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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS. NO. 312 OF 2000
WILSON THOMPSON
Plaintiff
AND:
NATIONAL CAPITAL DISTRICT COMMISSION
First Defendant
AND:
THE CITY MANAGER
Second Defendant
WAIGANI: KANDAKASI, J.
2003: 21st November
2004: 11th October
PRACTICE & PROCEDURE – Pleadings and proof – Plaintiff under duty to plead and prove his damages – Failure to – No award of damages.
EMPLOYMENT LAW – Employment with public authority – Authority of political head to execute purported contract of employment promoting an existing employee - No evidence of authority and approval by relevant authority – Effect of - Purported contract null and void – Employee remaining employed on existing position - Termination of – Employee leaving employment for another without prior notice and approval of employer – Effect of – Constructive termination – Employer entitled to terminate without notice or payment in lieu of – National Capital District Commission Act ss.32, 33, 34.
DAMAGES – Contract entitles – Claim for balance of – Effect of – Unenforceable penalty clause – Real measure of damages – Period of notice - Where payment made in lieu of notice – Plaintiff failing to provide evidence of damages pleaded – Effect of – No basis to assess and award damages.
Facts
Under a written contract of employment, the Second Defendant (NCDC) employed the plaintiff as its Revenue Controller. Sometime later, the National Government suspended the powers and functions of the NCDC. During the period of suspension, the Minister responsible for Provincial Affairs purported to execute a contract of employment with the plaintiff for the position of Deputy City Manager (DCM contract) with the NCDC. That contract was not approved by the Salaries and Conditions Monitoring Committee (SCMC) as required by the Salaries and Conditions Monitoring Committee Act 1988. The NCDC through its City Manager played no part in the contract and only came to learn of it later. Eventually, the NCDC suspended the plaintiff. Whilst under suspension, the plaintiff secured employment with the Liquor Licensing Commission as its Chief Licensing Commissioner, without any prior knowledge and approval of the NCDC. So on learning of that, the NCDC terminated the plaintiff's employment with it as its Revenue Controller and paid him his final entitlements, which he accepted. However, he later sued for some damages on the basis of his DCM contract and the National Court made certain awards and ordered the plaintiff to reimbursement some payments he received from the NCDC. Thereafter he sued for damages for the balance of his DCM contract claiming his termination was unlawful.
Held
1. The then political head of the NCDC the relevant Minister, did not have the power and or authority to execute the purported DCM contract, which was an administrative function usually vested in an administrator and not a political or policy head such as the Minister.
2. The purported DCM contract was null and void because:
(a) it was entered into without the necessary statutory or legal authority; and
(b) it did not get the approval of the SCMC, which is mandatory under the SCMC Act.
3. The plaintiff's acceptance of his employment with the Liquor Licensing Commission amounted to a breach of his employment contract with the NCDC in that:
(a) he did not comply with the contracts notice requirements; and
(b) he took up an alternative employment without the prior approval of the NCDC.
(a) in terms of s. 44 of the Evidence Act; and
(b) that the same issues raised in these proceedings were raised and determined on its merits in the earlier proceedings.
5. The plaintiff's conduct in terms of (2) and (3) above, vested in the NCDC a right to terminate its employment contract with the plaintiff without notice by reason of which the termination of its contract with the plaintiff was lawful disentitling the plaintiff to any damages as claimed or at all.
6. Further or in the alternative, the plaintiff's claim for the balance of his purported DCM contract cannot be upheld because:
(a) there was no foundation in the contract;
(b) if there was foundation in contract it would amount to a penalty and therefore unenforceable; and
(c) the plaintiff failed to establish his claim for damages by appropriate evidence.
Papua New Guinean Cases Cited:
Mark Ankama v. Papua New Guinea Electricity Commission (23/10/02) N2363.
Rimbink Pato & Anor v. Reuben Kaiulo & Ors (29/08/03) N2455.
Teio Raka Ila v. Wilson Kamit (11/10/02) N2291.
Wyatt Gallagher Bassett Limited v. Benny Diau (16/08/02) N2277.
National Airline Commission v. Lysenko [1990] PNGLR 226.
Tolom Abai & 765 Ors v. The State (20/12/95) N1402.
Coecon Ltd v The National Fisheries Authority of Papua New Guinea (28/02/2002) N2182.
Andrew Moka v. Motor Vehicles Insurance (PNG) Limited (01/04/04) SC729
PNGBC v. Jeff Tole (27/09/02) SC694
Igiseng Investments Ltd v. Starwest Constructions Ltd (17/12/03) N2498.
Tom B Gesa v. Bernard Kipit & NCDC (06/08/03) N2457.
Mathew Himsa & Anor v. Richard Sikani (08/11/02) N2307.
John Kopil v. Malcolm Culligan & The State (28/06/95) N1333.
Sulaiman v. PNG University of Technology (20/08/87) N610.
Albert Kuluah v. The University of Papua New Guinea [1993] PNGLR 494
God'frey Niggints –vs- Henry Tokam& Ors N1158.
Pochon Lili –vs- Jospeh Gabut and Ors N1394.
Leo Nuia v. The State (29/08/00) N1986. Steamships Trading Co. Ltd v. Joel & Ors [1991] PNGLR 133.
Steamships Trading Co. Ltd v. Joel & Ors [1991] PNGLR 133 at 141
Jimmy Malai v. Papua New Guinea Teachers Association [1992] PNGLR 568.
Andrew Moka v. Motor Vehicles Insurance (PNG) Limited (18/05/01) N2098.
Andrew Moka v. Motor Vehicles Insurance (PNG) Limited (01/04/04) SC729.
PNGBC v. Jeff Tole (27/09/02) SC694.
Post Puma Ltd v. Yama Security Services Ltd (unnumbered judgment 26/07/01) SCA No. 80 of 2000.
Appa v. Wama [1992] PNGLR 395.
Robert Karava v. Kevin Byrne and Tourism Promotion Authority () N1805.
Counsel:
G. Kaore for the Plaintiff.
J. F. Aisa Jnr for the Defendants
11th October 2004
KANDAKASI, J.: The Plaintiff is claiming damages in excess of one million Kina for alleged unlawful termination of a written contract of employment with the first defendant (the NCDC) as it's then Deputy City Administrator (Finance & Administration). The claim is for the balance of the Plaintiff's contract, which he says the NCDC unlawfully terminated.
The NCDC denies it had a written contract of employment with the Plaintiff as claimed by the plaintiff. Instead, it claims that there was a purported contract between the plaintiff and the NCDC which was entered into between the plaintiff and the then Minister for Provincial Affairs, (the Minister") which was not binding on the NCDC as the Minster did not have the authority to execute the contract on behalf of the NCDC. The NCDC says however that, it did have a written contract of employment with the plaintiff for the position of Revenue Controller. The NCDC says also that, the Plaintiff constructively terminated that contract by taking up an appointment with the Liquor Licensing Commission as its Chief Liquor Licensing Commissioner. Consequentially, the NCDC says, it proceeded to cease payment and other entitles due to the plaintiff under the contract once it became aware of the plaintiff's new employment and formalized the plaintiff's termination under clause 8.1.10 of the contract of employment it acknowledges as having existed between itself and the Plaintiff.
The plaintiff seeks to rebut the claims of the NCDC by claiming and maintaining that his employment was as Deputy City Manager (Finance & Administration) under a valid written contract and that, his termination was not in accordance with the provisions of that contract. He says further that, this issue was already determined under WS 216 of 2001 and is therefore res judicata. Then as for his purported attachment, he says it was with the knowledge and approval of the NCDC and as such continued to pay his salary and other entitlements under his contract of employment as Deputy City Manager.
Relevant Issues
From these arguments, the issues as far as I can see, are these:
In order to appreciate the background from which these issues are before this Court, it is necessary to consider the relevant facts and the relevant and applicable law. I therefore turn to a consideration of the relevant evidence and the facts emerging from them now.
The Evidence and the Relevant Facts
Evidence before the Court consists of both oral and sworn affidavit evidence. For the plaintiff are three affidavits by himself sworn respectively on 12th March 2003 (exhibit "A"), 16th July 2003 (exhibit "B"), 22nd August 2003 (exhibit "C"). In addition to these affidavit evidences, he gave oral evidence upon which he was cross-examined. I find overall that, the Plaintiff's evidence is incomplete and evasive as will be highlighted as I discuss specific aspects of the evidence.
The defendants' evidence comes from Mr. Kipit, who has deposed to three affidavits, all admitted into evidence without objection as exhibits "D1" sworn on 23rd June 2000, "D2" sworn on 8th October 2002, and "D3" sworn on 25th August 2003. The plaintiff cross-examined this witness on his affidavits. There is also evidence for the defendants from Ms. Osila Teko, the NCDC's Human Resources Manageress who has also deposed to an affidavit, admitted into evidence as exhibit "D5" also without any objection. She too was cross-examined on her affidavit. Further admitted into evidence for the defendant is an affidavit by Richard Pangwinyen marked as exhibit "D4" without the plaintiff's objection. I find nothing against the credibility of the facts emerging from these evidence, again as will be highlighted in the following discussions on certain specific aspects of the evidence.
From these evidences, I find a number of facts are not seriously in dispute. This starts with the NCDC employing the plaintiff in various capacities with its finance section since October 1995. He started as an accounts clerk. From that position, he made his way up to the position of revenue controller. Under a written and purported contract of employment, the plaintiff signed with the then Minister on 4th May 2000, the Plaintiff says he was appointed Deputy City Manager (Finance & Administration), by which time the NCDC was under suspension. The defendants claim that, this purported appointment was not valid because the appointment was by the Minister who did not have the power to do so and the contract did not receive the required approval of the Salaries and Conditions Monitoring Committee (SCMC) under the Salaries and Conditions Monitoring Committee Act 1988 (SCMC Act). This forms the basis for the first issue. I therefore, turn to a consideration of that issue now.
Capacity in which the NCDC employed the Plaintiff
There is no dispute between the parties that, the NCDC was under suspension during the period when it purported to employ the Plaintiff as its Deputy City Manager. The Plaintiff's argument is that, the suspension vested in the Minister, the administrative powers including the power to appoint him. The Plaintiff relies on ss. 32, 33 and 34 of the National Capital District Commission Act in support of his arguments. The defendant argues however that, the administrative powers of the NCDC were vested in the City Administrator, as there was no direction from the Head of State to the Minister for him to exercise the administrative powers in terms of s. 34 of the Act. Further or in the alternative, the defendants argue that, the purport contract being a contract with an authority, which is subject to the SCMC Act, did not receive the approval of the SCMC. Therefore, the contract is null and void.
I deal firstly with the arguments under the relevant NCDC Act. The provisions in question under that Act read as follows:
"32. Suspension.
(1) The Head of State, acting on advice, given after consideration of the report and statement and representations referred to in Section 31(2), may by order in the National Gazette, suspend all or any of the powers or functions of the Commission for a stated or an indefinite period.
(2) In advising the Head of State under Subsection (1), the National Executive Council is not bound by the terms of, or recommendations contained in the report of the Committee of Inquiry.
33. Effect of suspension.
(1) Subject to Subsection (2), a suspension order under Section 32(1) operates to deprive the Commission of the suspended powers or functions during the period of suspension.
(2) The suspension of a power or function under Section 32(1) does not affect any right, privilege, obligation or liability acquired, accrued under or in respect of the suspended power or function, or any investigation, legal proceeding or remedy in respect of such right, privilege, obligation or liability which may, subject to this Act, be carried on or endorsed as if the suspension had not taken place.
34. Appointment of Manager following suspension.
(1) Where a suspension order is made under Section 32(1), the Head of State, acting on advice, may in the order or in a subsequent instrument appoint a person to be the Manager in relation to the Commission.
(2) Subject to any directions given by the Head of State, acting on advice, a person appointed under Subsection (1), in relation to the Commission—
(a) has and may exercise on behalf of the body such of the suspended powers and functions as are specified by the Head of State, acting on advice; and
(b) has such other powers and functions as are prescribed.
(3) Notwithstanding Subsection (2), but subject to any directions given by the Head of State, acting on advice, the Minister may exercise, during a suspension under this Part, all or any of the suspended powers or functions."
These provisions, in my view, lay down the procedure for the suspension for the powers and functions of the NCDC and the effect of a suspension. The Head of State acting on advice by gazettal in the National Gazette can suspend the NCDC. A suspension deprives the NCDC of its powers and functions during the period of suspension. This does not affect the rights, privileges, obligations and liabilities acquired or accruing during the period of suspension. As such, any legal proceedings or remedies may continue.
Consequential on a suspension, the Head of State acting with and in accordance with advice may, in the same instrument of suspension or by a subsequent instrument, appoint a person to be the manager of the NCDC. If a manager is appointed, that person may subject to the direction of the Head of State acting on advice, exercise such powers and functions of the NCDC as are specified by the Head of State acting on advice. Notwithstanding that however, the Minister may exercise all or any of the suspended powers and functions but subject to any direction the Head of State acting on advice may give. This would mean in other words that, if the Head of State acting on advice directs the manager appointed to exercise all of the suspended powers and functions of the NCDC, the Minister would have nothing to exercise.
It is clear therefore that, one needs to ascertain the terms of the suspension. Likewise, where there is an appointment of a manager, following a suspension, one also needs to ascertain the terms of the appointment of the manager. Similarly, one needs to ascertain whether or not, the Head of State acting on advice issued any directions in relation to the exercise of any of the powers and functions of the NCDC. The evidence called and adduced by the parties is lacking particularly, in relation to the exercise of the suspended powers and functions of the NCDC at the time when the purported contract of employment between the Plaintiff and the then Minister was signed.
The onus was on the Plaintiff to adduce the relevant evidence. That evidence should have consisted of the various instruments constituting the suspension, the final of which, should be a copy of the relevant National Gazette. One of the relevant copies would have been a copy of the gazettal appointing the then acting Manager of the NCDC, Jamie Maxton Graham. These instruments could assist in a determination of the issue under consideration. The Plaintiff did not produce copies of any of these instruments or any other documents supporting his argument that the Minister had the power at the relevant time. This was not a difficult thing to do.
Indeed, in evidence before me is a copy of the relevant page of National Gazette number G.52 dated 18th May 2000, evidencing the appointment of Mr. Kipit as Acting City Manager, replacing, Mr. Jamie Maxton Graham. That instrument in subparagraph (c) states, "... that Mr. Bernard Kipit has and may exercise all the suspended powers and functions." This is consistent with the suspension of the NCDC and other provincial authorities. Usually, the administrative powers and functions gets vested in an administrative head, commonly known as administrators and not in a politician because of the consequence of the doctrine of separation of powers.
In this case, it is reasonable therefore, to infer that, the instrument appointing the earlier city manager during the suspension of the NCDC was in similar terms to the one appointing Mr. Kipit. If it was not and instead all the powers remained in the then Minister notwithstanding the usual convention, the onus was on the plaintiff as the one asserting that position to prove that, but he did not: Mark Ankama v. Papua New Guinea Electricity Commission (23/10/02) N2363 and Rimbink Pato & Anor v. Reuben Kaiulo & Ors (29/08/03) N2455. I find this lack in the evidence critical. Accordingly, I am not satisfied that, the then Minister had the power to appoint the plaintiff as the Deputy City Manager.
From the evidence before this Court, I find that, the NCDC itself through the relevant City Manager played no part in the appointment of the plaintiff. It follows therefore that the purported appointment of the plaintiff as the Deputy City Manager was illegal and therefore invalid. He thus remained employed as the NCDC's Revenue Controller.
Turning now to the arguments of the defendants under the SCMC Act, I note the relevant provisions there are sections 10 and 11. These provisions read:
"10. Public authority not to determine or vary salaries, etc.
(1) A public authority shall not determine or vary the salaries and conditions of employment of any employee except in accordance with this Act.
(2) A determination or variation of the salaries and conditions of employment of an employee made otherwise than in accordance with this Act is void, and any agreement, written or oral, intended to give effect to such determination or variation shall be unenforceable at law.
(3) A payment or benefit given to an employee under a determination or variation of his salary and conditions of employment made other than in accordance with this Act may be recovered by the State as a debt from the members of the governing body of the public authority who shall be jointly and severally liable to repay the payment or benefit.
(4) For the purposes of Subsection (3) a benefit may be valued by the Minister and such value shall be that claimed in any proceedings brought by the State.
11. Submissions by public authorities for determinations and variation to salaries, etc.
(1) Where a public authority proposes to determine or vary the salaries or other conditions of employment of its employees, the proposal shall be submitted to the Committee for its consideration and decision.
(2) A submission for the purposes of Subsection (1) shall be accompanied by a statement of—
(a) salary and wages rates; and
(b) terms and conditions of employment; and
(c) other benefits,
of employees of the public authority, and shall take into account the wages policy of the National Executive Council and in particular shall apply the principles of job evaluation and work value.
(3) In addition to the particulars referred to in Subsection (2), where the submission is made by—
(a) a public authority which is wholly funded from the National Budget, the submission shall be accompanied with a certificate from the Departmental Head of the Department responsible for finance and planning matters certifying that funds are available for that purpose; and
(b) a public authority which is self-funded, the submission shall be accompanied by a statement, signed by the chief executive of the public authority, setting out the budgetary implications of the proposal with particular reference to the effect on the profitability of the public authority."
I considered the effects of this provision in Teio Raka Ila v. Wilson Kamit & Anor (11/10/02) N2291. There I said at pp. 13-14:
"As the preamble to the SCMC Act states, the purpose of that Act is amongst others, to assist the government to implement its wages policy. Wages paid to the employees in the public service and the public authorities does certainly have a major impact on the government and hence the country's budget and monetary position. It is therefore necessary to have some control and discipline in this area. This is to ensure consistencies in the implementation of wages and or terms and conditions of employment philosophies. It is also to ensure that the expenditure is necessary and proper and is according to budget and that the country can afford the kind of terms and conditions of employment proposed.
The situation is akin to the need to comply with the tender and Minister for Finance approvals under the Public Finances (Management) Act 1995 as amended. What I said in Jack Livinai Patterson v. National Capital District Commission (unreported judgment) N2145 applies with necessary modifications to the present case. In that case, I said that the requirements for tender and Minister of Finance approval are important for the purposes amongst others to control the public expenditure to ensure expenditure according to budget so as to avoid a blow out. Unfortunately, there have been more breaches than compliance and that has resulted in the bad financial position we as a nation is in today.
...I also had regard to a large number of both local and overseas authorities on a failure by contracting parties to meet statutory requirements. This included the case of Panga Coffee Factory Pty Ltd v. Coffee Industry Corporation Limited (unreported judgment) SC619 and Credit Suisse v. Allerdale BC [1996] All ER 12. Then based on those authorities, I held that the contract for service between Mr. Patterson and the National Capital District Commission was unenforceable for failing to go through the tender and Minister for Finance approval under the Public Finance (Management) Act 1995 as amended.
What this means in this case is that all relevant and applying statutory requirement must be met if any contract with a public authority is to be enforced. This is very important because it means payment out of public funds. The government through the relevant agency needs to know how much is allowed out of the public purse, which is necessary for the national budget and controlling of public expenditure to avoid unbudgeted and unforeseen expenditure. The effects of uncontrolled expenditure are disastrous for the government and the nation as a whole. Hence, the foresight in the enactment of legislation such as the SCMC Act and the Public Finances (Management) Act 1995 as amended. Given this importance, the requirements in such legislation can not in my view be met by implication or inference. Specific steps must be taken to specifically comply with the requirements of the Act. A failure to do so can not be cured by an argument that is based purely on indirect means. "
In that case, I found that the relevant contract of employment did not receive the required approval under the SCMC Act. Hence, I found the contract void and unenforceable.
In the present case, there is no argument before me, nor have the parties referred me to any other authority, which takes a different view to the ones I have expressed in the above case. I am therefore of the view that, what I said in that case still correctly reflects the law. Accordingly, I adopt them and apply them to this case. Here, there is no dispute that the purported contract for the position of Deputy City Manager, had provisions that were beyond the usual terms and conditions of employment. This included inter alia, a contract allowance of K20,000.00, 30% gratuity in the first year, 40% in the second year and 50% in the third year of the gross salary. Domestic Market Allowance of K20,000.00 per year and school fees for children. Given these terms, the contract required approval of the SCMC. There is also no dispute that, the contract did not receive the approval of the SCMC. Accordingly, I find that there was no compliance of the mandatory requirements of the SCMC Act. This serves a further basis to find that the purport contract of employment for the position of Deputy City Manager (Finance & Administration) for the Plaintiff is void and unenforceable within the meaning of s. 10 of the SCMC Act.
This effectively means that, the Plaintiff remained in the employ of the NCDC as its Revenue Controller. However, without knowledge of the above facts, the National Court in WS No. 216 of 2001, entered default judgment against the NCDC and made certain orders. There, according to the evidence before this Court, the Plaintiff claimed damages for the difference in his salary between his position with the NCDC as its Deputy City Manager and the Liquor Licensing Commission as its Chief Licensing Commissioner. There is no serious contest that, under those proceedings Kapi DCJ (as he then was) directed the Plaintiff amongst others, to repay an amount of K30,291.68, being for unauthorized payments under his contract. The Plaintiff was also ordered to repay a further amount of K21,122.65 for overpayment of salaries after 17th October 2001, when he was appointed as Chief Liquor Licensing Commissioner on 18th October 2001.
Res Judicata
Given the above judgment, the Plaintiff could argue that the issue of the validity of his purported contract of employment for the position of Deputy City Manager is res judicata. The defendants argue that the issue is not res judicata, for two reasons. Firstly, they argue that the claims are different. The matter under WS 216 of 2001 relates to differences in loss of salaries and entitlements and not the validity of the contract in question, whereas the current proceedings are for damages for unlawful termination. Hence, they argue that they are not prevented from raising this issue and that this Court is not precluded from considering and determining the issue.
| Secondly, jk)t (Blue & White0 | - K10.00 |
plaitnfif for some inexplicable reason did not produce body of the contaractas Depty "f the cothey argue that the plaintiff failed to produce evidence that the decision in WS 216 of 2001, finally deposing of the matters in dispute between the parties on its merits. In so arguing, they rely on s. 44 of the Evidence Act (Chp. No. 48). That provision provides for the way to establish a judgment, degree, ruling, order or other judicial proceedings of a Court in the country before another Court.
The principles governing the doctrine of res judicata are well settled in our jurisdiction. In Wyatt Gallagher Bassett Limited v. Benny Diau (16/08/02) N2277, I discussed and applied the relevant principles as stated in Halsbury's Law of England (4th Edn), Vol. 16 paragraph 1528, under the sub-heading "essential of res Judicata" which Los J cited in National Airline Commission v. Lysenko [1990] PNGLR 226. This discussion makes it clear that, in order for the defence of res judicata to succeed, it is necessary to show not only that the cause of action was the same but also that the plaintiff has had an opportunity of recovering in an earlier proceeding that which he seeks to recover or have determined in the subsequent proceeding. A plea of res judicata must show either, an actual merger or a determination of the same point between the same parties in an earlier proceeding. In other words, not only the facts giving rise to a complaint should be identical but the test is whether it is merely an attempt to recover under the original cause of action, under some heading damages or a determination not previously secured. It is clear therefore that, a matter tried in a court of law and a decision on it is arrived at lawfully, it cannot be tried again. Subject only to the right of appeal, the law regards the matter in that case, as reaching res judicata, which means, "the matter is decided." In other words, when a court of competent jurisdiction decides on an issue on its merits, it reaches finality on the rights of the parties and those claiming through them. Hence, such a decision is a bar to any new action involving the same parties and essentially the same claim or cause of action: Tolom Abai & 765 Ors v. The State (20/12/95) N1402.
The question then for the present purposes is, whether the Plaintiff has shown that the issue of the validity of his purported contract against the position of Deputy City Manager of the NCDC is res judicata? The only evidence before this Court is the parties' general agreement that the National Court entered a default judgment against the NCDC when the Plaintiff sued the NCDC for the differences in his salary and allowances between his position as Deputy City Manager and Chief Licensing Commissioner. The entry of the default judgment may have resolved the question of liability on the matters pleaded: see Coecon Ltd v The National Fisheries Authority of Papua New Guinea (28/02/2002) N2182 and Andrew Moka v. Motor Vehicles Insurance (PNG) Limited (01/04/04) SC729 at pp. 11-12: see also PNGBC v. Jeff Tole (27/09/02) SC694 and PNGBC v. Jeff Tole (supra).
The Plaintiff had the onus to establish the plea of res judicata. He did not provide any evidence of the earlier proceedings finally hearing and determining the matters in dispute before this Court. The only evidence of the Plaintiff on this issue is his claim in his affidavit of 22nd August 2003 that the National Court ruled that his contract as Deputy City Manager was binding. He has not provided a copy of the relevant decision. Only the NCDC provided a copy of the order, which merely speaks of a default judgment. There is no evidence be it a copy of the relevant pleads in the earlier proceeding or such other evidence of the matters pleaded and were before the earlier Court. There is no evidence in terms of s. 44 of the Evidence Act. In these circumstances, I am unable to find in favour of res judicata, for the matters in dispute before me.
I now turn to the next issue of, did the parties agree to the Plaintiff's appointment as Chief Licensing Commissioner under the Liquor (Licensing) Act as an attachment?
Plaintiffs Appointment as Chief Licensing Commission
There is no dispute that, on 22nd May 2000, the then City Manager suspended the Plaintiff on allegations of misconduct in office. The plaintiff appealed to the Minister who by a letter dated 23rd May 2000, upheld the appeal and directed the City Manager to reinstate the plaintiff. Without any explanation as to what happened next, the Plaintiff says on 30th May 2000, he responded to the allegations but no decision was made on that.
Almost a year later, by letter dated 21st May 2001, the Minister directed the plaintiff to work with the Liquor Licensing Commission on what the Plaintiff claims, was an attachment basis. Subsequently on 18th October 2001, he was appointed Chief Licensing Commissioner for a term of four years. Under cross-examination however, the Plaintiff admitted that the gazettal in relation to his appointment as Chief Licensing Commissioner dated 18th October 2001, did not specify that his appointment was by way of an attachment from the NCDC. Under further cross-examination, he also admitted that, he did not specifically seek and receive approval from the NCDC for his appointment as the Chief Licensing Commissioner. He did not disclose these facts in his affidavit and evidence in chief. I find that the Plaintiff tried to withhold these facts.
The Plaintiff further claims that, during the period of his attachment with the Liquor Licensing Commission, the NCDC paid him all his salary, allowances, benefits and other entitlements. This, he claims, the NCDC did with knowledge of his purported work attachment with the Liquor Licensing Commission. Further, he claims the NCDC failed to object to his employment or attachment with the Liquor Licensing Commission and inform him of his breach of his employment contract with the NCDC. These, he submit effectively, strengthens his claim that, his purported attachment with the Liquor Licensing Commission was with the knowledge and therefore approval of the NCDC.
On the evidence before me, I do not find any persuasion in the Plaintiff's claims. There is no evidence of there being any arrangement between the NCDC and the Liquor Licensing Commission for the kind of attachment the Plaintiff claims. If there was such an arrangement, it is not clear, why that was necessary and what the gain was for the NCDC that it could have approved the attachment. What is clear however is that, both of these authorities are established under two distinctly separate legislation with distinctly separate powers and functions. If despite that, there were arrangements such as the Plaintiff's asserts, it was incumbent on him as the Plaintiff to establish it but he did not: See Igiseng Investments Ltd v. Starwest Constructions Ltd (17/12/03) N2498. The evidence in the form of the relevant gazettal clearly is that, the Plaintiff was appointed Chief Licensing Commissioner on 18th October 2001, for a four years term without any mention of that being on an attachment basis. It is settled law that, where there is a written record of a transaction, the document evidencing that should speak for itself and that no extrinsic evidence could be permitted to either add to or subtract from the written record. This is technically known as the rule against parole evidence. There are some exceptions, none of which the Plaintiff argues for and demonstrates as existing in his case: Igiseng Investments Ltd v. Starwest Constructions Ltd (supra). Thus, the gazettal speaks for itself without more.
The Plaintiff's employment with the NCDC against the position of Revenue Controller specifically stipulates at clause 8.1.10 that, the NCDC may terminate his employment if NCDC decides that he is in another employment whilst in the employ of the NCDC. It follows therefore, that the specific authority and approval, of the NCDC was required for the Plaintiff's claim of attachment with the Liquor Licensing Commission. There is simply no evidence of the Plaintiff seeking and or receiving approval of the NCDC for the alleged attachment. There is also, no evidence of any attachment. In these circumstances, I find that the Plaintiff's appointment as Chief Licensing Commissioner was not on an attachment basis but a separate employment. In the circumstances, this amounted, in my view, to a constructive termination of the Plaintiff's employment with the NCDC triggering a right in the NCDC under clause 8.1.10 to terminate the Plaintiff.
The continuity of payment of salaries to the Plaintiff, does not necessarily mean that, he was still in the employ of the NCDC. It is quite common for State departments and other public authorities who employ a large number of employees, continuing to pay salary and wages well after the end of an employment contract or relationship. In my view therefore, the continuity of salary was of no consequence on the constructive termination of the Plaintiff's employment with the NCDC. Similarly, I find it was of no consequence, if the NCDC did not inform the Plaintiff of his breach of his contract with the NCDC and his eventual termination. The Plaintiff had already constructively terminated its employment with the NCDC by taking up the unauthorized or unapproved employment with the Liquor Licensing Commission. Despite that, the Plaintiff says he was not aware of his termination by the NCDC until he obtained a copy of the relevant letter of termination from his then landlord. That too was of no consequence as the Plaintiff had his contract terminated by himself long before.
Legality of the Plaintiff's Termination
The matters just mentioned go into the legality of the process adopted by the NCDC to bring about the Plaintiff's termination. This is the subject of the fourth issue. The conclusions reached in the relation to the issues already discussed would render a consideration of this issue unnecessary. Nevertheless, I consider it would be appropriate to deal with the issue for clarity sake.
In Tom B Gesa v. Bernard Kipit & NCDC (06/08/03) N2457, also involving a written contract of employment with the NCDC, I held that in the absence of the contract otherwise providing, the contract governed the relationship between parties to the exclusion of the Public Service General Orders (the General Orders) or any internal staff discipline procedure. Consequently, the contract is the only source to turn to for guidance to determine the legal mode of terminating such contracts. In so doing, I followed my earlier judgment in Mathew Himsa & Anor v. Richard Sikani (08/11/02) N2307. The judgments in John Kopil v. Malcolm Culligan & The State (28/06/95) N1333; Sulaiman v. PNG University of Technology (20/08/87) N610; Albert Kuluah v. The University of Papua New Guinea [1993] PNGLR 494 provided the necessary authority for me to arrive at that decision.
The Plaintiff failed to provide any authority that states to the contrary from the above position. The only cases counsel for the Plaintiff was able to refer to where the National Court judgments in the cases of God'frey Niggints v. Henry Tokam& Ors (15/07/93)N1158 and Pochon Lili vs. Jospeh Gabut and Ors (28/12/95) N1394. These cases were in the context of judicial reviews where the General Orders did apply in the absence of a written contract of employment governing the terms and conditions of the plaintiff's employment. Another case on point, also referred to by the Plaintiff is the judgment in, Leo Nuia v. The State (29/08/00) N1986. There, the Court closely examined the terms of a contract of employment between the then Commander of the Papua New Guinea Defence Force and the State and found that the disciplinary procedures for termination of a departmental head were adopted but not applied by the State when terminating the plaintiff. The Court therefore proceeded to judgment for the plaintiff on that basis.
In the present case, t. own disciplinary process to apply to the contract of employment in thiscase" hem. one the publci y n the cases of Annexure "ihe plaintiff did not produce a complete copy of the relevant contract, save for the schedule to what appears to be his purported Deputy City Manager contract. The NCDC has on the other hand provided the contract entered into between itself and the Plaintiff for the position of Revenue Controller. The NCDC submits without any objection from the Plaintiff and I accept that, the terms of all employment contracts with the NCDC are standard and are similar to the ones considered in the Legu Vagi (supra) and Tom Gesa (supra) cases. The only difference is in the salary and other contractual entitlements. Therefore, the NCDC submits again without the Plaintiff's objection and I accept that the relevant terms of the contract are as those set out in the Revenue Controller contract except for the salary and contractual entitlements which are obviously different.
Clause 8.1.10 of that contract empowers the NCDC to terminate the contract in these terms:
"The employment here under may be terminated by the Employer if he Employer decides that the employee is engaged in employment other than this employment under this contract without the prior approval of the Employer".
The next clause, clause 8.2 then provides for a 3 months notice of intention to terminate in writing or payment in lieu of such notice, or part thereof together with a redundancy separation payment for the unexpired term of employment. However, this is up to a maximum of three (3) months in addition to three (3) months payment of base salary and accrued gratuity. At the same time, it provides that, in the event of termination pursuant to a number of provisions in the contract, which does not include clause 8.1.10 but includes termination because of continuous absence without leave or reasonable excuse (clause 8.1.8), no notice is required.
The NCDC submits without any serious counter argument from the Plaintiff that the combined effect of clauses 8.1.10 and clause 8.2 is this. If the employee obtains the approval of the City Manager before he commences new employment elsewhere, then he will be entitled to 3 months notice or payment in lieu of notice. If however, the employee is engaged in another employment without the approval of the NCDC, he is liable for termination without notice. The earlier part of this submission appears reasonable but not the second part of the submission as that would amount to a re-writing of the contract.
The situation at hand could however, come under clause 8.1.8 which covers continuous absence without leave or reasonable excuse. This is particularly so in view of the findings of this Court that, the Plaintiff took up his appoint with the Liquor Licensing Commission for four years not as an ordinary employee but its ultimate head, Chief Licensing Commissioner, without any prior approval of the NCDC. This meant a continuous absence from the NCDC for the duration of his new employment. That effectively amounted to a constructive termination of the employment contract between, the Plaintiff and the NCDC. I find this reason is open to the NCDC in accordance with the settled principles of law that, an employer may seek to justify a decision to terminate an employee for a reason not necessarily stated, available or disclosed at the time of effecting the termination. This is a necessary consequence of the long established principles at common law, on masters and servants. These principles recognize a right in a master to hire and fire his servant with or without notice and either with or without providing reason except in a few limited cases: see the Legu Vagi (supra); Steamships Trading Co. Ltd v. Joel & Ors [1991] PNGLR 133 at 141 and Jimmy Malai v. Papua New Guinea Teachers Association [1992] PNGLR 568.
I appreciate that the letter terminating the Plaintiff quoted clause 8.2.10 of the Contract, which does not exist. The body of the letter is however clear that the Plaintiff's termination was because of his employment with the Liquor Licensing Commission. I therefore accept the NCDC's submission that the correct reference should be clause 8.1.10 of the contract. Additionally, it is open to the NCDC to rely on clause 8.1.8 of the contract in view of the effect of the uncontested fact that the Plaintiff took up an appointment with the Liquor Licensing Commission as its Chief Licensing Commission.
As were the cases in the Legu Vagi (supra) and the Tom Gesa (supra) cases, the contract of employment in this case, did not provide for any suspension and laying of charges and a consideration of that before a decision to dismiss the Plaintiff in this case. The NCDC nevertheless chose to accord the Plaintiff the right to be heard by suspending him on 22nd May 2000, before deciding to terminate him. The Plaintiff responded to the charge against him, and then successfully obtained on 29th May 2000, an injunctive order from the District Court against the NCDC. That meant that the NCDC could not do anything against the Plaintiff as long as that order remained on foot. Also, there were changes in the NCDC's governing body and its City Manager which also impacted upon the ability of the NCDC to function smoothly.
In terms of specifics, the National Court on 4th October 2001, lifted the suspension of the NCDC. The powers and functions of the NCDC therefore returned to the Board of the NCDC then, headed by Hon. Philip Taku (as he then was). This saw the sidelining of Mr. Kipit and the appointment in his place Mr. Rongap as the City Manager. Around this time, the Plaintiff also secured his employment with the Liquor Licensing Commission as its Chief Licensing Commissioner, with its gazettal on 17th October 2001. That has already found, effectively terminated the employment contract between the Plaintiff and the NCDC.
Another consideration is the fact that, clause 8.3 of the Contract obliges the Plaintiff to give three months written notice of his intention to terminate the contract. Given this and the provisions of clause 8.1.8 and 8.1.10 of the contract, the duty was on the Plaintiff to give notice of his intention to terminate the contract and or secure the specific approval of the NCDC before taking up his employment with the Liquor Licensing Commission. There is no evidence of the Plaintiff giving any such notice or securing the NCDC's approval before taking up his employment with the Liquor Licensing Commission and thereby effectively terminate his employment with the NCDC. He therefore summarily terminated his contract with the NCDC in the absence of an evidence of the NCDC approving the plaintiff's appointment as Chief Licensing Commissioner by way of an attachment.
Given the above, it was not necessary and would not be reasonable to require the NCDC to give any notice of its intention to formally, terminate the Plaintiff's employment contract or payment in lieu of notice. I therefore find that the NCDC was entitled to formalize the termination of the Plaintiff's contract with it in the way it carried that out. Accordingly, I find that the NCDC legally terminated its employment contract with the Plaintiff.
Damages
In view of the foregoing findings and determination of the issues already considered, it is not necessary to consider the remaining question of damages. Nevertheless, in the event that I were wrong (which I believe not) in the foregoing, it is necessary to determine this issue.
It is settled law that a plaintiff claiming damages must first plead his damages with particulars. He must then establish by appropriate evidence what he has pleaded. Where either or both of these are lacking, there can be no award of damages. In Andrew Moka v. Motor Vehicles Insurance (PNG) Limited (18/05/01) N2098, I stated that principle and applied it in these terms in the context of a claim for past economic loss:
"The onus was on the Plaintiff to firstly, properly plead with sufficient particulars the full extent of his loss and then produce the appropriate evidence, to succeed in his claim against the Defendant. The plaintiff failed to discharge fully either or both of those obligations. For example, he failed to specify in the pleadings and establish by appropriate evidence when he left his employment and therefore his source of income to form the basis to calculate is past economic loss. The Plaintiff's own submissions do not help either. It fails to show how the figure of K20, 080.00 was arrived at. The pleadings do not even assist on the issue.
The Supreme Court on appeal upheld this part of the judgment in Andrew Moka v. Motor Vehicles Insurance (PNG) Limited (01/04/04) SC729 at pp. 11-12: see also PNGBC v. Jeff Tole (27/09/02) SC694 at p.19, for a more recent authority on point.
In the present case, the Plaintiff's statement of claim filed on 30th October 2002, sets out the details of his claim totaling well over a million Kina. There is however, no evidence establishing any or all of the items pleaded. The three affidavits of the plaintiff and his oral testimony say nothing about his damages. The Plaintiff carries this over into his submissions. His submissions address the issue of damages at pages 44 to 46, without stating any specific damages, the relevant evidence and how the Court should arrive at an assessment of the Plaintiff's damages. This makes it extremely difficult for the Court to ascertain what the Plaintiff's damages are, assess them and make an award.
What is clearly in evidence is the fact that, the plaintiff did sue the NCDC for damages under WS 216 of 2001. In addition to the orders that were made against the Plaintiff as noted in the foregoing, it is clear that the then Deputy Chief Justice ordered a sum of K74, 292.77 plus interest by consent of the parties on 11th December 2002. That judgment specifically left out other service entitlements for the parties to settle administratively. Evidence before this Court also shows again as already noted that, the NCDC paid a sum of K37, 708.00 to the Plaintiff as final termination entitlements, which the plaintiff says he repaid to the NCDC on orders of the Court without pointing to any specific evidence confirming that.
All of these dictate only one clear conclusion and that is that, the Plaintiff failed to establish by any evidence, what if any damages he has suffered and the extend of any such damages. Consequently, there can be no ward even if the Plaintiff established liability against the NCDC.
Further, the Plaintiff is asking for damages for the whole of the balance of his contract. I accept the NCDC's submission that, the fundamental principle for award of damages is to compensate a Plaintiff for his actual loss. This is technically expressed in the principle of restitutio in intergrum, subject to a requirement for a plaintiff to mitigate his loss and that the damages he is claiming are not remote.
In a case where a contract of employment provides for a payout of the balance of one's contract such as those seen in PNG with public authorities in the event of an early termination, the law is also clear. The Supreme Court in Post Puma Ltd v. Yama Security Services Ltd (unnumbered judgment 26/07/01) SCA No. 80 of 2000, held that such contracts amount to penalties. As such, the courts will not uphold it because it goes against the basis on which contracts exist, namely the freedom of the parties.
I had regard to that judgment and followed it in Teio Raka Ila vs. Wilson Kamit & Anor (supra) and held that a provision providing for a payout of the balance of the plaintiff's contract was null and void and therefore unenforceable. The Supreme Court in PNGBC v. Jeff Tole (supra) re-echoed that position. All of these proceed on the basis that the only true measure of damages is the amount of wages actually lost. They also take into account the fact that a plaintiff is under an obligation to mitigate his loss and further that there is always the possibility of a plaintiff finding an alternative employment.
Proceeding on that basis, the law does look up to the period of notice to measure an unlawfully terminated employee's damages. The relevant period of notice is the one the contract provides for or one imposed by legislation such as the Employment Act in the absence of any agreement of the parties to the contrary. A number of cases in this jurisdiction confirm that position. An example of that is the case of Appa v Wama [1992] PNGLR 395 where the Court said at p. 397:
"It is a general rule that the employee wrongfully dismissed can recover damages for pecuniary loss resulting from wrongful termination up to the equivalent of appropriate notice. In the usual case, damages will be equivalent to wages for the period of proper notice".
These line of cases, also make it clear that, where an employer pays salary in lieu of notice, there can be no additional award. A case precisely on point is the case of Robert Karava v. Kevin Byrne and Tourism Promotion Authority (19/03/99) N1805. There, the relevant contract did not provide for the period of notice. The Court therefore applied the provisions of the Employment Act and then found that the plaintiff received payment in lieu of notice. Therefore, the Court declined to make any award of damages and dismissed the action.
In the present case, the NCDC paid the Plaintiff what he was entitled to under the contract. If that was incorrect, it was incumbent on the Plaintiff to demonstrate that by appropriate evidence but he did not. What is clear though from his statement of claim without the support of any evidence is that, he is claiming the whole of his entitlements for the balance of his contract. He has not, either by evidence or in the pleadings drawn the Court's attention to the relevant provision in the contract that entitles him to do that. Even if he was able to do that, that would amount to a penalty in accordance with the principles discussed in Post Puma Ltd v. Yama Security Services Ltd (supra) and Teio Raka Ila vs. Wilson Kamit & Anor (supra) cases. Consequently, it would be against the law to uphold the claim.
Having regard to all the above reasons, I find that that the plaintiff has not made out a case against the NCDC in both liability and damages. Accordingly, I order a dismissal of the claim with costs against the Plaintiff to be agreed if not taxed.
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Lawyers for the Plaintiff: Koare Lawyers
Lawyers for the Defendants: In House employed Lawyer
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