Hoi v Somare [2012] PGNC 111; N4749 (10 August 2012)

N4749

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1315 OF 2001

BETWEEN

MAIRI HOI
Plaintiff

AND

ARTHUR SOMARE
First Defendant

AND

SBA LIMITED
Second Defendant

Waigani: Makail, J
2012: 24th, 27th July & 10th August

ASSESSMENT OF DAMAGES - Breach of contract - Contract of services - Contract of Employment - Oral contract - Services rendered - Failure to pay wages on agreed rate, leave monies and repatriation costs - Special damages assessed based on terms of oral contract - Balance of outstanding wages, leave monies and repatriation costs - General damages assessed for frustration, distress and hardship - Exemplary damages - Proof of - Employment Act - Sections 10, 15, 40, 61 & 62.

Cases cited:

Papua New Guinea cases

Peter Kirin and KK Farmers -v- John Paroda (2004) N2599
Petrus -v-Telikom PNG limited (2008) N3373
Andrew Kinaram -v- Vanimo Forest Products Limited (2011) N4413
Dia Kopio -v- Employment Authority of Enga Provincial Government [1999] PNGLR 462
Lawrence Sausau -v- Joseph Kumgal (2006) N3253
Peter Na-al -v- Michael Debege & Fly River Provincial Government (2000) N1958
Peter Aigilo -v- Sir Mekere Morauta, as Prime Minister & The State (2001) N2103

Overseas cases

Bakec -v- Denkara Ashanti Mining Corp Ltd (1903) 20 TLR 37

Counsel:

Mrs E Wohuinangu, for Plaintiff
No appearance, for Defendants

JUDGMENT
10th August, 2012

1. MAKAIL, J: This is an ex parte trial matter, the defendants having shown no interest in defending the claim following entry of default judgment on 11th August 2005. The matter is for assessment of damages. The cause of action is one of breach of contract of services. The plaintiff was employed by the defendants and rendered services to them. They failed to pay him wages at the agreed rate, leave monies and repatriation costs. He claims balance of the wages, unpaid leave monies and unpaid repatriation costs including general damages for frustration, distress and hardship and exemplary damages.

Evidence

2. In support of the claim, he relies on the following affidavits:

(a) His affidavit sworn on 30th August 2005 and filed on 01st September 2005, (Exhibit "P1");

(b) Affidavit of Gari Ranu sworn on 04th November 2005 and filed on 10th November 2005, (Exhibit "P2");

(c) Affidavit of Digana Lohia sworn on 04th November 2005 and filed on 10th November 2005, (Exhibit "P3"); and

(d) Affidavit of Maimu Gamoga sworn on 24th August 2005 and filed on 30th August 2005, (Exhibit "P4").

3. From the affidavits, the undisputed facts are; the plaintiff is a heavy plant operator from Tubuseria in the Central Province. He was employed by Hebou Constructions Limited in Port Moresby as a crane operator. At Hebou Constructions, he was paid at K3.00 per hour. The first defendant is a shareholder of the second defendant. On 03rd June 1995, Mr George Constantinou of Hebou Constructions approached the plaintiff and suggested to him to take up a job with the second defendant in Wewak in the East Sepik Province. At a brief meeting with the first defendant on 04th June 1995, he was offered a rate of K4.50 per hour, a return ticket for leave, and leave pay by the first defendant. He accepted the offer and flew to Wewak. He commenced work on 05th June 1995. He was based at a logging area at Kaup in Angoram until 15th September 1995 when his employment was terminated. He was paid at a rate of between K2.00 and K3.00 per hour.

4. According to the termination notice, the defendants' reason for his termination on 15th September 1995 was that, there was a change in the management of the logging project at Kaup where the second defendant as Project Managers ended and Heybridge Pty Ltd was appointed as new Project Managers. Further, the plaintiff was re-employed under a new contract commencing on 19th September 1995. On 19th September 1995, he resumed work until 22nd December 1995. He spent 1995 Christmas at Kaup village. On 02nd January 1996, he resumed work at Kaup but operations came to a standstill after the operations manager was terminated. Operations recommenced on 18th March 1996 and he worked until 31st October 1996. He was due for his leave but was not paid leave monies and given a return ticket. As a result, on 03rd November 1996, he met his own costs and travelled to Irian Jaya for leave.

5. On his return from Irian Jaya on 29th November 1996, he reported for duty at Wewak but due to bad weather, he remained in Wewak until 06th December 1996. On 07th December 1996, he returned to Kaup and on 09th December 1996, he resumed work until 28th December 1996 when operations ceased. He was not paid wages during the stoppage. After 10 months, on 19th September 1997, the first defendant met with him at Kaup and he informed the first defendant of his intention to resign and return to Port Moresby. The first defendant refused and informed him of his redeployment to Maprik. He waited from 19th September 1997 until 19th January 1998 when he commenced work at Maprik. On 20th January 1998, he returned to Wewak to follow up his request to return to Port Moresby. He met with Sana Somare who advised him that he would look for a place for him to stay and something to do.

6. Following this, he was not given any termination notice but was informed to keep checking with the second defendant's office in Wewak. He remained in Wewak to follow up his request. Meanwhile, the defendants did not provide accommodation for him. A Mr Maimu Gamoga accommodated him and provided food and sustenance during his stay in Wewak. He obtained odd jobs in between with Greenhill Investment Limited and Fletcher Morobe Constructions Limited. After a long wait, he requested the defendants to repatriate him to Port Moresby but the defendants failed. In the end, he paid for his own repatriation to Port Moresby.

The Law

7. Section 10 of the Employment Act provides that where a casual worker is employed by the same employer for more than six days in any one month, he shall be deemed to be an oral contract employee under Division 3. Division 3 provides for oral contracts. Section 15 which comes under Division 3 provides that where an employer and an employee enter into an oral contract of service, the employer shall, at the time of the engagement, make a written record of the terms and conditions of the contract. Where a dispute arises as to the terms and conditions of an oral contract of service, and the employer fails to produce a record, a statement by the employee as to the terms and conditions of the contract shall be conclusive evidence of those terms and conditions unless the employer satisfies the Secretary or an Arbitration Tribunal established under the Industrial Relations Act, 1962 to the contrary. see also Peter Kirin and KK Farmers -v- John Paroda (2004) N2599 and Petrus -v-Telikom PNG Limited (2008) N3373.

Application of law to the facts

8. On the evidence, I find there is an oral agreement between the plaintiff and the defendants. I also find the plaintiff was employed as a heavy plant operator (crane operator) at an hourly rate of K4.50. He was recruited in Port Moresby and transferred to Kaup in East Sepik Province. It was also a term of the agreement that the defendants would provide a return ticket for leave and leave pay to the plaintiff. The plaintiff rendered services to the defendants and they failed to pay wages at K4.50 per hour, leave monies and repatriation costs to him.

Assessment of Damages

9. The law is that, a plaintiff bears the onus of proving his losses notwithstanding entry of default judgment. The question is, has the plaintiff proven his losses? Firstly, he claims special damages. Under this head of claim, he claims outstanding balance of wages. He says the defendants were obliged to pay him at K4.50 per hour. Instead, they paid him between K2.00 and K3.00 per hour. The balance outstanding is between K1.50 and K2.00 per hour. As the rate fluctuated, I will strike a balance and apply K1.70 per hour. The first part of the claim is for the period he worked at Kaup from 05th June 1995 to 22nd December 1995, 18th March 1996 to 31st October 1996 and 09th December 1996 to 28th December 1996. This is a total of 448 days. I exclude the period from 29th December 1996 to 19th September 1997 because operations ceased and he did not work. I also exclude the period from 19th September 1997 to 19th January 1998 because he did not work. Multiplying K1.70 per hour by 8 hours per day by 448 days gives K6,092.80. I allow 10% for contingencies such as sick leave, absenteeism, weekends, etc... This reduces the total to K5,483.52. I award this sum.

10. The second part is for the period he would have worked if he had been employed at Maprik. This is from 19th January 1998 to 31st March 2001. The total number of days is 1,167. Multiplying K4.50 per hour by 8 hours per day by 1,167 days gives K42,012.00. Counsel submits that the plaintiff is entitled to receive this sum for outstanding wages for this period because no formal notice of termination was given to him. With respect, this submission is untenable. The plaintiff did not work during this period and therefore is not entitled to receive pay. He was offered work at Maprik but he chose to return to Port Moresby. In my view, by his refusal to work at Maprik, he has terminated the contract. I refuse the second part of this head of claim.

11. The next head of claim is unpaid leave monies. Section 61 of the Employment Act states, an employee is entitled to leave after a year of service. Section 62 sets out how leave monies is calculated. It is calculated at the rate of the wage for 21 days. The plaintiff was not paid leave monies after one year of service. He was not given a return ticket for his leave to Port Moresby. Applying the rate of K4.50 by 21 days by 8 hours per day gives K756.00. I award this sum from unpaid leave monies. As for the airline ticket, one way to Port Moresby from Wewak is K222.00. Both ways is K444.00. I award this sum.

12. The plaintiff also claims repatriation costs. His counsel submits that he was recruited in Port Moresby and brought to Wewak to work at Kaup. On his termination, the defendants were obliged to repatriate him to Port Moresby. Section 40 of the Employment Act states that an employer shall pay the expenses of repatriating an employee to the place from which he was recruited: see also Andrew Kinaram -v- Vanimo Forest Products Limited (2011) N4413. In this event, the defendants failed. I am satisfied the plaintiff is entitled to repatriation costs. He paid for an airline ticket (Air Niugini) from Wewak to Port Moresby at K224.50 and left Wewak on 31st March 2001. He makes no other claim under this head of claim. I award K224.50.

13. The other head of claim is general damages for frustration, distress and hardship. The plaintiff's counsel submits that from 19th September 1997 to March 2001, the defendants failed to repatriate the plaintiff to Port Moresby. Further, they did not advise him of his termination or that his services were no longer required. As a result, he was stranded in Wewak and had to fend for himself. Counsel relies on the cases of Dia Kopio -v- Employment Authority of Enga Provincial Government [1999] PNGLR 462 and Bakec -v- Denkara Ashanti Mining Corp Ltd (1903) 20 TLR 37 to support the claim. She submits K5,000.00 would be a reasonable and fair sum to award.

14. While there is no evidence from a Psychologist to verify the plaintiff's claim that he has suffered mentally and physically from the actions of the defendants, I am satisfied that this is a case where the plaintiff was taken from one place to work in another place by an employer. The employer was obliged to look after his welfare, at least the basic needs, such as food, shelter and money. The defendants provided these basic needs when the plaintiff was working at Kaup. They failed after the work at Kaup ceased. To start off with, they did not accept his request to resign after work at Kaup ceased. When he refused to take up work at Maprik, they did not immediately repatriate him to Port Moresby. Instead, they kept him at Wewak and promised him to find accommodation and work for him. Following that, he was advised to follow up with the second defendant at its office in Wewak. As a result, he was left stranded in Wewak and had to fend for himself. Mr Gamoga accommodated him and supported him during that time. I am satisfied that he has suffered frustration, distress and hardship.

15. It is trite law that assessment of damages is discretionary. The awarding of damages depends on the circumstances giving raise to the claim and the extent of the injury or suffering. The two cases relied upon by counsel for the plaintiff does not directly address the question of quantum. However, they state that in cases where dismissed employees claim damages for wrongful dismissal, they have a duty to mitigate their losses. That duty is to seek alternative suitable employment following dismissal. In my view, this principle is equally applicable in cases where the employee is claiming damages for frustration, distress and hardship, as in this case.

16. Comparable awards in past cases show that the National Court has awarded general damages ranging from K3,000.00 to K20,0000.00 for frustration, distress and hardship. Some of the cases are Lawrence Sausau -v- Joseph Kumgal (2006) N3253; Peter Na-al -v- Michael Debege & Fly River Provincial Government (2000) N1958 and Peter Aigilo -v- Sir Mekere Morauta, as Prime Minister & The State (2001) N2103.

17. In Peter Aigilio's case, the plaintiff was the Commissioner of Police and was dismissed. He sued the State for wrongful dismissal. The Court found that the dismissal was unlawful and awarded damages. One of the head of damages awarded was for frustration, distress and hardship. The Court awarded K20,000.00. It awarded this sum because it found that the plaintiff had suffered acute severe Nephrotic syndrome, which according to a medical report from the doctor, was attributed to the dismissal. In addition, it found that the plaintiff had mitigated his losses by seeking alternative employment but was unsuccessful.

18. Comparing this case with Peter Aigilo's case, I am of the view that an award between K10,000.00 and K20,000.00 would be reasonable given that the plaintiff was left without a job after work at Kaup ceased on 28th December 1996 and the defendants made no effort in repatriating him to Port Moresby. He has also mitigated his losses by securing part time employment with Greenhill Investment Limited Fletcher Morobe Constructions Limited. For these reasons, I award K13,000.00.

19. The final head of claim is exemplary damages. Counsel for the plaintiff submits that the Court should order the defendants to pay K3,000.00 for exemplary damages because they were well aware that they had employed the plaintiff but left him in Wewak for 3 years without pay and unattended. As a result, he was forced to look for work to make ends meet. An award of exemplary damages would show the Court's disapproval of such conduct by the defendants and a warning to other employers to refrain from such conduct.

20. I accept this submission. I always say, employers must look after their employees because they are the backbone of any enterprise. I am satisfied the defendants failed to look after the plaintiff's welfare. I hastate to add, an employer who employs or continues to employ an employee and fails to pay wages or without reasonable excuse, fails on demand to pay any wages due and payable to an employee, or makes any deductions from wages other than those authorised is guilty of an offence under section 96 of the Employment Act. The prescribed maximum penalty for this offence is a fine of K500.00. In that respect, the evidence strongly suggests that the defendants have also committed an offence within the meaning of section 96 of the Employment Act.

21. To show the Court's utter disappointment and disapproval of the defendants' conduct, I will order them to pay exemplary damages. I accept the amount suggested by the plaintiff's counsel. I award K3,000.00.

22. I also award interest at 8% from the date of issue of writ to date of judgment and costs.

Judgment accordingly.
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Public Solicitor: Lawyers for Plaintiff