Joses Taru for and on behalf of himself and 28 Others of Paul Tohian and Beaumarohis Vessels v New Ireland Shipping Limited (2008) N3501

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi, J
• Judgment Date: 24 October 2008
• Court: National Court
• Citation: (2008) N3501
• Docket Number: WS. NO. 657 OF 2004
• Year: 2008
• Judgement Number: N3501

Full Title: WS. NO. 657 OF 2004; Joses Taru for and on behalf of himself and 28 Others of Paul Tohian and Beaumarohis Vessels v New Ireland Shipping Limited (2008) N3501

National Court: Kandakasi, J

Judgment Delivered: 24 October 2008

N3501

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 657 OF 2004

BETWEEN

JOSES TARU for and on behalf of himself and 28 Others of Paul Tohian and Beaumarohis Vessels

Plaintiff

AND:

NEW IRELAND SHIPPING LIMITED

Defendant

Waigani: Kandakasi, J.

2006: 16 March and 16 May

2008: 24 October

DAMAGES – Assessment of – Relevant principles – Default judgment resolves all issues on liability but Court obliged to have cursory inquiring into pleadings to ensure a cause of action is pleaded - Damages allowable for actual and prospective loss but not too remote and not amounting to a penalty – Measure of damages be closer to restoring loss and damages as money can possibly.

EMPLOYMENT LAW – Unwritten contract of employment - Terms and conditions of – Employees claiming certain terms and conditions – Employer not disputing –Employer obliged to keep written record of terms and conditions of employment – Failure to – Effect of – Terms and conditions claimed by employer deemed the terms and conditions of employment - Employment Act s.15.

Cases Cited

Papua New Guinean Cases:

Coecon Ltd (Receiver/Manager Appointed) v National Fisheries Authority (2002) N2182

Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694

Titus Kagl by his next friend Boi Gabriel v Peter Baki, Secretary Department of Education and Department of Education and The Independent State of Papua New Guinea (2008) N3318.

William Mel v Coleman Pakalia, Commissioner of Police, The Independent State of Papua New Guinea (2005) SC790

Motor Vehicles Insurance Limited v. Maki Kol (28/11/07) SC902, (per Kandakasi, Lenalia and David JJ)

Anton Johan Pinzger v. Bougainville Copper Ltd [1985] PNGLR 160

Dillingham Corporation of New Guinea Pty Ltd v. Constantino Alfredo Diaz [1975] PNGLR 262

Australia and New Zealand [ANZ] Banking Group (PNG) Ltd v Kila Wari (1990) N801

MVIT v Pupune [1993] PNGLR 370.

Wilson Thompson v. National Capital District Commission and The City Manager (2004) N2686.

Rooney v Forest Industries Council of PNG & Anor [1990] PNGLR 407

Curtain Brothers (QLD) Pty Ltd & Kinhill Kramer Pty Ltd v. The Independent State of Papua New Guinea [1993] PNGLR 285.

Overseas Cases:

Eddis & Anor v. Chichester Constable & Ors [1969] 2 All ER 912

Counsel:

N.K Magela, for the Plaintiffs

No Appearance for the Defendants

24th October, 2008

1. KANDAKASI J: New Ireland Shipping Limited employed Mr. Joses Taru and 28 of its other former employees. In early 2003, the company ran into some serious financial difficulties making it difficult for it to pay its former employees their fortnightly salaries and other entitlements. The former employees continued to render their services to the company until it became difficult for them to continue to do so without receiving their salaries and other entitlements. Consequently, the former employees left their respective employments and subsequently issued these proceedings seeking a recovery of their unpaid salaries and other entitlements. The company did not take any step to defend the proceedings. That resulted in the Court signing default judgment against the company with damages to be assessed. Eventually, the matter came before me for assessment of damages, under several heads of damages.

2. The questions for the Court to determine are these:

(a) Are the former employees entitled to unpaid fortnightly salaries and their other heads of damages?

(b) Did the former employees suffer the damages they say they suffered?

(c) If the former employees did suffer damages, what are their damages?

3. A determination of the first question will determine the necessity to consider and determine the second and third questions. Similarly, a determination of the second question will determine the necessity of considering the third question. Hence, we will consider and determine each of the questions in the order in which they are stated.

Relevant Principles on Assessment of Damages

4. Before turning specifically to the issues, I remind myself of the principles on assessment of damages. In the case of Coecon Ltd (Receiver/Manager Appointed) v National Fisheries Authority,

liii (2002) N2182.

liii1 I summarized and set the principles governing the assessment of damages following the entry of a default judgment. The Supreme Court endorsed that summation in the case of Papua New Guinea Banking Corporation v Jeff Tole.

liv (2002) SC694.

liv2 These principles say in summary that, the entry of default judgment resolves all questions of liability in relation to the matters pleaded in the statement of claim on the basis of which the default judgment has been entered. The only exception to that is only in respect of anything that goes into the jurisdiction of the Court to entertain the matter at the first place as I noted in the case of Titus Kagl by his next friend Boi Gabriel v Peter Baki, Secretary Department of Education and Department of Education and The Independent State of Papua New Guinea.

lv (2008) N3318.

lv3

5. In its subsequent decision, the Supreme Court in William Mel v Coleman Pakalia, Commissioner of Police, The Independent State of Papua New Guinea,

lvi (2005) SC790.

lvi4 added an additional point. There, the Court said a trial judge in an assessment of damages hearing should make a cursory inquiry on liability only to be satisfied that, there is in fact a cause of action clearly pleaded for which default judgment has been entered in order to be satisfied that liability has been properly proven. If such an inquiry reveals no cause of action or the matters pleaded make no sense, proceeding to an assessment of the damages would be a futile exercise. Therefore, the judge should inquire further and revisit the issue of liability.

6. The principles enunciated in the above cases are not in derogation but in addition to well accepted principles at common law which have been adopted into our jurisdiction. The principles thus adopted and applying in our jurisdiction are these:

(a) One’s measure of damages “should as nearly as possible... that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation”;

lvii Motor Vehicles Insurance Limited v. Maki Kol (28/11/07) SC902, (per Kandakasi, Lenalia and David JJ).

lvii5

(b) However the measure of one’s damages should not include any damages or loss that is remote;

lviii Motor Vehicles Insurance Ltd v. Sanage Kuri (02/03/06) SC825, (Injia DCJ, Gavara-Nanu J, Lay J)

lviii6

(c) Damages may be awarded for the prospective as well as the actual loss incurred by a breach of contract. Although damages are in many cases difficult to ascertain, an attempt must nevertheless be made to assess them;

lix Anton Johan Pinzger v. Bougainville Copper Ltd [1985] PNGLR 160 (per Pratt , Amet and Woods JJ); Dillingham Corporation of New Guinea Pty Ltd v. Constantino Alfredo Diaz [1975] PNGLR 262 (per Frost CJ, Prentice DCJ, Raine J);

lix7

(d) There may be cases in which the contract may provide for a sum payable as damages in a case of a breach of one or more of its terms but such an agreement may not be upheld unless it can be demonstrated as a reasonable and genuine pre-estimated of one’s loss or damages;

lx Papua New Guinea Banking Corporation v. Jeff Tole (2002) SC694 (per Amet CJ, Sheehan and Kandakasi JJ)

lx8

(e) In some cases, damages may be recovered for inconvenience and mental distress resulting from the breach of contract;

lxi Australia nd New Zealand [ANZ] Banking Group (PNG) Ltd v Kila Wari (1990) N801 (per Salika AJ as he then was).

lxi9 and

(f) Finally, the law requires a plaintiff to take all reasonable steps to mitigate his loss failing which part of his damages may be reduced.

lxii MVIT v Pupune [1993] PNGLR 370; Wilson Thompson v. National Capital District Commission and The City Manager (2004) N2686 (per Kandakasi J) and Rooney v. Forest Industries Council of PNG & Anor[1990]PNGLR 407.

lxii10

7. Taking these principles as my guide, I will now address the specific issues raised in these proceedings, starting with the first issue first.

Are the former employees entitled to their claims for unpaid salaries and other heads of damages?

8. Turning firstly then to the first question, I note that, what damages an unlawfully dismissed employee is entitled to, is dependant on the nature and terms of his employment contract with his or her former employer. Where the contract is in writing, it is almost exclusively to the particular terms of the contract the law turns to, to ascertain the precise terms and conditions of one’s employment.

lxiii See Curtain Brothers (QLD) Pty Ltd & Kinhill Kramer Pty Ltd v. The Independent State of Papua New Guinea [1993] PNGLR 285 and the many cases that follow it for support for this proposition and its application.

lxiii11 In the case of unwritten or oral contracts, section 15 of the Employment Act

lxiv Revised Laws Chapter 373

lxiv12 requires an employer to “make a written record of...