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Kasimili v Vava'u Press [2002] TongaLawRp 26; [2002] Tonga LR 168 (10 July 2002)

IN THE SUPREME COURT OF TONGA
Supreme Court, Nuku'alofa

C 99/2000

Kasimili

v

Vava'u Press

Ford J
2 May, 20 June, 8 July 2002; 10 July 2002

Employment law – wrongful dismissal - damages

Damages – for wrongful dismissal – recover only pecuniary loss from repudiation

The plaintiff, Vakaolafehi Kasimili, worked as an advertising representative for the defendant, Vava'u Press Ltd, between November 1995 and January 1998. The plaintiff did not have a written contract of employment. The terms of his remuneration package were that he was entitled to a wage of $50 per week plus a 5% commission on payment of advertising space sold by him. On 20 January 1998 he was summarily dismissed from the company. In February 2000 he issued the present proceedings against the defendant and claimed $10,000 as compensation for his dismissal and $2747.25 for lost commission on advertising sales.

Held:

1. None of the evidence justified summary dismissal without notice. The dismissal was therefore wrongful.

2. An employee who was wrongfully dismissed was entitled to recover the pecuniary loss resulting from the employer's repudiation of the contract. In the case of a contract terminable by notice the employee was entitled to recover his loss only during the notice period. The appropriate notice period was two weeks.

3. The plaintiff was entitled to recover $100 wages, and commission on specified sales. Judgment was entered for the plaintiff in the sum of $457.92. As the plaintiff was not represented by counsel, no order was made as to costs.

Case considered:

Roberts v Ellwells, Engineering [1972] 2 QB 586

The plaintiff appeared in person
Counsel for defendant: Mr Niu

Judgment

The plaintiff, Vakaolafehi Kasimili, worked as an advertising representative for the defendant, Vava'u Press Ltd, between November 1995 and January 1998. On 20 January 1998 he was summarily dismissed from the company. In February 2000 he issued the present proceedings against the defendant claiming $10,000 as compensation for his dismissal and $2747.25 for lost commission on advertising sales. The claim proceeded to a defended hearing.

Mr Kasimili has not been well served by the lawyer he initially instructed in the matter, Mr Paul Muller. Mr Muller issued the proceedings. A trial date was fixed for 5 and 6 February 2001 and a pre-trial conference was set for 31 January 2001. Mr Muller did not appear for the pre-trial conference nor did he appear on 5 February when the case was called for trial. The claim was, therefore, struck out.

Subsequently, Mr Kasimili approached the court explaining how he had been let down by Mr Muller who was then believed to be in New Zealand. He made a formal complaint to the Law Society over Mr Muller's conduct but his main concern at the time was his inability to obtain access to Mr Muller's file. The plaintiff, therefore, had to start from the beginning and make up a new file which is never an easy task.

The defendant's counsel, Mr Niu, as president of the Tonga Law Society, obviously appreciated the plaintiff's difficulties and adopted a helpful stance in the matter which was appreciated by the court. The defendant consented to the strike out order being set aside. The court then made every effort to encourage the plaintiff to instruct another lawyer in the matter but, although some progress was made in this regard, the plaintiff ended up representing himself. No doubt, after his first experience, the plaintiff was very chary about seeking further legal representation.

In the circumstances, the court made certain concessions during the hearing which it otherwise may not have made. A special adjournment was granted, for example, to enable the plaintiff to subpoena witnesses and certain documentation which he thought would be helpful to his case.

These matters are mentioned by way of background. In the end, the plaintiff presented his case with admirable skill. He is obviously an articulate, intelligent young man with an excellent grasp of the English language.

The defendant company is owned and operated by Mr Pesi Fonua and his wife, Mary. They publish two well-known magazines in the Kingdom, "Matangi Tonga" and "Eve". Both are normally produced on a quarterly basis. In addition, during the 1997/98 years the company was proposing to produce two other publications known as the "Road Map" and "Discover Tonga". The Road Map was to be a 120 page bound book aimed for the service station, roadworks and construction industry market. The company was looking at a print run of 2000. Discover Tonga was to have a print run of 30,000. It was aimed at the larger tourism market.

A previous edition of Discover Tonga had been published in 1995/96. The Road Map was to be a "one-off" production. The two publications were "giveaways" and, as such, they were heavily dependent upon advertising. The court was told, for example, that each edition of Discover Tonga would cost $5 to produce and the company would, therefore, need to sell at least $150,000 worth of advertising space.

Sales of advertising for both publications began in July 1997 with a deadline for bookings to be confirmed by mid to late September 1997. The Road Map was to be published in January 1998 and Discover Tonga in February 1998. As it turned out, advertising sales were inadequate and only about one-third of the budgeted figure was achieved. Neither publication went ahead.

Mary Fonua, in her evidence, did not blame the plaintiff for the failure to reach the advertising targets for these two publications. She told the court that the advertising market was extremely competitive about that time, mainly because of the opening of a new television channel and radio station. The company also apparently experienced some other problems resulting from cyclone damage to part of its premises. Mrs Fonua explained that 1997 was such a difficult year in the advertising industry that they were only able to accommodate three editions of the company's "flagship" quarterly publication, Matangi Tonga.

Little needs to be said about the plaintiff's work history with the company prior to the latter half of 1997. He had had no previous experience in the industry and so he had started off as a trainee advertising sales representative. Apart from some arguments from time to time, the work relationship appears to have been reasonable and the plaintiff seems to have carried out his work in a satisfactory manner.

The plaintiff did not have any written contract of employment. Although there appears to have been some initial dispute over the exact terms of his remuneration package, I am satisfied that at all material times his entitlement was a wage of $50 per week plus a 5% commission on payment of advertising space sold by him.

It is apparent from the evidence relating to his claim for loss of commission, that the plaintiff contends that he was entitled to his 5% commission on all sales of advertising space sold regardless of whether or not the advertisers actually paid for the advertising and regardless of whether or not the particular publication was ever produced. I do not accept that proposition, however. I find that what happened in practice was what had actually been agreed to, namely, that the plaintiff would be paid his commission upon payment by the customer of the amount invoiced by the company.

The onus of proof in this case, as in any civil case, is on the plaintiff to establish his claim on the balance of probabilities. I understood the various points that the plaintiff made in relation to his commission entitlement and if, for example, he had been able to demonstrate that he had been paid commission on advertising sales for the issue of Matangi Tonga in 1997 which was never published then that would have been a different matter. Likewise, if he had been able to demonstrate that he had been paid commission on advertising sales even though the customer had never paid the company's invoice then, again, that would have been a different matter. With one exception which I refer to later relating to the Fujita Corporation, there is no reliable evidence of that nature before the court.

In his closing submissions Mr Niu conceded, quite properly in my view, that the plaintiff had made out his case of wrongful dismissal. In other words, the defendant had no right to terminate the plaintiff's employment in the high-handed manner in which it did. Mr Fonua spoke about a number of different matters which culminated in his decision to dismiss the plaintiff. He said that their relationship was never the same after the plaintiff indicated in about mid 1997 that he had applied for certain positions in the Mormon Church and for a scholarship to the Church University in Hawaii. He then spoke about a difficult period the plaintiff seemed to go through when he had problems sleeping and concentrating. Mr Fonua told the court that over a six to nine months period in 1997 he gave the plaintiff "about five" warnings regarding his unsatisfactory work performance. The plaintiff denied having been given any such warnings and I must say that I did not find Mr Fonua's evidence on this aspect of the case particularly convincing. Certainly there were never any written warnings.

Mr Fonua told the court that in January 1998 he sent the plaintiff to Ha'apai for a few days rest but asked him to check for new business customers while he was up in that group of islands. When he returned, the plaintiff did have some new contracts but Mr Fonua said that they contained mistakes such as the wrong year (1997 instead of 1998) and they showed the customer's address as "Nuku'alofa" instead of "Ha'apai". I would be reluctant to categorize the errors highlighted by Mr Fonua as serious mistakes. They certainly did not add up to the level of incompetence or negligence which would need to be established before an employer could dismiss an employee summarily without notice.

Mary Fonua said that the main reason the plaintiff was dismissed was because he was "argumentative and did not follow instructions". I believe that this explanation is probably close to the mark. The court, no doubt unwittingly, had insight into the personality conflicts during the plaintiff's cross examination of Mary Fonua. Mr Kasimili had challenged Mrs Fonua's accusation of his alleged "sloppy work" and he had asked her to expand on the allegation. The witness began talking about the company's normal procedure of issuing invoices to the customer after production of the publication when she was suddenly interrupted by Mr Kasimili with the comment:

"I don't want to listen to that!"

The response from the witness was:

"That's right. That's part of your problem."

The point is, however, that none of these various matters raised by the Fonuas justified summary dismissal without notice. The dismissal was, therefore, as Mr Niu acknowledged, wrongful.

An employee who has been wrongfully dismissed is entitled to recover the pecuniary loss resulting from the employer's repudiation of the contract. In the case of a contract terminable by notice, as the contract was in the present case, the employee is entitled to recover his loss only during the notice period. As is stated in Halsbury, 4th edition (new issue) vol 16 para 307:

"That remuneration includes wages or salary, including a reasonable amount of any variable such as commission, loss of a vehicle and other fringe benefits and any loss of pension rights. Any additional sums, such as extra payments ... are recoverable only if contractually binding. "

The employment in the present case was for an unspecified period. There was no express or specifically implied provision for its termination by notice. In those circumstances, the contract is terminable at common law by reasonable notice and what is reasonable notice is a question of fact, depending on all the circumstances of the case.

Mr Niu submitted that, having regard to all the relevant factors, an appropriate notice period in the present case would have been two weeks. I agree with that assessment. The plaintiff is entitled to recover two weeks wages.

Turning to the plaintiff's commission entitlement, the position is more complicated. In paragraph 9 of his statement of claim, the plaintiff lists over 50 companies which he claims to have sold advertising space to. The sales he enumerates total $54,945 and he claims his 5% commission on that figure which equates to $2747.25.

The evidence produced by the defendant in response to this head of claim satisfies me that in respect of the Discover Tonga and Road Map publications, the plaintiff's only commission entitlement was on the sale of advertising space to the Fujita Corporation which totalled $2272.72. The commission on that figure amounts to $113.64.

The same evidence produced by the defendant shows that the plaintiff is also entitled to certain commission payments for the sale of advertising space in respect of the Matangi Tonga and Eve magazines.

Mrs Fonua told the court that she paid the plaintiff his commission entitlement for one month after the termination of his employment which she said she considered "fair". In the case of discretionary commissions or bonuses such an approach would no doubt be more than reasonable but there was nothing discretionary about the entitlements in question. They were based on firm sales negotiated by the plaintiff and once payment was made by the customer then the plaintiff was contractually entitled to his commission. Although the nature of the commission payments is different, the principle is not unlike that recognised by the court in Roberts v Ellwells, Engineering [1972] 2 QB 586, where a commission agent was held to be entitled to his commission on orders and repeat orders even after the expiration of the three-month notice period he was entitled to under his agency contract.
In the present case, it was not open to the defendant to unilaterally change the terms of the contract to provide that commission payments would cease after one month from the termination of the plaintiff's employment.

Mr Niu submitted that in some instances another sales representative had to approach the customer after the plaintiff had left the company and renegotiate a new contract. There is some evidence to this effect in the written material before the court and in those cases where new contracts or bookings had to be negotiated (not simply the advertisements being "checked"), I do not consider it unreasonable for the defendant to pay the commission to the other sales representative instead of to the defendant.

As best as I can judge, the plaintiff is still entitled to commission payments in respect of the following invoices:

Invoices numbered: 3772, 3679, 3816, 3927, 4040, 4097, 4193, 3774, 3845, 3907, 3977, 3854 (issue 41), 3864 (issue 42), 3966 (issue 43), 3966 (issue 44).

The sales under these invoices totalled $4258.50 and the commission $212.93.

In the case of the customer, Pac Trade, the total amount invoiced is not shown in the defendant's breakdown and I therefore allow the plaintiff his commission on the amount claimed in his statement of claim for sales to Pac Trade, namely $780, less the amount already charged out in invoice 3672 of $153. The commission on the difference of $627 equates to $31.35.

The plaintiff, therefore, succeeds in his claim and is entitled to recover:

(a). Wages, $100.

(b). Commission on the Fujita sale, $113.64.

(c). Additional commission for period after termination of employment, $212.93.

(d). Pac Trade commission, $31.35.

Judgment is entered for the plaintiff in the sum of $457.92. As the plaintiff was not represented by counsel, no order is made as to costs.

I would add this. Even if the plaintiff had been represented by counsel, I would have been reluctant to make any order as to costs having regard to the modest amount recovered in relation to the sum claimed. This is another area where the plaintiff does not appear to have been well served by his former solicitor, Mr Muller. Mr Muller should have made it clear to the plaintiff at the outset that, even if he was successful in establishing his claim of wrongful dismissal, his entitlement to damages at common law is severely limited and the most that he could have expected to recover, putting to one side the question of commission, would have been his loss of wages for the two-week notice period. The claim of $10,000 is quite preposterous and such a figure would have done nothing to encourage a sensible settlement of the case at an early stage of the litigation.