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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
WS NO. 25 OF 2017
BETWEEN
MOHAN SINGH
Plaintiff
AND
MINERAL RESOURCES AUTHORITY
Defendant
WAIGANI: MAKAIL J
1 DECEMBER 2022; 4 FEBRUARY 2025
LIABILITY – CONTRACT – Breach of contract – Contract of employment – Wrongful dismissal – Termination for cause – Failure to disclose material information – Rental of accommodation – Ownership of property – Whether material information – Whether dismissal was wrongful
ASSESSMENT OF DAMAGES – Breach of contract – Damages for breach of contract – Wrongful dismissal – Whether damages are assessed on period of notice or balance of contractual term – Damages awarded for balance of contractual term
Cases cited
Porgera Joint Venture v Kami (2010) SC1060
Counsel
Mr S Nutley for plaintiff
Mr G Pipike for defendant
JUDGMENT
1. MAKAIL J: The is an action for wrongful dismissal of employment pursuant to an alleged breach of contract of employment. If liability is established, the plaintiff seeks damages.
Findings of Fact
2. The plaintiff tendered one affidavit by Nicholas Powrie sworn on 29th December 2019 and filed on 09th January 2020 (exhibit “P1”), six affidavits sworn by himself as follows, affidavit sworn on 28th April 2017 and filed on 01st May 2017 (exhibit “P2”), affidavit sworn and filed on 09th August 2018 (exhibit “P3”), affidavit sworn on 06th June 2019 and filed on 07th June 2019 (exhibit “P4”), affidavit sworn on 07th November 2019 and filed on 14th November 2019 (exhibit “P5”) affidavit sworn on 02nd September 2021 and filed on 06th September 2021 (exhibit “P6”) and the defendant tendered an affidavit by its Managing Director Mr Jerry Garry sworn on 08th October 2021 and filed on 11th October 2021 (exhibit “D”), The plaintiff, Mr Powrie and Mr Garry were also cross-examined in relation to the content of their respective affidavits.
3. Based on these affidavits, I find that the plaintiff entered into a contract of employment on 2nd September 2008 for a period of three years for the position of Chief Inspector of Mines of the defendant. When that contract expired, the plaintiff entered into a second contract of employment on 17th March 2011 for a period of three years for the same position. When that contract expired, the plaintiff entered into a third contract of employment on 14th May 2014 to take effect on 17th March 2014 for the same position of Chief Inspector of Mines of the defendant for a period of three years until 17th March 2017.
4. The contract of employment is for a fixed term. However, the contract does not contain (as employment contracts frequently do) any provision for early termination on giving of a period of notice. The only provisions for termination in the contract are contained in the Terms and Conditions under the following headings:
5. Significantly, clause 10;1 of the contract of employment provides for Allowances and Other Benefits in the following:
“10.1 The Chief Inspector shall be entitled to the following additional benefits:
(a) Fully furnished serviced and secured rental accommodation at MRA expenses.”
6. Also, of relevance is clause 16 of the contract of employment. Its heading reads “Personal Information Provided” and is in the following terms:
“The Chief Inspector warrants that the information furnished by him to the Authority at engagement as to his record of abilities,
health and employment matters is materially true and correct and that the Chief Inspector has not withheld any material information.
If any such particular shall be found to be incorrect or if it is discovered that the Chief Inspector has failed to disclose any
material information, the Managing Director may, on advising the Board, terminate the Contract without notice.”
7. When the plaintiff was employed under the first contract of employment on 2nd September 2008 his total salary was AU$179,918.00 per annum which included an accommodation allowance of AU$33,251.00 per annum.
When the plaintiff was offered the second contract on 17th March 2011, his total salary was increased to AU$193,000.00 per annum. This time, his accommodation allowance was changed to a fully
furnished, serviced and secured accommodation at the expense of the defendant. There was no fixed amount for the accommodation.
Upon a review of his performance, the plaintiff was offered a revised contract on 22nd September 2012 wherein his total salary was increased to AU$231,000.00 per annum whilst the defendant continued to pay his accommodation
without any fixed amount.
8. To facilitate the payment of the plaintiff’s accommodation, the defendant entered into a Residential Lease Agreement with LJ Hooker Real Estate Ltd on 28th December 2013 to provide accommodation to the plaintiff. The accommodation was described as Unit 3 of an apartment located on Section 27, Allotment 13, Paga Hill, Port Moresby. The rent was fixed at K7,000.00 per week plus GST to be reviewed annually. The rent was paid by the defendant at over K30,000.00 per month.
9. At the date of entering the third contract of employment, the plaintiff was a shareholder of a company. The company was the owner of the property and apartment. The plaintiff held 25% shares in the company.
10. In a letter to the plaintiff dated 18th April 2016 Mr Philip Samar the predecessor to Mr Garry informed the plaintiff that the latter misrepresented to the defendant the true ownership of accommodation at Unit 3 when he did not disclose to the defendant that he was one of the shareholders of the company which owned the property and apartment where Unit 3 is located. For this reason, the plaintiff was given notice to show cause within seven days of being served why he should not be terminated for failing to disclose the true ownership of the accommodation under clause 16 of contract of employment.
11. The plaintiff responded to the defendant’s allegation by way of a letter dated 22nd April 2016. He asserted that the defendant did not object to the payment of his accommodation under the second contract of employment and the signing of the third contract of employment was a renewal of the previous contract and payment of accommodation. Thus, the payment of accommodation was a carry-over of the previous contract and should not be a contentious issue between the parties.
12. By a letter dated 05th May 2016 Mr Samar of the defendant informed the plaintiff that his response to the allegation of breach of clause 16 of the contract of employment was rejected and that he was terminated for failing to disclose the ownership of the accommodation at Unit 3 to the defendant before the signing of the third contract of employment in breach of clause 16 of the contract of employment.
Grounds for Wrongful Dismissal
13. The plaintiff relies on two grounds to support his claim of wrongful dismissal. These are:
(a) Unfounded complaint by Newcrest Mining Limited against him; and
(b) Unfounded complaint by defendant of the breach of clause 16 of the contract of employment.
Unfounded complaint by Newcrest Mining Limited against him
14. The plaintiff relies on assertions at paragraphs 33 to 44 of his affidavit (exhibit “P6”) to prove that there has been a push by external elements led by the Chamber of Mines to have him removed as Chief Inspector of Mines because of his strong stance against their claim that the certificate of competency issued to mine operators under the Mining (Safety) Act is archaic.
15. The plaintiff submits that the complaint against his stance is unfounded but reinforced by his witness Mr Powrie’s account where he deposed at paragraph 9 of his affidavit (exhibit “P1”) that Mr Samar told him that Newcrest Mining Limited had complained about the plaintiff and wanted him out and it was the basis upon which Mr Samar arranged for or predicated the plaintiff’s dismissal. The defendant objected to the assertion by Mr Powrie at paragraph 9 of his affidavit (exhibit “P1”) as being hearsay.
16. I find Mr Powrie’s assertion at paragraph 9 of his affidavit (exhibit “P1”) that Mr Samar told him that Newcrest Mining Limited had complained about the plaintiff and wanted him out and it was the basis upon which Mr Samar arranged for or predicated the plaintiff’s dismissal not hearsay because it is what Mr Samar told Mr Powrie. However, it is hearsay if the plaintiff relies on it to prove as a fact that it was the reason the defendant dismissed the plaintiff from employment.
17. I make this finding because Mr Powrie’s assertion is unverified or uncorroborated by Mr Samar who has not been called or filed an affidavit to verify or corroborate the truthfulness of Mr Powrie’s assertion. For this reason, I also find the plaintiff’s assertion that external elements led by the Chamber of Mines were pushing for the plaintiff’s removal as Chief Inspector of Mines unfounded and without merit.
Unfounded complaint by defendant of the breach of clause 16 of the contract of employment
18. Moreover, the defendant has contradicted the plaintiff’s assertions by relying on breach of clause 16 of the contract of employment. Thus, the controversial question is whether the ownership of the accommodation at Unit 3 by the plaintiff is a material information and should be disclosed to the defendant prior to the signing of the third contract of employment on 14th May 2014.
19. The plaintiff submits that the defendant was given the option of three apartments to rent to accommodate the plaintiff based on an email from Karan Rana of LJ Hooker to the plaintiff of 27th December 2013 which the plaintiff sent to Mr Samar. The three apartments available for rent listed with the real estate agent LJ Hooker were:
(a) Windward Apartments: Newly constructed bedroom apartments. K7,500.00 per week + incidental expenses + GST.
(b) Paga Hill Apartments: One three-bedroom apartment. K7,000.00 per week + incidental expenses + GST.
(c) Granville Apartments: Three-bedroom apartments. K8,000.00 per week + incidental expenses + GST.
20. Further, the plaintiff submits that he did disclose this purchase. He gave notice to Mr Samar the former Managing Director of the defendant of his intention to purchase the property and that fact that he had purchase that apartment on Paga Hill when he did so. In addition, the plaintiff gave evidence that Mr Samar was a frequent visitor to his apartment on Paga Hill. Moreover, the plaintiff submits that Mr Samar actively encouraged him to purchase a residential property as noted from the letter by Mr Samar to “TO WHOM IT MAY CONCERN” dated 13th May 2013 in annexure “A” to the plaintiff’s affidavit (exhibit “P5”) where he wrote that the defendant support the plaintiff by renewing his contract of employment when it becomes due for renewal in the future and assisting the plaintiff in meeting his equity obligations towards a bank loan to enable him to buy residential property in Port Moresby.
21. The defendant submits that the plaintiff’s ownership of accommodation at Unit 3 through the company is a material information and should have been disclosed to it prior to the signing of the third contract of employment. The reason is it is responsible for payment of the plaintiff’s “Fully furnished, serviced and secured rental accommodation.....” under clause 10.1(a) of the contract of employment and will need that information to decide whether to agree to commit to the contract and pay rental for the plaintiff’s accommodation especially where the amount of rent/accommodation is not fixed.
22. Moreover, it submitted that it was shocked that it was paying for the Unit that the plaintiff had purchased and was unable to review and renegotiate the lease agreement at arms-length because according to paragraph 21 of his affidavit (exhibit “D”) Mr Garry deposed that “.....by withholding the information that the Plaintiff had purchased the unit and was the new landlord of the unit MRA was renting for him, the Plaintiff had denied MRA the right to review and renegotiate the lease agreement at arm’s length.”
23. The final ground of the defendant is that given the use of the expression “other employment matters” in clause 16 of the contract of employment, it must be read to include the ownership of the accommodation at Unit 3 because the accommodation is where the plaintiff lives and goes to work as Chief Inspector of Mines of the defendant. The plaintiff countered this submission by relying on the Latin expression ejusdem generis which means “of the same kind” does not support the interpretation given by the defendant.
24. I do not consider it necessary to comment on whether the ownership of the accommodation at Unit 3 fall within the expression “other employment matters” and the plaintiff is obliged to disclose it to the defendant. What is relevant is the expression “material information”. I consider that it must be construed literally. It means information that is relevant and important regarding the employment of the plaintiff. This includes information about the accommodation of the plaintiff. I accept the plaintiff’s evidence from LJ Hooker that the information in relation to the accommodation of the plaintiff consists of an option of three apartments put to Mr Samar of the defendant to choose. The apartment at Paga Hill with three-bedrooms going for K7,000.00 per week with incidental expenses and GST was chosen. To define “material information” as including ownership of the property or apartment would be reading too much into clause 16.
25. As part of the information of his employment, the plaintiff provided information in relation to his accommodation. The information was materially relevant and important to assist the defendant choose one out of the three apartments to rent for the plaintiff. It was also in accordance with accepted real estate practice to provide three quotations to employers of potential tenants to choose from. Although not obliged to inform the defendant about his intention to purchase a property because it is a private matter, the plaintiff did with the active encouragement from Mr Samar as noted from the letter by Mr Samar to “TO WHOM IT MAY CONCERN” dated 13th May 2013 in annexure “A” to the plaintiff’s affidavit (exhibit “P5”).
26. On the other hand, it was always open to the defendant to request the plaintiff to provide the details of the ownership of the accommodation, but it did not. If the rental amount for the accommodation was an issue and the defendant was not prepared to pay, it was always open to it to inform the plaintiff prior to signing the contract of employment. In the absence of such requests by the defendant, it must be the finding of the Court that the contract was mutually agreed upon by the parties and binding on them. It follows that the defendant’s assertion that it was shocked that it was paying for the Unit that the plaintiff had purchased and was unable to review and renegotiate the lease agreement at arms-length is of no consequence.
27. For the foregoing reasons, I find that the defendant’s reliance on breach of clause 16 of the contract of employment as the ground to dismiss the plaintiff is unfounded and without merit. I find the dismissal of the plaintiff was without cause, and wrongful and entered judgment on liability against the defendant.
Assessment of Damages
28. It is common ground between the parties that they presented two differing views on the principle on assessment of damages arising from a breach of contract of employment. One view presented by the plaintiff is that, as it was a fixed term of contract of employment for three years and the dismissal was without cause, damages should be assessed for the balance of the contractual term. In this case, the plaintiff was wrongfully dismissed on 18th April 2016 and the end of the contract was on 17th March 2017. Damages should be assessed from 18th April 2016 to 17th March 2017. This is a period of thirteen months. As the plaintiff is paid in AU$, computing based salary and allowances of thirteen months comes to a total sum of AU$307,666.66. Furthermore, the plaintiff submitted that as (B) on the first page of the contract of employment provides for an option “of extension for further 3 years” he is entitled to a further three years of damages at the rate of AU$248,000.00 per annum for further three years.
29. The other view proffered by the defendant is that damages are assessed based on a period of notice. This view is reinforced by the Supreme Court judgment in Porgera Joint Venture v Kami (2010) SC1060. Moreover, an award of damages for the balance of the contractual term is prohibited by clause 9 of the contract of employment. In this case, assessed should be assessed based on one month’s notice.
30. The plaintiff submitted in response that the Porgera Joint Venture v Kami case (supra) is distinguishable on its facts. I agree. In that case, the appellant did not follow the disciplinary procedure under the contract of employment in particular giving of notice prior to terminating the respondent. The majority judgment of the Supreme Court held that damages is assessed based on the period of notice or the period of time a disciplinary process would take. In this case, the plaintiff does not say that the disciplinary procedure in particular the giving of notice of allegation/charge was not served on him but the ground for dismissal was unfounded. For this reason, that case does not apply in this case.
31. As to the defendant’s submission that the balance of the contractual term is prohibited by clause 9 of the contract of employment, my view is that it applies to cases where parties mutually agree to part ways or terminate the contract. But it does not apply where the dismissal of the plaintiff is found to be without cause and wrongful. For this reason, I find clause 9 has no application in this case. On the other hand, I uphold the submissions of the plaintiff that as a fixed contract of employment with no period of notice being stipulated and where the dismissal is found to be without cause and wrongful, the plaintiff is entitled to the balance of the contractual term.
32. In this case, I accept the plaintiff’s assessment of damages. He was wrongfully dismissed on 18th April 2016 and the end of the contract was on 17th March 2017. Damages should be assessed from 18th April 2016 to 17th March 2017. This is a period of thirteen months. As the plaintiff is paid in AU$, computing based salary and allowances (International Market Allowance, Domestic Allowance and Contractual Allowance) of thirteen months comes to a total sum of AU$307,666.66. I award this sum.
Future Loss of Income
33. As to the plaintiff’s submission that as (B) on the first page of the contract of employment provides for an option “of extension for further 3 years” he is entitled to a further three years of damages at the rate of AU$248,000.00 per annum for further three years, my view is that this is a further claim for loss of future income and is not adequately substantiated. Further, regardless of the plaintiff enjoying a fixed contract for a term of three years, when it ends, it is subject to renewal. An award of damages for future loss of income based on a new contract which is yet to be agreed upon will amount to a speculation. I refuse to make an award for future loss of income.
Interest
34. As to interest, I order that the defendant pay interest at the rate of 8% from the date of filing of writ of summons to the date of judgment and until final settlement pursuant to the Judicial Proceedings (Interest on Debts & Damages) Act, 2015.
Costs
35. I order that the defendant pay the plaintiff’s costs of the proceedings on party/party basis, to be taxed, if not agreed.
Order
36. The Court orders that:
2. Judgment is entered in the total sum of AU$307,666.66.
________________________________________________________________
Lawyers for plaintiff: Fiocco & Nutley Lawyers
Lawyers for the defendant: GP Lawyers
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URL: http://www.paclii.org/pg/cases/PGNC/2025/24.html