N1128

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 66 OF 1991

APPOLONIA HUASASE
Plaintiff

-v-

NATIONAL HOUSING CORPORATION
Defendant

Waigani: Brown J.
1992: Feb 19 & Jul 10

Contract of employment - Claim for wrongful dismissal - Disciplinary offences - Use of house loan facility afforded plaintiff by employer in accordance with public employees home ownership scheme - Continued use of staff accommodation as well as loan - Liability to vacate staff accommodation - Refusal to vacate for reasons personal to the plaintiff's financial circumstances - Notice to vacate based on terms of home ownership scheme known to plaintiff - Refusal to vacate giving rise to disciplinary proceedings - Fairness - Powers of Managing Director of Housing Corporation.

The plaintiff sued for damages for unlawful dismissal, contending that her acceptance of a National Home Ownership Scheme loan did not give the Managing Director cause to terminate her from vacating the staff accommodation provided.

The facts appear from the judgment.

Held:

The Managing Directors powers relate to the terms and conditions of employment. Where the refusal to vacate staff accommodation was unreasonable, the Managing Director cannot be seen to be acting ultra vires when he imposes a penalty of dismissal which is available to him.

Statement of claim seeking damages for unlawful dismissal

Mr P. Kaumba, for plaintiff.
Mr K.A. David, for defendant.

BROWN J.: The plaintiff was formerly employed by the defendant. On the 10 October 1990 she was dismissed following disciplinary charges principally relating to her refusal to vacate staff housing whilst she owned residential premises purchased with assistance through the National Home Ownership Scheme. The plaintiff accordingly seeks damages for wrongful dismissal.

The facts leading up to her dismissal are not seriously in dispute. The plaintiff however, criticises the Commission's finding of a serious and wilful breach of the Corporation's terms and conditions of employment, which finding was the basis for her dismissal.

She was charged with breaching the provisions of those terms and conditions contained in a Determination No.2 of 1975 as amended more particularly cl 94(1)(b) & (c) which prohibited "employees from engaging in commercial enterprises whilst in the employ of the Corporation". The circumstances were such that the plaintiff obtained loan moneys from the Bank of South Pacific Limited to finalize the purchase of a residential allotment known as Lot 9 Section 449 town of Ensisi Valley, National Capital District. A house was subsequently erected with finance provided by the Bank and at that time the plaintiff was occupying staff accommodation at Section 231 Allotment 42 known as Flat 2 Tokarara. By notice dated the 30 September 1986 the plaintiff was instructed to vacate the staff flat on completion of her house in Ensisi Valley. Subsequently on the 23 of May 1990 a notice giving 7 days to quit the staff flat was served on the plaintiff again on the 11 June the plaintiff, was given a further 48 hours notice to vacate. The house premises which she had erected in Ensisi Valley were leased privately to various tenants during this period.

The plaintiff in her answer to the charges brought pursuant to the disciplinary articles of the Commissions Determination 2 of 1975 stated that her financial situation was such that she could not afford to vacate the staff accommodation and move to her own home for she would forego the rental income from her own home which was income necessary to repay her mortgage to the bank.

The Corporation charges that her continued residence in the staff flat in these circumstances amounts to "carrying on business" within the terms of clause 94 (1)(b) & (c) and that she could not continue to remain in the staff accommodation whilst a beneficiary under the National Home Ownership Scheme.

Whilst denying the effect of her continued residence in the staff accommodation could be categorised as a business within the terms of the Determination the fact that she continued to reside whilst owning her own home purchased pursuant to National Home Ownership Scheme with funds provided for by Bank of South Pacific was uncontroverted.

The plaintiff in effect has said to the Chairman of the Disciplinary Committee, empowered with the responsibility of determining the seriousness of the charges brought by the Corporation, that while the house may be rented, in her financial circumstances, she is precluded from relinquishing use of the staff accommodation and taking up her own accommodation. In those circumstances she anticipates the Bank would foreclose. She has not sufficient financial resources to meet mortgage payments unless she has the facility available from rent. To that extent then, it is clear that National Housing Corporation as her employer, is providing accommodation in circumstances where the plaintiff has her own home available for her use but chooses to not live there, claiming financial hardship. The Corporation on the other hand pleads that she is in breach of the Government Housing Policy and the National Housing Corporation Act by her continued occupation of staff accommodation, and that such continued occupation amounts to a breach of the Housing Policy and National Housing Corporation Act, justifying disciplinary proceedings.

The first notice of the 30 September 1986 clearly raised the issue for the plaintiff was advised by the Assistant Commissioner, following her request to continue to reside in the staff flat, that "due to limited staff accommodation and an increased demand by the National Housing Commission staff", her request had been rejected. She was further advised to vacate the flat as soon as her house was completed at Ensisi Valley.

On the 18 May 1990 she was suspended from duty with pay following the charge brought against her. [The disciplinary committee subsequently recommended that she be given the opportunity to continue to reside in the staff flat subject to a rent increase or if not acceptable that she vacate the flat if her financial circumstances were shown to be sufficient to maintain the existing bank loan repayments]. The Managing Director of the National Housing Corporation by written advise of the 10 October 1990, upon consideration of the disciplinary committees findings, terminated the plaintiff's employment on that day and consequently her entitlement to continue to reside in the staff flat ceased.

I am not satisfied the private rental of the plaintiff's home premises in the circumstances amounts to "a business" within the meaning of clause 94(1)(b) & (c) of the Determination. Perhaps if she had more than one rental property then the course of conduct in acquiring properties in that fashion could be seen as a business. In this case, the fact of ownership and mortgage payments from rentals, does not lead me to classify the rental income as "a business" within the meaning of clause 94(1)(b) & (c).

The plaintiff has however clearly breached the instruction of the 30 September 1986 when she was ordered to vacate the staff flat on completion of her residence.

However, pursuant to terms of the National Home Ownership Scheme, government assistance was available to assist home buyers and it is clear such assistance is conditional upon buyers building their own homes and residing in it themselves. A short description of the 1985 National Home Ownership Scheme has been admitted into evidence and I quote from that document. Also in evidence is the letter of a provisional offer to the plaintiff dated the 26 July 1985 which relates to the block of land at Ensisi Valley which was subsequently purchased with assistance through the scheme. A term or condition of acceptance of the offer was set forth on the second page. That provided -

"Special Conditions - Applicable applicant who currently occupy a Pool/Reserve or NHC house.

1. 	There is a greater restriction on sale of NHOS Home sites to applicants who are current tenants of a Pool/Reserve or NHC rental house. Hense the following conditions are imposed to check on possible abuses.

(a) 	You are required to sign a Statutory Declaration.

(b) 	If you are a current tenant on one of the above category of houses you are given the option of:

(i) 	retaining the Pool/NHC house and surrendering this offer

(ii) 	retaining this offer and surrendering your Pool/NHC house; or

(c) 	...

Failure to do this will result in eviction note served on you to vacate Pool/NHC and legal proceedings taken against you.

Yours faithfully,

JOSEPH BAL
Commissioner.

Having accepted the provisional offer and gone on with the purchase of the subject land by erecting her home with funds provided by the Bank of South Pacific, I am satisfied that the plaintiff is subject to that special condition. In her circumstances as a tenant of staff accommodation, she was obliged to comply with the special conditions as notified by the memo dated 30 September 1986. Whilst great delay has been occasioned by the Corporation's reluctance to take steps to enforce compliance with the condition possibly, as a result of the plaintiff's various requests for re-consideration, I am satisfied that the various notices to quit given on the 23 May 1990 and the 11 June 1990 and subsequently on the 12 July 1990 were valid.

The terms and conditions of the National Home Ownership Scheme 1985 as expressed in the special condition, "that a staff tenant shall vacate" appears to take no account of the entitlement of an employee in the circumstances to staff accommodation. That may not be so if in fact the scheme is more favourable to government employees in these circumstances. In any event that is a policy matter not for this Court. That fact is that there is a special condition which the plaintiff acknowledges breaching for as she says she was financially constrained from complying with those conditions.

The deliberation of the disciplinary committee tends to suggest that the income she received from the rental of her home property exceeded her anticipated outgoings of both the personal loan repayment and housing loan repayment by some K205 per month. As the disciplinary committee said, the plaintiff "was paying off her house at the expense of the Corporation". As the Corporation is heavily subsidising her staff accommodation, this aspect is not really a matter that need be determined here. The question is whether the employees continued failure to comply with the directions to vacate given by the Corporation's Property Authority from time to time amounts to such a wilful and serious breach of the Determination as to justify her dismissal. The particular Determination is dealt with in clause 142(c) -

"An officer who -

(c) willfully disobeys or disregards a lawful order made or given by any person having authority to make or give it; or etc.

is guilty of an offence is liable to be dealt with and punished under this Part.

I am satisfied the employee had the right to be heard and in fact was given every consideration both in the deliberations by the Disciplinary Committee and subsequently when I have regard to the correspondence tendered by her lawyers. I must however not substitute this Courts finding for the decision of the appropriate authority, the Managing Director, who on the 10 October 1990 determined the plaintiff's employment. I can only interfere with that finding of the Managing Director, (the appropriate Disciplinary Officer) pursuant to the Determinations that he was entitled to make, in circumstances which breach the Wednesbury principles [Associated Picture Houses Ltd v. Wednesbury Corpn. (1948) 1 K.B. 223]. He has the deliberations of the Committee to consider. The Managing Director was not bound however to adopt the recommendations of the Disciplinary Committee. (Clause 144(2), (d) & clause 145(3).

I am satisfied that the Managing Director of the Corporation is the appropriate authority referred to as "the Commissioner" in the Determination 2 of 1975 as amended when I have regard to the National Housing Corporation Act 1990. In these circumstances the penalty of dismissal is available.

Quite frankly I do not consider that the plaintiff can be said to have expected to enjoy the benefit of subsidised accommodation which she could legitimately expect to continue to enjoy as an employee since she has been told clearly in 1986 that she should vacate the staff premises on completion of her own residence. Consequently I am not satisfied that she falls within the criteria for judicial review as touched on in Counsel of Civil Service Unions v. Minister for Civil Service (1985) A.C.374. There is not need to consider the question whether the plaintiff has had an adequate hearing before the Disciplinary Committee. She has never being able to show that she has been under any misapprehension about the terms of her special conditions under which she took the benefit of the National Home Ownership Scheme, for the basis of her submissions both to the Disciplinary Committee and to the Managing Director were that she required particular consideration having regard to her financial disadvantage.

Lord Diplock's dicta in the abovementioned case, stated in effect to qualify as a subject for judicial review, that the plaintiff must come within one of two basic categories -

(a) 	a person who has in the past enjoyed a benefit which he or she could legitimately expect to continue until having been told to contrary given rational grounds and having been allowed to comment thereon; and

(b) 	a person who had received an assurance from the decision maker that the benefit would not be withdrawn without first affording him or her the opportunity for arguing that it should not be withdrawn.

I consider those principles apply in this case and the plaintiff does not fit into either category. Consequently she cannot say that she has not been afforded "natural justice" and thus her dismissal is unlawful. Her dismissal was valid, and nothing has been shown now, which would make her dismissal wrongful.

I am not willing to interfere with the decision of the appropriate officer and the plaintiff's claim must fail. There shall be a verdict for the defendant. The plaintiff shall pay the defendants costs.

__________________________________________________

Lawyer for the Plaintiff: Kirriwom & Co.
Lawyer for the Defendant: Namaliu & Associates