Narayan v Diners Club (NZ) Ltd [1995] FJHC 167; Hbc0099j.92s (22 November 1995)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 99 OF 1992

Between:

PREM NARAYAN
s/o Ragnundan
Plaintiff

- and -

DINERS CLUB (NZ) LTD
Defendant

Mr. S.P. Sharma for the Plaintiff
Mr. B. Sweetman for the Defendant

JUDGMENT

By writ of Summons dated 24 March 1992 the Plaintiff (P) brings this action against the defendant (D) to recover damages for alleged wrongful dismissal.

I need not recount all the details of the case; it will be sufficient if I gave a general outline of the facts.

The Plaintiff was employed by D (a company) under an agreement in writing dated 30 July 1990 although not signed by P as its "Manager, Fiji Diners Club (NZ) Limited" on a salary of F$28,000 and F$0.50 per Km vehicle allowance together with medical and a free Diners Club personal card to the limit of $84.

The Plaintiff alleges that in breach of the said agreement, D terminated P's employment by effectively dismissing him by giving written notice to him dated 24 October 1991.

The Plaintiff alleges that the termination was wrongful and the reasons given for it are 'false'. By reason whereof he says he has been deprived of the salary he would otherwise have earned during the continuance of the said agreement and he has thereby suffered loss and damage.

The Plaintiff claims: (1) damages for wrongful dismissal, (2) an order for payment by D to P of the amount found to be due to him on the taking of any account in respect of remuneration other than salary or alternatively, damages in lieu of such termination, (3) costs and (4) such further or other relief as this Court may seem just.

By its Defence, whilst admitting paragraphs 1, 2 & 3 (partly) of the Plaintiff's Statement of Claim D admitted the termination of employment by written notice dated 24 October 1991, it denies the other allegations in paragraphs 4, 5 and 6.

There were only two witnesses in this case, namely the Plaintiff himself and Miss Judith Kavanagh (JK) for the Defendant.

The Issues

The issues for the Court's determination are:

(a) Whether D's termination of P's appointment with D on 24 October 1991 was wrongful; and

(b) If so, whether P is entitled to any damages for wrongful dismissal and if so the amount of such damages.

The Plaintiff's evidence

The Plaintiff applied for a position advertised by D in the Fiji Times newspaper through the international recruitment consultants, Rishworth & Co., (RC) (exhibit I), by letter (exhibit 2) which was addressed to Miss Charmayne Goldfinch (Miss CG).

The Plaintiff who was a lending Manager with Westpac for about 25 years outlined to Court the circumstances which led to his resignation from the bank on 17 April 1990. He instituted an action against the Bank for wrongful dismissal and while this action was pending he applied to RC for the advertised post.

He tendered to Court copy of his Curriculum Vitae (CV) (Exhibit 2) which he says he sent to Miss CG with his application. Miss CG required further information which P supplied as per Exhibit 3 dated 7.6.90. On 14 July 1990 he was interviewed by Ms Judith Kavanagh (JK) at Sheraton Hotel, Nadi. At the time of interview she had the C.V. (which he sent to Miss CG) in front of her.

Plaintiff's Submissions

The learned counsel for the Plaintiff submits that "the issue for this Court is whether P failed to disclose to his prospective employer the fact that he had been dishonest in failing to disclose his termination from Westpac".

He said that no one from RC was called "to explain the difference in the curriculum vitae submitted to Miss J. Kavanagh and which she allegedly used and that submitted by the Plaintiff". He says that the curriculum vitae sent to RC were "as submitted in evidence and they are exhibits" but it is argued by D that they were "not known in the form so submitted because they had never seen them". Mr. Sharma submits that RC obtained all necessary details and his application for employment from P and he was thereafter interviewed by JK.

He says that no evidence was adduced by calling someone from RC to prove that P never sent the curriculum vitae in the form of Exhibits 2 and 3. The Plaintiff submits that he sent the said exhibits and "they made the appropriate disclosure".

On the question of P not signing the letter of appointment, counsel states that he has explained his reasons for not doing so. In this regard, he says, P's evidence is to be preferred to that of Miss JK.

The Defendant's Defence and Submission

It agrees that the issues before the Court involve (a) determination on whether there was a disclosure to J.K. that he was no longer employed by Westpac Banking Corporation and the circumstances surrounding his resignation and/or termination by Westpac; and (b) the events of 24 October 1991 immediately leading up to the P's dismissal and in particular the matters discussed between the Plaintiff and JK on that date.

The D's submission states that it is "inconceivable that Rishworth prepared a curriculum vitae other than from material supplied by the Plaintiff himself and accordingly in view of the difference between the Curriculum Vitae presented by the Plaintiff in evidence (exhibits 1 and 2) and the Curriculum Vitae presented by Rishworth to Miss Kavanagh (exhibit 8), the question arises of whether the Exhibits 2 and 3 Curriculum Vitae are copies of the documents which the Plaintiff sent to Rishworth."

The D argues that the document prepared by Rishworths for the Defendant is that the Plaintiff's Curriculum Vitae did not disclose the fact that he was no longer employed by Westpac.

The D further submits that by his conduct the Plaintiff clearly accepted the appointment as set out in the Letter of Appointment. There were no variation of any of its terms. It says that it is true that the Defendant raised no objection to the fact that the Plaintiff had not signed his letter of Appointment which may be considered an oversight, but this does not in any way detract from the binding nature of the terms and conditions set out in his Letter of Appointment.

The Defendant further submits that the dilemma facing the plaintiff is that if he is going to contend that he was not employed on the conditions set out in this letter of appointment then he has no other conditions of employment which he can rely upon. The Plaintiff it says, accepted the post and all the terms of employment set out in the letter of 30th July and the mere fact that he did not sign the letter agreeing that he understood and accepted the terms and conditions does not in any way prevent the contract of employment coming into force as a result of his conduct in taking up the offer.

The Defendant says that the contract of employment was in these circumstances terminable by one calendar month's notice or the payment of equivalent salary.

The Defendant maintains that JK had no reason to believe at any time after the interview until October 1991 that the Plaintiff was effectively dismissed by Westpac. She upon receipt of information flew to Suva on 23 October 1991 and confronted the Plaintiff with the proposition that he had not been honest with her concerning his employment with Westpac and that accordingly the "trust relationship" had broken down.

The Defendant's case is that there was no disclosure by the Plaintiff to the Defendant at the interview or at any subsequent time prior to date of his dismissal that he had effectively been dismissed by Westpac.

It is submitted by the Defendant that there was good cause to dismiss the Plaintiff for being dishonest. He was paid one month's salary in lieu of notice in terms of his contract of employment and is not entitled to any more.

Determination of the Issues

In the circumstances outlined above the Plaintiff says that he was wrongfully dismissed.

I have carefully analysed all the evidence adduced before me. Having seen and heard the two witnesses (one from each side) I am convinced that the Plaintiff has been truthful in regard to essential matters which have a bearing on the issues before me for my determination. On a balance of probabilities I prefer to accept the evidence of the Plaintiff to that of JK on the issue of alleged non-disclosure.

The Plaintiff was, after he had applied for the post, interviewed at length and minutely by JK at Sheraton Hotel when she had in her possession the Plaintiff's CV. I am satisfied and I find as fact that it was the C.V. prepared by RC from exhibits 2 and 3 which P sent to RC which was before her and that was all that was required to be disclosed as far as his employment with Westpac was concerned. If there was any difference between the CV submitted to JK and that submitted by P, it was for RC to clarify the situation. This was not done by adducing cogent evidence in that regard. I accept and find as fact that the CV sent to RC were as submitted in evidence and exhibited. This answers the query regarding the "non-disclosure" aspect of the matter.

I find as fact that after interview the Plaintiff was properly appointed to the post. Although he had not signed the 'appointment letter' the Plaintiff was interviewed and employed by D and was paid the salary. He has given reasons for not signing and he continued in employment without being required to sign the letter nor could JK explain why P's signature was not obtained. However, the fact remains and I so find as fact subject to what I say on the aspect of notice of termination hereafter that the Plaintiff was employed by the Defendant on the terms and conditions as set out in the said Letter of Appointment.

The Plaintiff was dismissed from employment under the "Termination" clause in exhibit 15 which reads:

"Termination: Should you decide to resign from your position you will do so in writing to the *Manager-Service Establishments Division giving one calendar month notice. Should the company wish to terminate your employment at any stage, likewise one calendar month or the equivalent salary will be paid. Diners Club does however, reserve the right to amend these conditions should such a change be warranted by them"

The reasons given in the said termination letter of 24 October 1991 are as follows:-

When Diners Club interviewed you for the position of Manager-Fiji office you verbally stated that the reason you were leaving Westpac was that you were keen to have a sole management position. In no way did you indicate that you were asked to leave.

Prem, there has also been instances of documentation for cash advances to Diners Club members being altered in the Suva Office.

The above and other relevant factors lead us to believe that the trust relationship between Diners Club New Zealand Ltd and yourself has completely broken down and nothing in the meeting held between you and myself this morning has reinstated that trust relationship.

Upon a careful consideration of all the evidence and the exhibits tendered in this case, I find without going into details that there was no justification for the Plaintiff's dismissal in all the circumstances of this case for the two reasons given by the Defendant and the manner in which he was dismissed.

Subject to what I say hereafter I agree with Mr. Sweetman that any contract of employment is terminable on reasonable notice if the contract does not specify a period of notice for as stated in AFRICAN ASSOCIATION LIMITED AND ALLEN [1910] UKLawRpKQB 8; (1910 1 K.B. 396) at 399 where LORD ALVERSTONE CJ said that:

"the general principle applicable to contracts of service is that, in the absence of misconduct or of grounds specified in the contract, the engagement can only be terminated after reasonable notice."

In the case before me the Plaintiff was summarily dismissed. In ALLEN (supra) there was a similar clause to the termination clause here to the effect that the clause conferred upon the employers the right to dismiss their servant summarily. But commenting on this LORD ALVERSTONE CJ (supra at 399-400) said that under that clause.

"The employers may in their discretion terminate the engagement at any time, but in my opinion the proper construction to place upon the language of clause 2, particularly when one bears in mind that the agreement relates to service abroad, is that it means that the discretionary power to terminate the engagement at any time can only be exercised after reasonable notice of their intention has been given by the employers."

(underlining mine for emphasis).

For the purposes of the case before me I agree and adopt the abovequoted passage. Similarly the following passages from the judgment of BRAY J in ALLEN (supra) at page 400 is also apt and this I also accept on the question of the interpretation of the termination clause on the agreement of service:

"It must, I think, be taken to be the law that an agreement of employment of this nature confers no right on the employer, in the absence of misconduct, to terminate the engagement without reasonable notice, unless the agreement contains clear words indicating a contrary intention. This contract provides for an engagement for two years; but the employers desired to have an opportunity of terminating it earlier if they so wished, and, therefore, clause 2 provides that "the employers may at any time hereafter, at their absolute discretion, terminate this engagement at any earlier date than that specified." That seems to me to give an option in favour of the employers, which option can, however, only be exercised by them on the usual and implied term of giving reasonable notice of their intention to exercise it. But the matter does not rest there. The termination of an engagement without notice is practically the same thing as a summary dismissal, and we find in clause 8 of the agreement a power to summarily dismiss the servant for certain specified reasons. The inference which I draw from that is that the determination of the engagement at any time under clause 2 is not the same thing as the summary dismissal under clause 8. I therefore come to the conclusion that in the circumstances of this case reasonable notice was required."

(underlining mine for emphasis)

Of the two reasons given for dismissal, the first one was that when interviewed the Plaintiff did not disclose that he "was asked to leave" Westpac.

When viewed in the light of all the circumstances surrounding this case particularly bearing in mind the fact that there was a proper application with C.V., followed by a thorough interview by a senior officer of the D company and the fact that he was employed and paid salary and there being no adverse comment on the performance of his duties, then this is far from being a case where the alleged non-disclosure, but I have held otherwise, is of little moment to justify the drastic action of summary dismissal. In GILL v COLONIAL MUTUAL LIFE ASSURANCE SOCIETY LIMITED (1912 V.L.R. p. 146) which was a case of claim for damages for wrongful dismissal, on the ground, inter alia, of making false statements it was held (headnote):

"A master is not, in the absence of express provision in the contract of employment justified in summarily discharging a servant on the ground that he has been guilty of dishonesty, before entering the master's employment."

(underlining mine for emphasis)

In the case before me it is alleged that the Plaintiff has been dishonest in not disclosing correctly his status regarding his employment with Westpac Bank. In GILL (supra) and so in this case the short point for decision is whether the Bank was justified in dismissing summarily the Plaintiff who has been guilty of "dishonesty" before entering on his employment but I have found as fact that he was not "dishonest" in this regard.

In GILL (supra) p. 147-148 HOOD J said, and I agree with him that:

"... I think the proper conclusion (to the above question) is arrived at by considering the contract between the parties, including any terms that the law implies therein. ... there is an implication that the servant will render faithful service subject to dismissal on failure: BOSTON Deep Sea, etc & Co v. Ansell (e); and also that he will not be guilty of any conduct during his service incompatible with the proper discharge of his duty: Pearce v. Foster (f). But there is neither reason nor authority for the proposition that the servant impliedly undertakes that his past life has been beyond reproach, nor is there any obligation on him to disclose, unasked, his previous history: See Fletcher v. Krell (g). In my opinion, therefore, the defendant's contention cannot be supported. What authority there is tells in the plaintiff's favour." (underlining mine for emphasis).

In the case before me, although I have found there was proper disclosure, in the light of the above-quoted passage with which I agree the Plaintiff was not obliged to tell the Defendant any more than what he had divulged to them. If anything, it was on JK to satisfy herself on relevant matters during the interview and before appointment.

In GILL (supra at p.148) HOOD J in his judgment goes on to make the following further statements in favour of the Plaintiff which is very much applicable to the case before me:

"It seems harsh to say that an employer cannot, without due notice, get rid of a servant whose previous conduct renders him undesirable; but it is equally harsh to say that a capable and willing servant may be immediately dismissed on the discovery of some ancient offence - so that no assistance is derived from this consideration. And if such an implication as to previous conduct is to be made against the employed, would it not be just to make a similar one against the employer? Could a servant justify his instant departure from his employment because the master had some years before been insolvent though now solvent, or because the master had been guilty of some moral delinquency? The one implication seems to me as impossible as the other."

I endorse the above views of HOOD J in determining the issue before me.

Further to what I have stated above on the giving of notice under the said termination clause of the letter of appointment, it is my view that because it was a wrongful dismissal for the reasons given the provision in the contract of employment as to giving of one month's notice will not apply in this case. There was therefore the need to give a reasonable notice and that is a question and will depend on the true construction of the contract of service, the nature of the position held by the Plaintiff and the circumstances of the case. After an interview the Plaintiff was given what appeared from the letter of appointment to be a permanent employment.

In view of what I have stated above, it follows that the Plaintiff's claim for unlawful dismissal must succeed.

That leaves me to consider what damages the Plaintiff is entitled to and in considering this I propose to assess damages worked out on the basis of reasonable notice.

In ADDIS v GRAMAPHONE COMPANY, LIMITED 1909 A.C. 483 it was held that:

"Where a servant is wrongfully dismissed from his employment the damages for the dismissal cannot include compensation for the manner of the dismissal, for his injured feelings, or for the loss he may sustain from the fact that the dismissal of itself makes it more difficult for him to obtain fresh employment."

Recently it was stated in MALIK and ANOTHER v BANK OF CREDIT AND COMMERCE INTERNATIONAL S A (in compulsory liquidation) (The Times, Court of Appeal 12.4.95) that:

"Damages for injury to his reputation were not recoverable by an employee alleging breach of an implied term of his contract of employment that the employer would not, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee."

On the question of what is reasonable notice BREARLEY & BLOCK the authors of EMPLOYMENT COVENANTS & CONFIDENTIAL INFORMATION (1993) state:

"However, factors considered relevant by the courts have included the employee's seniority and level of responsibility; the level of salary and frequency of pay days; the employee's length of service; the importance of the employee in the organisation; the difficulty the employer will face in replacing him; and local, trade or professional customs. See Hill v CA Parsons & Co Ltd [1927] 3 All ER 1345 (CA) for an example of how reasonable notice has been determined relatively recently. Whilst reasonable notice will never be less than the statutory minimum, in the case of senior employees it will frequently be considerably more."

The Letter of Appointment (exhibit 5) did not fix the duration of employment. The Plaintiff was employed until the trouble arose. In JAMES v THOMAS H. KENT & CO LTD (1950 1 KB p.551 at 555 SOMMERVILL L.J. said in a situation such as this "the law requires a reasonable period of notice."

The Defendant in this case terminated the Plaintiff's employment by giving one month's notice. In HILL v C.A. PARSONS & CO LTD 1971 3 AER 1345 CA, which was a case of a dismissal of a professional man when sued for wrongful dismissal it was held that the giving of "one month's notice to terminate his contract of service was far too short; accordingly the defendant's purported notice to terminate the plaintiff's employment amounted to a wrongful repudiation of his contract of service." There LORD DENNING M.R. said at p.1349 that:

"In order to terminate his employment, they would have to give reasonable notice. I should have thought that, for a professional man of his standing and I may add, his length of service, reasonable notice would be at least six months, and may be 12 months. At any rate, one month is far too short."

In my judgment, in all the circumstances of this case 9 months' notice of termination would have been reasonable.

In the outcome, for the above reasons, I find that the Plaintiff has been wrongfully dismissed. He is therefore entitled to recover damages in the sum of $22275.61 from the Defendant which is calculated as follows:

Nine months' salary i.e. $2334.00 $

per month (based on salary of

$28000 per year) 21006.00

Add 2% Staff annual increase

backdated

(as per exhibit 15 - termination letter) 152.46

Add 18 days holiday pay (as per

exhibit 15) 1117.15

$22275.61

There will therefore be judgment for the said sum of $22275.61 for the Plaintiff against the Defendant. If the sum of $4403.90 (referred to in exhibit 15) has been received by the Plaintiff from the Defendant then the said sum will have to be deducted from $22275.61 which will leave the balance sum of $17871.71 made payable to the Plaintiff.

I also award costs against the Defendant which is to be taxed if not agreed.

D. Pathik
Judge

At Suva
22 November 1995

HBC0099J.92S