Abai and 765 Others v Independent State of Papua New Guinea [1995] PGNC 53; N1402 (20 December 1995)

Unreported National Court Decisions

N1402

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 819 OF 1994
BETWEEN:
TOLOM ABAI AND 765 OTHERS - Plaintiff
And:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA - Defendant

Waigani

Sheehan J
20 December 1995

PNG DEFENCE FORCE - Retrenchment - claim for benefits and entitlements - claim for Ex Gratia payment.

Counsel:

Ms E Dirua for the Plaintiffs

Mrs F Wali for the Defendant

JUDGMENT

20 December 1995

SHEEHAN J: Preliminary.

“(c) & A declaration that that the Plaintiffs named in Sche1 attached to this Writ of t of Summons are entitled to:

1. &ـ M60; Money Oney Owing in Lieu of Recreat Leavitlements.

2. t Money Owing in Lieu of Furf Furlough Leave Entitlements.

3.ـ҈& 160; MoneyMoney Owing fhe the Decision of NEC No 14No 14/91 paragraph 2 authorising Exgratia Payment calculated in accordance with Wagambi and Kupo v gup and Others OS No 58 of 1989 of 7 December, 1990 and the Memorandum of Agreement dated 1ted 1 November, 1989 between the Public Service Commission - Public Employees Association paragraph 17 to pay retrenched servicemen an Ex-gratia Payment.

4. & M60; Money Owing in the nature of Repatriation Expenses.

5. ; 60ing ws a result of othf other Out of Pocket Expenses, as particularised in respect of each Plch Plaintiff in Schedule 4 attached to this Writ of Summons.6.&##160;;ټ&#Money Owing in the the naturnature of e of Loss Loss of Paof Pay due to premature discharge from the Defence Force.

7. & M60; Money Owing from the decision of the NEC No 54/91 paragraph 2 to improve the level of benefit payay an addition of a Hardship Allowance.

8. ҈ M60; Money oney Owiog fre the decision of Brown J in Wagambi and Kupo v Lokingup and Others OS No 58 of 1989 of 7 December 1990 and the Memorandum of Agreement dated 1 November 1989 between the Public Servommis- Pubmployeeloyees Asss Associatociation paragraph 17, NEC decision No 14/93 paragraph 3, NEC decision No 54/91 paragraph 1 to pay One and a Half Times the Members contributions to the Defence Force Retirement Benefit Fund.”

These are set out more specifically in the individual statements of claim found in the Third Schedule to the Plaintiffs’ claim.

The State has opposed these claims as follows:

(a) ټ T4e 33inPlaintiffs iffs named in Schedule 1 annexed hereto have compromised their claims having all been paid in this identical claim under previous Court proceedings, including OS No 58 o8 ando 58 89 and and theirtheir clai claims are therefore re judicata.

(b) &#160 267ePlaintiffs named amed in Schedule 2 annexed hereto have claimed in the previous proceedings namely OS No 58 of 1988 and OS No 58 of 1989, but not having betrencwere ded fayment thus, their claims ares are also also res res judicjudicata.

(c) ټ T5e 16inPlaintiffs iffs named in Schedule 3 annexed hereto have no cause of action as their claims are time barred having been discharged between 10 Novembe82 anOctob88.

It was said in the July Ruli Ruling inng in this this matter that the basis of a multiple claim such as this, is the underlying presumption that all the Plaintiffs have essentially the same status and cause of action. That is, that each Plaintiff is a retrenched soldior who has not been paid entitlements due to him. Therefore the Court iring ring the claim of one eadily decide the claims of all. Butact that has turned outd out not to be the case aase at all. Alh the Plaintiffs&; claimclaims in general terms are similar, they are not the same same. A decifor one will not nect necessarily be right for another or articular group.

During submissions prior to the July July Ruling, Counsel for the Plaintiffs told the Court that:

&#822 purpose of the Plaintiffs iffs in bringing this action in the form of the third schedule was to set out the substance of their claims in a clear manner, to allow the claim to be checked, verified, and adjudicated by an impartial tribunal. Each Plaintiff y want an i an impartial tribunal to look at their claims and indicate whether or not each of the Plaintiffs has been properly aing to law.”

Therefore to avoid the situation where individual claims might beht be lost in a general decision, the Court, with the close cooperation of Counsel for the Plaintiff and Counsel for the Defence - and their assistants - has looked at each claim one by one.

Having considered the evidence and the submissions of Counsel the Court now proceeds with this judgment which deals with the substance of claims and the law effecting them. A separate, indiv, one page page summary of judgment will also issue for each Plaintiff. This has been made possbece because the 3rd schedule of the Statement of Claim has transcribed into the Court Records. A copy of each cach claim annotated with the judgment for each Plaintiff can therefore be ed off.

DECISION

The Plaintiffs claims are made up of two parts. The firsthese is the claimclaim for l termination entitlements ents prescribed by law. These are the usutitlementements set out in the Manual of Personnel Administn for the Defence Force. A soldier hlawful rightrightright to these and if they are not paid then that soldier has a claim - a of action that can be enfo enforced in a Court of law.

The other part of the Plaintiffs claims is for ex gratia payments made by the State in their favour over and above the usual termination entitlements. An ex gratia pt literally ally means a payment made as a matter of grace or favour. A payment made without ann acknowledgement of liability. The ex gratia paymentthis case therefore can be described as voluntary grants tots to be made to eligible retrenched ex serviceman without any legal oblig admion the part of thof the State. claring such ex gratia paya payments therefore the Stae State did not grant rights enforceable in the same way that the statutory termination entitlements can be pursued. It is however open tservicervicemen to seek declaration that they are eligible for such payments in the terms stipulated by the State.

In fact, the State has conceded the obion to meet such payments. Thisecorded in the juhe juhe judgment of Mr Justice Brown in Jack Wagambi & Ors v Brigadier General Lokinap OS 58 of 1989 where he says:

“Counsel for the State concedes that if I was to categorise those found entitled to share in retrenchment benefits for the relevant period, a third group of ex-members would most probably arise. This gwill comprise those hose ex-members who have been discharged during the relevant period, who are not amongst those who have comp their claim already and received benefits, or who are the named plaintiffs listed in (thes(these proceedings).

It has been agreed that to bring some certainty to the resolution of the entitlement I should categorise those ex-members who should benefit rather than name and identify each individual. To name and ify each wouldwould naturally follow categorisation, for the Defence Force records relating to discharge could be perused and that third group identified. But dgement today, those nose nmed in (these proceedings) ngs) will need to claim seperately. The SSolicitor concedes hoes however that such a third group, ca of distinct identification should be included in entitlemetlement calculations when the State come to assess its total liability.#160; (emphasis added)

The State has not disputed that Defence Force personnel as of right can claim statutory entitlements on termination of service. Likewise it is not disputed that a Government policy of retrenchment was embarked on from 1983 and thereafter a series of ex gratia payments awarded for those retrenched.

Those eligible for such benefits have beenady determined by the judgejudgement of Mr Justice Brown in the National Court in OS 58 of 1989 already referred to. By the ord the Court in thin that decision the ex-servicemen eligible are those:

“who were discharged from the Defence Force g the period 10 November 1982 to 7 April 1989 for reasons assigned in their certificate of e of discharge other than those reasons listed in Serials 2, 5, 6 and 7 of Annex “A” to ch 58 of Manual of Personnel Administration.”

The Serials that result in exclusion are also summarised in the order as being:

“2 ;ټ H60; Having ving reached retiring age;

5. ټ&##160; H60; Having ving given false information;

6. ;&&#1Habeen conv convicted cted of an offence which will will rend render him unfit for services with the Dehe Defence Force;

7. &&#160ng medically unfit frr service.”

Thep>The verd verdict in favour of the successful Plaintiffs was:

“Judgemer sucintif the t of an ex gratia sum to be calculated in accordance with clah clause 1use 12 (2)2 (2) (a) (a) and (b) of the Public Service Agreement dated 10 November 1982 together with such other sums as may be due and owning but unpaid arising out of the Plaintiffs terms and conditions of employment on discharge from the Defence Force.”

The judgement also made rulings as to retrenched officers. The Learned Judid of thesethese:

“So far as officers are concerned, I would exclude from benefits, officers, who have been terminated from further service for the reasons set out in para. 2.1, 3.3 and 3.4. of ch 42.

Those reasons are:

2.1. ټ Attaining age for cfor compulsory retirement;

3.1. &##160; For disciplinary rery reasons;

3.4. Foical nsaso822”

;

The Plaintiffs all assert eligibiilty in the terms set out0; They say they were terminated within the time frame of 1 of 10 November 1992 to 7 April 1989 and their Defence Force files show that they were terminated for reasons other than set out in Serials 2, 5, 6, and 7.

With some 20 exceptions, the records examined do show that the termination of service of the Plaintiffs in this action fall within the relevant period of retrenchment. The Statever, in defendingnding this claim says that notwithstanding eligibility from retrenchment within the period, some of the Plainthave already been successful in earlier proceedings for the same entitlements now sought, aht, and more importantly have been paid. In legal terms their claim is res judicata - already decided. Some of the Plaintiffs have already compromised their claims, that is, they have accepted a payment in full settlement of all their entitlements. Again thee says some are nare not ele because despite the notation on their file of reasons fors for termination being other than those proscribed by Mr Justice Brown, tcts disclosed on their files show that they were in fact tect terminated for reasons arising in those Serials.

The State says that the remainder of the Plaintiff are simply out of time. Because after termination they failed to make any claim in Court within the 6 year period the law allows to make a claim, they have left their claims too late and in law are presumed to havedoned them. As was said this Coruling ling of 21 July July:

“if it is true that one group of Plaintiffs had already has their claims heard and decided, or agreed to settle, they could not come to Court again. ise if they had left theirtheir claims till outside the six year period in which any claims has to be made in a Court, those effected would also fail. Pro thesertions by the Stae State would mean those Plaintiffs iffs in any of these categories would be struck out of this proceedings...1;

RES JUDICATA/COMPROMISE OF ACTION

It is simple law that a claim tham that has been tried in a Court of Law and a decision lawfully made on it cannot be tried again in respect of the same matters.

The legal term for this is Res Judicata which means “the matter is decided”. Tha a final judgment by a by a competent Court on the merits of a claim has been made and is conclusive - final - as to the rights of the parties and those claiming through them. Such a dec is ato any new new actionction involving the same claim or cause of action. A compromise of actionettlsettlement of a claim cs a similar bar to further proceedings.

The defence asserts that 334 of the Plaintifintiffs have had the very claims they now e, already decided in their favour in decisions in OS 58 of58 of 1988 and OS 58 of 1989 this Court, and they have been paid. Fu, acknowledgement of payf payment in full settlement of claims in respect of the retrenchment has been evidenced by either copiethe relevant lawyers trust account receipts, or the comprehensive acknowledgement of settleettlement produced from of the Defence Force records.

In submissions before the July ruling in this matter, Counsel for the Plaintiffs acknowledged that as has been pleaded in their Statements of Claim, those 334 Plaintiffs have received payment from the State and each Statement indicates the amount so paid.

But Counsel went on to say that those payments were part payments only. He also submitted that MtiJustice Brown had not given judgment in relation to service entitlements. In fact the learnedl JudgeJudge granted libertPlaintiffs to apply for further orders in respect of these.

As for the releases sign signed by the Plaintiffs, it was submittet the Plaintiffs were not bound to answer to these since Stce State had not pleaded as part of its defence the fact that releases had been executed.

Counsel said that some of the documents amounted no more than lawyers trust account receipts others had been signed before Defence Force lawyers under duress or in situations which made them unenforceable. Other were signed wit rele release altered to show that payment was only accepted on part payment basis.

The decision in OS 58/89. That ion dule on service eice entitlements. On 7 June 1991 an enlargement of the 7 Decembecember 1990 decision was handed down by Mrice Brown following a Supreme Court Ruling on “figures which were unilaterally preparrepared by the Plaintiffs and erroneously ed by the Registrar...̶”

This supplementary decision also took into account the “additional moneys which the State (was) prepared to pay as a result of recommendation of the Acting Deputy Prime Minister” and which are also sought in these proceedings. It coms:

“Thi0;This Court entered a verdict for particular Plaintiffs on 7 December last. Those Plaintiffs were included in two lists of names comprised in a document which I shall refer to as exhibit “G”. That exhibit had some 120 handwritten names followed by a typed list of names. For reasons gin December Iber I have disregarded (the) 120 for they have compromised their supposed claims by negotiation and have been paid already. There are others ho haso blso been paid and they are not amongst the eligibligible Plaintiffs...”

The decision then dealt with the meaninthe term in the judgment:

“due and owing but unpaid, arising out of the Plaintlaintiffs terms and conditions of employment on discharge.”

Mr Justice Brown stated:

“The remaining query of the ex-serviceman relates to that phrase. There has been a suion than that they have not received all their ‘entitlement’ on discharge. They say have not receivedeived money in lieu of notice. There is no survice entitlntitlement, for servicemen are in receipt of padate of discharge. Discharge is effeat the mohe moment of expiration of term of engagengagement, or for any of the other reasonscribed by the Manual of Peof Personnel Administration. I made plainecember that ehat ex-servicemen are governed by the Defence Act, not Public Service Regulations so that apart from the ex gratia payment provision, the Agreement (with the State) has no bearintheir entitlement.

B

Bearing in mind the time that has elapsed since discharges, I am satisfied the servicemen have received their entitlements under the appropriate regulations set out in the Manual of Personnel Administration. In other words tave been peen paid their accrued furlough entitlements removal expenses etc...”

The first point to be noted is thatdecision of Mr Justice Brown in OS 58/89 has not been appealed. There is no Plaintiffntiff claiming that the Schedule in the decision is inaccurate or that each file was not fully examined. mains an unchallenged deci decision of the National Court.& Therefore the State and indeed all the Plaintiffs relying ying as they do on that decision are bound by its terms. In this actoo, wnot bound ound to that that decision this Court nevertheless can not overturn it. In fact I am y satisfied tied that its dons should be followed and implemented.

The decision could hardly be clearer. 160; Final judgwas then enen entered for taintiffs in that action in the specific sums set against thst their names. The award in favour of earh servicemen in the Schedu described under a column headed a “Total Retrenchmenchment Payment made in addition to termination Benefits under Defence Act&;.

I am satisfied that for those Plaintiffs successfcessful and paid under that decision, that is the end of the matter. Their claim has been examined and a final award made in their favour.

The supplementary order granting liberty to apply is simply a statement that application could be made for further orders to make the judgment effective. It was never a notice ttiearties that if they were not satisfied with the judgement they could re-apply to try the issues over again. The issues es Jua and thos those parties cannot claim again.

Now that judgment alone is sufficifficient to prevent any further claim for ame benefits. But those Plaintiere paid paid and on the receipt of payment some signesigned acknowledgements that the moneys received satisfied all their claims.

Tolam Abai the first named Plaintiff in these proceedings was one. He was one of the ssful Plul Plaintiffs before Mr Justice Brown. On payment of th awarded tded to him he signed the following release:

<220;I Tolam Abai hereby agree that the amount of K18, 736.24 receipt of which is hereby acky acknowledged (together with termination its paid to me by virtue ofue of the Defence Act Personnel Administration Regulations at the time of termination) is in full settlement of all claims made by me against the State in respect of my retrenchment from the Papua New Guinea Defence Force and contains recompense in full for all hardship and inconvenience experienced by me as a result of the payment of the aforesaid amount.”

That acknowledgement and receipt was duly signed without amendment by Mr Abai on 15 July 1991 and acknowledgement in the same terms were also signed by the other Plaintiffs and duly witnessed. Copies were thter forwardewarded to the State Solicitors officer, Defence records, Department of Personnel Management, the Department of Finance and Planning. In other thestlements wers were entered into all relevant State rece records. A copy was retained by the ex serviceman concerned.

Some res werered or crossed osed out by Plaintiffs when signing or accepting payment. That has noas not chatheirtheir position. Whether thnsidered the sume sum allotted to them sufficient or whether they wished to treat it as part payment only, had no effect on thatent was at all. It was payment a judg judg judgment of the National Court allocatingating to each of them their full entitlements. If any of the individual ex-servicemen did not accept that judgement or that allocation to him, his only course was to appeal the judgment, or at the very least seek further relief under the same proceedings. If he di appeal he is boun bound by the judgment whether he signed the release or not, whether he altered it or not. And of course ther no appe appeal.

The applies to those who, it was submitted, signed the releaseleases under duress, or without independent legal advise at least as to thunt of their benefits. There han no plea of dure dure duress, no complaint made by those Plaintiffs and no appeal or taking of proceedings to set aside what tlaim was improper. 160; They arrefore bound bund by the Court decision in their favour and their acceptance of payment out.

Those Plaintiffs whose acknowledgement is their solicitors trust account receipt just as cledemonstrated that they have have accepted judgment in their favour. A judgment of some K2,500,000 was paid to their lawyers by the State in full settlement of those Plaintiffs claims. Receippayment after deducteduction of legal fees is final evidenct their claims have been satisfied. e result thet the claims oims of those 334 Plaintiffs (Schedule 1 of the Defence) for whom s been conceded payment hast has been made by the State and who have in fact pleaded that payment, must fail.

RETRENCHMENT ELIGIBILITY/TIME BARS

There remains 432 Plaintiffs (Schedules 2 and 3 of the Defence). The State says these comprise 267 who were unsuccessful claimants under OS 58 of 1988 and OS 58 of 1989 because though they were terminated in the retrenchmeriod, they were terminated under Serials 2, 5, 6 and 7 of Annex A of the Manual of Personnesonnel Administration. As unsuccessfaimants they they are no less bound by the Court decisions as those who were successful. The reng 165 it is said whid whettherwise eligible or not have failed to claim within 6 years of termination and are therefoerefore time barred.

ELIGIBILITY/p>

Taking the question of eligibility first, this CourtCourt looks to the criteria establisy Mr y Mr Justice Brown cited above. After setting Serials 2, 5, 6, and 7 for exclusion from retrenchment benefits Mr Justice Brown went on to say:

Those Plaintiffs, and others, who were discharged within that period 10 November 1982 to 7 April 1989 apart from those members discharged for reasons in Serials 2, 5, 6, and 7 have satisfied me on the balance of probabilities that the Ministerial Directive was a material consideration of discharge authorities when exercising powers afforded them under the Manual.”

Thus the Court held that all ex-servicesmen terminated within the period are eligible if their certificates of discharge do not disclose a Serial 2, 5, 6 or 7 as a reason for discharge. That hat does the certifictificate of discharge say. For what Serialthe servicervicemen discharged?

On examination of these Plaintiffs files it was found that some thirty eight(38) Plaintiffs were either terminated outsidthe retrenchment period or their certificate of discharge srge showed the reason was a Serial 2, 5, 6 or 7 or the officer equivalent. The rest however were diseharged under Serials that render them eligible for retrenchment benefits.

The error that has lead to these Plaintiffs bringing proceedings was that following the Court ruling, the State officers in listing personnel eligible for payment, had gone beyond the certificates of discharge and found that the files disclosed reasons for discharge other than the eligible Serials actually recorded in the certificate of discharge.

This was not open to them. The Court hadady considereidered that issue and determined that if the servicemen certificate of discharge did not show 2, 5, 6 or 7 Serial ocharge, (or officer equivalent) there need be no further enquiry made. He was eligibligible forenetrenchment benefits. Accordithose Plaintiffs nafs named in Schedule 2 of the Defence whose certificates of discharge do not show a Serial 2, 5, 6 or 7 .1, 3r 3.4 for officers) are eligible for retrenchmenthment benefits. The decision of the the Courts did render their claims for retrenchment benefits res judicata, but res judicata in their favour. It was the incorrect application of the judgment that ill now excluded them from payment of those benefits. #160; By the sacision of thof the Court however, these Plaintiffs entitlemremain res judicata on defence Force termination Benefits sits since the Court in OS 58 of 1989 determined those had been paid in ful>

LIMITATION OF ACTIOACTION/TIME BARS

These time bars are the time limits the law places on claims being brought to Court. In the case of servontracttracts the time limit is six (6) years. After that lapseime any clny claim is by law deemed to be abandoned. The State aised this defendefence in respect of claims for retrenchment benefits by the 165 Defendantted in Schedule 3 of the Defence, on the basis that these hese having been discharged more than 6 years before 15 October 1988 when this claim was commenced in Court, are now out of time.

The short answer is, that in respect of the retrenchment benefits they are not out of time. In thst place as was statestated above, ex gratia payments are not entitlements of right giving rise to a cause of action leading to enforcement in a Court of Law. se only enforceable rightsights of action are governed by statutes of limitation, unenforceable rights cannot be time barred. Temain promises of grace oace or favour at the discretion ofparty making the grant.&#16. Unless to whom the grant rant has been promised have through reliance on the grants changed theirl position. That has has not happenre here. But even if they were ubjesubject of time bars, these ex gratia payments were promised within such a limit.

In any case the State has acknowledged before Mr Justice Brown that it consider itself bound to honts promises to claimants dets determined eligible by the Court.

But the timebar does prevent claims for the normal Defence Force termination entitlements not claimed within 6 years of termination. They are consideredave beee been paid in full or any claim in respect of them to heen been abandoned by this lapse of time. Thus all those Plaintwhosewhose termination was 6 years prior to the commencement of these proceedingsdings can no longer claim in respect of those benefits. That part of theiim isissemissed.

Examination of the files has shown hown that the majority of those in the 3rd schedule of the Defence are timred in respect of the statutory Defence Force termination entitlements.

A small numb number of Plaintiffs in the 3rd Schedule of the Defence have been discharged inside the 6 years preceding this claim. They argiblelai claim for for Defence Force entitlements unpaid on termination and are as well entitled to declarations of eligibility in respect of the ex gratia retment its.

There remains the claim of interest.&est. #160; It ithe discretion ofon of Courts to award interest on judgments given in respect of rights of action duly proved. There can be no to interenterest on ex gratia payments and I find it entirnappropriate to make such auch an award in respect of these in this case.

Nor do I award interest speculatively for that smaller of Plaintiffs who may yeay yet prove outstanding termination entitlements. None of the otherervicemencemen have been granted interest and it is not appropriate that only a few should so benefit. In any case the whole naofre of an ex gratia paymena grant to offset loss through delay in payment of lawful eful entitlements, just as interest does.

In summary then, of the 76intiffs, the claims of the 334 who have already been awardewarded judgment and have acknowledged payment are dismissed.

The remaining 432 Plaintiffs excepting those whose individual judgments so state, are declared eligible for the ex gratia retrenchment benefits. Their claims toination entn entitlements under Defence Force Regulations however are dismissed unless they were terminated subsequent to 14 October 1988 when these proceedings commenced.

Again the individual judgments which issue with this judgment will so specify.

The exact amount due to each successful Plaintiff has yet to be finalised. Because pre attempts at caat calculations by the parties have been unsuccessful and indeed lead to Supreme Court appeal, the order of this will be that if there is no agreement between the parties on the figures within 14 days ofys of this judgment the calculations shall be referred to the Department of Personnel Management which Departments calculation shall be.

Lawyer for the Plaintiffs: Howard & Dirua Lawyers

Lawyer for the Defendant: Solicitor General