A bank manager sued for wrongful dismissal, won K160,000, and lost it on appeal. The case is remembered less for the contract point than for what the Supreme Court said about pleadings.
Papua New Guinea Banking Corporation v Jeff Tole [2002] PGSC 8; SC694
Supreme Court, Waigani — Amet CJ, Sheehan and Kandakasi JJ, 27 September 2002. SCA 28 of 2001.
What happened
Mr Tole was employed by PNGBC under a written contract. The bank terminated him before the agreed end date, with one year and eight months still to run, and paid him K144,953.45 in contractual entitlements. He sued for unlawful termination. Judgment went against the bank in default, and at the assessment of damages the National Court, applying Rooney v Forest Industries Council [1990] PNGLR 407, awarded him K160,834.66 for salary and benefits for the balance of the contract, plus K15,000 for distress and interest.
The bank appealed against the K160,834.66 award, but not the K15,000.
What was argued
The bank said the claim as pleaded was limited to general damages for distress; that loss of salary and benefits was special damage never pleaded with particulars; and that in any event it had terminated in accordance with the contract and paid what the contract required. Mr Tole said the bank had never asked for particulars, had let judgment go by default, and could not now attack the pleadings.
The National Court decision applied
Seven months earlier, in Coecon, Kandakasi J had set out the principles governing an assessment of damages after judgment on liability: no issue on liability may be reopened; the plaintiff bears the burden of proving damages on the balance of probabilities; and damages not pleaded in the statement of claim remain in issue and may or may not be awarded, but if the defendant takes no issue on unpleaded matters, awards may be made subject to appropriate evidence. The Supreme Court applied that approach in Tole.
What the Supreme Court decided
Pleadings. The law is settled: unless there is a foundation in a party’s pleadings, no evidence, and no damages or relief on matters not pleaded, can be allowed. Loss of salary, wages and other benefits are special damages and ought to be pleaded with particulars. A pleading that merely promises particulars later is no pleading at all.
Waiver by conduct. A defendant who allows judgment to go by default, does not request further and better particulars and does not take issue with the pleadings at trial is not at liberty to “hack back” at the lack of pleadings on appeal. The judge was entitled to make awards on the evidence presented.
Contract. The purported variation of the contract had not been made in accordance with its terms, and the termination was in accordance with the contract before the agreed date. There was therefore no breach and no basis for damages beyond the contractual entitlements already paid. A dismissed employee must also mitigate loss. The award of K160,834.66 was quashed; the appeal was upheld, with costs of the appeal to the bank and costs below to Mr Tole.
Did it make new law?
The pleading rule came from earlier Supreme Court authority, chiefly MVIT v Pupune [1993] PNGLR 370 and MVIT v Etape [1995] PNGLR 214. Tole is the decision that stated it in the compact form now quoted, and that applied and endorsed the National Court’s Coecon principles on assessment. It also confirmed that a contractual termination properly effected under the contract gives no claim for the unexpired term.
Why it matters
Plaintiffs: plead every head of loss, with figures where they are special damages. What is not pleaded may not be proved.
Defendants: object early. Ask for particulars, and object when unpleaded evidence is led. Silence at trial is treated as acceptance.
Employees: a contract that permits early termination on payment limits the claim to that payment.
What it does not decide
Tole does not make pleading rules absolute. Later benches, citing Yakasa v Piso (2014) SC1330, stress that undue rigidity must not compromise the Court’s goal of doing justice according to law. Nor does it decide the measure of damages for a termination that is in breach of contract; that remains governed by Rooney and the mitigation principle.
Recent cases applying it
- TSC Industries Ltd v Koim [2021] PGSC 12; SC2078 — “well established” from Tole that without foundation in the pleadings no evidence or relief can be allowed, balanced against Yakasa v Piso.
- Kamuri v Pomoso [2021] PGSC 3; SC2071 — Kandakasi J’s summary of the law on pleadings in Tole quoted in a police raid claim against the State.
- Awesa v PNG Power Ltd [2019] PGSC 70; SC1848 — no pleading of breach meant no foundation on which loss could be assessed; Tole applied.
Sources
- PNGBC v Tole [2002] PGSC 8; SC694 (Amet CJ, Sheehan and Kandakasi JJ, 27 September 2002)
- Coecon Ltd (Receiver/Manager Appointed) v National Fisheries Authority [2002] PGNC 144; N2182 (Kandakasi J, 28 February 2002)
- Motor Vehicles Insurance (PNG) Trust v Pupune [1993] PGSC 12; [1993] PNGLR 370; Motor Vehicles Insurance (PNG) Trust v Tabanto [1995] PGSC 16; [1995] PNGLR 214
- National Court Rules 1983 — Order 8
- TSC Industries Ltd v Koim [2021] PGSC 12; SC2078; Kamuri v Pomoso [2021] PGSC 3; SC2071; Awesa v PNG Power Ltd [2019] PGSC 70; SC1848
The judgment cites MVIT v Etape as [1995] PNGLR 214; the decision reported at that page on PacLII is indexed as MVIT v Tabanto, and both are linked above as they appear in the index.
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