Case No.:

-HC-REV-220-1961

Court:

The High Court

Issue No.:

1962

Principles

·  Con tract—Damages——Employment contract breached by employer—Wages lost before new employment obtainable—Employee’s duty to mitigate

When an employer breaches an employment contract by dismissing his employee, the quantum of damages is not limited to wages in lieu of notice, but may include wages lost before similar employment can be obtained con sidering the duty of the employee to mitigate damages by using diligence to find other employment.

Judgment

(HIGH COURT)

SEFERIAN & CO. LTD. v. MICHAEL ZAKI DEMIAN

-HC-REV-220-1961

Advocates: El Rasheed Nayet ... for defendant-applicant Joseph L. Dem . -. for plaintiff-respondent

A. M. Imam 1. April 24. 1 is an application for revision submitted on behalf of defendant-applicant against the decree of the District Court. Khartoum, dated April 27, 1961, in which the plaintiff- respondent was awarded recovery of the sum of £S.3o .200m/mS in toto made up of one month’s salary, one month’s salary in lieu of notice, general damages and costs.

The application is mainly directed against the quantum awarded for general damages.

It also contains a half-hearted attack on the finding of the court below that the dismissal was wrongful. I am not interfering with this finding of fact and I think sufficient evidence was heard in support of it. I am not paying attention also to the claim made in reply to the application; for these ought to have been made the subject of a cross-appeal and it is now hopelessly out of time.

What is made out from the application iii respect of the reasons submitted against the quantum of the damages awarded seem to be the following:

(a) That the award is against all practice and enacted law; and

(b) That heavy or substantial damages are not normally awarded in the case of a simple breach of contract of service unless it was calculated to injure the servant’s reputation.

Perhaps it would be feasible to quote the following extract from the application itself submitted by the learned advocate for defendants- applicant:

“As for the ruling that plaintiff-respondent is entitled to damages for wrongful dismissal, I beg to apply that this ruling is against all the rules of practice and does not conform with the enacted law.

“Dismissal may be wrongful and entitle a plaintiff for damages if the dismissal was made in such a manner as to do harm to a man’s reputation.

“But in such an instance, unless dismissal per Se, i.e., every dismissal is deemed wrongful, respondent cannot be entitled to any damages.

“It is only when the dismissal is without reason or wrongful that an employee is entitled to one month’s notice, and that when the contract is in writing (the Employers and Employed Persons Ordinance, s. 10).

“It is every employer’s right to dispense with the services of an employee, especially when that employee conducts himself as to cause loss to the employer.

“I therefore beg to submit that the award of damages in this instance was incorrect and that the applicants are entitled to the sums claimed from respondent.

From the above-mentioned quotations. it is clear that the learned advocate for the defendants-applicant was confusing the remedies available under the statute and those available under the common law for breach of a contract of service. The award in question was made under the latter and I think, correctly made. In this case the damages to be given are those, which were reasonably in the contemplation of the parties at the time they entered into the contract. Hadley V. Baxendale (1854) 9 Exch.

341. At the time of fixing those damages the court is allowed to take into consideration the chances of the plaintiff to get new employment.

“In an action for damages the servant sues for a sum which he alleges represents the loss he has sustained by the master’s brea of contract. - The measure of damages in all actions for breach of contract is the same, namely, the pecuniary loss sustained, provided such loss flows naturally from the breach in question, and this will be the case whenever the loss is such as any reasonable person. Knowing all the circumstances existing at the time of the breach which are known or ought to be known by the defendant, would have contemplated would be likely to result from the breach in question.” Batt, Master and Servant 201 (4th ed. 1953).

Damages for breach of a contract of service can be awarded in both cases where there is a fixed period and where it is not provided there is an implied condition that the contract would be continuous.

Earle J. in Beckham v. Drake (1849) 2 H.L.C. 576. 6o6, said:

“The measure of damages for the breach of promise now in question is obtained by considering what is the usual rate of wages for the employment here contracted for, and what time would be lost before a similar employment, could be obtained. The law considers that employment in any ordinary branch of industry can be obtained by a person competent for the place, and that the usual rate of wages for such employment can be proved, and that when the promise of continuing employment is broken by the master, it is the duty of the servant to use diligence to find other employment.” Quoted in Sarkar, Master and Servant 242 (1939).

Sarkar states on the same page:

“The above principle applies not only to cases where the Contract of employment broken is for a term of years but also where there is no definite period and that the servant is entitled to reasonable notice before his services are terminated.”

It is the duty of the servant to mitigate the damages. If he remains passive he may be entitled to nominal damages only as in the case of Brace v. Calder [ 2 Q.B. 253. where a new employment was at once offered.

It is clear, however, that damages are not to be confined to wages in lieu of notice.

“In Savage v. British India S.S. Co., Wright J. appears to have given the plaintiff twelve months’ salary as damages because the plaintiff was entitled to twelve months’ notice. But clearly the servant’s damages ought not to be so limited; the master has committed a breach of contract and so all damages naturally flowing there from ought to be recoverable.” Batt, Master and Servant 202 (4th ed. 5953).

Of course the quantum of damages is governed by ‘the principle laid down in the leading case of Hadley V. Baxendale as already mentioned above:

“... the amount of damages in actions for breach of contract must not exceed that which would have been reasonably contemplated by the parties at the time of the breach, unless the parties have contracted on the basis of special circumstances which are known to increase the measure of damages in case of a breach and have thereby expressly or impliedly agreed that damages shall be assessed on the wider basis.” Batt, Master and Servant 192 (4th ed. 1953).

• It is appropriate here to note that Batt has given the above-mentioned rule in connection with the remedies open to the master in the case of a breach committed by the servant. I see no reason why its application should not be reciprocal.

In the particular circumstances of this case I think the court below was justified in giving damages for breach beyond the usual one-month’s salary in lieu of notice and that the damages actually given are not excessive or exaggerated. It is a fact that the defendants-applicant were the sole proprietors of the Volkswagon industry in the Sudan. The plaintiff-respondent with their consent had specialized in this sort of business in Germany. After his wrongful dismissal he could not obtain another job. He had to seek for that outside the country. He found it in Kenya.

For the above the application is dismissed.

Plaintiff-respondent is awarded costs taxed at £S.7.

Editors’ Note.—By authority of the Chief Justice, Mr. Justice Babiker Awadalla dismissed the application for revision to the Court of Appeal on July 23, 1962, for failure to submit grounds. AC-REV-1ç4-1962.