University of Papua New Guinea v Duwaino [2011] PGSC 27; SC1119 (2 August 2011)

SC1119

PAPUA NEW GUINEA
IN THE SUPREME COURT OF JUSTICE

SCA NO 112 OF 2009

THE UNIVERSITY OF PAPUA NEW GUINEA
First Appellant

AND

THE CHIEF SECURITY - MIKE MOIR BUSSY
Second Appellant

AND

OPERATION COMMANDER – THOMAS NIGAYA
Third Appellant

AND

JERRY DUWAINO
Respondent

Waigani: Injia CJ, Gabi & Kawi JJ
2011 : 2nd August

SUPREME COURT – CIVIL APPEAL – Appeal from National Court decision on appeal from District Court – Wrongful dismissal of employee – District Court award of damages not supported by finding on liability against employer – National Court made findings on liability, assessed and awarded damages with interest – Error of law –Substantial miscarriage of justice – Appeal upheld and National Court decision quashed – Decision of District Court quashed and matter remitted to District Court for rehearing.
Facts:

The respondent, a security guard employed by the University of Papua New Guinea, instituted legal proceedings, against the University, seeking to be reinstated to his former position. The District Court without making a determination as to liability, proceeded to award him damages using calculations made by the Department of Labour and Employment. The appellant contested both liability and damages in the District Court. On appeal, the National Court, confirmed the decision of the District Court. The National Court extended the award of damages to include compensation for pain, suffering and distress caused by the termination of employment. This was made after making a finding on liability. On appeal to the Supreme Court:

Held:

(1) Liability would have been attached to a finding of wrongful termination of the security employment contract. There was no evidence before the District Court, to ground a cause of action in wrongful termination. Similarly there was no evidence on liability being determined before the National Court. In consequence thereof, both the District Court and subsequently the National Court could not have possibly made a determination on breach of employment contract and thereby award damages.

(2) The question of damages only arises following a determination as to liability. The objective of an award of damages is to put the injured party in the same position as he/she would have been in but for the injury suffered for which he is now getting compensation.

(3) Assuming that the claim for damages was properly before the Court, the onus was on the respondent/ complainant to prove the damages claimed. The plaintiff has an obligation to prove his losses with much certainty and particularity as is reasonable.

(4) It is not sufficient for a plaintiff to simply write down his alleged losses and then request the court to give him back those damages. The plaintiff has an obligation to prove those losses.

Cases Cited
Papua New Guinea cases

Bob Kol v The State (2010) N 3912.
Firman Mawa v Southern Highlands Provincial Government (2008) N3505
Jonathan Mangope Praia v The State (1995) N1343
Kui Valley Business Group v Kerry Wamugl (2009) N3667
Kolaip Palapi v Sergeant Poko (2001) N2274
Kopung Brothers Business Group v Sakwar Kasieng [1997] PNGLR 331
Martin Piaore v Ian Barr (2009) N3786
Paul and Grace Nari v The State (2004) N2769
Peter Goodenough –v- The State [2001] N2157
Ray Tese Pty Ltd –v- Syntex Australia Limited [1998] 1 Qd R 104
Stanely Magi Eremugo v Daniel Tande (2005) N2889
Yange Lagan v The State (1995) N1369
Yooken Pakilin v The State (2001) N2212

Overseas Cases

Bonham Carter –v- Hyden Park Hotel Ltd [1948] 64 TLR 17

Counsel

Ms C. Lari, for the Appellant
Respondent in Person

2 September, 2011

1. BY THE COURT: Background of appeal: The University of Papua New Guinea appealed against the decision of the National Court ("the Court") given on the 23rd October 2009. The Court dealt with an appeal from the Port Moresby District Court ("the District Court") which had made certain findings against the University in a wrongful dismissal case brought by the respondent.

2. In the proceedings before the District Court, the appellant contested the question of liability and damages. The District Court did not make any specific findings on liability against the appellant. The Court did not conduct a proper assessment of damages. In spite of this the District Court ordered judgment in favor of the respondent and awarded K10,000.00 in damages. Aggrieved by this decision, the appellant appealed the decision to the National Court.

3. The National Court in dismissing the appeal made findings on the question of liability. The Court confirmed the District Court's decision to award damages and proceeded to re-asses and awarded damages in the sum of K9,000.00 in general damages with interest at K5, 544.00 plus costs at K500.00.

4. In relation to the question of liability, the Court said this:

"I do not consider that the learned magistrate erred by failing to consider the law relating to the right of the employer to hire and fire at will. In this case the University lacked the power to fire at will. What should have happened is that the operations commander or the chief of security should have put the allegations to Mr Duwaino in writing and asked him to show cause why he should not be terminated over the break and enter incident that he allegedly negligently allowed that to happen. Instead he was sacked virtually on the spot. It was clearly open to the learned magistrate to conclude that as a matter of law this was wrong: It was contrary to the implied terms of the contract of employment between the University and Mr Duwaino."

5. The Court also said this:

"Damages were awarded in account of the failure to administer a right to be heard prior to termination. This is clear from the respondents statement of claim in the District Court. His complaint was that he was not given reasons, but that he was not given a right to be heard."

6. In relation to damages, the Court said this:

"When an employee succeeds in proving that their employment has been unlawfully terminated, they establish a cause of action in breach of contract. The employee is therefore entitled to damages if damages have been sought in their statement of claim – which is a remedy aimed at compensating them for the losses suffered as a result of the breach of contract. In any civil action, the purpose of an award of damages is to put the innocent party in the same position, as far as possible, they would have been in if the wrongdoer had not committed the wrongful act. It follows that the dismissed employee is to be compensated not only for wages that they have lost for the length of the notice period but also for pain and suffering and inconvenience caused to them by the employer's unlawful act."

7. The Court also took into account frustration and sufferings even though that category of damages was not specifically pleaded and pursued in the District Court. The Court said this:

"Loosing one's job is invariably a dramatic and traumatic event in a person's life, especially in PNG where jobs are scarce and many people other than the employee's family are dependent on the income generated by the job. When a person is wrongfully – ie –unlawfully- dismissed, the pain and anguish are magnified. Such a person deserves an adequate award of damage to compensate them for injury to their livelihood and emotions and those of their dependants caused by the wrongful dismissal."

Grounds of Appeal

8. The appellant relies on a total of eleven (11) grounds of appeal which are as follows:

1. The National Court erred in law and in fact in assuming that the Respondent's employment contract attracted the same provisions of the National Public Service employment contracts. What the University employment contract states was that the conditions are "comparable to those that apply in the National Public Service". It does not state which conditions they are and does not even say the same conditions applied in this contract. Being comparable is not the same as being applied. The conditions were written and were before the National Court and His Honour did not set them out at all? The National Court has proceeded on the wrong footing, that the Agreement was the same as that in the Public Service, whilst the contract of employment does not say so.
   
2. The National Court erred in law and fact in building into the contract of employment terms that are not in the contract of employment of the respondent at all by deciding that the terms of the conditions applicable to the Public Service employees apply to the contract of employment of the respondent.
   

100. There was no specific right under the Respondent's employment contract to be heard before termination. The National Court erred in law and fact in building that right into the employment contract.
     

4. The National Court having found that damages were not one of the remedies sought, it erred in law that it was a wrong decision by the District Court in not ordering for the assessment of damages.
   
5. The National Court erred in law in stating that the damages were for pain and suffering when such was not the claim in the District Court, nor was it part of the decision of the District Court. The National Court had made an error in relying on cases of authorities that supported his position on pain and suffering.
   
6. The National Court having premised a view that the Public Service terms and conditions applied to the respondent's employment contract, the Court erred in law in its finding that the University had a duty to give reasons, when there is no terms in the employment contract that clearly state that there is a duty to give reasons. Nor was there any contractual term for the right to be heard before termination.
   
7. The National Court erred in law and fact when considering the mitigation of losses, did not consider the pain and suffering had to be mitigated as well. Because the respondent had not done anything to mitigate his losses, he can only be claiming for a certain period of time, and that is for the notice period of two weeks.
   
8. The National Court erred in law in not providing the basis for the calculation of the 10% reduction in the mitigation of losses.
   
9. The National Court having found that the District Court Magistrate did not explain how he arrived at a figure of K10,000.00 and the National Court agreed that "on the face of it to be a large amount of damages to be awarded to someone who has only been employed for a little over a year". The National Court erred in concluding that the amount was not excessive. The National Court erred in law to state that the appellants were to state in their appeal that the amount was "manifestly excessive" and not just "excessive", both seemingly being the same.
   
10. The National Court also erred in law in adding interests to the amount of claim when the respondent has not asked for it in the District Court, nor did the Magistrate make any such orders, nor did the respondents file a cross-appeal.
    
11. The trial judge erred in law and fact in not deciding that the respondent's right under the employment contract were limited to the terms of the contract of employment and the Employment Act, Chapter 373.
    

9. These 11 grounds of Appeal can be conveniently categorized into two (2) broad grounds of appeal as follows:

1. Grounds dealing with the question of liability. These are mainly grounds 1, 2, 3, and 11 of the Notice of Appeal.
   

2. Grounds dealing with the question of damages, are adequately summarized in grounds 4, 5, 6, 7, 8, 9 and 10 of the Notice of Appeal.

Determination of appeal grounds

10. In any civil action brought before a court of law, there are two (2) distinct questions to be determined – question of liability and question of damages. A determination on liability is a necessary pre-requisite for determining damages, whether or not liability is in issue in the proceedings. Except where liability is admitted in the pleadings or by evidence or statement made in Court by the defendant or his or her counsel, in which case liability may be determined without the consideration of any evidence; a determination on liability is based on a consideration of admissible and relevant evidence. The onus is on the complainant to produce that evidence for the Court to assess, make findings of fact and apply the law to make those findings to reach a conclusion as to liability.

11. In the present case, liability would have been attached to a finding of wrongful termination of the security employment contract made against the appellant. There was no evidence before the District Court to support a case of wrongful dismissal and the Court could not have possibly made a determination on breach of contract of employment. It follows that the National Court too would not have been in a position to determine that question.

12. In the notice of appeal, the appellant did not seek a determination on liability from the National Court. In our view, the learned trial judge was confined to the issues raised by the grounds of appeal. In making a determination as to liability when the District Court never made such findings on the evidence, we consider that the National Court fell into error.

13. With regard to the relief sought in the District Court proceedings, reinstatement was the only relief sought; he did not seek damages. At the hearing he produced evidence to support a claim for damages. He relied on a statement of calculations of his service entitlements made by an officer from the Labour office. The District Court considered the evidence and accepted a calculation made by the Labour office. The Court assessed damages this way. Complainant was on a gross annual salary of K9,532.00 per annum at a fortnightly salary of K365.44 His Worship then calculated that he had been unemployed for 5 years and his gross payment for four (4) years calculated to K14,617.6. The amount of K14,617.60 is well above the Court's jurisdictional limit. Therefore to come within its jurisdictional limit, the Court simply made a global award of K10,000. The magistrate then awarded judgement in favour of the respondent in the sum of K10,000.00 together with costs. No specific orders were made for interests.

14. The objective of an award for damages is to give the complainant compensation for whatever injury or loss he suffered. Assuming that the claim for damages was properly before the Court, the onus was on the respondent/complainant, to prove the damages being claimed. The Plaintiff has an obligation to prove his losses with much certainty and particularity as is reasonable, see Ray Tese Pty Ltd –v- Syntex Australia Limited [1998] 1 Qd R 104.

15. In Bonham Carter –v- Hyden Park Hotel Ltd [1948] 64 TLR at page 178 Lord Goddard CJ said;

"Plaintiffs must understand that if they bring actions for damages, it is for them to prove their damages, it is not good enough to write down particulars and so to speak, throw them at the hand of the court saying, This is what I have lost, I ask you to give me these damages. They have to prove it."

16. This principle has been adopted and applied in many decisions of the National Court. The principle was first adopted and applied by Injia J (as he then was) in Jonathan Mangope Praia v The State (1995) N1343, and applied in subsequent cases: Yange Lagan v The State (1995) N1369, Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331, Yooken Pakilin v The State (2001) N2212, Kolaip Palapi v Sergeant Poko (2001) N2274, Paul and Grace Nari v The State (2004) N2769, Stanely Magi Eremugo v Daniel Tande (2005) N2889, Firman Mawa v Southern Highlands Provincial Government (2008) N3505, Kui Valley Business Group v Kerry Wamugl (2009) N3667, Martin Piaore v Ian Barr (2009) N3786, Bob Kol v The State (2010) N 3912.

17. In Peter Goodenough v The State [2001] N2157, referring to the principle, Salika J (as he then was) made these comments:

"I adopt these statements, as I am of the view that they are reasonable and logical and should be applied by the courts in Papua New Guinea. Every plaintiff who wishes to be put in the same position as he would have been in had the tort not been committed has an obligation to prove his claim. He has to call evidence relevant to prove his damage. If he fails to provide the relevant evidence, his claim is likely to fail."

18. The principle in Bonham Carter is appropriate to assessment of damages for cases involving breach of employment contract. We affirm those principles forming part of the underlying law of Papua New Guinea. We apply the principle in the case before us.

19. We are of the view that the District Court made a gross error in entertaining a claim for damages when that relief was not claimed in the pleadings and also in not properly assessing damages by simply adopting a calculation by the Labor office on the respondent's lost wages. The National Court perpetrated the same errors by making its own assessment of damages based on the same calculations from the Labour office and by introducing a new category of damages in the form of damages for pain and anguish which was not claimed by the respondent.

20. In the grounds of appeal before the National Court the appellant took issue with the award of damages on the basis that damages was not claimed. The Court misunderstood and misinterpreted their position when it said:

"The learned magistrate awarded Mr Duwaino K10,000.00 damages even though he did not ask for damages, he wanted to be reinstated. The appellant have not argued that His Worship erred by awarding damages. Their argument is that it was beyond the amount permitted by the Employment Act"

21. We are satisfied that the National Court committed fundamental errors in determining questions of liability and damages which resulted in substantial miscarriage of justice. We would uphold the appeal for this reason. We would quash the decision of the National Court and in lieu thereof, order that the District Court appeal is upheld and the matter remitted to the District Court to be retried before a different Magistrate.

Orders

22. The formal orders of this Court are as follows:

(1) The appeal against the National Court decision is allowed;

(2) The decision of the National Court is quashed and in lieu thereof, the following orders are substituted:

• (a) The appeal from the District Court is allowed and the said decision quashed;
  
• (b) the matter is remitted to the District Court to be retried before a different Magistrate; and
  

(3) The respondent shall pay the appellant's costs of the appeal.

___________________________________
Nonggorr William Lawyers: Lawyer for Appellants
Lawyer for Respondents: Respondent in Person