Walker v Zurich (Australia) Insurance Ltd

[2000] QSC 345

IN THE SUPREME COURT

[2000] QSC 345

REGISTRY:  TOWNSVILLE

NUMBER:      S857 of 1998

Plaintiff Adrian Walker

and

First Defendant                    Zurich Australia Insurance Limited

and

Second Defendant              Zurich Pacific Insurance Pty Ltd

DECISION -  CULLINANE J.

DELIVERED THE 21^st DAY OF SEPTEMBER  2000

1. The Plaintiff has instituted proceedings against both Defendants claiming damages for wrongful dismissal.

WHO WAS THE EMPLOYER?

1. The Plaintiff sued both Zurich Australia Insurance Limited and Zurich Pacific Insurance Pty Ltd and contends that a finding should be made that he was employed by both.  The Second Defendant admits that it was the employer.  Whilst there are a number of documents (including the contractual document) in which  various names of the Zurich group are used, I think that it is clear that the Second Defendant was the employer.  The Applicant applied for the position of deputy manager of the Second Defendant and received payment of his salary from the Second Defendant.  I find that the Second Defendant was his employer and I will in this judgment refer to the Second Defendant as "the Defendant".

THE PLAINTIFF AND THE DEFENDANT'S NEW GUINEA OPERATIONS.

1. The Plaintiff is 49 years of age.  He is married but he and his wife separated in 1986. He commenced employment with the Zurich group in October 1988 in North Queensland having had some previous experience in insurance and remained with Zurich in North Queensland following a merger between Zurich and other insurers.  In 1996, he applied for the position of deputy manager of the Defendant in Papua New Guinea, a position which would be based in Port Moresby.  He was appointed to this position and moved to Port Moresby in August 1986.  The terms of his employment are contained in a contract which is item 26 in Exhibit 1 and I will return to this in the course of these reasons.

1. The manager of the Second Defendant's operations in New Guinea at this time was Mr Roger Green who had just been appointed to take over this role.  He had previously occupied the position of deputy manager. The staff of the office consisted upon the Plaintiff's arrival of Mr Green and the Plaintiff who were both expatriate Australians and 15 other members of the staff, all nationals of Papua New Guinea. 

THE SUGGESTED CULTURE OF THE COMMUNITY SO FAR AS IT CONCERNED A RELATIONSHIP OF THE KIND WHICH THE PLAINTIFF SUBSEQUENTLY FORMED.

1. It was the case for the Defendant that the cultural values of the community which the Plaintiff joined upon his move to Port Moresby were such that a relationship of the kind which the Plaintiff subsequently formed with Mrs Neville (to which I will shortly refer) was offensive to community standards and likely to incur the disapproval of the community.

1. There was some relatively brief evidence on this subject and the Defendant relied upon the Adultery and Enticement Act of 1988.  The Plaintiff's evidence was that de facto relationships were not unusual and he gave evidence that a number of members of the Defendant's staff were involved in de facto relationships.  In cross-examination it was suggested to him that some of these people had been married traditionally.  The Plaintiff said that he did not understand that was the case and I did not have any evidence that this was the case.  I accept the Plaintiff's evidence on this subject as I do his evidence that de facto relationships were not unusual generally in the community.

1. Mr Robson, who was at the time the general manager of Zurich International gave some very brief evidence of the indigenous culture as he observed it and in this context referred to the modest bearing of the girls in the Defendant's office.  He had had a discussion with the Plaintiff about some difficulty another person had had as a result of a relationship he had entered into with a national and related a conversation which he acknowledged was a casual conversation in which the Plaintiff mentioned something about the possibility of trouble  there if a person became involved with a national lady.  The Plaintiff was referring, it would seem, to the precocious behaviour of some village girls.

1. Mr Green gave evidence that he had had a discussion with the Plaintiff in which there was some general reference to the customs of Papua New Guinea and of things to be aware of and of the need to conduct oneself with some prudence.  He was asked whether he had given the Plaintiff any particular advice in relation to relationships and his answer was: 

"Oh, just to be careful.  Certainly to be careful of creating relationships which could draw attention".

1. I am satisfied from the evidence which the Plaintiff gave that Mr Green was aware at an early time that he was involved in a relationship and that he was told the identity of the person concerned and that he raised no issue with the Plaintiff about it.  Mrs Neville is a woman of mixed race with an Australian father and an indigenous mother and her husband is an expatriate Australian who had been born in Papua New Guinea.  The husband's father, as an expatriate Australian, was a long standing resident.  The claim that there were in Papua New Guinea some cultural values which disapproved of relationships outside the bonds of marriage is in my view not borne out by the evidence and there is nothing to suggest that a relationship of the kind which the Plaintiff and Mrs Neville engaged in offended any particular cultural or customary practices or mores.  The Defendant was inclined at one time to suggest that the fact that Mrs Neville was married to a member of an influential and powerful expatriate  family was likely to create special difficulties in the community given the prevailing attitudes.  I will shortly deal with the manner in which the Neville family reacted to the relationship and the concerns this gave rise to in Mr Green.  However on my assessment of it, the evidence provides no support for the claim that this reaction was what was to be expected to such a relationship in the context of the moral, social or cultural values or attitudes of the community.  So far as the Adultery and Enticement Act of 1988 is concerned this abolished all common law rights in respect of such matters and substituted a statutory right on the part of a spouse to claim a maximum sum of K1,000 in the case of adultery (something which is taken as including all acts of adultery committed between the same persons before the commencement of the action).  The effect of the legislation it would seem to me is to substitute a limited statutory right for any existing common law rights.  The act itself cannot in my view be taken as providing any significant support for the Defendant's claim in this regard.  I am satisfied that there is no validity in the claim that the relationship between the Plaintiff and Mrs Neville offended accepted cultural values.  On the contrary, I am satisfied that relationships between persons not married to each other were not unusual.  It is worth mentioning that earlier the Plaintiff had formed an association for a short period with a national woman who worked for an insurance broker.  Mr Green was aware of that and raised no objection.

THE PLAINTIFF AND MRS NEVILLE

10. The Plaintiff first met Mrs Neville at a function at the Royal Papua Yacht Club in early 1998.  She was with some friends and the Plaintiff was there with some friends.  She appeared to be on her own.  Approximately a week later he met her for the second time at a luncheon that he had been invited to.  He said the impression he had at that time was that she was not in a relationship or if she was married that she was separated from her husband.  He was later to ascertain that this was the case.  After that he invited her to lunch and the relationship developed to the stage where she would occasionally stay overnight at his unit and sometimes for a few days.  The relationship was conducted openly and outside of working hours.  I am satisfied that the relationship developed to the stage where each formed a strong attachment to the other.  Although Mr Green said the Plaintiff  told him that he was in a relationship with a woman who was married with children (to which he replied something to the effect that the Plaintiff should be careful) he denied knowing the identity of the woman concerned.  The Plaintiff said that he did tell him who he was in the relationship with and as I have already said, I accept his evidence in this regard.  Mrs Neville had two children by her marriage to her husband.  These children were living with her husband.  There was some reference to some other children who were apparently the children of a sister of Mrs Neville but it is not clear from the evidence whether they were with Mrs Neville or whether they were somewhere else and it does not seem to be of critical significance to the issues I am concerned with. 

THE NEVILLE FAMILY

11. Mr Greg Neville was the estranged husband of Mrs Brenda Neville.  He conducted a building business.  His brother, Timothy Neville, was a former politician having been the district governor of the Milne Bay Province.  He conducted a building business.  There was at least one other brother who was mentioned in evidence.

12. It appears that the family was a long standing one of considerable influence in Papua New Guinea.  There was evidence that the family had a reputation for threatening or violent behaviour towards those who crossed it in one way or another and evidence which suggested that the Neville family  had the capacity to have the police and other authorities act in furtherance of their interests.  Whilst Tim Neville was known to, or by the Plaintiff prior to this and was well known to Mr Green the reputation to which I have just referred would seem to have been something of which Mr Green only became aware on the morning of the 27^th April 1988.  He was by that time aware of threats which had been made against the life of the Plaintiff and was shortly to have personal experience of the making of such a threat. I am satisfied that what Mr Green learnt of the Neville family's reputation on the 27^th April and what occurred in his presence on the morning of 27^th April, taken with the earlier events on the weekend were critical factors in the Defendant's decision to dismiss the Plaintiff.  Mr Williamson, an insurance broker, who was in Port Moresby at about this time gave evidence of speaking to the Plaintiff at a function at the Airways Hotel in which some reference was made to the relationship between the Plaintiff and Mrs Neville, who was a friend of the Williamsons.  He says that he told the Plaintiff that the relationship wasn't a very smart idea and that he should be fairly cautious about continuing with it "knowing the family that the Nevilles were".  It is not clear when this occurred but it must have been before 27^th April. 

13. This brief conversation, which did not involve any elaboration by Mr Williamson of his reasons for the remark cannot in my view be regarded as something which required the Plaintiff to discontinue the relationship out of respect for his relationship with the Defendant or as amounting to misconduct within the context of his contract with the Defendant .

14. Mr Tim Neville occasionally obtained cover from the Defendant. This was in the nature of marine one-off transit cover arranged through a broker.  His company at one time had been a target for further business but was no longer so at the relevant time.  The evidence satisfies me that the Plaintiff's relationship with Mrs Neville did not place at risk any particular business or client relationship and that it was not unreasonable for him to conduct such a relationship having regard to considerations of this kind.

THE EVENTS OF 24-28 April

15. On the evening of 24 April 1998 the Plaintiff and Mrs Neville attended a function at the Royal Papuan Yacht Club.  Mr Tim Neville was at the Yacht Club and Mr Green also attended.  The Plaintiff did not speak to Mr Neville but Mr Green did.  In this conversation, Mr Neville told Mr Green that the family was concerned by the relationship between the Plaintiff and Mrs Neville and that it was the view of the family that the problem would be fixed. Mr Green subsequently spoke to another acquaintance who knew the Neville family.  This conversation took place at the same function.  This man told Mr Green that the Neville family and the family of Mrs Neville were going to meet over the weekend and discuss the relationship and sort the problem out.  As I have already mentioned Mrs Neville's father was an Australian living in Australia and her mother was an indigenous woman also living in Australia.

16. Late that evening after the Plaintiff and Mrs Neville and a friend of Mrs Neville had returned to the Plaintiff's unit the Plaintiff received a telephone call in which a threat was made against his life if he did not leave Papua New Guinea by Sunday evening.  The Plaintiff immediately contacted Mr Green and arrangements were made for the three of them to go to Mr Green's place where they spent the balance of Friday night and until lunch time on Saturday.  There were some conversations regarding the relationship between  the Plaintiff and Mrs Neville in which Mr Green raised the question  whether the relationship could be pursued in Papua New Guinea safely.  Both the Plaintiff and Mrs Neville made it clear that the relationship was a serious one and they wished to maintain it.

17. On Monday morning the Plaintiff attended at the office of the Defendant and in the course of a discussion between he and Mr Green, Mr Green indicated that he would make some enquiries to see what he could find out about the situation.  He did so and it appears he spoke to an acquaintance of the Nevilles who told him that there had been a meeting and that the matter was a very serious one.  He conveyed to Mr Green that he should take the matter seriously and that steps should be taken to ensure the safety of the Plaintiff.  He also conveyed to Mr Green that the matter should be taken seriously because the Nevilles had "done it before".  Mr Green formed the impression that the Plaintiff was at some serious risk.  The Plaintiff says and I accept that in the course of this conversation he was told that the police had become involved and that they would be coming to the office to serve some papers on him.

18. At that time it was agreed that the Plaintiff should apply for some leave and leave the country for a period.  Whilst Mr Green gave evidence that he had not been told anything which suggested that Mrs Neville was in danger, the Plaintiff believed that she was in the same sort of danger that he was and she was desirous of leaving Papua New Guinea with the Plaintiff.

19. She had confirmed the assessment that Mr Green had made that the Neville family were capable of inflicting physical harm upon the Plaintiff.  I accept that Mr Green advised the Plaintiff that it would be better if he left and that Mrs Neville didn't.  There was some discussion about the future of the relationship as there had been earlier in the weekend.  I am satisfied that the Plaintiff made it clear that he wished to maintain the relationship and also that he and Mrs Neville would leave Papua New Guinea together for a short period.  Mr Green during this time emphasised that he was concerned about the safety of the Plaintiff and I am satisfied that the Plaintiff was concerned about the safety of Mrs Neville who was anxious to leave with him.

20. The Plaintiff booked two airline tickets with open returns for himself and Mrs Neville.  He did this on the Defendant's account.  This is a source of complaint by the Defendant.  This was done through the company accountant and a letter was written on company stationery to the travel agent.  The Plaintiff says that this was not an uncommon practice and that it was intended to recompense the company for the cost of Mrs Neville's airfare. 

21. Shortly after this discussion and after the Plaintiff and Mrs Neville left, Mr Greg Neville (the husband of Mrs Neville) and another brother, Mr Peter Neville arrived at the Defendant's premises with a superintendent of police.  The superintendent of police intended to serve upon the Plaintiff a copy of a summons under the Adultery and Enticement Act and when it was found that he was not there, it was left with the receptionist who signed for it.  Mr Greg Neville and Mr Peter Neville entered the board room with Mr Green.  Mr Greg Neville appeared to be agitated.  He told Mr Green that the families were in Port Moresby and that they wanted the matter sorted out.  Mr Green informed him that Mr Walker would be leaving the country as soon as possible.  He says that Mr Neville said "If Mr Walker leaves the country, he will leave the country in a bodybag". 

22. Mr Green suggested that if the concern was that Mrs Neville was departing Papua New Guinea with the Plaintiff he (Mr Green) would attempt to ensure that if any air fares had been booked for Mrs Neville through the company he would retract them so that she couldn't fly on that particular ticket and he would advise Mr Greg Neville about this later in the day.  It is obvious from this that he was aware that it was likely that the tickets would have been booked on the company's account.

23. When I asked whether he reported this conversation to the superintendent of police he expressed the view that there would be no point in doing that because the police were there to further the interests of the Neville family.  Arrangements were made through a firm of solicitors for Mr Walker and Mrs Neville's security until they were ready to depart.  Mr Green established that the tickets had been booked on the company's account and cancelled Mrs Neville's ticket.  He told the Plaintiff of this and  the Plaintiff informed him that Mrs Neville would make her own arrangements about obtaining a ticket.  He also called Mr Greg Neville and told him that he had taken Mrs Neville's ticket.

24. It is plain that Mr Green regarded himself as having entered into an agreement with Mr Greg Neville that the safety of the Plaintiff until he left the country would be guaranteed if he didn't travel with Mrs Neville.  He was later to be accused by Mr Greg Neville of a breach of this agreement because Mrs Neville did in fact leave the country.  The Plaintiff and Mr Green spoke about this arrangement and about the matter generally and I have no doubt that Mr Green tried to persuade him that his interests would be best served if he left without Mrs Neville.  The Plaintiff indicated that he wanted Mrs Neville to come with him, something which I am convinced was motivated both by the desire of himself and Mrs Neville to continue with their relationship and the Plaintiff's concern about Mrs Neville's safety. 

25. Mr Green then received two telephone calls.  Both were from a European but he does not know who made the calls.  In the first he was asked whether a particular vehicle was the property of the Plaintiff or the property of the Defendant.  When he told the caller that it was the property of the Defendant  he was told that had it been the property of the Plaintiff it would have been torched.  In the second call, he was asked about a boat.  This boat was the property of the Plaintiff.   Mr Green immediately  made some attempt to have people alerted so that steps could be taken to secure the boat.

26. That evening Mr Green spoke to Mr Robson and  following this discussion he formed the view that the best course to take was to dismiss the Plaintiff.

27. I should mention that the copy of the summons had been forwarded to solicitors who had been engaged for the Plaintiff who was aware prior to leaving the country of the summons and of its return date.  I am also satisfied that although the Plaintiff had originally booked an open return he had, prior to leaving Papua New Guinea, booked a return flight for a date approximately two weeks or so later.  The evidence satisfies me that he intended at all times to return.

28. The following day when the Plaintiff went to the airport to depart for Australia, he was questioned by immigration officers and the questioning continued beyond the time of the departure of the plane.  Members of the Neville family including Mr Greg Neville were there together with some associates.  Later in the day the Plaintiff was able to depart to another destination in Australia.  Before he did so Mr Green arrived.  Mr Green says that he intended to tell the Plaintiff of his dismissal at that time but before he could do so a police officer entered the room for the purposes of serving a copy of the summons personally upon the Plaintiff.  The Plaintiff says that the police officer attempted to persuade him to remain in Papua New Guinea. 

29. The next day the Plaintiff received a telephone call from Mr Green in which Mr Green informed him that he had been dismissed.  I accept the Plaintiff's evidence that Mr Green adopted a hostile tone in this conversation.  This was the first sign of hostility by Mr Green towards the Plaintiff.

30. Before me Mr Green suggested that he believed the Plaintiff was not going to return and that in effect he had abandoned his employment.  This is one of the grounds relied upon by way of defence.  Mr Robson says he was led to believe that this was the case.  This it seems clear is  because of what Mr Green told him.  I am satisfied that the Plaintiff at all times intended to return and that at no time did Mr Green have any reason to believe otherwise.

THE DISMISSAL

31. I have already referred to the conversation between Mr Green and the Plaintiff on 29 April.  The Defendant under Mr Green's hand sent a letter to the Plaintiff dated 29 April 1998.  This is Item 40 in Exhibit 1:

"Dear Adrian,

This letter serves to confirm my verbal advise to Carter Newell on the evening of the 27^th April 1998 and to you personally over the phone on the 29^th April 1998.

Your termination is as a result of a breach of Clause 17 of your contract of employment with Zurich Pacific.

The specific breach's are serious misconduct and neglect of duty.  It was your duty not to place the ongoing viability of the business or Zurich Pacific's reputation in jeopardy at all times during the course of your employment with Zurich Pacific.  In addition to this, is the possibility that were you to return to PNG you may face legal charges taken out against you under the Adultery and Enticement Act.

If, because of your conduct the Department of Labour and Immigration withdraw your Work and Residency permit's you will not be able to re-enter Papua New Guinea in which case you will be prevented from carrying out your duties in accordance with your contract.

Your actions have created a negative view to Zurich Pacific from some quarters of the business community in Port Moresby and whilst they will be dealt with in a professional manner it was a focus the company could well have done without.

I will be informing the appropriate authorities of your termination and suggest that should you wish to appeal my decision then you do so within 10 days.

Zurich Pacific will arrange for the packing and shipment of your personal belonging at our cost as soon as you inform us of a forwarding address

Yours sincerely
Zurich pacific Insurance Limited
R. Green".

32. It is to be noted that there is no reference in the letter to the claim that the Plaintiff abandoned his employment nor is there any reference to the Plaintiff having improperly booked a ticket for Mrs Neville through the company.  The letter has a significant hypothetical component to it.

33. I am satisfied from the evidence as a whole that the attitude of Mr Green towards the Plaintiff changed from one of concern for his safety to one of hostility to him following the events of the morning of Monday 27 April.  Mr Green, having learned something of the reputation of the Neville family and having had the experience of the visit by Mr Greg Neville and Mr Peter Neville with the superintendent of police became alarmed.

34. As I have said, Mr Green was of the belief that the police were acting in the interests of the Nevilles and that there would be no point in referring these matters to them.  It is not difficult to understand the alarm which Mr Green would have felt nor is it difficult to understand why he might have concluded that the continuing employment of the Plaintiff with the Defendant - particularly given the Plaintiff's and Mrs Neville's determination to continue their relationship - might subject the Defendant and its staff to further hostility or aggression on the part of the Nevilles and that the Defendant's interests could suffer damage.

35. It is a sad reflection upon the then state of law enforcement in Papua New Guinea, at least as Mr Green perceived it,  that he should take the view he did.  The dismissal of the Plaintiff was the line of least resistance but in my view no reasonable person would regard the extreme reaction and unlawful behaviour  as something for which the Plaintiff should be held responsible.

36. The case is not one where a person has conducted a relationship which inevitably would be disruptive of his place of employment either because it involved another member of the staff or though not involving a member of the staff, involving a relationship which by its nature impacted upon the normal relationships between an employee and his employer or co-employees.

37. The case involves one in which two people, both separated and conducting lives separate from their spouses formed a relationship which they conducted in their own  time and which developed to the stage where each regarded it as important to them and as one each wanted to continue.

38. It was at one time somewhat faintly contended that the Plaintiff's relationship with Mrs Neville interfered with the performance of his duties because it meant he was able to lunch less frequently with Mr Green and discuss company matters.  Mr Green did not suggest that the Plaintiff performed his work other than adequately and conceded that the Plaintiff was free to use his lunch hours for his own purposes.  In any case it would seem that some difficulties Mr Green was experiencing had led to a reduction in the number of these lunches.

THE ISSUES

39. The Defendant relied upon  three grounds as justifying its dismissal of the Plaintiff.

40. The first is that the Plaintiff engaged in serious misconduct which warranted the termination of the contract pursuant to clause 17 of the contract.  This provides as follows:

"The company may choose to dismiss you at any time with no period of notice and not recompense you in lieu of notice for:

(a)neglect of duty

(b)serious misconduct

(c)an indictable criminal offence"

41. The second ground upon which the Defendant relies is that the Plaintiff abandoned his employment contract.  I have already dealt with this matter.  Mr Green encouraged the Plaintiff to leave for a short time and I am satisfied that the Plaintiff intended to return within a relatively short time.  I am satisfied that there is no basis for Mr Green's claim that he formed the contrary impression.

42. The third ground is based upon what is said to be an implied term of the contract namely that the Plaintiff would not do anything to destroy the relationship of trust and confidence between he and the Defendant.  The Defendant relies upon the same conduct in support of its claim that there was a breach of such an implied term as it does in relation to the claim of serious misconduct.

43. I take the relevant principles in a case of this kind to be as laid down in cases such as Laws -v- London Chronicle (Indicator Newspapers) Ltd (1959) 2 All E.R.285and North -v- Television Corp Ltd (1976) 11 FCR 599.

44. See also W.R. Knott -v- Carlton and United Breweries  (1958) 13 IIB 212 on the subject of serious misconduct.  In a case of this kind the misconduct relied upon must be reprehensible and deserving of censure.) 

45. In Law's case, Denning M.R. said at page 287 when dealing with the type of conduct which would at common law justify the summary determination of a contract of employment:

"To my mind, the proper conclusion to be drawn from the passages which I have cited and the cases  to which we were referred is that, since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service".

46. In its written outline the Defendant pressed a number of matters which it was said cumulatively constituted serious misconduct within the terms of the contract.  The first was the maintenance of the relationship with Mrs Neville. It was contended that the evidence should lead to the conclusion that community standards in Papua New Guinea are such that adultery is viewed with much greater disfavour than it is in Australia and would or might reflect adversely upon the Defendant.  It was said that this was a fortiori where the other person was "the spouse of a member of an influential and a powerful family in Papua New Guinea".  I have already dealt with the question of community standards. The evidence is quite unconvincing that the standards contended for by the Defendant existed at least in the community where the Plaintiff and Mrs Neville lived and I do not think the matter is affected by the right to claim a limited sum by way of damages under legislation for adultery.  The fact that Mrs Neville was the estranged wife of a member of an influential and powerful family of Australian expatriates in Papua New Guinea is in my view on the evidence not relevant to this issue.

47. The second matter raised in the written outline is that the Plaintiff disobeyed a direction to return to Australia without Mrs Neville. The evidence simply does not support the claim that any such direction was given.  Mr Green counselled the Plaintiff that it would be better if he did so.  I have already referred to the extraordinary arrangement which he seems to have made with Mr Greg Neville and of which he told the Plaintiff.  However, there is nothing to suggest that the Plaintiff was given a direction by Mr Green  as his superior that he was to return without Mrs Neville.  The Plaintiff was concerned that Mrs Neville's safety was at risk and he and Mrs Neville both desired that she accompany him. 

48. The third matter relied upon was the use of the corporate account to purchase Mrs Neville's ticket.

49. The Plaintiff said that it was not an unusual practice for staff to book a ticket on the company's account and then pay for it subsequently.  I accept that this was the case and it would seem clear from what Mr Green said to Mr Greg Neville that he anticipated that this is what would have been done when he undertook to do what he could to prevent Mrs Neville from leaving Papua New Guinea.  What was done was done openly and in circumstances of some urgency.  It is impossible to regard this as having the necessary quality to justify instant dismissal.  Moreover I think that it is at least arguable that Mrs Neville was his partner at the time within the meaning of clause 10 of the contract.  The Plaintiff was, I am satisfied, taking leave and may have been entitled to call in aid the contractual entitlement for which clause 10 provides. It is not necessary to form any final conclusion about this because I do not accept that the conduct amounted to serious misconduct.

50. Another matter relied upon by the Defendant was that the Plaintiff's conduct was such that he had placed himself in the position where he could not return to Papua New Guinea without there being a real risk of physical harm to him.  It was said that the reaction of the Neville family  was not unusual or out of the ordinary in the environment in which the Plaintiff was employed.   It was said that the Plaintiff had been warned about the risks of his relationship but continued with it.  The latter is a presumably a reference to the evidence of Mr Williamson but I am satisfied that there was nothing in the brief comments that he made which would have warranted the Plaintiff terminating the relationship because of any duty to the Defendant .  I reject the claim that the extreme action of the Neville family or those acting on its behalf over the period from the 24^th to the 27^th and the 28^th April is something for which the Plaintiff should be held responsible.  There is no evidence to support the contention that such a reaction was not unusual or out of the ordinary in the environment in which the Plaintiff was employed and such a claim in my view is without foundation.

51. I am satisfied that there was no justification for the Defendant  to determine the Plaintiff's contract summarily upon the grounds of serious misconduct.

52. As to the implied term, I do not see any reason why such a term should be implied into the contract between the Plaintiff and the Defendant so as to provide a basis for the summary determination of the contract in the event of the breach of such a term when the parties have expressly stipulated the grounds upon which the contract might be determined summarily.  The implication of such a term is not necessary to give business efficacy to this contract (which contains express stipulations of the Plaintiff's obligations­ to the Defendant - see Clause 16) and would not in my view accord with the approach to be found in cases such as B P Refinery (Westernport) Pty Ltd -v- Shire of Hastings 52 ALJR 20 and Codelfa Construction Pty Ltd -v- State Rail Authority of NSW (1982) 149 CLR 337.

53. No authority was cited in support of the claim that there is such an implied term.  However on the assumption that there is such an implied term I reject the suggestion that the Plaintiff's conduct in the respects complained of, (which are as I have said, the same as those relied upon in support of the serious misconduct ground) amounted to a breach of such a term.  Again, the argument advanced would involve ascribing to the Plaintiff responsibility for the actions including criminal conduct of the Neville family and anyone acting on its behalf.

54. In my view the Plaintiff has made out his claim that he was unlawfully dismissed.

55. The Plaintiff's contract was for a period of three years commencing on Monday 19^th August 1996.  Clauses 1, 2 and 16 of the contract provide respectively as follows;

1.Commencement

Your contract will commence on Monday 19 August 1996, and is initially 

for a period of three (3) years.  This may be extended by mutual

agreement.

2.Termination

One month's notice of termination of service shall be given by the Company or the staff member. Standard disciplinary and warning procedures apply.

16.Resumption of Duties

Provided that you perform satisfactorily throughout the period of service, employment will be offered with the Group in Australia on completion of the contract."

56. The Plaintiff's claim for damages was based upon the proposition that he would have worked for the Defendant until the expiration of the three year term and that it is then likely he would have worked for a further three year term for the Defendant.  There is also a claim made for lost long service leave on a  pro rata basis.  In the case of the alternative scenario, namely that the Plaintiff would have returned to Australia and been employed by the Defendant pursuant to clause 16, it is conceded that since the time when he would have returned to Australia, the Plaintiff's earnings have exceeded what he would have earned with the Defendant had he been employed by it.

57. Much of the argument centred upon clause 2 of the contract.  For the Defendant, it was contended that it gave to each party the right to determine the contract upon giving one month's notice to the other.  The Plaintiff on the other hand argued that whilst this was the case so far as the Plaintiff was concerned, the Defendant did not have such a right.  This is because of the words, "Standard disciplinary and warning procedures apply".

58. It is difficult to know just what is meant by this reference.  Exhibit 11 was tendered.  This deals with a number of subjects, including dismissal.  Some of these are dealt with by reference to  Australian legislation which, it seemed to be common ground, could not have application here.  In part the document deals with employment entitlements under Australian legislation.  However Mr Robson saw no reason why  procedures  in Exhibit 11 could not have been applied in Papua New Guinea in the case of dissatisfaction with the performance of an employee or where the company was contemplating taking steps to dismiss an employee.  There was some reference in the evidence to some procedure provided for in the legislation of Papua New Guinea when dismissing an employee.  However this matter was taken no  further and the Plaintiff did not allege any failure to comply with any legal requirement applicable to the contract which had been entered into in Papua New Guinea.

59. On the Plaintiff's approach, the Defendant would have no right to determine the contract under clause 2 until the procedures referred to had been exhausted. 

60. It must be borne in mind that the Defendant may have wished to exercise the right to determine a contract of service for grounds unassociated with any conduct on the part of an employee.

61. Just what meaning or area of operation should be afforded to the words "Standard disciplinary and warning procedures apply" is problematical.  To construe the clause in the way suggested by the Plaintiff would be to alter the language of clause 2 significantly.  One possible view that might be taken of this reference is that it is a statement of recognition on the part of the parties of the existence of procedures which the Defendant has in place which can and generally will be followed when any question arises about the performance of an employee before any dismissal occurs.  Looked at in this way the words refer to a matter of policy or practice and do not have the effect of conferring rights or imposing an obligation of a contractual nature.  Whatever the import or scope of these words they cannot, in my view, affect the right of the parties under clause 2 to terminate the contract on one month's notice. The location of the words in clause 2 rather than elsewhere such as perhaps clause 17 is a little curious.

62. This being the case, it was submitted that the application of the principles to be found in cases such as the Mihalis Angelos (1971) 1 QB 164 and Beach -v- Reid Corrugated Cases Ltd (1956) 1 WLR 807 requires that the damages should be assessed upon the basis that the Defendant would have exercised the right to determine the contract. The principle referred to requires damages to be assessed in such a case upon the basis that the party responsible for the repudiation of the contract would exercise whatever options were available to it under the contract in such a way as to result in the least burden of damages to it. That is, although it has wrongfully repudiated the contract it would had it not done so have exercised such rights as it had under the contract to terminate the contract of employment as soon as could lawfully be done.

63. There is no doubt here that Mr Green had as a result of what occurred determined that the best course that the company could take would be to remove the Plaintiff.  I have referred to this as the line of least resistance.  I think that the application of the principle to which I have just referred also reflects likelihood in this case.

64. That being so I think that the Plaintiff is entitled to receive the equivalent of one month's salary and entitlements. 

65. On the calculations placed before the court as to the Plaintiff's current salary and entitlements, the Plaintiff's loss on this basis would be some $12,851.  I allow interest on this sum of 2.3 years and 5% of producing an amount of $1,477.

66. I give judgment for the Plaintiff against the Second  Defendant in the sum of $14,328.

67. There will be judgment for the First Defendant against the Plaintiff.

68. The parties will be at liberty to apply within 14 days on the issue of costs.