Permanent Secretary for Ministry of Education v Prakash [2011] FJCA 53; ABU0032.2009 (25 November 2011)

IN THE COURT OF APPEAL, FIJI ISLANDS
APPELLATE JURISDICTION
CIVIL APPEAL NO.ABU0032 OF 2009

[Civil Action No. HBC 058 of 2001 LTK]

BETWEEN:

THE MINISTRY AND THE PERMANENT SECRETARY FOR THE MINISTRY FOR EDUCATION
First Appellant

THE ATTORNEY-GENERAL OF THE REPUBLIC OF FIJI
Second Appellant

AND:

AMRIT PRAKASH (f/n Ram Bhagat)
Respondent

CORAM: Hon. Justice William Marshall, Justice of Appeal
Hon. Justice Sriskandarajah, Justice of Appeal
Hon. Justice Nimal Wikramanayake, Justice of Appeal

COUNSEL: Mr. Ropate Green for Appellant
Mr. Vipul Mishra for Respondent

Date of Hearing: Tuesday, 8 November 2011
Date of Judgment: Friday, 25 November 2011

JUDGMENT

William Marshall, JA

1. I agree with the judgment, the reasons and the proposed orders of Sriskandarajah JA.

Sriskandarajah, JA

2. The Respondent was appointed as a Teacher Primary in the Education Department in the public service of Fiji with effect from 22nd January 1990. The letter of appointment issued on the 29th December 1989 by the Secretary Public Service Commission contains the terms and conditions of the said appointment. The appointment is on probation for a period of one year with the initial salary of $6631.00 per annum and will be subject to the provisions of the Public Service Commission Regulations1987, the Public Service Decree 1988, Regulations made under the Fiji Service Commission Decree1988, General Orders, Financial and Stores Regulations and Departmental instructions as from time to time amended. The Respondent was posted in the first instance to Ba Andhara Sangam School.
   
3. The Respondent after serving as a teacher for six years in different Schools had sought approval to release on study leave without pay, with effect from 29th July 1997, for one semester (semester II, 1997). The approval was granted by the Public Service Commission to pursue a BA majoring in Geography 1998/Educational Administration at the University of the South Pacific. The Respondent to complete the said course sought approval to extend his release without pay until the end of semester I, 1998. The Permanent Secretary for Education and Technology, by his letter of 22nd May 1998 approved the release in accordance with General Order 717 (b)(iii) for the duration of one Semester (I) 1998 and the Respondent was requested to report to IST division at the end of studies in June,1998. The Respondent was informed by this letter that he will be financing his studies from his personal funds. The Letter further stated that the Ministry of Education and Technology will be absolved from any financial commitment incurred by Respondent during his study.
   
4. The Respondent's study leave without pay was from 29th of July 1997 to the 15th of July 1998. He has obtained sick leave from the 16th of July 1998 to 30th of August 1998 and reported to work on 31st August 1998 to A D Patel Memorial School, Ba. Thereafter he was transferred from AD Patel Memorial School to Ba Sangam High School on his existing terms and conditions of service with effect from 28th January 1999.
   
5. The Respondent instituted legal proceedings against the 1st and 2nd Appellants in the High Court of Fiji at Lautoka claiming the following reliefs:
   

"(a) Loss and damages for the unlawful reversal of the Respondent's salary for the month of July 1997 and the delay of seven months for the reimbursement of the said salary.

(b) Loss and damages due to the forwarding of the insurance payments to the wrong insurance companies and the delay on reimbursing the Respondent with the wrongful deduction.

(c) The loss of two month salary as a result of the 1st Appellant's failure to pay his salary during the period the Respondent was on sick leave.

(d) Loss and damages due to the failure to pay the correct salary per annum more than one year.

(e) Loss of the reimbursement of all his expenses incurred by him in completing his study programme.

(f) Loss of interest on the sum that were reimbursed after a period of time".

6. The Learned Trial Judge Mr Justice Finnigan in his judgment has up held the following claims and awarded special and general damages:
   

"a) For reversal of wages; a sum of $877.35 being consequential damages plus interest on the sum of $733.23 for reversed wages for seven months at the rate of 12 per centum per annum and an overall special damages of $1,142.28 with general damages $9000.

2. For wrong deduction from wages: a sum of $13,687.41.This sum has been included in the general damages $15,000.
   

100. The court has not granted any relief claimed by the Respondent for salary during the period the Respondent was on sick leave.
     

4. For under paid wages for completion of degree, a sum of $943.76 plus interest thereon from 9th September 1999 to date, plus interest on the sum of $1,024.24 for 1 year. The total special damages $1,198.62.
   
5. The court has not granted any relief in relation to the expenses incurred by him in completing his studies".
   

7. The Appellants challenged the aforesaid judgment in this appeal. The grounds of appeal are contained in the Appellants' notice of Appeal dated 13th of October 2009. They may be summarised as follows:
   

"1) That the Learned Judge erred in fact and in law in holding that the plaintiff is entitled to special and general damages because the Ministry delayed the rectification of his salary. In particular there was no evidence to suggest or support the findings that the plaintiff lost due to the said delays and there is no evidence to support general damages.

2. That the Learned Judge erred in law and in fact in awarding general damages for wrongful deductions and payments from the wages.
   
3. That the Learned Judge erred in fact and law in holding that the Respondent is entitled to special damages for the Appellants' delay in paying the Respondent at graduate scale".
   

Grounds of Appeal 1 and 3

8. The Appellants argue that the Learned Judge erred in fact and in law in holding that the plaintiff is entitled to special and general damages for the delay in paying the salary for the two fortnights in July 1997 and for the delay in rectifying the salary for the completion of the degree in August 1998.
   
9. The Appellants submitted that the award of damages on the basis of a breach of contract is erroneous as there cannot be a breach of contract in view of the fact that the Appellants have not entered into a contract with the Respondent. The Appellants' position is that a remedy under private law cannot be sought under these circumstances. If at all the Respondent should have challenged the decisions of the Appellants by way of judicial review.
   
10. The Appellants in supported of their contention relied on the decisions of the Court of Appeal of Fiji in Manunivavalagi Dalituicama Korovulavula v. Public Service Commission [1994] FJCA 44; ABU 0061994 and Ram Prasad v. The Attorney General [1999] FJCA52; Abu 005897s. In Korovulavula v. Public Service Commission the appointment of the Appellant was made by the Minister exercising the power given to him in s.5 (1) of the Traffic Act. The court held:
    

"in our view this was a statutory public appointment and the minister's power to terminate it is reviewable by the High Court".

11. In Ram Prasad v. The Attorney General the court held:
    

"In the present case the terms of the Appellant's employment, including the power of dismissal, were governed by the Regulations to which we have referred. It was the existence of those regulatory provisions which underpinned the element of public law that attracted the remedies of administrative law."

As the Appellant had been appointed under a statutory provision, public law applied to his appointment, and any claim resulting from his dismissal can only be brought by an application for judicial review. The Court in its judgment referred to the observation of Purchas LJ in ex parte Walsh [1984] 3 All ER 452 where he said at 439:

"There is a danger of confusing the rights with their appropriate remedies enjoyed by an employee arising out of a private contract of employment with the performance by a public body of the duties imposed on it as a part of the statutory terms under which it exercises its powers. The former are appropriate for private remedies inter partes whether by action in the High Court or in the appropriate statutory tribunal, while the latter are subject to the supervisory powers of the court under Ord.53."

12. In Palani v. Fiji Electricity Authority [1997] FJCA 21; ABU0028.96 the court held that judicial review is not applicable in a strict master and servant relationship based on private contract of employment as there is no element of public law involved. The court arrived at this finding after discussing the principle enumerated in R v. BBC ex parte Lavelle (1983) 1 All E.R. 241 and R v. East Berkshire Health Authority, ex parte Walsh [1984] EWCA Civ 6; (1984) 3 All E.R. 425, the Court observed whether a dismissal from employment by a public authority was subject to public law remedies depend on whether there were special statutory restrictions on dismissal which underpinned the employee's position and not on the fact of employment by a public authority per se or the employee's seniority or the interest of the public in the functioning of the authority.
    
13. In Permanent Secretary For Education v. Savita Devi Nair Civil Appeal NO.ABU0061 of 2008 Justice William Marshall, JA observed:
    

"In considering whether the decision to transfer Mrs Savita Nair is amenable to judicial review, this Court need only refer to two English decisions. The first of these is R v. East Berkshire Health Authority Ex Parte Walsh [1984] EWCA Civ 6; [1985] 1 QB 152. The second is Regina (Tucker) v. Director General of the National Crime Squad [2003] 1 CR 599. In these cases there are references to many other cases. It may be necessary to refer to these individually".

The court after dealing with these cases in detail arrived at the following conclusion:

"It is clear from East Berkshire v. Walsh that where employees of a public body have by statute a code of remedies governing dismissal from the employment they do not have the option of judicial review. In respect of Tucker I find that the principles set out there, are wholly applicable to the case of Mrs Savita Nair. Like the decision to terminate the secondment of Mr Tucker, the decision to transfer Mrs. Savita Nair was managerial and operational. As in Mr. Tucker's case, Mrs. Savita Nair must have known that under Public Service Regulations she could be transferred on Notice whether she desired such transfer or objected to it. As in Tucker's case, the transfer involved no element of disciplinary proceedings or wrongful dismissal and transfer was not a penalty or a punishment".

The court concluded that managerial and operational decisions are not amenable to judicial review.

14. Administrative Law by H.W.R.Wade & C.F.Forsyth (Ninth Edition) page 637 states as follows:
    

"It has since been made clear once again those contractual rights are outside the scope of certiorari altogether, so that this remedy was not available to a Post Office employee alleging that he was dismissed in breach of his terms of employment. But if the dismissal was in breach of statutory restrictions certiorari will lie to quash it."

15. It has been held in R v. British Coal Corporation ex p. Vardy [1993] 1 CR 720 that if there is a statutory underpinning to the appointment the writ of certiorari will lie. Glidewell L.J. Held:
    

"Mr. Dehn argues, correctly, that if the proprietors of a large industrial concern decided to close a plant and make redundant hundreds or thousands of employees, this will be a matter which not only affects those employees and their families but is of public concern to other people. Nevertheless, the employees have only their contractual rights, and those under Section 188 of the Act of 1992. They have none in public law.

Whilst I accept, of course, that is correct; I do not accept that British Coal is to be equated to other major employers who are in private owner ship. From the time when the coalmines first came into national ownership, Section 46 of the Coal Industry National Act 1946 has provided a regime for consultation on the matters to which it refers, including colliery closures and resulting redundancies, which is unique to the coalmining industry. In other words, the statute places express duties on British Coal which are not placed on other employers. To use Sir John Donaldson M.R's phrase in Reg v. East Berkshire Health Authority, Ex parte Walsh [1984] I.C.R.743, 753, Parliament has underpinned the position of coalminers by directly restricting the freedom of British Coal to dismiss them. The modified colliery review procedure, to use Woolf L.J.'s formulation in McClaren v. Home Office [1990] I.C.R 824, is a mechanism and the independent review body is a body to which the employee or the employer is entitled or required to refer disputes affecting their relationship.

If, therefore, British Coal have not complied with their obligations under Section 46 of the Act of 1946, and the machinery established under that section, their decision not to do so is, in my judgement, a matter of public law and susceptible to judicial review."

16. The principles invoking public law remedy in relation to employment are well settled. An employee of a public authority is entitled to invoke a public law remedy in relation to his employment depends on whether there were special statutory restrictions governing the employment or whether there are Regulations or statutory underpinning to the conditions of employment. If not the relationship between the employee and the public authority is only a master and servant relationship and it is governed by the respective contract of employment. In this instant case the Respondent's employment is not made under any statutory provision or governed by any regulation. He was appointed as a Primary Teacher by the Ministry of Education with the concurrence of the Public Service Commission in terms of the letter of appointment issued to him. The Respondent has entered into a contract of employment in terms of the letter of appointment. Any breach of the terms and conditions stipulated in the letter of appointment would fall under realm of private law. Hence I reject the submission of the Appellants that the remedy that is available to the Respondent in the given circumstances is by way of judicial review.
    

Delay in paying the salary for July 1997

17. The Petitioner was appointed as a Teacher Primary with effect from 22nd of January 1990 by the letter of appointment issued by the Secretary to the Public Service Commission. The terms and conditions of this appointment are stipulated in the letter of appointment. One of the terms is that he would receive salary at the rate of $6631.00 per annum in the scale $6631 - $11.885 the merit increase payment of salary is 1st of February. This letter of appointment creates a contractual relationship between the Appellants and the Respondent in writing. The said letter of appointment has not specified the mode of payment and the time of payment of the salary. But the salary was paid every fortnight and it is admitted by parties to the action that the salary payments of the Respondent for two successive pay periods 2nd July to 15th July and 16th July to 28th July 1997 were reversed and the salary for the month of July 1997 was reimbursed on the 28th of February 1998.
    
18. Before considering the consequence of the reversal of the salary of the Respondent for the month of July 1997 one has to look in to the background for the reversal. On an application of the Respondent the Permanent Secretary for Education by his letter of 4th August 1997 addressed to the Secretary Public Service Commission sought retrospective approval for Mr Prakash (Respondent) to be released on study leave without pay, with effect from 29th July 1997, for one semester (semester II,1997) in order to complete his desired programme. This letter was replied by the Public Service Commission on 11th August 1997 where approval was granted in retrospective to Mr Amrit Prakash and he was released on study leave without pay for one semester (Semester II) 1997. The study leave without pay was further extended on the request of the Respondent for another duration of one semester, with effect from 19th January 1998 until the end of Semester I, 1998.
    
19. The Appellants in their statement of defence have taken up the position that the said reversal of the salary was carried out because the Plaintiff was being paid for a period for which he was understood to be on study leave without pay.
    
20. Mr A D Matairavula, Principal, Administrative officer Ministry of Education in his evidence said:
    

"Study Leave without pay means teacher is approved to pursue but without pay. Have off pay roll but still on civil list establishment. His 1-28 July salary was reversed this had refrains, Ministry overlooked his COLA identified overpayment then advised withdraw his salary and pay again proper amount".

In cross-examination he said "Have to withdraw the money from the Bank and he has to repay us".

21. The evidence led on behalf of the Appellants show that the retrospective approval of the study leave without pay effective from 29th of July 1997 made to believe that the Plaintiff was wrongly paid for July 1997, a period for which he was understood to be on study leave without pay and as overpayment the salary of the Respondent reversed.
    
22. In this background the reversal of the salary of the Respondent for July 1997 cannot be considered as arbitrary. But the Learned Judge in his Judgment has observed:
    

"the facts shows a draconian withdrawal by the First Defendant of the Plaintiff's contractually earned salary for July 1997. They showed that the first defendant held this money for a period over seven months. He could not explain why it took so long. To an objective observer it is not normal and is a serious interference with the plaintiff's contractual entitlement."

23. In fact the delay in the payment of the July salary was explained. As the Respondent was on study leave without pay he was off pay roll and the salary adjustment and payment of the withdrawn salary has to be processed manually and forwarded to the Finance Ministry for payment. The Learned Trial Judge observed that this explanation is not sufficient to justify a delay of seven months.
    
24. It is common ground that the Respondent's salary for July 1997 was paid in February 1998 therefore the contracted sum for the month of July 1997 was paid as per the agreed terms in the letter of appointment. But it was not paid on time that it ought to have been paid.
    
25. The Learned Judge in his judgment identified certain consequences that he considered has arisen by the failure to pay the salary at the expected time. They are namely:
    
    1. Non payment of the Plaintiff's mortgage payments to Home Finance Company and accumulation of arrears.
    2. Non payment of union dues
    3. Non payment of PAYE and FNPF contributions
    4. Loss of his investment in two life policies with Colonial and reduction in value of the other four
    5. The trouble taken by the Plaintiff to make manual payment of instalments.
    6. Significant distress arose from the frustration and extra work he had to do and no reply and actions for his request and complains.
       
26. The Learned Judge has identified as one of the consequences in delay in rectifying the reversal of the salary was loss of the Respondents investment in two life policies with Colonial and reduction in value in another four. This finding is erroneous as the policy 7346201 lapsed on 4th October 1996 and Policy 7347199 lapsed on 22nd August 1997. The first mentioned policy lapsed before the reversal of the salary occurred. The second mentioned policy lapsed due to the failure to make the payments for August to December 1997, during this period the Respondent was on study leave without pay. In a letter from Colonial to Messrs Iqbal Khan & Associates, Colonial has given a detailed list of all policies of the Respondent and the period during which premium not received. There is not a single default mentioned in the month of July 1997 in respect of any of the policies of the Respondent.
    
27. None of the payments or matters mentioned above form part of the contract of employment between the Appellants and the Respondent. The payments that the Respondent has agreed to make to third parties are the responsibility of the Respondent. Certain payments are facilitated by the Appellants on the request of the Respondent. Accordingly on the request of the Respondent specific sums are deducted at source from the salary of the Respondent and forwarded as per instructions. This can only be done if the salary is paid to the Respondent in a particular month. If the salary is not paid for same reason or other these deductions cannot be made and the Respondent has to make his own arrangements to make these payments. For instance the Respondent was in no pay leave from 29th July 1997 to August 1998 the Respondent cannot expect the Appellants to pay the above payments to the said parties.
    
28. The Learned Judge erred in principle in coming to the conclusion that there is a contractual obligation on the Appellant when the Respondent requests to make the aforesaid payment. Even if one attribute negligence on the part of Appellants for the failure to pay the July 1997 salary in time, the Appellants cannot be held liable in tort as the consequences mentioned above cannot be foreseen by the Appellants. It is expected that the Respondent would look after his payments to third party in the absence of the payment of his salary. The Learned Trial Judge in his judgment has correctly rejected the claim in tort as it is unsupported.
    
29. The salary for the month of July was paid but the said payment was delayed for seven months for the reasons stated by the Appellant. The Privy Council in Koufos v. C. Czarnikow Ltd, (1969) 1 AC 350 held that the sole rule as to the measure of damages of any kind of breach of any kind of contract was that the contract breaker is responsible for result of damage which he ought to have foreseen or contemplated when the contract was made or being not likely, or liable to result from his breach, or of which there was a serious possibility or real danger. In this case when the contract of employment was entered by issuing and accepting the letter of appointment there was no obligation on the part of the employer the Ministry of Education to forward any remittance to third parties. Therefore the employer could not have foreseen or contemplated the consequences the Respondent claim due to the delayed payment of the July 1997 salary when the contract was made. Hence the Appellants are not responsible for any damage that has been caused by the delayed payment of salary.
    
30. In Halsbury's Laws of England, (4th edition Vol.12) at Paragraphs 1207-1209, the learned Author says: " an appeal from award of Judge alone is by way of re-hearing and Court of Appeal may reduce or increase damages awarded if satisfied judge acted upon a wrong principle of law or where the award made is a wholly a wrong estimate". As the award of general damages of $ 9,000.00 was made on wrong principle. I propose that this award be set aside.
    
31. There is a seven month delay in the payment of the July 1997 salary of the Respondent. Hence I uphold the finding of the Learned Judge that the Respondent is entitled for interest. I propose an award of interest calculated at 6% per annum on his July 1997 salary for seven months as special damages. The learned judge below at paragraph 12 found the sum on which interest is to be paid to be $733.23.

Under paid wages for completion of Degree

32. The University of the South Pacific by its letter of 9th July 1998 has informed the Respondent that the degree will be awarded to him on 14th August, if you have already applied for graduation on that date. Other candidates will receive their award at the graduation ceremony on 11th December.
    
33. There is no evidence to show when the degree was awarded to him whether in August or in December and there is no evidence to show when he handed over the degree certificate to the relevant authorities to verify the certificate and to regrade his position from Primary Teacher to Secondary Teacher and to adjust his salary accordingly. The only evidence before court is the letter of the Respondent to the Permanent Secretary of Education dated 11th March 1999 informing him that the teacher's certificate was forwarded through Ba Education Office and requesting him to adjust the salary without delay.
    
34. The letter issued to the Respondent posting him from A D Patel Memorial School to Ba Sangam High School with effect from 28th January 1999 specifically informed him that his employment is based on the existing terms and condition of service. Unless and until the Respondent graduate certificate is accepted and an amendment is made to the contract of employment regrading the Respondent to Secondary Teacher and the payment of the corresponding salary the parties to the contract are bound by the existing terms and conditions of the contract.
    
35. The Learned Judge in his judgment has acknowledged the need for care in authorising claims to higher qualifications, to ensure that they are genuine. He observed that it does take time, but within the urban area of Suva, surely a week or two should suffice. He observed that DW1 had no evidence about the actual process in the plaintiff's case. He could not explain the delay of 12 months.
    
36. The upgraded salary was paid to the Respondent on the 9th of September 1999 at that time arrears of $1,024.24 was also paid to the Respondent. It is common ground that the Respondent was paid a graduate scale of $13,850.00 from 31st August 1998 and the starting salary for graduates with teacher training at the material time was $ 15,818.00 per annum. As such there is a short fall $943.76 in the payment of arrears. The Learned Judge correctly found that the sum of $ 943.76 has been proved as special damages.
    
37. Eventhough the salary of the Respondent is adjusted to the relevant scale on 9th September 1999 and backdated to the date of the qualification acquired i.e. to 31st August 1998, the contractual obligation to pay the adjusted salary arises only from the date of the adjustment of the salary after the certificates are verified and accepted correct. In these circumstances the Respondent is entitled to the short fall of arrears $943.78 and not for the interest on arrears from 31st August 1998 to 9th September 1999.
    

Ground of Appeal 2

38. That the Learned Judge erred in law and in fact in awarding general damages for wrongful deduction and payment from the wages.
    
39. The learned Judge in his judgment observed that the Plaintiff had authorized direct deduction of various insurance premiums from his wages but the 1st Defendant did not make the expected payments. One insurer, Blue Shield ceased to operate and the first Defendant automatically switched to the payments to Marsh & McLennan. In another instance, while the first Defendant was actually making payments to Home Finance Company Limited the Plaintiff refinanced with a different lender but the 1st Defendant continued to make the mortgage payments to home Finance Company Limited. In another instance the Plaintiff had number of policies with the Colonial, which went into arrears and/or lapsed due to missed premium payments.
40. The Appellants have explained their actions in relation to the above transaction in defence but the question here is whether in the given circumstances the Learned Judge could award damages to the Respondent. As I have given above the terms and conditions of the contract of employment between the Respondent and the Appellants. None of the deductions complained of by the Respondents form part of the contract of employment. The deductions are made on the request of the Respondents from his salary or wages and they are sent to the persons to whom the Respondent requested to send. If the Respondent is not satisfied with the way in which the Appellants are complying with his request he is free to make other arrangements to make these payments. There is no requirement that the said payments have to be made by the Employer.
    
41. The Learned Judge has held:
    

"I find without difficulty that these erroneous payments and the delay in rectifying them were unreasonable. The consequences for the Plaintiff were once again significant distress and a great deal of effort and frustration in trying to rectify things both with the insurance companies and with the Ministry".

42. The award of damages under this head includes damages for distress and frustration. Normally no damages in contract will be awarded for injury to the Plaintiff's feelings or for his mental distress or annoyance. The exception has been extended to a contract whose purpose is to provide peace of mind or freedom from distress and to a contract of employment where the termination of employment had caused humiliation to the employee.
    
43. In Baltic Shipping Co v. Dillon [1993] HCA 4; [1992-93] 176 CLR 344 at p 365 Mason CJ said:
    

"For that reason, if for no other, it is preferable to adopt the rule that damages for disappointment and distress are not recoverable unless they proceed from physical inconvenience caused by the breach or unless the contract is one the object of which is to provide enjoyment, relaxation or freedom from molestation. In cases falling within the last-mentioned category, the damages flow directly from the breach of contract, the promise being to provide enjoyment, relaxation freedom from molestation. In these situations the court is not driven to invoke notions such a 'reasonably foreseeable' or 'within the reasonable contemplation of the parties' because the breach results in a failure to provide the promised benefit".

In Central Manufacturing Company Ltd v. Kant [2003] FJSC 5 the Supreme Court of Fiji held:

"In our view, the Court of Appeal correctly determined that Addis v. Gramophone Company Limited [1909] AC 488, no longer represents good law. The modern trend of authority, apart from the decision of the House of Lords in Johnson v. Unisys Ltd [2003] 1 AC 518, (which is explicable on other grounds) is entirely against the somewhat artificial approach taken by Lord Loreburn. Even among the majority Law Lords in Johnson there was little enthusiasm for the principle. Addis only serves because, in practice, it did not preclude recovery of damages for distress and humiliation arising from the manner of dismissal through the industrial tribunals. Although Addis continues to be applied in Australia, the portents for its survival in that country are not good.

This Court is required to declare the common law as it applies in Fiji. In our view, Addis has no place in a modern system of employment law. It should be considered to be history."

The court further held:

"in our view the Respondent was entitled to some compensation for the distress and humiliation that was needlessly inflicted upon him by his employer in the manner in which he was dismissed".

44. In this instant case as I have observed above the Appellants would never had foreseen the consequences complained by the Respondent in relation to the alleged wrongful deduction and payments made to wrong parties as this arrangements have not formed part of the contract. It has been held in C.Czarnikow Ltd v. Koufos [1969] 1 AC 359:
    

"It is a vexed question whether the test for remoteness of damage is the same in contract and in tort. The basis of remoteness in tort is foreseeability, and foreseeability is the sine qua non for the recovery of damages in contract – the circumstances in question must have been foreseeable at the date the contract was made and in fact it must have been foreseen by the parties to it."

45. As the deductions complained of had not formed part of the contract of employment, the consequences complained of would not have been foreseen at the time the contract was made. The failure to make the payments to different parties as instructed would not amount to a breach of contract to attract damages. For these reasons I propose that the award of $15,000.00 general damages to the Respondent be set aside.
    

Grounds of cross appeal by the Respondent

46. The Respondent in his notice of Cross Appeal 14th October 2009 raised four grounds but at the stage of argument decided to pursue grounds 1 and 2 and abandoned grounds 3 and 4.
    

Respondent's Grounds of Appeal are as follows:

"1. The Learned Judge erred in law and/or in fact in not awarding exemplary damages when he found that the consequences of the Appellant's failure to pay the Respondent's salary was draconian and due to its own mistake and the delay in reimbursing the Respondent unreasonable and the same led to default of his mortgage payments, non payment of PAYE and FNPF contributions and had other serious consequences for the Respondent.

2. The Learned Judge erred in law and/or in fact in not awarding special damages for or adequate general damages for the loss of two life Policies and the Appellant's breach of contract to pay salary and other benefits in a timely manner and failed to adequately assess the impact the careless and/or reckless disregard of the Appellant's conduct on the Respondent."
   
47. The Respondent in his cross appeal is seeking exemplary damages. Exemplary damages can apply only where the conduct of the Defendant merits punishment. The House of Lords in Rookes v. Barnard [1964] UKHL 1; [1964] AC 1129 limited the scope of the exemplary damages in contract to the following categories:
    
    1. Where exemplary damages are authorised by statute.
       
    2. Where the Defendant's conduct has been calculated by him to make a profit for themselves that may well exceed the compensation payable to the plaintiff.
       
    3. Where the Plaintiff had suffered from oppressive, arbitrary or unconstitutional action by servants of the government.
       
48. In paragraph 20 to 30 I have dealt with the issues raised in the cross appeal and I have found that the action of the Appellants are not arbitrary. As the grounds of cross appeal has no merit I would dismiss the cross appeal.
    

Nimal Wikramanayake, JA

49. I also agree with the judgment, the reasons and the proposed orders of Sriskandarajah, JA
    

William Marshall, JA

ORDERS OF THE COURT

50. The Orders of this Court are:
    

(1) That the appeal of the Ministry and the Permanent Secretary for the Ministry for Education be allowed in part.

(2) That the orders of Mr Justice Finnigan in the Court below be vacated.

(3) That in respect of the Ministry of Education's breach of contract in failing to pay Amrit Prakash (the Respondent) salary for two periods in July 1997 in the sum of $733.23 and failing to pay this sum to Amrit Prakash until 28th February 1998, Amrit Prakash be paid damages by way of interest at the rate of 6% per annum on the sum of $733.23 for a period of 7 months.

(4) That by reason of the Ministry of Education's breach of contract in failing to pay Amrit Prakash $943.76 in arrears in respect of his entitlement by reason of his becoming a graduate teacher with teacher training as from 31st August 1998 the Ministry of Education do pay Amrit Prakash damages in the sum of $943.76

(5) That all other claims of Amrit Prakash in his Statement of Claim dated 9th February 2001 including claims for general damages and/or exemplary damages be dismissed.

(6) That the Plaintiff in the Court below (Respondent in the Court of Appeal) Amrit Prakash do pay to the Defendants/Appellants three quarters of their costs in the Court below assessed in the sum of $1000.

(7) That the Respondent in the Court of Appeal and Plaintiff in the Court below, Amrit Prakash do pay the Appellants/Defendants three quarters of their costs in the Court of Appeal assessed at $1000.

(8) That interest at 6% per annum be paid on the damages awarded to Amrit Prakash from 9th February 2001 until the date of this order being 25th November 2011.

.........................................................
Hon. Justice William Marshall
Justice of Appeal

........................................................
Hon. Justice Sriskandarajah
Justice of Appeal

........................................................
Hon. Justice Nimal Wikramanayake
Justice of Appeal