Naunga v Telecom (Vanuatu) Ltd [2011] VUCA 11; Civil Appeal 30 of 2010 (8 April 2011)

IN THE COURT OF APPEAL THE REPUBLIC OF VANUATU
(Civil Appellate Jurisdiction)

Civil Appeal Case No. 30 of 2010

BETWEEN:

MR DAVID NAUNGA, MRS SERAH KEKEI, MR PAUL WILLIE, MR TOM HAKWA, MR JONAH KAPUS, MR BARNABAS BOE, MR SAM GRAUFITY, MR RICHARD WILFRED RORY, REUBEN MARK, MR JAMES AVOCK, and MR BARNABAS ARU
First Appellants

AND:

GRAHAM LELE, NESLINE TOA and BLAISE TEMAKON
Second Appellants

AND:

TELECOM (VANUATU) LIMITED
Respondent

Coram: Hon. Chief Justice Lunabek
Hon. Justice Saksak
Hon. Justice Mansfield
Hon. Justice Asher
Hon. Justice Fatiaki
Hon. Justice Spear

Counsel: Mr S Stephens for Appellants
Mr M Hurley for the Respondent

Date of Hearing: 31 March 2011
Date of Judgment: 8 April 2011

JUDGMENT

Introduction

1. On or about 28 February 2009 Telecom Vanuatu Limited, ("Telecom") sent letters to a number of its staff terminating their employment. Following their departure from Telecom, fourteen of those employees ("the appellants") issued proceedings alleging unjustified and unlawful termination of their employment, and claiming significant damages. Those proceedings were case managed by Dawson J, and there was a hearing on 4 November, 2010. In the decision, delivered on 11 November 2010, the appellants were awarded limited damages and costs. They now appeal that decision.
   

The Decision

2. The parties had agreed that there should be a preliminary hearing under r 12.4 of the Civil Procedure Rules, and this was the matter set down for 4 November 2010. The issues to be determined were:
   

(a) Was the Defendant entitled to terminate the First and Second Claimant's employment on 26 February 2009 pursuant to s. 49 of the Employment act 1983 ("the Act") without notice?

(b) Has the Defendant paid to the Claimants all of their lawful entitlements?

3. In his decision Dawson J recorded;
   

"Both parties have indicated to the court at the end of the hearing that the resolution by the court of the preliminary issues would conclude this claim."

Earlier he had recorded that it was accepted by the Appellants that Telecom was entitled to terminate their employment pursuant to s. 49 of the Act. He had noted that the appellant's counsel, Mr S Stephens had advised the court that the claims were now limited to:

"(a) Remuneration and other employment entitlements for 21 days, representing the short notice given to the Commissioner;

(b) Repatriation costs pursuant to s. 58 of the Act;

(c) Annual leave

(d) VNPF contributions they say were not paid for all claimants."

4. On the first issue, the learned judge found that Telecom should have given 30 days notice to the Commissioner of Labour under s. 67 of the Act. Telecom gave notice, but it was 21 days short of the required 30 days. He held that Telecom could not profit from its failure to observe this duty, and that Telecom was to pay to the appellants an amount equivalent to an extra 21 days of employment benefits.
   
5. On the second issue he decided that the appellants were not entitled to repatriation costs. The plaintiffs had failed to prove any such losses under s. 58.
   
6. On the third and fourth issues he found that the plaintiffs had failed to show any entitlement to further unpaid bonus payments, or any failure to pay VNPF contributions.
   
7. The net result was a very modest award of damages in favour of the appellants, who succeeded in obtaining orders for 21 days of damages for salary and employment benefits, but who failed in their significant claims. The judge awarded the appellants half the usual costs.
   

The appeal
8. The appellants do not challenge the findings on the third and fourth issues relating to bonuses and VNPF contributions. They do however challenge the findings on the first and second issues, and the costs order. Indeed, the appellants go further, and put forward five grounds of appeal. In summary these are:

1. The judge in ordering damages arising from the failure to give the 30 days notice should have calculated those damages on 30 days and not 21 days.
   
2. The judge should have ordered repatriation costs under s. 58 of the Act.
   

100. The appellants should have been awarded exemplary damages of 6 times the multiplier under s 56 (4) and (6) of the Act, as the dismissals were unjustified.
     

4. The judge wrongly dismissed the other claims including personal injury claims.
   
5. The appellants should have been awarded full legal costs.
   

9. Underlying these complaints was the objection that the judge had acted wrongly in determining the specific damages claims in a preliminary hearing, rather than adjourning them for further evidence.

The nature of the hearing
10. At first sight it is surprising that the preliminary hearing developed in the way that it did. The two questions agreed to be the subject of the preliminary hearing were not, in the end, specifically answered in the judgment. Although there was no provision in the questions for an award of damages, an award of damages was made.

11. To understand how this arose, it is necessary to consider in more detail the history of the hearing. Prior to the preliminary hearing there had been timetable orders made, requiring the appellants to file all their evidence in advance. This is not surprising, as the court could only determine the second question, namely whether Telecom had paid the plaintiffs their lawful entitlements, if the plaintiffs presented their evidence in support of these entitlements to the Court. This meant that when the preliminary hearing began the judge was in fact in a position where he could determine the claims on their merits, assuming that Telecom did not wish to cross examine the deponents on their statements or call evidence.

12. This is what happened. At the outset of the hearing Mr Stephens had set out the issues, and agreed, as recorded by the judge, that the resolution of the preliminary issues would determine the claim. Despite this, in his submissions before us Mr Stephens argued that the judge should not have proceeded to determine the claims without a full hearing, which should have been on a later second occasion. But it is clear that he accepted that the preliminary hearing could proceed in the way that it did before Dawson J. For its part, Telecom was content to argue the issues on the merits on the basis of only evidence from the Appellants, and without cross examination of the Appellant's deponents.

13. There had been another significant development at the outset of the hearing. The Appellants who had pleaded their case on the basis that the termination of employment was unlawful, changed their position. Through Mr Stephens they conceded that the termination was indeed lawful under s. 49 of the Act. This appears to be because in terms of s. 49 of the Act three months salary in lieu of notice was paid. Section 49 provides:

"Notice of termination of contract

(1) A contract of employment for an unspecified period of time shall terminate on the expiry of notice given by either party to the other of his intention to terminate the contract.

(2) Notice may be verbal or written, and, subject to subsection (3), may be given at any time.

(3) The length of notice to be given under subsection (1) –

(a) where the employee has been in continuous employment with the same employer for not less than 3 years, shall be not less than 3 months;

(b) in every other case –

(i) where the employee is remunerated at intervals of not less than 14 days, shall be not less than 14 days before the end of the month in which the notice is given;

(ii) where the employee is remunerated at intervals of less than 14 days, shall be at least equal to the interval.

(4) Notice of termination need not be given if the employer pays the employee the full remuneration for the appropriate period of notice specified in subsection (3)."

14. Three months salary in lieu of notice was given by Telecom to all the Appellants. At the outset of the hearing it was conceded that Telecom was entitled to terminate, presumably because the payment of 3 months notice by Telecom had invoked the saving provision in s. 49 (4). The concession meant that the first preliminary question had to be answered in the affirmative against the Appellants. This was not recorded presumably because no finding on the question was now required.

15. This meant that the only issues to be determined came under preliminary question 2 being the amounts, if any, to which the plaintiffs were entitled, arising from the lawful termination.
    

The first ground of appeal: failure to give 30 days notice
16. Section 67 provides:

"67. Duty of employer to notify Commissioner of certain redundancies

(1) Any employer proposing to dismiss as redundant ten or more employees at 1 establishment within a period of 30 days or less shall notify the Commissioner in writing of his proposal at least 30 days before the first of those dismissals is proposed to take place.

(2) At any time after being notified under subsection (1) the Commissioner may by written notice, require the employer to give him such further information as may be specified in that notice.

(3) If in any case there are any special circumstances rendering it not reasonably practicable to comply with the requirements of this section, the employer shall take such steps towards compliance with such requirements as are reasonably practicable in those circumstances."

It was disputed by Telecom that the notice given on 19 February 2009 was 21 days short of 30 days.

17. Telecom did not cross-appeal the decision of the judge to award damages under s. 67. Nevertheless it submitted that there was no legal basis for that damages award, and no basis upon which the plaintiffs could claim more on appeal.

18. Dawson J did not explain in his decision the cause of action that gave rise to the s. 67 damages award, save to observe that the claimants would have been in employment 21 days longer and received their employment benefits for that time, if the full 30 days notice had been given, and that Telecom could not profit from its oversight.

19. We are not persuaded that these factors alone could establish a cause of action for this head of claim. Section 67 does not contain any words suggesting that a failure to give the full notice will give rise to a claim in damages. At s. 67 (3) it is contemplated that in special circumstances where it is not reasonably practicable to comply with the 30 day period, a lesser but reasonable period of notice may be sufficient. This is some indication that the requirement is procedural and does not give rise to substantive rights. Rather, such a failure can be seen to give rise to the offence provisions at s. 78 of the Act.

20. We do not consider it possible to imply a term into the employment contract that any shortfall in the 30 days notice would give rise to a claim in damages, and this was not pleaded. Dawson J in this part of his decision referred to Kalangis v. Vanuatu Air Service (Vanair) Ltd where Coventry J stated of s. 78:
    

"In dismissing him they have breached a procedural requirement. In the particular circumstances of this case I do not find that invalidated this termination and further any damages for that breach would be derisory."

21. We do not need to determine whether those propositions are correct. Suffice to say s. 78 provides for a compulsory procedure rather than a potential cause of action at the hands of the employee. There is no basis to increase the award of damages already ordered by Dawson J. If Telecom had chosen to cross appeal on the damages award that was made, it might well have succeeded.

The second ground of appeal: repatriation costs.
22. Section 58 of the Act provides:

"58. Employee's right to repatriation

(1) Subject to section 63 every employee whose ordinary place of residence is more than 50 kilometres away from his place of employment and who has been brought to the place of employment by the employer or his agent shall have the right to be repatriated at the expense of the employer to his place of origin or engagement, whichever is nearer to the place of employment, in the following cases –

(a) on the expiry of the term of contract;

(b) in the case of a termination of a contract when the employee has become entitled to a paid annual leave;

(c) in the case of a breach of contract or a serious offence committed by the employer;

(d) in the case of the termination of a contract due to the inability of the employee to complete the contract owing to sickness or accident.

(2) The right of an employee under subsection (1) shall lapse if not used by him within 6 months from the date at which he becomes entitled thereto."

23. The pre-requisites to a claim therefore are:

1. An employee whose place of origin was more than 50 kilometers away from the place of employment.
   
2. Who has then been brought to the place of employment from the employee's place of origin by the employer.
   

100. Who uses or attempts to use the right of repatriation within 6 months from the date of entitlement.
     

24. We agree with Dawson J, that the employee must prove the facts relied on under this head of claim on the balance of probabilities. If the pre-requisites have been proved, the right to repatriation at the expense of the employer to the employees place of origin accrues.

25. The difficulty with this claim is that none of these pre-requisites have been established or indeed addressed in any specific way. In particular:
    
    1. apart from some bare references in the summary of losses in the Supreme Court claim to the appellants being from certain towns and villages without further explanation, the appellants do not explain their place of origin when they were employed.
       
    2. There is no statement from any of them that they were moved from their place of origin by Telecom.
       
    100. There is no evidence from any of them that within the 6 month period they moved or tried to move back to their place of origin.
         

26. Furthermore, there is evidence that they have remained in the place where they were employed by Telecom. The Appellants in their Supreme Court claim pleaded that they were ni-Vanuatu citizens and that the first appellants were resident in Port Vila and the second appellants resident in Luganville, the places of their employment. In their sworn statements they record that they are from those two towns. This indicates that they have not repatriated. Further, the proceedings were filed more than six months after their employment terminated, and no actual repatriation expenses incurred since termination were pleaded. They do not appear to have moved. Those factors all indicate that although the appellants may have originally come from other places, they are now resident in Port Vila or Luganville, and have not returned to their places of origin.

27. Therefore, the evidence before the Court on balance shows that there were no claimable repatriation expenses under s. 58. This appeal ground cannot succeed.

Third ground of appeal. Failure to award a 6 times multiplier under s. 56 (4)

28. Section 56 (4) provides:

"56. Amount of severance allowance

(4) The court shall, where it finds that the termination of the employment of an employee was unjustified, order that he be paid a sum up to 6 times the amount of severance allowance specified in subsection (2)."

There was a claim under s. 56 (4) in the Supreme Court claim, but when the issues were set out for the judge by Mr Stephens at the start of the hearing no claim was pursued under this head. This was, perhaps, because of the concession that had been made by the Appellants that Telecom was entitled to terminate their employment.

29. In his submissions Mr Stephens referred to the breach of the s. 67 obligation to give notice to the Commissioner, as a basis for arguing that the terminations were unjustified. For the reasons already given, we see a failure to give notice under that section as a procedural failure, and not an act giving rise itself to a cause of action on the basis of an implied term, or any other ground.

30. There is an issue as to whether a lawful dismissal, as this was acknowledged to be, might nevertheless be an unjustified dismissal. There was no justification for these terminations in the sense of dismissal for cause, or a contractual entitlement to terminate. But three months pay was given to each employee under s. 49 (4), and the concession of lawful termination was made. The appeal was not argued on the basis that a lawful termination could still be unjustified in the Supreme Court. No explanation was offered as to why Mr Stephens' statement of issues should be allowed effectively to be withdrawn at this appeal stage, and a new claim pursued in the final Court. Indeed, Mr Stephens did not address the problem created by his earlier Supreme Court statement of issues in his submissions to us.

31. This Court cannot ignore an effective concession by the parties through their counsel, which has shaped the way a case was argued at first instance. To do so would be to risk causing an injustice to the other party. Here Telecom will have shaped its case and concessions in response to those of the Appellants. We cannot now embark on an investigation of this unargued point.

32. For those reasons we must reject this ground of appeal. We emphasis that we have not had argument on whether there is, as a matter of law, a distinction in Vanuatu between an unlawful dismissal and an unjustified dismissal, or whether the distinction could arise on these facts, and we express no view on the issue.

Fourth ground of appeal – personal injury and other claims
33. This also was a new argument, not in the list of issues put to Dawson J, but now raised on appeal. Again there is no explanation as to why the earlier position put forward by counsel and acted on by the Court, should be treated as withdrawn.

34. Moreover the only pleading in the Supreme Court claim supporting the personal injury and other claims is a bare entry in the list of losses. There is no obvious cause of action that would support these claims, or other claims in the list. They are unsupported by evidence. There was nothing in the appellant's statements to explain how the injuries occurred, or their consequences. The other claims are unproven. Therefore this ground of appeal must fail.

Fifth ground of appeal – costs
35. The Appellants complain that they were successful, but only got half their costs. They seek full costs.

36. The appellants had largely failed in their claims. They conceded the first question by accepting that there was a lawful termination. They had failed to prove specific heads of damage that arose in the second question. The claim on which they succeeded for the further 21 days of salary and employment benefits, was raised by the judge at the hearing, rather than by them. Telecom had been put to the expense of successfully defending most of the claim. These factors indicate that the Appellants were fortunate to get half their costs.

37. The award of cost is a discretionary matter. This Court will not interfere with the Supreme Court's exercise of that discretion unless there has been some clear error by the judge, or the result was not one that was reasonably open to the Court. Neither has been shown to have occurred, and this ground cannot succeed.

Result

38. The appeal is dismissed.
    

Costs
39. The respondent is to have costs, to be taxed by the Registrar if not agreed.

Dated at Port Vila, this 8th day of April, 2011

BY THE COURT

Hon. Chief Justice Vincent LUNABEK

Hon. Justice Oliver SAKSAK

Hon. Justice John MANSFIELD

Hon. Justice Daniel FATIAKI

Hon. Justice Robert SPEAR

Hon. Justice Raynor ASHER