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Kelau v Sinclair [2017] PGNC 193; N6864 (7 September 2017)

N6864

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 638 OF 2015

AMOS KELAU & 11 OTHERS
Plaintiffs

V

SIR BOB SINCLAIR
First Defendant

LAE BUILDERS & CONTRACTORS LIMITED
Second Defendant

Madang: Cannings J
2006: 21, 22 March, 3 May,
2017: 7 September

CONTRACTS – oral employment contracts – alleged breach of contract constituted by failure, upon termination of employment, to pay full amounts of final entitlements – cross-claim by employer against former employees – alleged breach of contract constituted by failure, upon resignation and payment of final entitlements, to vacate employer-provided accommodation.

The plaintiffs were longstanding employees of the second defendant, which ceases conducting business at the place where the employees were working. The second defendant gave the plaintiffs an option of transferring to other locations or resigning. The plaintiffs elected to resign. The second defendant paid the plaintiffs certain sums upon termination of employment. The plaintiffs disputed the sums paid, asserting that they were underpaid, and refused to vacate the accommodation provided to them by the second defendant until they were paid the full amounts claimed. The plaintiffs commenced proceedings against the second defendant and its principal shareholder and managing director, the first defendant, claiming damages for breach of contract (constituted by failure to pay them the full amount of final entitlements). The defendants denied the claim and filed a cross-claim, claiming damages for breach of contract (constituted by failure, upon resignation and payment of final entitlements, to vacate the employer-provided accommodation).

Held:

(1) The plaintiffs’ claims of underpayment of final entitlements were vague and unsubstantiated. The defendants proved that a reasonable and genuine attempt was made in consultation with the Department of Labour and Employment to pay each of the plaintiffs what was lawfully due. The plaintiffs’ claims were dismissed in their entirety.

(2) As to the cross-claim, the defendants established that it was an implied term of the contracts of employment that the plaintiffs would vacate the employer-provided accommodation once employment had ceased and final entitlements were paid and all employment issues were resolved. However it was not proven that that term was breached as the plaintiffs were not required to vacate while real questions remained about outstanding entitlements. The cross-claim was entirely dismissed. The parties were ordered to bear their own costs.

Cases cited
None.

STATEMENT OF CLAIM & CROSS-CLAIM

This was a trial on liability, the cause of action being breach of contract on both the statement of claim and the cross-claim.

Counsel

A Meten & J Morog, for the plaintiffs
N Y Tenige, for the defendants

7^th September, 2017

1. CANNINGS J: The plaintiffs were longstanding employees of the second defendant, Lae Builders & Contractors Ltd, which decided, in 2014, to wind down its operations in Madang, where the plaintiffs worked. The second defendant gave the plaintiffs an option of transferring to either of its two main locations – Lae or Port Moresby – or resigning. The plaintiffs elected to resign. The second defendant, in early 2015, paid the plaintiffs certain sums upon termination of employment. The plaintiffs disputed the sums paid, asserting that they had been underpaid, and refused to vacate the accommodation that had been provided to them by the second defendant until they were paid the full amounts claimed.
   
2. The plaintiffs in May 2015 commenced proceedings against the second defendant and its principal shareholder and managing director, Sir Bob Sinclair (the first defendant), claiming damages for breach of contract (constituted by failure to pay them the full amount of final entitlements). The defendants denied the claim and the second defendant filed a cross-claim against the plaintiffs, claiming damages for breach of contract (constituted by failure, upon resignation and payment of final entitlements, to vacate the employer-provided accommodation). A trial has been conducted on both the plaintiffs’ claim and the second defendant’s cross-claim. There are three issues:
   
1. Have the plaintiffs proven a cause of action as pleaded in the statement of claim?
   
2. Has the second defendant proven a cause of action as pleaded in the cross-claim?
   
3. What order should the Court make?
   
1. HAVE THE PLAINTIFFS PROVEN A CAUSE OF ACTION?
   
3. I find that the plaintiffs’ claims of underpayment of final entitlements are vague and unsubstantiated. The defendants have proven that a reasonable and genuine attempt had been made in consultation with the Department of Labour and Employment to pay each of the plaintiffs what was lawfully due. The plaintiffs’ claims are dismissed in their entirety.
   
2. HAS THE SECOND DEFENDANT PROVEN A CAUSE OF ACTION?
4. As to the cross-claim, the defendants have established that it was an implied term of the contracts of employment that the plaintiffs would vacate the employer-provided accommodation once employment had ceased and final entitlements were paid and all employment issues were resolved.
   
5. However, the defendants have failed to prove that that term was breached as the plaintiffs’ grievances were genuine and the implied term did not require that they vacate while real questions remained about outstanding entitlements. Furthermore this court granted an interim injunction in related human rights proceedings, HRA Nos 28-38 of 2015 on 22 June 2015, which restrained the eviction of the plaintiffs, and that order was later adopted as an order in the present proceedings. This reinforces the conclusion that the plaintiffs were not in breach of the implied term relied on by the second defendant. The cross-claim was entirely dismissed.
   

3 WHAT ORDER SHOULD THE COURT MAKE?

6. As this was a trial on liability, I will make an order for dismissal of the proceedings both on the statement of claim and the cross-claim. Some interim orders were made in the course of the proceedings which need to be dissolved. As both sides have failed to prove their cases, they will bear their own costs.
   

ORDER

(1) All relief sought in the statement of claim is refused and the proceedings in respect of the statement of claim are dismissed.

(2) All relief sought in the cross-claim is refused and the proceedings in respect of the cross-claim are dismissed.

(3) All interim orders made in the course of the proceedings, including the order of 22 June 2015 requiring the plaintiffs, subject to assessment, to pay water and electricity charges, are dissolved.

(4) The parties will bear their own costs.

Judgment accordingly.
_____________________________________________________________
Public Solicitor: Lawyer for the Plaintiffs
Gamoga & Co Lawyers: Lawyers for the Defendants