Adam v Ainui [2020] PGNC 373; N8638 (23 November 2020)

N8638

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1426 OF 2016

BETWEEN:
PAUL ITO ADAM
Plaintiff

AND:
PAULINE AINUI AS THE DIRECTOR HUMAN RESOURCES DIVISION, MADANG PROVINCIAL GOVERNMENT
First Defendant

AND:
DANIEL ALOI AS THE PROVINCIAL ADMINISTRATOR
Second Defendant

AND:
MADANG PROVINCIAL GOVERNMENT
Third Defendant

Madang: Narokobi J
2020: 2^nd October, 23^rd November

DAMAGES - Assessment of damages – Loss of salaries and entitlements from non-implementation of Public Service Commission decision – Liability not in issue – Appropriate Amount for Each Head of Damages Claimed – General Damages for Breach of Employment Contract – Exemplary Damages – Whether Appropriate in the Circumstances

The plaintiff is the Deputy Provincial Administrator of Madang Provincial Government. Public Service Commission overturned a decision to terminate his employment. The Public Service Commission also ordered that he be back paid his lost salaries and other allowances. Liability has been determined in a separate trial, and he is now before the court to claim damages for his termination.

Held:

(1) Although the State sets the terms and condition of the plaintiff’s employment the third defendant is responsible for the management of the contract and payment of the plaintiff’s terms and conditions of employment and should be held responsible for any claims made under the contract of employment.

(2) Since the third defendant is sued in its own capacity and not the State, there is no requirement to give s 5 notice under the Claims By and Against the State Act 1996 (Habolo Building & Maintenance Ltd v Hela Provincial Government (2016) SC1549 followed.

(3) Judgment sum is assessed at K283,007.91 composed of lost salaries and allowances, general damages, special damages and interest.

(4) Interest is calculated at 4% for the fixed amounts and 8% for the general damages (Opi v Telikom (2020) N8290 and Sorum v Aloi (2020) N8416 adopted).

Cases Cited:

Aigilo v Morauta, Prime Minister (No. 2) (2001) N2103
Coecon Ltd (Receiver-Manager Appointed) v National Fisheries Authority of Papua New Guinea (2002) N2182
Felix Kua v. Clement Patiken (2010) N4103
Habolo Building & Maintenance Ltd v Hela Provincial Government (2016) SC1549
MAPS Tuna Limited v Manus Provincial Government (2007) SC857
Opi v Telikom (2020) N8290
Sorum v Aloi (2020) N8416

Counsel:

Mr D. Wau, for the Plaintiff
Mr T. Ilaisa, for the Defendants

JUDGEMENT

23^rd November, 2020

1. NAROKOBI J: This is the court’s decision on the plaintiffs claim for damages for lost salaries and allowances, damages for breach of human rights and other related damages.
   

A BACKGROUND

2. On 11 February 2020 after a short trial the court made the following orders on the issue of liability:
   

“1. The plaintiff has established a cause of action for breach of human rights under Section 41(1) of the Constitution against the defendants who are liable in damages accordingly arising from the failure to implement fully, the decision of the Public Service Commission dated 8 December 2014.”

3. There was no appearance of the defendants at the trial on liability. Since then, the defendants have not filed any application to set aside the order, nor have they led any evidence during trial on assessment of damages. All issues in relation to liability are therefore considered to have been resolved (Coecon Ltd (Receiver-Manager Appointed) v National Fisheries Authority of Papua New Guinea (2002) N2182).
   
4. Trial on assessment of damages was conducted on 23 September 2020 and submissions made thereafter.
   
5. During trial on assessment of damages, only one affidavit was filed, that of the plaintiff filed on 25 May 2020. The defendant did not file any affidavits in response. They chose to only make legal submissions.
   
6. The Plaintiff is claiming damages arising from unlawful termination of his employment with the Third Defendant on 15 April 2013.
   
7. The Plaintiff was employed as a contract officer occupying the position of Deputy Provincial Administrator in charge of Corporate and Technical Services until his termination by the former Provincial Administrator, Mr., Ben Lange. This employment was based on a contract of Employment dated 16^th August 2012. The contract is annexed as Annexure B to the plaintiff’s affidavit filed on 15 May 2020.
   
8. When the plaintiff was terminated on 15 July 2013, the Plaintiff appealed to the Public Service Commission (PSC). The PSC made its decision on 18 December 2014, annulling the decision of the Madang Provincial Government and he was reinstated to his substantive position. The PSC decision is annexed to the plaintiff’s affidavit filed on 15 May 2020.
9. The particular of the PSC decision was:
   
   1. That the commission annuls the decision of former Provincial Administrator, Mr. Bernard Lange of Madang Provincial Administration to dismiss Mr. Paul Adam Ito dated 15^th July 2013 from the Madang Government Administration and the Public Service.
      
   2. That Mr. Paul A. Ito be immediately reinstated to the substantive position as Deputy Provincial Administrator – Corporate & Technical Services Division and his contract of employment be renewed as a result of unnecessary dismissal; and
      
   3. That Mr. Paul A. Ito be paid all loss salaries and contractual entitlements from the date he was effectively put off the payroll and dismissed from the public service
      
10. The Plaintiff alleges that he was never properly paid all his lost salaries contrary to the Decision number 3 of PSC Decision. The Plaintiff says that he was paid only a sum of K80,459.08 upon the Pay Variation on 28^th May 2015. This is referred to in his affidavit.
    
11. The Plaintiff says that he was never paid all his lost salaries and other emoluments due and accrued to him from the period of year 2012 to year 2015. This proceeding by the Plaintiff is therefore to recover all those emoluments accrued and owed to him under the Contract of Employment dated 16 August 2012 and those benefits derived from the employment ordinarily as a senior public servant.
    

B MAIN ISSUE

12. Since the defendants do not dispute the existence of the PSC decision, in my view the issue is straightforward, that is whether the claim was pleaded, there is evidence of the claim under the previous contract of employment and if so, what they are, and have they been paid or not.
    

C PRELIMINARY ISSUE

13. Before I go into that issue, I would like to address the contentions raised by the defendants on the necessity of giving section 5 notice under the Claims By and Against the State Act 1996. The defendants have also raised the ground that the plaintiff’s contract is entered into between the national government and the plaintiff, that is, it is signed with the Department of Personnel Management, and since the department is a national government entity, it brings into play the necessity of giving notice under section 5 of the Claims By and Against the State Act 1996.
    
14. I reject this submission on three grounds. Firstly, it was not raised in defence, and no application to dismiss was filed on this basis with supporting evidence. This proceeding has been on foot since 2016. At some stage the Solicitor General was representing the defendants and did not file an application to that effect. Secondly, having regard to the Supreme Court decision in , Habolo Building & Maintenance Ltd v Hela Provincial Government (2016) SC1549 which stands for the proposition that where the State is not named as a party there is no requirement to give section 5 notice under the Claims By and Against the State Act 1996. Thirdly liability has been determined, so even if it was a requirement, I am precluded from revisiting that issue through an oral submission at the closing submissions on assessment of damages. It amounts to trial by ambush.
    
15. The more substantive issue is whether the plaintiff should be suing the State as he has signed the contract with the State. That is, the contract is signed by the Provincial Administrator on behalf of the State. After having read the contract, I have reached the view that any issue in relation to emoluments is the responsibility of the provincial government as a separate legal entity. It is in more ways than one, the authorized agent of the national government in relation to dealing with issues of terms and conditions of employment and emolument of employees in the province from the position of Deputy Administrator down. The Administrator is appointed by the National Executive Council and therefore an aggrieved person occupying this position must sue the State. Although the national government has primary responsibility to set terms and conditions of employment, the management of the day to day affairs of the contract of employment vests with the provincial government. Since it is a legal entity created by the Organic Law on Provincial and Local Level Government, it is susceptible to sue and be sued on any question arising out of the contract of employment, generally. To confirm this, one will note that the plaintiff was in fact terminated by the Provincial Administrator. Any questions on payment of the terms and conditions would be an issue attended to by the respective provincial government as a separate legal entity from the state.
    

D ADDRESSING THE MAIN ISSUE

16. Returning to the main contention, I turn to consider what the plaintiff is claiming for in this matter. The underlying consideration is whether the plaintiff is entitled to the monies as his lawful entitlements and if so, what evidence is there to show that he was or was not paid the moneys due to him.
    
17. Let me begin by setting out in summary the plaintiff’s claim.
    

No.	Particulars of Claims	Amount (Kina)
1	Loss salary entitlements accrued and due under the Contract of Employment from the date of his termination of employment on 15th July 2013 to the date his reinstatement on the payroll on 28th May 2015.	K 206, 102.81
2	General Damages for breach of Employment Contractual Agreement.	K51,386.74
3	General damages for breaches of Human rights under Section 39,41 and 58 of the Constitution	K5,000.00
4	General damages for pain and physical and mental distress	K20,000.00
5	Exemplary damages against the Defendant	K4,000.00
6	Special Damages	K9,422.11
7	Cost of the proceeding	K25,000.00
8	8% judicial interests	By the court
	Total amount of Debt and Damages	K311,489.55

18. I now turn to each of the claim. For each claim I look at the pleadings, the evidence of both parties, and the law and decide whether that claim should be upheld or not.
    
19. The Plaintiff’s first claim is for the amount of K206,102.81. This is for the underpayment of the lost salaries and entitlement benefits under the contract of employment during the period he was unemployed while going through the appeal process with the PSC. Under the contract as provided in Annexure A in his affidavit filed on 15 May 2020, the Plaintiff was on a contract categorized as Category A Contract Pay Grade PS18.1 that comprised of the following entitlements:
    
    • base salary
    • contract gratuity
    • special domestic market allowance
    • housing allowance
    • vehicle allowance
    • contract allowance
      
20. I am able to confirm from the plaintiff’s affidavit that the plaintiff was holding the substantive contract position categorized “Category “A2” as Deputy provincial Administrator – Corporate & Technical Services of Madang Provincial Government. This is confirmed from Annexure D of his affidavit filed on 15 May 2020.
    
21. The Plaintiff is submitting that the amount of K206,102.81 must be paid by the Defendants being for the underpayment of his loss of salaries and entitlement benefits under the contract of employment. K206,102.81 is arrived at by subtracting K104,000.00 from what he is entitled to, that is K310,102.81. K310,102.81 is arrived at as follows:
    

LOSS OF SALARIES AND ENTITLEMENTS KINA (k)
Senior Officer Contract Allowance Category “A2”
Suffered as a result of Termination of Contract of Employment

1. Accommodation

K15,000 x 2years = K30,000 30,000.00

K15,000 /12 = 1250 x 6 fortnights = K3,750 7,500.00

37,500.00 37,500.00

2. Vehicle

K15,000 x 2 = K30,000 30,000.00

K15,000/12 months = K1250 6 fortnights = K7,500 7,500.00

37,500.00 37,500.00

100. Utilities

K1,800 x 2 = K3,600 3,600.00

K1,800/12 months = K150 x 6 fortnights = K900 900.00

4,500.00 4,500.00

4. Telephone

K1,200 x 2 = K2,400 2,400.00

K1,200/12 = K100 x6 fortnights = K600 600.00

3,000.00 3,000.00

5. Entertainment

K3,600 x2 = K7,200 7,200.00

K3,600/12 = K300 x6 fortnights = K1,800 1,800.00
9,000.00 9,000.00

1. GRATUITY

Based on 25% of Grand Salary of K68483 = 17,120.75
Less 35% tax (17,120.75-5,992.26=11,128.49
16/08/2012 to 15/02/2013.....per Human Resource list 4,346.53
16/02/2013 to 31/12/2013.....per Human Resource list 7,727.20
01/01/2014 to 31/12/2014.....per Human Resource list 91.32
2015 11,128.49
2016 11,128.49
2017 11,128.49
2018 11,128.49
2019 11,128.49
67,807.50 67,807.50

1. SALARY BACK PAY AND ALLOWANCE
   

1. Salary Back Pay and allowance provided by Human Resource 30,180.93

K2,338.11 x 52 fortnights = K 121,581.72 121,581.72
K2,338.11 x 6 fortnights 14,028.66
165,791.31 165,791.31

2. Foregone POSF Contribution whilst terminated K138 x 52 7,176.00

K138 x 6 fortnights 828.00
8,004.00 8004.00

3. Domestic Market Allowance

K3,000 per annum x 2 years 6,000.00
K3,000 per annum/12 = K250 per month x 6 fortnights = K1,500 1,500.00
7,500.00 7,500.00

4. Finance/Audit Inspectors Allowance

K600 per annum x 2 years 1,200.00
K600/12 months = K50 per month x 6 fortnights = K300 300.00
1,500.00 1,500.00

Sub Total 342,102.81

Less: Gratuity paid to me December for the year 2013,2014,2015 (32,000.00)
Total Claim 310,102.81

22. I have considered the contract of employment and confirm that the amount claim relates to his contract of employment at the relevant time for which he was not paid. I therefore award the amount of K206,102.81.
    
23. The plaintiff’s second claim is for general damages for breach of contract. The plaintiff claims a total of K51,386.74 had accrued and is owed to him but that was not paid due to his termination and being put off the system payroll. The Plaintiff is claiming this amount of K51,386.74 to be paid out forthwith as balance of his contract for year 2013. The plaintiff has provided a schedule indicating his name and stating that those amounts are due to him. In the absence of independent evidence to confirm this amount I dismiss this claim. A question I have which there is no evidence to answer is that in his claim for K206,102.81, it also includes gratuity for the period claimed in this amount. Since there is no explanation for this discrepancy, I dismiss the claim for K51,386.74.
    
24. The third claim is for general damages for breach of s 41(1) of the Constitution. The plaintiff claims K5,000. Since the plaintiff is a long serving employee, I consider this to be a reasonable sum. I award K5,000.
    
25. The fourth claim is for general damages for pain and physical and mental distress. In Sorum v Aloi (2020) N8416 I awarded K20,000, a case involving a former employee of the Madang provincial government also on a written contract of employment. Since the plaintiff also claims this amount, I award K20,000 for general damages for pain, physical and mental distress.
    
26. The fifth claim is for exemplary damages. This is a matter of discretion. I note that the defendants have already paid a sum of K104,000, and this is from the plaintiff’s own evidence. I therefore do not find any element of egregious conduct on the part of the defendants, so I refuse this claim.
    
27. The sixth claim is for special damages. The plaintiff submits as follows.
    
28. The plaintiff refers the court to the case of Aigilo v Morauta, Prime Minister (No. 2 N2103 where the defendant was ordered to pay interest on loan repayment of the Plaintiff.
    
29. In particular the decision in the case of Opi v Telikom (2020) N8290 held that where there is sufficient notice given to the Defendant that evidence will be led to show matters of special damages and where the evidence on special damages is led on without any serious objection, the court is entitled to make findings on the basis of that evidence, provided the evidence is within the general ambit of the Plaintiff’s claim. This case law is applicable in the present case.
    
30. Applying the above principle of evidence with regard to special damages, the Plaintiff has led evidence of calculation of his lost salaries and entitlements which was not disputed by the Defendants with contrary evidence. As such the evidence by the Plaintiff stands to prove the claim for special damages.
    
31. There is evidence that the plaintiff paid out a sum of K9,422.00 as loan payout. See Annexure K of the plaintiff’s affidavit filed 15 May 20202 at page 2 contains a bank statement showing the amount paid to Bank of South Pacific by the Plaintiff.
    
32. In light of the foregoing, I order that the Defendants reimburse the Plaintiff the sum of K9,422.11 being for the loan repayment.
    
33. The total damages I order to be paid by the defendants are therefore as follows:
    

No.	Particulars of Claims	Amount (Kina)
1	Loss salary entitlements accrued and due under the Contract of Employment from the date of his termination of employment on 15 July 2013 to the date his reinstatement on the payroll on 28 May 2015.	K 206, 102.81
2	General damages for breaches of Human rights under Section 41 of the Constitution	K5,000.00
3	General damages for pain, physical and mental distress	K20,000.00
4	Special Damages	K9,422.11
	Total	K240,524.91

E INTEREST

34. In following Telikom and adopting my reasoning in Sorum v Aloi (2020) N8416 I will award interest at the rate of 4% from the date of service of the proceedings to the date of judgement, that is from 14 November 2016 to 23 November 2020 for items no 1 and 2 as being special damages in nature as a fixed costs item. For items 2 and 3, I will award 8% interest rate. For ease of calculations, I determine a fixed period of four (4) years.
    
35. Therefore, interest payable for items 1 and 4 is K215,524.11x0.04x4 years = K34,483.99.
    
36. For item 2 and 3 I also determine a fixed period of 4 years. Therefore, interest payable is K25,000 x 0.08x4 = K8,000.
    
37. Total interest is therefore K34,483.00 + K8,000 = K42,483.00.
    
38. The total judgment sum due to the plaintiff is therefore K240,524.91 +K42,483.00 = K283,007.91.
    

F COSTS AND LIABLE PARTY

39. I was minded to award fixed costs for K10,000, but in hindsight I accept the plaintiff’s claim for costs for K25,000 and award this sum as the defendants could have better assisted the court by adducing credible evidence from its human resources division to either support or refute the plaintiff’s claim. This has left the court to only consider the plaintiff’s evidence to arrive at its decision, which is undesirable, but in the circumstances the best evidence the court has to arrive at its findings.
    
40. Since the first and second defendants are sued vicariously, I order that the third defendants meet the judgement sum.
    

G ORDERS

41. The orders the court makes are therefore as follows:
    
    1. The third defendant pay the plaintiff a total judgement sum of K283,007.91.
    2. The third defendant pay the plaintiffs costs fixed at K25,000.
    3. Interests will accrue on the judgement sum at 8% per annum for any amount that remains unpaid within 90 days from today.
    4. Time is abridged.
    5. Filed is closed.
       

Orders accordingly
DFW Lawyers: Lawyers for the Plaintiff
Thomas More Ilaisa Lawyers: Lawyers for the Defendant