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Imbok v Thomas [2021] PGNC 185 (10 August 2021)

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:


  1. that the Court will proceed with the assessment of damages, and
  2. that the parties provide submissions on quantum.

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:


  1. For the Plaintiff:
  2. For the Defendant:

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:


  1. What is the effect of Default Judgment given 20th October 2016?
  2. Whether the Plaintiff is entitled to any damages, and if so, how much.

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:

  1. The judgement resolves all questions of liability in respect of the matters pleaded in the statement of claim.
  2. Any matter that has not been pleaded but is introduced at the trial is a matter on which the defendant can take an issue on liability.
  3. In the case of a claim for damages for breach of contract as in this case, such a judgement confirms there being a breach as alleged and leaves only the question of what damages necessarily flow from the breach.
  4. The plaintiff in such a case has the burden to produce admissible and credible evidence of his alleged damages and if the Court is satisfied on the balance of probabilities that the damages have been incurred, awards can be made for the proven damages.
  5. A plaintiff in such a case is only entitled to lead evidence and recover such damages as may be pleaded and asked for in his statement of claim.”
  6. The Supreme Court in PNGBC v. Jeff Tole (2002) SC694 adopted and applied this summation of the principles. Later, the decision of the Supreme Court in William Mel v. Coleman Pakalia (2005) SC790, did the same. Additionally, however, the Court in that case went further by noting several decisions of the National Court in which the principles were adopted and applied. It then added 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.


  1. Since December 2016, the parties commenced settlement negotiations. The parties have exchanged various submissions for the settlement but did not reach a resolution.

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. TERMINATION OF CONTRACTS.

(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. NOTICE OF TERMINATION.

(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. TERMINATION OF CONTRACT WITHOUT 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.”

  1. The law on termination of employment contract is settled in this jurisdiction. In Ruhuwamo v PNG Ports Corporation (2019) N8021, Thompson J said this at paragraph 17-19 of her Judgement:

“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.”


  1. In the present case the Plaintiff was employed under a written contract. The terms were governed by the PNG University of Technology Citizen Employment Contract Standard Terms and Conditions of Employment. Under clause 4.2 of the said Terms and Conditions of Employment where termination is contemplated, the maximum period for notice of termination is three months. The Plaintiff was terminated for serious misconduct of office pursuant to clause 4 (1) (d) and 5.4 of the said PNG University of Technology Citizen Employment Contract Standard Terms and Conditions of Employment. He was paid for the three months entitlement in lieu of notice. These clauses are like sections 34,35 and 36 of the Employment Act.
  2. Although the Plaintiff secured liability the amount of damages is restricted to the notice period and for the actual loss of salary and other entitlements. The Plaintiff was suspended on 26th February 2013 without pay. He was terminated on 23rd August 2013 to have retrospective effect from 26th February 2013. In my view injustice would be done to the Plaintiff if the Court accepts 26th February 2013 as the date for termination. In my view the Plaintiff is entitled to damages to commence from 26th February 2013 to date of termination which is 23rd August 2013. This view is not seriously contested by the defendants. I will therefore allow damages for the thirteen fortnights that the Plaintiff missed during the period of suspension without pay.

Appropriate Amount for damages


  1. What is the appropriate amount for damages is the Plaintiff entitled to? The Plaintiff seeks damages under the following heads of damages:
    1. Loss of salaries and entitlement
    2. General damages for wrongful termination
    1. Interest
    1. Costs

Salaries, wages, and other entitlements


  1. The Plaintiff has submitted for loss of salary and entitlements for the entire balance of the contract period which is set out below:
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

  1. In my view the Plaintiffs calculation is erroneous. Firstly, it is for the full term. Secondly, the Plaintiff has not produced any payslips for the purposes of confirming the net income per fortnight.
  2. The Plaintiff’s contract of employment provides his gross salary and entitlements in the following:

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:


  1. Salary Head of Department
    1. Grade 18.4 18.4
    2. Base Salary K49,565.00
    3. Domestice Market Allowance K5,000.00
    4. Head of Dept allowance K5,000.00
    5. Institutional Allowance K30,912.00

K90,477.00

And gratuity at 25%.


  1. I note the Defendants did a detailed calculation for the thirteen (13) fortnights which is annexed to the Affidavit of the first defendant sworn and filed 3rd September 2020 as annexure “I”. It includes amounts for accrued leave entitlements and gratuity. Based on this calculation the Defendant arrived at a net figure of K 37, 963.45 for Salary & Entitlements for the thirteen (13) fortnights. This is calculated as follows:

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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