Vere Kilao and Chemica Didiman Store, Kimbe v Bernard Tiau (2007) N5000

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 16 February 2007
• Citation: (2007) N5000
• Docket Number: CIA NO 46 of 2006
• Court: National Court
• Year: 2007
• Judgement Number: N5000

Full Title: CIA NO 46 of 2006; Vere Kilao and Chemica Didiman Store, Kimbe v Bernard Tiau (2007) N5000

National Court: Cannings J

Judgment Delivered: 16 February 2007

N5000

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

CIA NO 46 0F 2006

VERE KILAO

First Appellant

CHEMICA DIDIMAN STORE, KIMBE

Second Appellant

V

BERNARD TIAU

Respondent

Kimbe: Cannings J

2006: 2 August,

2007: 16 February

LAW OF EMPLOYMENT – oral contract of service – termination of contract for cause – wrongful dismissal claim – alleged breach of contract by employer.

APPEAL – whether District Court made decision against weight of evidence – District Courts Act, Section 230 (power of National Court upon appeal) – power to vary order appealed from and make order which ought to have been made by the District Court – whether power to vary District Court order is contingent on appeal being allowed.

The respondent was employed by a didiman store in Kimbe. He let three bags of chicken stock feed go out of the store to someone who had not paid for them. The customer who actually paid for them became irate and complained to the respondent’s boss who sacked the respondent. The respondent sued his boss (the first appellant) and the store (the second appellant) in the District Court for wrongful dismissal. The District Court found in the respondent’s favour and awarded him damages of K1,000.00. The appellants appealed on the grounds that (a) the dismissal was justified under Section 36 (grounds for termination of contract) of the Employment Act and (b) the award of damages was excessive.

Held:

(1) When an employer terminates the employment of an employee for cause under Section 36 of the Employment Act, the terminated employee may establish a cause of action in breach of contract if the reasons for termination are proven, in fact, not to have existed.

(2) Even if there is on the face of it good cause to terminate employment the employee must first be given a right to be heard before a considered decision is made whether to terminate employment.

(3) The District Court carefully considered the evidence as to the circumstances in which the plaintiff was terminated and concluded that termination for cause under Section 36 of the Employment Act was not justified; and a review of the evidence by the National Court showed that that was a finding reasonably available on the evidence. The District Court’s decision was not against the weight of the evidence.

(4) On the evidence before the District Court a decision ought to have been made that the contract of employment was also breached by the employer’s failure to administer a right to be heard prior to terminating the plaintiff’s employment.

(5) In assessing damages for wrongful dismissal a court is not restricted to the amount of wages that would have been earned in the notice period.

(6) The amount of damages awarded by the District Court of K1,000.00 was not excessive. On the contrary it was a modest amount and inadequate in all the circumstances. The National Court has the power under Section 230 of the District Courts Act, on an appeal, to vary orders made by the District Court and that power is not subject to the appeal being upheld or a cross-appeal being instituted.

(7) The District Court’s order was quashed and substituted with an award of damages of K2,000.00. The appeal was substantively dismissed.

Cases cited

The following cases are cited in the judgment:

Egga Pua v Otto Benal Magiten (2005) N2892

Jimmy Malai v PNG Teachers Association [1992] PNGLR 568

Joe Kala v NBPOL OS, WS No 879 of 2005, 16.02.07, unreported

Vitus Sukuramu v NBPOL and Others WS No 1175 of 2003, 16.02.07, unreported

APPEAL

This was an appeal from a decision of the District Court upholding a claim for wrongful dismissal.

Counsel

L Tunian, for the appellants

O Oiveka, for the respondent

16 February, 2007

1. CANNINGS J: This is an appeal against a decision of the District Court at Kimbe, constituted by Mrs G R Coppard, in which her Worship upheld a claim for damages for wrongful dismissal. In July 2005 the respondent, Bernard Tiau, commenced work as a supervisor of counter-sales with the Chemica Didiman store in Kimbe. There was no written contract. It was an oral contract of service. In December 2005 he let three bags of chicken stock feed go out of the store to someone who had not paid for them. The customer who actually paid for them became irate and complained to the respondent’s boss, the store manager, who sacked the respondent. The respondent sued his boss (the first appellant) and the store (the second appellant) in the District Court for wrongful dismissal. The District Court found in the respondent’s favour and awarded him damages of K1,000.00.

DISTRICT COURT PROCEEDINGS

2. On 31 January 2006 the respondent filed a complaint in the District Court. There were two defendants: Vere Kilao (the store manager) and Chemica Didiman Store Kimbe. The complaint was that the appellants wrongfully terminated the respondent’s employment as they made false allegations of embezzlement against him and denied him natural justice. The respondent claimed damages for wrongful termination and for loss of reputation. The complaint was tried before the District Court on 10 March 2006. The respondent represented himself and the appellants were represented by Ms Tunian, of Warner Shand Lawyers. Three witnesses gave sworn oral evidence and were subject to cross-examination.

3. The respondent, Bernard Tiao, said that a customer, Ben Hambu, purchased 14 bags of chicken stock feed but could not take them all with him. So Mr Hambu made an arrangement that the bags would remain in the store and he would come and collect them one by one when he came to town. The arrangement worked fine for the first five bags. When he came to collect the fifth bag Mr Hambu was accompanied by another person. Shortly after they left, the same person who had accompanied Mr Hambu came back, with somebody else, and asked for three more bags. The respondent quizzed them whether that was true as Mr Hambu had only just been in to collect a bag. They responded that it was true and that they had a vehicle available so they must get three more bags. As it turned out they were not telling the truth. A week later Mr Hambu came in to collect another bag and became angry when the respondent told him there were only six bags left. Mr Hambu said it should be nine bags. Mr Hambu complained to the store manager (the first appellant) who told the respondent he would have to pay Mr Hambu K213.00. The respondent did not have that amount of money but got a loan and paid Mr Hambu. The first appellant then sacked the respondent without notice. There was nothing put in writing. He just said ‘you’re finished’. The respondent was paid finish pay of K112.80.

4. The first appellant, Vere Kilao, said the problem arose because when the respondent sold the 14 bags of stock feed he kept the receipts to himself when he should have put them in the office. The customer, Mr Hambu, complained. Then other customers became angry and accused the store of stealing their money. The first appellant denied sacking the respondent in the open or calling him a thief.

5. The customer, Ben Hambu, said the total cost of 14 bags was K1,024.00. He confirmed that on the day he got the fifth bag he did not send anyone back to get another three bags.

6. Her Worship Mrs Coppard handed down judgment on 24 March 2006. She rejected the appellants’ argument that the respondent’s termination was justified under Section 36(1)(a)(ii) of the Employment Act. It was an unjustified dismissal, as the real culprit was the customer’s friend who came back and stole the three bags. The respondent was loyal, faithful and innocent. He was treated unfairly and firing him was unjust and unlawful. Her Worship concluded:

For the employer to lean on the common law as stated for termination of employees would be to deprive the workman of all forms of compensation.

The plaintiff suffered from distress, frustration and genuine disappointment as he was penalised twice for a wrong the defendants [ie the appellants] did.

The plaintiff [ie the respondent] must be compensated so that justice is seen to be done.

7. Her Worship awarded the respondent damages of K1,000.00 plus K114.00 costs.

APPEAL TO NATIONAL COURT

8. Five grounds are set out in the notice of appeal but they overlap and can be summarised as:

1. the dismissal was justified under Section 36 (grounds for termination of contract) of the Employment Act and therefore not wrongful; and

2. the award of damages was excessive, not being supported by any evidence.

EMPLOYMENT ACT

9. The provision of the Employment Act at the centre of the District Court proceedings, and the provision again relied on by the appellants in this appeal, is Section 36(1). It states:

(1) An employer may terminate a contract of service without notice or payment instead of notice—

(a) where the employee—

(i) wilfully disobeys a lawful and...