Schumacher Straumann v Emile Senn [1922] SLSC 7 (14 February 1922)

S{)llU~lACHElt & ~1.'l~AU:\IANN '1/. Wrongful Jismissal-J!cawre of damages--<.'ompwsation for injUTed feeling of servant-1'a/;.ing into accow1i jailu1·e of dismissed sen·ant to uek other employment in assessing damages-Cot·enant in 1'estraint, in agreement. '!'he Respondent "ho was l.'mployed by the .\ppdlnnts for a c·,·rtain term of years under a r1 agreement, prodding for six months' notite, was summarily dismissed. '!'he agreement contained a. penalty <·lause restrain ing the Respondent from taking any other t•mploynu.•nt in the Colony. J udgment was gil·en in the Supreme Court for £20-1 for loss of wages for the unexpired term of the agreement, nncl for an additional sum of 1.:200 for the an:-<iety and humiliation which he had suffered. Held that the Olllis,ion b;: Respondent to ignore the 1 enalty clause as to other employment, or t<> invite the Appellants to wah·e it, was no ground for reducing the £20 ~ damages. Held also, on tho authority of .\ddis t". Gramophone Co., that thl' judgment be rever.sed as to the additional £200 damages for injured feelings, and t hat, the Appelh1nts haYing acted oppressively, judgment should be without cost~, both in the Supn,me Court and the Court of Appeal. .lp[JCal from ,I juclgmcnt of Pnreell. c .. J .. in tlle Suprcwe Courl o£ the Colon~· of t>icrra I.conc. • Wright for Appellant~ cites:- llah.Lmry, Laws of En~land, Vol. X .. p. :J:JU. 11:ayne on Dama~c:,, 8th Edition. Reid v . Explosive Co., 19 Q .B.D. 2()4. Brac·e t·. Calder (1890), 2 Q.B. 253. t>mith's Muster and Servant, Gth Edition, p. 1-19 . ..lddi,; v. Gramophone Co. (1909), ..l.C., p.

488. Boston for the Uespond.ent cites:- Hahbury, Vol. XX ., pp . 112 and

113. Hochster and Delatour, 22 L .. J.. Q.D., p.

455. Addison on Contracts, l Oth Edition, p.

871. Wright in repl~r cites: - Lake and Campbell. 5 L .T. , p.

582. Ansctt and Marshall, 22 L .. J., Q.B., p .

118. Halsbury, Vol. X ., p.

307. Baker v . Denkera Ashanti Mining Corp ., 20 T.L .R., p. 37 . 141/t f', (;ruvr!J, 1922. S<JHUlL\CIIEB &; STRAOMA}.'N v. SENN. ~AWRt:Y· COOI(SO:S, J. SA. ·wnEY -COOKSOK, J. The material facts in this appeal are the following :- The Plaintiff entered the service of the Defendants in the capacity of some sort of joint-mana ger of their (Defendants') IIotel in Freetown for a certain term of yea.rs under an agreement which provided (t"nter alia) for G monihs' notice of Plaintif!'s intcutio11 to tcrmin:de that agrN'llit'ni.. ::\ o such notice was giwn but he .found him~el£. after having sen-ed for a little over a year, summarily dismissed from his employment. The learned Chief Justice (as trial ,Judge) found that :;uch dismissal was wrongful and awarded damages in as full measure as he deemed possible. The :fin;t ground of appeal here is that. the damages ::\l'e excessive, i.e., more than would and should 1Htve been awarded had the learned Cl1ief Justice not misdi1·ccted himself as to thC' proper measure of damages in cases of wrongful dismissal. 1\ ow it is evident from the language used by the learned Chief Jt1stice in regard to the item of .£200 awarded as part of such damages that he regarded it as something further than the ordinary measure of damages, for towards the <>nd of his judgment he uses these words, '' It is ob-.ious to my mind that in addition to the damages that I haw already tliscussed, the l>lainfiff is entitled to further damages which will include all the consequences of the breach of this COJliract. .... Uc has heen forced owing to the circumst auecs of the ease to be the recipient of another m::m':> bounty alHl to undt'l'go an amo1.mt of anxiety and humiliation which one hardly likes to contemplate and under that head 1 award him £:WO." .\.nd if it were necessary to show more clearly the rea..;on for awarding such furth<'l' damages it is only necessary to refer to another passage earlier in the judgment which is as follows:- " The consequence o£ all that has happened in connec " tion with this unfortunate transaction has been disastrous " so far as the Plaintiff has been concerned and to those o£ " any experience it only needs to be stated that he found " himself ~;h·anded in a place like Freetown, Sierra Leone." From those passages there can, I think, be no doubt that the learned Chief ,Justice considered that there had been an aggra >ation of the injury in consequence of the manner of the dis missal and that the Plaintiff was entitled to be compensated further for the harsh and humiliating conduct of the Defendants towards him. --- 2!) !£this be so, there is equally no doubt that Addis v. Gramo phone Co., Ltd. (1909) A.C. 488, where the facts and circum stances were ;ery similar to those of the present rase and which appears never to have been brought to lht- learned Uhie£ Justice's notice at the trial, is conclusively in the Appellants' favour as far as this item of £200 is concerned. There )faw v . Jones (1890) 23, Q.B.D. 107, was very distinctly o;erruled by five out of the six eminent Lords of Appeal, it being the only case (ac cording to Lord Atkinson) " in which any countenance is given to the notion that a dismissed employee can recover in the shape of exemplary damages for illegal dismissal. .... " There (in Addis v. Gramophone Co., I,td .) the law as to the correct measure of damages for wrongful dismissal was fully considered, but I propose to quote only a few pa«sages from the judgments, as follows:- Lord Loreburn, L.C. (after stating what i11e rule is for damages in case of wrongful di-.missal) say~ (inter alia) '·I cannot agree that the manner of dismissal affects these damages. l::luch considerations have never been allowed to influence damages .in this kind of case ..... i£ there has been a dismissal without notice the employer must pay an indemnity but that indemnity cannot include compensation for the injured feelings of the servant." And after going on to admit that there is a class o£ case, such as a refusal by a banker to honour cheques when he has funds in hand and adding that that dass of case has, however, always been regarded as exceptional, he says " . . . . the rule as to damage in wrongful dismissal has always been I believe what I stated .... it is too inveterate t.o be now altered even if it were desirable to alter it." And Lord James of Hereford says that the case " raised a question whether in an action of contract there can be such damages as those to which I referred " (viz: damages on the ground that tl1ere has been an aggravation of the injury in consequence of the manner of dismissal) " I do not see either from authority or from the reasoning which is to be found in that judgment (of Lord Collin,'>, who alone dissented) that such damages can be reco>ered in an action of contract." And he adds, " wl1cn I was a junior of the bar, when I was draw ing pleadings, I always strove to convert a breach of contract into a tort in order to recover a higher srale of damages, it having been then as it is now, I belieYe, the general impression of the profession that snrh damages cannot be recovered in an action of contract as distinguished from tort and, there£ore 1 it wM 3 ,. ' SAWIIJ.:Y· (lOOKfH'l~, J. 30 So~cm;n useless to attempt to 1·ecover them in such case .... that view STnA UMANN • • • • remains true to this day." II. SENN. .As already indicnted, therefore, in so far as this sum of £200 SAwnny. is concerned, this appeal must he allowed. C,OOKSON, J• I turn now to the further question '' hich ari::;es for our decision, viz., as to the £204 which no doubt represents the greatest amount that the leamed Chief Justice could award as being the full extent of the damage suffered by reason of the breach and fio,ving naturally and probably therefrom, and such as was or should have been in contemplation o£ the parties to the agreement. In this connection it has been very ably and indeed plausibly argued by ~\ppellant.'s Counsel, Mr. Wright, that inas much as it is undoubtedly well established law that a person wrongfully dismissed shall not be allowed to sit down and fold his arms after such dismissal but shall do all possible to obtain further employment, and inaomuch as such person in this in stance took no ~>uch steps at all, that sum of £204 should be reduced. Many cases were cited by lrr. \\!right in support of this pro position and he contended, "hen reminded of the clause in the agreement o£ service which disLinctly prohibits the Respondent from being employed at all in this Colony under heavy penalty, that the Uespondent should at least have warned the Appellants that ho con:>iuered himself at liberty to ignore that penalty clause, or if he did not approac·h them in that spirit, at any rate he should ha•e solicited their wai•er of that clause; and accord ing as he adopted the one or other o£ these courses he would have put himl>el£ in the right, whether the Appellants had sought to enforce thei1· rights under that clause, or had declined to wai\e the rights which it gave them and which they endeavoured to maintain in their counterclaim, from which, howe\er, they eventually decided to withdraw. Now the point is of interest, and if sustainable, amounts to this, viz., that the authorities relied upon by Mr. :Wright go as far as to say that when there has been, as here, a serious breach of contract of sen·ice, the party suffering from such breach, how ever humiliated by the breach (and as has been shown above, he may not be compensated for that humiliation), must in every case put his feelings aside and at once do all in his power to render the person responsible for his loss and su1fering liable to pay him as little compensation as possible . But can it be said that these cases go so far? Must a man, according to them, in every case be at pains to mitigate as far 31 as in him lies the amount of damages that his wrong-doer shall pay him so as to restore him, as far as money can do it, to the position he would have enjoyed but for the breach? X ow there is often a thin di ,·it ling line between adions for damages founded in tort and those foundPtl in contract and it is cleat· at any rate in this connection from the di:ssenting j udgmcnt of Lord Collins in Addis v. Ununoplwnc Co., Ltd., that many elllinent judges besides himself Jun·c maintained the principle that the first and foremost concern of the law is to compen:sate as fully as possib1e rather than to make the compensation ns light a~ possible. I ,}lould, therefore, ]lt'-.iiatc con-.itlernbly before I'Ollling to the con dusion that, on the fal'ts and circumstances whid1 were before the learned Chief ,J nst i1·c in thi,., case the Lords of Appenl who disagreed with Lord Collins in Addis 'V. Gramophone Co., Ltd., "·ould ha\e held that what the Respondent failed to do here and because he failed to do it, should be reason for frittering away the compensation awarded. I think they would have dis tinguished a ease of this kind hom the fortunately more ordinary kind in which servants or employees find themselves dismissed, and would ha\e held that while it is perfeetly true as a general propo::.ition of law that in ordinary circumstances fresh employ ment should at mwe he sought, yet there may well be circum stances where it is not in<'umbent upon the person suffering from the breach to tnke the steps necessary to obtain su<·h employn1ent . .And I think they would have held that there was here just such a set of circumstances disclosed, viz ., a foreigner smarting under the injustice done him and probnbly more aware, tmd if he took ad,ice rendered still more aware, of the prohibiting or penalty clause in this agreement than of any other. Such a proposition of law, moreover, was meant, I think, to apply in cases where employment of a nature similar to that of which a person had been wrongfully deprived is much more readily to be found than the Respondent would ha'e found it here, and where all surrounding ci1·cumstances were far different from those obtaining in the present case. Further, there is no evidence that the employment obtain abl ~, had any been sought by the Respondent, would ha\C been of a kmd that the law would say he should have accepted so as to reduce the damages payable by the Defendant. . This part of the appeal accordingly fails, and is dismiss ed With costs. 31. .. SAWREY• COOKSON,

1. SonuMA.cmm & STRA U»Ai''"N v. sm.. S.LWRJoTli• COOKSON, 1. 32 I n regard to the question of the £200 already disposed of, inasmuth as it was aw::trded for reasons very similar to those for which a portion of the damages was not allowed to stand in Addis v. Grmnophone Co., Ltd., although the appeal in this rl'gard must be allowed it will be so without costs for reasons also simila1 to those which justified the Appellant's Company being deprived of their costs in that ca~e, where it was hela that having acted oppressively and the Plaintiff ha-ving succeeded in recover ing a substantial sum, the judgment in his fa-vour should be with out costs there and below. The concludin~ p·t~sag(> in the jm1gment of Lord Shaw of Dumfermlinc is enlightcnillg" on the ratio decidl'ndi here, and there, but I ,.;perially adopt it as being also particularly applic able (as to its first liM or two) to the facts of this case. '· A certain regret that 'accompanies the conclusion " which I have reached on the facts o£ this particular case " is abated by the conseiousness that the settlement by Your " JJord~hip's Ilouse of the important question of principle " and practice may go some length in preventing the intru " sion of not a few matters of prejudice hitherto introduced " for the inflation of damages in cases of wrongful dismissal " and 110w definitC'ly derlarC'd to he irrelevant and inad " mil'sible on that issue." PURCELL, C.J. I concur. McDONNEIJL, Acting J . I concur.