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Supreme Court of Vanuatu |
IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
(Civil Jurisdiction)
CIVIL CASE No.114 of 1999
BETWEEN:
ADELYNE NELSON
Plaintiff
AND:
THE ATTORNEY GENERAL
representing the Republic of VanuatuFirst Defendant
AND:
THE TEACHING SERVICE COMMISSION
Second Defendant
Coram: Chief Justice Lunabek
Counsel: r. Robert Sugden for the Plaintiff
Mr. George Boar for the Defendants
Date: 10 April 2001
JUDGMENT
1 By Summons dated 17 November 1999, the Plaintiff claims, among other relief, for her unpaid salary since the time of her dismissal by the defendants and housing allowance entitlements. (Housing allowance claim was included as part of this case with leave of the Court).
FACTUAL BACKGROUND
2 On 16 September 1998, the Plaintiff obtained judgment against the First and Second Defendants in Civil Case No.17 of 1995. In that case, the Court held that the Plaintiff had never been validly suspended or dismissed from her employment as a Principal in the Vanuatu Teaching Service. Mr. Justice Tompkins held, in effect, that the Plaintiff was still employed as a Principal in the Teaching Service and ordered that all of her unpaid salary up to the date of judgment, less the salary she had managed to earn during that time at Vila City College, be paid to her.
3 Since the judgment the defendants apparently, have continued not to pay the plaintiff’s salary or provide her with a Principal position of a school.
4 The defendants now concede and accept that the plaintiff should have been paid the difference between her salary as a Principal (of Vatu 98,939) and what she could earn in other employment. The plaintiff has continued working at Vila City College, until 15/06/1999 when she resigned from there and did not work again until 01/04/2000.
5 The parties agree that, for the period 15/06/99 until 15/09/99 the plaintiff should receive VT349,551.
6 The parties are also agreed that each month of the period 1/4/00 until the present the plaintiff should receive the difference between her monthly salary as a Principal and her salary at Vanuatu Rural Training Centre (V.R.T.C.) (VT60,000 + VT20,000 for housing allowance) = VT98,839 – VT80,000 = 18,839. It is clear then, that as at 28/2/01 the number of months is 11. It follows and then agreed between the parties that the sum of this period is VT18,839 x 11 = VT207,229.
7 On 15 June 1999, the plaintiff resigned from Vila City College. She was then unemployed until 1/4/00. The period 15/6/99 until 1/4/00 represents 6˝ (half) months. This period has been the subject of dispute between the parties.
8 The defendants say that the plaintiff should receive nothing for the time as she had resigned from her position and therefore she had failed to mitigate her loss.
9 The plaintiff accepts that she should have kept her employment at Vila City College in order to mitigate her loss brought about by the defendant’s failure to pay her and that because she chose to give up that income she cannot require the defendants to make good what she have earned. However, the plaintiff says that, even if she had kept that employment she would still have suffered a loss of VT38,839 per month as she could only earn VT60,000 per month – Vt38,839 less then her salary. Thus, the plaintiff says, she should receive VT38,839 per month for this time – a total of 6˝ x VT38,839 = VT252,454.
EVIDENCE AND FINDINGS
10 The plaintiff gave oral evidence in addition to her sworn affidavit filed on 14 February 2000. The plaintiff gave evidence to the effect that on 1st April 2000 she started her current employment with the Vanuatu Rural Training Centre on a three year contract at a salary of VT.60,000 per month plus housing allowance of VT20,000 per month. The evidence establishes also that the defendants offered the plaintiff a teaching post at Lini Memorial College in Pentecost as an English and Social Science Teacher. This was done by a letter from the Hon. Jacques Sese, Minister for Education dated 30 May 2000, directing the plaintiff to make necessary arrangement to the said school, without any further delay. (Exh.D1)
11 She stated also that her claim is now understood by the defendants to include a claim for housing allowance. She submit and marked “Annexure A” part of the Teaching Service Staff Rules that include the provision relevant to housing allowance for teachers.
12 The plaintiff by letter of 22 June 2000 appealed against the ministerial decision of 30 May 2000 for three (3) reasons:
13 Firstly because she is currently employed by the Vanuatu Rural Development Training Association and she needed to give three (3) months notice to her new employer. Secondly, she said her appointment as a class teacher at the said school is still contradictory to the judgment of the Supreme Court issue by Justice Tompkins on the 16 September 1998. Finally, because she was deprived of her profession and salaries by the defendants since October 1998 and then was unemployed since June 1999 to 1 March 2000, she did not have the finance for such an abrupt posting at such a inconvenient time. She also said that she will willingly take up any posting anytime in future if-
(i) Her withheld salaries are immediately released; and
(ii) the defendants via the Ministry of Education will consider fully points 1 and 2 of this letter in respect to the next posting.
14 She gave evidence that she did not receive a response of her appeal from the defendants. There is no evidence from the defendants to the contrary. There is no reason to disbelieve the plaintiff on that point.
15 She stated that prior to the decision of the Hon. Justice Tompkins in September 1998, she had been living in a rented premises in Port-Vila at a monthly rental of VT33,000 and had received no payments of any sort from the defendants. She shared the rents with her partner. She paid VT18,000 for the rent and her partner paid VT15,000. She produced all receipts/invoices of rent she paid from January 1998 to February 2001. (Exh.P2)
16 The defendants file a sworn affidavit dated 26 February 2001, of Louis Pakoa, Manager in charge of the Government salaries within the Department of Finance. This affidavit shows the personal account history file of the plaintiff covering the last two (2) periods as a teacher from 1993 to 1994 marked “CPI”. It is also said in the affidavit that as a teacher in Teaching Service with Vanuatu Government, the plaintiff’s TPF No. is 2-60079. She ceased to receive her salary on 13 September 1994. The Finance record shows that she received a basic forth night salary of Vatu 39,919 plus Vatu 2,125 being for subsistence allowance. Mr. Pakoa’s affidavit further shows that the plaintiff was not paid any housing allowance nor was her salary deducted towards payment of housing rent.
17 I find as a matter of fact that the affidavit of Pakoa shows the financial record of forth-night salary of the plaintiff as a class teacher but not as a Principal of the school which is in issue in the proceedings. The evidence of the plaintiff is then preferred.
18 I find also that the Teaching Service Staff Regulation which include relevant provisions for housing allowance for the Teachers No.33 of 1994 became effective on 26 October 1994 after the plaintiff was wrongly dismissed by the defendants. It is also common ground that as from the judgment of the Hon. Justice Tompkins of 1998, the plaintiff had never been validly suspended or dismissed from her employment as a Principal in the Vanuatu Teaching Service. The Supreme Court, in effect, held that the plaintiff was still employed as a Principal in the Teaching Service. It is also the case that the Court ordered that all of the plaintiff’s unpaid salary up to the date of judgment, less the salary she had managed to earn during that time at Vila City College, be paid to her. The evidence shows also as an established fact that the plaintiff paid housing rents exceeding VT15,000 per month prior to the judgment of the Supreme Court in September 1998.
SUBMISSIONS OF THE PARTIES
Plaintiff
19 The plaintiff accepts that she should have kept her employment at Vila City College in order to mitigate her loss brought about by the defendant’s failure to pay her and that because she chose to give up that income she cannot require the defendant to make good what she could have earned. However, even if she had kept that employment she would still have suffered a loss of VT38, 839 per month as she could only earn VT60, 00 per month for this time.
a) Unpaid Salary
20 The Plaintiff’s Counsel submitted that calculation of the compensation or unpaid salary of the plaintiff should be for the 3 periods:
i) Teaching at Vila City; difference in her Salary (TSC/Vila City College)
15/09/98 to 15/6/99 = 9 months x VT38, 839 = VT349, 551
ii) Period when she resigned from Vila City College
15/6/99 to 1/4/2000 = 9 and ˝ months x VT38, 839 = VT388, 839
iii) Period from 1st April 2000 to end of February 2001 – total of 11 months. Calculations base on difference between plaintiff’s salary and housing allowance subtracted from her salary as principal of VT98, 839 per month.
21 The amount of compensation should be 11 months x 18, 839 being the difference in her earning which is VT207, 229.
b) Housing Allowance
22 The counsel for the plaintiff submit that the plaintiff entitled to housing allowance starting from 15 September 1998 up to 28 February 2001. The total month for this period is 29 ˝ months x VT15, 000 per month = VT442, 500.
23 Therefore, the total compensation (unpaid salary and housing allowance) the plaintiff should receive is VT1, 368, 251.
Defendant
(a) Unpaid Salary
24 The defendant although admitted that plaintiff is entitled to compensation, argued that she cannot be compensated for the period she resigned from Vila City College and receive no remuneration. This period, the defendant argued that she failed to mitigate her loss. The defendant cited British Westinghouse Electric and Manufacturing Co. Ltd. v. Underground Electric Railways Co. of London Ltd. [1912] UKLawRpAC 43; [1912] AC 673 which in Viscount Haldene LC said:
25 “The fundamental basis is…. compensation for pecuniary loss naturally flowing from the breach; but this principle is qualified by a second which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent upon the breach; and debars him from claiming in respect of any part of the damage which is due to his neglect to take such steps……”
26 Relying on the above authority the defendants deny compensation for the 4 months the plaintiff is without job as a result of her resignation from Vila City College until the time she gets the job with Vanuatu Rural Training Centre. The defendants argued that the plaintiff could have avoided loss of VT38, 839 being the difference in salaries had she continued to work at Vila City College. The defendant further argued that the assertion that the plaintiff could have avoided the loss of VT60, 000 (being salary per month at Vila City College) by not resigning but must still be paid the difference of salary had she continue to work is untenable. Defendants admit that the plaintiff can only entitle to difference in salary for the period. In supporting the proposition, the defendant cited Halsbury’s Vol. 4 at paragraph 1195 which states:
“(she) must be prepared if necessary to lower her sight and accept employment at a lower remuneration”.
27 The defendants argued that the plaintiff’s reason for her resignation from Vila City College is low salary and pressure of work. The defendant argued that as she voluntarily resigned she should not be entitled to claim for the period she was unemployed.
b) Housing Allowance
28 The defendants cited Rule 7.16, which set out housing allowance entitlement. The defendants argued that when the plaintiff was principal at Epi High School, she was not being paid housing allowance. Defendants argued that she lost nothing and cannot claim for benefits for which she was not previously enjoyed.
LAW
29 Mitigation of Loss
a) The first and most important rule is that the plaintiff must take all reasonable steps to mitigate the loss to him consequent upon the defendant’s wrong and cannot recover damages for any such loss which he could thus have avoided but has failed, through unreasonable action or inaction, to avoid. Put shortly, the plaintiff cannot recover for avoidable loss;
b) The second rule is the corollary of the first and is that, where the plaintiff does take reasonable steps to mitigate the loss to him consequent upon the defendant’s wrong, he can recover for loss incurred in doing so; this is so even though the resulting damage is in the event greater than it would have been had the mitigating steps not been taken. Put shortly, the plaintiff can recover for loss incurred in reasonable attempts to avoid loss;
c) The third rule is that, whatever the plaintiff does take steps to mitigate the loss to him consequent upon the defendant’s wrong and these steps are successful, the defendant is entitled to the benefit accruing from the plaintiff’s action and is liable only for the loss as lessened; this is so even though the plaintiff would not have been debarred under the first rule from recovering the whole loss, which would have accrued in the absence of his successful mitigating steps, by reason of these steps not being ones which were required of him under the first rule. Put shortly, the plaintiff cannot recover for avoided loss.
Housing Allowance
30 The law in this area is Teaching Service Staff (Amendment) Regulation No. 33 of 1994. The relevant provisions are as follows:
31 “Amendment of chapter 7 of the Principal Rules
3. Chapter 7 of the principal Rules is amended by adding after paragraph 7.15 the following new paragraphs-
Housing allowance
7.16 (a) All locally recruited officers, permanent or temporary are entitled to receive a housing allowance of VT15,000 per month.
(b) An officer residing in Government housing will not be eligible for housing allowance but will continue to pay the rent for the house at the rate imposed for the grade in which the house is classified.
(c) Officers residing in private rented houses-
(i) will be eligible to be paid VT15,000 where the rent equals or exceeds that amount; or
(ii) where the rent is less than VT15,000, the housing allowance will be equal to the amount of the rent.
(d) Officers living with relatives or residing in their own houses are entitled to 50% only of the housing allowance.
7.17 (a) In the case of an officer or officers who are married and living with relatives or living in their own houses they shall be entitled to be paid an allowance at the rate of 50% of the allowance payable to one officer only;
(b) Married offices residing-
(i) in separate private rented housing are each entitled to be paid the housing allowance in accordance with paragraph 7.16(c);
(ii) together in private rented housing are each entitled to the housing allowance in accordance with paragraph 7.16(c); provided that it is paid to the female partner.
(c) Single officers sharing private rented housing shall each be paid a proportion of the allowance which when added together will be equal or as near to the rent payable for the private dwelling per month.”
APPLICATION OF THE LAW
32 The plaintiff has been wrongly dismissed by the Teaching Service Commission and obtained a judgment of the court on 16 September 1998 to be paid her full salary entitlement by the Teaching Service Commission (defendant). Since her dismissal the plaintiff managed to teach at Vila City College and earned a salary less than what she normally earns when she was a principal with the Teaching Service Commission. The plaintiff here mitigates her loss due to the wrong caused to her by the defendants. By doing so, the plaintiff had lower her sight and accepted employment at a lower remuneration. The plaintiff, then, resigned from Vila City College on 15/9/98 and got a new job on 1st April 2000. This represents a period of 9˝ months that the plaintiff was unemployed.
33 Is the plaintiff entitled to any compensation from the defendants corresponding to that period (15/9/98 to 1/4/00)? My answer to this question is yes. I accept the plaintiff’s submission that even if the plaintiff had kept her employment at Vila City College (and not resigned) she would still have suffered a loss of 38,838 per month as she could only earn VT60,000 per month for this time. It is clear the defendants had caused loss to the plaintiff that could not be avoided. If the defendants caused loss to the plaintiff, the defendants must make good that loss. The failure of the plaintiff to mitigate that loss does not stand as a penalty.
34 The plaintiff claimed housing allowance of 15,000 Vatu per month since 15 September 1998. Housing allowance is one of the conditions of the employment between the Teaching Service Commission and its employees.
35 The plaintiff is a locally recruited officer, and has continued to be employed between 15/9/98 and 28/2/01. She has not resided in Government housing during that time as she was not offered it. She is residing in private rental accommodation for which she pays rental in excess of VT15,000 per month so, she comes within Regulation 7.16(c)(1) and so is entitled to vt15,000 per month. The plaintiff is not married so she does not come within 7.17(a) and (b) and she is not sharing with officers and so she does not come within 7.17(c). There is no reason to reduce what she is allowed under Regulation 7.16(c). It does not matter what she would have been entitled to if she had been appointed to Epi High School as its Principal during that time because she was not appointed. It is to be noted that, if she had been, she would have received Government housing at cheap rent – much better off financially than paying for private rental accommodation. As an officer during that period, she was not given Government housing, and hence, she should have been given housing allowance.
DECISION
36 The plaintiff is entitled to the salary she had lost that cannot be avoided as the result of her wrong dismissal. Calculation of the amount of money she entitles to should reflect the following three periods:
- Her full salary as from the time of her dismissal to the time she managed to get the job as an ordinary teacher at Vila City College;
- Difference in her salary as Principal in Teaching Service and as an ordinary teacher at Vila City College; and
- Difference in her salary when she was teaching at Vila City College for the period she voluntarily resigned and received no remuneration.
Calculation as follows:
i) Teaching at Vila City; difference in her Salary (TSC/Vila City College) 5/09/98 to 15/6/99 = 9 months x VT38, 839 = VT349, 551.
ii) Period when she resigned from Vila City College
15/6/99 to 1/4/2000 = 9 and ˝ months x VT38, 839 = VT388, 839.
iii) Period from 1st April 2000 to end of February 2001 – total of 11 months. Calculations based on difference between plaintiff’s salary and housing allowance subtracted from her salary as principal of VT98, 839 per month. The amount of compensation should be 11 months x 18, 839 being the difference in her earning = VT207, 229.
37 Total unpaid salary compensation she should be granted is VT349, 551 + VT388, 839 + VT207, 229 = VT945, 619.
38 The plaintiff is also entitled to housing allowance of VT15, 000 per from 15/9/98 up to the time she was employed by Vanuatu Rural Training Centre. The housing allowance she is entitled to from 15/9/98 to 28/2/2000 is 29˝ months x VT15, 000 per month = VT15,000 x 29,5 = VT442,500.
39 Therefore the total compensation the plaintiff should get is VT 945,619 + VT 442,500 = VT 1,388,119. The defendants are ordered to pay the costs of these proceedings and costs to be taxed failing agreement.
DATED at PORT-VILA, this 10th DAY of APRIL, 2001
BY THE COURT
LUNABEK Vincent
Chief Justice
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