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D'Cruz v Carpenters Fiji Ltd [2012] FJHC 1136; ERCC2.2012 (21 May 2012)

IN THE EMPLOYMENT COURT OF FIJI AT SUVA
ORIGINAL JURISDICTION


CASE NUMBER: ERCC NO 2 OF 2012


BETWEEN:


CAPTAIN RUFUS D' CRUZ
PLAINTIFF


AND:


CARPENTERS FIJI LIMITED
DEFENDANT


Appearances: Mr. R. P. Chaudhry for the Plaintiff.
Mr. S. Sharma and Mr. R. J. Singh for the Defendant.


Coram: The Hon. Justice Anjala Wati.
Date/Place of Hearing: Tuesday, 08 May 2012 at Suva.
Date/Place of Judgment: Monday, 21 May 2012 at Suva.


JUDGMENT


Catchwords:


EMPLOYMENT LAW – TERMINATION OF EMPLOYMENT – Interlocutory injunction–prohibitory and mandatory- Principles governing grant- no contract on foot pursuant to which relief claimed- ex-hypothesis, if contract was extended on existing terms, then the injunctive relief would not preclude the employer from repeating the termination; viz a viz an employer can terminate the contract the very next minute of the issuance of the injunction, without cause but lawfully-effect of injunction cannot prohibit the employer from exercising its rights under the contract lawfully-in any event the remedies designed under the ERP is such that damages would be an adequate remedy in such circumstances of the case-defendant in a situation to pay such remedies-plaintiff has not shown the ability to pay damages-application for injunctive relief refused.


LEGISLATION:
The Employment Relations Promulgation 2007 ("ERP 2007").


CASES REFERRED TO:
American Cyanamid v. Ethicon Ltd. [1975] UKHL 1; [1975] 1 ALL ER 504.
Redland Bricks Ltd. v. Morris and Another [1970] AC 652.
Air Pacific Limited & Others v. Air Fiji Limited [unreported] Court of Appeal, Fiji Islands Case Number ABU 0066 of 2006S.


______________________________________________________________________________


The Cause


  1. The plaintiff, until recently, had been in the employ of the defendant. The defendant has terminated the plaintiff's contract, who now seeks certain interim orders until the determination of his employment grievance.
  2. The interim orders sought are:-
  3. The interlocutory application is vehemently opposed.

Grounds/Submissions in Support


  1. The plaintiff states that he is the brother in law of the former owner or majority shareholder of Carpenters Fiji Limited, Sir Dr. Ninian Mogan Lournenadin. He says that around 2006, he was in Quebec Canada, with his wife and two children. By profession he is a ship Captain. He was approached by Dr. Mogan. Dr. Mogan asked whether the plaintiff wanted to work in Fiji. At that time he was employed as a ship captain. He was informed by Dr. Mogan that the ship repair division of the defendant company was not performing and that his help was needed to rehabilitate this division and to make it a profitable entity. He was also asked to assist in other shipping matters.
  2. He discussed with his family. His wife was reluctant to move in the first place because she liked living in Canada. They have been domiciled there for several years. Dr. Mogan then said that the plaintiff would be given a long term contract for 10 years to compensate his family's relocation. He implored his wife that for the sake of the family they should move and help him. Dr. Mogan also made a number of promises to him in exchange of relocation which included competitive and rewarding salary, executive home, fully maintained motor vehicle, expense account and payment of education expenses of the children. They therefore decided to move.
  3. On 5 October 2006, he executed a contract of employment. Thereafter his family arrived in Fiji. He was originally based in Suva for a period of about 3 years and then in Malaysia for a few months overseeing Super Yatch Project. When he returned to Fiji, he was given the responsibility of managing the defendant's shipping line. Thereafter he was asked by the defendant to go to Papua New Guinea and set up the infrastructure for the shipping line. He did so and was successful because the defendant under resourced the capital and management needed for this project.
  4. On or around 2 October 2008, his contract was further renewed for a period of 3 years which expired around 3 November 2011. On or around 8 November, 2011 he was asked by the defendant for his passport and that of his family members which he gave. His work permit was renewed for further 3 years.
  5. On 11 April 2012, without any warning, the defendant terminated his contract. He was given 24 hours to hand over everything. He was shocked. He had been a very diligent and honest worker and felt that no employer has the right to treat its workers the way the defendant did to him.
  6. He consulted his lawyers who wrote to the defendant on 12 April 2012 on a without prejudice basis stating why the termination was wrong in that the three months notice provision had not been complied with, with his other entitlements due and owing to him.
  7. On 14 April 2012, he received a letter from the defendant's solicitors by which they contested the matters but admitted that certain entitlements were due and owing which was going to be paid with his passage back to Canada. His stay on the company property was also extended until 27 April 2012.
  8. The plaintiff says that he now has 3 children, 2 of them attend International Secondary School in years 5 and 2. The youngest child is in early childhood. The children are devastated and were crying when the news of termination was broken.
  9. All three children are in the middle of their respective school year. The two weeks time period is clearly detrimental to their schooling. If they were to leave now, they would have to repeat their respective classes in Canada. It would be proper for them to complete their school term and then leave as it is would not affect their studies.
  10. The defendant has provided him with a house. The plaintiff says that he should be allowed to stay in the house until his case is determined by the Court.
  11. The plaintiff says that his work permit has been cancelled and the immigration department has allowed him time until the 9 May 2012 to stay in the country. The plaintiff was permitted by the Court to stay in the country until the determination of the injunction case.
  12. Mr. R.P. Chaudhry stated that there is a serious issue before the Court to be tried which is whether the termination of the contract was lawful and until the issue is decided the balance of convenience lies in granting the interim reliefs sought as the plaintiff would not be able to find an alternative accommodation. They have invested in a lot of furniture, household good and personal effects in Fiji in the sum of $30,000. There would not be any prejudice to the defendant as no one else has been appointed to the position and in any event the defendant has a number of properties around Suva and can house any such appointee in one of those premises.
  13. Mr. Chaudhry further says that damages will not be an adequate remedy for the plaintiff and his family. His children will suffer psychologically for a long time. He will have a loss of reputation and this would affect him finding a suitable job. Mr. Chaudhry says the plaintiff has a healthy bank account and can pay back the monies if he is not successful in the matter.

Grounds/Submissions in Opposition


  1. The General Manager of Carpenters Properties Limited deposed an affidavit and stated that the defendant company is a tenant of Carpenters Properties Limited ('CPL"). The plaintiff had been resident in the property of CPL. Upon the termination of the contract, the property has reverted to CPL. It was also deposed that a substantive replacement has been made to plaintiff's position. The General Manager of CPL also stated that the defendant is a multinational company with turnover in excess of $400 million and assets in excess of $300 million within the jurisdiction of Fiji and would be in a position to satisfy any final judgment or award of damages that may be given against it. There is no factual basis for allegation of interference, harassment and intimidation as made by the plaintiff.
  2. Mr. Sharma, appearing for the defendant company, in his vehement objection to the grant of interim orders made an extensive submission.
  3. He stated that the plaintiff's contract was terminated on 11 April 2012. The plaintiff's substantive claim is on whether the termination of the contract was lawful. That question needs to be tried by the Court upon which the damages would be an adequate remedy if the question was resolved in favour of the plaintiff. The plaintiff is also entitled to reinstatement but that is a final remedy that would be considered in the context of the mutual breakdown of the trust, confidence and relationship of the parties. The defendant is a multimillion dollar company and would be in a position to pay any damages. On the other hand, the plaintiff's undertaking as to damages is unclear and not precise so is not worthy at all.
  4. Mr. Sharma also submitted that since the property belongs to another company, an order cannot be sought against that company without it being a party to the proceedings.

The Law and Analysis


  1. The plaintiff seeks both a negative and positive injunction pursuant to his contract of employment.
  2. The law on negative injunctions was aptly laid down by Lord Diplock in American Cyanamid v. Ethicon Ltd. [1975] UKHL 1; [1975] 1 All ER 504:-

"The grant of an interlocutory injunction is both temporary and discretionary... The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried.


It is no part of the courts function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide questions of law will call for detailed argument and mature considerations. These are matters to be dealt with at trial. One of the reasons for the introduction of the practice of requiring an undertaking as to damages on the grant of an interlocutory injunction was that 'it aided the court in doing that which was its great object, viz abstaining from expressing any opinion upon the merits of the case until the hearing' (Wakefield v Duke of Buccleuch (1865) 12 LT 628 at 629. So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting the interlocutory relief that is sought.


As to that, the governing principle is that the court should first consider whether if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiffs claim appeared to be at that stage. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should then consider whether, on the contrary hypothesis the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff's undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason on this ground to refuse an interlocutory injunction.


It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises. It would be unwise to attempt even to list all various matters which may need to be taken into consideration in deciding where the balance of convenience lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case.


Where other factors appear to be evenly balance it is counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date on which he is able to embark on a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial.


Save in the simplest cases, the decision to grant or to refuse an interlocutory injunction will cause to whichever party is unsuccessful on the application some disadvantage which his ultimate success at the trial may show he ought to have been spared and the disadvantages may be such that the recovery of damages to which he would then be entitled either in the action or under the plaintiff's undertaking would not be sufficient to compensate him fully for all of them. The extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies; and if the extent of the compensable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party's case as revealed by the affidavit evidence adduced at the hearing of the application. This, however should be done only where it is apparent on the facts disclosed by evidence as to which there is no credible dispute that the strength of each party's case is disproportionate to that of the other party. The court is not justified in embarking on anything resembling a trial of the action on conflicting affidavits in order to evaluate the strength of either party's case..."


  1. The law on mandatory injunction is governed by the case of Redland Bricks Ltd. v. Morris and Another [1970] AC 652. Lord Upjohn stated the principles governing grant of such injunctions. His Lordship said at pp 665 to 666:-

"The grant of a mandatory injunction is, of course, entirely discretionary and unlike a negative injunction can never be "as of course". Every case must depend essentially upon its own particular circumstances. Any general principles for its application can only be laid down in the most general terms:


  1. A mandatory injunction can only be granted where the plaintiff shows a very strong probability upon the facts that grave damage will accrue to him in the future. As Lord Dunedin said in 1919 it is not sufficient to say "timeo". [Attorney –General for the Dominion of Canada v. Ritchie Contracting and Supply Co. [1919] A.C. 999. 1005, P.C]. It is a jurisdiction to be exercised sparingly and with caution but in the proper case unhesitatingly.
  2. Damages will not be a sufficient or adequate remedy if such damage does happen. This is only the application of a general principle of equity; it has nothing to do with Lord Cairns' Act or Shelfer's case [1895] 1 Ch. 237.
  3. Unlike the case where a negative injunction is granted to prevent the continuance or recurrence of a wrongful act the question of the cost to the defendant to do works to prevent or lessen the likelihood of a future apprehended wrong must be an element to be taken into account:
(a) where the defendant has acted without regard to his neighbour's rights, or has tried to steal a march on him or has tried to evade the jurisdiction of the court or, to sum it up has acted wantonly and quite unreasonably in relation to his neighbour he may be ordered to repair his wanton and unreasonable acts by doing positive work to restore the status quo even if the expense to him is out of all proportion to the advantage thereby accruing to the plaintiff. As illustrative of this see Woodhouse v. Newry Navigation Co. [1898] 1 I.R. 161;

(b) but where the defendant has acted reasonably, though in the event wrongly, the cost of remedying by positive action his earlier activities is most important for two reasons. First, because no legal wrong has yet occurred (for which he has not been recompensed at law and in equity) and, in spite of gloomy expert opinion, may never occur or possibly only upon a much smaller scale than anticipated. Secondly, because if ultimately heavy damage does occur the plaintiff is in no way prejudiced for he has his action at law and all his consequential remedies in equity.

So the amount to be expended under a mandatory order by the defendant must be balanced with these considerations in mind against the anticipated possible damage to the plaintiff and if, on such balance, it seems unreasonable to inflict such expenditure upon one who for this purpose is no more than a potential wrongdoer then the court must exercise its jurisdiction accordingly. Of course, the court does not have to order such works as upon the evidence before it will remedy the wrong but may think it proper to impose upon the defendant the obligation of doing certain work which may upon expert opinion merely lessen the likelihood of any further injury to the plaintiff's land. Sargant J. pointed this out in effect in the celebrated "Moving Mountain" case, Kennard v. Cory Bros. & Co. Ltd [1922] 1 Ch. 265 at the foot of p.274 (his judgment was affirmed in the Court of Appeal [1922] 2 Ch. 1).


  1. If in the exercise of its discretion the court decides that it is a proper case to grant a mandatory injunction, then the court must be careful to see that the defendant knows exactly in fact what he has to do and this means not as a matter of law but as a matter of fact, so that in carrying out an order he can give his contractors the proper instructions.

This has been well settled for a long time and I regret that I cannot agree with Danckwerts L.J (1967) 1 W.L.R. 967, 974, B), that the observations of Joyce J., in Attorney-General v. Staffordshire County Council [1904] UKLawRpCh 176; [1905] 1 Ch. 336, 342 have not been followed in practice. My experience has been quite the opposite. There may be some cases where to revert to the simple illustration I gave earlier, the defendant can be ordered "to restore the right of way to its former condition." This is so simple as to require no further elucidation in the court order. But if anything more complicated the court must in fairness to the defendant tell him what he has to do, though it may well be by reference to plan prepared by some surveyor, as pointed out by Sargant J., in the passage in the "Moving Mountain" case to which I have already referred. The principle is summed up by Maugham L.J., in Fishenden v. Higgs & H. Ltd. (1935) 153 L.T. 128, 142:


"I should like to observe, in the first place, that I think a mandatory injunction, except in very exceptional circumstances, ought to be granted in such terms that the person against whom it is granted ought to know exactly what he has to do."


  1. I will turn to the relief sought. The first relief sought is to restrain the defendant from removing the plaintiff and his family from their currently occupied residence at lot 1, Mika Dreu, Namadi Heights, Suva.
  2. Indisputably the property in question belongs to CPL and not the defendant. The plaintiff's right to occupy that property arose from clause 9 of the contract of employment dated 5 October 2006. Clause 9 reads:-

"...The employer does not provide accommodation. The employee is expected to locate a house, flat or other accommodation and when this has been done the employer will, at its discretion, lease such accommodation in its own name and sublease it to the employee at a rental of F$3,000.00 [Three Thousand Fiji Dollars] less than the employer pays per month".


  1. The contract dated 5 October 2006 was for a term of two years. On 2 October 2008, the plaintiff's contract was extended for a further period of 3 years commencing 3 November 2008. That contract has now expired. There is no evidence on the basis on which the plaintiff continued his employment thereafter.
  2. The defendant in its letter of 11 April 2012 wrote to the plaintiff and stated that after the expiry of his contract he was retained in the employment on a "month to month" basis and that the periodic monthly arrangement has come to an end.
  3. The substantive dispute before the Court from which other matters arise is whether the plaintiff's contract was lawfully terminated. The plaintiff has not shown any material that his contract was extended on the same terms and conditions based on which his right to stay on the premises arises. However the plaintiff did continue to stay in the premises even after the expiry of the contract.
  4. The plaintiff's original contract had a termination clause. By clause 5, the contract provided that the contract could be "terminable at any time...by not less than three months notice in writing on either side, or by payment of three months' salary in lieu of notice". Further, where the employee was guilty of any form of serious misconduct, the employee could be summarily dismissed by the employer without entitlement to notice or payment in lieu of notice.
  5. The plaintiff accepts that his contract could be terminated without cause but with proper notice or payment in lieu of notice.
  6. The issue is the proper notice period that ought to have been given or payment in lieu of the notice. That is a matter that needs determination at the trial. The parties will give evidence to say what terms of engagement was entered into when the plaintiff's contract came to an end and the basis on which the plaintiff continued in the employment of the defendant.
  7. Whatever determination the Court will finally come up with, it is at this interlocutory stage pertinent to emphasize that the contract permits the same to be terminated without cause. It effectively means that the plaintiff can be asked to leave the employment at any time provided he is either paid 3 months' salary in lieu of notice or 1 months' salary, whatever is the appropriate period.
  8. An injunctive order in the nature sought brought on the premise that the contract has been unlawfully terminated could be very easily circumvented the very next hour from the time of its issuance as the defendant can always give 3 months' salary, which is the maximum claim, irrespective of whether the contract was extended on the same terms, and ask the plaintiff to leave the employment.
  9. The ambit of the injunctive order, in my view, cannot be framed so widely to grant the plaintiff an indefinite right to stay in the housing accommodation. The parties' right to terminate the contract without cause is the major backdrop that will sabotage any injunctive orders of the nature sought.
  10. Further, the defendant has leased this property from CPL on account of the master servant relationship. The master and servant relationship has broken down and lawfully or unlawfully, the plaintiff's benefit under the contract has come to an end. The property now reverts to the registered proprietor being CPL.
  11. CPL cannot be ordered to lease its premise to the plaintiff at this stage as there is no existing contractual nexus between the parties.
  12. If the termination of the contract is found to be unlawful, then the plaintiff at the end of the day, will have to claim the appropriate remedy under s. 230 of the ERP 2007 which includes:-
  13. Even if reinstatement is finally ordered as a remedy, the defendant will not be precluded from bringing the contract to an end lawfully if it does not wish to retain the services of the plaintiff in such senior capacity. The working relationship has definitely broken down which has brought about the termination and undoubtedly the Court will consider this aspect when considering the remedy of reinstatement.
  14. The most workable and pertinent remedy in such circumstances is damages which indisputably the defendant is in a capacity to pay. On the contrary there is no evidential basis to make such finding in favour of the plaintiff.
  15. The plaintiff says that his children will suffer education hassle, long term psychological effect and that he will suffer humiliation and loss of dignity which cannot be compensated in money. I must say that the psychological effect on an employee and his family upon termination is inevitably always present. To what extent the employer has caused that is a matter of evidence. All these are always compensated by damages as only minimal percentage of employees get the remedy of reinstatement especially when the working relationship breaks down in such manner.
  16. The plaintiff has stated that he is financially wealthy and will be able to pay the damages should the need arise. The only worthwhile asset that the plaintiff has shown to court is some $3,000 in his Westpac Bank Account in Fiji. The other assets are not in the country and there is no certainty that it will remain with the plaintiff to make the undertaking worthwhile. The other two statements annexed by the plaintiff is a statement from Royal Skandia which indicates that the Managed Pension Account Contribution has USD $62,847.62. The policy governing the payout of the pension is not attached and so I am not able to assess the worthiness of this document. Another document that is attached is $10,000 and in a language I cannot comprehend. Where a party gives an undertaking to pay damages, there must be adequate information to allow assessment of the worth of undertaking: Air Pacific Limited & Others v. Air Fiji Limited [ unreported] Court of Appeal, Fiji Islands Case Number ABU 0066 of 2006S.
  17. I find as a result that the plaintiff has not shown to me that he can pay damages if he has to.
  18. The plaintiff has also claimed that the defendant continues to pay the plaintiff his salary and benefits as per terms and conditions of the original contract of employment dated 5 October 2006 until the determination of the matter or further order of the Court. All my earlier observations on the viability of issuing such an order in a master –servant relationship case and the observations on damages as an adequate remedy is equally applicable.
  19. The third remedy sought is to restrain the defendant and or its servants or agents or whatsoever from interfering, harassing, and intimidating in any manner whatsoever with the plaintiff and or his family and children. There is no evidence of any harassment by the employer except for the demands that the company properties be returned to the defendant and the plaintiff's allegation that his wife was followed by the defendant's servants. I am of the view that this order was sought to bolster the relief sought to continue to stay in the accommodation of CPL. There is no evidence of any harassment based on which an order could be issued.

Orders


  1. For the above reasons, the interlocutory application for injunction is dismissed. The matter is now listed for 26 June 2012 for directions on the costs issue and the security for costs application.

ANJALA WATI
Judge
21.05.2012
______________________________________________________________________________
To:

  1. Messrs Gordon & Chaudhry Lawyers.
  2. Patel Sharma Lawyers.
  3. File: ERCC 2 of 2012.

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