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National Court of Papua New Guinea |
N9019
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO. 999 OF 2013
BETWEEN:
JIMMY IMBOK
Plaintiff
AND:
VERONICA THOMAS, Acting Registrar
First Defendant
AND:
JOHN PUMWA, Acting Vice Chancellor
Second Defendant
AND:
THE PAPUA NEW GUINEA UNIVERSITY OF TECHNOLOGY
Third Defendant
Lae: Dowa J
2021: 16th, 20th July & 10th August
EMPLOYMENT LAW - Unlawful Termination of Employment- Parties are bound by terms of written contract of employment-Employer had cause to terminate employment - Issue of liability determined by default judgment-Assessment of damages -Damages restricted to notice period and for actual salary and entitlements lost to date of termination.
Cases Cited
Coecon Ltd (Receiver Manager) v The National Fisheries Authority of PNG (2002) N2182
PNGBC v Jeff Tole (2002) SC694
William Mel v Coleman Pakalia (2005) SC790
Albert v Aine (2019) N7772
Yooken Paklin v The State (2001) N2212
Peter Wanis v Fred Sikiot and The State (N1350)
Enaia Lanyat v State (1996) N1481
Obed Lalip v Fred Sekiot and The State (1996) N1457
Jonathan Mangope Paraia v The State (1995) N1343
Samot v Yame (2020) N8266
Counsel:
K. Keindip, for the Plaintiff
J. Mune, for the Defendants
DECISION
10th August 2021
1. DOWA J: This is a decision on assessment of damages. The issue of liability was resolved by entry of Judgment on 20th October 2016.
FACTS
2. The Plaintiff is a former employee of the Papua New Guinea University of Technology (“Unitech”) as Deputy Bursar. He was terminated from employment on 21st August 2013.
3. The Plaintiff alleges that the termination was unlawful and in breach of the terms of Contract of Employment he signed with the Third Defendant.
4. The Plaintiff therefore seeks damages for loss of salary and consequential orders.
THE PROCEEDINGS
5. On 20th October 2016, his Honour Sawong J (as he then was) entered Summary Judgment for the Plaintiff in damages to be assessed.
6. Between October 2016 and April 2018, there been no activity on the files.
7. Between April 2018 and August 2020, the matter has been on the ADR track before his Honour Kandakasi DCJ. Parties have been negotiating settlement but have not reached a resolution.
8. On 20th August 2020, the matter was referred to the civil track for trial on assessment of damages.
9. On 16th July 2021, the Plaintiff applied for Summary Judgment for K87,170.93 with interest and cost.
10. On 20th July 2021, I refused the application for Summary Judgment and asked counsels in Court whether the Court enter summary judgment for the agreed sum of K 56,421.31 with interest and cost. Both counsels could not reach agreement. Thereafter I issued the following directions:
11. After hearing counsels orally, I asked counsels to file their written submissions on quantum for assessment by 26th July 2021. I reserved my ruling which I now deliver.
DOCUMENTS
12. For the purposes of assessment, I have referred to the following documents:
ISSUES
13. During the presentation of the oral arguments on 20th July 2021, Mr. Mune briefly raised the issue of liability. He urged the Court to revisit the issue of liability. Therefore, the issues for consideration are:
What is the effect of Default Judgment?
14. The parties have not addressed this issue properly. Although Mr. Mune asked the Court briefly during the directions hearing to revisit liability, he has not filed any submissions giving reasons as directed by the Court. Mr Keindip has not filed any submissions on this issue too. The lawyers have been given sufficient time and therefore I will proceed with my decision.
15. The law on the effect of default judgment is settled in this jurisdiction. A trial Judge must satisfy himself with the principles summarised in the cases; Coecon Ltd (Receiver Manager) v The National Fisheries Authority of PNG (2002) N2182, PNGBC v Jeff Tole (2002) SC694, William Mel v Coleman Pakalia (2005) SC790, and Albert v Aine (2019) N7772. In Albert v Aine, Kandakasi DCJ at paragraphs 7 & 8 of his judgment said:
“7. Fourthly, the law on the effect of the entry of default judgment is clear. In Coecon Limited (Receiver/Manager Appointed) v. The National Fisheries Authority of Papua New Guinea (2002) N2182, I summarised the principles that govern an assessment of damages after the entry of default judgement in the following terms:
“A survey of the authorities on assessment of damages after entry of judgement on liability mainly in default of a defendant’s defence, clearly show the following:
“Turning back to the issue raised above as to the role of the trial judge after entry of default judgment, we consider the following to be the correct approach:
the trial judge should make a cursory inquiry so as to be satisfied that the facts and the cause of action are pleaded with sufficient clarity;
if it is reasonably clear what the facts and cause of action are, liability should be regarded as proven;
only if the facts or the cause of action pleaded do not make sense or would make an assessment of damages a futile exercise should the judge inquire further and revisit the issue of liability.”
16. The liability in this matter was resolved by a judgment of his Honour Sawong J (as he then was) on 20th October 2016, where he struck out the Defendant’s defence. The decision was made after His Honour found the Defence filed by the Defendants offended Order 8 Rule 28 of the National Court Rules by pleading the general issue and not specifically setting out a defence. Thereafter His Honour proceeded to enter judgment for the Plaintiff in damages to be assessed. The decision was made after His Honour heard full arguments from the parties. I find no reason to revisit liability.
ASSESSMENT OF DAMAGES
17. Whilst the issue of liability is settled, the Plaintiff is still required to prove its damages with credible evidence. Ref: Yooken Paklin v The State (2001) N2212, Peter Wanis v Fred Sikiot and The State (N1350), Enaia Lanyat v State (1996) N1481; Obed Lalip v Fred Sekiot and The State (1996) N1457; Jonathan Mangope Paraia v The State (1995) N1343, and Samot v Yame (2020) N8266.
18. In Samot v Yame (Supra), His Honour, David J referring to legal principles to be applied in assessing damages said this at paragraph 46 of his judgment:
“ The Supreme Court in William Mel v Coleman Pakalia (2005) SC790 and the National Court decision of Cannings, J in Steven Naki v AGC (Pacific) Ltd (2006) N5015 summarise or identify a number of legal principles that are applicable in assessing damages where liability is established either following a trial or after the entry of default judgment and these are:
19. I will adopt and apply these principles in the present case when considering each head of damages sought by the Plaintiff.
EVIDENCE
20. The summary of the Plaintiff’s evidence is this. He commenced employment with the Third Defendant as Deputy Bursar in 2002. On 20th September 2011 the Plaintiff entered a written contract of employment with the Third Defendant as bursar for a term of three years. On 25th February 2013 he was suspended without pay on allegations of fraud and conspiracy to defraud the Third Defendant. He was arrested and charged for the said offences.
21. On 5th July 2013 the District Court dismissed the proceedings for lack of evidence. The Plaintiff sought reinstatement, but the Third Defendant refused. Instead, the Third Defendant terminated the Plaintiff’s contract of employment on 23rd August 2013. The Plaintiff said the termination was unlawful.
22. The Plaintiff said because of the unlawful termination, he suffered loss of salaries and other entitlements. He wants to be paid for the entire balance of his contract period, that is a period of one year and 10 months.
23. The First Defendant gave evidence for the Defendants. She is the Registrar for the Third Defendant. On instructions from the Second and the Third Defendants she suspended the Plaintiff for fraud and conspiracy with others to defraud the Third Defendant of K 675,703.00. She laid a complaint with the police. The Plaintiff was then charged with the said criminal offences. After several committal hearings the Plaintiff was discharged due to insufficiency of evidence. On 23rd August 2013, on instructions from the Second and Third Defendants, she terminated the employment of the Plaintiff with the Third Defendant.
24. She instructed her lawyers to defend the proceedings. Due to pleading the general defence the Defendants defence was struck out. Since then, the Defendants proposed to settle the Plaintiff’ in the sum of K 124,384.43 inclusive of costs and interest. This offer remained open even up to 15th July 2021 which the Plaintiff has not accepted.
25. The Defendants say the Plaintiff is not entitled to any damages but if the Court considers otherwise, the damages be limited to thirteen (13) fortnights less amount already paid to the Plaintiff in lieu of notice.
REASONS FOR DECISION
26. The Plaintiff signed a Contract of Employment on 23rd September 2011 for a term of three (3) years to end 31st December 2014. His gross salary was fixed at K49,565.00, with other allowances. On 23rd August 2013, his employment was terminated by the Defendants. The Plaintiff filed proceedings alleging breach of contract of employment and seeking damages for loss of wages and entitlements for the remaining contract period.
27. Although the Defendants filed a Defence, it was struck out, and the effect of it is that the matter will proceed to assessment of damages.
28. The Plaintiff did not clearly particularise the amounts for the loss in the statement of claim. However, the Plaintiff filed an affidavit sworn 16th and filed 19th February 2018, where he set out the details of his claim. The claim for salaries and entitlements alone amounted to K425,983.69.
WHAT IS THE REASONABLE PERIOD FOR CALCULATING DAMAGES?
30. The Plaintiff is seeking damages for the balance of the contract period. That is a period of one year and ten months. The Defendants have taken the position that the Plaintiff is not entitled to anything except for the period of notice, although I note during the settlement negotiations, they were prepared to settle for a period up to thirteen (13) fortnights.
31. The relevant law is the Employment Act that governs employment relations in Papua New Guinea. The Act sets out the minimum requirements for contract for service. In the present case, the Plaintiff had a written contract of service. Sections 19 (a), 22, 33, 34, 35, and 36 of the Employment Act are relevant and applicable. Sections 33 -36 read, and I quote:
(1) A contract of service for a specified time or for specified work shall, unless terminated otherwise under this Division, terminate when the period of time for which the contract was made expires, or the work specified in the contract is completed.
(2) A contract of service for an unspecified period of time shall be deemed to continue until terminated by either party under this Division.
(1) This section does not apply to a written contract of service for the first two years of operation of the contract unless the parties to the contract agree otherwise.
(2) Subject to this Act, a party to a contract of service may, at any time, give notice to the other party of his intention to terminate the contract.
(3) The length of notice of intention required to terminate a contract of service shall be the same for both parties and–
(a) shall be as specified in the contract; or
(b) shall be not less than the periods specified in Subsection (4).
(4) Where there is no provision in a contract of service for notice of intention to terminate, the length of the notice shall be not less than–
(a) one day’s notice if the employee has been employed for less than four weeks; or
(b) one week’s notice if the employee has been employed for not less than four weeks and for less than one year; or
(c) two weeks’ notice if the employee has been employed for not less than one year and for less than five years; or
(d) four weeks’ notice if the employee has been employed for five years or more.
(5) Notice of termination shall be given–
(a) in the case of a contract of service referred to in Section 19(a)– in writing; and
(b) in the case of any other contract of service–either orally or in writing,
and the day on which the notice is given shall be included in the period of notice.”
(1) An employer and an employee may mutually agree to terminate a contract of service with or without notice.
(2) Where a party to a contract has given notice of intention to terminate under Section 34, either party may, without waiting for the expiry of that notice, terminate the contract by paying to the other party a sum equal to the amount of salary that would have accrued to the employee during the period of the notice.
............
GROUNDS FOR TERMINATION OF CONTRACT.
(1) An employer may terminate a contract of service without notice or payment instead of notice–
(a) where the employee–
(i) wilfully disobeys a lawful and reasonable order; or
(ii) misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties; or
(iii) is guilty of a fraud or dishonesty; or
(iv) is habitually neglectful of his duties; or
(v) is imprisoned for a period exceeding seven days; or
(vi) is continually absent from his employment without leave or reasonable excuse; or
(vii) is convicted of an offence or contravention of this Act or any other law relating to employment; or
(b) on any other ground on which he would be entitled to terminate the contract without notice at common law.
(2) An employee may terminate a contract of service without notice–
(a) if the employer or a person acting or purporting to act on his behalf or by his authority–
(i) induced him to enter into the contract by force, fraud or a statement that was misleading in any material particular relating to the employment; or
(ii) has been convicted of an offence against or a contravention of this Act or any other law relating to the employee or his dependants; or
(iii) has been negligent or careless in the discharge of his duties towards the employee or his dependants under the contract, this Act or any other law; or
(iv) has committed an act of omission or commission that is Inconsistent with the due and faithful discharge of his obligations towards the employee or his dependants; or
(v) has ill-treated the employee; or
(b) on any other ground on which he would be entitled to terminate the contract without notice at common law.
(3) Termination of a contract of service under Subsection (1) or (2) shall be made as soon as practicable after the happening of the event on which the termination is based.
(4) This Act does not prevent termination of a contract of service under this section being the subject of an industrial dispute under the Industrial Relations Act 1962.”
“17. It is well settled by a long line of case authorities in PNG, that an employer has the right to hire and fire his employees and does not have to give reasons for his decision. If this is done in breach of the terms of a contract, the measure of damages is what the employee would have received for his salary and other entitlements if the contract had been lawfully terminated. (see Jimmy Malai v PNG Teachers Association (1992) PNG LR 568, Paddy Fagon v Negiso Distributors Pty Ltd (1999) N1900, New Britain Palm Oil Ltd v Vitus Sukuramu (2008) SC 946, and Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) PGSC 11).
18. This is consistent with the provisions of the Employment Act. Under S 34, a contract of employment may be terminated at any time, with the length of notice being either as specified in the contract, or dependent on the length of the employment. If an employee has been employed for over five years, the length of notice shall be not less than four weeks. Under S 35, the termination may be by notice, or by payment in lieu of notice.
19. Under S 36, the employer may terminate without notice or payment in lieu, if the employee, inter alia, willfully disobeys a lawful and reasonable order or misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties.”
Appropriate Amount for damages
Salaries, wages, and other entitlements
Description | First term of contract (Entitlements Earned) | ||
All salary from 06th March 2013 to 31st December 2014 | 2013 (10 months) | 2014 (12 months) | Sub Total |
Salary Grade 18.5 or UT14.4 | 41,130.42 | 49,565.00 | 90,695.42 |
Domestic Market Allowance (DMA) | 4,166.67 | 5,000.00 | 9,166.67 |
Gratuity (25% of Salary & DMA) | 11,324.27 | 13,641.25 | 24,965.52 |
Head of Department (HOD) Allowance | 4,166.67 | 5,000.00 | 9,166.67 |
| | | |
Institutional Allowance (IA) | 25,760.00 | 30,912.00 | 56,672.00 |
Allowance Related to Duties (ARD) | 3,333.33 | 4,000.00 | 7,333.33 |
Superannuation (15% of Salary & DMA) | 6,794.56 | 8,184.75 | 14,979.31 |
Sub-Total | 96,675.92 | 116,303.00 | 212,978.92 |
4) In the position of the Bursar the initial gross will be K49,565.00 on a salary range from K42,485 to 52,705.00 as payable in Kina shall comprise:
K90,477.00
And gratuity at 25%.
a. Salary and Entitlements - K88,304.37.
b. Deduction for tax - K 30,006.86
c. Net K 58,297.51
d. Less paid in lieu of notice K 20,334.06
e. Amount due to Plaintiff K 37,963.45
40. On 29th November 2019, the Defendants conveyed the offer to the Plaintiff for acceptance. The letter is annexed to the Affidavit of Patricia Sawanga sworn 18th and filed 20th August 2020 as Annexure “K”. On 29th November and 4th December 2019, the Plaintiff accepted the sum of K37,963.45 for the salary and entitlements. Refer to Annexure’s “L” and “M” in the Affidavit of Ms. Sawanga filed 20th August 2020.
41. I find the calculations are done properly and I have no reason to reject or vary them. I accept the figure of K37,963.45 and make an award in favour of the Plaintiff under this head of damages.
General damages for Stress and Anxiety
42. The Plaintiff has made a claim for stress and anxiety. In his submissions he submitted for a sum of K 200,000.00. The Plaintiff refers to the cases Akai v Reeves (2020) N8185, Rodao Holdings Ltd v Sogeram Development Ltd (2007) N5484 and Feria v Lenge (2009) N3574 in support of his submission. I note the facts and circumstances of the cases referred to by counsel for the Plaintiff are different from this case. The Plaintiff in the present case, was referred to police for a cause. Although the criminal charges were terminated at the committal Court the complaint by the defendants was not conclusively dealt with. The Defendant was entitled to lodge a complaint and due process was followed. In the circumstances, to suggest a figure of more than K10,000.00 would be excessive. I note the defendant has not made any submission on this head of damages. However, in their previous negotiations for settlement, the defendants have offered to settle at K 8,000.00 which was accepted by the Plaintiff. The amount is not unreasonable. I will make an award for K8,000.00 for stress and anxiety.
Repatriation (ex gratia)
43. The Defendant offered to settle, and the Plaintiff accepted the sum of K1,500.00 as repatriation expense. I will endorse and award same.
K8,457.86 – NASFUND Contribution
44. The parties have also agreed that the Plaintiff is entitled to a sum of K8457.86 for the NASFUND contributions. Refer to Annexures “O” and “P” of Ms Sawanga’s Affidavit. I will allow this sum as well.
45. In summary, the Plaintiff is entitled to K55,921.31 which I have assessed and will award same.
INTEREST
46. The Plaintiff claims interest at 8% from date of filing of Writ of Summons. I note both parties were at fault in not resolving this matter sooner. I do not see any particular reason why I should not award the maximum statutory rate under the Judicial Proceedings (Interest on Debts and Damages) Act. I will award interest at 8% from date of writ, 18th September 2013 to date of Judgement (10th August 2021) for a period of 2,886 days. Interest is calculated as follows:
I will award interest at K 35,382.36. Post judgment interest shall accrue at 8% from 30 days after service of this order.
47. The total award shall be K91,303.67.
COST
48. The Plaintiff has succeeded in prosecuting his claim. He is therefore entitled to cost as a matter of course.
ORDERS
49. The Court orders that:
(1) Judgment be entered for the Plaintiff in the sum of K91,303.67 inclusive of interest.
(2) Post Judgment interest shall accrue at 8% on the judgment sum after 30 days from date of this order.
(3) The Defendants shall pay the cost of the proceedings to be taxed, if not agreed.
(4) Time of entry of these Orders is abridged to take place forthwith upon the Court signing the Orders.
______________________________________________________________
Gamoga & Co. Lawyers: Lawyer for the Plaintiff
PNG UOT In-House Lawyer: Lawyer for the Defendant
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