Nahau Rooney v Forest Industries Council of Papua New Guinea and Aaron Nawason [1990] PNGLR 407

• Jurisdiction: Papua New Guinea
• Judge: Woods J
• Judgment Date: 26 October 1990
• Court: National Court
• Citation: [1990] PNGLR 407
• Year: 1990
• Judgement Number: N914

Full Title: Nahau Rooney v Forest Industries Council of Papua New Guinea and Aaron Nawason [1990] PNGLR 407

National Court: Woods J

Judgment Delivered: 26 October 1990

N914

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

ROONEY

V

FOREST INDUSTRIES COUNCIL OF PAPUA NEW GUINEA AND ANOTHER

Waigani

Woods J

30 August 1990

26 October 1990

EMPLOYMENT LAW — Contract of employment — Wrongful dismissal — Damages for — Assessment of — Relevance of statutory provisions where not pleaded — Effect of liability for taxation — Salaries and Conditions Monitoring Committee Act (Ch No 384) — Income Tax (Salary or Wages Tax) (Rates) Act 1979, s 1.

DAMAGES — Contract — Breach of — Employment contract — Assessment — General principles — Relevance of statutory provisions where not pleaded — Effect of liability for taxation — Salaries and Conditions Monitoring Committee Act (Ch No 384) — Income Tax (Salary or Wages Tax) (Rates) Act 1979, s 1.

On an assessment of damages for wrongful termination of an employment contract,

Held:

(1) For the purposes of assessing damages for wrongful dismissal from employment, the provisions of the Salaries and Conditions Monitoring Committee Act (Ch No 384) are irrelevant unless pleaded on the substantive issues.

(2) The measure of damages was the amount which the employee would have earned under the employment contract and the value of other benefits thereunder for the period from unlawful termination to the time when the employer could lawfully have terminated, less the amount reasonably expected to be earned in other employment.

(3) Because the Income Tax (Salary or Wages Tax) (Rates) Act 1979, s 1, has specifically provided for payment of tax at the rate of 2 per cent on the payment of a lump sum following termination of employment, the income tax which the employee might have to pay is irrelevant to the assessment of damages for wrongful dismissal.

Atlas Tiles Ltd v Briers (1978) 144 CLR 202 at 212, adopted and applied.

Pupu v Tomilate [1979] PNGLR 108, distinguished.

Cases Cited

The following cases are cited in the judgment:

Atlas Tiles Ltd v Briers (1978) 144 CLR 202.

British Transport Commission v Gourlay [1956] AC 185.

Kerr v Motor Vehicles Insurance (PNG) Trust [1979] PNGLR 251.

Pupu v Tomilate [1979] PNGLR 108.

Assessment of Damages

This was a hearing relating to the assessment of damages for wrongful dismissal under a contract of employment.

Counsel:

J L Shepherd, for the plaintiff.

G J Sheppard, for the defendants.

Cur adv vult

26 October 1990

WOODS J. : The trial of this matter on the question of liability was held in March 1989. The decision then went on appeal to the Supreme Court. In December 1989, the Supreme Court dismissed the appeal. The matter has now come back to me for the assessment of the damages for the wrongful dismissal.

As a preliminary point it was submitted by the defendant that the Salaries and Conditions Monitoring Committee Act (Ch No 384) must be applied for the purpose of assessment of damages.

However, I ruled that whilst the Act is a law in force, in the running of a civil claim, it being an Act that could materially affect the plaintiff's case, the issues it raises must be specifically pleaded to show that the plaintiff's case is or aspects of the plaintiff's case are not maintainable.

The defendant failed to plead the issue and I have already ruled accordingly in the original hearing and this ruling still applies and as the ruling was not taken on the appeal that ruling is still relevant at this stage.

I now add further that it is not open to now amend pleadings further and admit the Act for the purpose of assessment of damages as it would presumably create inconsistencies; in relying on the evidence governing an agreement that it is alleged may be void, if the matter had been raised originally and whether the Act does apply even at this stage would still have to be a matter of evidence, evidence which would have been relevant and should have been given at the original hearing. Perhaps these were the documents sought to be tendered at the original hearing but were refused because of the ruling I made then. So without the supportive evidence, which was not admissible at the original hearing, the Act cannot be applied now.

The plaintiff was terminated on 11 June 1988. She was employed under a contract of employment which was for three years from 14 December 1987. The normal measure of damages is the amount the employee would have earned under the contract for the period until the employee could lawfully have been terminated less the amount the employee could reasonably be expected to earn in other employment. The dismissed employee must take reasonable steps to minimise the loss which, in the case of wrongful dismissal, means the employee must seek and accept any reasonable offer of employment. If a person fails to take other employment when one ought reasonably to have done so, damages will be assessed on the basis of the difference between the salary under the broken contract and what would have been received from the substituted employment.

Such damages for wrongful dismissal may also include an assessment of other benefits which the dismissed employee would have received from the continuation of the employment and of course the leading example is the value of board or a rent-free house.

The plaintiff was employed as an executive director on a salary of K21,000 plus other benefits such as housing, motor vehicle, children's education allowance, which in effect have been calculated to be worth up to around K30,000 a year.

There can be no dispute that this was a very senior position with an exceptionally high remuneration when one allows for the value of the other benefits and this would give great security for the term of the contract. Further, it would be very...