[1999] PNGLR 521

PAPUA NEW GUINEA

[national court of justice]

Wellington Geroro

v

Coffee Industry Corporation

goroka: kirriwom j
18 June 1999

practice and procedure – Summary judgement – Liability and quantum – Contract of employment – Whether the doctrine of contra proferentem applies.

contract of employment – Wrongful dismissal – Application for summary judgement – Whether the doctrine of contra proferentem applies.

Facts

This is an application for summary judgement by the applicant/plaintiff in respect of liability and quantum. Alternatively the applicant seeks orders striking out the defendant’s defence and also for judgement to be entered for the plaintiff in respect of both liability and quantum.

The plaintiff’s application for summary judgement is pursued on the premise that the defendant has no defence at all because the plaintiff’s termination from employment was not done in accordance with the procedures laid down in the Coffee Industry Corporation Terms and Conditions of Service. Clause 11 of the Terms and Conditions of Service relates to Discipline. The fundamental prerequisite in any disciplinary matter regulated by such determination is the right to be charged and to be given the opportunity to answer the charge. It is submitted on behalf of the applicant that in this case he was not charged under Clause 11(2) or served a Notice of Charge so that he could reply, therefore the termination is in breach of this Regulation and clearly unlawful.

The plaintiff therefore contends that because the termination was unlawful, the presumption is that he was not at fault. And because it is presumed that he was not at fault, he must be paid the value of all his entitlements for the remaining portion of his contract as stipulated in Clause 16(c)(i) of his contract of employment.

In seeking summary judgement the plaintiff relies on the doctrine of contra proferentem, which literally means that ‘where a clause has more than one meaning, it will be interpreted against the interests of the person who proffered or put forward the clause’. The general assumption is that the employer is usually the party who drafts the contract language. Thus, if a clause does not say what you meant, or it has two or more possible meaning, the meaning most favourable to the employee will usually be adopted by the court: see Employment Contracts: An Employer’s Guide by Brenda J. Bowlby, Paul & Jarvis and Ellen E. Mole, Butterworths.

Held

1.	The argument in support of the summary judgement can be best addressed at the substantive hearing of the plaintiff’s claim. There are substantial issues in law that can only be addressed when issues have been narrowed down by the pleadings and evidence is called.

2.	In this case where the claim has been formulated as one of liquidated demand, the whole issue centres on the question of liability and the next issue is that of quantum.

3.	His Honour dismissed the motion by the plaintiff/applicant in respect of both reliefs sought.

Counsels

J Bray, for the applicant/plaintiff.
A McDonald, for the respondent/defendant.

18 June 1999

Kirriwom j. This is an application for summary judgement by the applicant/plaintiff in respect of liability and quantum. Alternatively the applicant seeks orders striking out the defendant’s defence and also for judgement to be entered for the plaintiff in respect of both liability and quantum.

At the hearing of this motion the defendant also filed a motion seeking leave to amend its defence by filing fresh defence and for leave to file a counter-claim. This motion was not heard.

The plaintiff’s application for summary judgement is pursued on the premise that the defendant has no defence at all because the plaintiff’s termination from employment was not done in accordance with the procedures laid down in the CIC Terms and Conditions of Service. The Terms and Conditions of Service cover all the employment details of an employee or officer of the Coffee Industry Corporation from recruitment to discipline. It is similar to the Public Service General Orders, which are made by the authority of the Public Service (Management) Act as amended from time to time. Certain statutory bodies such as the National Housing Corporation, Papua New Guinea Harbours Board have similar determinations either by way of by-laws or regulations that govern the terms and conditions of employment of all employees and officers employed therein.

Clause 11 of the terms and conditions of service relates to discipline. The fundamental prerequisite in any disciplinary matter regulated by such determination is the right to be charged and to be given the opportunity to answer the charge. It is submitted on behalf of the applicant that in this case he was not charged under Clause 11(2) or served a notice of charge so that he could reply, therefore the termination is in breach of this Regulation and clearly unlawful.

The plaintiff therefore contends that because the termination was unlawful, the presumption is that he was not at fault. And because it is presumed that he was not at fault, he must be paid the value of all his entitlements for the remaining portion of his contract as stipulated in clause 16(c)(i) of his contract of employment. The clause reads: 

"If the Employee is terminated through no fault of his, then -

(1)	he shall be paid the value of all his entitlements under this contract for the remainder of the term of contract, except accommodation; . . ."

The plaintiff was dismissed seemingly for inefficiency and gross insubordination. There is a procedure laid down by the Rules that were not followed as far as disciplinary proceedings are concerned. Apart from the plaintiff who has raised it and has founded his case on it, the defendant has not explicitly or implicitly addressed this issue apart from denying that the termination is unlawful.

As I surmised the defendant’s submission it seemed to be contending that:

1.	The non-compliance with the regulations especially clause 11(2) of terms and conditions of service is not a substantial error because when read with clause 16(c) of the Contract of Employment, either party can terminate the contract giving to the other four weeks written notice, thus the inference is that the regulations are not compulsory and can waived at the discretion of the employer, i.e. CIC.

2.	Even if the plaintiff was not at fault, his maximum entitlement under clause 16(a) is four weeks payment (in lieu of notice) - Employment Act

3.	The plaintiff had been over-generously paid off with his termination benefits when he should not have been. Clause 16 (c) of the Contract of Employment in tantamount to be read as a penalty payment against the defendant.

Alternatively the defendant also submits that the plaintiff’s application is misconceived. The fact that internal procedures stipulated in the regulations dealing with disciplinary matters were not complied with meant that the plaintiff had no case to answer but not that he was innocent of any wrong-doing for purposed of clause 16(c) of the contract of employment. Furthermore, whilst there is reference to clause 11 of the regulation by clause 14 of the contract of employment, there is requirement explicitly stated in the contract of employment that the employee must follow the procedure in clause 11. It was thus submitted that this issue and the argument under clause 16(c) in correlation to the penalty argument on contract of employment must be properly addressed in the substantive claim itself when they have been properly pleaded in an amended defence, not in an interlocutory manner.

The plaintiff/applicant’s claim is quite elaborate and detailed. The defendant’s statement of defence also pleads the grounds upon which termination was done. On the face of it both absenteeism and misconduct are not matters of little or no significance when it comes to termination of employment. There are sufficient particulars provided of them in the statement of defence.

In seeking summary judgement the plaintiff relies on the doctrine of contra proferentem, which literally means that where a clause has more than one meaning, it will be interpreted against the interests of the person who proffered or put forward the clause. The general assumption is that the employer is usually the party who drafts the contract language. Thus, if a clause does not say what you meant, or it has two or more possible meaning, the meaning most favourable to the employee will usually be adopted by the Court: see Employment Contracts: An Employer’s Guide, by Brenda J. Bowlby, Paul & Jarvis and Ellen E. Mole, Butterworths.

The defendant submitted that the contract was unclear and inconsistent in many areas and even disputed that defendant was responsible for clause 16(c) finding its way into the contract. Whether or not clause 16(c) is a penalty clause to the employer or that the doctrine of contra proferentem must apply, I need to have evidence before me as to who is responsible for drawing up this contract. There is suggestion or argument that the plaintiff proffered this particular clause.

On the whole I agree with counsel for the defendant/respondent that the argument in support of the summary judgement can be best addressed at the substantive hearing of the plaintiff’s claim. There are substantial issues in law that can only be addressed when issues have been narrowed down by the pleadings and evidence is called.

Counsel for the plaintiff/applicant did not firmly pursue the argument that the defendant’s defence to be struck out for being not verified. Reference was made to the one page head note only of the case of Wilson v Howard [1994] PNGLR 418 which was a claim for a liquidated amount. Of course in this case where the claim has been formulated as one of liquidated demand, the whole issue centres on the question of liability and the next issue is that of quantum.

The end result there is that I dismiss the motion by the plaintiff/applicant in respect of both reliefs sought in paragraph 1 and 2.

Costs follow the event.

Lawyer for the plaintiff/applicant: Pryke & Co.
Lawyer for the defendant/respondent: Warner Shand.