Caribbean Star Airlines Claimant v Ricardo Sealy Defendant [ECSC]

• Jurisdiction: Antigua and Barbuda
• Judge: Harris J
• Judgment Date: 04 September 2008
• Judgment citation (vLex): [2008] ECSC J0904-2
• Docket Number: CLAIM NO: ANUHCV 2006/0082
• Court: High Court (Antigua)
• Date: 04 September 2008

[2008] ECSC J0904-2

THE EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(CIVIL)

CLAIM NO: ANUHCV 2006/0082

Between:

Caribbean Star Airlines

Claimant

and

Ricardo Sealy

Defendant

Appearances:

Mr. Hugh Marshall & Mrs. Cherissa Thomas—Roberts for the Claimant

Dr. David Dorsett of Watt & Associates for the Defendant

Harris J

1 This is a claim for, breach of an employment agreement and, monies had and received for the benefit of the Claimant and, a counterclaim for outstanding employment vacation pay.

2 The Claimant was an Airline carrier based in Antigua and Barbuda, now no longer

operational. The Defendant was employed with the Claimant as a pilot and worked with the Claimant from October 2001 to January 2005.

3 It is common ground that the employment relationship between the Claimant and

Defendant for our purposes here was primarily governed by the Antigua and Barbuda Labour Code Cap. 27 ("the Labour Code"). It is common ground also that the services of the Defendant were terminated by letter dated 31 ^st January, 2005 1.

4 Upon termination, the Defendant was paid the sum of $104,408.00 in terminal benefits. The Claimant company undertook to forward to the Defendant "Any outstanding vacation

or overtime entitlement…"1. In fact, the Claimant acknowledges in para. 10 and 12 of its "Defence to Counterclaim of the Defendant", the sum of $785.00 2 owing to the Defendant for vacation leave from 1 ^st January, 2005 for 2.3 days.

5 The Claimant's case and supporting submissions is, firstly, that upon termination of the services of the Defendant, it paid off the Defendant pursuant to the Antigua and Barbuda Labour Code. The amount of $104,408.00 represented the Defendants, equity" in the company, one (1) months pay in lieu of notice, three (3) months future loss. This "equity", avers the Claimant, was calculated as one (1) months salary for every year or major fraction thereof. The case for the Claimant as pursued, is that due to a mistake of fact the Defendant was overpaid by EC$41,508.00. The Claimant alleges that the payment should have been calculated in the manner set out in the Claimant's "Particular of Claimant's Loss" 3

6 The said calculation is now set out here for convenience:

"Amount paid to employee -		$104,408.00
Employee's entitlement
(a) Equity (Basic Salary)	$ 7,400.00
	x 4.5
	$33,300.00
(b) Payment in lieu of Notice	$ 7,400.00
(c) Three months Future Loss	$22,200.00
Subtotal		$ 62,900.00
Total Loss		$ 41,508.00"

7 The Claimant claims the $41,508.00 overpayment as Damages for monies had and received. It is the Claimant's position that in calculating the 'equity', it used the Defendant's 'gross wages' of EC$12,400.00 instead of his 'basic wage' of $7,400.00, thereby resulting in the overpayment.

8 There is no dispute that in calculating the severance pay of an employee under the

Labour Act, the "basic wage" is to be used. If there is a dispute over this, then the finding

of this court is that the 'basic wage' is the appropriate wage to use to calculate 1severance pay.

9 From the Claimants revised calculation of the severance pay set out above, the Defendant would have been paid the sum of $69,900.00 and not the $104,408.00 actually paid to the Defendant. It is not disputed that the Defendant did receive the sum of $104,408.00. The case for the Claimant is that the mistake of fact that it made in calculating the sum paid to the Defendant, was in applying the higher "gross wages" instead of the lower "basic wages".

10 Secondly, submits the claimant, the Statement of Case of the Defendant is that he did not declare the difference between his 'basic wages' and his 'gross earnings' a sum of $5,000.00 so as to deny certain statutory deductions on that $5,000.00 portion of what the Defendant asserts was his "basic salary"—the $12,400.00. I am unable to find this allegation or denial by the Defendant or any averment from which this can be inferred.

11 This the Claimant submits, is illegal, a criminal offence and that the Defendant cannot then obtain, or enforce any rights resulting to him from his own crime 2. This allegation, contained only in the claimant's submissions (and not in its pleadings), is ill conceived.

12 Finally, the Claimant contends that the Defendant's counterclaim for vacation leave accrued during the year 2004 is without merit, he having been paid all his vacation leave save for the 2.3 days acknowledged in the pleadings. Further, says the Claimant, the Defendant has claimed the said vacation leave in the Industrial Court in an action filed on the 17 ^th September, 2007. The Claimant submits that this 'double' claim as it were, is an abuse of the process of the court in that the Claimant has to fight the same claim twice.

13 The Defendant on the other hand submits that the action for money had and received is an equitable action and will succeed only when the Defendant is obliged by the ties of natural justice and equity to refund the money 3.

14 The Claimant paid the disputed portion of the monies to the Defendant gratuitously and not as a legal requirement avers the Defendant. In any event the defendant contends that

his "basic" wage is not the $7,400.00 as contended by the claimant but $12,400.00 1 the same figure that the claimant used initially to calculate the disputed sum. The Labour Codes definition for "basic wage" includes the "total remuneration for services received in money, in kind and in privileges or allowances, including gratuities and premium pay." In the instant case there is no evidence of the defendant being remunerated in 'kind' or 'privileges' or being remunerated with 'gratuities' or 'premium pay' (which is defined as time and a half pay). The only allowances as reflected in the letter of appointment of the Defendant—at pp 70 of the Trial Bundle—is the meal allowance and the allowance for managerial responsibilities, all to a total of $2,300.00. The management allowance was not raised in the testimony of any of the witnesses in this matter as a management allowance. In any event it appears from the evidence in cross examination of the defendant, the basic wage calculation is not a straight forward one in the peculiar circumstances of the airline industry.

15 The Defendant submits further that the payment, whether actuated by mistake or not, was a payment due to the Defendant in "point of honour and conscience" 2 resulting from his unfair dismissal.

16 Further, submits the Defendant, the unfair dismissal being an unfair act precludes the Claimant from obtaining an equitable remedy-restitution.

17 The Defendant submits further, that in any event the 'over payment', by the admission of Mrs. Surjusingh, a witness for the Claimant, was that the payment to the Defendant was an ex-gratia payment 3. It was a gift, avers the Defendant, and the Claimant cannot now seek to take it back. Mrs. Surjusingh in her evidence stated that a decision had been taken in the Claimant Company to make a gratuitous payment to the Defendant and it did so.

18 The Defendant further submits that the Claimant owed the Defendant a duty of care to be accurate in calculating the payments to the Defendant and not to misrepresent it. That the employer/Claimant cannot in these circumstances recover based on its own misrepresentations. The decision to pay and the quantum of the gratuitous terminal

payment was in the discretion 1 of the Claimants, the formula for which was peculiarly within their knowledge.

The Law & Findings—mistake of fact

19 I accept the law in relation to the Claimants action—"money had and received—being money paid under a mistake" to be captured in Halsbury's Laws of England 3 ^rd edit., para. 1711: "Where money is paid voluntarily under a mistake on the part of the payer, as to a material fact, it may as a general rule be recovered in an action for money had and received to the use of the plaintiff". The authority for this proposition does not stop here, but is supported and articulated with greater detail in other authorities. In Kelly v Solari (1841) 9 M&W. 54 Parke B 2 stated the principle in the following terms at pp58–59 :

" I Think that where money is paid to another under the influence of a Mistake, that is, upon the supposition that a specific fact is true, which Would entitle the other to the money, but which fact is untrue,and the Money would not have paid if it had been known to the payer that the fact was untrue, an action would lie to recover it back, and it is against conscience to retain it;…If, indeed, the money is intentionally paid, without reference to the truth or falsehood of the fact, the plaintiff meaning to waive all inquiry into it, and that the person receiving shall have the money at all events, whether the fact be true or false, the latter is certainly entitled to retain it; but if it is paid under the impression of the truth of a fact which is untrue, it may, generally speaking, be recovered back, however careless the party paying may have been, in omitting to use diligence to inquire into the fact." (emphasis mine)

20 Rolfe B in the Solari case referred to above said further at pp 59 "…wherever [money] is paid under a mistake of fact, and the party would not have paid it if the fact had been known to him, it cannot be otherwise than unconsciencious to retain it". 3

21 In order to succeed in an action to recover money on the ground that it had been paid under a mistake of fact the payer has to identify (a) payment made to a payee (b) a specific & fundamental fact as to which the payer was mistaken in making the payment and (c) a casual relationship between that mistake of fact and the payment 4.

22 The basis for the action; 'money had and received' is that it lies only for money that the law compelled him to pay or to pay 1...