The Judicial Committee of the Privy Council Decisions

Privy Council Appeal No. 69 of 1995

 

(1) SOS Kinderdorf International and

(2) SOS Children's Village Limited Appellants

v.

Ebrima B. Bittaye Respondent

 

FROM

 

THE COURT OF APPEAL OF THE GAMBIA

 

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REASONS FOR DECISION OF THE LORDS OF THE

JUDICIAL COMMITTEE OF THE PRIVY COUNCIL

OF THE 24TH APRIL 1996, Delivered the

20th May 1996

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Present at the hearing:-

Lord Keith of Kinkel

Lord Griffiths

Lord Jauncey of Tullichettle

Lord Nicholls of Birkenhead

Lord Steyn

  ·[Delivered by Lord Keith of Kinkel]

 

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1. This appeal arises out of an action brought by Mr. Bittaye, who is the respondent in the appeal, against SOS Kinderdorf International and SOS Children's Village Limited, who are the first and second appellants, in the Supreme Court of the Gambia.  The respondent has a cross-appeal.

 

2. The second appellants are successors to a body set up in 1981 to administer an orphanage in the village of Bakoteh under the auspices of the first appellants, a charitable organisation based in Innsbruck, Austria, which provided the funding for the orphanage.  The respondent was employed by the second appellants, under an agreement dated 23rd July 1982, as director of the orphanage.  Under the agreement the respondent was entitled to a salary which in March 1986 amounted to D18,000 per annum and also to rent-free accommodation with free water and  electricity and  to  the  use  of  a car provided by the second appellants. The first appellants had a representative at Bakoteh named Mr. Josef Kittl.  It appears that early in 1986 relations between the respondent and Mr. Kittl were in an unsatisfactory state, and on 15th January 1986 the Deputy Secretary General of the first appellants, Mr. Werner Handl, wrote to the respondent from Innsbruck criticising the respondent over this, and mentioning that his salary was dependent on funds supplied by the first appellants.  In fact, no salary was paid to the respondent after 28th February 1986.  It appears that in the opinion of the first appellants matters did not improve, and on 12th May 1986 Mr. Handl wrote to the respondent stating that his services were terminated forthwith by the payment of three months' salary in lieu of notice, and requiring him to hand over everything to Mr. Kittl and vacate his accommodation.  The letter was received by the respondent on 16th May 1986.  He did not vacate his accommodation, and shortly afterwards Mr. Kittl cut off the water and electricity supplies to it the interruptions lasting for about one week. As a result foodstuffs to the value of D1380 contained in a deepfreeze became unfit for consumption.  Mr. Kittl also prevented the respondent from using the village car.

Following these events the second appellants brought an action in the Supreme Court against the first appellants claiming a declaration that the latters' purported dismissal of the respondent was null and void.  The judge of first instance granted the declaration, and his judgment was upheld on appeal.

 

3. In the meantime an accountant employed by the first appellants at the village, Mr. Yusufa Jaiteh, brought certain information to their notice and to that of the second appellants.  This was to the effect that, at some time in 1985/86 when checking the respondent's account, Mr. Jaiteh found that a sum of D10,000 which should have been in the respondent's safe was not all there.  Mr. Jaiteh had asked the respondent about this and was informed by him that he had lent D7,000 to Mr. Kemo Touray, a friend of his.  Mr. Jaiteh arranged for Mr. Touray to sign an IOU for D7,000 addressed to the Director of the village and bearing the date 2nd May 1985.

 

4. On 19th June 1986 the second appellants' honourary treasurer, Mr. Jagne, sent a memorandum to Mr. Kittl stating that the Board had decided, in the light of the prevailing situation and the information provided by the accountant to them for the first time, that the respondent should vacate the village.  This followed an emergency board meeting held on 16th June 1986, the minutes of which recorded that the respondent had applied to proceed on leave with effect from 17th June (four months leave being due to him) and to move out of the village, and that the application had been granted.  On the same day Mr. Jagne sent to the respondent a  letter formally  confirming  that leave  of  120 days had been

granted. This expired on 14th October 1986. The respondent never returned to the village, nor did the second appellants ask him to do so.

 

5. On 21st December 1990 the respondent started his action against the first and second appellants in the Supreme Court.  By his statement of claim the respondent claimed against the appellants jointly and severally loss of earnings from 1st May 1986 to 31st December 1990 and continuing, the amount claimed up to that date being D122,544, and also sums in respect of the value of foodstuffs destroyed in the deepfreeze, the loss of use of car, removal and living expenses and other items which brought the total amount claimed up to D163,293.  The respondent also claimed (in paragraph 3 of his claim) aggravated damages against the first appellants for (a) wrongfully interfering with the respondent's contract of employment by the second appellants, (b) procuring a breach of that contract of employment by the second appellants, and (c) intimidation of the respondent causing the loss of wages and other benefits.  There was an additional or alternative claim against the second appellants for breach of contract.  In paragraphs 10 and 11 of his statement of claim the respondent pleaded that the first appellants by the letter of 12th May 1986 purported to terminate the respondent's services as director of the village and that the purported termination was wrongful as being unauthorised by the second appellants. By paragraph 4 of their statement of defence the appellants admitted these averments.  That particular part of the pleadings figured prominently in the argument before the courts below and their Lordships' Board.  By paragraph 9 of their statement of defence the appellants averred that the respondent had been involved in acts of dishonesty and misuse of funds and consequently the second appellants "have not been disposed to providing the plaintiff with any work".  The respondent did not ask for particulars of the alleged acts of dishonesty.  At the trial before Agidee J. the respondent was without objection cross-examined about the loan to Mr. Touray, which he said he had made in his personal capacity, and the appellants, also without objection, led the evidence of the accountant Mr. Jaiteh, on the lines indicated above.

 

6. By his judgment dated 5th April 1993 Agidee J. found in favour of the respondent.  He awarded D163,293 by way of special damages, D30,000 in respect of the items in paragraph 3(a), (b) and (c) of the claim, with interest on these amounts at 13.5% per annum from the date of issue of the writ until payment.  He also ordered that the appellants should pay the respondent salary from 1st March 1986 until December 1990 and continuing, and also pension contributions. The award appears to  have  been made  against the appellants jointly and severally.

7. It had been argued for the appellants before Agidee J. that the respondent had been dismissed by the second appellants and that they had justification for doing so by reason of the evidence given by the accountant Mr. Jaiteh relating to the loan by the respondent of D7,000 of the second appellants' money to a friend of his. Agidee J. held, however, that, by reason of the appellants' admission in paragraph 4 of their statement of defence that the dismissal of the respondent by the first appellants had been wrongful, it was not open to the appellants to seek to establish that the dismissal of the respondent by the second appellants was justified. The learned judge appears to have overlooked that the averment admitted was to the effect only that the first appellants' purported dismissal of the respondent was wrongful as being unauthorised by the second appellants.  That averment had no bearing on the question whether the dismissal of the respondent by the second appellants was justified.

 

8. The appellants appealed to the Court of Appeal of The Gambia.  The judgment of the court (Anin P., Chomba J.A. and Njie Acting J.A.) was delivered by Chomba J.A. on 26th April 1994.  The court held that the trial judge had erred in awarding to the respondent, in addition to special damages of D163,293 which included D122,544 for loss of salary from 1st March 1986 to 31st December 1990, and also the loss of certain benefits, unquantified general damages including the same loss of salary and loss of benefits.  The court therefore quashed the order for general damages.  The court also held that the trial judge had erred in awarding a sum for loss of earnings after July 1987, since the evidence was that the respondent had at that time taken paid employment with the American Peace Corps and subsequently with another employer.  As regards the trial judge's award of D30,000 by way of aggravated damages in respect of the matters in paragraph 3(a), (b) and (c) of the claim, the court held that this was unreasonably low and increased it to D60,000, expressing the view that the first appellants' conduct was so disgraceful that punitive damages were appropriate.  The court dismissed an argument for the appellants that the dismissal of the respondent by the second appellants was justified by reason of the circumstances of the loan of D7,000 to Mr. Touray, holding that the appellants' admission that the dismissal of the respondent by the first appellants was wrongful precluded that argument.  A large part of the judgment was taken up by consideration of an argument for the appellants that by reason of the decision in the litigation between the first and second appellants (in which the respondent had been a witness for the second appellants) the respondent was estopped per rem judicatam from raising the matter of his dismissal at all.  That argument was rejected.  In the result, the Court of Appeal varied the judgment of the trial judge so as to award the  respondent  general damages  for  loss of  wages  and

benefits from 1st March 1986 to 30th June 1987 consisting of (a) salary D24,000, (b) loss of use of car for 16 months D2,057.14, (c) value of damaged foodstuffs D1,380, (d) transport costs of removal D1,450 and (e) living expenses incurred from 1st March 1986 to June 1987 of D3,825.  The court also awarded the respondent aggravated damages of D60,000 and costs of D15,000, but made no award for loss of pension contributions or for interest.  The court refused to differentiate between the liability of the first and second appellants holding that they were joint tortfeasors.

 

9. The appellants appeal to the Board upon the principal ground that the learned trial judge and the Court of Appeal fell into error in failing to hold that the circumstances of the loan of D7,000 of the second appellants' money by the respondent to Mr. Touray justified the dismissal of the respondent by the second appellants.  The same circumstances are also relied upon as justifying the first appellants' interference with the respondent's contract of employment.  The principal ground of the respondent's cross-appeal is that the Court of Appeal erred in awarding damages for loss of salary only up to 30th June 1987, and also in failing to take into account fringe benefits under the respondent's contract with the second appellants which were not available in his subsequent employment.  The Court of Appeal is also said to have erred in not awarding interest on the damages or any element in respect of lost pension contributions.

 

10. The principal issue is concerned with the question whether the respondent was dismissed by the second appellants and, if so, whether the dismissal was justified. It is fair to say that these issues were not raised at all clearly on the appellants' pleadings.  However, they were at least adumbrated there and relevant evidence was led without objection.  The second appellants, when they learnt what the accountant Mr. Jaiteh had to report about the loan to Mr. Touray, sent the respondent on 120 days' leave at his own request.  When the period of leave expired on 14th October 1986 the respondent did not return to his employment with the second appellants, nor did the latter ask him to do so.  The proper inference must be that the second appellants did dismiss the respondent on 14th October 1986, even though they never formally notified him of this.  As to justification for the dismissal, the fact is that the respondent without any authority whatever lent D7,000 of the second appellants' money, which they held for charitable purposes, to his friend Mr. Touray.  That was a gross breach of trust.  In Sinclair v. Neighbour [1967] 2 Q.B. 279 the manager of a betting shop took ,15 out of the till, replacing it with an IOU for that sum, and used the money to place a bet elsewhere. The following day he replaced ,15 in the till.  The Court of Appeal,

reversing the trial judge, held that the employers were justified in dismissing the manager summarily.  Sellers L.J. said at page 287:-

"To take money out of the till in such circumstances is on the face of it incompatible and inconsistent with his duty. Some people might well say that to take money out of the till, when the manager knew that if he had asked if he could do it for the purpose which he might have had to disclose it would have been refused, is dishonest conduct.  The question for this court to decide is whether, in the circumstances of this case, it was conduct in its nature, as it has been described, quite irrespective of any point of pleading, which justified the employer instantly dismissing the manager.  I think that it was ... The whole question is whether that conduct was of such a type that it was inconsistent, in a grave way - incompatible - with the employment in which he had been engaged as a manager."

In the present case the sum of money involved was much greater than ,15 and it is inconceivable that the respondent could have believed that the second appellants might have consented to what he did, if asked, nor did the respondent in the witness box suggest that he did believe that.  The second appellants would have been fully justified in dismissing the respondent on the spot, instead of sending him on 120 days' leave.  The appellants' admission in their pleadings that the first appellants' purported dismissal of the respondent was wrongful as being unauthorised by the second appellants is irrelevant to the question whether the first appellants were justified in dismissing the respondent, as is the decision of the courts in the litigation between the first and second appellants.  The learned trial judge and the Court of Appeal fell into error in not appreciating the irrelevance of the admission.

There is no doubt, however, that the first appellants interfered with the contractual relations between the respondent and the second appellants by cutting off the water and electricity supplies to the respondent's residence and depriving him of the use of the car, these being services to which the respondent was entitled under his contract of employment.  They did so before the facts about the loan to Mr. Touray came to the notice of either of the appellants.  It is the law that an employer who dismisses an employee may justify it by relying on misconduct of the employee which did not come to his notice until after the dismissal: Boston Deep Sea Fishing and Ice Co. v. Ansell (1888) 39 ChD 339.  But that principle cannot reasonably be applied to one who interferes with contractual relations between employer and employee.  The interference must be capable of justification as at the time it takes place.  In any event circumstances such as to justify an employer in dismissing an employee cannot, except perhaps in exceptional circumstances, constitute justification for a third party interfering with the contract.

 

11. Their Lordships are therefore of opinion that the first appellants are liable to the respondent in tort for interfering with the contractual relations between him and the second appellants.  They consider, however, that the Court of Appeal went astray in awarding the respondent D60,000 by way of damages under this head.  That sum amounts to over three years' salary.  The Court of Appeal appear to have considered that the damages should include some punitive element, but this case does not fall into any of the categories which attract punitive damages: see Rookes v. Barnard [1964] AC 1129.  The respondent is entitled by way of damages against the first appellants to D1,380, the value of the foodstuffs destroyed through the cutting off of the electricity, and also a reasonable sum by way of compensation for the trouble and inconvenience caused to him through the disruption of electricity and water supplies and his being deprived of the use of the village car.  Their Lordships assess that sum at D2,000, which added to the D1,380 makes a total of D3,380.  The respondent is entitled to interest on that sum at the rate of 13.5% per annum from 31st May 1986 to 26th April 1994 (the date of judgment in the Court of Appeal), which amounts to D3606.65 making a total award against the first appellants of D6986.65.

 

12. As regards the claim against the second appellants, the position is that the respondent's employment was justifiably terminated on 14th October 1986.  He was not, however, paid any salary from 1st March 1986 until that date, although he continued to be employed during that period. The salary thus unpaid amounts to D11,250, which the second appellants are liable to pay to the respondent either as a debt or by way of damages for breach of contract.  The second appellants are also similarly liable to pay the respondent unpaid pension contributions amounting to 10% of salary, namely D1,125, making a total of D12,375.  The respondent is entitled to interest on that sum from 31st May 1986 to 26th April 1994 at the rate of 13.5% per annum, which amounts to D13,204.66.  The total liability of the second appellants is therefore D25,579.66.

 

13. Their Lordships will therefore vary the order of the Court of Appeal to the effect of finding the first appellants liable to pay the respondent damages of D6,986.65, and the second appellants liable to pay him the sum of D25,579.66, allowing the appeal and cross-appeal in so far as necessary to bring about that result. The respondent must repay to the appellants the excess over the sum assessed by the Board of the amount which he has already received from the appellants under the judgment of the Court of Appeal, but without interest.

 

 

14. As regards costs, the trial judge awarded the respondent the sum of D2,000.  That award will stand.  The Court of Appeal awarded the respondent D15,000.  That sum must be repaid to the appellants (but without interest) so as to bring about that no costs will be due to or by either party in respect of the proceedings in the Court of Appeal.  The respondent must pay the appellants' costs before the Board.

 

 

© CROWN COPYRIGHT as at the date of judgment.