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Huasase v National Housing Corporation [1992] PNGLR 310 (10 July 1992)

Papua New Guinea Law Reports - 1992

[1992] PNGLR 310 - Appolonia Huasase v National Housing Corporation 

[1992] PNGLR 310

N1128

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

APPOLONIA HUASASE

V

NATIONAL HOUSING CORPORATION

Waigani

Brown J

19 February 1992

10 July 1992

CONTRACT OF EMPLOYMENT - Claim for wrongful dismissal - Disciplinary offences - Use of house loan facility afforded plaintiff by employer in accordance with public employees home ownership scheme - Continued use of staff accommodation as well as loan - liability to vacate staff accommodation - Refusal to vacate for reasons personal to the plaintiff's financial circumstances - Notice to vacate based on terms of home ownership scheme known to plaintiff - Refusal to vacate giving rise to disciplinary proceedings - Fairness - Powers of Managing Director of Housing Corporation.

Facts

The plaintiff was formerly employed by the defendant. She was dismissed following disciplinary charges principally relating to her refusal to vacate staff housing whilst she owned but rented out residential premises purchased with assistance of the National Home Ownership Scheme. She sued for damages for unlawful dismissal, contending that her acceptance of a National Home Ownership Scheme loan did not give the managing director of the defendant cause to terminate her employment by reason of her not vacating the staff accommodation.

Held

The managing director's powers relate to the terms and conditions of employment. Where the refusal to vacate staff accommodation was unreasonable, the managing director cannot be said to have acted ultra vires when he imposed a penalty of dismissal which was available to him.

Cases Cited

Associated Provincial Picture Houses Ltd v Wednesbury Corp. [1947] EWCA Civ 1; [1948] 1 KB 223.

Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374.

Counsel

P Kaumba, for plaintiff.

K A David, for defendant.

10 July 1992

BROWN J: The plaintiff was formerly employed by the defendant National Housing Corporation (Corporation). On 10 October 1990 she was dismissed following disciplinary charges principally relating to her refusal to vacate staff housing whilst she owned residential premises purchased with assistance through the National Home Ownership Scheme. The plaintiff, accordingly, seeks damages for wrongful dismissal.

The facts leading up to her dismissal are not seriously in dispute. The plaintiff, however, criticises the finding of a serious and wilful breach of the Corporation's terms and conditions of employment, which was the basis of her dismissal.

She was charged with breaching the provisions of those terms and conditions contained in Determination No 2 of 1975, as amended, more particularly clause 94(1)(b) and (c), which prohibited "employees from engaging in commercial enterprises whilst in the employ of the Corporation". The circumstances were such that the plaintiff obtained loan moneys from the Bank of South Pacific Limited to finalize the purchase of a residential allotment known as Lot 9 Section 449, town of Ensisi Valley, National Capital District. A house was subsequently erected with finance provided by the bank. At that time, the plaintiff was occupying staff accommodation at Section 231 Allotment 42, known as lot 2 Tokarara. By notice dated 30 September 1986, the plaintiff was instructed to vacate the staff flat on completion of her house in Ensisi Valley. Subsequently, on 23 May 1990, a notice giving 7 days to quit the staff flat was served on the plaintiff. Again on 11 June, 1990 the plaintiff was given a further 48 hours notice to vacate. The house premises which she had erected in Ensisi Valley were leased privately to various tenants during this period.

The plaintiff, in her answer to the charges brought pursuant to the disciplinary articles of Determination No 2 of 1975, said that her financial situation was such that she could not afford to vacate the staff accommodation and move to her own home for she would forego the rental income from her own home which was income necessary to repay her mortgage to the bank.

The Corporation charges that her continued residence in the staff flat in these circumstances amounts to "carrying on business" within the terms of clause 94(1)(b) and (c) and that she could not continue to remain in the staff accommodation whilst a beneficiary under the National Home Ownership Scheme.

Whilst denying the effect of her continued residence in the staff accommodation could be categorised as a business within the terms of the determination, the fact that she continued to reside whilst owning her own home purchased pursuant to National Home Ownership Scheme with funds provided for by Bank of South Pacific was uncontroverted.

The plaintiff, in effect, has said to the chairman of the disciplinary committee empowered with the responsibility of determining the seriousness of the charges brought by the Corporation, that while the house may be rented, in her financial circumstances, she is precluded from relinquishing use of the staff accommodation and taking up her own accommodation. In those circumstances, she anticipates the Bank would foreclose. She has not sufficient financial resources to meet mortgage payments unless she has the facility available from rent. To that extent then, it is clear that National Housing Corporation, as her employer, is providing accommodation in circumstances where the plaintiff has her own home available for her use but chooses not to live there, claiming financial hardship. The Corporation, on the other hand, pleads that she is in breach of the government housing policy and the National Housing Corporation Act by her continued occupation of staff accommodation, and that such continued occupation amounts to a breach of the housing policy and National Housing Corporation Act, justifying disciplinary proceedings.

The first notice of 30 September 1986 clearly raised the issue, for the plaintiff was advised by the Assistant Housing Commissioner, following her request to continue to reside in the staff flat, that "due to limited staff accommodation and an increased demand by the National Housing Commission staff", her request had been rejected. She was further advised to vacate the flat as soon as her house was completed at Ensisi Valley.

On 18 May 1990, she was suspended from duty with pay following the charge brought against her. (The disciplinary committee subsequently recommended that she be given the opportunity to continue to reside in the staff flat subject to a rent increase or if, not acceptable, that she vacate the flat if her financial circumstances were shown to be sufficient to maintain the existing bank loan repayments). The managing director of the National Housing Corporation, by written advice of 10 October 1990, upon consideration of the disciplinary committee's findings, terminated the plaintiff's employment on that day. Consequently, her entitlement to continue to reside in the staff flat ceased.

I am not satisfied that private rental of the plaintiff's home premises in the circumstances amounts to "a business" within the meaning of clause 94(1)(b) and (c) of the 1975 determination. Perhaps if she had more than one rental property, the course of conduct in acquiring properties in that fashion could be seen as a business. In this case, the fact of ownership and mortgage payments from rentals does not lead me to classify the rental income as "a business" within the meaning of clause 94(1)(b) and (c).

The plaintiff has, however, clearly breached the instruction of the 30 September 1986 notice when she was ordered to vacate the staff flat on completion of her residence.

Pursuant to terms of the National Home Ownership Scheme, government assistance was available to assist home buyers, and it is clear such assistance is conditional upon a buyer building his own home and residing in it himself. A short description of the 1985 National Home Ownership Scheme has been admitted into evidence, and I quote from that document. Also in evidence is the letter of a provisional offer to the plaintiff dated 26 July 1985, which relates to the block of land at Ensisi Valley which was subsequently purchased with assistance through the scheme. A term or condition of acceptance of the offer was set forth on the second page. That provided:

"Special Conditions - Applicable applicant who currently occupy a Pool/Reserve or NHC house.

1.       There is a greater restriction on sale of NHOS Home sites to applicants who are current tenants of a Pool/Reserve or NHC rental house. Hence the following conditions are imposed to check on possible abuses:

(a)      You are required to sign a Statutory Declaration.

(b)      If you are a current tenant in one of the above category of houses you are given the option of:

(i)       retaining the Pool/NHC house and surrendering this offer;

(ii)      retaining the offer and surrendering your Pool/NHC house; or

(c)      ...

Failure to do this will result in eviction note served on you to vacate Pool/NHC and legal proceedings taken against you.

Yours faithfully,

JOSEPH BAL

Commissioner."

Having accepted the provisional offer and gone on with the purchase of the subject land by erecting her home with funds provided by the Bank of South Pacific, I am satisfied that the plaintiff is subject to that special condition. In her circumstances as a tenant of staff accommodation, she was obliged to comply with the special conditions as notified by the memo dated 30 September 1986. Whilst great delay has been occasioned by the Corporation's reluctance to take steps to enforce compliance with the condition, possibly as a result of the plaintiff's various requests for re-consideration, I am satisfied that the various notices to quit given on 23 May 1990, 11 June 1990, and 12 July 1990 were valid.

The terms and conditions of the National Home Ownership Scheme 1985, as expressed in the special condition "that a staff tenant shall vacate", appears to take no account of the entitlement of an employee in the circumstances to staff accommodation. That may not be so if, in fact, the scheme is more favorable to government employees in these circumstances. In any event, that is a policy matter, not for this Court. The fact is that there is a special condition which the plaintiff acknowledges breaching, for, as she says, she was financially constrained from complying with those conditions.

The deliberation of the disciplinary committee tends to suggest that the income she received from the rental of her home property exceeded her anticipated outgoings of both the personal loan repayment and housing loan repayment by some K205 per month. As the disciplinary committee said, the plaintiff "was paying off her house at the expense of the Corporation". As the Corporation is heavily subsidising her staff accommodation, this aspect is not really a matter that need be determined here. The question is whether the employee's continued failure to comply with the directions to vacate given by the Corporation's Property Authority from time to time amounts to such a wilful and serious breach of the determination as to justify her dismissal. The particular determination is dealt with in clause 142(c):

"An officer who:

(c)      wilfully disobeys or disregards a lawful order made or given by any person having authority to make or give it; or etc.

is guilty of an offence and is liable to be dealt with and punished under this Part."

I am satisfied the employee had the right to be heard and, in fact, was given every consideration both in the deliberations by the disciplinary committee and subsequently, when I have regard to the correspondence tendered by her lawyers. I must, however, not substitute this Court's finding for the decision of the appropriate authority, the Corporation's managing director, who on 10 October 1990 determined the plaintiff's employment. I can only interfere with that finding of the managing director, (the appropriate disciplinary officer) pursuant to the Determinations that he was entitled to make, in circumstances which breach the Wednesbury principles [Associated Provincial Picture Houses Ltd v Wednesbury Corp. [1947] EWCA Civ 1; [1948] 1 KB 223]. He has the deliberations of the disciplinary committee to consider. The managing director was not bound, however, to adopt the recommendations of the disciplinary committee. (Clause 144(2)(d) and clause 145(3)).

I am satisfied that the managing director of the Corporation is the appropriate authority referred to as "the Commissioner" in the Determination No 2 of 1975, as amended, when I have regard to the National Housing Corporation Act 1990. In these circumstances, the penalty of dismissal is available.

Quite frankly, I do not consider that the plaintiff can be said to have expected to enjoy the benefit of subsidised accommodation which she could legitimately expect to continue to enjoy as an employee since she had been told clearly in 1986 that she should vacate the staff premises on completion of her own residence. Consequently, I am not satisfied that she falls within the criteria for judicial review as touched on in Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374. There is no need to consider the question whether the plaintiff has had an adequate hearing before the disciplinary committee. She has never been able to show that she has been under any misapprehension about the terms of her special conditions under which she took the benefit of the National Home Ownership Scheme. The basis of her submissions both to the disciplinary committee and to the managing director was that she required particular consideration having regard to her financial disadvantage.

Lord Diplock's dicta in the abovementioned case stated, in effect, that to qualify as a subject for judicial review, the plaintiff must come within one of two basic categories:

(a)      a person who has in the past enjoyed a benefit which he or she could legitimately expect to continue until having been told to the contrary, given rational grounds and having been allowed to comment thereon; and

(b)      a person who had received an assurance from the decision maker that the benefit would not be withdrawn without first affording him or her the opportunity for arguing that it should not be withdrawn.

I consider those principles apply in this case, and the plaintiff does not fit into either category. Consequently, she cannot say that she has not been afforded "natural justice" and, thus, her dismissal is unlawful. Her dismissal was valid, and nothing has been shown now which would make her dismissal wrongful.

I am not willing to interfere with the decision of the appropriate officer, and the plaintiff's claim must fail. There shall be a verdict for the defendant. The plaintiff shall pay the defendant's costs.

Lawyer for the plaintiff: Kirriwom & Co.

Lawyer for the defendant: Namaliu & Associates.