The Central Bank of Papua New Guinea v Gabriel Tugiau (2009) SC1013

• Jurisdiction: Papua New Guinea
• Date: 22 December 2009
• Citation: (2009) SC1013
• Docket Number: SCA NO. 29 OF 2007
• Court: Supreme Court
• Year: 2009

Full Title: SCA NO. 29 OF 2007; The Central Bank of Papua New Guinea v Gabriel Tugiau (2009) SC1013

Supreme Court: Kirriwom, Kandakasi and Batari JJ

Judgment Delivered: 22 December 2009

22 December 2009

EMPLOYMENT LAW—Contract of employment—Unwritten contract but governed by staff hand book—Terms and conditions—Dispute as to—Terms and conditions—Entitlements claimed outside any specific agreement and staff handbook not terms of the contract - Dispute as to relevant period of notice—Contract silent—Applicable period of notice as prescribed by the Employment Act s34 (3) and (4) and relevant measure of damages - Employer calculated paid final termination entitlements and accepted by employee—Effect of—No outstanding entitlements—Damages assessed beyond notice period prescribed by the Employment Act amounting to penalty.

DAMAGES—Assessment of—Damages for unlawful termination of employment—Relevant measure of damages—Period of notice before termination as prescribed by the Employment Act in the absence of any agreement of the parties—Any assessment beyond prescribed period of notice illegal and amounting to penalty for termination.

DAMAGES—Claims for psychological effects, stress, embarrassment, shame and defamation reputation and character following alleged unlawful dismissal—Need for proper foundation in pleadings and evidence of such loss in fact being suffered—Lack of proper pleadings and proof of—No basis to assess and allow any damages.

Cases Cited:

MVIT v Maki Kol (2007) SC902; MVIT v James Pupune [1993] PNGLR 370; PNGBC v Jeff Tole (2002) SC694; Nazel Wally Zanepa v Ellison Kaivovo (1999) SC623; Ereman Ragi v Joseph Maingu (1994) SC459; Teio Raka Ila v Wilson Kamit (2002) N2291; Legu Vagi v NCDC [2002] PNGLR 100; Gideon Barereba v Margaret Elias (2002) N2197; Rooney v Forest Industries Council [1990] PNGLR 407; Felix T Ramram v National Broadcasting Commission (1990) N1110; Re Isaac Lupari v The State (2008) SC930; Young Wedau v PNG Habours Board [1995] PNGLR 357; Post Puma Ltd v. Yama Security Services Ltd (unnumbered judgment 26/07/01) SCA No. 80 of 2000; Teio Raka Ila v Wilson Kamit (2002) N2291; Wilson Thompson v NCDC (2004) N2686; Boinamo Enterprises Ltd v Michael Edwin Carey (2004) SC744; Robert Karava v Kevin Byrne [1999] PNGLR 39; Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705; Tian Chen Ltd v The Tower Ltd (No 2) (2003) N2319; PNG Forest Authority v Concord Pacific Ltd (No 2) (2003) N2465; Peter Aigilo v The Independent State of Papua New Guinea (2001) N2102

22nd December 2009

1. BY THE COURT: The Appellant Bank is appealing against an assessment of damages in favour of the Respondent, Mr. Gabriel Tugiau for loss of employment income for 3 years at K72, 000.00, leave, vehicle and housing allowances at K20,000.00 and stress, anxiety and loss of reputation at K50,000.00. The Bank says, this assessment amounts to a penalty which has no foundation in law. Further in relation to the leave, vehicle and housing allowances, the Bank says those were not part of Mr. Tugiau’s contract of employment. As for the damages for stress, anxiety and loss of reputation, the Bank says Mr. Tugiau did not make a case for such awards. Therefore, the learned trial judge erred in the assessments he arrived at.

2. Of course, Mr. Tugiau is opposing the appeal and says the National Court did not fall into any error when it made the various awards in his favour. Accordingly, he argues for a dismissal of the appeal.

Relevant Issues

3. From the arguments of the parties the issues for us to determine are clearly these:

(a) Did Mr. Tugiau suffer any damages?

(b) If the answer to the first question is in the affirmative, what is the measure of his damages?

(c) Did the contract of employment between the parties provide for leave, vehicle and housing allowances?

(d) If the answer to question (c) is in the affirmative, which of the allowances were due and owing to Mr. Tugiau and in what amounts?

(e) Did Mr. Tugiau make out a case for the award of damages for stress, anxiety and loss of reputation?

(f) If the answer to question (e) is in the affirmative, what is the appropriate measure of his damages?

(f) Is the award of damages for loss of income for 3 years effectively a penalty?

4. We deal with each of these issues in the order they are presented. But before doing so, it will be necessary to have some understanding of the background to this appeal to give proper context to a consideration of the issues and their determination. Accordingly, we first turn to a consideration of the background.

Background

5. The Bank, which is a public institution, terminated its employment of Mr. Tugiau under an unwritten contract of employment but clearly governed by a Staff Handbook. The termination was allegedly over some missing numismatic notes representing K64,680.00 in value. At the time of the termination, the Bank worked out Mr. Tugiau’s termination entitlements based on a salary of K16, 081 per annum, which added up to K10, 917.19. After allowing for tax and other deductions he was paid a net of K7, 015.85, which he accepted on 13th September 1994.

6. Subsequently, however, Mr. Tugiau was not happy and he sued the Bank for reinstatement and other relieves including, various heads of damages for unlawful dismissal. Following the Bank’s failure to give discovery, the Court entered judgment for Mr. Tugiau which included an order for reinstated. That came after 7 years and 2 months from the date of his dismissal. However, Mr. Tugiau did not resume his employment with the Bank as he had already secured alternative employment with Air Niugini Savings and Loans Society, after 1 year 7 months from the date of the termination of the contract. So he chose instead to sue for damages for wrongful dismissal. Accordingly, the matter proceeded to an assessment of damages hearing after which, the National Court arrived at the decision, the subject of this appeal.

Did Mr. Tugiau suffer any damages?

(a) Relevant Principles of law on Assessment of damages

7. Duly noting the background as we have just outlined, we turn to a consideration of the first issue of did Mr. Tugiau suffer any damages. It is necessary to first remind ourselves of principles governing an assessment of damages as recently stated by this Court in its decision in the matter of Motor Vehicles Insurance Limited v. Maki Kol, [ (2007) SC902 ] in the following terms:

“Generally speaking, a desire to compensate one’s loss and suffering is at the very core of the whole body of law governing the assessment of damages, be it for a breach of contract situation or personal injuries. Usually, the law looks at awarding damages in monetary terms not more or not less than what has actually been suffered or lost. Lord Blackburn in Livingstone v. Rawyards Coal Co … formulated the classical and often quoted principle in the following terms:

‘where any injury is to be compensated by damages, in settling the sum of money to be given for … damages you should as nearly as possible get at 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.’

In time, this principle has become known as the principle of restitution in integrum.”

(b) Relevant Facts

8. It is therefore appropriate that we have started with the question; did Mr. Tugiau suffer any damages? This is a question that turns on the relevant facts and or background to the action. As we have already noted, the Bank and Mr. Tugiau were in a relationship of employer and employee or master and servant for a period of 15 years, one month, one week and 4 days. The Bank terminated its employment of Mr. Tugiau, over some missing numismatic notes valued at K64,680.00 However, in separate proceedings against the Bank by another officer Mr. Andrew Saige, the Court found that the notes in question went missing in Mr. Saige’s office. He had the keys to a box that contained the notes. The Court found that Mr. Saige was in a position to explain what become of the notes but did not. Consequently the court found he was responsible for its loss or theft.

9. At the time of termination, the Bank worked out Mr. Tugiau’s termination entitlements which added up to K10, 917.19. After allowing for tax and other deductions including the repayment of a loan, he was paid a net of K7, 015.85, which Mr. Tugiau accepted and signed for on 13th September 1994. Later however, Mr. Tugiau sued the Bank for unlawful dismissal.

10. Following the Bank’s failure to give discovery, the Court entered judgment for Mr. Tugiau which included an order for reinstated. However, Mr. Tugiau decided not to resume his employment with the Bank as he had already secured alternative employment. He...