PAULA ARUHUR Others
Respondents
Coram: Hon. Chief Ju
Vincent Lunabek
Hon. Justice Bruce Robertson
Hon. Justice John von Doussa
Hon. Justice Daniel Fatiaki
Counsel: Mr. F.J. Purnell and
oa Damena-Tepai for the appellant
Mr. Mark Hurley for the
respondents
Date of hearing: 31 October
2001
Date of judgment: 01 November
2001
JUDGMENT
The 12th January
1998 will be a day long remed in the history of Port-Vila and of the
appellant Bant Board and its employees.
That was the day when an unruly mob
numbering between 300 and 500 people laid siege to the Vanuatu National
Provident
Fund (VNPF) building in downtown Port-Vila armed with
sticks, stones and metal pipes and weapons and projectiles. It is not
entirely
clear how long it lasted, but, for over several hours, the mob
vented its collective frustrations and anger on the VNPF building and
despite the presence of police force members at the scene, outer doors and
almost all windows and some internal
partitioning of the building were
shattered by flying projectiles. Employees of the appellant including
sixteen (16)
of the respondents who were working in and around the building
at the time were severely traumatized by the experience. It
is pure good
fortune that no one was seriously injured.
When the crowd was eventually
dispersed allVNPF building had
sustained dned damage in varying degrees which the building insurers assessors
estimated could cost 12,000,000 VT to repair and/or replace including
170 panes of window glass; several doors; a large number of internal gyprock
and vinyl
wall panels and internal partitioning; suspended ceiling panels
and a skylight on the top floor.
The dispersing crowd then moved
on to other business premises in Port-Vila causing severe damage to
buildings and stock
and contents were looted. A police truck was upturned
and set alight and tear gas was used to further disperse the mob. So
dangerous and volatile was the situation that a State of National Emergency
was declared the following day and a limited
curfew was imposed in Port-Vila
and Luganville.
The situation at the Luganville offices of the VNPF was not much better although thgh there was no actual
rioting or serious damage done to the building premises. Nevertheless
the
three (3) staff members were faced with an angry hostile mob which numbered
about 800 people who had gathered outside
the building that housed the
appellant’s offices and had remained there until late in the afternoon.
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The learned trial Judge
observed that ‘its is probably through a mixture of good fortune and
the skill of Major Aru and Inspector Boe that the staff in Luganville
were
not subject on the 12th January to the same fate as their
colleagues in Port-Vila. However there was a period when they were in the
building
with a hostile crowd outside, there was no senior managerial
directive or plan, no contingency plan for their evacuation, indeed
they
were virtually on their own. In these circumstances, an award of damages
should be made…’
Ipect of the Luganville
employees it was common ground that their safety was never serr seriously
considered or discussed
by the appellant Board at its meetings leading up to
the 12th January 1998.
On 27th September 1999 the respondents issued proceedings against the appellant claiming
damages unde under various heads including
breach of statutory duty; breach of an
implied term in the contract of employment; and breach of a common law duty
of
care. The appellant by its solicitors filed a Statement of Defence
on 31st May 2000 denying liability and pleading in the
alternative contributory negligence and ‘volenti non fit injuria’.
At the trial of the actio nineteen (19) respondents testified and medical evidence of each was adduced
beforbefore the trial
Judge. The appellant Board also called several witnesses
including a Board member, members of the VMF and regular police force
and
the Deputy General Manager at that time.
It is unnecessary to canvass in
any great detail the trial Judge’s judgment in so fa for various
reasons,sons, more fully
set out in his judgment, the trial Judge rejected a
large part of the respondent’s evidence and complaints and awarded damages
for breach of an implied term of the contract of employment and breach of a
common law duty of care.
The VNPF has appealed
against the trial Judge’s finding of liability and the da awarded
advancing nung numerous grounds. We have
been assisted by the comprehensive
written and oral submissions of counsels.
In summary this appeal may be
reduced to the following two (2) issues:
(1)&t;"> &nnsp;&&nsp;;
sp wpan>whether or not the learned trial Judge was correct in his finding of
liability; and
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whether damages were properly awarded and the legal basis for such an
award.
>
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A number of subsidiary matters
were raised in the written submissions but not pressed in oral
argument. We consider
those matters are without merit and do not require
further discussion.
As to (1) above counsel for the
appellant forcefully argued that the Board had discharged both its statutory
and common
law duties owed to the respondents. Counsel asks rhetorically
‘how could an evacuation plan have made the slightest difference to an
event which was unforeseen namely the riot?’ When pressed however,
counsel had difficulty explaining why the riot that in fact occurred was not
a foreseeable possibility
having regard to the events over the days
preceding the riot.
Lord Brandon
in [1986] UKHL 5; (1987) 2 All
ER 878 at 887 speaking of the legal responsibility of an employer towards
it‘s employees said:
“…the rel principle
of law can be divided into three parts. Fis. First, an employer owes to his
employee a duty to exercise
reasonable care to ensure that the system of
work provided for him is a safe one. Second, the provision of a safe system
of work has two aspects: (a) the devising of a system; and (b) the operation
of it. Third, the duty concerned has been
described alternatively as either
personal or non-delegable… The essential characteristic of the duty is that,
if it
is not performed, it is no
defence for the employer to show that he delegated its performance to
a person, whether his servant or not his servant, whom
he reasonably
believed to be competent to perform it. Despite such delegation the employer
is liable for non-performance
of the duty’.
The learned trial Judge deals
with this first issue in the following passages in his judgment. He said:
“It is in issue that
tension was rising in the early days of January 1998 1998 and that there were
major security concerns.
By the nature of the ‘Micro Loan Scheme’ and its
widening to all members it was inevitable the Fund, its building and staff
would become the focus of a large number of people (the members) seeking
return of their money. That was against the
background of the fear (well
founded or not) that monies had been wrongly dissipated and there might not
be enough to
pay back all the members.
The mog tension was
being discussed by the Board and was clas clearly in the minds of the Chairman
and General Manager.
Police and VMF assistance was obtained, complaint was
made about the adequacy of police action, a Court order was obtained
and
private security firms were engaged.
Whilst a fcale riot
might not have been foreseen, it is clear tear the defendant foresaw the high
risk of serious civil
disturbance and the fact that that disturbance would
be focus on its building and its staff. In the few days before the 12th
January both in Port-Vila and Luganville staff were working “flat-out” to
distribute and process forms. Tents were erected
outside the Vila building
to facilitate this. Members seeking repayment were becoming demanding,
abusive and angry towards
the Fund’s staff who were dealing with them.
However, cust be
taken to ensure findings are not made ‘with thth the benefit of hindsight’. I
find it was reasonably
foreseeable that a serious disturbance could occur
and that the focus of that disturbance would be the fund’s building and
its
staff. The location of the Fund’s building was known to all, and the fund’s
staff were easily identifiable by their
uniforms.
p clas class="MsoNormal" style="margin-left: 36.0pt; margin-top: 1; margin-bottom: 1">
The Fund took the
measures set out above. Tere clearly aimed at securiecurity outside and
around the building both in
Port-Vila and Luganville. There is no evidence
of any special instruction issued to staff as to what to do if a disturbance
should break out. There was no prior identification of anyone (staff or
security officer) in the building who would be
in charge of and responsible
for staff, where they should go, what they should do, how they would be
protected and then
evacuated from the building. In particular, for the
purposes of evacuation and concealing identity how staff should dress.
The
simple expedient of instructing staff to go to and from work in ordinary
clothes and change at work would have assisted
and meant every member of
staff had a set of ordinary clothes at work.
In the event it was the
k thinking and courage of s of security officers Nato Tawia and Willie
Kaloris that saved the plaintiffs
from physical injury, (save for Maxime
Charley).
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I find that in the unusual circumstances of this case it was foreseeable thae that the ‘working
conditions’ of these plaintiffs
could become dangerous and they did. Whilst
the Fund was not in a position to remedy the condition as such by stopping
the riot they were in a position to reduce or abate the effects of the riot
upon the staff by the prior formulation and promulgation
to staff of
instructions and a plan as to what to do. This they failed to do. The fact
there would be and were police
and VMF outside the building to deal with
disturbances and some security officers outside or inside did not mean the
Fund could leave the matter there.
Luganville is m smaller than Port-Vila. There were only three staff thff there. For these reasons
the individual pressure
upon these plaintiffs and their feeling of isolation
and vulnerability must have been greater. They each describe the aggressive
and abusive treatment they received from Fund members in those days. Their
house and families were subject to threats
as well.
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It must be to the credit
of Major Aru and Itor Boe that no major distudisturbance took place, and
only one or two windows
were broken. Major Aru give evidence of the patrols
he sent out to look after the staff homes and the Fund building although
this did not stop the threats and abuse and the need to temporarily move
home.”
Having ourselves carefully
considered the evidence led befor trial Judge much of which hich was common
ground, including
the appellant’s concession ‘that the events of 12th
January were very frightening and necessarily could give rise to upset for
some time and bad memories which would fade
but probably not go away,’
we are not persuaded that the trial Judge erred either in his specific
finding findings or in his conclusions about the evidence.
This was a case
that called for the application of a measure of common sense and we detect
no error in the trial Judge’s
determination of this aspect of the case. The
appeal against liability is accordingly dismissed.
We turn next to address the
second issue in the appeal which was only obliquely d by counsel for
the the appellant as
a causation and a ‘de minimis’ argument.
The learned trial Judge deals
withaward of damages in the following manner: firstly, he foundfound that
‘in the unusual circumstances of the case it was foreseeable that the
working conditions of the (respondents) could become dangerous
and they did.
The appellant was in a position to reduce or abate the effects of the riot
upon the staff by the prior
formulation to the staff of instructions and a
plan as to what to do. This (the appellant) failed to do.”
Additionally the trial Judge
noted the room the staff was taken to (in the VNPF building at
at
Port-Vila) ‘(had) no windows, no air conditioning or ventilation and
it was crowded. They were there for a considerable time, knowing
there was a
riot going on outside and it was partly directed at them. Prayers were
said.’ By all accounts the respondents were held-up in the room for
2-3 hours. The trial Judge found as much.
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Then in this judgment the
following important passage occurs where he
‘All (respondents) describe the whole incident as terrifying and
frightening. Several feared for their lives. I accept
that evidence. There
would have been a short time of fear after the riot started until any
prearranged plan would have
been put into action. However I find the failure
to issue contingency instructions and have any plan available greatly
contributed to the measure of fear and fright felt and the duration of it.
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Whilst no employee was physically hurt and no specific sum is claimed under
these heads, (i.e. a failure to have in place
an evacuation plan and holding
the respondents in an inadequate room for approximately three hours) I find
the plaintiffs
are entitled to damages for the consequences of the
defendants failures as set out above. I award them damages for breach of
the
implied contractual term and common law duty.’
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In this latter regard we find
(althoughraised by counsel) that the trial Judge erred in purportingrting to
award damages
for terror and fright arising out of the appellant’s breach of
a common law duty of care in the absence of a clear finding
of any
recognizable psychiatric injury’ suffered by any of the respondents. See
Jaensch v. Coffey [1984] HCA 52; (1984) 155 CLR 549. This much was responsibly
conceded by counsel for the respondent who thereafter sought to support the
trial Judges award
on the basis of the appellant’s breach of an implied
contractual term that the appellant ‘would at all times take all
necessary steps to ensure the health, safety and welfare at work of each
(respondent)’.
On one view and on a narrow
ng it may be said that a contract of employment is simply oply one in which
an employee agrees
that in consideration of a wage or other remuneration, he
will perform some service or work for his employer. We are satisfied
however
that a contract of employment in this day and age in Vanuatu is more than
that. Undoubtedly a general legal relationship
exists between an employer
and employee but it is a relationship in which the law, both common law and
to a significant
extent statute, imputes several rights and responsibilities
to each side. For instance Section 2 of the Health and Safety
at Work Act [CAP.195] imposes a non-delegable statutory duty on
‘every employer to ensure, so far as is reasonably practicable, the
health safety and welfare at work of all his employees’.
Accordingly we aresfied
that a contract of employment and the relationship of employer and employee
e
is a special
relationship where the very nature of the relationship imposes
a duty on the employer to ensure the health (both physical and
mental),
safety as to the place, equipment and system of work provided and welfare of
employees. This latter duty has
not been the subject of interpretation but
in our view must include a duty to consider and address the concerns of
employees
before inanimate objects; a duty to warn employees and to provide
information, instruction, training and supervision; and the
maintenance of a
safe means of ingress and egress from the work place to name but a few.
In the case of Haynes Dodd (a firm) (1990) 2 All ER 815, a commercial
contract cact case for the purchase of a leasehold on an incorrect assurance that
the
premises had a right of way, Staunghton LJ said at p.824:
“It seems to me that
damages for mental distress in contract are, are, as a matter of policy, limited
to certain classes
of case. I would broadly follow the classification
provided by Dillon CJ in discussing the basis for an award of damages for
mental distress in Bliss v. South East Thames Regional Health Authority
(1987) ICR 700 at 718.”
“…where the contact which has been
broken was itself a contractrovide peace of mind or frer freedom from
distress…. It
may be that the class is somewhat wider than that. But it
should not, in my opinion, include any case where the object of the
contract
was not comfort or pleasure, or the relief of discomfort, but simply
carrying on a commercial activity with
a view to profit.”
In Watts v. Morrow [1991] EWCA Civ 9; (1991) 4 All ER 937, a negligent surveyor case, Binghaingham LJ said at
p.859:
“A contract-breakenot in general
liable for any distress, frustration, ion, anxiety, displeasure, vexation tension
or
aggravation which his break of contract may cause to the innocent party.
The rules is not, I trust, founded on the assumption
that such reactions are
not foreseeable, which they surely are or may be, but on considerations of
policy. But the rule
is not absolute. Where the very object of a contract is
to provide pleasure, relaxation, peace of mind, or freedom from molestation,
damages will be awarded if the fruit of the contract is not provided, or if
the contrary result is procured instead.
If the law did not cater for this
exceptional category of case it would be defective.
<
In cases not falling
within this exceptional category, damages are, ine, in my view, recoverable for
physical inconvenience
and discomfort caused by the breach and mental
suffering directly related to the inconvenience and discomfort… But I also
agree that awards should be restrained…’
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The law has been similarly
expounded in Auia in Baltic Shipping Co. v. Dillon (1993)
3)
[1993] HCA 4; 176 CLR 344. At 365 Mason CJ (with whom Toohey and Gaudron
JJ agreed on this aspect) said:
“…it is preferable to
adopt the rult damages for disappointmenntment and distress are not
recoverable unless they proceed
from physical inconvenience caused by breach
or unless the contract is one the object of which is to provide enjoyment,
relaxation, or freedom from molestation. In cases falling within the
last-mentioned category, the danger flows directly
from the breach of
contract, the promise being to provided enjoyment, relaxation or freedom
from molestation. In these
circumstances the Court is not driven to invoke
notions such as ‘reasonably foreseeable’, or ‘within the contemplation of
the parties’ because the breach results in failure to provide the promised
benefit”.
McHugh J
at 405 said the law should recognise thae that damages for distress or
disappointment are recoverable in an action for
breach of contract if it
arises from breach of an express or implied term that the promisor will
provide the promisee
‘with pleasure or enjoyment or personal
protection or if it is consequent upon the suffering of physical injury or
physical
inconvenience’.
We respectf
adopt the above statestatements as correctly reflecting the legal basis for the
learned trial Judge’s award
of damages to the respondents in the present
case.
In the present case
the terrifying and frightenintening episode for which the award of damages was
made was consequent
upon physical inconvenience. Further, the implied term
of the contracts of employment required the employer to provide the
employee
with personal protection to avoid molestation from irate and angry clients.
On both scores the plaintiffs were
in law entitled to recover damages for
breach of contract for the fear and distress they must have experienced on
12
January 1998.
We recognize however that the
quantification and assessment oages in this area must nece necessarily be in
general global
terms. We note that both the Employment Act [CAP. 163]
and the Health and Safety at Work Act [CAP 195] provide for a maximum
‘fine of 100,000 VT’ for any contravention or breach of the
statutory duties imposed thereunder. Viewed in that context and mindful that
the
learned trial Judge has not sought to explain the difference in the
amounts awarded to the Port-Vila and Luganville employees
of the appellant,
we consider that on principle, the damages awarded for both sets of
employees ought to be modest and
the same. Accordingly we reduce the award
for the Port-Vila employees to 100,000 VT each.
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The Orders ofCourt
are:
1. & &nsp; &nbssp; &nbssp;
Than>The appeal is alloweto the quantum of the damages awarded.
2. &nnbsp;; &nsp; &nsp; &&nbp;; &nnsp;&
p;
The damages awarded to each of the Port-Vila respondents isced
to
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1">
3. p; &nsp; &nbbsp; &nbbsp;
Than>There will be no order as to costs on the appeal. The ors to costthe tmade e tridge remainpan><
DATED at PORT-VILA, this 1st
DAY of NOVEMBER, /span>
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ON BEHALF OF THE COURT
V. LUNABEK CJ
