IN THE SUPREME COURT OF THE
TERRITORY OF PAPUA AND NEW GUINEA

No. 77

BURNS PHILP (NEW GUINEA) LIMITED
Appellant

-v-

G. BLADEN
Respondent

Appeal from the District Court, Rabaul (PNG)

JUDGMENT ON APPEAL, (delivered by Phillips C.J.
on 22nd November, 1955, at port Moresby.

This is an appeal from a decision of the District court at Rabaul on the 14th of May, 1955, in the matter of a civil complaint by Mr G. Bladen (the present respondent) against Burns Philp (New Guinea.) Limited (the appellant). The complaint, which averred that on the 15th of June, 1955, the defendant Company "was indebted to the complainant in the sum of ₤79.0.1 for work and labour done by the complainant for the defendant," did not include the customary words "at the request of the defendant;" but, so far as can be gathered from the copy of the District Court's proceedings now before me, that important omission drew no comment from the Magistrate or either of the learned Counsel at the hearings. A set-off of ₤77. had been pleaded by the defendant Company on the ground that that amount was owed to it by the complainant under and by virtue of the terms of his employment with the defendant. A set-off of that kind is, of course, a "set-off" in the strict sense, and one raised by way of defence to a claim; but in this case at the District Court, (if the copy proceedings are a correct record), the witnesses for the defence gave evidence before the complainant did, with no recorded objection from learned Counsel for the defence. Why that extraordinary procedure was adopted, I do not know and the copy proceedings do no tell me. In the end, the Magistrate gave judgment for the complainant in the sum of ₤77. and costs, from which it may be inferred that he rejected the defendant's set-off. On what grounds he rejected that set-off and for what reason he awarded the complainant ₤77 instead of the ₤79.0.1 the complainant had claimed, cannot be ascertained from the copy proceedings: no reasons for judgment are recorded therein, notwithstanding the plain duty of a Court to give and clearly record the reasons for its judgment, however briefly. In the appellant's notice of appeal, however, it is alleged that the Magistrate had erroneously, the appellant submitted - held that an agreement of employment made between the parties on the 14th December, 1951 was one that was limited to two years' duration and was one that had been rescinded.

At this Court Mr Clay, learned Counsel for the appellant, submitted that that agreement continued in force until terminated in May last by written notice from Mr Bladen: on the other hand, Hr Kirke, learned Counsel for the respondent, submitted that that agreement had been rescinded by the conduct of the parties towards the end of 1953 and that two successive agreements had since taken its place.

From the copy of the District Court proceedings the facts appear to be as follows:-

In December, 1951, the respondent interviewed Burns, Philp and Co. Ltd. in Sydney about getting employment in New Guinea, and, on the 10th of that month, that Company, acting as agents far Burns Philp (New Guinea) Limited, drew up a letter which was addressed to the latter Company's Rabaul Manager and which set out the terms of the respondent's proposed employment with the latter Company. That letter has not been seen by this Court, but what purports to a true copy of it has; and relevant passages in that copy are as follows:-

"This will serve to introduce to you Mr T.P.G. Bladen, whom we have selected to proceed to yours per Qantas plane on 12th December, 1951, to engage with you in the capacity of Native Labour Overseer.

"The bearer has expressed himself as willing to carry out faithfully all or any duties which may be allotted to him from time to time ....

"He distinctly understands that his employment only commences from the date of his arrival at Rabaul, and salary will be paid to him as from that date at the rate of /58.6.8 ... per month, payable monthly in arrears, but subject to a deduction at the rate of 10/- per week for rental of single quarters, where Company premises are occupied.

"Mr Bladen's appointment is terminable by one month's notice on either side, and we have informed him that the Company will not be responsible for his passage should he resign or be dismissed and that his salary will cease on the date of such resignation or dismissal. Further if he does not complete two years' service he will be called upon to refund to the Company the amount of his forward fare.

"He has been advised that if he remains in the service he will be entitled to holiday leave amounting to six weeks only after each completed two year period of continuous service. A free passage will be granted to him on one of the Company's Steamers to his original port of embarkation and return to Rabaul on the occasion of the abovementioned leave, provided always that there will no return passage granted if he is leaving the Company's employ at the expiration of such leave.

"Also, it is understood that should he leave our service before the expiration of a further two years from the date of his return from leave, he is liable to pay us the full amount of his return passage.

"Mr Bladen has been told that it is necessary for him to become a Subscriber to the Burns Philp Provident Fund.

Yours faithfully,

for BURNS PHILP & COMPANY LIMITED
As Agents for BURNS PHILP (NEW GUINEA) LIMITED"

immediately after which is written, in the copy, "(Sgd.) ......" (which could either mean that there was an illegible signature or perpaps none at all I cannot say without seeing the original); and then, in the copy appeared "Correct. G. Bladen. Mr Bladen brought that letter to Rabaul where, on the 14th of December, he had an interview with Hr. G.A.Clarke, the local Manager for Burns Philp (New Gninea) Limited, at which the letter was indorsed "Confirmed at Rabaul this 14th day of December 1951" and was signed by Mr Clarke as "Manager" and by respondent as "Employee."

Thus the letter of the 10th of December, 1951 became - certainly at the time it was confirmed and signed by the parties at Rabaul on the 14th December, 1951, if not before - the memorandum of the agreement of employment they had entered into, which agreement I shall, for brevity, hereinafter refer to as "the 1951 agreement."

It will be noted that that agreement did not provide that its duration should be for a fixed term. It was not an agreement expressly limited for two years' duration or to any other number of years' duration: that is quite evident from the language used in the memorandum itself, for example - the phrase "each completed two years' period of continuous service." In other words, the agreed employment was to be for an indefinite period, - one that might go on for many years or one that might not last even for one year because of the provision enabling it to be terminated by one month's notice on either side.

Mr Bladen duly commenced his employment with the appellant Company on 14th December, 1951. Towards the end of 1953, when the date was approaching at which he would become entitled to six weeks' holiday leave, he told Mr Clarke that he would like to defer his leave. At Mr Clarke's suggestion he put this in writing in a letter dated 13th October, 1953 which read as follows: - "I have to advise that I do not wish to avail myself of leave due to me this Christmas 1953 other than perhaps a day or two over the gazetted Christmas 1953 holidays when perhaps I may spend a week in New Ireland. It is respectfully requested that any other leave due to me is not reviewed before November-December 1954."The year's postponement of leave requested by Mr Bladen was agreed to by the Company.

Now Mr Kirke has contended that the postponement of respondent's leave, assented to by the appellant, was a variation of the 1951 agreement and substituted some new one, the terms of which Mr Kirke could not specify. Mr Clay, on the other hand, submitted that the provision about leave in the 1951 agreement was merely one entitling the respondent to leave in certain circumstances and that respondent's delay in availing himself of that entitlement did not amount to a variation of that agreement. I think that the leave provision in the agreement was clearly an entitling one: it did not go so far as to say that leave must be taken the moment respondent had done two years' service, or at any other particular moment it was a provision (in a common enough form) that left a flexibility of choice in that respect. The respondent's letter of 23rd October, 1953 used language that obviously related to the leave provision in the 1951 agreement and there was no suggestion in that letter that he considered that that agreement had been rescinded. But the respondent did say, in evidence at the District Court, that he told the he thought the 1951 agreement had "finished 18 months ago." 
I shall examine that piece of evidence more closely presently.

The respondent eventually went on leave on the 11th of December, 1954. Mr Clarke gave evidence about that as follows:-"(Mr Bladen) proceeded on leave in December, 1954, in accordance with his written request. He was given leave pay from the Company for approximately 91 days on full pay. Leave was granted in excess of the leave granted by the terms of employment. He was granted pro rata leave and excess." for what reason Mr Bladen was granted excess leave does not appear in the copy proceedings. Mr Kirke has submitted that the grant of excess leave was a variation of the agreement of employment sufficient to rescind it, whereas Mr Clay has argued that the grant of excess leave was in the nature of a gift that had no effect on the currency of the agreement. If the 1951 agreement was still in force when that 91 days' leave (including excess) was granted, I fail to see why the granting of more leave than respondent was entitled to should amount to a rescission of that agreement. If that were so, and employer would be well advised not to give his office-boy a day off to attend his grandmother's funeral and not to give an employee a cash bonus, over and above salary, at Christmas time.

The respondent took only part of his leave in Australia, returning to Rabaul by the "Bulolo" on the 1st of February, 1955, - approximately a month before his leave was to expire on the 4th of March. He did not spend the remaining month of his leave in idleness; he worked for the appellant Company throughout that remaining period and received pay for so doing, that is to say, pay additional to the leave moneys he had already received for the same period. At the District Court respondent was asked in cross-examination:- "Did you resume working, for B.P.'s at your request on 1st February?" He replied: - "I met Mr Clarke on the 'Bulolo' and he asked me if I would come back to the firm. He solved a problem for me and I decided I would." This reply seems a shade oblique and although it might suggest that Mr Clarke took the initiative, respondent did not expressly deny that he himself requested employment at that time. Whether the respondent meant the words "come back to the firm" to have any greater significance than "come back to the firm until you resume duty at the end of your leave" cannot be determined on the material before me: Mr Clarke was not asked about this, but then, he had already given evidence as a witness for the defence before the complainant was called on, as I have already indicated. The respondent agreed, at the District Court, that for the period 1st February to 4th March, 1955, he received 'double pay" i.e. leave money plus additional pay. He was asked whether that additional pay was "normal wages;" He replied:- "So much per day for each day I worked" but did not mention what that daily rate was.

Mr Kirke has submitted that the arrangement made between the respondent and Mr Clarke that respondent should work for the Company and receive "additional" pay for the period 1st February to 4th March, 1955 was a variation of the then current agreement that rescinded the agreement. Mr Clay has disputed that submission. In my opinion, there is nothing in the evidence to show that the arrangement made between Mr Clarke and the respondent in regard to the period 1st February to 4th March, 1955 was any more than a temporary special arrangement that had nothing to do with respondent's original agreement of employment and was in no way inconsistent with it.

After the 4th of March, 1955, the respondent continued to work for the appellant Company: but on the 30th of April, 1955, he wrote to the Company's Manager as follows:- "I have to advise having purchased a vessel that will require my full attention operating it. I respectfully tender my resignation to take effect at the close of business, 31st May, 1955".

Now it seems plain, from Mr Clarke's evidence at the District Court, that there was no doubt in his mind that respondent's letter of 30th April 1955 was an effective termination, pursuant to the terms of the 1951 agreement, of that 1951 agreement; nor would there seem to have been any doubt in Mr Clarke's mind that that agreement had continued with uninterrupted force until so terminated. But what was Mr Bladen's view of the matter? In evidence at the lower Court in said: - "I commenced employment with Burns Philp (New Guinea) Ltd. about 13th December, 1951 ... I remained employed by Burns Philp (New Guinea) Ltd. until 26th May, 1955, and my services terminated on that date as a result of my written resignation." The generality of that statement was qualified by Mr Bladen, later on in his evidence, in this way:- he said that when he was told on the 6th June last (i.e. after he had left the Company) by the Company's Accountant that money had been deducted, pursuant to the 1951 agreement, from his wages, he said to the Accountant:- "That contract finished 18 months ago," and that when the Accountant remarked that it was still in force, he replied - "That is the first I have heard of it."Thus, according to Mr Bladen, he claimed on that recent occasion that the 1951 agreement had "finished" eighteen months earlier - which would be in December, 1953, the time he first became entitled to holiday leave. Whether or not Mr Bladen had expressed such a view to the Company before the 6th of June last does not appear in the copy proceedings. The question arises, - How far was Mr Bladen's statement that the 1951 agreement finished in December, 1953 supported by the evidence? What "finished" that agreement? It does not appear that it was terminated at that time by the giving of notice, such as was provides for in the agreement. There is no evidence that the respondent, if he considered that that agreement finished in December, 1953, communicated his view to the Company at any time before the 6th of June, 1955. As I have said they agreed postponement of his leave was not a variation, muchless a rescission of the 1951 agreement; indeed his letter of 23rd October, 1953, asking that his leave be deferred, only made sense if read with that agreement. He travelled to Australia on a passage provided by the appellant in accordance with the 1951 agreement. He returned to Rabaul on 1st February, 1955 on a return passage which was provided by the appellant, the appellant says, in accordance with the 1951 agreement. The cost of that return passage formed the subject matter of the set-off pleaded by the appellant at the lower Court in reliance on the provision in the 1951 agreement that it was to be refunded if the respondent left the Company's service before the expiration of a further two years from the date of his return from leave, as he had done. What did the respondent say at the District Court about that return passage? He did not refer to it, expressly, in his examination-in-chief or under cross-examination, but he was then asked about it by the Magistrate as follows:- "Did you ask B.P.'s for a passage on the 'Bulola' or did they offer it to you?" The respondent replied:-- "I spoke to the employment officer, Mr Moore, and told him that I didnt't want to stay in Sydney too long and he said he would advise me when a passage was available. I received a letter from B.P.'s telling me that a passage was available about the beginning of January. First a radio and then a letter" This reply seems to me somewhat equivocal and did not answer the question that had been put: but the respondent certainly did not say in so many words, that Burns Philp had unconditionally granted hire a free return passage to New Guinea. The Magistrate then twice asked the respondent whether he had ever been asked to pay that fare on the 'Bulolo' and the respondent twice said he had not. Those replies were not correct; but they were corrected by the Magistrate's next question:- "The first notification that you have received was ... on 6th June?" -- to which the respondent said "Yes." Here it may be observed that, if the appellant is correct in contending that the 1951 agreement was still in force until it was terminated by the respondent at the end of May last, the respondent's contingent liability to refund the cost of his return-passage on the "Bulolo" could not (under the very terms of that agreement) become a full liability to refund the passage money until the end of May; and, as the appellant claimed the cost of that passage from the respondent on the 6th of June, the Company's claim was by no means a dilatory one.

If the respondent believed that the 1951 agreement "finished" in December, 1953, on what terms and conditions did he work for the appellant from the expiration of his leave on 4th March, 1955 until he left the Company an 26th May, 1955? He did not, at the lower Court, give any evidence whatever about such terms and conditions nor did he give any particulars showing how he arrived at the sum he then claimed for salary, - ₤65.17.10. That figure appears in the particulars of his complaint, which was dated 15th June, 1955. Curiously, that is the very same figure that the appellant Company had arrived at, in the statement it presented to respondent nine days earlier, as being that of salary earned by him.

Mr Clay has suggested that the fact that the 1951 agreement provided that it could be terminated by a month's notice on either side and the fact that the respondent, in his letter of 30th April, last, notified the Company that he was resigning as at the close of business on 31st May go to show that that notice was given under the 1951 agreement. That could be so, but, as Mr Kirke pointed out, it does not necessarily follow the respondent may have given a month's notice with the idea that that was "reasonable notice" of his intention to resign.

Mr Kirke made a final submission at this Court and it was this: - that if the respondent was liable to refund the cost of his return passage in the "Bulolo" (₤77) to anybody, he was liable to refund it to Burns Philp & Co. Ltd. in Sydney, not to Burns Philp (New Guinea) Limited in Rabaul. That was at least a courageous submission but one entirely without substance, I think, because the letter that was dated l0th December, 1951, became the Memorandum of the 1951 agreement and that was signed in Sydney by the respondent and was confirmed and again signed by him at Rabaul, stated as clearly as could be that Burns Philp & Co. Ltd. were acting as agents for Burps Philp (New Guinea) Limited. The respondent called no evidence to show, nor did he assert at the District Court, that, at the time he interviewed the Sydney Company in Sydney in December, 1954 or January, 1955, about returning to New Guinea, the Sydney Company acted otherwise than as agents for the Rabaul Company.

Mr Clay has, on behalf of the appellant, conceded that, subject to the appellant's pleaded set-off of ₤77, the amount claimed by the respondent in his complaint, (₤79.0.1), was correct. Learned Counsel for the respondent, however, did not concede that set-off, and, as we have seen, strove to show that the 1951 agreement was rescinded some years ago.

But the evidence available establishes beyond doubt, in my opinion, that the 1951 agreement continued in force until respondent terminated it in May last and if the District Court found or held otherwise, it was, I think, in error. On my view that the 1951 agreement continued in force over that period, and as the respondent left the appellant Company's service before the expiration of two years from the date of his return from leave, it follows that I am also of the opinion that the respondent thereby rendered himself liable, under the agreement, to pay the appellant the full amount of his return passage, the ₤77 claimed in the appellant's set-off. For the reasons I have already given, I think the District Court erred in rejecting that set-off.

Here it should be mentioned that Mr Clay very properly raised the question whether, if the memorandum of the 1951 agreement was liable to stamp duty, that duty had been paid. There is nothing in the copy proceedings from the District Court that would suggest that the question of stamp duty arose there. The copy of the memorandum that we have here has no marking on it that would indicate that the original had been duly stamped, but this is not necessarily conclusive. However, Mr Clay undertook that, if the original was unstamped and by law required to be stamped, he would have this done. On that undertaking the hearing of the appeal went on. Although I am prepared to hear argument on the point, I am of opinion, as at present advised, that the memorandum was a document that was liable to stamp duty. Whether it was duly stamped or not I cannot say, not having seen the original. That is a matter which should be cleared up, and I think that the Court has a duty to see that it is cleared up. One way of ensuring that would be for me to direct that my order on this appeal shall not be drawn up until the appellant has filed in the Registry satisfactory proof (for example by affidavit, or by a certificate from the Treasurer) verifying that the requirements of the Stamp Duties legislation of the Territory of New Guinea in respect of the memorandum of the 1951 agreement had been complied with.

Subject to the question of stamp duty, I consider that this appeal should be upheld; that the appellant should have the costs of his appeal; and that the lower Court's Judgment for the complainant in the sum of ₤77 should be set aside.

As to what judgment should substituted for the one I have just set aside, it was my intention to order that judgment for the complainant in the sum of ₤3.0.1 should be substituted, that amount being the difference between the sum claimed by the complainant in his complaint and the sum which was pleaded by the appellant in its set-off and which should have been allowed by the District Court, on the evidence given. But, before I began to deliver judgment this morning, Mr Clay and Mr Kirke informed me that since the adjournment they had learned that the sum of ₤2.0.1 had been given by Mr Shand (Counsel for the appellant at the District Court) just before the hearing of Mr Bladen's claim commenced at that Court. Mr Clay and Mr Kirke have suggested that, although there is no reference whatever to that transaction in the copy proceedings received from the District Court, it could be inferred that the Magistrate was told of it and that that was why he gave judgment for complainant in the sum of ₤77, that is, 2.0.1 less than the complainant had claimed. Although it would appear, from the now-intimated payment of ₤2.0.1, that the appellant conceded the complainant's claim subject to its set-off, the case went on, - from which it would seem that Mr Jones did not concede the set-off, although, once again, the notes of proceedings tell us nothing about what Mr Jones may have said about that. This morning's belated, though proper disclosure by learned Counsel raises difficult questions. Let us assume that matter was put before the Magistrate that warranted this deducting ₤2.0.1 from the amount claimed by the claimant, leaving ₤77. He should also, as I have held in this judgment, have allowed the set-off and deducted its amount, ₤77, from the amount claimed by the claimant, and this would have left nothing. In such circumstances, the question arises as to what order should be made about the costs of the proceedings at the District Court at which, on what now seems to have been the facts, the complaint should have been dismissed. I should like to hear Counsel on the question of those costs.

C.J.