for professional negligence. He had earlier retained them to act for him in a claim against South Pacific Insurance (PNG) Limited for damages arising out of the insurance company’s failure to settle a claim for loss of a house and personal effects due to fire. He alleged apart from issuing writ of summons proceedings, the respondents failed to help prosecute his claim with due diligence resulting in its dismissal. He thus claimed damages in terms of the value of his house and personal effects.

2. The trial judge dismissed the proceeding on the ground that Mr. Akai failed to establish liability and held that; (1) he was responsible for the delay because he failed to give adequate instructions to the respondents to prepare for trial; (2) he contributed to the dismissal because he failed to pay legal costs and disbursement; (3) the claim for the value of the house and personal effects against the respondents was an abuse of process because such damages should be claimed against the insurance company; (4) there was no evidence of court documents and the reasons of the judge who dismissed the earlier claim for want of prosecution to show why the claim was dismissed; and (5) the pleading in the statement of claim was inadequate.

Claim for Professional Negligence

3. Mr. Akai appeals against the dismissal of the proceeding and relies on nine grounds of appeal. The cause of action was the tort of negligence. The trial judge canvassed the relevant principles on the tort of negligence in his judgment and stated that, to succeed on a negligence claim it must be proven that:

· The defendants (respondents) owed him a duty of care,

· They breached that duty,

· The breach caused him damage,

· The type of damage was not too remote, and

· He did not contribute to his own loss and detriment, by being contributory negligent or voluntarily assuming the risk.

4. The trial judge also referred to the case of Martha Limitopa v. The State [1988-89] PNGLR 364, which held that 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. It was also held in that case that an action against a lawyer by a client for breach of the lawyer’s professional obligations is an action in tort because it arises from the relationship between the lawyer and the client. Hence, it is not the subject of a special contract where the duty is the subject of a special contract. The Court further held that, the duty of care of a lawyer is measured by the standards which apply to the profession as a whole. Parties have no issues with these principles but take issue with their application to the facts, particularly on the question of any breach of the duty and the measure of any damages arising there-from.

Competency of Appeal

5. The respondents object to the competency of the appeal on two grounds on the basis of which they submit the appeal should be dismissed. Firstly, they claim the grounds of appeal raise questions of fact for which leave is required but no leave was sought and obtained. Secondly, they claim the grounds of appeal were not raised in the National Court. Therefore, Mr. Akai is estopped from relying on them on appeal.

6. The respondents’ objection is without notice. Order 7, rule 15 of the Supreme Court Rules, 2012 imposes a duty on the respondents to file and serve a notice of objection to competency within 14 days after service of the appeal. The notice is to put the appellant and the Court on notice of the respondents’ intention to seek dismissal of the appeal on grounds of incompetence. The respondents did not explain why they were unable to give the required notice.

7. Notwithstanding the time limit of 14 days to file a notice of objection to competency after service of the appeal, the Court has discretion to deal with any issues of competencies of appeals at any stage of the...