Divine Word University v George Podas (2015) SC1414

• Jurisdiction: Papua New Guinea
• Judge: Kirriwom J, Kassman J, Murray J
• Judgment Date: 26 February 2015
• Citation: (2015) SC1414
• Docket Number: SCA NO. 8 OF 2014
• Court: Supreme Court
• Year: 2015
• Judgement Number: SC1414

Full Title: SCA NO. 8 OF 2014; Divine Word University v George Podas (2015) SC1414

Supreme Court: Kirriwom J, Kassman J, Murray J

Judgment Delivered: 26 February 2015

SC1414

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 8 OF 2014

BETWEEN:

DIVINE WORD UNIVERSITY

Appellant

AND:

GEORGE PODAS

Respondent

Waigani: Kirriwom J, Kassman J, Murray J,

2014: 30 October

2015: 26th February

APPEAL – decision on breach of employment contract – appeal on judgment on assessment of damages - grounds of appeal is that court erred in assessing and awarding damages to plaintiff representing the balance of the term of the Agreement- learned judge erred in assessing damages payable for the balance of the term of the contract – appeal upheld

Counsel:

Wailyo Mapiso, for the Appellant

Jan-Marie Ainui, for the Respondent

Cases cited:

Porgera Joint Venture v Kami [2010] PGSC 11; SC1060

Legislation cited:

Employment Act c.373 Sections 34(1) and 35(2)

DECISION

26th February, 2015

1. BY THE COURT: This was an appeal from the judgment of the National Court at Madang made on 13 December 2013 in proceeding WS No. 611 of 2009. In that decision, the National Court assessed damages in favor of the Respondent totaling K7,092.81 and ordered that each party bear their own costs of those proceedings.

Background

2. By an Employment Agreement dated 15 January 2007 (“the Agreement”), the Appellant Divine Word University “(DWU”) employed George Podas (“Podas”) as Supervisor of the Kiosk for a term of three years. Essential terms were stated in the agreement including duties, fortnightly pay, annual leave, medical expenses, in-house training and termination.

3. By a letter from DWU to Podas dated 4 August 2008, Podas’ employment was terminated with immediate effect. Podas was paid all his final entitlements including a sum equivalent to three months of pay which DWU said was the contractually agreed amount payable in lieu of notice. Five days later, Podas secured employment with his former employer Best Buy. At the request of Podas, DWU allowed Podas and his family to remain in occupation of accommodation provided by DWU to the end of the school year to avoid disruption to the education of Podas children who were attending school in Madang.

4. On 2 August 2009, Podas filed a writ in the National Court at Madang claiming DWU breached the Agreement by failing to give three months notice of its intention to terminate the Agreement, failing to give reasons for the termination of the Agreement, and failing to allow Podas the right to be heard and to appeal before the termination was made final.

5. In its defence filed, DWU admitted the Agreement was duly entered and performed until termination by DWU’s letter dated 4 August 2008. DWU denied the Agreement was unlawfully terminated as claimed by Podas and maintained the instant termination by payment of three months wages in lieu of notice was permitted by Clause 15(iv) of the Agreement.

6. On 23 September 2011, the National Court in its decision on liability found DWU had breached the Agreement “… by not giving three months notice in writing of its intention to terminate the contract as required by the contract of employment. The contract did not allow for the salary to be paid in lieu of notice and the defendant could not rely on section 35(2) of the Employment Act (a party may without waiting for expiry of a notice of intention to terminate pay a sum equal to the amount of salary that would have accrued during the notice period) as that provision does not (by virtue of Section 34(1)) apply for the first two years of operation of a written contract of service.” As to the two other claims by Podas, the National Court found there was no provision in the Agreement that obliged DWU to give Podas the right to be heard prior to terminating the contract and DWU was not obliged to give Podas reasons for terminating the contract and neither did Podas have such rights under the underlying law. The matter then proceeded to assessment of damages on the claim on which liability was found in favor of Podas.

7. Podas claimed damages which the trial court categorized as “(1) special damages representing unpaid overtime during the period of actual employment (K5,824.00); (2) general damages representing humiliation, pain and suffering due to the circumstances in which the contract had been abruptly terminated (no specific amount claimed); (3) loss of future salary, representing the salary that would have been due to the Plaintiff if the contract had been completed (K6,448.00); and (4) loss of future overtime (K4,513.60), being a total claim of K16,785.60 plus unspecified general damages.”

8. On 13 December 2013, the National Court found:

1) The claim for unpaid overtime of K5,824.00 was misconceived. It was actually a claim for unpaid debt. The plaintiff did not obtain judgment for any unpaid debt. He only obtained judgment in respect of a cause of action in breach of contract. The claim was misconceived. Nothing was awarded.

2) The claim for general damages was jurisprudentially sound. It was not misconceived. However the evidence showed that the defendant had treated the plaintiff with humanity and respect and concern for the welfare of his family including the school-aged children by allowing him and the family to occupy employer-provided, rent-free accommodation for a period of four months after termination of the contract. This was sufficient compensation for the humiliation, pain and suffering incurred by the plaintiff as a result of the breach of contract. Nothing was awarded.

3) There is no universal principle of law that a person who succeeds in establishing liability against his former employer for breach of a contract of employment is entitled to no more damages than the amount of salary that would have been payable to him under the contract. Each case and each contract must be determined on its merits. Here, there was a notice period of three months but the contract made no provision for payment of salary in lieu of notice, so the three month notice period was an irrelevant point of reference for purposes of assessment of damages. In the special circumstances of this case and given the unusual and clumsily drafted contract and the indecent manner in which it was abruptly terminated, the interests of justice required that the plaintiff be awarded damages representing the balance of the salary that would have been due to him if the contract had been performed according to its terms (K6,448.00) less the amount that was actually paid to him (K1,074.66) after the contract was terminated. He was awarded K5,373.34.

4) The claim for loss of future over time was not supported by the evidence, as the contract did not provide for payment of overtime as there was hence no legitimate expectation that overtime would be paid after the date of termination of the contract nothing was awarded.”

9. In addition, interest was awarded (K1,719.47) making the total judgment sum payable of K7,092.81.

10. DWU then filed this appeal from the judgment on assessment of damages issued on 13 December 2013. The Notice of Appeal filed 20 January 2014 contains six grounds of appeal.

11. All of the grounds of appeal repeat the one critical argument and that is the court erred in assessing and awarding damages to Podas representing the balance of the term of the Agreement. The critical finding of the court was that “there was a notice period of three months but the contract made no provision for payment of salary in lieu of notice”. DWU placed reliance on clause 15(iv) of the Agreement which provides “Either party shall give three (3) months notice in writing of its intention to terminate/resign this contract.”

12. The learned judge described the Agreement as being poorly and clumsily drafted and there was some merit in that criticism but, with respect, the intention of the parties was clear. Clause 15(iv) in our view provided the avenue to either party to terminate the contract on giving three months notice in writing. If DWU wished to terminate the Agreement, DWU was required to give Podas three months notice if its intention to terminate. If Podas wished to resign, Podas was required to give DWU three months notice of his intention to leave DWU. The general premise is no contract or law should force parties to...