N5443
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 611 OF 2009

GEORGE PODAS
Plaintiff

V

DIVINE WORD UNIVERSITY
Defendant

Madang: Cannings J
2013: 18, 23 October, 13 December

DAMAGES – breach of contract – wrongful dismissal – failure by employer to give three months notice in writing – whether the plaintiff entitled to be paid out the balance of the contract.

The plaintiff succeeded at an earlier trial in establishing a cause of action against the defendant, his former employer, for breach of his contract of employment. The court found that the defendant had terminated the contract without notice in circumstances not provided by the contract. It was an unusual and poorly drafted contract in that it provided that the defendant was obliged to give three months notice of the intention to terminate the contract but did not provide for payment of wages in lieu of notice. The parties were encouraged to attempt to settle the question of the amount of damages out of court but they were unable to settle so the case returned to court for a trial on assessment of damages. The plaintiff claimed four categories of damages: (1) special damages, representing unpaid overtime during the period of actual employment (K5,824.00); (2) general damages, representing humiliation, pain and suffering due to the circumstances in which the contract had been abruptly terminated (no specific amount claimed); (3) loss of future salary, representing the salary that would have been due to the plaintiff if the contract had been completed (K6,448.00); and (4) loss of future overtime (K4,513.60), being a total claim of K16,785.60 plus unspecified general damages. This was the trial on assessment of damages.

Held:

(1)	The claim for unpaid overtime of K5,824.00 was misconceived. It was actually a claim for unpaid debt. The plaintiff did not obtain judgment for any unpaid debt. He only obtained judgment in respect of a cause of action in breach of contract. Nothing was awarded.

(2)	The claim for general damages was jurisprudentially sound. However the evidence showed that the defendant had treated the plaintiff with humanity and respect and concern for the welfare of his family including his school-aged children by allowing him and the family to occupy employer-provided, rent-free accommodation for a period of four months after termination of the contract. This was sufficient compensation. Nothing was awarded.

(3)	There is no universal principle of law that a person who succeeds in establishing liability against his former employer for breach of a contract of employment is entitled to no more damages than the amount of salary that would have been payable to him under the contract. Each case and each contract must be determined on its merits. In the special circumstances of this case the interests of justice required that the plaintiff be awarded damages representing the balance of the salary that would have been due to him if the contract had been performed according to its terms (K6,448.00) less the amount that was actually paid to him (K1,074.66) after the contract was terminated. He was awarded K5,373.34.

(4)	The claim for loss of future overtime was not supported by the evidence, as the contract did not provide for payment of overtime and there was no legitimate expectation that overtime would be paid after the date of termination. Nothing was awarded. 

(5)	The total award of damages was K5,373.34. In addition, interest was awarded. The total judgment sum was K5,373.34 + K1,719.47 = K7,092.81. As the plaintiff's claim for damages had been exaggerated, and most of it misconceived, the parties were ordered to bear their own costs. 

Cases cited

The following cases are cited in the judgment:

Chemica Didiman Store v Bernard Tiau (2007) N5000
George Podas v Divine Word University (2011) N4395
Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) SC1060
Vitus Sukuramu v New Britain Palm Oil Limited (2007) N3124

ASSESSMENT OF DAMAGES

This was a trial on assessment of damages.

Counsel

A Meten, for the plaintiff
W Mapiso, for the defendant

13th December, 2013 

1. CANNINGS J: The plaintiff, George Podas, is seeking damages for wrongful dismissal against his former employer, Divine Word University. On 15 January 2007 the plaintiff commenced employment as Kiosk Supervisor under a fixed-term written contract of employment, which was due to expire on 15 December 2009. A little over 18 months later, on 4 August 2008, he was given a notice of termination, signed by the Acting President of the University, stating that his services were no longer required and that his employment was terminated with immediate effect. 

2. A trial was conducted to determine liability. The court found that the defendant had terminated the contract without notice in circumstances not provided by the contract. It was an unusual and poorly drafted contract in that it provided that the defendant was obliged to give three months notice of the intention to terminate the contract but did not provide for payment of wages in lieu of notice. Judgment was entered in favour of the plaintiff: it was declared that he had established a cause of action in breach of contract against the defendant (George Podas v Divine Word University (2011) N4395). 

3. The parties were encouraged to attempt to settle the question of the amount of damages out of court but they were unable to settle so the case returned to court for a trial on assessment of damages. 

PLAINTIFF'S CLAIMS 

4. Mrs Meten for the plaintiff submitted that in accordance with the statement of claim the plaintiff should be awarded four categories of damages: 

(1)	special damages, representing unpaid overtime during the period of actual employment (K5,824.00); 

(2)	general damages, representing humiliation, pain and suffering due to the circumstances in which the contract was abruptly terminated (no specific amount claimed); 

(3)	loss of future salary, representing the salary that would have been due to the plaintiff if the contract had been completed (K6,448.00); and 

(4)	loss of future overtime (K4,513.60), being a total claim of K16,785.60 plus unspecified general damages. 

DEFENDANT'S POSITION 

5. Mr Mapiso for the defendant submitted that nothing should be awarded as the defendant already paid three months salary in lieu of notice and that is the most that can be awarded. He submitted that although I have in a number of cases such as Vitus Sukuramu v New Britain Palm Oil Limited (2007) N3124, Chemica Didiman Store v Bernard Tiau (2007) N5000, expressed a different view, I am now bound by the decision of the Supreme Court (Injia CJ and Gabi J, Makail J dissenting) in Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) SC1060, which stands for the proposition that an employee who has been wrongfully dismissed cannot be awarded a sum of damages of any amount greater than the salary he would have received if the contract of employment had been lawfully terminated under a notice period in the contract of employment. 

6. I will now assess the four categories of damages that are claimed. 

1	SPECIAL DAMAGES: UNPAID OVERTIME 

7. The claim for unpaid overtime of K5,824.00 is misconceived. It is actually a claim for unpaid debt. The plaintiff did not obtain judgment for any unpaid debt. He only obtained judgment in respect of a cause of action in breach of contract. Nothing is awarded.

2	GENERAL DAMAGES: HUMILIATION, PAIN AND SUFFERING 

8. As I pointed out in Sukuramu and Chemica Didiman, losing one's job is invariably a dramatic and often a traumatic event in a person's life, especially in PNG where jobs are scarce and many people other than the employee's immediate family are dependent on the income generated by the job. When a person is wrongfully – ie unlawfully – dismissed, the pain and anguish are magnified. Such a person deserves an adequate award of damages to compensate them for the injury to their livelihood and emotions and those of their dependants caused by the wrongful dismissal. The claim for general damages is therefore jurisprudentially sound. It is not misconceived. 

9. However the evidence shows that the defendant treated the plaintiff with humanity and respect and concern for the welfare of his family including his school-aged children by allowing him and the family to occupy employer-provided, rent-free accommodation for a period of four months after termination of the contract. I am persuaded by the evidence of Father Jan Czuba, the President of the University, that the defendant went out of its way to treat the plaintiff decently after his employment was terminated. This was sufficient compensation for the humiliation, pain and suffering incurred by the plaintiff as a result of the breach of contract. Nothing is awarded.

3	LOSS OF FUTURE SALARY 

10. I reject Mr Mapiso's submission that there is now a universal principle of law that a person who succeeds in establishing liability against his former employer for breach of a contract of employment is entitled to no more damages than the amount of salary that would have been payable to him under the contract. Each case and each contract must be determined on its merits. 

11. Here, there was a notice period of three months but the contract made no provision for payment of salary in lieu of notice, so the three-month notice period is an irrelevant point of reference for purposes of assessment of damages. In the special circumstances of this case and given the unusual and clumsily drafted contract and the indecent manner in which it was abruptly terminated (in contrast to the decent manner in which the defendant treated the plaintiff after the contract was terminated) the interests of justice require that the plaintiff be awarded damages representing the balance of the salary that would have been due to him if the contract had been performed according to its terms (K6,448.00) less the amount that was actually paid to him (which I estimate to be K1,074.66) after the contract was terminated. He is awarded K5,373.34.

4	LOSS OF FUTURE OVERTIME 

12. This claim is not supported by the evidence. The contract did not provide for payment of overtime so there was no legitimate expectation that overtime would be paid after the date of termination of the contract. Nothing is awarded. 

INTEREST

13. Interest will be awarded at the rate of 8 per cent per annum on the total amount of damages under Section 1(1) of the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. Interest is calculated from the due date of expiry of the contract, 15 December 2009, to the date of this judgment, a period of 4 years, by applying the formula D x I x N = A, where:

•	D is the amount of damages assessed;
•	I is the rate of interest per annum;
•	N is the appropriate period in numbers of years;
•	A is the amount of interest.

Thus K5,373.34 x 0.08 x 4 = K1,719.47.

COSTS

14. The general rule is that costs follow the event, ie the successful party has its costs paid for by the losing party on a party-to-party basis. However, in this case the plaintiff's claim for damages has been exaggerated, and most of it misconceived. In these circumstances the parties will bear their own costs. 

ORDER

(1)	The defendant shall pay to the plaintiff damages of K5,373.34 plus interest of K1,719.47, being a total judgment sum of K7,092.81.

(2)	The parties shall bear their own costs. 

Judgment accordingly.
___________________________________________________
Public Solicitor: Lawyer for the Plaintiff
Lakakit & Associates Lawyers: Lawyers for the Defendant