N476

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

ROBINSON

V

NATIONAL AIRLINES COMMISSION

Waigani
Andrew J

3 May 1983
28 May 1983

MASTER AND SERVANT - Action for wrongful dismissal - Injunctive relief sought - No jurisdiction in respect of contract or wages - Jurisdiction with respect to ancillary matters - Principles applicable - Action effective election to accept repudiation of contract - Damages adequate remedy - No discretionary grounds on which injunction might go.

INJUNCTIONS - Interlocutory injunctions - When available - Preservation of status quo - Justice and convenience - Discretion to refuse - Action for wrongful dismissal - Damages adequate remedy - Injunction not granted.

Following termination of his employment as deputy general manager of the defendant company the plaintiff instituted proceedings for damages for wrongful dismissal in which proceedings, on notice of motion, he sought orders directing the defendant to refrain from demanding possession of a company supplied car and house and to ensure non-termination of electricity etc. to the house, and to continue to pay the salary and allowances and to accord privileges to the plaintiff pursuant to the contract of employment.

Held

(1) The application should be treated as an application for an injunction or injunctions.

(2) An injunction will not in ordinary circumstances be granted to compel either master or servant to continue a personal relationship which has become noxious to either of them.
Howes v. Gosford Shire Council [1962] N.S.W.R. 58, applied.
Hill v. C. A. Parsons and Co. Ltd [1971] 3 all E.R. 1345 at 1350, distinguished.

(3) Accordingly there was no power to grant the orders sought in respect of the continuation of salary etc.

(4) The application in respect of the house and car should be treated as an application seeking an interlocutory injunction prohibitive in nature.

(5) An interlocutory injunction, the purpose of which is to preserve the status quo, will be granted where just and convenient: the plaintiff must prove that he has a serious, not a speculative case, which has a real possibility of ultimate success and that he has a legal or equitable right, title or interest which might be jeopardized if the injunctive relief were not granted: it is then for the court to determine whether nonetheless the injunction should not go taking into account such factors as the adequacy of damages as a remedy, the possibilities of alternative remedies, whether there has been any laches or delay, the strength of the grounds of defence, what if any undertakings the defendant is prepared to give and most importantly, hardship and the balance of convenience.

(6) A writ for damages for wrongful dismissal is an effective election to accept repudiation of the contract of employment and so to treat the contract as at an end.
Car and Universal Finance Co. Ltd v. Caldwell [1965] 1 Q.B. 525; Garnac Grain Co. Incorporated v. H.M.F Faure and Fairclough Ltd and Anor. [1966] 1 Q.B. 650; and Canas Property Co. Ltd v. K.L Television Services Ltd [1970] 2 Q.B. 433, followed.

(7) The plaintiffs remedy being in damages only, could not be said to be inadequate and as no case of hardship had been made out, an injunction should not in the exercise of the court’s discretion be granted.

Cases Cited

Burns Philp Trust Company Pty Ltd v. Kwikasair Freightlines Ltd [1963] S.R. (N.S.W.) 492; (1963) 80 W.N. 801; [1964] N.S.W.R. 63.
C. H. Giles and Company Ltd v. Morris and Ors [1972] 1 W.L.R. 307; [1972] 1 All E.R. 960.
Canas Property Co. Ltd v. K. L. Television Services Ltd [1970] 2 Q.B. 433; [1970] 2 W.L.R. 1133; [1970] 2 All E.R. 795
Car and Universal Finance Company Ltd v. Caldwell [1965] 1 Q.B. 525; [1964] 2 W.L.R. 600; [1964] 1 All E. R. 290.
Garnac Grain Company Incorporated v. H.M.F. Faure and Fairclough Ltd and Anor [1966] 1 Q.B. 650; [1965] 3 W.L.R. 934; [1965] 3 All E.R. 273.
Gunton v. Richmond-upon-Thames London Borough Council [1980] 3 W.L.R. 714; [1980] 3 All E.R. 577.
Heyman v. Darwins Ltd [1942] A.C. 356; [1942] 1 All E.R. 337.
Hill v. C. A. Parsons and Company Ltd [1972] 1 Ch. 305; [1971] 3 W.L.R. 995; [1971] 3 All E.R. 1345.
Howes v. Gosford Shire Council (1961) 78 W.N. (N.S.W.) 981; [1962] N.S.W.R. 58.
Hubbard v. Vosper [1972] 2 Q.B. 84; [1972] 2 W.L.R. 389; [1972] 1 All E.R. 1023.
McCarty v. North Sydney Municipality (1918) 18 S.R. (N.S.W.) 210; (1918) 35 W.N. 85.
Mt Hagen Airport Hotel Pty Ltd v. Gibbs and Anor [1976] P.N.G.L.R. 216.
Pakenham Upper Fruit Company v. Crosby (1925) 35 C.L.R. 386; (1925) 31 A.L.R. 13; [1925] V.L.R. 27.
Sydney Consumers’ Milk and Ice Co. Ltd v. Hawkesbury Dairy and Ice Society Ltd (1931) 31 S.R. (N.S.W.) 458; 48 W.N. 127.
The Mihalis Angelos [1971] 1 Q.B. 164; [1970] 3 W.L.R. 601; [1970] 3 All E.R. 125.
Thomas Marshall (Exports) Ltd v. Guinle [1979] Ch. 227; [1978] 3 W.L.R. 116; [1978] 3 All E.R. 193.
Universal Cargo Carriers Corporation v. Citati [1957] 2 Q.B. 401; [1957] 2 W.L.R. 713; [1957] 2 All E.R. 70.
Vine v. National Dock Labour Board [1957] A.C. 488; [1957] 2 W.L.R. 106; [1956] 3 All E.R. 939.
White and Carter (Councils) Ltd v. McGregor [1962] A.C. 413; [1962] 2 W.L.R. 17; [1961] 3 All E.R. 1178.

Notice of motion

This was a notice of motion seeking the orders set out below in proceedings seeking damages for wrongful dismissal.

Counsel

P. Donigi, for the applicant/plaintiff.
I. Molloy and T. Glen, for the respondent/defendant.
Cur. adv. vult.

3 May 1983

ANDREW J: This matter comes before me as an application on notice of motion seeking orders directing the defendant and its agents or employees:

(a) to refrain from demanding possession of allotment 27, s. 51, Airvos Avenue, Port Moresby, and;

(b) to ensure that electricity, water and telephone services are not terminated from allotment 27, s. 51, Airvos Avenue, Port Moresby, and;

(c) to refrain from demanding possession of the motor vehicle registration no. ADO-548, and;

(d) to continue to pay the salary and other allowances to the plaintiff at the rate applicable to the plaintiff immediately prior to the termination of the said contract of employment, and;

(e) to continue to accord to the said plaintiff the privileges and other entitlements pursuant to the contract of employment dated 4 May 1982.

The application is made as a result of the plaintiffs termination by the defendant from the position of deputy general manager of Air Niugini. The plaintiff has issued a writ of summons directed to the defendant claiming:

(a) a declaratory order that the dismissal of the plaintiff from his employment as the Deputy General Manager of Air Niugini was wrongful and/or unfair; and;

(b) damages for wrongful and/or unfair dismissal from his employment with the defendant in the capacity of Deputy General Manager of Air Niugini.

Counsel for the defendant submits that the application is not competent and is bad in law and equity and that the court has no power to grant the orders sought. Even assuming, he says, that the plaintiff could show a prima facie case of wrongful dismissal (which is not conceded) the plaintiff cannot obtain specific performance of a contract for personal services nor can he obtain, in these circumstances, a mandatory injunction.

Firstly, he submits that this application amounts to a claim for specific performance of a contract for personal services and that this will only be granted where damages are shown to be inadequate.

Equity will not specifically enforce an agreement which is not a valid and binding contract, or a contract which the defendant is entitled to rescind and equity will not decree specific performance of a contract if the plaintiff has an adequate remedy at law.

It is true that the rights of the plaintiff lie at law by way of action for wrongful dismissal, assuming the dismissal to be unlawful. In a suit between master and servant in which the servant seeks to prevent the master suspending or dismissing him, the court will not interfere. If it is a suit for a declaration that the service continues, again in the case of an ordinary relationship of master and servant, the court will not interfere. Equity will not compel either master or servant to continue a personal relationship which has become noxious to either one of them: see Howes v. Gosford Shire Council [1962] N.S.W.R. 58. But in this case it seems to me that the plaintiffs real application is for the granting of an injunction and the question before me is whether that application is maintainable.

It has been said that it is a misnomer to describe a mandatory order compelling a defendant to perform some positive contractual obligation as a mandatory injunction, alleging that it is really a species of specific performance. But such orders are habitually referred to as "injunctions". Thus, Long Innes J, in Sydney Consumers’ Milk and Ice Ltd v. Hawkesbury Dairy and Ice Society Ltd (1931) 31 S.R. (N.S.W.) 458 at 471, said:

"Both on principle and on authority, therefore, I have come to the conclusion that in cases where an injunction is sought to compel the performance in specie of an executed contract the court has a discretion."

The High Court thought likewise in Pakenham Upper Fruit Company v. Crosby (1924) 35 C.L.R. 386, and in Burns Philp Trust Company Pty Ltd v. Kwikasair Freightlines Ltd (1963) 63 S.R. (N.S.W.) 492, the Full Supreme Court of New South Wales granted a mandatory injunction to enforce one single positive stipulation in a contract, expressly adding a mandatory injunction to the negative injunction granted at first instance. The truth of the matter is firstly, that "specific performance" is a term usually reserved for an order enforcing the whole of an agreement, whilst an order compelling performance of a single positive contractual obligation is called a mandatory injunction; and secondly, that in the realm of contract all forms of a injunction, mandatory or prohibitory, approximate in some degree to decrees of specific performance: see Equity Doctrines and Remedies by Meagher, Gummow and Lehane (par. 2179).

The injunction seeks to restrain what is said to be a legal wrong. But in general, an injunction will only lie if damages are inadequate. The requirement that "irremediable damage" or "irreparable injury" would result if an injunction were not granted is no more than another way of saying that damages must be shown to be inadequate as a remedy; all damage is in equity considered irremediable or irreparable if not adequately compensable in damages; McCarty v. North Sydney Municipality (1918) 18 S.R. (N.S.W.) 210.

It seems to me that the orders sought in pars (d) and (e) of the notice of motion, namely, that the defendant continue to pay the salary and other allowances to the plaintiff and that the plaintiff is accorded the privileges and other entitlements pursuant to the contract of service are orders which would be mandatory in character.

"The interlocutory mandatory injunction is a Rara Avis. This is partly because a mandatory injunction is usually more onerous for a defendant to comply with than a prohibitory one; moreover, the usual purpose of an interlocutory injunction is to preserve the status quo, a consideration inapplicable to mandatory injunction. But there is nothing to prevent a court from issuing an interlocutory mandatory injunction: see Meagher at par. 2172."

In my opinion also it is not shown that damages would be an adequate remedy. The plaintiff is ultimately seeking damages for wrongful dismissal and they are matters which can be compensated for by damages assuming the dismissal is shown to be wrongful. Furthermore, they are positive demands and an injunction will not be granted to compel either master or servant to continue a personal relationship which has become noxious to either one of them: see Howes v. Gosford Shire Council.

For these reasons I uphold the objection of counsel for the respondent in relation to pars (d) and (e) of the notice of motion and I find that the application is not competent and that the court has no power to grant those orders.

In relation to the orders sought in pars (a), (b) and (c) of the notice of motion, I find that the application seeks an interlocutory injunction which is prohibitive in nature. It is sought to restrain the defendant from demanding possession of the residence supplied to the plaintiff and of the utilities which go with it and to refrain from demanding possession of a motor vehicle.

The purpose of an interlocutory injunction is to preserve the status quo until the hearing of the main action "where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo", per Frost C.J in Mt Hagen Airport Hotel Pty Ltd v. Gibbs and Anor [1976] P.N.G.L.R. 316. No real principles can be laid down as to when they should or should not be granted except they are granted when "just or convenient" and what falls within that description must differ substantially from case to case. As Lord Denning M.R. said in Hubbard v. Vosper [1972] 2 W.L.R. 389 at 396:

"In considering whether to grant an interlocutory injunction, the right course for a judge is to look at the whole case. He must have regard not only to the strength of claim but also to the strength of the defence and then decide what is best to be done. Sometimes it is best to grant an injunction so as to maintain the status quo until the trial. At other times it is best not to impose a restraint upon the defendant but leave him free to go ahead ... The remedy by interlocutory injunction is so useful that it should be kept flexible and discretionary. It must not be made the subject of strict rules."

What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success and that he has property or other interests which might be jeopardized if no interlocutory relief were granted. Then it becomes a matter of seeing if, in all the circumstances of the case the court should nonetheless exercise its discretion by declining to issue an interlocutory injunction.

In order to determine this, the court will have regard to such factors as the adequacy of damages, the possibilities of alternative remedies, whether there has been any laches and delay, the strength of the grounds of defence suggested by the defendant, what, if any, undertakings the defendant is prepared to give, and most importantly, hardship and the balance of convenience: see Meagher pars 2167-2168.

Of course, it is not necessary to decide all of these matters at this point. But I have set out some of those general principles insofar as they relate to the competency of the application. In my view, it may become relevant, especially to the question of hardship to consider the plaintiffs position. He is a foreigner to the country who is restricted in his choice of employment and could not presumably obtain other employment pending the outcome of his action for wrongful dismissal.

In these circumstances, I consider that the question of possession of the residence he now occupies and the supply of a motor vehicle are relevant to hardship and may go beyond a question of compensation in damages. In considering the status quo, I think it is important to consider that the plaintiff must be afforded every reasonable opportunity to bring his action, a fortiori, in a matter which will involve his whole livelihood and reputation.

For these reasons I find that the application is competent and is not bad in law and equity insofar as concerns pars (a), (b) and (c) of the notice of motion.

28 MAY 1983

In relation however to the orders sought in pars (a), (b) and (c) of the notice of motion, I ruled that the plaintiff was seeking an interlocutory injunction which was prohibitive in nature and that considering the circumstances of the plaintiff there were matters relevant to hardship which could go beyond a question of compensation in damages. I ruled that the application was competent and that matter was then fully argued.

In the ordinary master and servant case:

"... if the master wrongfully dismisses the servant, either summarily or by giving insufficient notice, the employment is effectively terminated, albeit in breach of contract". See Vine v. National Dock Labour Board (1956) 3 All E.R. 939.

Accordingly, the servant cannot claim specific performance of the contract of employment. Nor can he claim wages as such after the relationship has determined. He is left to his remedy in damages against the master for breach of the contract to continue the relationship for the contractual period. He gets damages for the time he would have served if he had been given proper notice, less, of course, anything he has, or ought to have earned, in alternative employment: see Hill v. C A. Parsons and Company Ltd.

But in that case Lord Denning M.R., at 1350, continued as follows:

"I would emphasize, however, that this is the consequence in the ordinary course of things. The rule is not inflexible. It permits of exceptions. The court can in a proper case grant a declaration that the relationship still subsists and an injunction to stop the master treating it as at an end. That was clearly the view of the Privy Council in the latest case on the subject, Francis v. Municipal Councillors of Kuala Lumpur [1962] 3 All E.R. 633, where Lord Morris of Borth-y-Gest said:

‘... when there has been a purported termination of a contract of service a declaration to the effect that the contract of service still subsists will rarely be made.’

He added that in ‘special circumstances’ it may be made. Let me give an example taken from the decided cases. Suppose that a senior servant had a service agreement with a company under which he is employed for five years certain — and, in return so long as he is in the service, he is entitled to a free house and coal — and at the end a pension from a pension fund to which he and his employers have contributed. Now, suppose that, when there is only six months to go, the company, without any justification or excuse, gives him notice to terminate his service at the end of three months. I think it is plain that the court would grant an injunction restraining the company from treating the notice as terminating his service. If the company did not want him to come to work, the court would not order the company to give him work. But, so long as he was ready and willing to serve the company, whenever they required his services, the court would order the company to do their part of the agreement, that is, allow him his free house and coal, and enable him to qualify for the pension fund.

It may be said that, by granting an injunction in such a case, the court is indirectly enforcing a contract for personal services. So be it. Lord St Leonards L.C. did something like it in Lumley v. Wagner [1843-60] All E.R. Rep. 368."

Further authority for the proposition that the courts may in exceptional cases specifically enforce a contract for personal services or involving the continuous performances of services may be seen in C. H. Giles and Company Ltd v. Morris [1972] 1 All E.R. 960; Thomas Marshall (Exports) Ltd v. Guinle [1978] 3 All E.R. 193 and Gunton v. Richmond-upon-Thames London Borough Council [1980] 3 All E.R. 577.

But that principle, particularly as set out in Hill v. C. A. Parsons and Company Ltd is clearly distinguishable from the present case because there the injunction was granted at the behest of the employee against the employer to restrain a threatened wrongful dismissal. Here, the plaintiff is not challenging the repudiation of the contract. His action is for damages for wrongful dismissal.

What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success and that he has property or other interests which might be jeopardized if no interlocutory relief were granted. Then it becomes a matter of seeing if, in all the circumstances of the case, the court should nonetheless exercise its discretion by declining to issue an interlocutory injunction. The plaintiff must show that he has a legal or equitable right or title or interest which might be jeopardized if the injunctive relief was not granted.

But, here the plaintiff does not point to any such legal or equitable right or title or interest which is in need of protection. He is asking in effect for an order that he be allowed to remain in the defendant’s premises and that the defendant continue to supply him with a car, to assist him in bringing his action for damages for wrongful dismissal against the defendant.

In my view, the application fails for this reason. The plaintiffs remedy is in damages and it cannot be said that that would be an inadequate remedy. He has not challenged the repudiation of the contract and attempted to persuade the employer to change his mind but he has sued for damages for wrongful dismissal.

I should have said that it is a question of fact whether or not the plaintiff has accepted the repudiation of the contract: see Halsbury’s Laws of England (4th ed.), at par. 551, and Heyman and Anor v. Darwins Ltd [1942] A.C. 356. When the plaintiff served his writ for damages for wrongful dismissal he had made his election to accept the repudiation and to treat the contract as at an end: see Car and Universal Finance Company Ltd v. Caldwell [1965] 1 Q.B. 525; Garnac Grain Company Incorporated v. H.M.F Faure and Fairclough Ltd and Anor [1966] 1 Q.B. 650; Canas Property Company Ltd v. K.L. Television Services Ltd [1970] 2 Q.B. 433. Clearly also the affidavit material before me points to the plaintiffs acceptance of the repudiation.

I find it unnecessary to decide whether the plaintiff has a serious and not a speculative case which has a real possibility of ultimate success. Even if I was wrong on this point that he has not shown that he has some legal or equitable right or title which is in need of protection it has not been shown that this is such a case of hardship that the court should in the exercise of its discretion grant the injunctive relief.

The plaintiff, it is true, is in a difficult position in that he is a foreigner who is restricted in his choice of employment and could not presumably obtain other employment pending the determination of his action for wrongful dismissal. He has submitted figures on the basis that the matter is determined within some three months and these show that it might cost some K11,000 for accommodation and the hire of a car.

However, his home is in England and it is there that he can seek other employment and he is under a duty to mitigate his damage: Universal Cargo Carriers Corporation v. Citati [1957] 2 Q.B. 401; White and Carter (Councils) Ltd v. McGregor [1962] A.C. 413; The Mihalis Angelos [1971] 1 Q.B. 164. Furthermore, I consider that the cost of returning to the jurisdiction to pursue his claim is far less than the cost of remaining and those expenses will be relevant either to damages or to any costs which might ultimately be awarded.

It was also argued that there had been breaches of the plaintiffs constitutional rights. In particular, that there was a breach of his basic right to freedom of employment (Constitution, Preamble: basic rights and s. 48). Leaving aside the argument as to whether or not these constitutional rights would apply to the plaintiff as a non-citizen I cannot see how they have any application in the present case. The plaintiff had exercised a freedom of choice of employment when he took up the position of Deputy General Manager of Air Niugini but that does not mean he is immune from dismissal from the position for alleged misconduct in office.

For the foregoing reasons, the plaintiff has failed to make out that this is a proper case for the granting of discretionary relief. Accordingly, the application is refused.

The application is dismissed. I note the defendant’s undertaking that the plaintiff be allowed one week further before the residence is to be vacated and the car returned. Accordingly, the plaintiff has until Friday 4 June 1982, to make those necessary arrangements.

Application dismissed.

_______________________

Lawyer for the applicant: P. Donigi.
Lawyer for the respondent: Beresford Love & Co.