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Insurance Partners (PNG) Ltd v Arumapperuma [2024] PGNC 61; N10712 (8 April 2024)

N10712

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS NO. 1581 OF 2011


BETWEEN:
INSURANCE PARTNERS (PNG) LIMITED
Plaintiff


AND:
SHAMAL ARUMAPPERUMA
Defendant


Waigani: Shepherd J
2019: 8th February
2024: 8th April

DAMAGES - Assessment of damages on Undertaking as to Damages following discharge of interim injunction and dismissal of plaintiff’s claim for want of prosecution – principles applicable - assessment of damages arising from defendant’s loss of salary and entitlements in consequence of interim injunction - whether damages should be assessed for breach of defendant’s Constitutional right of choice of freedom of employment – whether general damages should be assessed for pain and suffering – damages awarded under all three heads of damages.


Cases Cited:


Audela Ltd v National Housing Corporation (2024) SC2531
Cheong Supermarket Pty Ltd v Muro [1987] PNGLR 24
East Arowe Timbers Resources Limited v Cakara Alam (PNG) Ltd (2008) N3270
Haluya v The State (2001) N2109
Harding v Teperoi Timbers Pty Ltd [1988] PNGLR 128
Hodson v The State [1985] PNGLR 303
Kolokol v Amburuapi (2009) N3571
Lee Song Timber (PNG) Co Limited v Burua (2005) N2836
Morobe Provincial Government v Tropical Charters Ltd (2011) N4240
Nayos v Gawi (2014) N5667
Nambawan Super Ltd v Petra Management Ltd (2017) N6748
Opi v Telikom PNG Limited (2020) N8290
Pain v The State (2014) N5604
PNG Ports Corporation Ltd v Canopus No. 71 Ltd (2010) N4288
Steamships Trading Company Ltd v Magellan Properties Ltd (2023) N10082
White Corner Investments Ltd v Harro (2006) N3089

Counsel:

Mr William Yep, for the Plaintiff

Mr Levi Tilto, for the Defendant


DECISION


8th April 2024


  1. SHEPHERD J: This is a decision on assessment of damages for the defendant. The assessment arises from an undertaking as to damages the plaintiff gave to the Court on 2 December 2011. The undertaking was given in support of the plaintiff’s motion seeking an interlocutory injunction to restrain the defendant’s employment pending the substantive determination of the plaintiff’s claim against the defendant for his alleged breach of a restraint of trade clause in the defendant’s employment contract with the plaintiff. The plaintiff’s claim against the defendant was subsequently dismissed for want of prosecution and judgment entered for the defendant pursuant to the plaintiff’s undertaking as to damages, with damages to be assessed.
  2. Given that there were also appellate proceedings in SCA 25 of 2012, the Court will refer in this Decision to the parties as plaintiff and defendant as cited in this proceeding WS 1581 of 2011.

BACKGROUND

  1. The relevant facts that go directly to the issue of assessment of damages are set out below.
  2. The defendant is a Sri Lankan national who on 15 October 2008 entered into a contract for his employment by the plaintiff for the position of ‘quality assurance broker’ for 4 years based in Port Moresby. The plaintiff is an insurance broker providing insurance placement services through its industry contacts with a range of domestic and international insurance companies.
  3. In addition to an agreed salary, the defendant’s employment contract with the plaintiff provided, among others, the payment to the defendant of housing and vehicle allowances, medical insurance cover and return airfares to Sri Lanka after 2 years of service.
  4. Clause 13 of the defendant’s employment contract was in the following terms:
    1. The Employee promises to keep the Employer’s business secrets confident [sic] during and after the term of employment and the Employee also promises that, on the termination of the Employee’s employment with the Employer for any reason, the Employee will not operate a similar business or in any way aid and assist any other person to operate such a business in Port Moresby for a period of two years from the date of termination of the Employee’s employment.

[emphasis added]


  1. A non-citizen intending to work in Papua New Guinea (PNG) in the private sector must possess a valid work permit regulated and issued by the PNG Immigration and Citizenship Authority. The work permit is linked to an employment visa issued by the Department of Foreign Affairs. It was the plaintiff’s responsibility as the employer to apply for the work permit on behalf of the defendant.
  2. By letter from the Secretary of the Department of Labour & Industrial Relations dated 17 December 2008, the plaintiff was notified that the defendant had been issued a general work permit, which was to expire on 31 January 2011.
  3. The defendant arrived in Port Moresby on 28 April 2009 and commenced employment as a quality assurance broker with the plaintiff in the first week of May 2009.
  4. On 28 November 2010, 20 months after commencing employment with the plaintiff, the defendant tendered his resignation, giving 3 months’ notice as required by his employment contract. According to the defendant, his decision to resign arose as a consequence of the conduct of the plaintiff’s manager, Ms Antoinette Amputch, who the defendant says had engaged in abusive, harassing and bullying conduct towards him such that his work environment had become unbearable and his position with the plaintiff untenable.
  5. On 13 January 2011 the defendant was forced to leave PNG, with Ms Amputch giving him only several hours’ notice to do so. He was not permitted time to pack or to attend to personal obligations, including organising matters relating to his vehicle. The defendant was escorted to Jacksons Airport by Ms Amputch herself and handed to immigration officers. It was only then that Ms Amputch delivered to the defendant a work reference and a one-way Air Niugini airline ticket. The defendant was compelled to depart from PNG that day and return to Sri Lanka, leaving behind many of his personal effects and his motor vehicle mortgaged to Westpac Bank-PNG-Ltd.
  6. The defendant thereafter applied and successfully secured a position with another insurance brokerage company operating in PNG, Kanda International Limited (KIL). The defendant was employed by KIL as its ‘manager of information systems and quality assurance’. The defendant’s employment contract with KIL was for a term of 3 years. Apart from agreed salary, the defendant’s entitlements included an accommodation allowance, educational assistance, airfares after 12 months of service, medical insurance and provision of a motor vehicle allowance.
  7. The defendant returned to Port Moresby on 5 July 2011 to commence his employment duties with KIL under a PNG general work permit and entry visa, which were both valid to 22 March 2013.
  8. On 2 December 2011 the plaintiff commenced this present proceeding WS 1581 of 2011 against the defendant in the National Court seeking damages for breach of the restraint of trade clause in the defendant’s employment contract with the plaintiff dated 15 October 2008.
  9. At the outset of this suit, the plaintiff also sought and obtained an interim injunction which restrained the defendant from working with KIL or any other insurance broker pending the determination of the substantive proceedings.
  10. On 21 March 2012 the following orders were made in this proceeding (interim injunction):
    1. An interim injunction will lie against the defendant restraining him from working for, assisting or in any way helping Kanda International Brokers or any other insurance broker (at any of such insurance brokers main or branch offices) who provide insurance broking services in Port Moresby or Papua New Guinea done with the view to ensuring more particularly compliance with clause 13 of the Contract between the plaintiff and the defendant dated 15th October 2008, and these orders will remain until the hearing and final determination of the substantive proceedings filed herein.
    2. The defendant will pay the plaintiff’s costs of this application to be taxed if not agreed.
    3. Time is abridged to time of settlement to take place forthwith.

[emphasis added]


  1. As a result of the interim injunction the defendant was compelled to cease work with KIL on 21 March 2012. This in turn meant that his work permit and entry visa could be cancelled and that if he failed to depart PNG, he was in jeopardy of being deported.
  2. On 28 March 2012 the defendant’s lawyers filed appeal SCA 25 of 2012 in the Supreme Court against the interim injunction together with a stay application.
  3. On 30 March 2012 the stay application was heard by then Chief Justice Sir Salamo Injia. However, because of intervening events, including the political turmoil at the time, a ruling by his Honour could not be handed down immediately.
  4. The defendant had no income from his employment contract with KIL after he was forced by the plaintiff’s interim injunction to cease working for KIL on 21 March 2012. The plaintiff had no further financial means to support himself in PNG while waiting for a decision from the then Chief Justice on his Supreme Court application for a stay of the interim injunction. The defendant therefore departed from PNG and returned to Sri Lanka on 11 June 2012 rather than risk deportation.
  5. On 25 June 2012 the Supreme Court stayed that part of the interim injunction obtained by the plaintiff which had prevented the defendant from working for KIL or another employer of his choice (the stay order) in the following terms:
    1. The part of the orders of the National Court dated 21 March 2012 preventing the Appellant from being employed by Kanda International Insurance Brokers and Risk Consultants or by another employer of his choice is stayed. The other parts of the orders remain in force.
    2. Subject to the Appellant complying with the Papua New Guinea laws relating to employment of non-citizens the Respondent its agents or servants are not to interfere with the Appellant’s peaceful employment with Kanda International Insurance Brokers and Risk Consultants or any other employers of his choice.
    3. The costs of the Application shall be costs in the Appeal.
  6. On 25 July 2012 the defendant filed an application in SCA 25 of 2012 to stay the National Court proceedings generally.
  7. On the advice of his lawyers, the defendant returned from Sri Lanka to PNG on 4 November 2012 and recommenced his employment with KIL.
  8. On 7 December 2012 the National Court proceedings were stayed generally by the Supreme Court pending the hearing of the defendant’s appeal.
  9. On 18 December 2012 the Supreme Court upheld the defendant’s appeal in SCA 25 of 2012, set aside the interim injunction save for the order for time to abridge time and dismissed the plaintiff’s application for an injunction with costs. The case then returned to the National Court for the plaintiff to progress to trial its claim against the defendant in WS 1581 of 2011 for alleged breach of the restraint of trade clause in the defendant’s earlier employment contract with the plaintiff.
  10. In the Supreme Court proceedings, judgment was subsequently entered against the plaintiff in SCA 25 of 2012 on 30 July 2014 in the sum of K185,584.40 with 8% interest effective from 2 July 2014, being the date of service of a certificate of taxation, to the date of payment by the plaintiff of the defendant’s costs. A further costs order was also made against the plaintiff in connection with an unsuccessful application that the plaintiff had filed on 22 July 2014.
  11. On 10 August 2016 the Supreme Court entered a further judgment against the plaintiff in favour of the defendant in the sum of K78,864 with 8% interest effective from 23 May 2016, being the date of service of a certificate of taxation, to the date of payment by the plaintiff of the latest round of the defendant’s taxed costs, which were payable by the plaintiff on a solicitor and client basis.
  12. Meanwhile, on 5 October 2015 the plaintiff’s claim in this National Court proceeding was dismissed for want of prosecution and judgment entered for the defendant pursuant to the undertaking as to damages filed by the plaintiff on 2 December 2011 with damages to be assessed and costs of the proceeding.
  13. On 7 December 2018 the matter was set down for trial for assessment of the defendant’s damages pursuant to the plaintiff’s undertaking.
  14. On 8 February 2019 this Court conducted an assessment of damages. Judgment was reserved.
  15. At trial the defendant’s affidavit filed 10 July 2017 informed the Court that the two costs orders against the plaintiff made in SCA 25 of 2012 were still unpaid. No evidence was led by the plaintiff to the contrary.
  16. Unfortunately, the reservation of the Court’s decision on assessment of the defendant’s damages as pending was never recorded in the Court’s case docketing system. No follow-up correspondence was received by me via the Registry from either party’s lawyers until the defendant’s lawyers recently brought this matter to the Registrar’s attention by letter on 23 January 2024. The defendant’s letter was referred to me by the Registrar on 6 February 2024. The Court apologises to the parties for the administrative oversight that led to the unintended delay in delivering this decision.

COMPETING CLAIMS ON DAMAGES TO BE PAID TO THE DEFENDANT


  1. The defendant seeks an order that the plaintiff should pay him damages pursuant to the plaintiff’s undertaking in the sum of K158,419.40 as follows:

Loss of salary from KIL: K 29,090.40

Loss of accommodation allowance from KIL: K 26,000.00

Disbursements/Expenses (airfares) K 5,329.00

Damages for breach of Constitutional rights: K 18,000.00

General damages for pain and suffering: K 80,000.00

K158,419.40


  1. In response, the plaintiff says that the amount that the Court should assess by way of damages for the defendant is the sum of K25,312 as follows:

Residual amount owed: K 1,588.99

Net balance of loss of salary from KIL: K 13,973.40

Balance of accommodation allowance from KIL: K 9,750.00

K 25,312.39

EVIDENCE ON ASSESSMENT OF DAMAGES

  1. The defendant relied at trial on his affidavit filed on 10 July 2017. No notice was filed by the plaintiff to cross-examine the defendant. As such all of the defendant’s affidavit evidence was unchallenged at trial. Written submissions for the defendant were filed on 4 February 2019 in compliance with directions of the Court made on 7 December 2018.
  2. The plaintiff’s counsel failed to comply with the Court’s directions of 7 December 2018 but at the last minute did hand up written submissions at trial with leave of the Court. The plaintiff did not seek to rely on any affidavit material at trial other than making reference to the defendant’s affidavit filed on 10 July 2017.
  3. Counsel for each party made oral submissions at trial based on their respective written submissions.

ISSUES

  1. The plaintiff accepts that the defendant is entitled to damages under the undertaking which the plaintiff filed in this proceeding on 2 December 2011. The parties’ dispute relates solely to the quantum of those damages.
  2. Having considered the evidence and the submissions made on behalf of the parties, I find that the issues which fall for determination by the Court in its assessment of the quantum of the defendant’s damages are these:

(1) What is the quantum of the defendant’s lost employment and other entitlements consequent upon the making of the interim injunction of 21 March 2012?

(2) Is the defendant entitled to damages for the plaintiff’s breach of his Constitutional right to freedom of choice of employment?

(3) Is the defendant entitled to general damages for pain and suffering?


LEGAL PRINCIPLES


  1. The general principles for assessing damages consequent upon the giving of an undertaking as to damages are well established in our jurisdiction.
  2. Although an undertaking as to damages does not found any cause of action, it enables the party enjoined to apply to the Court for compensation if it is subsequently determined that the injunction should not have been granted: Lee Song Timber (PNG) Co Limited v Burua (2005) N2836 (Injia DCJ, as he then was).
  3. Save in exceptional cases, an undertaking as to damages is the price that the person asking for the interlocutory injunction has to pay for its grant if the Court later determines that the undertaking is to be enforced. A party giving an undertaking as to damages is presumed to understand the seriousness of such an undertaking: East Arowe Timbers Resources Limited v Cakara Alam (PNG) Ltd (2008) N3270 (Makail AJ (as he then was).
  4. What occurs when such an undertaking is extracted from a plaintiff is that the Court has ensured, as a condition of its grant of interim or interlocutory relief, that should it turn out that that relief should never have been granted, the Court will have the power, so far as monetary compensation allows, to make good the harm which the grant has done to the defendant: White Corner Investments Ltd v Harro (2006) N3089 (Gabi J).
  5. There is a distinction between damages caused by the grant of an injunction and damages that arise from the cause of the litigation. The damages to which a defendant is entitled pursuant to an undertaking are limited to those which the defendant has sustained by reason of the grant of the injunction: Morobe Provincial Government v Tropical Charters Ltd (2011) N4240 (Gabi J): Audela Ltd v National Housing Corporation (2024) SC2531 (David, Geita J, Shepherd JJ).
  6. In assessing a defendant’s damages arising from an undertaking given by a plaintiff to obtain interlocutory relief, the ordinary principles of the law of contract apply both as to causation and as to quantum: Lee Song Timber (PNG) Co Ltd v Burua (supra).
  7. As to the principles derived from earlier English and Australian case authorities and adopted in Papua New Guinea when dealing with the quantum of damages flowing from an undertaking as to damages, the cases were reviewed by me in Steamships Trading Company Ltd v Magellan Properties Ltd (2023) N10082 and can be summarised as follows:

(1) The damages must flow directly or naturally from the injunction.

(2) The damages are those which could reasonably have been foreseen when the injunction was granted.

(3) The damages are separate from any other award by the Court in the proceeding, and may be awarded even where no other relief is granted to parties in the substantive action.

CONSIDERATION OF THE ISSUES

ISSUE 1: WHAT IS THE QUANTUM OF THE DEFENDANT’S LOST EMPLOYMENT AND OTHER ENTITLEMENTS CONSEQUENT UPON THE MAKING OF THE INTERIM INJUNCTION?

  1. It is not in contention that the defendant ceased employment with KIL on 21 March 2012 and did not resume employment with that company until 12 November 2012. The defendant seeks his lost wages and other contractual entitlements for that period of approximately 8 months. In answer, the plaintiff submits that the defendant is only entitled to lost wages and entitlements for just over 3 months, that is from the defendant’s last pay period ending 13 March 2012 until the making of the stay order by the Supreme Court on 25 June 2012 which lifted the interim injunction made by the National Court on 21 March 2012.

The defendant’s submission


  1. It is submitted on behalf of the defendant that the terms and conditions of his contract of employment with KIL entitled him to a gross salary of K2,631.15 per fortnight which after tax and deductions amounted to K1,711.20 net. The defendant was also entitled to an accommodation allowance of K3,250 per month, a bonus when merited, overtime and medical expenses payable by KIL as and when required. The last pay the defendant received from KIL prior to the interim injunction was for the pay period ending 13 March 2012.
  2. The interim injunction took immediate effect on 21 March 2012. That meant the defendant could only be paid by KIL for 7 days from 14 March to 21 March 2012.
  3. By the time the interim injunction was made, the defendant had only worked for KIL for 6 months and his unpaid salary and entitlements as at 21 March 2012 were limited to:
  4. The plaintiff would have been well aware that the interim injunction obtained on 21 March 2012 would put the defendant out of a job and send him back to his home country of Sri Lanka because of PNG’s strict entry and work permit conditions.
  5. The defendant calculates his net salary and accommodation rental lost under his employment contract with KIL as follows:
  6. In summary, the defendant contends that the total monetary loss sustained by him and claimed as a result of the interim injunction is K60,419.40 as follows:

Net salary for 17 pay periods: K 29,090.40

Accommodation for 8 months: K 26,000.00

Airfares: K 5,329.00

Total: K 60,419.40


The plaintiff’s submission:


  1. The plaintiff contends that the defendant is only entitled to lost wages up to 25 June 2012 which was when the interim injunction effectively ceased on the making of the stay order by the Supreme Court, representing an entitlement of 3 months and 4 days or 96 days. The plaintiff contends that it was at that time, that is 25 June 2012, that the plaintiff was free to recommence employment with KIL.
  2. On the plaintiff’s calculations, the total amount of pay to which the defendant is entitled by way of compensation for loss of salary is limited to the period from 21 March 2012 to 25 March 2012, that is to say 7 pay periods commencing 13 March 2012 ending 19 June 2012, with 13 days residual remaining between pay periods.
  3. The plaintiff therefore submits the following calculation as being the proper amount which should be assessed by the Court as owing by the plaintiff to the defendant, a total of net K25,312.40:
  1. The plaintiff submits that the total of the defendant’s net monetary loss from his employment contract with KIL which is compensable by the plaintiff as a result of the interim injunction should be assessed by the Court at a total of K25,312.40 computed as follows:

Net salary for 7 pay periods: K 13,973.40

Net residual salary for 13 days: K 1,589.00

Accommodation for 3 months: K 9,750.00

Airfares: K Nil

Total: K 25,312.40


Consideration


  1. Taking into account the evidence and submissions, the Court finds that the damages that flowed directly or naturally from the interim injunction obtained by the plaintiff on 21 March 2012 should be calculated as sought by the defendant in the sum of K60,419.40, consisting of lost net salary of K29,090.40, lost accommodation allowance of K26,000 for approximately 8 months as claimed and out-of-pocket expenses for return airfares of K5,329. This amount will be rounded off to K60,420.
  2. These are all damages that were reasonably foreseeable when the plaintiff obtained the interim injunction if the plaintiff’s claim against the defendant in this suit were not to succeed. They are damages separate from any other award that could have been made by the Court in this proceeding between the parties,
  3. I am reinforced in this finding because the plaintiff has disputed that the defendant:
  4. The plaintiff would or should have been aware (and took no issue by leading evidence to the contrary or by way of challenge to the defendant’s evidence or otherwise by cross-examination) that:
  5. It was neither practical nor reasonable for the plaintiff to expect or consider that on the making of the Supreme Court’s stay order of 25 June 2012 the defendant, who would need to return to Sri Lanka, could suddenly materialise in PNG on 26 June 2012, work permit and entry visa in hand, ready to resume employment with KIL.
  6. Nor could it be viewed as unreasonable on the making of the Supreme Court’s stay order of 25 June 2012 for the defendant who had experienced what he referred to as ‘two forced repatriations’ and was then involved in Supreme Court litigation to take the timely advice of his lawyers and be afforded a reasonable grace period to make the necessary arrangements for his return to PNG which ensured his full compliance with the PNG laws including visa and work permit laws to permit the resumption of the ‘peaceful employment’ contemplated by the terms of the stay order.
  7. The Court is further persuaded in this view by comparison with the time period it took for the plaintiff to make its own arrangements when it earlier employed the plaintiff, a period of over 6 months having elapsed between the date of the plaintiff’s letter of offer of employment, execution of employment contract, receipt of work permit and the defendant’s commencement of his earlier employment with the plaintiff in PNG.
  8. The plaintiff led no evidence to show that it was unaware of the obvious dire consequences faced by the defendant on grant of the interim injunction on 21 March 2012. As was pointed out by Makail AJ in East Arowe Timber Resources Ltd v Cakara Alam (PNG) Pty Ltd (supra), a party giving an undertaking as to damages is presumed to understand the seriousness of such an undertaking.
  9. In short, there can be no reasonable dispute that the damages as claimed by the defendant under this heading were reasonably foreseeable financial losses the defendant sustained by reason of the interim injunction sought by the plaintiff, supported by its undertaking as to damages. This head of damages arose as a direct or natural consequence of the plaintiff obtaining its interim injunction, later set aside by the Supreme Court on appeal, which resulted in the defendant’s loss of salary and accommodation entitlement which would otherwise have been payable by Kil for just over 8 months. Furthermore, without the defendant paying for the cost of his return airfares to PNG, he would not have been able to resume his employment with KIL. It is not in contention that KIL was never responsible for those return airfares. It is the plaintiff who must reimburse the defendant for the airfares claimed by the defendant under this head of damages.

ISSUE 2: IS THE DEFENDANT ENTITLED TO DAMAGES FOR BREACH OF HIS CONSTITUTIONAL RIGHT TO FREEDOM OF CHOICE OF EMPLOYMENT?


  1. It is contended on behalf of the defendant that the plaintiff’s conduct breached the defendant’s right to freedom of choice of employment guaranteed by s. 48(1)of the Constitution.
  2. Section 48(1) of the Constitution is in these terms:

FREEDOM OF EMPLOYMENT.

(1) Every person has the right to freedom of choice of employment in any calling for which he has the qualifications (if any) lawfully required, except to the extent that that freedom is regulated or restricted voluntarily or by a law that complies with Section 38 (general qualifications on qualified rights), or a law that imposes restrictions on non-citizens.


  1. The right to freedom of choice of employment is one of a number of individual rights and freedoms found in Part III Division 3 of the Constitution under the heading Basic Rights. Those rights are then divided into Fundamental Rights (Subdivision B) and Qualified Rights (Subdivision C), with s.48 within the latter sub-set of Constitutional rights.
  2. Relevantly, s.32 of Subdivision A of Part III Division 3 of the Constitution, which is headed Introductory, encapsulates the general right of freedom based on law, which is said in s.32(1) to consist “in the least amount of restriction on the activities of individuals consistent...with the National Goals and Directive Principles and Basic Social Obligations.” The latter, as outlined in the Preamble of the Constitution and under the heading Basic Rights, acknowledges that:

“ ... subject to any restrictions imposed by law on non-citizens, all persons in our country are entitled to the fundamental rights and freedoms of the individual ...... to each of the following:
.....
(e) freedom of employment and freedom of movement
.....

and have accordingly included in this Constitution provisions designed to afford protection of those rights and freedoms, such to such limitations on that protection as are contained in those provisions, being limitations primarily designed to ensure that the enjoyment of the acknowledged rights and freedoms by an individual does not prejudice the rights and freedoms of others or the legitimate public interest.”


  1. The enforcement of guaranteed rights and freedoms is provided by s.57(1) of the Constitution, which relevantly states:
    1. Enforcement of guaranteed rights and freedoms

(1) A right or freedom referred to in this Division shall be protected by, and is enforceable in, the Supreme Court or the National Court ... either on its own initiative or on the application by any person who has an interest in its protection and enforcement ...

  1. The Supreme Court and the National Court have jurisdiction to award compensation for breach of Constitutionally guaranteed rights and freedoms under s.57(3 of the Constitution, which is in these terms:

57(3) A court that has jurisdiction under Subsection (1) may make all such orders and declarations as are necessary or appropriate for the purposes of this section ...


  1. The defendant seeks damages for breach of his right to freedom of choice of employment guaranteed under s.48(1) of the Constitution. The defendant quantifies this head of damage at K16,000, which is K2,000 for each of the 8 months for which the defendant was unemployed.
  2. The unchallenged evidence deposed to by the defendant in his affidavit on the issue of breach of his Constitutional right to choice of freedom of employment is as follows:

“ 21. At the time the orders were made I had been working in PNG for 6 months on a New Work Visa for Kanda International as an IT and Quality Assurance Manager until 21st of March 2012 when I had been effectively restrained by the order of the National Court to stop me working for Kanda International or any other insurance brokers in Port Moresby or any other parts of NG. I had stopped working as of 21st of March 2012.

  1. As a foreign contract worker working in PNG on a Work Permit, the order against me meant the following things:

(a) I being an expatriate contract worker in PNG, I would automatically lose my current job as an IT and Quality Assurance Manager as the interim injunction took effect forthwith on 21 March 2012.

(b) Upon losing my current job as an IT and Quality Assurance Manager my Entry Permit and my Work Permit would be automatically cancelled and I would be declared persona non grata meaning that I would be forcefully removed from PNG by the Department of Foreign Affairs.

(c) Furthermore, as a direct consequence of the automatic cancellation of my Entry Permit and as a direct consequence of myself being declared a persona non grata and my forceful removal from PNG by the Department of Foreign Affairs I would no longer be in PNG to defend myself and clear my name over certain allegations made against me in the substantive matter in the National Court under WS 1581 of 2011.

(d) Due to very strict Entry Permit and Work Permit conditions imposed on all foreign contract workers, the current Work Permit I had was non-transferable meaning that I could not use the same work permit to get another job except the one endorsed and approved on my Work Permit.

(e) I could not survive without money for an indefinite period. Being a foreigner without family, relatives or friends, I could not turn to anybody to help to sustain me for my daily living while waiting for the outcome of my Appeal.

(f) The blanket type of interim injunction prevented me from working anywhere in PNG effective from 21 March 2012 which was harsh, oppressive, unfair and unconstitutional.

(g) I was depressed, worried and was in a shock state of mind because of the orders of the National Court.

(h) My employer even though ... very sympathetic could not do anything to help me and my condition just got worse every day.

(i) The only hope I had was appealing the orders of the National Court.

...

  1. Being a foreigner and being confronted with two forced repatriation (sic) is no small thing for me. I know that my constitutional rights were violated by the plaintiffs General Manager not once but twice.”
  2. In view of the defendant’s evidence, there can be no doubt that in this instance the interim injunction which the plaintiff obtained on 21 March 2012, by prohibiting the defendant from not only working for KIL but which also restrained him from “working for, assisting or in any way helping ... any other insurance broker ...in Port Moresby or Papua New Guinea ... until the hearing and final determination of the substantive proceedings filed herein” went too far. The interim injunction not only interfered with the defendant’s employment contract with KIL, but it also operated to prevent the defendant from exercising his constitutionally guaranteed right of choice of employment with any other insurance broker in PNG pending the outcome of this current proceeding.
  3. The plaintiff’s breach of the defendant’s right to freedom of choice of his employment was recognised by the Supreme Court in SC 25 of 2012 on two separate occasions, namely:

(1) on 25 June 2012 when the Supreme Court stayed that part of the interim injunction which had prevented the defendant from being employed by KIL or by any other employer of the defendant’s choice and ordered the plaintiff not to interfere with the defendant’s “peaceful employment” not only with KIL but also with any other employer of the defendant’s choice;

(2) on 18 December 2012 when the Supreme Court made its final ruling whereby it set aside the interim injunction and dismissed the plaintiff’s application for that injunction with costs in favour of the defendant.

  1. Counsel for the defendant concedes that the tariff for damages for claims based on breach of the right to freedom of choice of employment under s.48(1) of the Constitution has not been settled by the Courts. He cites no case law by way of guidance as to what that tariff should be. Counsel refers to leading early cases such as Premdas v State [1979] PNGLR 329, Raz v Matane [1986] PNGLR 38 and Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 264 as examples where breaches of Constitutional rights were considered at length by the Supreme Court. However, none of those cases have any direct relevance when it comes to the assessment of the quantum of awards of damages for breach of the right to freedom of choice of employment under s.48(1) of the Constitution.
  2. In reply, counsel for the plaintiff has submitted that the submissions for the defendant in this regard are misconceived. It is submitted for the plaintiff that because its substantive claim against the defendant was dismissed for want of prosecution, there was no substantive finding as to the constitutionality or otherwise of the restraint of trade clause the subject of the plaintiff’s main proceeding against the defendant. That is correct. But the constitutionality of the restraint of trade clause is not the issue. What is in issue is the amount to which the defendant is entitled for the plaintiff’s breach of the defendant’s rights under s.48(1) of the Constitution.
  3. The Court does not accept the proposition advanced on behalf of the plaintiff that because there were no substantive findings on the plaintiff’s breach of contract claim against the defendant, this disentitles the defendant from seeking damages under this heading.
  4. This is because, firstly, the Court is entitled to make findings on the evidence it has before it.
  5. Secondly, no substantive findings could be made in this suit in connection with the plaintiff’s primary claim for breach of the restraint of trade clause in the defendant’s employment contract with the plaintiff for the reason that the plaintiff’s claim was dismissed for the plaintiff’s failure to prosecute its claim. The plaintiff should not be permitted to mount its own dilatory conduct as a defence in this matter which precluded the making of findings which may have favoured the plaintiff. In that regard, the plaintiff does not come to Court with clean hands. To otherwise permit the plaintiff to succeed with this argument would be tantamount to encouraging the potential abuse of court process for those litigants inclined to use their greater resources and financial power to achieve a particular strategic outcome unrelated to the substantive orders sought by them.
  6. Thirdly, an application to claim damages on an undertaking given on a motion for injunctive relief cannot be commenced until the final determination of the issues at trial, in this case a determination that resulted in the dismissal of the plaintiff’s claim and where, during the course of the defendant’s appeal, it was determined that the interim injunction should not have been granted. The defendant was entirely successful in the outcome he sought both on appeal and the outcome of the plaintiff’s claim against him in the National Court because of the plaintiff’s own inaction. The dismissal of the plaintiff’s interim injunction and the plaintiff’s own failure to prosecute this litigation gives rise to inferences adverse to the bona fides of the plaintiff, a litigant who was legally represented at all stages of the National Court and Supreme Court proceedings.
  7. Fourthly, no positive authority was advanced for the plaintiff’s proposition that no finding of breach of the defendant’s restraint of trade clause disentitles the defendant in circumstances such as this from his claim for breach of his Constitutional right to freedom of employment. No case authorities were cited by counsel for the plaintiff to support this submission.
  8. Fifthly, whilst an undertaking as to damages does not give rise to a cause of action on its own, and while care needs to be taken to ensure there is no ‘double dipping’ where, as is the case here, the defendant seeks damages under various heads, on first principles alone it would be difficult to accept that damages for breach of the defendant’s Constitutional right to freedom of choice of employment, a right reinstated and reinforced by the very terms of the stay order, could not be a proper head of damage when enforcement of an undertaking as to damages is at issue. Here, the evidence has conclusively established that the plaintiff’s conduct by obtaining its interim injunction against the defendant, an interim injunction later set aside by the Supreme Court, seriously affected the defendant’s choice of freedom of employment. The conduct of the plaintiff compelled the defendant to leave PNG, only to return 8 months later to resume his chosen employment after the Supreme Court on 25 June 2012 stayed the interim injunction and ordered the plaintiff not to interfere with the defendant’s employment with KIL or with the defendant’s employment with any other employer of the defendant’s choice. The damages sought by the defendant under this head of damages are proper and are separate from all other awards made in the defendant’s favour by the Supreme Court in SCA 25 of 2012.
  9. Counsel for the plaintiff has advanced the proposition that if the Court is minded to award damages for the plaintiff’s breach of the defendant’s rights under s.48(1) of the Constitution, then the defendant’s claim should be for an amount much less than K16,000. It is the plaintiff’s position that the defendant’s claim in this amount is unreasonably high, unsupported by evidence or case precedent.
  10. As with the defendant, the plaintiff by its counsel has not assisted the Court with any case precedents that are on point or could be seen as analogous.
  11. A review of cases involving abuse of police powers where damages have been awarded for breaches of Constitutionally guaranteed rights and freedoms of plaintiffs who have subsequently commenced civil suit indicates a general tariff of between K5,000 to K10,000 per breach.
  12. In Haluya v The State (2001) N2109 (Sakora J), the plaintiff was awarded the sum of K6,000 for breach of his Constitutional right to full protection of the law after the Court found that the plaintiff had been acquitted of the offence of selling beer without a liquor licence but who had then been re-arrested, re-charged and found guilty at a second criminal trial where no evidence was led by the prosecuting police officer and where the plaintiff was wrongfully sentenced to 6 months imprisonment.
  13. Breach of Constitutional rights attracting compensation at a tariff of K5,000 for each breach was awarded by Cannings J in Kolokol v Amburuapi (2009) N3571. The essential facts in that case were that the plaintiff had been shot in the leg and foot by police who had chased him on suspicion of his being involved in an armed robbery. The plaintiff was subsequently charged with being in possession of a dangerous weapon but after 3 months of wrongful detention the criminal charge against him was struck out by the Lae District Court
  14. In Pain v The State (2014) N5604, an assessment of damages and compensation was conducted by Cannings J into human rights breaches by certain police officers at Wewak, one of whom had shot the plaintiff in the back while the plaintiff was trying to explain to another police officer that he and others were merely defending themselves by throwing stones at a pack of aggressive dogs. On being shot, the plaintiff collapsed and was taken unconscious to Boram Hospital, where the bullet was surgically removed the next day. His Honour determined that the plaintiff had established causes of action for breach of four of his Constitutional rights:

The plaintiff was awarded K20,000 as compensatory damages for breach of his Constitutional rights based on K5,000 for each category of breach.

  1. A further case involving the abuse of police powers is Nayos v Gawi (2014) N5667 (Sawong J). The plaintiff had been wrongfully arrested on a charge of murder that had been fabricated by a police officer. The plaintiff was found by the Court to have been unlawfully arrested and deprived of his liberty for 1 year and 7 months. The plaintiff was awarded, among other damages, the sum of K10,000 for breach of his right to full protection of the law (s.37(1) of the Constitution) and the further sum of K10,000 for breach of his right to freedom of movement (s.53 of the Constitution).
  2. Taking into account the evidence, the legal principles earlier identified and the impact of inflation on the tariff for awards of breach of Constitutional rights in the case authorities adverted to above, the Court concludes that justice requires that the plaintiff in this instance pay the defendant the sum of K8,000 for breach of his Constitutional right to continue with an employer of his choice for a period of 8 months. The evidence has credibly established that the defendant was employed by KIL in a position for which he was qualified. KIL was supportive of him and valued his services. The action taken by the plaintiff when it wrongfully obtained the interim injunction on 21 March 2012 not only interfered with the defendant’s employment with KIL but by its very terms that injunction expressly prevented the defendant from exercising the defendant’s Constitutionally guaranteed right of freedom of choice of employment with any other potential employer in the insurance industry in PNG pending the outcome of the plaintiff’s substantive claim against the defendant, a claim that was later dismissed for want of prosecution by the plaintiff.
  3. An award of K8,000 is not compensation for the defendant’s financial loss per se which he sustained due to the plaintiff’s interference with his employment contract with KIL. It is compensation for the disturbance and loss of the defendant’s right of choice of freedom of employment, a right viewed by the framers of the Constitution as sufficiently important to be constitutionally enshrined as a basic right of all persons present in PNG.
  4. The Court considers that an award of K8,000 represents a sum that provides proper acknowledgment of the loss of the defendant’s right to freedom of choice of employment under s.48(1) of the Constitution, a loss that flowed directly or naturally from the interim junction and was one that was reasonably foreseeable when the injunction was granted and which the plaintiff risked when it filed its undertaking as to damages.
  5. It is a sum the Court considers appropriately reflects the defendant’s entitlement to compensation for the plaintiff’s failure to take ‘the least amount of restriction’ on the defendant’s Constitutional right to freedom of choice of employment. The restraint of trade which the plaintiff sought to protect under clause 13 of the defendant’s employment contract with the plaintiff was found by the Supreme Court to be too broad. The restraint of trade should have been geographically limited to Port Moresby, yet the interim injunction the plaintiff obtained prohibited the defendant from “working for, assisting or in any way helping Kanda International Brokers or any other Insurance Broker (at any of such insurance brokers’ main or branch offices) who provide insurance broking services in Port Moresby or Papua New Guinea ...”. [emphasis added]
  6. This Court has no hesitation in finding that the blanket nature of the interim injunction and its consequential effect on the defendant, causing serious disruption to his employment contract with KIL, breached the defendant’s right to freedom of choice of employment under s.48 (1) of the Constitution. The defendant is awarded the sum of K8,000 for his claim under this head of damages

ISSUE 3: IS THE DEFENDANT ENTITLED TO GENERAL DAMAGES FOR PAIN AND SUFFERING?


  1. It is submitted on behalf of the defendant that the Court should award the defendant a sum for general damages for pain and suffering and the serious ramifications suffered by him as a result of the interim injunction. It is submitted that based on the principles first enunciated in Hodson v The State [1985] PNGLR 303 the particular circumstances of the case justify an award of K80,000. In Hodson, the plaintiff was awarded damages for breach of contract which also included an award for the disappointment, distress, upset and frustration caused by the breach; the Court considering two earlier English authorities in support of such an award.[3]
  2. It has been submitted at [36] of the written submissions of counsel for the plaintiff that as there has been no finding on the substantive issues as to the fairness of the restraint of trade clause, the plaintiff’s undertaking as to damages does not give rise to a cause of action. The Court rejects that submission out of hand on the principles earlier discussed. It is then submitted for the plaintiff that the defendant has not supported his claim of injury by medical evidence, and the amount claimed of K80,000 is otherwise exorbitant where the courts have awarded far less in cases involving breach of contract that were unlawfully terminated.
  3. The Court repeats and relies upon its earlier discussion of the submission on behalf of the plaintiff with respect to a lack of findings on the substantive claim. This is not a case where the various heads of damages were not raised by the defendant well in advance of the trial in the form of the defendant’s sworn evidence. The plaintiff was afforded ample opportunity to adduce its own evidence and to test the evidence of the defendant if it was so minded before making submissions on the matter.
  4. Nor is the Court persuaded that because the defendant did not produce medical evidence to support his claim inter alia of depression and distress at his treatment, that he is likewise precluded from seeking general damages on that basis. His evidence with respect to the impact on him of the loss of his employment and a second forced repatriation as a result of the interim injunction, including his level of distress, upset, hurt and frustration, was not challenged at the assessment of damages trial. As such that evidence must be accepted.
  5. Further, it is not a leap to conclude on the evidence that having found himself required to again leave the country quickly for fear of deportation following the making of the interim injunction and having lost the ability to support himself compounded by the disruption of repatriation, the defendant would experience all of the feelings deposed to by him.
  6. The Court has considered the cases referred to by the defendant. Based on the evidence, and the reasonable inferences that arise from that evidence, the Court is satisfied that damages should be awarded for the disappointment, distress and upset experienced by the defendant as a direct result of the making of the interim injunction. Although Kidu CJ noted in Harding v Teperoi Timbers Pty Ltd [1988] PNGLR 128 at 132 that this head of damages can be difficult to assess in terms of money, his Honour also said that it is no more difficult than the assessment which the Courts have to make every day in personal injury cases for loss of amenities.
  7. Having considered the plaintiff’s evidence as to the pain, suffering, distress and depression he suffered, the Court assesses his entitlement to damages under this head at K15,000.

SUMMARY OF QUANTUM OF DAMAGES


  1. In the result, the Court assesses the damages to be paid to the defendant by the plaintiff at K 83,420 comprising:

Lost wages, accommodation and expenses K 60,420

Breach of Constitutional right to freedom of choice of employment: K 8,000

General damages for pain and suffering: K 15,000

Total of Damages: K 83,420

  1. No submissions were made on time to pay. The Court fixes 30 days from the date of this Order.

INTEREST ON DAMAGES

  1. A plaintiff is, at the discretion of the Court, entitled to an award of interest on damages.
  2. Section s.4(1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015 states:

4. Subject to Section 5, in proceedings in a court for the recovery of a debt or damages, the court may order a rate as it thinks proper to be applied to the sum for which judgment is given interest, on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause action arose and the date of the judgment.

  1. Section 5 of the Act prohibits the awarding of interest on interest. This means that when an interest component is included in a judgment, post-judgment accrual of interest under s.6 of the Act does not include allowance for further interest on the pre-judgment interest component. Post-judgment interest will however accrue from time to time on the unpaid amount of the damages component of a judgment debt.
  2. Section 4(1) of the Act confers a four-fold discretion on the Court: (1) whether to grant at all; (2) to fix the rate; (3) to grant interest on the whole or part of the damages for which judgment is given; and (4) to fix the period for which interest will run: see Cheong Supermarket Pty Ltd v Muro [1987] PNGLR 24 (Bredmeyer J): Nambawan Super Ltd v Petra Management Ltd (2017) N6748 (Cannings J).
  3. Unless the Court otherwise orders, the conventional rate of interest is 8% per annum: Order 12 Rule 6(2) of the National Court Rules. No submissions were made by counsel for either party that if interest on damages were to be awarded, then interest should be at a rate other than 8% per annum.
  4. I consider that the circumstances of this case are such that an award of interest on the damages to be awarded to the defendant is warranted and that a fair and proper rate of interest to be applied to those damages is 8% per annum, notwithstanding the many fluctuations in commercial banking rates which have occurred since the interim injunction was made.
  5. As to when interest at 8% per annum should commence, I consider that the date the interim injunction was granted, 21 March 2012, is the most appropriate date from which interest should run, this being the date on which the defendant was compelled to cease working for KIL. It was also the date on which the defendant’s financial losses and other sequelae commenced.
  6. Once a commencement date for interest on damages has been determined by the Court, the end date for interest to run is usually the date on which judgment is delivered. However, I accept that if the end date for computation of interest on the defendant’s damages were to be today, the date of delivery of this reserved decision, then this could be perceived by the plaintiff to be unfair because of the lengthy delay in delivery of this decision, a delay which was caused by an administrative issue within the Registry. I have therefore determined that the end date for interest to run in this instance should be 2 years from the date of the trial. The trial was conducted on 8 February 2019. The end date for computation of interest will therefore be 8 February 2021, a total of 731 days from 8 February 2019.
  7. Interest on the defendant’s damages is therefore the sum of K13,365 calculated to the nearest whole number. It is computed by applying the formula: D x IR x (N/325) = I, where D is the principal amount of the damages, IR is the applicable percentage rate of interest per year, N is the number of days for which interest is calculated expressed as a percentage of years and I is the amount of interest.

K83,420 x 8% x (731/365 days) = K13,365

  1. Post-judgment interest will, pursuant to the discretion of the Court allowed by s.6(1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015 and Order 12 Rule 6(1) of the National Court Rules, be payable by the plaintiff at the rate of 8% per annum on such of the judgment amount of damages assessed at K83,420 as remains from time to time unpaid.

COSTS

  1. The general rule is that costs follow the event, which means that the successful party is awarded a contribution towards its legal costs paid for by the losing party on a party/party basis on the scale set out in Table 1 of Schedule 2 of the National Court Rules. However, an award of costs is always within the discretion of the Court. As the scale of party/party costs has not been revised since the National Court Rules came into operation in 1983 it is, in my view, way out of step with fees presently charged by lawyers to their clients. The Court may therefore, depending on the circumstances of the case, award costs to a successful litigant on a solicitor/client basis (also known as costs on a lawyer/client basis) or on an indemnity basis.
  2. An award of solicitor/client costs is compensatory. An award of costs on an indemnity basis is punitive. As to the distinction between solicitor/client costs and indemnity costs, see Opi v Telikom PNG Limited (2020) N8290 (Shepherd J).
  3. There are many circumstances when an award of solicitor/client costs is warranted, such as where there is no defence on the merits, where the other party failed to explore and exhaust all prospects of having the matter settled without court action or delay, where there has been defiance by the other party in complying with court orders or where the successful party has generally had to incur unnecessary expenses through unmeritorious litigation: PNG Ports Corporation Ltd v Canopus No. 71 Ltd (2010) N4288 (Kandakasi J).
  4. I am satisfied that in the present case the defendant has had to incur substantial legal costs in defending the plaintiff’s claim only to have that claim dismissed for want of prosecution by the plaintiff and for the matter to then come back before the Court for assessment of the defendant’s damages pursuant to the plaintiff’s undertaking to pay damages. The plaintiff will therefore be ordered to pay the defendant’s costs on a solicitor/client basis, subject to any earlier interim orders as to costs already made in this proceeding.

JUDGMENT


  1. The terms of the formal orders of this Court on assessment of the defendant’s damages are as follows:

1. Judgment is entered for the defendant in the sum of K 96,785 comprising:

(a) Lost wages, accommodation and expenses: K 60,420

(b) Breach of Constitutional right: K 8,000

(c) General damages for pain and suffering: K 15,000

K 83,420

(d) Interest on above damages at 8% per annum

from 8 February 2019 to 8 February 2021: K 13,365

Total of damages and pre-judgment interest: K 96,785


  1. The combined total of K96,785 for damages and pre-judgment interest shall be paid by the plaintiff to the trust account of the lawyers on the record for the defendant within 30 days from today.
  2. Post-judgment interest on total damages of K83,420 shall accrue at the rate of 8% per annum on so much of the above assessed damages of K83,420 as remains from time to time unpaid.
  3. Subject to earlier interim orders as to costs, the plaintiff shall pay the defendant’s costs of and incidental to the whole of this proceeding on a solicitor/client basis, such costs to be taxed if not agreed.
  4. The time for entry of this judgment is abridged to the time of signing by the Court which shall take place forthwith.

Judgment accordingly

Leahy Lewin Lowing Sullivan Lawyers: Lawyers for the Plaintiff
Kari Bune Lawyers: Lawyers for the Defendant

[1] See written submissions on behalf of the plaintiff at [12]
[2] See written submissions on behalf of the plaintiff at [13] and [14]
[3] Jarvis v Swans Tours Ltd [1972] EWCA Civ 8; [1973] 1 QB 233; Cox v Philips Industries Ltd [1976] 1 WLR 638.

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