Onne Rageau v Chaudoc Ltd

• Jurisdiction: Papua New Guinea
• Court: National Court
• Judge: Hartshorn J.
• Judgment Date: 08 January 2015
• Citation: (2015) N5901
• Judgment Number: N5901
• Year: 2015

Full : WS 1672 of 2002; Onne Rageau v Chaudoc Limited and Mola Lam Medical Limited and Bracalba Limited and Glen Liddle Mola and Misimoa Morris Lam and Robin Sios (2015) N5901

National Court: Hartshorn J.

Judgment Delivered: 8 January 2015

N5901

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 1672 of 2002

BETWEEN:

ONNE RAGEAU

Plaintiff

AND:

CHAUDOC LIMITED

First Defendant

AND:

MOLA LAM MEDICAL LIMITED

Second Defendant

AND:

BRACALBA LIMITED

Third Defendant

AND:

GLEN LIDDLE MOLA

Fourth Defendant

AND:

MISIMOA MORRIS LAM

Fifth Defendant

AND:

ROBIN SIOS

Sixth Defendant

Waigani: Hartshorn J.

2014: February 18th,

2015: January 8th

Trial

Cases Cited:

Papua New Guinea Cases

Morris v. PNG Associated Industries Ltd (1980) N260 (L)

Vitus Sukuramu v. New Britain Palm Oil Ltd (2007) N3124

New Britain Palm Oil Ltd v. Vitus Sukuramu (2008) SC946,

James Geama, Koim Kopun v. OTML Shares In Success Ltd (2011) N4269

Overseas Cases

In Re Homebush Abattoir (1966) A.R. (NSW) 37

Counsel:

M. Saroa, for the Plaintiff

G. B. Purvey, for the Defendants

8th January 2015

1. HARTSHORN J. The plaintiff and the fourth, fifth and sixth defendants are all medical doctors by profession. They were all working at a Private Hospital and Clinic in Port Moresby prior to April 2002. In 1994 the plaintiff was employed by the first defendant as a doctor. The first defendant is the holding company of the second defendant, a company which carries on a medical practice on land owned by the third defendant.

2. In March 1996 the plaintiff became a 10% shareholder of the first defendant pursuant to a shareholders’ agreement.

3. In April 2002, the plaintiff was given notice of termination of his employment and the notice of his deemed intention to retire from the shareholders agreement. The defendants also informed that pursuant to the shareholders agreement, they exercised their option to purchase his share. The share was compulsorily acquired in November 2002.

4. The plaintiff in his amended statement of claim pleads amongst others that:

a) the purported termination of his employment was unlawful,

b) his purported termination from being a shareholder of the first defendant was unlawful,

c) the purported compulsory acquisition of the shareholding was unlawful.

5. The defendants pleaded amongst others that:

a) the termination of the employment was lawful,

b) the termination of the plaintiff’s partnership was lawful,

c) the plaintiff’s shareholding was lawfully compulsorily acquired by the defendants.

6. The parties agreed seven issues for trial in a “statement of agreed and disputed facts with issues for trial” that was filed on 30th October 2007. The plaintiff made written submissions in respect of six of those issues. I now consider those issues.

Did the defendants lawfully terminate the plaintiff’s contract of employment on or about 29th April 2002 in that the plaintiff’s conduct constituted a proper cause for termination?

7. The plaintiff contends that the purported termination of his employment contract was unlawful as the defendants failed to:

a) inform the plaintiff of the specific action or conduct that constituted the “guilty conduct” warranting his dismissal,

b) give the period of notice or take it into account when giving notice,

c) provide the plaintiff with the right to appeal the decision or to be given the opportunity to be heard.

8. These contentions are not pleaded in the amended statement of claim. The agreed relevant issue is set out above and is also contained in the plaintiff’s written submissions. Consequently these contentions should be rejected. I will however give consideration to them.

9. The plaintiff submits that the shareholders agreement does not make provision as to what constitutes guilty conduct or wrongful behaviour and so the Employment Act 1978 applies. Pursuant to that Act submits the plaintiff, he was entitled to 4 weeks notice but was not given such notice. The defendants did not take issue with the Employment Act applying. I am of the view though that pursuant to authority and its wording, in this instance it is not the Employment Act that applies, it is the Port Moresby General Employment Award 1973 as varied by the Port Moresby General Employment (Amending) Award 1975 (Port Moresby Common Rule).

10. It is of no moment however as both the Employment Act and the Port Moresby Common Rule, provide for an employer to terminate a contract of employment or service without notice in certain circumstances.

11. In the Employment Act, s. 36 (1) provides:

“36. Grounds for termination of contract.

(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 reasonable order; or

(ii) misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties; or

(iii) is guilty of a fraud or dishonesty; or

(iv) is habitually neglectful of his duties; or

(v) is imprisoned for a period exceeding seven days; or

(vi) is continually absent from his employment without leave or reasonable excuse; or

(vii) is convicted of an offence or contravention of this Act or any other law relating to employment; or

(b) on any other ground on which he would be entitled to terminate the contract without notice at common law.”

12. The Port Moresby Common Rule, Clause 8 (a) (iv) provides:

“(iv) Nothing in this clause shall affect the right an employer may have to dismiss an employee without notice for conduct incompatible with the due and faithful discharge of that employee’s duty to his employer. In the event of a dispute as to the right of dismissal without notice, either party may refer the matter to the Secretary for Labour or his delegate for decision.”

13. It is pleaded in the amended statement of claim that the plaintiff gave notice to the fourth defendant for special leave without pay to contest the Abau seat in the 2002 National Elections. In preparation for this leave the plaintiff arranged for another Doctor to cover his position. The request to accept this doctor to cover his position was refused as was the plaintiff’s request for special leave. It is further pleaded by the plaintiff that “The Plaintiff despite the Doctors’refusal went ahead and nominated for the elections and went on a campaign trail on one (1) week off and one (1) week on that basis.”

14. To my mind, without consideration of the defendants submissions in this regard, the actions of the plaintiff as pleaded by him fall within s. 36 (1) (a) (i), (ii), (iv) Employment Act and clause 8 (a) (iv) Port Moresby Common Rule such that his contract of service or employment could be properly terminated without notice. It is clear to my mind that the plaintiff deliberately absented himself from his duties as pleaded.

15. In this regard I refer to the case of In Re Homebush Abattoir (1966) A.R. (NSW) 37 that was referred to in Morris v. PNG Associated Industries Ltd (1980) N260 (L), in which Cook J. at p374 said:

“…. the question of whether the conduct of an employee amounts to misconduct justifying instant dismissal would generally depend upon whether or not the act complained of can properly be regarded as deliberate or wilful or of such nature as to strike at an essential element in the contract of service.”

16. I am satisfied from the evidence that the plaintiff was advised that his request for special leave was refused and of the reasons why, that a letter outlining those reasons was sent to him and that a second request for special leave was also refused. Given this, this court to my mind, is entitled to find that the plaintiff’s actions were deliberate and his employment was able to be terminated without notice.

17. In addition, I agree with the submissions of the defendants’ that as a medical specialist, shareholder and director, the plaintiff disregarded the essential conditions of his employment when he was absent from his employment and his duties as a doctor and director of the medical hospital. Further, his conduct in leaving his employment in circumstances when he was refused such leave and provided with reasons why his request for special leave was refused was conduct that entitled the defendants’ to dismiss the plaintiff from his employment as provided in clause 3.6 of the shareholders agreement.

18. As to the contention that the letter of 29th April 2002 did not inform the plaintiff of the specific action or conduct that constituted “guilty conduct” warranting his dismissal, I note that this is not pleaded in the amended statement of claim and is not listed as an issue in the statement of agreed and disputed facts with issues for trial. In any event the letter does refer to guilty conduct which would entitle his dismissal from employment. Given this and in the absence of submissions concerning and reliance...