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Goma v Protect Security and Communication Ltd [2010] PGNC 46; N4046 (12 May 2010)

N4046

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 69 OF 2007

BETWEEN:

MATHIAS GOMA AND 703 OTHERS
listed in the attached schedule to this Writ
Plaintiffs

AND:

PROTECT SECURITY AND COMMUNICATION LIMITED
Defendant

Waigani: Hartshorn J.
2009: 10th November,
2010: 12th May

Breach of Statutory Duty - Breach by employer - National Provident Fund Act, Superannuation (General Provisions) Act 2000 - when cause of action arises - criteria considered

Facts:

The plaintiffs are former employees of the defendant who allege that they have not been paid their superannuation entitlements. They commenced this proceeding seeking amongst others, those entitlements and damages.

Held:

1. A breach of statutory duty is not by itself sufficient to give rise to a private law cause of action. A private law cause of action may arise if it can be shown as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of that class a private right of action for breach of the duty; Byrne v. Australian Airlines Ltd [1995] HCA 24, (1995) 185 CLR 410, and X (Minors) v. Bedfordshire CC [1995] 3 All ER 353, UKHL 9 applied.

2. Whether the statute provided other remedies for its breach and whether on the true construction of the statute it was shown that the protected class was intended by Parliament to have a private remedy were indicative of whether a private law cause of action lay for breach of a statutory duty; X (Minors) v. Bedfordshire CC [1995] 3 All ER 353, UKHL 9 applied.

3. It cannot be ascertained as a matter of construction that it was intended by Parliament to confer on an employee a private right of action for a breach of a duty by an employer under the National Provident Fund Act or the Superannuation (General Provisions) Act 2000.

4. The plaintiffs are not entitled to the relief that they seek even if they prove the allegations contained in the amended statement of claim.

Cases cited:
Papua New Guinea cases

Raymond Groves v. Airlink Pty Ltd (2002) WS 1156/95
Ona v. National Housing Corporation & Anor (2009) SC995

Overseas cases:

Byrne v. Australian Airlines Ltd [1995] HCA 24, (1995) 185 CLR 410
X (Minors) v. Bedfordshire CC [1995] 3 All ER 353, UKHL 9

Counsel:

Mr. N. K. Magela, for the Plaintiffs
Mr. D. Patalo, for the Defendant

12th May, 2010

1. HARTSHORN J: The plaintiffs allege that they are former employees of the defendant Protect Security and Communication Limited (Protect) and have not been paid their superannuation entitlements. They commenced this proceeding seeking amongst others, those entitlements and damages.

2. Protect denies that the plaintiffs are so entitled as they were either never employed by Protect or if they were, their claims are statute barred or they were employed as casual employees and are not entitled to superannuation payments.

3. Counsel for the plaintiffs and Protect submit that there are 4 issues for this court to determine. Those issues are whether:

a) all of the plaintiffs were ex-employees of Protect?

b) Protect breached sections 31, 32 and 33 of the National Provident Fund Act (NPF Act), and the Superannuation (General Provisions) Act 2000 (Superannuation Act)?

c) the plaintiffs each and severally are entitled to the loss and damages as per the amended statement of claim?

d) the plaintiffs’ claims are statute barred?

4. I will consider issue (c) first. That is, if the plaintiffs, prove the allegations in the amended statement of claim, are they entitled to the relief that they seek? An adverse finding for the plaintiffs on this question will determine the proceeding.

5. In the amended statement of claim, the plaintiffs plead amongst others, that Protect breached it’s statutory obligations to comply with the NPF Act and "its succeeding Act" by failing to make, "... the necessary deduction and payment towards the National Provident Fund and subsequently, the National Superannuation Fund.... "

6. I presume that the cause of action is that Protect breached its statutory duty by not complying with the NPF Act and the Superannuation Act, and as a consequence the employees suffered loss.

7. As to the requirements that have to be satisfied in a successful claim for breach of statutory duty in circumstances such as the present, neither counsel cited any relevant authority and I have been unable to find any Supreme or National Court authority specifically on point.

8. In a National Court decision of Sheehan J. in Raymond Groves v. Airlink Pty Ltd (2002) WS 1156/95, His Honour said:

"While it may be - depending on the proper construction of the statute - that a breach of a statutory duty can give rise to a civil cause of action, it is not the law that any event or error that occurs contrary to provisions of a statute designed to avert or prevent such occurrences of themselves establish a breach of statutory duty. It is not a res ipsa loquitur or absolute liability situation where the mere happening of an error establishes a statutory breach."

9. A recent Supreme Court case, Ona v. National Housing Corporation & Anor (2009) SC995 concerned an appeal against a decision that dismissed a proceeding because it was time barred. The appeal was successful. The proceeding was seeking relief in respect of the non payment of superannuation contributions under the Public Officers Superannuation Find Act. In the course of considering the question before it, namely whether the proceeding was time barred, the Court made obiter observations concerning public and private law rights and did not give a detailed consideration to the requirements for a successful claim based on a breach of statutory duty.

10. The statement of the position by Sheehan J. in Groves (supra) does not conflict with the leading authorities in England and Australia on breach of statutory duty. Decisions in these jurisdictions are persuasive in our jurisdiction.

11. In the Australian High Court case of Byrne v. Australian Airlines Ltd [1995] HCA 24, (1995) 185 CLR 410, Brennan CJ, Dawson and Toohey JJ.; it was stated at 424:

"A cause of action for damages for breach of statutory duty arises where a statute which imposes an obligation for the protection or benefit of a particular class of persons is, upon its proper construction, intended to provide a ground of civil liability when the breach of the obligation causes injury or damage of a kind against which the statute was designed to offer protection (see Sovar v. Henry Lane Pty Ltd [1967] HCA 31; (1967) 116 CLR 397 at 404, 405). The question is one of the construction of the statute, although as Dixon J. pointed out in O'Connor v. S. P. Bray Ltd [1937] HCA 18; (1937) 56 CLR 464 at 477-478, an examination of the statute "will rarely yield a necessary implication possibly giving a civil remedy".

12. In the English House of Lords case of X (Minors) v. Bedfordshire CC [1995] UKHL 9, Lord Browne-Wilkinson said in respect of a claim in a statement of claim that alleged a statutory duty and breach of that duty causing damage to the plaintiff:

"The basic proposition is that in the ordinary case a breach of statutory duty does not, by itself, give rise to any private law cause of action. However a private law cause of action will arise if it can be shown, as a matter of construction of the statute, that the statutory duty was imposed for the protection of a limited class of the public and that Parliament intended to confer on members of the class a private right of action for breach of the duty. There is no general rule by reference to which it can be decided whether the statute does create such a right of action but there are a number of indicators. If the statute provides no other remedy for its breach and the Parliamentary intention to protect a limited class is shown that indicates that there may be a private right of action since otherwise there is no method of securing the protection that statute was intended to confer. If the statute does provide some other means of enforcing the duty that will normally indicate that the statutory right was intended to be enforceable by those means and not by private right of action: Cutler v. Wandsworth Stadium Ltd [1949] A.C. 398; Lonrho Ltd v. Shell Petroleum Co Ltd (No. 2) [1982] A.C. 173." and;

"The cases where a private right of action for breach of statutory duty have been held to arise are all cases in which the statutory duty has been very limited and specific as opposed to general administrative functions imposed on public bodies and involving the exercise of administrative decisions."

13. Applying the criteria referred to in Byrne (supra) and X (Minors) (supra) to the NPF Act and the Superannuation Act, as to whether these Acts were imposed for the protection of a limited or particular class of the public, both Acts do impose amongst others, a statutory duty upon employers to make payments for the ultimate benefit of their employees. If protection is interpreted to include the provision of financial benefits, then the statutory duties imposed by the Acts can be said to be for the protection of a limited or particular class of the public; the employees whose employers are required to comply with the Acts.

14. As to whether Parliament intended to confer on employees a private right of action for a breach of a duty under the Acts, there is no specific remedy given to an employee under the Acts against an employer. There is provision for a defaulting employer to be prosecuted and for a Court to order requisite payments to be made in addition to the imposition of a fine or a term of imprisonment. Further, under the Superannuation Act, the licensed trustee of an authorized superannuation fund can commence proceedings against a defaulting employer for recovery of outstanding contributions. The Acts therefore do provide a remedy for a breach by an employer of its duty under the Acts.

15. Given the above, as it cannot be ascertained as a matter of construction that Parliament intended to confer on an employee a private right of action for a breach of a duty under the Acts by an employer and as the Acts do not confer a specific remedy upon an employee but do provide other remedies for an employer's breach, pursuant to the criteria referred to in Byrne (supra) and X (Minors) (supra), it is apparent that it was not intended that a breach of a duty under the Acts was to be enforceable by private right of action.

Conclusion

16. I am of the view that it was not intended that breaches of the NPF Act and the Superannuation Act are to be enforceable by private right of action and consequently these Acts do not give rise to a private cause of action for damages in favour of the plaintiffs. The plaintiffs are not entitled to the relief that they seek even if they prove the allegations contained in the amended statement of claim. Given this finding, it is not necessary to consider the other arguments of counsel.

Orders:

a) the plaintiffs’ claims are dismissed.

b) judgment is entered for the defendant against the plaintiffs.

c) the plaintiffs shall pay the costs of and incidental to the proceeding to the defendant.

_______________________________________________
Nikiuma Lawyers: Lawyers for the Plaintiffs
MS Wagambie Lawyers: Lawyers for the Defendant