Suve v Bromley and Rural Development Bank of PNG [1997] PGNC 68; N1589 (10 June 1997)

Unreported National Court Decisions

N1589

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]
WS 1 OF 1996
HOHORE SUVE
PLAINTIFF
V
KEN BROMLEY
FIRST DEFENDANT
THE RURAL DEVELOPMENT BANK OF PNG
SECOND DEFENDANT

Waigani

Sevua J
4 April 1997
10 June 1997

Counsel

A. Lora for Plaintiff

J. Baker for Defendant

JUDGMENT

10 June 1997

SEVUA J: The plaintiff’s claim in his writ of summons is for damages for wrongful termination, right to own property at Section 73, Allotment 26, Gordons, National Capital District and costs.

The plaintiff was formerly employed by the second defendant in various capacities, and at the time of his alleged termination, was Manager, Economics Division.

He had been an employee for 13 years after graduating from the University of Papua New Guinea in 1983 with a degree in Agriculture. During his employment with the second defendant, the plaintiff was allocated accommodation and resided at a property described as Section 73, Allotment 26, Gordons in NCD, which property was owned by the second defendant. By a letter dated 5th October, 1995, the plaintiff’s employment was determined and he was retrenched effective from 31st October, 1995. He now claims that his retrenchment amounted to a wrongful termination and he has therefore suffered loss and damages.

At this juncture, I would accept Mr Baker’s submission that there are three issues in these proceedings. Firstly, was the plaintiff wrongfully terminated? Secondly, was the plaintiff allocated a house? And thirdly, is the plaintiff entitled to own that house? I would like to deal with the second and third issues first.

In respect of these two issues which I wish to discuss together, the evidence is undisputed. The plaintiff was allocated a house at Section 73, Allotment 26, Gordons, on account of his employment with the second defendant (the bank). Evidence from both the plaintiff and John Gaius confirmed this, therefore this issue does not need much consideration. Is he then entitled to own that house?

On 24th October, 1994, John Gaius, General Manager, Administration and Personnel, sent a memo (Exhibit “B”) to the plaintiff advising that the second defendant had approved the sale of certain houses to staff under the bank’s Home Ownership Scheme. The plaintiff was requested to indicate his intention in writing if he wish to purchase the house he was occupying at Section 73, Allotment 26, Gordons. He responded in a memo on 25th October, 1994 (Exhibit “C”) stating his intention to purchase the house. The plaintiff further said “please proceed to provide the actual offer for the sale of the house so that I may make necessary arrangements to negotiate for finance from the commercial banks” (my emphasis).

Again, on 17th October, 1995, the plaintiff sent another memo (Exhibit “D”) to Mr Gaius. He said, “I wish to enquire as to whether the bank accommodation I am currently occupying at Section 73, Allotment 26, Arua Place, Homoka Street, is still open for sale to me since your last correspondence asking me to register my interest” (my emphasis). Mr Gaius did not respond because the second defendant’s Board had resolved to shelve the Home Ownership Scheme. The evidence is supported by the evidence of Robert Clayton, Manager, Human Resources and Administration, and Board Secretary, who confirmed that the Board had decided this at its meeting of 13th October, 1994 which has subsequently ratified on 15th December, 1994 in its meeting No. 12/94. According to Mr Gaius, other staff who had indicated interest in purchasing houses owned by the bank were also affected, not only the plaintiff.

It is the undisputed evidence of Mr Clayton that the former Managing Director, Shem Pake, had offered houses for tender and for sale to staff in the guise of Home Ownership Scheme he initiated because, he himself, had wanted to purchase the house he then occupied. The Board abandoned this scheme when it discovered this.

The plaintiff admitted in cross-examination that he did not execute a contract of sale in relation to this house. He also acknowledged that the contract was “coming” when a question was put to him by Mr Baker. I consider that this evidence is consistent with parts of the contents of Exhibits “C” and “D” which I have adverted to and emphasised.

I reiterate that on 25th October, 1994, the plaintiff requested Mr Gaius to make an actual offer for the sale of the house to him (plaintiff). Then, again, on 17th October, 1995, after the Board had shelved the housing scheme. The plaintiff asked Mr Gaius if the house was still open for sale to him. How does Mr Lora, counsel for the plaintiff reconcile this evidence to his argument on offer and acceptance? I consider that his argument is misconceived. The evidence is clear, there was no offer and there was no acceptance in the legal sense, as in the law of contract.

Mr Gaius’ memo to the plaintiff was merely a request for the plaintiff to indicate his interest or intention to purchase the house. It was never an offer. If I were to accept that it was an offer, where is the consideration in this offer? The plaintiff’s subsequent response pertinently revealed that no offer had been made to him since he was still asking for an offer to be made to him. It is my view that Mr Gaius’ memo was tantamount to an invitation to treat, it was certainly not an offer. See Chitty on Contracts, 27th ed. pp 93-94 at paras 2-004 and 2-005. Similarly, the plaintiff’s response did not amount to an acceptance. He merely indicated his interest and intention to purchase the house. If I accept, his memo of 25th October, 1994 as an acceptance of Mr Gaius offer, why would the plaintiff say, “please proceed to provide the actual offer for the sale of the house....?” (my emphasis).

In my judgment, there was no contract between the plaintiff and the second defendant in respect of the sale/purchase of Section 73, Allotment 26, Gordons. The plaintiff’s continued right or licence to use the premises was dependent on his continued employment with the second defendant. I consider that his right of occupation ceased on the date he was retrenched and accordingly, he was not entitled to continue residing there, nor was he entitled to be declared the owner of the property in question. Simply put, the plaintiff never purchased the house, therefore he has no right to claim it as his property. I agree with Woods, J in Maip Pty Ltd -v- Ambra Coffee Estate Pty Ltd, N1368, 29th September, 1995, that, in dealings with land, there can be no rights whatsoever until a contract embodying the terms has been executed by both parties. The plaintiff’s claim for the right to own the property at Section 73, Allotment 26, Gordons, must therefore fail.

I now deal with the first issue, was the plaintiff wrongfully terminated?

The undisputed evidence before me is that, on 5th October, 1995 the plaintiff received a letter from the first defendant who was, Acting Managing Director, (Exhibit “A”) advising that due to the restructuring of the second defendant, a number of existing positions were either being abolished and/or amalgamated with others to rationalise operation on a cost effective basis.

His position had been identified as one of those considered for redundancy thus he was being terminated with effect from 31st October, 1995.

Exhibit “A” which is the correspondence entitled, Notification of Redundancy and Retrenchment, sets out the termination benefits. It also provides in item 2 a right to appeal to the Redundancy Monitoring Committee within 7 days of the date of receipt of this notice. However, in my view, the most strikingly and important thing about this notice is the clause appearing under the first defendant’s name and signature. It reads:

“I hereby accept the terms and conditions offered to me under the above staff retrenchment plan and give my full consent for my services to be terminated with effect from 31st October, 1995. I also confirm that I shall have no other claims on the Rural Development Bank of Papua New Guinea on settlement of the retrenchment benefits as indicated above.”

The plaintiff signed this on 11th October, 1995.

There can be no doubt in anyone’s mind that the plaintiff was consenting to his retrenchment. No misunderstanding, confusion or ambiguity can be inferred from this clause which is quite simple, and self explanatory, in my view. The plaintiff’s acknowledgement of the terms and conditions of his retrenchment was by his signature. He admitted in cross-examination that he did not appeal. In my view, he had a right of appeal but he waived his right. His explanation was that, he accepted the retrenchment because he intended to fight it in Court. This in my view is a misconception and an unfortunate state of affair as far as the plaintiff was concerned.

Counsel for the plaintiff has not referred me to any case law or legal principle and I am unable to find any, that a consent retrenchment amounts to unlawful dismissal. The evidence is clear, the plaintiff consented to his retrenchment and he further undertook that he would not make any claim against the bank once he received the benefits. In my view, he is therefore estopped from making any claim for wrongful termination and I accept Mr Baker’s submissions. I hold that where an employee has consented to his retrenchment, he is estopped from claiming wrongful termination. I further hold that in such a situation, the retrenchment does not constitute wrongful termination.

The plaintiff seems to suggest there was a certain degree of ill feeling between him and certain expatriate staff and I can understand his feelings. I sympathise with his predicaments, however, I consider that emotions aside, the plaintiff’s claim cannot be sustained in law. Accordingly, I find that his claim for wrongful termination has no basis in law.

In the final analysis, I order that the plaintiff’s action be dismissed with costs to the defendants to be taxed, if not agreed upon.

Lawyer for Plaintiff: A.D. Lora

Lawyer for Defendants: Henaos