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

Civil Appeal Case No. 48 of 2012

BETWEEN:

REPUBLIC OF VANUATU
Appellant

AND:

DIMITRI MALVIRLANI
Respondent

Coram: Hon. Chief Justice Vincent Lunabek 
Hon. Justice John von Doussa 
Hon. Justice Ronald Young 
Hon. Justice Oliver A. Saksak 
Hon. Justice Robert L. Spear
Hon. Justice Dudley Aru 
Hon. Justice Mary Sey 

Counsel: Ms. F. Williams for the Appellant 
Respondent in person 

Date of Hearing: 18 April 2013

Date of Decision: 26 April 2013 

JUDGMENT

1.	This is an appeal against part only of the judgment of the Supreme Court which awarded remedies to the respondent consequent upon the termination of his employment with the Vanuatu Maritime Authority (VMA) when the VMA was abolished by the Vanuatu Maritime Authority (Repeal) Repeal Act No. 22 of 2007, effective from 31st December 2007. 

2.	The respondent had been in continuous employment with the VMA since 2002, first as a trainee accountant and then under a fixed three (3) year term contract commencing on 20th September 2007 as the administrator of VMA. 

3.	The abolition of the VMA by legislation brought the Respondent's employment to an end as further performance of the contract of employment was frustrated: see Benard v. Republic of Vanuatu [2012] VUCA 4 Civil Appeal Case No. 5 of 2012, at paragraphs 28 to 30. 

4.	This Court held in the earlier decision of Benard v. Government of the Republic of Vanuatu [2009] VUCA 24 at paragraph 26 that the VMA was a government agency for the purposes of the Public Finance and Economic Management Act [CAP. 244], and that the government is therefore liable for its debts under section 57 of that Act. On the basis of that decision the respondent sued the appellant for payment in lieu of notice, outstanding annual leave, severance and damages for the loss of remuneration for the balance of the term of his contract of employment. 

5.	At trial the appellant admitted liability to pay salary in lieu of notice, annual leave and a severance allowance in accordance with the Employment Act [CAP. 160]. The judge assessed the award under these heads of loss at VT3,631,750. Interest was then added at 10% with effect from 31st December 2007 which added a further VT1,725,081. There is no appeal by the appellant against this part of the award. Those aspects of the case are not before this Court. 

6.	The sole issue in the appeal concerns an additional sum allowed by the trial judge for what he described as "compensatory damages". The appellant contends that the compensatory damages award should be wholly set aside. 

7.	Before dealing with compensatory damages in his judgment the trial judge discussed the claim by the respondent for the loss of remuneration for the balance of his contract of employment. This claim was based on the allegation that the termination of the respondent's employment was an "unjustified" termination. The trial judge dismissed this claim as the termination was not due to the wrongful act of the employer but due to the further performance of the contract being frustrated by the repeal of the VMA Act. The trial judge applied the decision of this Court to this effect in Benard v. The Republic of Vanuatu [2012] VUCA 4. The trial judge was correct in dismissing this aspect of the respondent's claim, and the respondent has not challenged the dismissal by way of a cross-appeal. 

8.	The trial Judge then continued: 

"Having said that I am satisfied that the claimant is entitled to receive compensatory damage for the period before he obtained alternative employment on 1 June 2008 (ie. 5 months) during which time he was labouring under the reasonable expectation that he would be re-employed by the defendant in the government department that would be taking over the VMA's responsibilities. I am also mindful that a liquidator for the VMA under the Repeal Act was not appointed until 2 July 2008, and further, the claimant's special qualifications made it difficult for him to obtain employment commensurate with his qualifications when he eventually decided to start looking after it became clear to him that he would not be re-employed."

9.	The trial Judge allowed compensatory damages of five months salary together with interest in all totaling VT2,190,000. That is the amount in issue in this appeal. 

10.	The legal basis for the claim for compensatory damages was not clearly articulated as a pleading in pre-trial procedures. However the nature of the claim for compensation for the period from 31st December 2007 to 31st May 2008 was made known to the appellant by the respondent. 

11.	The statement of claim was drafted by the respondent, not by a lawyer. The respondent claimed entitlements identified in a sworn statement made in support of the claim. In that statement he sought compensation for the remaining period of his contract of employment without identifying any legal basis for the claim. 

12.	In the course of interlocutory steps to prepare the case for trial the appellant sought information about steps the respondent took to find employment after 31st December 2007. The respondent informed the appellant by sworn statement dated 30th November 2010: 

"I and others were offered (and promised) by the then Minister for Infrastructure and Public Utilities to be re-employed by the Government in a new Marine division and we waited 6 months that this offer should be concretized but it was not."

13.	In another sworn statement dated 10th February 2011 the respondent said: 

"2.	After the repeal of the VMA Act effective 31st December 2007, the government marine division was placed under the authority of the department of Ports and Harbors. I had applied for a position but I never received a response whilst the new appointees have no maritime or port qualifications.

3.	I confirm that I did not find a job corresponding to my qualifications with the private sector and I stayed five months without employment not being paid for my VMA entitlement. My family and myself met very hard time during this period between 1/01/08 and 1/06/08.

4.	On the 1st June 2008 I obtained a job which did not correspond to my qualifications whilst I had no other choice in regard of my financial situation."

14.	In May 2011 the respondent filed a sworn statement from Less J. Napuati who had been the Commissioner of Marine Affairs under the VMA Act. He deposed that on 19th December 2007 he was called to a meeting with the Prime Minister who told him of the pending fate of the VMA and said that a number of VMA employees would continue to assume duties and responsibilities within a new marine division after the closure of the VMA. Included among those employees would be Mr. Napuati as head of the Marine Division and the respondent as the administrator. By plain inference from the evidence this information from the Prime Minister was passed by Mr. Napuati to the respondent. 

15.	In correspondence about the possible settlement of the respondent's claim, the respondent wrote to the appellant's legal advisers on 13th March 2011 saying as a particular his claim for compensation "I was promised to be employed soon by the government and I awaited six months but nothing happened". 

16.	On 24th March 2011 the respondent asked the appellant to agree a statement of facts that included the statement "from January 2008 to the 1st May 2008 the claimant did not seek employment because he was promised to be re-employed. On or about 1st June 2008 the claimant was employed by the Vanuatu Tyre Wholesalers as a Sale Manager …". 

17.	In a further sworn statement dated 29th April 2011 filed in relation to a direction to the parties to agree a statement of facts. The respondent said "I repeat that I was promised to be re-employed with marine department and to be ready to commence works for the government". 

18.	In these various statements and communications the respondent made it clear that his claim for compensation for loss of remuneration after 31st December 2007 was not solely based on wrongful dismissal but also included a claim for loss of remuneration for five months whilst he awaited the offer of a new position which he understood the Prime Minister had promised, and for which he had made a formal application. 

19.	This aspect of the respondent's claim was not addressed by the appellant at trial. The appellant's case at trial was simply that nothing should be awarded for losses after 31st December 2007 as there had been no wrongful dismissal of the respondent by the VMA. 

20.	Before this Court the appellant's submissions were confined to the proposition that as there was no unjustified dismissal of the respondent by the VMA there is no legal basis to award compensation beyond 31st December 2007. That proposition fails to address the claim made by the respondent based on the alleged promise of employment after the abolition of the VMA. 

21.	At trial the evidence adduced by the respondent about the promise of employment, in particular the evidence of Mr. Napuati, was not disputed by the appellant. Moreover, at trial the appellant did not cross-examine the respondent about the alleged promise of re-employment or about his reliance on the promise. 

22.	Claims based on reliance on a promise are not without difficulties which include both the legal basis for the claim and the factual proof of the promise and the promise's reliance on it. However such a claim can succeed if a factual basis for it exists. In this case we consider the factual evidence before the trial Judge could support the claim made by the respondent based on an unfulfilled promise, and no legal principle that could defeat it was put either to the trial Judge or to this Court by the appellant. 

23.	In all the circumstances we are not persuaded that any error was made by the trial Judge in awarding the compensatory damages for the period of five months following 31st December 2007. 

24.	Accordingly the appeal is dismissed with costs. 

DATED at Port Vila, this 26th day of April, 2013.

FOR THE COURT

Hon. Vincent LUNABEK
Chief Justice.