NATIONAL COURT OF JUSTICE

tom b. gesa

v

bernard kipit - city manager - national capital district; and
national capital district commission

waigani: kandakasi j

26 May and 6 August 2003

JUDICIAL REVIEW - Application for leave for judicial review – Termination of a written employment contract – Whether normal disciplinary process of the National Capital District Commission and the Public Service applies? – Effect of written contract – Contract speaks for itself – No provision made for application of National Capital District Commission and or Public Service disciplinary process to apply – Such process does not apply – Judicial review is not available – Leave for judicial review denied.

CONTRACT - Written contract of employment – Termination of - Whether pubic service disciplinary process a term and part of the contract? – Answer dependent on the terms of the contract – No extrinsic evidence can be allowed to add to or subtract from what is provided for in the written contract – Public Service disciplinary process not part of the contract.

EVIDENCE - Written Contract of employment - No extrinsic evidence can be allowed to add or subtract from the terms of a written contract – Effect of – Conduct contrary to terms of contract does not amount to variation of contract by conduct. 

Facts

The applicant was employed by the NCDC as the Deputy City Manager, Community and Social Services under a written contract of employment. He was suspended from duties for alleged mismanagement, charged and eventually a decision was taken to terminate his service. He claims, however, that following an appeal against the decision to the Full Board of the NCDC, the first defendant was directed to reinstate him but he failed to do so. The applicant sought a review of the first defendant's failure to reinstate him.

Held

Once a person enters into a written contract for service in the public service, the contract governs the relationship and it becomes a matter of private contract law and not within the domain of public law. Judicial review is therefore not available to the employee unless the contract provides for the procedures that are available under the relevant legislation, should apply.

Papua New Guinea cases cited
Mathew Himsa & Napao Namane v Richard Sikani & Ors (08/11/02) N2307.
Ku Kalopei v Assistant Commissioner of Police & Ors (22/10/02) N2342.
John Kopil v Malcolm Culligan & The State (28/06/95) N1333.
Sulaiman v PNG University of Technology Unreported National Court (20/08/87).
Albert Kuluah v The University of Papua New Guinea [1993] PNGLR 494.
Leo Nuia v The State (29/08/00) N1986.
Legu Vagi v NCDC (23/08/02) N2280.

Counsel
P Mawa, for the plaintiff/applicant.
J Aisa Jnr., for the defendant/respondents.

6 August 2003

Kandakasi j. This is an application for leave for judicial review by Mr. Tom B. Gesa. His application came before me on 26 of May 2003 after a number of mentions earlier during motions. At that time, I informed the parties that I was going to be away on circuit the following month and did not know where I would be in July. I therefore, asked the parties to go before the motions judge in June. They, however, preferred and agreed that I should deal with the matter in terms of a trial by affidavit and written submissions. These would then be considered after which a decision could be delivered when I am able to.
On account of my being away on circuit in June and being committed to trial matters in July 2003, I was not able to give any consideration to this matter until late last month. Hence the timing of this judgement.

Background and the parties' arguments

Mr. Gesa was employed as the Deputy City Manager, Community and Social Services of the National Capital District Commission (NCDC). He was suspended from duties for alleged mismanagement, charged and eventually a decision was taken to terminate him. Mr. Gesa claims however, that following an appeal against that decision to the Full Board of the NCDC, the first defendant, Mr. Kipit was directed on 25 of February, 2003 to reinstate him but that has not happened. Instead, on 24 April, 2003, Mr. Kipit decided not to give effect to the Full Board's decision. Mr. Gesa is therefore seeking a review of Mr. Kipit's failure to reinstate him.

The defendants did not take issue on nearly all of the requirements that must be met before leave for judicial review can be granted. The main argument for the defendants is that this is not an appropriate case for judicial review. This is so, they say, because Mr. Gesa was employed under a written contract of employment. That, they argue, effectively removed Mr. Gesa's case out of the public administrative law domain and rendered his employment with the NCDC, a private contractual matter. Consequently, they argue that judicial review is not available as a remedy. Instead, he is entitled to sue for damages for breach of contract, if he can prove unlawful termination of his employment contract. They refer to and rely on my own judgement in Mathew Himsa & Napao Namane v Richard Sikani & Ors (08/11/02) N2307, where I held to that effect in a similar contractual situation. 

Issues

From these arguments and the background, there is only one main issue for me to resolve. The issue is, having regard to the written contract of employment between the parties, whether judicial review is available as a remedy to Mr. Gesa? 

Evidence

The relevant evidences in this matter are set out in a number of affidavits. For Mr. Gesa are the affidavits of:

1. himself sworn and filed on 21 and 29 May, 2003.

2. Jack Pidik sworn on 15 and filed on 21 May, 2003.

3. Susan Setae sworn on 15 and filed on 21 May, 2003.

4. Michael Malabag sworn on 15 and filed on 21 May 2003.

5. James Wasilolo sworn on the 15 and filed on 21May 2003. 

As for the NCDC are the affidavits of:

1. Bernard Kipit sworn on 25 and filed on 26 May 2003, which annexes an affidavit deposed to by the deponent on 9 of May 2003, under OS 226 of 2003 between the same parties; and

2. Rarua Gamu sworn and filed on 28 of May 2003. 

From these affidavits, it is clear to me that Mr. Kipit is the City Manager and is responsible by reason of that for the administration and management of the NCDC. He is the authorised custodian of all documents and information regarding the administration and management of the NCDC. This also includes the employment of its officers and employees. 

Mr. Gesa was initially employed on 18 of October 2001 under a written contract dated the same day. It was for a period of three years commencing 18 October, 2001 and ending on 18 of October 2004. That contract was superseded by another written contract dated 7 March 2002 for a period of three years, commencing 7 March 2002 and ending on 7 of March 2005. In both instances, Mr. Kipit signed the contracts for and on behalf of the NCDC under the seal of the NCDC and Mr. Gesa in the witness of another person. A O Teko signed on his own behalf.

By a memo dated 9 September 2002, Mr. Kipit suspended Mr. Gesa and required Mr. Gesa to show cause as to why he should not be terminated on a number of grounds or allegations. A period of 7 days was given to Mr. Gesa to respond and he did on 11 September 2002. On 11 of December 2002, the matter went before the Finance and Executive Committee of the NCDC. That committee recommended a termination of the contract of employment and referred it to the Full Board of the NCDC to deliberate on and make a decision.

The Full Board met on 17 December 2002 and resolved to terminate the services of the plaintiff. Acting on that decision, Mr. Kipit forwarded a letter dated 30 December 2002 to Mr. Gesa, terminating his employment with the NCDC. On 7 of January 2003, Mr. Gesa appealed to the Full Board of the NCDC against the decision to terminate him. The Full Board met on 18 January 2003 and decided that a review committee be established to review the decision of the Full Board's decision of 17 December 2002 to terminate his services. The relevant part of the resolution of that meeting reads:

"On the motion of Mr. Malabag and seconded by Mr. Pidik, the full Commission agreed and resolved:

1. that the Previous Resolution No. FB04-08-02- Termination of Mr. Tom Gesa, is reviewed; and 

2. that the Committee of Commissioners and other NCDC Committee members are appointed by the Chairman to review Resolution No. FBO4-08-02"

It is not clear who was appointed by the Chairman to review the Full Board's decision of the 17 December 2002. However, going by a letter dated 13 March 2003 to Mr. Kipit jointly signed by the Chairman and Susan Setae, Deputy Chairperson; Michael Malabag, Commissioner; and James Waselolo, these persons appear to have been appointed as the Review Committee. This Committee met on the 25 February 2003 and decided to reinstate Mr. Gesa. There are no minutes of the committee's meeting, which is at odds with the affidavit of Mr. Rarua Gamu, Manager, Assembly Services of the NCDC. The decision was communicated to Mr. Kipit by the letter in question which directed him to immediately reinstate Mr. Gesa, without the loss of any of his entitlements.

Also, it is not clear whether the Committee was empowered to make a final determination upon the review on behalf of the Full Board or go back to the Full Board for a final decision. The lack of any minutes of the Committee's meeting and the instrument of their appointment, which might contain the Committee's terms of reference and the powers delegated to them, makes it difficult to tell who was appointed and constituted the review committee. It also makes it difficult to tell what powers were delegated to it by the Full Board in relation to Mr. Gesa's appeal. 

This is critical because it is settled law that delegated duties and responsibilities ought to be and must be specific. This position was recently made clear by my brother, Justice Injia in, Ku Kalopei v Assistant Commissioner of Police & Ors (22/10/02) N2342 in these terms:

"An administrative direction from a superior authority to a sub-ordinate authority to make decisions on operational matters cannot take precedence over a legal authority or empowerment to make such decision on transfer of a member. The decision to transfer a member is a specific power given to the Commissioner himself and he must either delegate that power or vest that power to his sub-ordinate by specific written instrument before his sub-ordinate exercises that power. The onus is on the sub-ordinate officer claiming to act under delegated or vested authority to prove that he had such authority."

In this case, s 17 of the National Capital District Commission Act 2001, empowers the NCDC to create such committees or boards as necessary to carry out its functions, and delegate some of its powers and responsibilities to such boards or committees. It is required at the same time by this provision to prescribe the powers and functions it is delegating or vesting them with and who is to constitute the committees or boards.

The review committee in this case, it seems was not given the power to determine the appeal. This is confirmed by Mr. Gamu's affidavit evidence, which deposes to the Full Board meeting again on the 18 March 2003. The relevant minutes are annexed to his affidavit but they are not signed because he says the term of the chairman expired the very next day. I note that although Mr. Gesa raised some arguments questioning the accuracy of these minutes, he accepts in his supplementary affidavit and his subsequent submissions that there was such a meeting which arrived at the kind of decision arrived at. The relevant part of these minutes read:

"Commissioner Malabag brief (sic) the Full Board about a Review Committee comprising of the Chairman, Deputy Chairperson, Union Rep (Comm. Malabag) and DPM Representative in which they review the case of Mr. Tom Gesa.

After a brief discussion it was agreed that the matter be referred back to the Management.

Management was told to come back with the outcome of the matter at the next meeting."

Mr. Gesa says that the administration through Mr. Kipit did not go back to the Full Board as was directed by the meeting of the 18th of March 2003. Instead, he says, Mr. Kipit chose to reaffirm his earlier decision to terminate. The argument for Mr. Gesa goes on that, when Mr. Kipit did that, he acted without any power and so therefore he acted ultra vires his powers. 

Whether judicial review is available?

Bearing this background and facts in mind, I will now consider the issue before me. In the Mathew Himsa & Napao Namane case, I held that once a person enters into a written contract for service in the public service, the contract governs the relationship and it becomes a matter for private contract law and not within the domain of public law. Consequently, I held that judicial review was not available to the plaintiffs, unless the contract provides for the procedures that are available under the relevant legislation to apply. In so holding, I noted that, where a contract exists, the contract speaks on the rights and or duties and obligations of the parties to the contract. 

I was guided or persuaded to arrive at that conclusion by the judgements in John Kopil v Malcolm Culligan & The State (28/06/95) N1333; Sulaiman v PNG University of Technology unreported National Court (20/08/87) and Albert Kuluah v The University of Papua New Guinea [1993] PNGLR 494. 

In the first case, the plaintiff held a contract position for three years. Subsequently, there was a restructuring in the department he was employed which resulted in him and others being treated as holding acting positions. The plaintiff was concerned with what he claimed to be irregularities in the advertisement, selection and appointment of officers. He therefore applied to the National Court for a judicial review of the relevant decisions.

In dismissing the plaintiff's application, His Honour Mr. Justice Woods said:

"The plaintiff has a contract of employment with the State for service in the Department of Western Highlands. By accepting a contract, he has taken himself out of many of the previous methods of disputing alleged irregularities in public service employment by way of the Public Service General Orders. If he feels that this contract has been breached, he must then consider whether there is any cause of action in contract law available to him. Such a cause of action would be affected by the general law of employment and would have to be actionable by way of an action for breach of contract or wrongful dismissal with a writ of summons."

In the second case, the Court expressed similar comments as those in the first case. The Court said:

"Where courts have interfered by way of review in the process of dismissal because of the failure to observe the rules of natural justice, it has been where there is a statutory power or procedure being exercised, not a contractual power and I refer again to the Taylor v National Union of Seamen case above. The applicant here is trying to make the position of the University under its Terms and Conditions, a position of special status. I am not satisfied the employee here has a special status which would enable this Court to interfere in this way in a contract of employment. The relationship between the parties is governed by the contract and the applicant must afford himself of whatever remedies are available for the alleged breach of that contract. This Court will not enforce through these procedures or interfere in this manner in the process whereby that contract may have been terminated or broken. The applicant is not without a remedy. He has a remedy in damages for wrongful dismissal. He has a remedy under a contract law. I therefore dismiss the application."

In the final case, the plaintiff was also on a written contract of employment with the defendant, University. When the contract expired, the defendant refused to renew it. The plaintiff therefore applied to the Court for a review of that decision. In refusing the application, Sheehan J. said at p. 497 of the judgement:

"In the first place, it is acknowledged that the plaintiff's contract of employment was a private contract. As such, the action or the decisions of the parties to it are outside the scope of judicial review. Judicial review is concerned only with the protection of rights under public law, not the private rights and duties of parties that arise under contract or tort. Judicial review is certainly not available to those involved in disputes regarding private contracts of employment: Sulaiman v PNG University of Technology (1987) unreported NC."

After considering these cases, I proceeded to consider the terms of the contract in the case before me then. A close examination of the terms of the contract revealed that the contract did not provide for the normal administrative procedures available to an employee in the public service to apply. I therefore concluded that judicial review was not available. 

In Leo Nuia v The State (29/08/00) N1986, my brother, Justice Sevua closely examined the terms of a contract of employment between the then Commander of the Papua New Guinea Defence Force, and found that the disciplinary procedures for termination of a departmental head were adopted but not applied and proceeded to judgement on that basis.

The question that I need to consider therefore in this case is this, what did the parties agree to in terms of the written contract between them? This requires an interpretation of the terms employed by the parties in their contract to the exclusion of any extrinsic evidence. I noted the principles governing this exercise in the Mathew Himsa & Napao Namane case in these terms:

"…the law has developed to the stage of precluding the parties from calling extrinsic evidence to show what was it that the parties agreed to: Odata Ltd v Ambusa Copra Oil Mill Ltd (Unreported judgement delivered 06/07/01) N2106. Generally, the Courts will let the words employed by the parties in their contract to speak without the need for calling extrinsic evidence: Curtain Brothers (QLD) Pty Ltd & Kinhill Kramer Pty Ltd v The Independent State of Papua New Guinea [1993] PNGLR 285."

The relevant contract in this case is the contract dated 7 March 2002, which superceded the earlier one, dated the 18 October 2001. In so far as is relevant, I note clause 2.3 sets out the duties of the employee and concludes in this way:

"If the Employee acts in breach of any of the above, the management of the NCDC will take disciplinary action, including possible termination."

Clearly, this gives the management of the NCDC to take appropriate disciplinary actions, including possible termination, should Mr. Gesa breach any of his duties and obligations under the contract. In the event of a termination, clause 8 provides as to the circumstances in which Mr. Gesa could be terminated. Clause 8.2 then provides that:

"The Employee shall be given three months notice in writing of termination to be made pursuant to this Clause or payment in lieu of such notice, or part thereof together with a redundancy separation payment for the unexpired term of the employment up to a maximum of three months in addition to three months payment of the base salary in lieu of notice accrued gratuity. …."

There is nothing else in the contract that concerns discipline, including termination. Clearly on the face of the document, no disciplinary procedure has been adopted or prescribed, let alone the public service disciplinary regime. Consistent with that, there is no right of appeal created and granted to Mr. Gesa to challenge any decision of the "management of the NCDC". Hence, this was a typical employment contract as it applies in private employment settings, where the employer has the authority to hire and fire at any time with or without good reason in the absence of anything to the contrary.

Mr. Gesa agrees that there is no provision expressly adopting and incorporating into his contract the normal public service and or the NCDC disciplinary process. He argues however, that by conduct, the NCDC agreed to adopt and apply the administrative process. He goes on to argue that, there is no specific provision that excludes the application of the normal administrative process applying to and governing employment in a public authority such as the NCDC. 

No authority has been cited in support of these arguments. The arguments Mr. Gesa raises were raised in nearly all of the case authorities to date, some of which I cited with approval in the Mathew Himsa & Napao Namane case. In the end, I am left with no authoritative argument questioning the correctness of the judgements in question. I therefore reject this argument.

There is a further reason to reject Mr. Gesa's arguments. All of what happened starting with Mr. Gesa's appeal to the Public Service Commission and the Full Board of the NCDC to the final decision of the Full Board of the NCDC happened outside the terms of the contract. There is no evidence of a variation being sought by Mr. Gesa and agreed to by the NCDC for all of this to be part of the contract. There is a specific provision clause 16 of the contract concerning the issue of a variation to the contract. It does not allow for a variation of the contract in the way argued for by Mr. Gesa.

In the circumstances, I can only observe as I did in Legu Vagi v NCDC (23/08/02) N2280. There, I observed and I do likewise here that the NCDC although not obliged under its contract, it did take upon itself the burden of making known the allegations against the respective employees before taking the ultimate step of terminating them. Not much can be built into the steps the parties took outside the contract in the absence of any evidence of a variation to allow for the normal public service disciplinary process to apply.

Ultimately therefore, I find that there is no provision in the contract allowing for the normal public service or the NCDC's own disciplinary process to apply to the contract of employment in this case. Consequently, I find that the parties by agreement evidenced and contained in the written contract of employment decided to render Mr. Gesa's employment with the NCDC as a private matter of contract and not something in the domain of public administrative law. Accordingly, I find that judicial review is not available as a remedy to the plaintiff. Accordingly, I order a dismissal of the application with costs following that event.

Lawyers for the plaintiff/applicant: Mawa Lawyers.
Lawyers for the defendants: J.E.Aisa Jnr