Reid v Murray Hallam and Allcad Pty Ltd [1995] PGNC 26; N1337 (6 July 1995)

Unreported National Court Decisions

N1337

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS NO 23 OF 1994
BETWEEN:
KEITH REID - Plaintiff
And:
MURRAY HALLAM - First Defendant
And:
ALLCAD PTY LIMITED - Second Defendant

Waigani

Kapi DCJ
11-12 April 1995
6 July 1995

NATIONAL COURT RULES - O 8 r 21 is applicable where pleading is filed by the other party.

ASSESSMENT OF DAMAGES - Breach of Contract of Employment.

Counsel:

R Thompson for the Plaintiff

V Mirupasi for the Defendant

6 July 1995

KAPI DCJ: The plai sued the defendanendants for damages for breach of contract of employment. Default judgment waered aged against the defendants on 22 March 1994 for not f a defence.

The matter came on before me for assessmsessment of damages.

Counsel for the plaintiff has submitted that alegations of fact in the sthe statement of claim stand admitted by the defendants because they did not traverse any of the facts by their failure to file a defence. Counsel relied on O 8 r 21 of the National Court Rules for this proposition. It is in theowing terms:

“O 8 r 21. Admissions and traverse

(1) & Subject to Sub-r3), aegataegation of fact mact made by a party in his pleading shall stand admitted by any opposite pite party required to plead to that pleadiless trav by tpposite party in his pleadingading or a or a join joinder oder of issue under Rule 22 operates as a denial of it.

(2) ҈ A travetraverse may be eibher by a denial or by a statement of non-admission, and eithereexpressly or by sary implication, and either generally or as to any particular allegation.

(3) #160; &#Wh0; a pleading makeslleesllegation of the suffering of damage, or an allegation of a of an amount of damages, a pleading to that pleading by an opposite partyl be to tse thegation, unless the allegatiogation is n is specispecificalfically admitted.”

As far as I am aware this rule has not been considered and applied in the manner submitted by counsel for the plaintiff. This rule iilar in terms trms to Supreme Court Rules of New South Wales (15/20). Ritchie’s Supreme CPurt Procedure (NSW) has the following note on this rule (V p. 2364):

“Furthermore, the deemed admission sion arising under subrule (1) only applies if a pleading is in fact filedhe other party. ConseConsequentdefendant'sant's failure to file and serve a defence does not give rise to a deemed admission of all of the matters alleged in the statement of claim: My Distributors Pty Ltd v Omaq Pty Ltd [1992] FCA 329; (1992) 36 FCR 578.”

It is clear from this case that O 8 r 21 is not applicable where default judgment is entered where there is clearly no pleading by the opposing party in terms of filing a defence. Therefore, Iot accept the the submission of counsel for the plaintiff.

What then is the effect of a default judgment? A writ of sumshould discloisclose a cause of action in law. That isay it shollege matt matteratters of fact which gives rise to a cause of action in law. In this case the ment of c of claim alla valntract of employmployment, breach of that contract and claims damages based on the terms ofms of the contract.

Where default jnt is entered in an unliquidated demand (as in this case) tse) the facts which gives rise to the question of liability are settled. The effect of default of judgment in this case is that there was a valid contract of employment and that there was a breach of that contract. All the fact legal issues sues relating to liability are no longer in issue.

Assessment of damages involves consideration of the terms of the contract and assessing the damages that flow from the breach of the terms of the contract.

The plaintiff claims the following:

(a) ;ټ Contracntract of e of employment for period of two years.

(b) &#160ual nalary of K35,000.,000.00.

(c) ـ Accommocommodation ance 50.00 per week.

(d) Annual gratuity payment o 25% of salary.

(e) ټ Annchoonchool for hild.

(f) An0; Anneal lfave fares foes for the family to Australia.

(g) &##160;; Motor vtor ve alle alle of 0 per week

(60;&##160; &#16ur weeks recreatioeation leave.

(i

(i)&#16) &<  Ont monti nola lieuotice.

(j) Loss consisting of xtrarenteresterest charges on the FIFL Lease.

(k0;҈& Lccount for moneys had andd and and receireceived.

The plaintiff and the first defendant gave evidence on all the items set out in the statemenclaim. A far as I can see from vie evidence and submisubmissions by counsel for the defendants, it is not disputed that a contract of employment provided for a period of employment, a salary, gratuity, accommodation allowance and motor vehicle allowance. The dispute relates to quantum of damages under these heads and denied completely the existence of any term with regard to school fees for one child, airfares for the family, money in lieu of notice and that all the monies had and received have been accounted for.

PERIOD

There is no dispute that the contract was for a period of two years.

SALARY

There is no dispute that the plaintiff was contracted on K35,000.00 per annum. The diffe between the part parties relate to the dispute as to the date on which the plaintiff commenced employment. According to the plff, he , he started work onune 1992. According to the first defendant, the plainplaintiff was only on orientation from 24 June to 14 July and commenced duwith the company on 15 July 1992. In regard, I a, I am incliinclined to believe the plaintiff. The tiff was already gainfgainfully employed when he was offered a job to join the first defendant. He would not have left the previous employment for a perion he would be without a salary. I fiat he commenommenced eced employment on 24 June 1992. I accept alculations by thby thintiff in respect of unpaid salaries, K1,210.65.

p>GRATUITY

The dispute in respect of this head of claim is also bon the dispute relating to the date on which the plaintiff tiff commenced work. I have already mined this this in favour of the plaintiff. Therefore, the propount ownt owing in this regard is as calculated by the plaintiff, K2,844.60.

ACCOTION ALLOWANCE

There is no dispute as to the amoe amount of allowance per week. The dispure again relate tate to the date the plaintiff commenced work with the defendants. I have alreaund that the pthe plaintiff commenced work on 24 June 1992.; The amount that is owing is as calculated by the plaintifintiff, K8,475.00.

MOTOR VEHICLE ALLOWANCE

The eviden the amount of allowance ince in respect of transport is not easy to determine. The plaintiff gvidence thae that the allowance was K80.00 per week. The first dant gave evidenvidence that it was K45.00 per week. The only indent evidence wnce whs relevant to this issue is a record of payment of an amounamount of K180.00 (see Ex “A”). Thes not indicate for whri whriod this allowance was paid. If thent was K80.0K80.00 p.00 per week, one would expect to find for two weeks that would work ouK160.00. However, an amount of K180.00 would appear oear on the face of it to be two payments of K90.00. Therefore, doing the best I can in the circumstances, this K180.00 most probably represents two payments of K90.00. I thee conclude that this this wrepresent two payments of K90.00 than anything else. For this reasoncept the evhe evie evidence of the first defendant and find the terms of contract was K45.00 per week. I therefoerefore find thunamount outstanding is as calculated by the first defendan71.71.

SCHOOL FEEL FEES

The first defendant denied that this was a ever a term of employment. There is evi thatfirst deft defendant pant paid school fees of K1500.00 for a term. This amount was paid after the plaintiff discussed the r with the first defendant. I concluom this payment thnt that there was provision forn for school fees in the contract. Tlance to bd for the contrcontract period is as calculated bted by the plaintiff, K7,500.00.

AIRFARES

I find that ther provision for airfares for the family under the contract. I acthe evidence of t of t of the Plaintiff that when he commenced employment, the defendants agreed to pay for the airfares for the family to come up to Papua New Guinea. It can be implied this thet the provision of n of airfares for recreation leave would have included the family. The ba to be paid under ther this is as calculated by the plaintiff, K800.00.

NOTICE

The parties do noto not dispute that a month’s notice equired to terminate employment. The dispute was, whe, whether, one month notice was given or whether money in lieu of notice was promised. The plaintiff gaveence to e to the effect that he was notified to finish employment on 12 March 1993 forthwit60; One month pay has not bnot been paid.

The first defendant gave evidence to the effect that the plaintiff was given one month notice to terminate his employment and this is confirmed by a letter dated 15 March 1993 (Ex D) giving one month notice to terminate employment on 12 April 1993.

I am inclined to accept the first defendant’s evidence on this in view of the letter of termination which supports the version of events given by the first defendant. The plff was, therefore, gre, given one month notice.

Counsel for the defendants further submitted that the plaintiff is not entitled to one month salary becau was not at work. In respect of the plaintifintiff gaff gave evidence that he was working on his own boat for that month. He wt performing work in c in connection with the defendant’s business. The net result is tha plai plaintiff is not entito a months salary as well as other allowances for the month in question.

MONIES NIES HAD AND RECEIVED

This claibased on insurance money paid to the defendants for repairspairs to the plaintiff’s boat, Starbuck II. The amount in quesis K25,0K25,000.00. This money ed to the repairepair of the masts on the boat. An initial quot obtained fned from thtralian suppliers for two masts. However,as decided to put put in only one mast.&#16. This mast was ordand fittefitted.

Counsel for the plaintiff is prepared to accept that K16,000.00 was used for the mast and that K1500.00 was used for the hire of the crane.

I accept that K3,000.00 is to be refunded to the plaintiff on the basis of the evidence. I also acceat an amount ofnt of K1,500 was used for the hire of the crane.

As to the cost of the mast, Ex E was prepared after the litigation in this matter commencd I am not prepare to give it due weight. There is nois no reasy they the invoice and the payment receipt for this amount could not be presented to the court. Such documents should settle this issue.

I also cannot accept the concession by thentiff that the cost of the the mast is K16,000.00. There is no evidon which tich to base this.

I would direct that the dants properly account for for balance of K25,000.00 by provision of the invoice and receipt of the payment for the mast. Thiser masettled upon the the the plaintiff being satisfied of the cost of the mast. If this is not se then then the matter shoulrelisted for the purposes of the defendants supplying the copy of invoice and payment of thof the invoice for the cost of the mast.FIFL LEASE INTEREST

The plaintiff claims thas that the lease payments were based on the salary and the accommodation allowance provided in the contract. He submitted that this he the only source of income upon which the lease arrangements were entered into. He further sted that thesethese were not paid or not paid regularly resulting in non-payment of the lea160; Therefore, counsel subl submitted that penalty interests for the non-payment of the lease is a damage which flows directly from the failure to pay salary and accommodation allowance under the contract of employment.

Counsel for the defendants submitted that the interest in question was for period 1 December 1992 to 17 March 1993. That for the part of this this period he was still employed and was paid his salary as well as accommodation allowance and he should have been in a position to keep up withpayments.

The evidence shows that the plaintiff was was paid his salary for the relevant period an amount of K641.94 paid on 24 December 1992 and another amount of K641.94 also paid on 24 December 1992. There is no d of any otherother payment of salary until 7 May 1993.

As to the accommodation allowance the record shows he was paid an amount of K500.00 for 9 Decembe15 December 1992. No further pas were made uade untiluntil 15 February 1993.

The evidence shows that the defendants did not regularly pay the salary and the accommodation allowance. Tas the reason for non-payn-payment of the lease payments. In thcumstances of this cais case, the interest penalties were a direct result of the failure to pay salary as well as accommodaallowby the defendantsdants. I awardamount as calculateulated by the plaintiff, K791.98.

I assess the damages at K22,293.94 plus interest at the rate of 8% pa from 12 April 1993 to the date of judgement. The defendao pay the plainplaintiff cost of hearing.

Lawyers for the Plaintiff: Young and Williams

LawyeLawyers for the Defendants: Nii & Mirupasi