1,360 PNGDFESM Association Incorporation v Lupari [2024] PGNC 72; N10717 (12 April 2024)

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BETWEEN:
1,360 PNGDFESM ASSOCIATION INCORPORATION Comprising Retrenched Servicemen of PNG Defence Force as listed in the Schedule
Plaintiffs

AND:
ISSAC LUPARI in his Capacity as Chief Secretary to the Government and National Executive Council
First Defendant

AND:
BRIGIDER GENERAL GILBERT TOROPO in his Capacity as Commander of the PNG DEFENCE FORCE
Second Defendant

PRIME MINSTER AND NATIONAL EXECUTIVE COUNCIL ACT – literal interpretation applied – no statutory duty created on the Chief Secretary to protect any class of persons from non-implementation of NEC decisions by the National Public Services – intent of Act is to create State offices that support the top-level Executive arm of Government being the Prime Minister and the NEC.

NEC DECISIONS – caution to be applied in interpreting – nature of NEC decision considered - no resolution approving housing and hardship allowances on the face of the record of the decision.

DAMAGES – Distress and anxiety – plaintiffs misled – but made aware of the State’s position in 2013 – no medical evidence - 50% of nominal damages awarded.

The plaintiffs allege the Chief Secretary has a statutory duty under the PM & NEC Act to ensure that the defendants implemented three NEC decisions. That the NEC decisions approved additional allowances totaling K60,000.00 to be paid to each of the 1360 plaintiffs on their retrenchment and discharge from the PNGDF between the period 2001 to 2007. That because they were not paid the allowances, the Chief Secretary failed his statutory duty and as a result they have a cause of action for damages.

The three NEC decisions did not contain any resolutions specifically approving the housing and hardship allowances as part and parcel of the plaintiff's retrenchment benefits.

Nevertheless, the plaintiffs are entitled to nominal damages for distress and anxiety from being misled prior to 2013.

Papua New Guinean Cases
Anave Ona v National Housing Corporation & Nambawan Supa Limited (2009) SC995
Behori Incorporated Land Group v Sirinumu Development Company (2016) N6862
Golu v National Executive Council (2011) N4425
Kunai v Papua New Guinea Forest Authority (2018) N7570
Koim v O'Neil and NEC (2016) N6558
Lo v Hevilift Aviation Ltd (2023) N10413
Madring v Santi Forestry (PNG) Ltd (2015) N5908
Marshall Lagoon Investment Company Pty Ltd v Ding Company Ltd (2008) N3650
Mathias Goma v Protect Security & Communication Ltd (2013) SC1300
Singorom v Kalaut [1985] PNGLR 238
State v Downer Construction (PNG) Ltd (2009) SC979
Walup v National Housing Corporation (2019) N8065
Wereh v Wamuk (2023) SC2487

Legislation
Constitution s100
Claims by and Against the State Act 1996
Prime Minister and National Executive Council Act 2002, preamble, s18, sch1 item 11, ss 20, 21, 22
Wrongs Miscellaneous Provisions Act Chapter 297.

References
Christopher Walton Charlesworth & Percy on Negligence, Sweet & Maxwell, 2010.

Trial by affidavit on liability and assessment of damages where the plaintiffs sought to prove breach of statutory duty.

COUNSEL
Mr A Furigi, for the Plaintiffs
Ms P Yom, for the First, Second and Third Defendants

1. BRE AJ: INTRODUCTION: The plaintiff Association represents 1360 PNG Defence Force ex-servicemen who were retrenched between 2001 and 2007. They claim they are each owed K50,000.00 in housing allowances and K10,000.00 in hardship allowances which were to be paid to them as part of their redundancy payments after it was approved by the National Executive Council on three occasions, once in 1996 and twice in 2001. The total amount claimed is K81.6million.

2. A preliminary matter concerns the State's representation at trial. The State's lawyer attended late and sought adjournment because the lawyer who had carriage was not available and the lawyer in attendance was not prepared to proceed with the trial. I refused the adjournment. My reasons for the refusal are; there was sufficient time for the State to be prepared, the plaintiff was ready for the trial and the adjournment was not properly sought by filing an affidavit to justify why the trial date should be vacated. The State counsel has a duty to its client the State, and the Court to be prepared. Their conduct is unbecoming and unprofessional.

3. The plaintiffs were made redundant and retrenched between 2001 to 2007 in nine batches as part of the government's initiatives in 2001 to downsize the PNGDF to 2000 men. Three Cabinet decisions were made in NEC decision number 26 of 1996, NEC decision number 213 of 2001 and NEC decision number 239 of 2001. The plaintiffs allege these NEC decisions approved housing allowance of K50,000 and hardship allowance of K10,000.00 per personnel which was to be paid to their group as part of their retrenchment benefit. These allowances were not factored in their final calculations and have not been paid to them and remain outstanding.

4. The plaintiffs allege that the Chief Secretary failed in his duty to ensure that the Brigadier General and the relevant State agencies implemented the NEC decisions to pay them the allowances on their retrenchment or immediately after.
5. The plaintiff incorporated an association for the purpose of pursuing their claim and its 1360 members have appointed retired PNGDF ex-serviceman Godfrey Aisi to be the association's chairman. He is authorised to pursue this claim on behalf of the ex-servicemen. After numerous unsuccessful attempts with the defendants to settle their claim, they commenced this proceeding on 25 June 2018.

“7. On 20 January 1996 the Defence Force Council tabled a policy submission seeking the National Government’s approval of a comprehensive and up to date retrenchment policy specifically for the Defence Force.

8. PNGDF opted to use the Public Service 1982 Redundancy Agreement with some changes to recognise the special circumstances of the military personnel and their families particularly those who participated in the Bougainville crisis.

9. On 26 February 1996 the NEC approved the PNGDF retrenchment terms and conditions detailed in the same submission and the retrenchment benefits formular which were in line with other State Services for inclusion in the PNGDF’s Manual of Personnel Administration (MPA).

b) approved the application of all retrenchment benefits contained in the Retrenchment Benefits Calculation Form taken from the MPA with the inclusion of the entire range of redundancy and retrenchment benefits which included housing and hardship allowances.

11. With the inclusion of housing and hardship allowances being added for all retrenched members, brought the total benefits serials to nine (9) to be paid as follows:

a) Money in lieu of Notice	d) Ex gratia payment	g) Housing allowance – K50,000.00
b) Money in lieu of leave	e) Re-settlement allowance	h) Hardship allowance K10,000.00
c) Money in lieu of Furlough	f) Repatriation expenses	i) Contract Gratuity

12. Between 2001 and 2007 the Plaintiff by its members were paid all their other entitlements except for housing and hardship allowances.

13. It is therefore alleged that the Defendants collectively through their respective servants, agents and associates have breached their mandatory statutory obligations under the PNG Constitution, Prime Minister and National Executive Council Act 2002 (No. 23 of 2022) and the Defence Force Act 1975.

a) Failed to ensure that the decisions, lawful directives and policies of the NEC referred to at paragraph 6 above were implemented by the National Public Service and by public bodies; and in particular for the inclusion of housing and hardship allowances for the retrenched members.

b) Failed to ensure that the Defence Force Council and the Department of Defence facilitate for inclusion housing and hardship allowances in the MPA

14. Accordingly, the Defendants failed to address the issue of housing and hardship allowances despite numerous promises by the National Government to settle their grievances to date.

a) NEC’s 1996 and 2001 policy decisions particularly that of which concerns aspects of housing and hardship allowances remain valid for all intents and purposes and further remain unrevoked.

b) The issues concerning housing and hardship allowances under those NEC policy decisions remain outstanding and unresolved.
d) The Defendants collectively through their servants, agents and associates within the National Public Service have deliberately and inordinately delayed addressing any of the Plaintiffs’ grievances to date.

Numerous meetings were held on end at various levels of government offices and with political heads at various times but neither the National Public Service nor political heads displayed any interest whatsoever over the Plaintiff’s grievances and to provide any appropriate relief to date.

16. As a result of the breachers of the mandatory statutory obligations the Plaintiff by its members and their families each and severally have suffered substantial losses and damages.

17. Therefore, the Plaintiffs claim the benefits under the NEC determinations or decisions as contained in the Retrenchment Benefits Calculation Form – DFRET 1 inclusive of housing and hardship allowances as follows:

F. Interest at 2% pursuant to the Judicial Proceedings (interest on Debts and Damages) Act (as amended)

7. The State filed its defence on 28 September 2018 generally denying the allegations made by the plaintiffs but admitting that s21 PM &NEC Act vests certain functions to the Chief Secretary which includes issuing certain directives to departmental heads but deny it is his function to implement the NEC decisions which are responsibilities of the respective departmental heads. The defence avers s12(1) Claims By and Against the State Act applies to discourage any award of exemplary damages as it only applies in cases where there are severe and continuous breaches of constitutional rights.

8. The plaintiff tendered the Affidavit of Godfrey Aisi sworn on 11 September 2023 and filed on 19^th September 2023 which was accepted into evidence as an exhibit and marked "P1". Godfrey Aisi deposes about the three NEC decisions made to award housing and hardship allowances of K50,000.00 and K10,000.00 respectively for each ex-servicemen which has not been paid and the numerous unsuccessful efforts with the defendants and politicians to settle their claim but to no avail. The pertinent facts are applicable to all 1360 ex-servicemen.

9. The State did not file any affidavits but allege in their defence that the plaintiff had the onus of proving liability and damages.
SUBMISSIONS

10. Mr Furigi for the plaintiff, submitted that the plaintiff's rely on statutory negligence by the State defendants in not implementing the three NEC decisions. Counsel cited Koim v O'Neil and NEC (2016) N6558 and Golu v National Executive Council (2011) N4425 to clarify the non-justiciable nature of NEC decisions submitting once the decision is made it cannot be challenged. He relied on Goma and others v Protect Security and Communications Limited (2013) SC1300 to base the plaintiff's claim on the elements of statutory duty.

11. Counsel submitted that the Prime Minister and National Executive Council Act 2002 placed a statutory duty on the Chief Secretary to ensure that NEC decisions are implemented by the National Public Service which includes the second defendant. The plaintiffs contend that the Chief Secretary breached his duty when they did not get paid the housing and hardship allowances.

12. The plaintiff's evidence comprises public newspaper advertisements and PNGDF discharge orders containing the names and file numbers of each of the 1360 ex servicemen. The global amount of the plaintiff's claim is K81,600,000.00 being K60,000.00 for each of the 1360 plaintiffs.

13. Ms. Yom for the state raised poor arguments about the vagueness of the court's directions of 19^th September 2023 and referred to section 12(3) of the Claims By And Against The State Act 1996 which discourages an award on fixed or liquidated judgments against the state.

14. The plaintiff's evidence is largely uncontested. I make the following findings of fact. The ex-servicemen were retrenched on various occasions from 2001 – 2007 as part of the Government's downsizing programme. A redundancy situation was confirmed by NEC Decision 213 of 22 November 2001. The plaintiffs have had meetings since 2007, with the defendants and politicians but to no avail. 1360 ex-servicemen claim that they were each supposed to be paid K50,000.00 in housing allowance and K10,000.00 in hardship allowance as part of the retrenchment exercise.

15. The NEC made three decisions concerning the PNGDF retrenchment and retirement policy to revise it to align with the rest of the State Services and the Public Services in its 1996 decision and affirmed the revised policy in both its 2001 decisions. In those decisions, it also approved the benefits package outlined in the 1996 cabinet submission.

16. The plaintiffs are the group of ex-servicemen affected by the three NEC decisions. The plaintiffs were retrenched in nine batches pursuant to these decisions from 2001 to 2007. The plaintiffs have been paid these seven heads of benefits as applicable, when they were each retrenched.

17. The plaintiffs must prove the defendants owe them a statutory duty to implement the three NEC decisions which they breached causing loss to them by not receiving the allowances. The issues for deliberation is of law and fact and are:-

1) Whether the PM&NEC Act creates a statutory duty on the Chief Secretary to ensure the three NEC decisions are implement?

18. This issue is one of law and requires construction of the PM & NEC Act to ascertain if the Chief Secretary owes a statutory duty of care to the plaintiffs to ensure the three decisions are implemented. In constructing the PM &NEC Act, caselaw^[1] dictates that statute must be interpreted applying the constitutional principle of a fair and liberal approach to dispense justice but at the same time requires caution to be applied where the language of the statute are plain and obvious that no intendment is required. Bearing these principles of interpretation in mind, I set out below the elements of breach of statutory duty as ably put by his Honour Cannings J in Goma v Protect (2013) SC1300 as:-

(e) the plaintiff suffered damage as a result of the breach; and
(f) the Parliament intended to create a private right of action for breach of the statutory obligation.

19. The learned authors^[2] on negligence explain two ways in which a common law duty of care can arise from a statutory breach of duty:-

"A common law duty of care can arise as a result of the statutory duty in two ways: the statutory requirement upon the defendant to do or refrain from doing a particular act may itself give rise to a common law obligation: alternatively, and perhaps more frequently, in carrying out the statutory duty, the defendant or the servants or agents for whom it is vicariously liable, may come into a relationship with the claimant that gives rise to a duty of care."

20. In Philips v Britannia Hygienic Laundry [1923] 2 K.B 832 at 841, Lord Atkin urged a proper construction of the Act to extract Parliament's intention in protecting a right. The approach suggested is consistent with Goma.

“When an Act imposes a duty of commission or omission, the question whether a person aggrieved by a breach of the duty has a right of action depends on the intention of the Act.

Was it intended to make the duty one which was owed to the party aggrieved as well as to the State, or was it a public duty only?

That depends on the construction of the Act and the circumstances in which it was made and to which it relates.

One question to be considered is, Does the Act contain reference to a remedy for breach of it? Prima facie if it does that is the only remedy. But that is not conclusive. The intention as disclosed by its scope and wording must still be regarded, and it may still be that, though the statute creates the duty and provides a penalty, the duty is nevertheless owed to individuals.”

21. The tests in Philips v Britannia Hygienic Laundry provides relevant guidance to interpreting the law to ascertain intent and are relevant where the language of the statute is unclear. In Singorom v Kalaut [1985] PNGLR 238 his Honour Kapi CJ clarified that the Court should not read into or imply a meaning or intent of a matter where Parliament through the clear words of statute has not legislated on. He continued that this would be treading into the legislatures’ power and would be unconstitutional. His Honour’s decision is cited below:-

“Whatever the rules or maxims of statutory interpretation say, one thing must not be lost sight of and that is that a clear parliamentary intention in legislation cannot be ignored or overruled by the courts. The courts cannot and must not frustrate clear parliamentary intention in any legislation so long as such legislation is constitutionally valid. For Parliament is empowered by the Constitution, s 100, to exercise the legislative power of the people and not the courts. In fact, Parliament's legislative power, subject to the Constitution, is unfettered (the Constitution, s109(1)), and laws made by Parliament shall receive such fair, large and liberal construction and interpretation as will best ensure that attainment of the object of the law according to its true intent, meaning and spirit (s109(4)). I have said the above to emphasis that the Court cannot go beyond its powers by using maxims of interpretation or rules of interpretation to over-ride clear and explicit parliamentary intent in legislation. This is not saying that I support the strict literal and grammatical construction of the words, heedless of the consequences approach to statutory interpretation: see PLAR No 1 of 1980 [1980]PNGLR 326". (Emphasis added)

22. I turn now to consider the relevant sections of the PM & NEC Act. The plaintiffs rely on Sections 18 schedule 1 item 11, 20 and 21 of the PM & NEC Act to contend that these provisions create a statutory obligation on the Chief Secretary to ensure that the NEC Decisions approving the housing and hardship allowance were implemented by the Department of Defence and paid to the plaintiffs upon their retrenchment. Schedule 1(11) from Section 18 PM & NEC Act 2002 regarding the functions of the department states, it is:

"primarily responsible for managing all policies relating to the operation of the Government."
"20. Functions of Chief Secretary to Government.

(a) to be the principal adviser to the Prime Minister and to the National Executive Council; and
(b) to co-ordinate policies and initiatives of the National Executive Council; and
(c) to ensure that decisions, directions and policies of the National Executive Council are implemented by the National Public Service and by public bodies; and
(d) to ensure that the National Public Service and public bodies perform effectively and are accountable to the National Executive Council and to the Parliament; and
(e) to oversee public sector reform; and
(f) such other functions as are determined by the National Executive Council, or any other law.

21. Powers of the Chief Secretary to Government.
(1) The Chief Secretary to Government may at any time, for the purpose of the performance of his functions under this Act or any other law –

(i) a Department; or
(ii) a Provincial Government; or
(iii) a public body; and

(b) question a person who appears likely to have information relevant to the functions of the Chief Secretary to Government; and
(c) require any person to provide information relative to the functions of the Chief Secretary to Government; and
(d) require any person to produce documents within his possession or subject to his control where such documents are relevant to the functions of the Chief Secretary to Government; and
(e) make and retain copies of any document produced under Paragraph (d); and
(f) issue direction relative to his functions to a Departmental Head and to the head of a public body.

(2) All Departmental Heads, heads of public bodies and officers of the National Public Service and of public bodies shall –

(a) co-operate with the Chief Secretary to Government in the performance of his functions and the exercise of his powers under this Act; and
(b) comply with any directions issued under Subsection (1)(f)."

23. Section 18 of the PM & NEC Act vests the Chief Secretary with the primary responsibility for managing all policies of Government. The alleged breach of statutory duty is of s20(c) of the PM & NEC Act. In section 20 of the PM & NEC Act, Parliament outlines six functions that the Chief Secretary to Government is expected to perform. Two of those functions are contained in Section 20(c) and (d) PM&NEC Act and imposes a duty on the Chief Secretary to 'ensure' that all decisions of the NEC are implemented by the National Public Service and public bodies and to make sure that they perform effectively and are 'accountable' to the NEC and Parliament. Sections 21 and 22 PM&NEC Act confers certain powers and responsibilities on the Chief Secretary to confirm that heads of public agencies implement NEC decisions.

24. Section 21 grants the Chief Secretary inspection powers to enter premises, cause inquiries, require production of documents or issue directives to heads of departments and statutory bodies about any aspects of his responsibilities including ensuring implementation of NEC Decisions. Section 21 powers of the Chief Secretary are discretionary. Any allegations of failure to exercise the powers under section 21 will not hold legal weight as the power is discretionary and does not compel the Chief Secretary to exercise the inspection powers to secure compliance by departmental heads in implementing NEC decisions.

25. Section 22(1) PM & NEC Act provides a mandatory reporting obligation on the Chief Secretary to provide an annual report to the NEC about the status of implementation of its decisions. Section 22 reads:-

(1) The Chief Secretary to Government shall, no later than 31 March in each year, give to the Prime Minister, for presentation to the National Executive Council, a report in respect of implementation by the National Public Service and public bodies, during the year ending 31 December preceding, of Governmental policies and decisions.

(2) Nothing in Subsection (1) prevents the Chief Secretary to Government from making, on his own initiative or at the direction of the Prime Minister, other reports on the implementation, by the National Public Service and public bodies, of Governmental policies and decisions.''

26. A plain reading of Sections 18 schedule 1 item 11, 20, 21 and 22 of the PM&NEC Act, produces an interpretation that the Chief Secretary is primarily responsible for managing all policies relating to the operations of government and that includes ensuring NEC decisions are implemented by departmental heads. He may enforce compliance by causing inquiries or production of documents from departmental heads. There is no penalty prescribed for non-compliance by departmental heads but I infer that the weight of the annual report to the Prime Minister and NEC should create sufficient incentive for departmental heads to comply with the Chief Secretary's requests for progress updates on implementing NEC decisions which their department is responsible for. I make this inference because the NEC is the appointing authority^[3] for departmental heads. It may cost departmental heads their job when they do not implement NEC decisions.

27. The plaintiff's contention is that the fact that they have not been paid the housing and hardship allowances should be accepted by the Court as evidence of the Chief Secretary failing in his duty to ensure the Defence department, the second defendants and other relevant departments of the third defendant failed in their duties to implement the NEC decisions to pay them the allowances on their retrenchment. In other words, they raise the argument of 'the thing speaks for itself’ or res ipsa loquitur, as evidence of the defendants alleged negligence. Counsel for the plaintiff did not address me on this aspect. However, the circumstances where it may be invoked are captured in Marshall Lagoon Investment Company Pty Ltd v Ding Company Ltd (2008) N3650 and do not apply to support the plaintiff.

28. With respect, I do not accept the plaintiff's submissions because it ignores the other elements for the tort of breach of statutory duty, which requires that the PM&NEC Act intended to protect a class of persons to which the plaintiff belongs from negligent actions or omissions of the Chief Secretary. The plaintiffs claim that they belong to the PNGDF which is a State Service and this is a class that Parliament intended to protect when the Chief secretary fails in his duty to ensure NEC decisions for their benefit were implemented is not supported by the construction and language of PM & NEC Act.

29. A literal interpretation of the provisions of PM & NEC Act examined do not create any inference or implication to protect a class of persons or impose any duty on the Chief Secretary to ensure NEC decisions are implemented for the benefit of persons the subject of its decisions or for PNGDF or State Services members (past or present). Parliament must legislate in clear language to impose this duty into the PM & NEC Act by holding the Chief Secretary liable, for instance where parliament intends to protect workers, as demonstrated in the cases of Lo v Hevilift Aviation Ltd (2023) N10413 (worker's compensation), Woolcott v Nivani Ltd (2023) SC2335 (workers’ health, safety and welfare regulations) or Anave Ona v National Housing Corporation & Nambawan Supa Limited (2009) SC995 and Goma ( workers superannuation).

30. In the absence of clear express provisions imposing liability on the Chief Secretary in the PM & NEC Act, I cannot infer, imply or intend any meaning into the clear language of the Act to create a duty of care to the plaintiffs. That would be unconstitutional and bordering on legislating, which is not the role of the Court. See s100 Constitution and Singorom v Kalaut.

31. Further and for added emphasis; I also refer to the preamble of the PM & NEC Act to ascertain the overall scheme and purpose of the Act which is reproduced below:-

(a) to implement Section 143 (Acting Prime Minister) of the Constitution by providing for –

(i) a Deputy Prime Minister; and
(ii) the Deputy Prime Minister or another Minister to be the Acting Prime Minister in certain circumstances; and
(b) to provide for the suspension from office of the Prime Minister pending an investigation for the purposes of Section 142(5) of the Constitution; and
(c) to provide for the National Security Council and the National Security Advisory Committee; and
(d) to provide for the establishment and functions of the Department of the Prime Minister and National Executive Council; and
(e) to establish the office of Chief Secretary to Government and to provide for its functions and powers; and
(f) to provide for the office of Secretary to the National Executive Council and for its functions and powers; and
(g) to provide for the establishment of the Central Agencies Co- ordination Committee and for its functions and powers; and
(h) to provide for implementation of decisions of the National Executive Council; and
(i) to repeal the Prime Minister Act 1975, and for related purposes,”

32. The purpose of the Act is to establish certain State offices to support the top-level executive arm of government being the Prime Minister and the NEC by establishing the offices and the office bearers, their functions, powers and their reporting line direct to the Prime Minister and ultimately the NEC. The office of Chief Secretary to Government is a key position in co-ordinating the efforts of the bureaucracy, the National Public Service and reporting that to the Prime Minister. It is obvious the Chief Secretary's primary duty is to the Prime Minister.

33. Extending statutory negligence in the manner submitted by the plaintiffs in my view is stretching the concept of statutory negligence too far. I find the argument remote and contrary to the intention of Parliament for the PM&NEC Act and the responsibilities of the Chief Secretary.

34. Parliament has intentionally provided a statutory avenue to commence actions against the State for torts or wrongs committed by its officials or agents and the legislation are the Wrongs Miscellaneous Provisions Act Chapter 297 and the Claims By and Against the State Act 1996. Any action for negligence would lie under this legislation or alternatively breach of statutory duties may be commenced under public law seeking judicial review of the public officials' actions or omissions.

35. Clearly, the Chief Secretary does not owe a statutory duty of care to the plaintiffs to ensure NEC decisions are implemented. His duty is to the Prime Minister and NEC, not to the plaintiffs nor any persons who may benefit from NEC decisions. As a result no statutory duty arises to create an actionable right to a cause of action in damages for the plaintiffs.

36. I proceed now to consider the evidentiary aspects of whether the NEC decisions relied on by the plaintiffs contained resolutions approving hardship allowance of K10,000.00 and housing allowance of K50,000.00 for each soldier and whether the defendants are negligent at common law for not implementing these decisions. For this issue, I apply my considerations only to the second and third defendants as I have formed the view that the Chief Secretary does not owe any statutory obligation or duty of care to the plaintiffs. However, in some instances my reasoning includes the Chief Secretary.

37. This issue requires an examination of the three NEC Decisions and the evidentiary matters contained in the plaintiff’s evidence. I have closely examined the affidavit of Godfrey Aisi and the submissions of Counsel, and I make the following findings of fact:-

38. I now turn to consider the NEC Decisions. Decision number 26 of 1996 dated 26 February 1996 approved to align the PNGDF retrenchment benefits formulae to the rest of the State Services and directed the First Legislative Counsel to make the necessary law changes to the Defence Force Retirement Benefits Fund Act, Defence Act and Regulations.

1. approved the definition of redundancy and retrenchment in the Defence Force, contained within Policy Submission No.25/96 for inclusion in the Manual of Personnel Administration, which brings the Defence Force in line with the other State Services.

2. approved the Defence Force retrenchment terms and conditions detailed in the same submission and the retrenchment benefits formulae which are in line with the other State Services, for inclusion in the Manual of Personnel Administration.

3. approved the retrenchment of the list of former Commanders and Colonels attached to the submission under Section 12 of the Defence Act and advised the Head of State to revoke their appointments, with effect from 30th April 1996, provided that retrenchment benefits will be paid in accordance with Council’s decision hereunder.

4. directed the Department of Personnel Management and the Department of Finance to ensure funding from the 1996 budgeted retrenchment funds of K2.5Million in respect of retrenchment benefits for the redundant officers and men listed and include them for calculation purposes under the auspices of the Department of Personnel Management, in the 1996 Budget provisions.

5. approved the drafting instructions attached to the submission to amend the Defence Force Retirement Benefits Fund Act, in order to establish retirement/redundancy benefits policy in line with the other State Services, and to seek legislation in time to pay out the lump sums to the retrenched officers in the list attached to the submission prior to the expiry date of their notice;

6. approved the drafting submissions attached to the submission to amend the Defence Act Regulations to bring the Defence Force retirement age policy in line with the other State Services and to present draft legislation to Parliament so that amendments are brought into force following the 30 April 1996.

7. directed the First Legislative Counsel, in consultation with the Defence Council and the Department of Personnel Management, to draft legislation for Council’s consideration in accordance with the drafting instructions and the approved time table and

8. noted that the contracts of employment of the Commander and the Colonels already contain provisions for retrenchment benefits, and that all Colonels are required to sign contacts of employment by virtue of NEC Decision 125/93 and subsequently SCMC decisions on their terms and conditions of employment, since ratified by the Defence Council.

39. NEC decision number 213 of 2001 dated 22 November 2001 provided particularly a resolution for termination series 1 to 9 as contained in the Manual of Personnel Administration (MPA) and directed the Defence Department to update the MPA accordingly.

1. confirmed that prior to the announcement of the 2001 Budget, no redundancy declaration had been executed by the NEC, and that therefore any ex-serviceman terminated in the period 1997 up to 31st December 2000 is not entitled to retrenchment benefits.

2. confirmed that a de facto declaration of redundancy situation came into force on 01 January 2001 by virtue of Council’s 2001 Budget Decisions made in November 2000;

3. endorsed the application of NEC Policy Decision No.26/96 in the Defence Force, as reproduced in its entirety in the Submission, with a variation to prove that medically discharged personnel deemed to have been retrenched from 01 January 2001 will be paid retrenchment benefits.

4. approved the application of the Termination Serials 1 to 9 as contained in the Manual of Personnel Administration at times of redundancy for the purpose of awarding retrenchment benefits, for application to the current exercise, whereby all eligible men retrenched from 01 January 2001 will be paid retrenchment benefits.

5. directed the Department of Defence to up-date the Manual of Personnel Administration with the redundancy and retrenchment policy statement together with its application under the Manual of Personnel Administration Termination Serials 1 to 9 as contained in the Submission.

6. directed that any claims for ex-graita payments made by ex-servicemen who were terminated in the period September 1982 to April 1989 are now no longer acceptable in the absence of a retrenchment policy at that time, only terminations classified as retrenchment under the criteria of NEC Decision No.26/96 as clarified by this Decision shall be considered.

7. approved the retrenchment of rank and file members and any former Commanders and Colonels and approved to advise the Head of State to revoke the appointments of the commissioned officers with effect from date of Gazettal;

8. directed the Public Sector Reform Management Unit, in conjunction with the Department of Finance and the Department of Defence to obtain funding for the additional cost of retrenchment benefits estimated at K45million, from aid donors currently funding the down sizing of the Defence Force.

9. directed the Defence Council and the Department of Personnel Management to rigorously defend any retrenchment claims which come before the courts utilising the approved policy decisions; and

10. directed the Defence Council in consultation with the Department of Personnel Management to review the short service engagement policy whereby short service would be compensated with an appropriate level of ex-gratia lump sum payment on early termination related to service, (similar to the retrenchment benefit provisions), and DFRBF benefits, whereby the age and fitness of the Force is properly taken into account.

40. A month later, the NEC decision number 239 of 2001 dated 19 December 2001 declared a further redundancy situation to be funded from the 2002 budget.

1. approved and advised the Head of State to declare a Defence Force strength of 2000 for year 2001 and onwards, under Section 13 of the Defence Act.

2. declared a further redundancy situations in the Defence Force under the 2002 Budget, and directed the Defence Council to reduce the size of the force through a retrenchment exercise, commencing no later than 31 December 2001.

3. noted that the cost of retrenchment, repatriation, and DFRBF payments will be funded through the Australian Government contribution to rebuilding the Defence Force and

4. directed the Defence Council to set aside K5million from the available funds to meet the cost of retrenchment benefits for 274 ex-servicemen currently before the Court, and inform the Courts of this action.

41. The plaintiff requires this Court to read into the NEC approvals to deduce an interpretation that housing and hardship allowance has been approved by the NEC. At the outset, I place my discomfort in making any attempts to interpret an NEC decision because it is not statute, contractor an administrative decision. The Court can order that specific NEC resolutions be complied with but not question the fairness or otherwise of an NEC decision which will require reading into the decisions. See Behori Incorporated Land Group v Sirinumu Development Company (2016) N6862 and Koim v O'Neil and NEC (2016) N6558.

42. It is obvious on the face of the record of the three NEC decisions that there is no specific reference to any resolutions by Cabinet to approve the hardship and housing allowance in any of the three NEC Decisions. The closest reference to the benefit is as mentioned in the 1996 NEC Decision reference to a cabinet 'submission’ and in Decision 213 of 2001 resolutions 4 and 5 “approving the application of termination series 1 to 9 as contained in the MPA and directing the Defence Department to update the MPA.”

43. Counsel for the Plaintiffs refers me to the Cabinet Submission dated 20 January 1996, that gave rise to the first NEC Decision being NEC Decision 26 of 1996, marked as annexure K to Godfrey Aisi’s affidavit. However, I find that there is no specific reference to these two allowances in that submission. The submission that resulted in NEC 26/1996 contains only seven retrenchment benefits for Cabinet's approval. These are:-

44. The plaintiffs confirm they have no issues with these seven allowances to which they confirm were paid to them on their retrenchment. The evidence also shows in annexure “L1” of Godfrey Aisi’s affidavit that these seven benefits were captured in the PNGDF's staff employment rules, the Manual of Personnel Administration (MPA), when Commodore Ilau amended the MPA on 18 June 2002, seven months after the NEC decision 213 of 2001, to include the updated retrenchment definitions and policy and at clause 5.11 listed the above seven retrenchment benefits.

45. NEC Decision 213 of 2001 referred to termination series 1 to 9 which the plaintiff claims includes the additional benefits of housing allowance of K50,000.00 and hardship allowance of K10,000.00. However, the NEC resolution itself does not outline what the termination series benefits 1 to 9 comprise of. There is also no copy of the submission referred to in resolution 5 of NEC decisions 213 of 2001, produced in evidence.
46. The plaintiffs assert that a 'Retrenchment Benefits Calculation Form' exists and contains the housing allowance of K50,000.00 and hardship allowance of K10,000.00 which are termination series 8 and 9 of the approved termination series 1 to 9 in the NEC decision 213 of 2001 in resolutions 4 and 5. The plaintiffs contend that I should imply this meaning to this NEC Decision.

59. Costs are discretionary and are usually awarded to the successful party. However, in this case, the State's lawyers have not properly defended the matter at trial. The plaintiffs have been diligently pursuing their case in Court and their retrenchment occurred some 16 years ago. They were informed of the State's position in 2013 that the NEC decision did not approve the allowances claimed, yet still pursued their grievance. Taking these considerations into account, it is just that each party bears their own costs.

(a) Judgment is awarded against the plaintiffs in favour of the defendants on the primary cause of action for breach of statutory duty or negligence.

(b)Judgement is awarded in favour of the plaintiff for mental distress, and anxiety only.

(c) Damages are awarded for mental distress, and anxiety to the plaintiff of K2500.00 for each plaintiff or a global sum of K3,400,000.00

Judgment and orders accordingly.
________________________________________________________________
Furigi Lawyers: Lawyers for the Plaintiffs
Solicitor General: Lawyers for the Defendants

^[1] See Mathias Goma v Protect Security & Communication Ltd (2013) SC1300 and State v Downer Construction (PNG) Ltd (2009) SC979.

^[2] Christopher Walton Charlesworth & Percy on Negligence, Sweet & Maxwell, 2010 at para 12-11 pg 876-877.

^[3] Sec ss193 and 208B of the Constitution.
^[4] Annexure ‘BB’ of Godfrey Aisi’s affidavit.

National Court of Papua New Guinea

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