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Bong v National Capital District Commission [2000] PGNC 55; N1999 (27 October 2000)

N1999

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 1213 of 1998

BETWEEN

FINIAN BONG

Plaintiff

AND

NATIONAL CAPITAL DISTRICT COMMISSION

Defendant

Waigani : Sevua, J
2000 : 7th August &
27th October

MASTER AND SERVANT – Contract of Employment – Termination – Right to terminate contract by employee – Termination by employee amounting to resignation – Whether plaintiff can sue for breach of contract – Whether plaintiff entitled to damages for breach.

HELD: The plaintiff’s termination of his contract pursuant to Clause 8.3 of his contract of employment amounted to a resignation therefore he cannot claim breach of contract and is not entitled to recover damages for breach of contract.

No cases cited.

Counsel:
K. Frank for Plaintiff
J. Aisa Jr. for Defendant

SEVUA, J: The plaintiff claims damages for wrongful dismissal in the sum of K 521,518.91; damages for vexation, frustration and mental distress in the sum of K 6,000.00; aggravated damages; costs, and interest.

The plaintiff was employed by the defendant as Revenue Controller following his successful application for that position after the position was advertised. The defendant subsequently offered the job to the plaintiff on 31st March, 1998 on a three (3) years contract, see Exhibit "B". The plaintiff accepted the offer on 1st April, 1998, but requested that the following be included as part of the terms and conditions of the contract:

"6. ACCOMMODATION : Rental of K 650.00 per week

payable to a nominated entity in lieu of National Capital District Commission accommodation.

8. OTHERS : Professional and Club subscriptions

and CPA continuing education seminars. Comprehensive medical insurance cover.

9. SPECIAL ALLOWANCE : K 10,000.00 per annum

10. EDUCATION : Dependant’s education costs up to

tertiary level."

The plaintiff’s acceptance was received by the defendant on the same date. Mr Michael Kondai who was then the defendant’s Deputy City Administrator Finance and Administration noted the following comments on the plaintiff’s letter, "Osila OK, Requests are reasonable. Include in Contract." Then he signed under those comments. Mr Kondai confirmed this in his oral testimony. The plaintiff then commenced work on 1st June, 1998.

However, prior to the plaintiff’s letter, he had personally discussed those matters with Mr Kondai on 31st March, 1998 in Mr Kondai’s Office. Following that meeting and discussion, Mr Kondai informed the plaintiff that the matters which, the plaintiff had sought to include in his contract of employment, were reasonable. Mr Kondai, then called Ms Osila Teko into his office, and in the presence of the plaintiff, told Ms Teko that, she should incorporate the plaintiff’s request in his contract of employment. Ms Teko did not deny or dispute this issue in her oral evidence, and she was unable to recall if the comments were made prior to the execution of the contract of employment.

There is, in evidence before me, an undated contract of employment signed by the plaintiff only. It is Exhibit "D". No issue has been raised in relation to the validity or otherwise of that contract, however, I am satisfied that the contract represented the intention of the parties to create a legal relationship enforceable in law. The additional terms which the plaintiff requested, and which, Mr Kondai agreed to, are not found in the contract. However, I accept the evidence of both, the plaintiff and Mr Kondai on this issue. I find that the agreement between the parties was partly written and partly oral.

The plaintiff, in his pleadings, claimed that the defendant had failed to provide various entitlements under the contract. By doing so, the plaintiff alleged that the defendant had breached it’s contract, in that, its default in providing the various entitlements amounted to a constructive wrongful dismissal. However, the Court has not been assisted by the plaintiff’s counsel on what is constructive wrongful dismissal and what the law is on this issue. The entitlements, which the plaintiff alleged were not provided by the defendant were – rent for accommodation, office facilities, special allowance of K 10,000.00, professional subscriptions, recruitment expenses and vehicle hire.

Whilst the plaintiff alleged wrongful dismissal, the plaintiff’s own evidence was that he terminated the contract in accordance with the terms of the contract. Exhibit "H" is a letter dated 17th September, 1998 from the plaintiff’s lawyer advising the defendant that the plaintiff was giving notice to terminate his contract. By a letter dated 13th November, 1998, the defendant advised the plaintiff that it (defendant) had accepted the plaintiff’s termination of his contract, and further, the defendant advised the plaintiff that in pursuance of Clause 8.2 of the contract, the plaintiff would be paid three (3) months entitlements.

Despite the plaintiff’s claim that he was wrongfully dismissed, I find that the plaintiff himself had terminated his contract. I am satisfied from his own evidence that he himself terminated his contract of employment through his lawyer on 17th September, 1998. Although, the defendant referred to Clause 8.2 of the contract, I consider that the contract was terminated in accordance with Clause 8.3, which states:

"The Employee may terminate the employment hereunder by giving at least three (3) months notice in writing directly to the employer and in the event of his giving such notice he shall also be deemed to have resigned from the employment hereunder from the date of the expiry of the said notice," (my own underlining).

The Court noted that there are written comments in pencil in Clause 8.2 and 8.3 of the contract, however, there is no evidence as to who wrote these comments and why. In any event, I do not consider that they form part of the contract of employment. The Court also noted that the plaintiff said in his oral evidence that, at the time of signing the contract, he just had a glance as he was rushing to catch a plane. Be that as it may, the plaintiff cannot turn around and say he did not know or understand all the terms and conditions of his employment contract. Perhaps Clause 8.3 is unfair to the plaintiff, however, that is not an issue.

Pursuant to Clause 8.3, I find, and I am satisfied that the plaintiff himself, through his lawyer’s letter of 17th September, 1998, had terminated his contract of employment. I also find that in terminating his own contract, the plaintiff had resigned from his employment. That is the effect of Clause 8.3. That then raises the issue of whether, having resigned from his employment, the plaintiff is entitled to claim damages for breach of contract for alleged wrongful termination.

The Court is not assisted in any way by counsel for the plaintiff. In fact, the Court reached it’s decision without the assistance of the plaintiff’s counsel’s submissions, despite direction to both counsel to file written submissions, which was the course of action agreed to at the end of the trial. In any event, it is my view that, once an employee resigns for whatever reasons, he cannot sue for breach of contract. It stands to reason therefore that, the plaintiff cannot claim damages for breach and I consider that he is not entitled to damages for breach of contract under the circumstances.

Having reached that conclusion, I consider it unnecessary to address the other issues, in particular, the entitlements that the plaintiff claimed in his statement of claim. Nevertheless, I am of the view that, he is not entitled to accommodation and vehicle allowances. The defendant was paying for these expenses therefore the plaintiff is not entitled to claim these allowances. He was not paying rent himself as all rental invoices were sent to the defendant. Similarly, the invoice for hire from Avis Rent A Car was sent to the defendant.

However, as part of the terms and conditions of the contract, I am of the view that the plaintiff is entitled to be paid pro rata rates of the sum of K10,000.00 special allowance, professional subscriptions and education expenses up to the time of termination only, because he only worked for several months.

In respect of the claim for housing allowance of K 650.00 per week, I consider that the plaintiff is not entitled to that. His rented accommodation was being paid for by the defendant. His entitlement for K 650.00 per week for accommodation in my calculation is K33,800.00 per annum which works out at K2,816.66 per month. The invoices, Exhibit "S", "T", "U", "V", and "W" from Tok Investments Pty Ltd for the monthly rent of K 2816.67 utilizes the whole of the accommodation allowance therefore, the plaintiff is not entitled to claim that allowance.

Similarly, I am of the view that, the plaintiff has no valid claim for motor vehicle allowance. Clause 4.3 clearly stipulates that he is entitled to use a vehicle during working hours only. In any event, the evidence is that Avis Rent A Car was billing the defendant, but due to non-payment of hire by the defendant, the plaintiff’s hired vehicle was repossessed. Education costs have not been established so, again, the plaintiff is not entitled to that.

For these reasons, I am of the view that, the plaintiff’s claim cannot succeed. I consider that Clause 8.3 of the employment contract removes this claim from the usual claim for a breach of contract situation where the employee is entitled to claim damages for breach. The plaintiff’s termination of his contract pursuant to Clause 8.3 of contract of employment amounted to a resignation, therefore, it is my view that, where an employee resigns, he cannot claim breach of contract, and consequently, is not entitled to recover damages for breach of contract.

However, I reiterate that the plaintiff is entitled only to pro rata payment of the special allowance of K 10,000.00 and the professional subscription totalling K1,392.58 (Exhibit "O"). The pro rata basis, in my view, will only be for the period from the date of commencement to the date of termination or resignation. My calculations are that the pro rata rate of the special allowances is K 2,986.30 and the pro rata rate for the subscription is K 415.86 based on the 109 days, the plaintiff was actually employed. I consider that the plaintiff is only entitled to the total sum of K 3,384.16 and not K 521,518.91 as claimed in his writ.

The claim of K 6,000.00 for damages for vexation, frustration and mental distress is dismissed as having no basis in the light of my finding that the plaintiff resigned from his employment.

Since the plaintiff has only succeeded in getting a nominal amount, I order that the defendant pays only 50% of the plaintiff's costs on the District Court scale pursuant to Order 22 Rule 25 (1), National Court Rules. I allow interest at 8% from the date of writ to date of judgment.
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Lawyer for Plaintiff : Maladinas Lawyers
Lawyer for Defendant : Joseph Aisa Jr