Rai v Kapera [2014] PGNC 180; N5806 (29 October 2014)

N5806

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

WS NO 618 OF 2012

CHRIS RAI
Plaintiff

V

MEMAFU KAPERA, MANAGING DIRECTOR, NATIONAL BROADCASTING CORPORATION
First Defendant

NATIONAL BROADCASTING CORPORATION
Second Defendant

Waigani: Cannings J
2014: 14, 17, 29 October

LAW OF EMPLOYMENT – wrongful dismissal – elements of a cause of action in breach of contract – whether a contract of employment existed – whether employer breached contract of employment

The plaintiff, who originally was employed under a six-month contract, claimed that he then entered into a three-year contract of employment with the second defendant, which was breached by his being unlawfully terminated, only one week after the contract commenced operation, by the first defendant (the second defendant's managing director) writing him a termination letter. The plaintiff claimed damages for breach of contract.

Held:

(1) There was no three-year contract entered into. The plaintiff was unable to prove that the Board of the second defendant made a decision to offer him a three-year contract or that the first defendant wrote him a letter of offer or that he accepted it or that there was any written contract drafted or, if there was a draft contract, that it was signed.

(2) The only contract in existence on the date of termination of employment was an oral contract of undefined duration, which the defendants were entitled to terminate without cause or notice.

(3) The plaintiff failed to prove the breach of any contract, so he had no entitlement to damages and the proceedings were wholly dismissed, with costs.

Cases cited

The following cases are cited in the judgment:

Steven Naki v AGC (Pacific) Ltd (2005) N2782
Wolfgang Bandisch v National Capital District Botanical Enterprises Ltd (No 1) (2009) N3806

TRIAL

This was a trial on liability and damages for breach of contract of employment.

Counsel

P Wariniki, for the plaintiff
B S Lai, for the defendants

29th October, 2014

1. CANNINGS J: The plaintiff, Chris Rai, claims damages against the National Broadcasting Corporation and its Managing Director Memafu Kapera for breach of his contract of employment with the Corporation. The plaintiff claims that in January 2011 he entered into a three-year contract of employment with the Corporation, which was breached by his being unlawfully terminated (without notice and without being given a right to be heard) only one week after the contract commenced operation, by Mr Kapera writing him a termination letter. The plaintiff claims the balance of his entitlements under the contract of K181,218.15 plus general damages.

2. The defendants deny liability. They deny the existence of any three-year contract. They argue that on the date of termination of his employment, 4 February 2011, the plaintiff was engaged under an oral contract, which they were entitled to terminate without cause and without notice.

3. The parties agree that Mr Rai was initially employed, on 28 July 2010, under a six-month oral contract, as Executive Officer to the Managing Director. The period of that contract expired on 28 January 2011.

ISSUES

4. The elements of a cause of action in breach of contract are: (a) there was an enforceable contract between the parties, (b) the defendant breached the contract and (c) the breach of contract caused damage to the plaintiff (Steven Naki v AGC (Pacific) Ltd (2005) N2782). Here, all elements are in dispute.

5. The issues are first, whether there was a three-year contract in existence on 4 February 2011 and if there was, whether it was breached by the defendants, and if it was breached, whether the plaintiff suffered damage. If all issues are decided in favour of the plaintiff, an assessment of damages will be made.

WAS THERE A THREE-YEAR CONTRACT IN EXISTENCE ON 4 FEBRUARY 2011?

6. The plaintiff argues that his original six-month contract was extended on the date of its expiry, 28 January 2011, for a period of three years, as a consequence of the following events:

• on 1-2 December 2010 the NBC Board at its meeting approved his appointment to the position of Executive Officer to the Managing Director for a period of three years;
  
• on 21 January 2011 he was given a letter of offer from the Managing Director, notifying him of the Board's decision, stating that this was a contracted senior management position and that his starting base salary would be grade 13, step 1, setting out the details of his salary package and enclosing an acceptance letter and commencement form for him to complete and return to the Managing Director's office;
  
• in response to that letter he continued to perform the duties of Executive Officer to the Managing Director.
  

7. The plaintiff concedes that he did not sign a written contract of employment before he was terminated and says that this was because no lawyer was available in the Corporation at that time to draft the contract. Mr Wariniki, for the plaintiff, submitted that it was of no consequence that a written contract was not signed as it was only a formality and the contract had already been entered into.

8. As to the alleged facts relied on by the plaintiff, I find that:

• it has not been proven that the Board made a decision on 1-2 December 2010 or at any time to appoint Mr Rai to the position of Executive Officer to the Managing Director;
  
• it has not been proven that there was a Board meeting on the dates alleged as there were no minutes of such a meeting or any other credible evidence of such a meeting, let alone the purported Board decision to appoint Mr Rai, and the defendants did not concede either that there was a Board meeting on the dates alleged or that the Board made a decision to appoint Mr Rai;
  
• it has not been proven that the letter of 21 January 2011 from Mr Kapera to Mr Rai is genuine as the copy adduced in Mr Rai's evidence is unsigned and the acceptance letter and commencement form referred to in the letter have not been adduced in evidence, and Mr Kapera testified that he had no knowledge of the letter of 21 January 2011;
  
• it has not been proven that Mr Rai signed the acceptance letter or commencement form allegedly attached to the letter of 21 January 2011;
  
• Mr Rai continued to work as Executive Officer to the Managing Director until the date of termination of employment, 4 February 2011.
  

9. I conclude, on the basis of those observations, that:

• the Board did not make a decision to appoint Mr Rai as Executive Officer to the Managing Director;
  
• Mr Kapera did not write him a letter of offer dated 21 January 2011 or at any other time, and no one else on behalf of the NBC gave him a letter of offer;
  
• the letter of offer adduced in evidence is not a genuine document;
  
• no letter of offer was accepted by Mr Rai;
  
• no written contract was drafted;
  
• no written contract was signed by Mr Rai or by Mr Kapera or anyone else on behalf of the NBC;
  
• the original six-month contract expired on 28 January 2011 and on its expiry, because Mr Rai continued to work, the correct position at law is, as contended for by Mr Lai for the defendants, that Mr Rai was employed under an implied oral contract on the same terms and conditions as those applying to his original six-month contract (Wolfgang Bandisch v National Capital District Botanical Enterprises Ltd (No 1) (2009) N3806);
  
• the only contract in existence on the date of termination of employment, 4 February 2011, was the oral, implied contract of undefined duration, which the defendants were entitled to terminate without cause or notice;
  
• there was no three-year contract in existence on 4 February 2011.
  

CONCLUSION

10. The plaintiff has failed to prove that the contract he claims was breached was in existence on the date of his termination. He has failed to prove the first element of a cause of action in breach of contract. He was not unlawfully terminated. He has no entitlement to damages. The proceedings will be wholly dismissed and costs will follow the event.

ORDER

(1) The proceedings are wholly dismissed.

(2) The plaintiff shall pay the defendants' costs of the proceedings on a party-party basis, to be taxed if not agreed.

(3) Time for entry of this order is abridged to the date of settlement by the Registrar which shall take place forthwith.

Judgment accordingly.
___________________________________________________________
Wariniki Lawyers & Consultants: Lawyers for the Plaintiff
B S Lai Lawyers: Lawyers for the Defendants