DAMAGES FOR WRONGFUL DISMISSAL.

Otago Daily Times, Issue 12648, 28 April 1903, Page 7

DAMAGES FOR WRONGFUL DISMISSAL.

AN IMPORTANT JUDGMENT. At the Hesident Magistrate's Court yesterday MrE. H. Carew, S.M., delivered judgment in tho action Smith v. Irvine and Stevenson, which was a claim for £225 damages for wrongful dismissal. In the action (he plaintiff was represented by Mr Finch and tho defendants by Messrs Hosking and Payne. His Worship gave judgment as follows:— This is an action to recover £255 as damages for wrongful dismissal, cand the parties have agreed in writing that; notwithstanding the amount claimed exceeds £200, the court shall havo jurisdiction. The evidence shows that plaintiff was employed by tho defendants for about nine months in superintending the erection of a milk condensing plant at Henley, and on the Ist September, 1902, they exchanged documents, in which it was agreed that plaintiff should servo'the defendants as milk condenser and factory manager at their Henley factory for the term of 16 months at a. salary of £ 5 weekly. The plaintiff took charge of the factory, and entered on his duties. On October IG, 1902, a. company was registered under " Tho Companies Act, 1882," as "The Irvine and Stevonson's St. George Company, Limited," and became possessed of the business of the Henley factory. No change append to'have been made in the personnel of tho management, and tho plaintiff received his instructions from Mr Stevenson, as ho did before the company was registered.'. The plaintiff says lie knew a company was formed and had taken over the business, that ho worked for. the company and tho company paid him his wages, and ho did not object to work for the company under the same agreement, so long aa he got his money— that he did .not either object or consent to work for the Company. So long as ho was paid £5 a week by Mr Stevenson he w?.s satisfied. There was no agreement either by speech or in writing that plaintiff was to be employed by the company, but he simply went on to work as he would have done if there had been no change of proprietorship. On March 4,1903, tho plaintiff received a letter signed by Mr William Stevenson on behalf of "Irvine- and Stevenson's St. George" Company, Limited," giving him notice that his engagement was terminated on the ground of incompetence and negligence. The plaintiff left, and wa9 paid up to March 9, 1803. The third count of the particulars of demand sets out that on the ICth October, 1902, the defendants wrongfully discharged the plaintiff and refused to permit him to serve or to pay him for,his services. Mr Finch contends that the defendants broke the contract when they transferred the Henley factory to.the company, and put it out of their power to personally employ the plaintiff at that faSory, and that as soon as the company went into possession .plaintiff had a cause of action for wrongful dismissal, but so long aa the new proprietors wero willing to employ plaintiff at the same work and at the same pay he could have proved only for nominal damages; but he is now out of employment, and sues for actual.loss. Mr Hosking confeuds there was no breach' by transfer to the company, and that there was a substitution of a new agreement to work for the' company as accord and satisfaction for the former agreement. ' Erace v. Ca-lder (2 Queen's Bench, p. 258) is clear authority that a dissolution of.a partnership by some of the members retiring from it operated as a. dismissal pf a managing clerk, who had contracted with the old firm for a period which had not 'then expired. The present is a stronger case, because by transfer fo a limited liability company there was a complete change of proprietorship. That there could be no transfer of the contract of service is, I think, equally clear in Tolhurst v. Associated Portland Cement Manufacturers (1902, 2 K. 8., G63). Collins, M.8., said: " It is, I think, quite clear that neither at law.nor in equity could the burden of a contract be shiited off tho shoulders of a contractpr on to those of another without the consent of the contractee. A debtor cannot relieve himself of his liability to his creditor by assigning tho burden of the' obligation to someone else;" this oan only be brought ahbut by tho consent of all three, and involves' the release of the original debtor." If tho fact that the plaintiff continued to occupy the same position after the company took over «s he did before is cvidenco of a new contract, .it. is only of such a contract as would be implied by law from such service and a weekly payment of wages. There could be neither a novation of the original contract or_* substitution of a- new contract for the balance of the term, bscause, as it exceeded 12' months, .if would require by the Statute of Frauds and section 96 of "The Companies Act, 1882," to be in writing. "Dp to the time when the company went into possession, neither by' word or act had plaintiff in any way conEented or assented to relieve defendants of the contract, and the breach (if there was a breach) was complete before he commenced to work for tho company. There is evideucc that Mr Stevenson, has recognised his" liability in the original agreement on at least two occasions since his transfer to the company. On the 32th 'February, 1903, ho wrote to plaintiff, in reference to selling tho factory: "I wish you to Hvrite a. lettor stating that you aro willing to continue your arrangements with me dh favour of tho — for the balance of the term." And there is plaintiff's uncontradicted evidence that after he received the letter of dismissal he saw Mr Stevenson, and they had a conversation about his dismissal, when Mr Stevenson said that after his return from Henley the halfyearly balance sheet was before, him, that he found he was losing money, and determined to make the first loss the least, and further said: "Of course, .1 havo a. year to run with you yet; but you will have to see my solicitor. 'See and come to eoiuo arrangement. Whatever it is, I'll fall.in with it"; and added that he did not want to argue the point himself, as his health would not aamit of it. That joes clearly to show Mr Stevenson, up to that time recogwised his liability under the agreement. As to ■damages, the breach took place about seven weeks after the term of 18 months commenced, l)ut the plaintiff was employed by tho comipany, receiving the same pay up to March 9, and sustained no pecuniary damage up to that date. It is alleged 'that h< was then discharged jnainly because he was incompetent to manufacture sweetened condensed milk. Mr Stevenson sa-id in his evidence that if he hud been competent to manufacture" condensed milk Ms services would have been retained by the company. Defendant admitted in cross-examina-tion that if he could not manufacture sweetened condensed milk of marketable quality with proper appliances and materials he could not can;' out what ho undertook to do as a milk condenser, and also admitted that he made five or six attempts at Henley, without success. There was considerable evidence as to the ■cause of the failure, and some of the excuses appear to me.io be disproved; but one matter stands out without evidence to dieprove it. The fault in tho manufacture was that it wps too thick, and wae insoluble. The plaintiff oays that the principal cause of that was that the pan at the factory was too large, and 'Unfit to deal with the quantities of milk that ■had to be operated on; that the milk and sugar required to be brought to a heat of 212deg Fahr. to make a. proper emulsion, and it was impossible to briiig it to lhat heat in that pon without burning the material. M.r Stevenson when cross-examined, would not undertake to deny that the pan. would burn tho material at that heat. The plaintiff's evidence further went te"show, in corroboration, that it was necessary to heat the material to 212deg that in a recipe for manufacturing coudensed milk he Bupplied to Mr Stevenson before he entered liis employ, that it is shown that at a part of the process of manufacture tho material must be brought to ft "furious boil." He also ■says that in a. letter he wrote to Jlr Stevenson he explained the reason why he bad not made sugared milk to be that, he could not raise it to a sufficient heat. A letter from Mr Stevenson, dated December 15, says ttie:—"l havo" your explanation ahout 'tho sugared milk, which I now understand." Unfortunately' the defendants have not produced the 'elter containing plaintiff's explanation, but Mr Stevenson says plaintiff made no complaint abont tho pan, and never did, but he was unable to say what was plaintiff's explanation that lie said he understood. Mr Sevenson, under cross-examination, admitted that he had not doubted plaintiff's competency until lately, and there is some reason for Mr Finch's suggestion that-doubt did exist up to the rime when plaintiff stipulated for a bonus if he transferred his agreement for the balance of the torsi to a company then expected to purchase the factory. On tho whole, I am not satisfied it is proved tin plaintiff is incompetent, or that that was the true reason for his losing employment by the company, and therefore I need not express any opinion of what effect it would have had on the question of damages had it been proved. The plaintiff was paid up to March 9—that is to say, seven weeks ago—and ho has lost in wages from that time .-£35, and to that must be added such further loss as he will sustain by the breach up to the end of the term. In Sowdoa •'. Mills (30 L.J., Q. 8., p. 176), Blackburne, J., said: "If an action is brought by a servant for wrongful dismissal soon after tho dismissal, the judge tolls the jury that they must speculate on the chance of his getting a- new place, and base ■their damages on that.. If tho action is delayed till tho man has got a pliice, what was matter of speculation before becomes certain then, and the jury calculate accordingly." The agreemont lias 44 weeks more to run, and it has been pointed out that this is the off Benson, when faclory employment- such us plaintiff held is difficult-to obtain, and there is, bf course, an uncertainty that when plaintiff obtains employment he will command equally good wages. On the other hand, there is the possibility that he may get employment as a factory engineer in the slack season, and employment like that at Henley factory when the 3eason commences in about September next. I think if I add £65 to the wages lie has already lost it will, as near as I can judge, cover the probable less. Judgment for £100, costs o£ court (435), professional costs (£0).