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Denfop v Mario [2015] PGNC 16; N5869 (20 February 2015)

N5869

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 282 OF 2012

BRUNO DENFOP
Plaintiff

V

WU-JUI MARIO
First Defendant

GOGOL REFORESTATION CO LTD
Second Defendant

JANT LTD
Third Defendant

Madang: Cannings J
2014: 3 September, 12 December,
2015: 20 February

DAMAGES – breach of contract of employment – assessment of damages following trial on liability – failure by employer to terminate contract of employment in accordance with provisions – claim for damages of K388,365.16.

The plaintiff established liability in breach of contract against the third defendant, his former employer, due to its failure to terminate the contract of employment in accordance with its provisions. It was a one-year written contract that could be terminated by either party on giving one month's notice to the other party. However, the employer terminated the contract without notice by paying the plaintiff's salary for only two fortnights, ceasing payment and giving no notice at all of termination. The plaintiff claimed 11 categories of damages totalling K388,365.16. The defendant argued that the claim was grossly excessive and that only K1,100.00 should be assessed, to which sum there should be applied a 10% discount due to the plaintiff's failure to mitigate his losses; he therefore should be awarded no more than K990.00.
Held:

(1) Only two of the 11 categories of damages were pleaded in the statement of claim, so the Court's assessment of damages was confined to those two categories: (a) money in lieu of notice and (b) damages for mental anxiety, stress, suffering and inconvenience.

(2) For (a), K600.00 was awarded, being the amount of wages that would have been earned in the notice period of one month. For (b), K8,000.00 was awarded as the plaintiff had worked for the third defendant or its subsidiary for 19 years and was treated shabbily by his employer.

(3) The defendant failed to establish good reason for discounting the award.

(4) The total award of damages was K8,600.00. In addition, interest of K2,958.40 was awarded. The total judgment sum was K11,558.40. The parties were ordered to bear their own costs.

Cases cited

The following cases are cited in the judgment:

Bruno Denfop v Wu-Jui Mario, Gogol Reforestation Co Ltd & Jant Ltd (2014) N5442
Coecon v National Fisheries Authority (2002) N2182
Dia Kopio v Employment Authority of Enga (1999) N1865
Leeway East Enterprise Ltd v Daniel Danaben (2013) N4951
PNGBC v Jeff Tole (2002) SC694
Timothy Con v Jant Ltd (2014) N5503

ASSESSMENT OF DAMAGES

This was a trial on assessment of damages for breach of contract.

Counsel

B Tabai, for the plaintiff
B B Wak, for the defendants

20th February, 2015

1. CANNINGS J: This has been a trial on assessment of damages. The plaintiff, Bruno Denfop, established liability in breach of contract against his former employer, the third defendant, Jant Ltd, due to its failure to terminate the contract of employment in accordance with its provisions.

2. It was a one-year written contract of employment, which commenced on 1 October 2010. Clause 14 stated that the contract could be terminated by either party giving one month's notice to the other party. However, Jant terminated the contract without notice by paying the plaintiff's salary for only two fortnights, ceasing payment and giving no notice at all of termination. Further details of how the breach of contract occurred are in the judgment on liability, Bruno Denfop v Wu-Jui Mario, Gogol Reforestation Co Ltd & Jant Ltd (2014) N5442.

PLAINTIFF'S CLAIM

3. The plaintiff was employed by Jant or its subsidiaries from 1991 to 2010. At this trial on assessment of damages he sought 11 categories of damages:

ASSESSMENT

4. I uphold the submission of Mr Wak, for Jant, that only two of the 11 categories of damages were pleaded in the statement of claim, so the Court's assessment of damages must be confined to those two categories: (3) money in lieu of notice and (10) general damages for mental anxiety, stress, suffering and inconvenience (PNGBC v Jeff Tole (2002) SC694).

5. The parties agree that K600.00 should be awarded for money in lieu of notice as that represents the total salary due to the plaintiff in the one-month notice period. As for general damages, Mr Wak submits that only K500.00 should be awarded as the contract of employment was only of one year's duration and it was terminated after two fortnights. I think this submission avoids the context in which the breach of contract was committed. The plaintiff had been in effect employed by Jant for a period of 19 years. He was given shabby treatment over the last few years of his employment, required to agree to short-term contracts in various forms and then given confusing information about whether his services were required any longer.

6. In Timothy Con v Jant Ltd (2014) N5503 the plaintiff established liability in breach of contract due to the defendant's failure to pay, by an agreed date, all items it was obliged to pay or provide to him as final entitlements under his contract of employment. Taking into account that he had worked for the defendant for 37 years, he was awarded general damages on account of pain, suffering and inconvenience of K5,000.00. Though the present plaintiff, Mr Denfop, served the company for a lesser period, I consider that he deserves more to reflect the shabby treatment he was given by his employer. I award him K8,000.00.

7. As to whether a discount should be applied to the total award of damages, K8,600.00, on account of the plaintiff's failure to mitigate his losses, I consider that in the circumstances of the present cases it would be oppressive to take that approach. Besides that, it is the defendant that bears the onus of proof on this issue (Dia Kopio v Employment Authority of Enga (1999) N1865, Coecon v National Fisheries Authority (2002) N2182). I find that the third defendant has failed to discharge the onus of proof. There will be no discount due to the alleged failure to mitigate losses.

SUMMARY

8. The following table summarises the damages awarded.

INTEREST

9. Interest will be awarded at the rate of 8 per cent per annum on the total amount of damages under Section 1(1) of the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. Interest will be calculated in respect of the period from the date on which the cause of action accrued (1 November 2010) to the date of this judgment, a period of 4.3 years, by applying the formula D x I x N = A, where: D is the amount of damages assessed, I is the rate of interest per annum, N is the appropriate period in numbers of years and A is the amount of interest. Thus: K8,600.00 x 0.08 x 4.3 = K2,958.40.

COSTS

10. The general rule is that costs follow the event, ie the successful party has its costs paid for by the losing party on a party-to-party basis. In this case there is no clear winner. The plaintiff has on the one hand succeeded in obtaining an award of damages. On the other hand he succeeded in convincing the court that only 2.21% of his claim (K8,600.00 out of K388,365.16) had merit. The defendants succeeded in showing that the bulk of each claim was misconceived. In these circumstances the approach taken in Leeway East Enterprise Ltd v Daniel Danaben (2013) N4951 is the most appropriate: the parties will bear their own costs.

ORDER

(1) The third defendant shall pay to the plaintiff damages of K8,600.00 plus interest of K2,958.40, being a total judgment sum of K11,558.40.

(2) The parties will bear their own costs.

Judgment accordingly.
_____________________________________________________________
Tabai Lawyers: Lawyers for the plaintiff
Kunai & Co Lawyers: Lawyers for the defendants