Kewa v Ilau [2021] PGNC 33; N8755 (3 February 2021)

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AND:
COMMANDER PETER ILAU, DMS, CBE, COMMANDER OF
PAPUA NEW GUINEA DEFENCE FORCE
First Defendant

AND:
MATHEW GUBAG, MP, DEFENCE MINISTER, IN HIS CAPACITY AS THE CHAIRMAN OF THE DEFENCE COUNCIL
Second Defendant

AND:
SIR MICHAEL SOMARE, CGMC, CH, MP, PRIME MINISTER, IN HIS CAPACITY AS THE CHAIRMAN OF THE NATIONAL EXECUTIVE COUNCIL
Third Defendant

DAMAGES – assessment of damages following successful application for judicial review.

Cheong Supermarket Pty Ltd v Pery Muro (1987) PNGLR 24
Leo Nuia v Benias Sabumei, Minister for Defence [1992] PNGLR 90
PNGBC v Jeff Tole (2002) SC694
William Mel v Coleman Pakalia & Ors (2005) SC790
Lupari v Somare (2008) N3476
Harding v Teperoi Timbers Pty Ltd (1988) PNGLR 128
Joe Naguwean v The Independent State of Papua New Guinea (1992) PNGLR 367
Peter Na’al v Michael Debege (2000) N1958
Peter Aigilo v The Independent State of Papua New Guinea (2001) N2102
Rodao Holdings Ltd v Sogeram Development Corporation Ltd (2007) N5485
Fred Angoman & Papaco No.1 Limited v Independent Public Business Corporation of Papua New Guinea & Glen Blake as the Managing Director of the Independent Public Business Corporation of Papua New Guinea (2011) N4363
Likui Trading Ltd v Joseph Selna (2011) N4530
Samot v Yame (2020) N8256
Colonel Joseph Mark Kewa v Commander Peter Ilau & Ors (2020) N8746

2. I adopt the brief background facts canvassed in the judgment on the application for judicial review (Colonel Joseph Mark Kewa v Commander Peter Ilau & Ors (2020) N8746) and these are restated here. The plaintiff was enlisted in the Defence Force on or about 17 July 1978 initially holding the rank of Lieutenant after graduating from the University of Papua New Guinea with a Bachelor of Education. He was deployed at the Murray Barracks Trade Training Unit for six months and later posted to the Goldie River Training Depot as an instructor with the Education Wing. On 18 February 1980, he was promoted to the rank of Captain and made Adjutant (Personnel Assistant) to the Commander. In 1981, the plaintiff was a senior instructor. On or about 1 December 1982, he was promoted to the rank of Major and posted to Igam Barracks, Officer Cadets Training Academy, Lae where he was an Instructor with the Academic Studies Wing and later held the post of Major-Admin. Between 1986 and 1989, the plaintiff was based at Defence Force Headquarters as Senior Officer Grade 2 to the Directorate of Training and later as Senior Officer Grade 2 to Special Projects. In 1989, he became the immediate Superior Officer to Lieutenant Colonel John Lytus (Rtd). In 1993, the plaintiff was appointed the Recruiting Officer for Officer Cadets. In 1995, the plaintiff was promoted to the rank of Lieutenant Colonel and posted to Canberra where he acted as Defence Advisor to Australia in the absence of a Colonel. In 1998, he was appointed as Director of Personnel Services. In 1999, he was promoted to the rank of Colonel and posted as Chief of Personnel and later as Acting Chief of Staff. In 2000, the plaintiff was appointed as the First Training Commander and established the Kerowil base then in Western Highlands Province, but now in Jiwaka Province. In 2001, he was posted to Murray Barracks as Chief of Personnel. On 2 May 2002, he was appointed as Defence Advisor to New Zealand for a period of four years pursuant to NEC Decision No.137/2002 notice of which was gazetted in National Gazette No.G77 dated 2 May 2002. By NEC Decision No.153/2004, the plaintiff’s appointment to the rank of Colonel was revoked and he was discharged from the Defence Force for being unsuitable. Notice of the revocation of the plaintiff’s appointment as Colonel in the Defence Force pursuant to the NEC Decision No.153/2004 dated 30 September 2004 was published in National Gazette No.G111 on 7 October 2004. A signal authorizing the plaintiff’s discharge from the Defence Force effective as of 30 September 2004 was raised on 14 October 2004.

3. I will now address the question of what amount of damages the plaintiff is entitled to based on the evidence presented to the Court and the principles on pleadings and assessment of damages: PNGBC v Jeff Tole (2002) SC694, William Mel v Coleman Pakalia & Ors (2005) SC790.

6. The parties’ affidavits were admitted into evidence by consent. No cross-examination was conducted by the parties.

WHAT AMOUNT OF DAMAGES IS THE PLAINTIFF ENTITLED TO?
7. At the trial on assessment of damages, the plaintiff claimed three categories of damages, but actually lumped them together into two claims and these are:

8. The defendants contended that nothing should be awarded for claims not specifically pleaded in the statement in support, but that the Court’s assessment should only be limited to the claim specifically pleaded in the statement in support for general damages for hardship and loss of entitlements.

9. The defendants also argued that apart from the sum of K115,520.80 which the plaintiff was entitled to receive as per the discharge entitlement calculations made by the Department of Personnel Management, nothing further should be awarded for loss of salary and entitlements as despite reaching retirement age of 50 years, the plaintiff remained on the payroll until 2012 when his salary was ceased and evidence shows that some other payments were made to the plaintiff during that period.

10. Order 16 Rule 7 of the National Court Rules allows the Court to award damages on an application for judicial review. That rule states:

“(1) On an application for judicial review the Court may, subject to Sub-rule (2), award damages to the applicant if -

(a) he has included in the statement in support of his application for leave under Rule 3 a claim for damages arising from any matter to which the application relates; and

(b) the Court is satisfied that, if the claim had been made in an action begun by the applicant at the time of making his application, he could have been awarded damages.

(2) Order 8, Division 2, shall apply to a statement relating to a claim for damages as it applies to a pleading.”

11. Order 16 Rule 7(2) clearly demonstrates that the rules on pleadings apply. In that regard, a plaintiff is restricted to what is claimed in the statement in support in a judicial review application: PNGBC v Jeff Tole (2002) SC694.

12. The plaintiff has included in his statement in support a claim for damages which was limited to an order for general damages to be assessed for hardship and loss of entitlements as a consequence of the first defendant’s action in failing to comply with the; NEC Decision No.137/2002; Court order of 18 July 2003; and the subsequent actions to suppress, tarnish his name and reputation and terminate his appointment. To my mind, the claim for general damages is not broad or wide ranging to accommodate other claims, but is limited to what is pleaded. I concur with the defendants that the claim for general damages is limited to hardship and loss of entitlements.

13. The plaintiff cannot claim exemplary damages as that is not a head of damages he specifically seeks in his statement in support. After the decision on the application for judicial review, the plaintiff did not seek leave to amend the proceedings to include a claim for exemplary damages: Lupari v Somare (2008) N3476. I therefore award nothing for exemplary damages.

14. The plaintiff submits that he is entitled to claim for overseas allowance of K4,516,074.54 for being posted to Australia and acting as Defence Advisor to Canberra for four years from 14 January 1994 to 27 March 1998. I reject the submission as, in my view, the claim falls outside the ambit of the head of damages claimed in the statement in support. In fact, this particular claim could have been a basis of a separate cause of action which could have been commenced by an ordinary civil action in the Court, but I think it is now statute-barred by virtue of Section 16(1) of the Frauds and Limitations Act. I award nothing.

15. The plaintiff was declared a persona non grata by the New Zealand Government on 18 July 2002, a decision not made by the defendants, so he was not eligible to take up the post of Defence Advisor to New Zealand: see Colonel Joseph Mark Kewa v Commander Peter Ilau & Ors (2020) N8746 paragraphs 38-42. He did not take up the post of Defence Advisor to New Zealand hence there was no formal engagement by way of a contract. It would, in my view, be an unjust enrichment on the part of the plaintiff if his claim for K8,052,168.48 for a period of two terms or any part thereof were to be allowed. I award nothing.

16. On 28 September 2020, I ordered, among others, that the plaintiff be accorded a proper discharge from the Defence Force.

17. Given the circumstances of this case, it is necessary to be reminded about how a member of the Defence Force is appointed or promoted to the rank of Colonel and removed or discharged: see Colonel Joseph Mark Kewa v Commander Peter Ilau & Ors (2020) N8746 for earlier discussion. The appointment and promotion of a member of the Defence Force to the rank of Colonel or above is made by the Head of State, acting on advice, pursuant to Section 18(1) of the Defence Act. That provision states:

“(1) Appointments and promotions of members of the Defence Force (other than appointments and promotions to the Office of the Chief of Defence Force) to the rank of Colonel or above, shall be made by the Head of State, acting on advice.”

18. Schedule 1.10(4) of the Constitution provides, among others, that, subject to subsection (5), where a Constitutional Law confers a power to make an appointment, the power includes power to remove or suspend a person so appointed. This would apply in the case of the appointment of the Commander of the Defence Force under Section 193(1)(f) and (3) of the Constitution.

19. The appointment of members of the Defence Force to the rank of Colonel are made under the Defence Act and there is no equivalent provision in the Defence Act.

20. Assistance is therefore sought from Section 36 of the Interpretation Act which states:

(1) Where a statutory provision confers a power to make an appointment, the power includes power, subject to Subsection (2), to remove or suspend a person so appointed.

(2) The power provided for by Subsection (1) is exercisable only subject to any conditions to which the exercise of the original power of appointment was subject.”

21. By this provision, the Head of State, acting on advice, has power to remove a member of the Defence Force holding the rank of Colonel such as the plaintiff in the present case. That was confirmed by Los, J in Leo Nuia v Benias Sabumei, Minister for Defence [1992] PNGLR 90 where he held that the Head of State is the prescribed authority to appoint or remove a member of the Defence Force to or from the rank of Colonel.

22. However, the power to remove would be exercisable only subject to any conditions to which the exercise of the original power of appointment was subject under Section 36(2) of the Interpretation Act.

23. Los J in Leo Nuia v Benias Sabumei, Minister for Defence [1992] PNGLR 90 also confirmed that there are at least two alternative ways by which a member of the Defence Force can have his service as a member terminated; one is under the Code of Military Discipline and the other is under the Defence (Period of Service) Regulation.

24. The Head of State, acting on advice, is authorised by Section 72 of the Defence Act to make regulations to enforce the various provisions of the Defence Act. Section 72(3)(a), in particular, authorises the Head of State to make regulations in relation to the enlistment, appointment, promotion and discharge of members of the Defence Force.

25. The period of service of a member of the Defence Force may be a fixed period or a period ending when a member attains a prescribed age. Section 32 of the Defence Act is relevant and it states:

(1) Subject to this Act, the period of service required of a member of the Defence Force is as prescribed by the regulations.

(3) A member of the Defence Force may re-engage, in such manner and on such conditions as are prescribed, for a further period of service, to commence at the conclusion of his current period of service.

(4) At the end of his period of service, a member of the Defence Force is entitled to be discharged with all convenient speed from the Force, except in time of war or during a defence stand-by, when the Defence Council may extend the period of service for a period ending not later than the end of the war or defence stand-by.”

26. A member of the Defence Force may be discharged from the Defence Force by virtue of Section 33 of the Defence Act which states:

A member of the Defence Force may be discharged from the Defence Force by such authority and on such grounds (if any) as are prescribed.”

27. The plaintiff last entered into a contract of employment with the fourth defendant, Independent State of Papua New Guinea on 9 June 1999 as a Colonel and to serve the State as Chief of Personnel and in such other capacity as determined by the National Executive Council on advice from the Defence Council from time to time for a term of three years effective on and from 25 January 1999 (Contract of Employment). The Contract of Employment comprised the Employment Agreement and the Standard Terms and Conditions for the Employment of Colonels in the Defence Force (1994) (the Standard Terms and Conditions for the Employment of Colonels). A copy of the Contract of Employment is annexed to Exhibit A as annexure B. One of the grounds for termination of employment under the Contract of Employment specified at Clause 19.1(f) of the Standard Terms and Conditions for the Employment of Colonels is “Normal Retirement”.

28. No further contract was entered into between the plaintiff and the State as after the expiry of the Contract of Employment, on 2 May 2002, the plaintiff was appointed as Defence Advisor to New Zealand for a period of four years pursuant to NEC Decision No.137/2002 notice of which was gazetted in National Gazette No.G77 dated 2 May 2002. The plaintiff was declared persona non grata by the host country, New Zealand on 18 July 2002 so his posting could not be implemented. His former substantive position of Chief of Personnel was already taken up by Colonel Mai so he was unattached: Colonel Joseph Mark Kewa v Commander Peter Ilau & Ors (2020) N8746, paragraphs 39-43. So effectively he has been made redundant for reaching his retirement age. The continuous payment of salary, etc to the plaintiff beyond his retirement age, although improper, was at the whim of his employer, the State.

29. The term “retirement age” is defined in Section 1 of the Defence (Period of Service) Regulation. It means, “in the case of an officer of the Defence Force – in accordance with the Schedule”.

30. Under Section 9 and Schedule to the Defence (Period of Service) Regulation, in the case of an officer holding the rank of Colonel, the retirement age is 50 years. Section 9 (Retirement of officers) is expressed in mandatory terms and it states:

Subject to the Act, an officer of a rank specified in Column 1 of the Schedule shall be retired from the Defence Force when he attains the age specified in Column 2 opposite that rank.”

31. Chapter 42, paragraph 42.4 of the Manual of Personnel Administration states that the compulsory retirement age of all officers is 55 years. The Defence Act and the Defence (Period of Service) Regulation would take precedence over the Manual of Personnel Administration. Hence, the retirement age of an officer holding the rank of Colonel is that specified in the Schedule to the Defence (Period of Service) Regulation which is 50 years.

32. The plaintiff was born on 29 April 1956. He would have reached his retirement age of 50 years on 29 April 2006. It is my view that it would be an unjust enrichment on the part of the plaintiff for him to have continued to receive salaries and other entitlements beyond his retirement age. In that regard, the plaintiff has not demonstrated on the balance of probabilities and to the Court’s satisfaction any statutory or legal basis as to why he should be entitled to receive salaries or other benefits or allowances beyond his retirement age. I concur with the defendants’ submissions that nothing further should be awarded to the plaintiff for loss of salary, entitlements or other benefits and increments thereto beyond his retirement age of 50 years as despite reaching retirement age, he remained on the payroll until 2012 when his salary was ceased and evidence shows that some other payments in connection with the plaintiff’s discharge from the Defence Force were made to him during that period.

34. Colonel John Rakatani, Chief of Personnel of the Defence Force states that since 2004, the plaintiff has refused to accept his discharge from the Defence Force. He also states that in 2005, the Department of Personnel Management calculated the plaintiff’s discharge entitlements at K115,520.80 and a cheque for that amount was raised for payment to the plaintiff: annexure B, Exhibit 1. He goes on to state that the payment was not made or that the Defence Force did not administer post- discharge administration as it was restrained from doing so by Court order of 26 May 2006: annexure C, Exhibit 1. Colonel Rakatani also states that other payments have been made to the plaintiff between 2015 and 2016 as is recorded in the plaintiff’s bank statements from his Bank of South Pacific Limited Kundu Account number 1000122586 showing deposits of; K132,098.80 on 16 July 2007; K20,640.19 on 29 August 2007; K73,898.20 on 21 December 2007; and K48,216.50 on 29 December 2010: annexures D1, D2, D3 and D4, Exhibit 1. An offer made by the defendants to settle for K101,051.27 on 22 May 2015 through a letter of that date from the Solicitor General to the plaintiff’s lawyers was refused by the plaintiff which was communicated through by his lawyers’ letter to the Solicitor-General dated 2 October 2015: annexures E and F, Exhibit 1.

35. Brigadier General Gilbert Toropo, Commander of the Defence Force, states that on 14 October 2014, he wrote to the plaintiff and requested his cooperation with the Defence Force Administration to process his outstanding entitlements, if any, and exit the Defence Force honourably: annexure A, Exhibit 2. In that letter, he noted, among other things, that; a sum of K132,098.80 being 100% DFRB Fund entitlements under Section 33A(2)(b) of the Defence Force Retirement Benefits Fund Act was paid to the plaintiff by Comrade Trustee BSP Cheque No.10828 dated 13 July 2007; and a BPNG Cheque No.3980 for K115,520.80 being Final Discharge entitlements was raised and paid to the plaintiff.

36. The plaintiff has successfully challenged the decision to discharge him in 2004 by his application for judicial review. He will therefore be only entitled to receive entitlements or benefits with increments lawfully due to him up to the date of reaching his retirement age of 50 years on 29 April 2006.

37. The Contract of Employment per Clause 1.7 of the Standard Terms and Conditions for the Employment of Colonels states:

“Upon completion of the Contract, a new Contract may be offered to the COLONEL in accordance with these Terms and Conditions, provided that where a new Contract is not offered, employment in the PNG Defence Force may continue subject to Section 27 herein, otherwise employment shall cease.”

38. It is uncertain as to which Section 27 of an Act or regulation is referred to by Clause 1.7. Section 27 of the Defence Act deals with “Command of officers of co-operating and other forces” and is of no relevance here. There is no Section 27 under the Defence (Period of Service) Regulation. The Contract of Employment inclusive of the Standard Terms and Conditions for the Employment of Colonels does not have a Section or Clause 27.

39. In the absence of a new contract of employment having been offered by the State on the expiry of the Contract of Employment either as a Colonel in a position within the Defence Force or as Defence Advisor to New Zealand, for purposes of this exercise, the terms and conditions of the expired Contract of Employment are deemed to apply. Hence, the suggestion by the plaintiff to be guided by the improved terms and conditions of employment contained in Schedule 1 of the Salaries & Remuneration Commission Determination for Colonels in the Defence Force, a copy of which is annexed to the contract of employment of Colonel Walter Enuma dated 30 July 2019 is rejected: annexure C, Exhibit A.

40. The document entitled Manual of Personnel Administration, Retrenchment Benefits Calculation Summary Form (annexure B, Exhibit 1) contains the summary of the calculation of the entitlements the plaintiff would have received as at 29 December 2005 and I set out the summary again in the table below.

ITEM	PAYMENT CATEGORY	GROSS	TAX	NETT
1.	MILON	K9,616.44	K1,442.47	K8,173.97
2.	MILOL	K8,547.94	K1,282.19	K7,265.75
3.	MILOF	K34,619.17	K2,859.28	K31,759.89
4.	EX GRATIA	K59,237.25	K8,885.59	K50,351.66
5.	CONTRACT GRATUITY	NIL	NIL	NIL
6.	REPATRIATION EXPENSE	TO BE PAID BY PNGDF MOVEMENTS UNIT
7.	RESETTLEMENT ALLOWANCE	K3,500.00	NIL	K3,500.00
8.	STATE MONIES OWING	NIL	NIL	NIL
	TOTAL PAYMENTS DUE	K115,520.80	K14,469.53	K101,051.27

41. From the summary, the gross payable to the plaintiff as at 29 December 2005 was K115,520.80. The nett payable after reduction by tax of K14,469.53 was K101,051.27. The defendants conceded during submissions that this payment was not made to the plaintiff.

42. The above calculation does not capture the amounts payable under the payment categories specified for a period of about four months between 29 December 2005 and 29 April 2006. I have not been assisted or properly assisted by the parties as to how the calculation for this period can be made. In the circumstances, I will award a global amount of K116,000.00 which I think is reasonable. Repatriation expense will still have to be met by the Defence Force Movements Unit.

43. The plaintiff claims or submits that he is entitled to K2,534,590.96 for loss of pay, leave and interest between 2012 and 2020. It is my view that the claim is not justified as without any statutory or legal basis, the plaintiff having reached his retirement age of 50 years on 29 April 2006.

44. The plaintiff also claims K87,827.00 for educational fees and expenses for children. The details of this claim are set out in paragraphs 83 and 84 of Exhibit A. The Court has not been referred to the legal basis for this claim. This claim is rejected as a result. I award nothing.

45. Damages for distress, frustration, vexation, injured feelings, hardship, etc, are part of general damages: Harding v Teperoi Timbers Pty Ltd (1988) PNGLR 128; Joe Naguwean v The Independent State of Papua New Guinea (1992) PNGLR 367. I agree that damages should be awarded to compensate the plaintiff for the anxiety, distress, stress and hardship caused to him by the actions of the defendants. By way of comparable awards, I have considered the awards made in Harding v Teperoi Timbers Pty Ltd (1988) PNGLR 128 (K1,000.00); Joe Naguwean v The Independent State of Papua New Guinea (1992) PNGLR 367 (K1,000.00); Peter Na’al v Michael Debege (2000) N1958 (K15,000.00); Peter Aigilo v The Independent State of Papua New Guinea (2001) N2102 (K20,000.00); Rodao Holdings Ltd v Sogeram Development Corporation Ltd (2007) N5485 (K50,000.00); Fred Angoman & Papaco No.1 Limited v Independent Public Business Corporation of Papua New Guinea & Glen Blake as the Managing Director of the Independent Public Business Corporation of Papua New Guinea (2011) N4363 (K5,000.00); Likui Trading Ltd v Joseph Selna (2011) N4530 (K15,000.00); and Samot v Yame (2020) N8256 (K6,000.00). I am of the opinion that an award of a sum of K25,000.00 is reasonable in the circumstances of this case. I will therefore allow K25,000.00 for this claim.

47. I therefore award the plaintiff the sum of K141,000.00 as total general damages.

48. The plaintiff claims interest at 8% yearly. The Judicial Proceedings (Interest on Debts and Damages) Act, Chapter 52 was repealed and replaced by the Judicial Proceedings (Interest on Debts and Damages) Act 2015 which came into force after a Notice of Commencement dated 9 March 2016 signed by the Head of State was published in National Gazette No.G138 on 16 March 2016. This action was commenced on 13 May 2005. The awarding of interest under the repealed and current legislation is discretionary: Cheong Supermarket Pty Ltd v Pery Muro (1987) PNGLR 24. Interest under the repealed and current legislation may be ordered to apply either for the whole or part of the period between the date when the cause of action arose and the date of judgment. In the exercise of my discretion, I will award interest at the rate of 2% yearly for a total of 15 years which is K42,300.00. Interest will run on the award at 2% yearly from the date of judgment until paid.

Judgment and orders accordingly.
_______________________________________________________________

National Court of Papua New Guinea

Kewa v Ilau [2021] PGNC 33; N8755 (3 February 2021)