Kapo v Bure [2010] PGSC 54; SC1162 (15 December 2010)

SC1162

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE AT WAIGANI]

SCA No. 18 of 2010

BETWEEN:

ROBERT KAPO
Appellant

AND:

AYLEEN BURE
First Respondent

AND:

MARK FISHER
Second Respondent

AND:

GARY O'BREE
Third Respondent

AND:

EVERT VAN DAN BRAND
Fourth Respondent

AND:

PLACER (PNG) LIMITED
Fifth Respondent

Waigani: Davani, Hartshorn & Sawong, JJ
2010: 29th October & 15th December

Facts:

This is an appeal against a decision of the National Court which awarded the sum of K2,000.54 as damages for wrongful dismissal to the appellant.

Held:

The appellant has not demonstrated where and how the trial judge made any identifiable or unidentifiable errors. The appeal is dismissed with costs.

Cases Cited:
Papua New Guinea Cases

Ereman Ragi & Ors v. Joseph Maingu (1994) SC459,
Zanepa v. Kaivovo, Department of East New Britain & Anor (1999) SC 623,
PNGBC v. Jeff Tole (2002) SC694
Porgera Joint Venture v. Robin Kami (2010) SC 1060
Susan Love (substitute for Fabian Love (Deceased) v. Bridgestone Tyres (PNG) Limited SCA 1 of 2006 dated 3rd September, 2010

Overseas Cases

Boyo –v- London Borough of Lambeth [1995] 1RLR 50AC; (1980) I.C.RC 755
Gunton –v- London Borough of Richmond-upon-Thames [1980] 3 All ER 577

Counsel:

Mr. L Yandeken, for the Appellant
Mr. T. Boboro, for the Respondent

DECISION

15th December, 2010

1. BY THE COURT: This is an appeal against a decision of the National Court which awarded the sum of K2,000.54 as damages for wrongful dismissal to the appellant.

Background

2. The appellant was employed by the fifth respondent (Placer) under a contract of employment dated 5th September 1995. His services were terminated on 23rd July 2005 on disciplinary grounds.

3. Following his termination, the appellant commenced proceedings in the District Court at Port Moresby, claiming damages for wrongful dismissal. The District Court found that the appellant had been wrongfully terminated and ordered that:

(a) The appellant be reinstated to his substantive position with Placer.
(b) The appellant's entitlement be backdated to the date of his termination.

4. The respondents appealed to the National Court against the findings and orders of the District Court.

5. The National Court dismissed the appeal and confirmed the lower Court's finding that the appellant had been wrongfully terminated. The National Court also made several other orders. One of the orders was that the question of damages was to be referred back to the District Court for proper assessment, with a proviso that, should the damages claimed exceed the jurisdictional monetary limit of K 10,000.00, the District Court should consider referring the case back to the National Court for assessment of damages pursuant to ss. 23 and 24 of the District Courts Act.

6. The matter was then remitted back to the District Court for assessment of damages. However, upon an application under s.24 of the District Court's Act, the matter was referred back to the National Court for trial on assessment of damages.

7. In the National Court the appellant claimed gross damages of K3,112,748.01. At the end of the trial on an assessment of damages, the trial judge found, inter alia, that the appellant was only entitled to a sum equivalent to the period of notice under his employment contract. Accordingly the appellant was awarded K2,000.54. This is the decision that is the subject of this appeal.

Grounds of Appeal

8. Originally there were six (6) grounds of appeal. However, at the hearing, grounds 5 and 6 were abandoned by the appellant. Consequently these grounds are dismissed.

9. Only four (4) grounds remained and were dealt with. These are:

"1. That His Honour erred in law and in fact in revisiting and made a ruling in relation to Clause 14 of the Employment Contract when: -

(a) The National Court (per His Honour, Injia DCJ, as he then was) extensively dealt with Clause 14 of the Employment Contract and found in favour of the Appellant, and

(b) The Supreme Court had not quashed the decision in respect of Clause 14 of the Employment Contract.

2. That His Honour erred in law and in fact when he failed to give any or any sufficient consideration to the disciplinary processes under clause 5.6 to 5.9 of the Company Manuel of Personal Policies and Procedures which form part of the written contract of employment and confirmed himself only in clause 14 of the employment contract in making the decision.

3. That His Honour erred in law and in fact in failing to find that the second sentence in Clause 14 offended the Company Police No. 5.7.1, wherein the Appellant was subject to disciplinary processes under Clauses 5.6 to 5.9 of the Company Policies and Procedures.

4. That His Honour erred in law and in fact in failing to find that: -

(a) The Appellant was terminated on disciplinary grounds of being intoxicated at the Jacksons Airport;

(b) the notice provision of the first sentence in Clause 14 of the employment contract applied to termination only and not termination on disciplinary grounds;

(c) with regard to the second sentence in Clause 14 of the employment contract, the Appellant was subject to disciplinary processes under Clauses 5.6, 5.7.1 to 5.9 of the Company Manual on Policies and Procedures.

(d) Therefore on the principles of res integrum, the Appellant was entitled to be paid his back-dated entitlements and damages up to the date of judgment."

10. We will consider these grounds together as they raise only one issue. This may be summarized as follows:

(i) Whether Placer's disciplinary process in its Policy manual applied to the appellant.

(ii) If the answer to question (i) is "yes", is the appellant entitled to damages for a reasonable period within which the disciplinary proceedings would be commenced and concluded.

(iii) If yes, whether the trial judge, erred in finding that the Appellant was not entitled to anything more than 4 weeks or an amount in lieu of 4 weeks' notice.

11. The general principles of law as to the appropriate measure of damages for wrongful dismissal are now settled in our jurisdiction; Ereman Ragi & Ors v. Joseph Maingu (1994) SC459, Nazel Wally Zanepa v. Ellison Kaivovo, Department of East New Britain & Anor ( 1999) SC 623, PNGBC v. Jeff Tole (2002) SC694.

12. We note in this regard the recent Supreme Court decision of Susan Love (substitute for Fabian Love – Deceased) v. Bridgestone Tyres (PNG) Limited; SCA 1 of 2006 dated 3rd September, 2010 where the Supreme Court upheld the trial Judge's decision to award K1,350.00 in damages. In that case, the deceased, a former employee of Bridgestone Tyres, had his contract of employment prematurely terminated. The contract provided that employment may be terminated by either party giving one month's notice in writing. Bridgestone Tyres did this by letter. However, the deceased refused to accept the month's payment offered to him. Instead, he lodged a claim in the National Court seeking damages for wrongful dismissal, in excess of K50,000.00. The National Court refused that claim and only awarded payment of K1,350.00 which was the equivalent of the notice period under the contract. The Supreme Court comprising Kirriwom, Davani and Kariko JJ. held that;

"The employment contract signed on 23rd January, 1997, was one that provided that termination can take place where one party gives the other the relevant notice of the termination. Damages are therefore equivalent for the period of appropriate notice only." (pg.7)

13. The principles concerning the measure of damages to be paid in a wrongful dismissal claim under a private contract of employment have been further clarified by the Supreme Court decision in Porgera Joint Venture v. Robin Kami (2010) SC 1060. The brief facts in that case are that Porgera employed the respondent under a written contract of employment for a fixed term. The contract provided for early termination by either party without reason, upon four weeks notice or by Porgera without notice upon payment of money in lieu of notice. Porgera terminated the contract for disciplinary reasons and paid money in lieu of notice. The National Court found termination to be unlawful and in breach of the contract and awarded damages for the balance of the contract period. Porgera appealed against that decision to the Supreme Court. The Supreme Court by a 2-1 majority upheld the appeal. The learned Chief Justice considered and clarified the principles of law relating to this aspect. After discussing some English authorities and the common law principles on damages for want of notice and want of disciplinary procedures in a private employment contract, His Honour referred to several significant authorities including Gunton –v- London Borough of Richmond-upon-Thames [1980] 3 All ER 577 and Boyo –v- London Borough of Lambeth [1995] 1RLR 50AC; (1980) I.C.RC. 755

14. At pp 10 the Chief Justice stated:

"24. I consider that the common law principles on compensation for want of notice and want of disciplinary procedures in a private employment contract developed in Gunton, Janciuk, Boyo, Focsa set out above are persuasive, appropriate and applicable to the circumstances of this country and apply them to the case at hand. Much of the principles set out above relating to measure of damages for want of notice are already part of the common law as adopted and applied in this jurisdiction in many cases including the cases cited by counsel before us. The principles on compensation for want of compliance with disciplinary procedures in a private employment contract is new and requires further development and refining in subsequent cases with assistance of counsel.

25. I consider that in a private employment situation where an employee is employed under a written contract of employment for a fixed term and which contains a termination clause for termination with or without notice by either party, with or without reason, the measure of damages which the employee is entitled to receive is based on the salary and other entitlements that the employee would have received if the contract had been lawfully terminated. In a case where it is an express or implied term of the contract that termination of the employment contract for cause would be effected upon compliance with disciplinary procedures, the measure of damages is assessed on a reasonable period within which the disciplinary proceedings would be commenced and concluded. The likely outcome of the disciplinary proceeding is immaterial or is an irrelevant consideration.

26. Let me expound on the principle that I have just enunciated. In a case where the employer in the exercise of its right to terminate the contract chooses to terminate for cause, and there is a disciplinary procedure that the parties have adopted in the Contract, the employer is under an obligation to follow the disciplinary process agreed to under the contract. If the employer is found to have not followed the proper procedure the termination is wrongful and the employee is entitled to damages. But damages will not be for the balance of the contract unless the parties agree to such a term under the contract. Instead, damages is for the reasonable period during which proper disciplinary process would have been initiated and concluded in accordance with any time lines prescribed for various steps in the disciplinary procedure to be concluded. For a start, it would very much depend on the steps in the procedures set out in the disciplinary process and the time limit, if any, prescribed for various procedural steps where there are no time limits prescribed, it would come down to assessing what would be as reasonable time frame to cover the main steps in the process – formulating and presenting complaint, opportunity to reply and a decision made and communicated to the employee and any provisions for appeal or review from that decision by a higher management body or person. It is not a matter for the Court to analyze and speculate on the employee's chances of success if the process was completed."

15. We adopt and apply these principles in this case as in our respectful view, the passage cited is correct in law.

16. Counsel for the appellant submitted that the disciplinary procedures including appeals, adopted by the respondents, would involve a lengthy period of time to complete. He submitted that the process would take more than two or three weeks. Therefore this Court should not follow the suggestion made in PJV v. Kami (supra). He submitted that a reasonable period for this disciplinary process would be about three months and that the appellant is entitled to damages for that period.

17. The problem with this submission is that there is no evidence supporting it. During argument, counsel was asked if there was any evidence given at the trial of how long the disciplinary process would take. Counsel submitted and agreed that there was no such evidence and that no evidence was led before the trial judge in that respect.

18. Given that concession, we dismiss this ground as it does not have any merit. We see no reason to depart from the majority's reasoning in Kami (supra).

19. Counsel for the appellant then submitted that as the respondent did not follow the disciplinary process to terminate the appellant's services, its actions were harsh and oppressive.

20. He submitted that the appellant was entitled to damages from that date of instituting proceedings in the District Court to the date of judgment given by this Court. In addition, he relies on a sentence at pg. 34 of the trial Judge's published reasons, which reads,

"On the principle of res intergum, he is entitled to be paid his back-dated entitlements up to the date of judgment."

21. We reject this submission for two reasons. First, the trial Judge's comments were made in his decision on liability. The issue of how much was to be awarded to the appellant was to be determined at the hearing or trial on the assessment of damages. Secondly, we find that the sentence by the trial Judge is obiter and should not be relied upon.

22. To conclude, we are not satisfied that the appellant has demonstrated where and how the trial judge made any identifiable or unidentifiable errors.

23. Consequently we dismiss the appeal with costs.

_______________________________________________

Yandeken Lawyers: Lawyers for the Appellant

Barrick (PNG) Limited: Lawyers for the Respondent