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Gulu v PNG Defence Force Savings & Loan Society Ltd [1995] PGNC 57; N1399 (28 December 1995)

Unreported National Court Decisions

N1399

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 80 OF 1993
BETWEEN:
TAU GULU - Plaintiff
And:
PNG DEFENCE FORCE SAVINGS & LOAN SOCIETY LTD - Defendant

Waigani

Sheehan J
18 October 1994
28 December 1995

A BREACH OF CONTRACT CLAIM OF - wrongful dismissal under employment contract.

Counsel:

Mr Wasina for the Plaintiff

Mr G Shepherd for the Defendant

28 December 1995

SHEEHAN J: The Plaintiff claim for wrongful dismissal.

He was employed as General Manager of PNG Defence Force Saving and Loans Society under a three contract commencing 2 October 1991. He took up this position, but on 7 October 1992 the Board terminated his services for misconduct under clause 7 of the contract of employment. That provided for termination “forthwith without notice or salary in lieu of notice and therefore all his rights under this agreement shall cease forthwith”.

The Plaintiff contends that he was guilty of no misconduct and sues for breach of contract, claiming damages in the form of balance of contract, entitlements. That is to say, the balance of salary accommodation and motor vehicle allowances that would have been paid to him during the remaining Twenty Four (24) months of the contract.

The Defence acknowledges that the Plaintiff was terminated for misconduct and points to a full investigation carried out into his conduct of his duties as general manager, an investigation carried out with Plaintiff being given a full opportunity to be heard on all allegations against him. A report on the investigation was considered by the Board and a decision taken to dismiss.

The Defence says that the dismissal of the Plaintiff was justified and that the Plaintiff is therefore not entitled under his contract of employment to anything other than any outstanding entitlement due to him at the time of dismissal.

The Defence further notes that there is in fact an outstanding balance on loan advance to the Plaintiff that remains unpaid. It has accordingly made a counter claim for that sum K1981.61. The Defence further points out that even if the dismissal were found to be unwarranted, then nonetheless, the Plaintiff’s claim would be excessive since the contract itself determines the correct measure of his damages. Clause 9 provides that either party may terminate the contract, for any reason, upon one ( 1) months notice being given.

The Plaintiff gave evidence denying that the termination for misconduct was justified. He said that he was not aware of Clause 7 of the contract till after he signed but in any case did not expect to be affected by such a clause. He accepted though that in circumstances other than misconduct, termination could be affected by either party (under Clause 1 (c)) upon one months notice.

He called a former Chairman of the Savings and Loan Board Lt. Col. Vagi Mae and Celestine Taut to support his contentions that he had carried out his duties as general manager properly and efficiently.

Lt. Col. Mae gave evidence in general terms favourable to the Plaintiff though he acknowledged under cross examination that complaint against the Plaintiff regarding a dishonoured cheque had originated with him arranging with the Plaintiff the exchange of his own personal cheque for one from the Society. His personal cheque was dishonoured.

Celestine Taut gave evidence that she had been the Finance and Administration Manager under the Plaintiff and had acted as General Manager on his dismissal. She told the Court that the investigation against the Plaintiff had been carried out by a Board member with a grudge against the Plaintiff. She also said that subsequent to the Plaintiff’s dismissal and the appointment of the new General Manager, the operations of the Society so deteriorated that she had been obliged to protest. That protest had resulted in her own termination as well. Under cross examination she acknowledged that it was she in fact who had been responsible for the damaging seven page report on the conduct of Plaintiff which was a substantial part of the investigation reported to the Board and which lead to the Plaintiff’s termination. She acknowledged that what she had reported was in fact accurate and true in all aspects.

The Defence evidence simply reiterated that because of concerns about the Plaintiff, an investigation had been carried out and the documentation of that inquiry was put in as evidence. That shows that the Plaintiff had been made aware of the allegations against him; that he had been given an opportunity to reply and had done so. The sum of all that together with the report by the investigating officer, had been put before the Board which determined on dismissal.

Having considered all the evidence I am satisfied the Plaintiff’s claim must fail. On the main issue of whether there was misconduct warranting dismissal, that was a matter of fact within the authority of the Board of Directors of the Society to consider. It was satisfied upon evidence before it that the Board should terminate the Plaintiff’s contract and it was competent to do so.

Whether that termination was a breach of contract, that is, whether the Boards action is so deciding could be classified as a wrongful dismissal, was dependent on whether there were really facts in existence on which to base such a decision.

I’m satisfied on the evidence before this Court that serious complaints were made of the Plaintiffs conduct. Investigation was carried out during which the Plaintiff was given opportunity to respond to allegations made, and did so. The report of the investigation including the Plaintiffs reply was put before the Board and considered.

This Court in considering the claim of breach contract can not substitute its own view of that evidence, all that it can do is determine whether there was before the Board evidence which if accepted, would constitute misconduct under the terms of the contract. I am satisfied that that was the case and that it was open to Board to come to the conclusion that it did. In the circumstances the Plaintiffs claim is dismissed.

Turning to the counter claim. The Plaintiff denies that he ever received any claim from the Defendant as to a balance of K1981.61 outstanding. The Defendant itself did not give any convincing evidence that a claim for such a figure had indeed been served on the Plaintiff. The exhibit in this regard appears to be an original which supports the contention that it was not so served. While it was acknowledged by the Plaintiff that there maybe indeed a balance outstanding by him in respect of loans from the Society he considered that figure to be less than a thousand kina.

The Defendant was terminated as General Manager on 7 October 1992 and until this time there appears to be no evidence that this sum was actively pursued by the Defendant until the Plaintiff commenced his proceedings. Even then the counter claim did not stipulate such a sum, rather a much larger figure in respect of other allegations. In the result I am not satisfied that this claim is fairly put before the Court. Despite the acknowledgement that a sum is owing, it has not been established satisfactorily as to amount and I believe that it is appropriate that it be taken up in other proceedings. Accordingly the counter claim is also dismissed.

Cost follows the event.