WR Carpenter (PNG) Ltd v Winold [2008] PGNC 213; N3566 (13 December 2008)

N3566

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

APP NO 128 OF 2003

BETWEEN:

WR CARPENTER (PNG) LIMITED
Appellant

AND:

ARNOLD WINOLD
Respondent

Mount Hagen: Makail, AJ
2008: 14 July
: 13 December

CIVIL APPEALS - District Court appeal - Entry of judgment after ex parte trial - Whether properly entered - No reasonable explanation for adjournment of trial - More than sufficient time to prepare for trial - Claim for unpaid entitlements - Accrued annual leave and pro rata long service entitlements - Claim for damages for unlawful termination of employment distinguished - Appeal misconceived - No miscarriage of justice - Appeal dismissed.

Cases Cited:

Firman Manua & Kolopa Security Services Limited -v- The Southern Highlands Provincial Government: WS No 848 of 2006 (Unnumbered & Unreported Judgment of 24th October 2008)

Counsel:

Mr Koeya Peri, for the Appellant
No appearance for Respondent

JUDGMENT

13 December, 2008

1. MAKAIL AJ: In this appeal filed on 10 July 2003, the Appellant appeals from the decision of Mt Hagen District Court of 2 July 2003 where the learned Magistrate first refused to grant the Appellant’s application for adjournment of the trial and secondly, heard the complaint and entered judgment in the sum of K7, 471.06 plus 8% interest in favour of the Respondent.

BRIEF FACTS

2. The Respondent was formerly employed by the Appellant as a motor mechanic and supervisor of the Appellant’s workshop at Kudjip for 18 years until his termination on 7 April 2001. He was terminated because he raised a pig in the estate of the Appellant which was against the policy of the Appellant. During his service with the Appellant, he was not paid entitlements which consisted of:

1. Annual leave - K5, 078.70.

2. Pro rata Long Service Leave - K2, 804.26

3. Notice of Dismissal - K376.20

3. On or above 8 November 2002, the Respondent commenced court proceedings in the District Court to recover these unpaid entitlements. On 19 November 2002, Warner Shand Lawyers filed a Notice of Intention to Defend on behalf of the Appellant and subsequently on 15 January 2003 filed a Defence for the Appellant.

4. In the Defence, the Appellant denied the claim for unpaid entitlements and said that the Appellant had paid these entitlements to the Respondent during the period of service with the Appellant. It also said that the Respondent was terminated for disciplinary reasons, that being he raised a pig in the estate of the Appellant which was against the policy of the Appellant.

GROUNDS OF APPEAL

5. In the Notice of Appeal, the Appellant relies on the following grounds of appeal:

"1. The Court erred in law and in fact in not considering that sufficient notice was given to the Defendant in respect of the ex parte hearing on 02 July 2003.

2. The Court erred in law and in fact in not considering that no Notice was issued by the Clerk of Court or the Complainant that the matter was set down for ex parte hearing.

3. The Court erred in law and in fact when ordering the Defendant to pay the Complainant K7, 471.06 when the Complainant did not prove his claim with sufficient evidence.

4. The Court erred in law and in fact in considering and awarding damages to the Complainant when there was evidence before the Court, the Complainant had already received annual leave pay for eighteen (18) years and his pro rata long service leave.

5. The Court erred in law and in fact in awarding such damages when the Complainant was warned not to raise pigs on the Defendant’s estate and such warning was never adhered to, which required immediate dismissal.

6. The Court erred in law in awarding damages to plantation labourers who are not entitled to leave fares and payment in lieu of notices or notices under the common rules of Mt Hagen".

GROUNDS 1 & 2 OF NOTICE OF APPEAL

6. I will consider grounds 1 and 2 of the Notice of Appeal together because they raise the central issue of whether or not the Appellant was given notice of the hearing of the complaint of 2 July 2003.

7. Mr Peri of counsel for the Appellant argued that the learned Magistrate erred in law and fact when he refused the Appellant’s application for adjournment of the hearing of the complaint on 2 July 2003. This is because first, the Appellant was not given notice of the hearing and was not ready to defend the complaint on that date.

8. Secondly, in the judgment of the learned Magistrate, he refers to a date of 10 July 2003 as the date of the judgment when the judgment itself was made on 2 July 2003. He argued that this made the judgment of 2 July 2003 flawed.

9. Finally, he argued that the judgment of 2 July 2003 was a final judgment and not an interlocutory one. Thus, it was wrong for the learned Magistrate to refuse the Appellant’s application for adjournment when the Appellant’s lawyers were present in Court and requested so. As the judgment of 2nd July 2003 was a final order, it was wrong for the learned Magistrate to say that it was an ex parte trial and the Appellant may apply to set aside the judgment of 2nd July 2003 if it is aggrieved by the judgment.

10. I can dispose off these two grounds quickly. They are without merit and also misconceived. I have perused the court depositions in the Appeal Book and I can find no notice of the complaint being fixed for hearing on 10 July 2003. The only date which is consistent with the date of the judgment and also the learned Magistrate’s notes on page 22 of the Appeal Book is 2 July 2003. That can only mean that the hearing of the complaint took place on 2 July 2003 and not 10 July 2003.

11. In saying this, it is also clear that the learned Magistrate made reference to 10 July 2003 in his judgment. But in my view, it is a trivial matter as it does not substantially affect the conclusions he reached, that is, to refuse the Appellant’s application for adjournment. It is a ground that was advanced to distract the attention of this Court from the main issue of whether or not the Appellant had sufficient time to prepare for the trial on 2 July 2003. And if the Appellant confines its submission to the issue of whether it had sufficient time to prepare for the trial, it appears to me that the learned Magistrate refused the application for adjournment because he considered that the Appellant had more than sufficient time to prepare for the trial on 2 July 2003 and also because the Respondent had been waiting long enough to get the complaint heard. I will return to this point later on in this judgment.

12. Secondly, if the Appellant’s lawyers said that the hearing of the complaint took place on 10 July 2003, then it is incumbent on them to show by appropriate evidence that the trial took place on 10 July 2003. All these references to the previous court appearances dating back to 3 December 2002, being the date of first mention as noted by the learned Magistrate in his notes from pages 22-34 of the Appeal Book are not relevant to accurately determine that the date of the hearing of the complaint was 10 July 2003. They are relevant to the issue of first, notice of the trial of 2 July 2003 and secondly, whether the Appellant had sufficient time to prepare its defence for the trial on 2 July 2003.

13. For those two issues, as I found above, the hearing of the complaint took place on 2 July 2003. The last mention of the complaint was on 17 June 2003 according to the learned Magistrate’s notes on page 25 of the Appeal Book. There, he wrote and I quote: "Case adj to 2/7 of ....." I also note that a Mr P. Kumo appeared for the Respondent and there was no appearance for the Appellant.

14. Thus, it is clear to me that the complaint was adjourned to 2 July 2003 for hearing. I returned to the next issue of whether the Appellant had sufficient time to prepare its defence for the hearing on 2 July 2003. I am of the view that this issue must be determined from the whole circumstances of the case. That is, I must look at how many adjournments took place since the complaint was filed and what the parties had done to prepare for the trial, more particularly the Appellant as it was defending the complaint.

15. First, I think there were a total of 10 adjournments since the complaint was filed on or about 8 November 2002. Again, I refer to the learned Magistrate’s notes on pages 22-34 of the Appeal Book. In my view, that is not only time wasted but more then sufficient time for the Appellant to prepare its defence for the trial. Why wait until the date of hearing and ask for another adjournment?

16. In this respect, there is no evidence before the learned Magistrate and also this Court to explain the Appellant’s unpreparedness on 2 July 2003. All I have is evidence from the learned Magistrate’s notes stating that on those 10 adjournment instances, there where instances were Appellant’s lawyers appeared and there were instances where the Appellant appeared either in person or through a Mr P Kumo. That is why I can make out from the learned Magistrate’s judgment that he was not satisfied with the Appellants lawyers’ application for a further adjournment on 2 July 2003. If he granted the application, it would have been the eleventh adjournment! This is what he said on page 38 of the Appeal Book:

"This case came before this court on 03 December 2002 and was adjourned because complainant was not present. Up to 17 June 2003, there were ten (1) adjournments and defendant failed to appear on six (6) of them. On two occasions, 27 March 2003 and 28 April 2003 when defendant failed to appear in court, he was notified to appear on 10 June 2003 and 10 July 2003. On the 17 June 2003, defendant failed to turn up while 10 July 2003 a lawyer turned up and asked for an adjournment to seek instructions from his client (defendant) was refused. Refusal was on the basis that complainant have filed their affidavits and was unfair for further delays as both parties knew of the adjournment date".

17. I agree with his reasoning. In my view, the Appellant had more than sufficient time to prepare its defence for the hearing. This included filing and service of Affidavits in reply to the Respondent’s Affidavits. In terms of the evidence of the Respondent, I note he had filed the following Affidavits:

1. Affidavit of the Respondent sworn on 24 February 2003 and filed on 25 February 2003;

2. Affidavit of Gabriel Kiap sworn on 24 February 2003 and filed on 25 February 2003; and

3. Affidavit of Nathan Pok filed on 19 March 2003.

18. As there is no evidence from the Appellant to show that it was not served with these Affidavits, I assume that these Affidavits were served on the Appellant in good time. Hence, the Appellant would have been in a position to give instructions to its lawyers to prepare Affidavits in reply to rebut or counter the evidence of the Respondent and his witnesses prior to 2 July 2003. In any case, any lawyer who has filed a Notice of Intention to Defend and Defence is assumed to have received relevant instructions to defend the action and in this appeal, the complaint of the Respondent.

19. I say this because the Appellant’s lawyers have filed a Notice of Intention to Defend on 19 November 2002 and subsequently a Defence on 15 January 2003. If we compute time from the date of the filing of the Defence, the Appellant would have had six months to prepare and file Affidavits in reply to the complaint or if we compute time from say March 2003, being the time the Respondent filed his last witnesses’ Affidavit (Affidavit of Joe Pok), still there would have been four months left to prepare and present its case. In my view in either instance, it is a lot of time for the Appellant and its lawyers to prepare for the hearing on 2 July 2003.

20. In the end, I am not satisfied that the Appellant was not given sufficient time to defend the complaint on 2 July 2003. As the learned Magistrate refused the Appellants lawyers’ application for adjournment, he proceeded subsequently to hear the complaint as an ex parte trial. I find no error made by the learned Magistrate on these grounds of appeal and dismiss them accordingly.

GROUNDS 3, 4, & 5 OF NOTICE OF APPEAL

21. As I had done with the first two grounds of appeal, I will consider grounds 3, 4, and 5 of the Notice of Appeal together because they raise the central issue of whether or not the Respondent had proven his claim of unpaid service entitlements against the Appellant before the District Court.

22. First, Mr Peri argued that the learned Magistrate erred in law and fact when he found the Appellant liable and entered judgment in favour of the Respondent in the sum of K7, 471.06. He submitted that this is because there was no evidence before the learned Magistrate to prove that the Respondent was not paid these service entitlements. In any case, he submitted that the Respondent was paid his service entitlements during the period of service with the Appellant and the Appellant do not owe him any monies after he was terminated. Further still, he submitted that the Respondent had not produced evidence to support the basis of calculation of service entitlements, hence the learned Magistrate fell into error when he entered judgment against the Appellant.

23. I have two difficulties with these submissions of the Appellant. The first difficulty is a more practical one. That is, there is simply no evidence from the Appellant before the learned Magistrate nor before this Court to show that the Appellant had paid the Respondent’s service entitlements. Whilst I accept that the Appellant had filed a Defence stating that it had paid the Respondent’s service entitlement, there must also be evidence to establish that defence. For it is trite law that he who asserts must prove the assertion. There is not even an Affidavit from the Appellant in the Appeal Book to establish that defence. That is the first difficulty I have with the Appellant’s submissions.

24. The second difficulty I have is a question of law. Claims for unpaid service entitlements are distinct from claim for damages for unlawful termination of employment. I had explained the distinction in my judgment of Firman Manua & Kolopa Security Services Limited -v- The Southern Highlands Provincial Government: WS No 848 of 2006 (Unnumbered & Unreported Judgment of 24th October 2008). That was a case of breach of contact of services (security services) allegedly provided to the Southern Highlands Provincial Government by the Plaintiffs. The Defendant failed to pay the Plaintiffs for the alleged services pursuant to the contractual price of K525,600.00 for a period of three years. I made the distinction at page 12 of the judgment as follows:

"There is another reason for me to dismiss the action. The reason is this; claims based on contract for services are different from contract of employment cases. In the present case, it is a case of breach of contract for services. Unlike contract of employment cases where it is usually the case where an amount or monetary sum is agreed or fixed and expressly set out in the contract, contract for services would not have any. If there is, it would be a monetary rate which is fixed or agreed upon by the parties. The rate would form the basis for calculating the remuneration or fees due under the contract. This present case typifies this category of contract.

Let me illustrate the point further. In my judgment of Paul Piru -v- Chimbu Holdings Pty Limited: WS No 542 of 2005 (Unnumbered & Unreported Judgment of 04th July 2008), I awarded a total sum of K73,100.00 to the Plaintiff in damages for breach of contract of employment. In that case, the Plaintiff was employed by the Defendant as its Managing Director and signed a contract for 3 years. After serving more than 1 year of the contract, the Plaintiff resigned. Following his resignation, the Defendant failed to pay his resignation entitlements and also unpaid entitlements under the contract. Under the contract, amongst other heads of entitlements, the Plaintiff was entitled under clause 4 of the contract to a salary of K65,000.00 per annum, clause 8 to accommodation allowance of K10,800.00 per annum and clause 9 for transportation costs of K27,375.00 per annum.

As the parties agreed or fixed the amounts or monetary sum under each head of damages, I had no difficulty in finding that the Defendant was liable for the unpaid entitlements under the contract like K13,400.00 for accommodation allowance and K33,000.00 for transportation. Then, there are cases of breach of contract of employment where the employer pays the employee during the period of contract and subsequently terminates the employee from employment. In this category of cases, the law is that the employer shall pay damages based on the period of notice under the contract. The cases falling under this category are Christopher Appa -v- Peter Wama [1992] PNGLR 395 and Robert Karawa -v- Kevin Byrne & Tourism Promotion Authority (1999) N1805 to name a few".

25. I made those observations in the context of a written contract of employment. As I said, if the contractual entitlements are not paid during the period of service and the employee either resigns or gets terminated, he is entitled to be paid those entitlements. The reason is obvious, he or she would have been paid those entitlements had the employer paid during the period of employment. Thus, whilst that principle applies in a written contract of employment cases, I am of the view that it is applicable in pure master and servant relationship where there is no written contract like in this case. This is because it is common in any employment situation an employee is entitled to annual leave and is paid monies for the annual leave and monies for long service leave (furlough leave) after 15 years of service or pro rata long service leave if the employee has not reached 15 years.

26. These entitlements (annual leave and long service leave (furlough leave) or pro rata long service leave) accrue during the period of service. They are due and payable in the case of annual leave, after 1 year of continuous service and for long service leave (furlough leave), after 15 years. Thus, in my view, when these entitlements are not paid during the period of service and the employee resigns or gets terminated, the employer must pay these entitlements.

27. Proceeding on this basis, my perusal of the complaint and summons shows that the Respondent claimed unpaid service entitlements and not damages for unlawful termination from employment. In my view, he is entitled to bring this complaint before the District Court as the amount claimed is under the monetary jurisdiction of K10, 000.00. In terms of the question of liability, the evidence of the Respondent and his brother in law, Gabriel Kiap showed that the Respondent had not taken his annual leave, hence not paid money for annual leave. As he had served for 18 years with the Appellant, he would have taken long service leave after 15 years, hence he would have been only entitled to pro rata long service leave after 15 years of service which would have been 3 years.

28. But on review of his calculation of pro rata long service in paragraphs 9 and 10 of his Affidavit, the Respondent seemed to have claimed for 18 years rather than just 3 years. Thus, does this make the calculation of pro rata long service leave wrong, hence the judgment of the learned Magistrate also wrong in respect of this entitlement? I do not think so! I think what the Respondent has claimed is his accrued long service leave entitlement. This is why Mr Joe Pok has calculated this entitlement using 18 years. This calculation is also consistent with the evidence of the Respondent and also his brother in law, Mr Kiap that the Respondent has not taken any long service leave since working with the Appellant. And so, in terms of proving his losses, his evidence and also of Mr Joe Pok’s clearly set out the calculations for annual leave and pro rata long service leave which would have been actually long service leave entitlements.

29. Their evidence had not been rebutted or challenged in any shape or form by the Appellant and they remain evidence of the Respondent to establish his claim for the unpaid entitlements, in respect of both liability and damages. I cannot find any reason to reject the evidence, hence they must stand. That being the case, I am of the view that the learned Magistrate was entitled to find on the evidence presented before him that the Respondent had established liability and damages against the Appellant and entered judgment for that amount.

30. In the end, I am not satisfied that the Appellant has shown any error on these grounds of appeal and I dismiss them accordingly.

GROUND 6 OF NOTICE OF APPEAL

31. The Appellant has abandoned ground 6 of the Notice of Appeal, hence it is not necessary for me to address this ground.

ORDERS

32. In conclusion, I find that the Appellant has not made out its appeal. It is misconceived and there is no miscarriage of justice.

33. Accordingly, I dismiss the appeal and uphold the decision of the District Court of 2nd July 2003 in awarding a sum of K7,471.06 in favour of the Respondent and order the Appellant to pay the Respondent’s costs of the appeal to be taxed if not agreed.

Orders accordingly.

___________________________________________

Warner Shand Lawyers: Lawyers for the Appellant
No appearance for the Respondent