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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO. 717 OF 2000(JR)
BETWEEN:
LAWRENCE SAUSAU
Plaintiff
AND:
JOSEPH KUMGAL –
THE GENERAL MANAGER
PNG HARBOURS BOARD
First Defendant
AND:
PNG HARBOURS BOARD
Second Defendant
Waigani: Injia, DCJ
2006: 19 December
JUDGMENT NO. 1
JUDICIAL REVIEW – Ground of review – Denial of natural justice – Disciplinary dismissal –Public employee’s right to be heard by Disciplinary Appeals Panel before dismissal – Denial of right – Dismissal quashed – Appropriate Relief – Contract of Employment for fixed term expired - Damages only.
JUDICIAL REVIEW – PRACTICE AND PROCEDURE – Statement filed under Order 16 r 3 – Purpose of Statement – Pleading of damages – Particulars of damages not required to be pleaded in the Statement – Evidence on damages may be heard at the trial – National Court Rules, O. 16 rr 3, 7; O 8 rr 29, 30, 32, 33, 34 & 36.
JUDICIAL REVIEW – PRACTICE AND PROCEDURE – Grounds of review – breach of s 23, 37, 41 & 48 of the Constitution – Not proper grounds for judicial review.
PNG Cases cited:
Brian Hudson v The Independent State of Papua New Guinea [1985] PNGLR 303;
David Nelson v Patrick Pruaitch (2004) N2536;
Ereman Ragi & Ors v Joseph Maingu [1994] SC459;
Harding v Teperoi Timbers Pty Ltd [1988-89] PNGLR 128;
John Kombati v Fun Singin (2004) N2691;
Luke Supro v Telikom PNG Ltd [1997] PNGLR 353;
Lysenko v National Airline Commission trading as Air Niugini [1988-89] PNGLR 69;
Malloch v Aberdeen Corporation [1971] 1 WLR 1578 at 1581
MVIT v John Etape [1994] PNGLR 596;
MVIT v James Pupune [1993] PNGLR 370;
National Airline Commission trading as Air Niugini v Lysenko [1986] PNGLR 323;
Sullaiman v PNG University of Technology [1987] N610;
Young Wadau v PNG Harbours Board & Ors [1995] SC489.
Overseas Cases cited:
Wallace v United Grain Growers Ltd [1997] 152 DLC (4th) 1, at 31
Counsel:
C. Narokobi with V. Narokobi, for the Plaintiff
J. Aisa (Jnr), for the First Defendants
19 December, 2006
1. INJIA, DCJ.: This application for judicial review is made under O.16 r.5(2) of the National Court Rules.
Relief claimed and grounds relied upon:
The Plaintiff seeks orders as follows:
"1. An order in the nature of certiorari to remove into this Honourable Court and quash the decisions made on or about 28th November 1996 by the defendants to terminate the employment of the Applicant.
7. That the defendants’ action was a breach of contract in that the Plaintiff was terminated before the expiry of the three (3) year term of his contract as stipulated in his Contract Employment.
2. The grounds relied on as set out in the Statement filed under O.16 r.3 on 16 January 2001 are as follows:-
"A. Constitution:
(i) That the defendants’ action was harsh and oppressive or unlawful within the meaning of s.41 of the Constitution in that the plaintiff was terminated on charges that were never determined and as such null and void.
(ii) That the defendants’ action breached the principle of natural justice within the meaning of s.59 of the Constitution in that the plaintiff was not given a fair and just hearing relating to the charges laid against him.
(iii) That the plaintiff was denied the opportunity to appeal the decision of the defendants to terminate his Contract of Employment and in failing to do so was denied his right of protection of law within the context of s.37 of the Constitution.
(iv) The defendants had powers and duties within the meaning of s.23 of the Constitution and failed to act accordingly.
(v) The actions of the defendants have denied the plaintiff his right to freedom of choice of employment within the meaning of s.48 of the Constitution.
B. Contract of Employment:
(vi) That the defendant’s action was a breach of contract in that the plaintiff (was) terminated before the expiry of the three (3) year term of his contract as stipulated in his Contract of Employment
(vii) That the defendants’ action was a breach of contract within the meaning of Clause 1.7 of the plaintiff’s Contract of Employment in that he was completely terminated from the PNG Harbours Board’s employment when it was stipulated in clause 1.7 of his Contract of Employment that the plaintiff would continue employment with the board in position other than that he occupied on contract, otherwise he was to serve as a redundant officer of the Board.
(viii) That the first defendant had acted ultra-vires his power in dismissing the plaintiff from his employment in that he had no power to terminate the plaintiff’s Contract of Employment until the charges against the plaintiff were determined by the Board.
(ix) That the defendants were biased in their deliberation for the renewal of the plaintiff’s Contract of Employment in that they took into consideration charges that were never determined or null and void.
(x) That the defendants had breached the plaintiff’s Contract of Employment in that they failed to pay his entitlements for the balance of the contractual term and/or failed to pay the 3 months entitlements in lieu of notice."
3. The relief sought in the Statement are distinct from the grounds relied upon and pleaded in the Statement and unless the Statement is amended to plead additional grounds, the plaintiff is restricted to the grounds and relief pleaded therein: O.16 r.6(2). In the present case, no such amendments were sought and granted. Therefore, the plaintiff is restricted to the grounds pleaded in the Statement. There are some new grounds such as failure to give reasons for decision and lack of delegated power raised in Mr Narokobi written submissions but these grounds are not available to the plaintiff to be pursued in this application.
Evidence:
4. The plaintiff’s evidence consists of his affidavit sworn on 5 July 2000 (Exhibit "A"), his affidavit sworn on 20 February 2006 (Exhibit "B"), affidavit of Bonnie Gelu sworn on 22 February 2006 (Exhibit "C"), affidavit of Bonnie Gelu sworn on 8 March 2006 (Exhibit "D"), affidavit of Kevin Yalkwien (Exhibit "E"), affidavit of the Plaintiff sworn on 16 March 2006 (Exhibit "F"), affidavit of Charles Punaha sworn on 20 June 2001 (Exhibit "G"), and affidavit of Camillus Narokobi sworn on 6 December 2005 (Exhibit "H"). Mr Gelu and Mr Yalkwien gave oral evidence.
5. The defendants’ evidence consist of the affidavit of Tau Vini sworn 6 January 2006 (Exhibit "I") and affidavit of Waisale Tivuka sworn on 29 November 2005 (Exhibit "J"). Mr Kau Vini gave oral evidence.
Admissibility Issues:
(Ruling delivered on 10 April 2006).
6. At the hearing of the application for judicial review, Mr Aisa objected to the tender of two affidavits deposed to by the Plaintiff’s witnesses and Mr K Yalkwien. The basis for the objection is that the affidavits contain evidence on damages, particulars of which were not pleaded in the statement in support of the application for leave (Statement) filed under O.16 r.3 of the National Court Rules (NCR). Mr Aisa relies on O.16 r.7 and cases such as MVIT v John Etape [1994] PNGLR 596 and MVIT v James Pupune [1993] PNGLR 370 which say that a party cannot lead evidence in a trial on matters it has not pleaded. He also relies on O.8 r.29 which requires particulars of the "claim" to be pleaded. He submits "claim" includes damages. In the present case, whilst a claim for "damages" is pleaded in the Statement, particulars of those damages are not pleaded.
7. Arguments from both parties were received and I made a ruling on 7 April 2006 overruling the objection and admitted the affidavits. I now give my full reasons for the ruling which I indicated I would publish.
8. In a judicial review application, the Statement filed under O 16 r 3 is equivalent to a Statement of Claim in an action commenced by Writ of Summons. The Statement contains a succinct statement of the relevant facts alleged as giving rise to the grounds of review and the relief sought which are also pleaded in the Statement. The rules on pleadings of particulars under NCR O.8 Div. 2 also apply to a Statement by virtue of O.16 r.7(2). Order 16 rule 7 relates to pleading of damages in a Statement and it states:
"7. Claim for damages (UK.53/7)
(1) On an application for judicial review the Court may, subject to Sub-rule (2), award damages to the applicant if –
- (a) he has included in the statement in support of his application for leave under Rule 3 a claim for damages arising from any matter to which the application relates; and
- (b) the Court is satisfied that, if the claim had been made in an action begun by the applicant at the time of making the application, he could have been awarded damages.
(2) Order 8 Division 2 shall apply in a statement relating to a claim for damages as it applies to a pleading."
Submissions on substantive application:
12. Counsel for both parties filed written submissions (original and supplementary) and made oral submissions. I have considered the evidence and the submissions.
Facts:
13. The undisputed relevant facts are that on 27 April 1992, the applicant was employed by the First Defendant (PNGHB) as its Port Security Manager, under a written Contract of Employment for a term of 3 years. Clause 1 of the contract incorporated the standard "Terms and Conditions of Senior National Officers in the PNG Harbours Board. Prior to his employment, he was a policeman for 16½ years, with his last engagement being an Assistant Commissioner of Police. The contract was to expire on 31 December 1996. On 22 August 1996, the Board had appointed a Special Committee to investigate and report on all contract positions in PNGHB. On 4 September 1996, he was served with a Notice of Suspension dated 2 September 1996, together with a disciplinary charge dated 4 September 1996 under Clause 18(1)(a) of the Contract. The charge related to damage of a motor vehicle owned by PNGHB which was assigned to the applicant. He was given 7 days to reply. On 9 September 1996 he replied to the charge denying the charge. By this time, the Special Investigation team’s report was before the Board. The charge was not determined by the Board under Clause 25.2(c). On 26 November 1996, the first defendant advised the plaintiff that his Contract "will NOT be renewed" on the basis of a staff appraisal done on his performance by his immediate supervisor and the recommendation of the Special Investigation Committee. On 3 December 1996, he asked the First Defendant to withdraw the letters of 26 November 1996 because the disciplinary charge was pending and also he was not given an opportunity to be heard on the renewal of the contract. Between 2 January 1997 and 31 March 1998, he entered into further correspondence with the defendants and other interested persons regarding his case for renewal of contract, re-deployment, etc. On 3 August 1998, the board, whilst acknowledging the disciplinary process was incomplete, confirmed its earlier decision. Upon non-renewal of the Contract, the applicant was not retained on another position. He became a redundant officer and presumably paid out his entitlements. One of the issues in this application is whether pursuant to Clause 1.7 of the Terms and Conditions, PNGHB was obliged to retain the plaintiff on the same or another position.
Competency Issues:
14. I have also considered the pleading of the relief and grounds upon which those relief are sought as pleaded in the statement. In my view, the grounds pleaded under ss.41, 37, 23 and 48 of the Constitution relate to breaches of the Constitution, for which the Plaintiff must seek declaratory orders as of right. They require proper pleading and trial on both issues of fact and law. They are not the sort of grounds upon which the common law discretionary procedure of judicial review would lie. The trial in this matter in fact has not been about one of constitutional breaches and protection of rights. For this reason, I dismiss the plaintiff’s submissions on those grounds. With these grounds, the related relief pleaded in par. 2, 4, 5 and 6 are also dismissed.
15. The grounds under (ii) relating to s.59 of the Constitution (breach of principles of natural justice) is an appropriate ground for judicial review and I consider it.
16. Also, as submitted by Mr Aisa, in judicial review, judicial review procedure is not available to enforce purely private contractual rights: Ereman Ragi & Ors v Joseph Maingu [1994] SC 459; Young Wadau v PNG Harbours Board & Ors [1995] SC 489; Luke Supro v Telikom PNG Ltd [1997] PNGLR 353; John Kombati v Fun Singin (2004) N2691. Sullaiman v PNG University of Technology [1987] N610. However, in David Nelson v Patrick Pruaitch (2004) N2536, I distinguished those kind of cases from cases where a public employee employed under contract, oral or written, as provided for by statute, involves a disciplinary process for removal, which is spelt out in the enabling statute and/or the Contract. The decision-making process on disciplinary matters is a proper subject of judicial review. I understand my decision was appealed but I am not aware if a decision was made by the Supreme Court on the appeal. I still maintain my view and that view still applies to this case because the contract in the present case contains disciplinary procedures set out in Clause 25. My views are succinctly stated in the passage in David Nelson’s case quoted by Mr Aisa, as follows:
"In my view, when a statute or Contract of Employment entered into under a statute, prescribes disciplinary procedures designed to ensure compliance with principles of natural justice, then the exercise of disciplinary power as provided under the Contract of Employment is a proper matter for judicial review. Such a Contract of Employment is a public Contract of Employment for service. I use the term "public Contract of Employment" to connote the exercise of statutory power on the part of an authority of the State, to enter into a contract of employment for service with a person, for that person to discharge public functions prescribed under Statute. Upon his engagement he becomes a public official."
17. Mr Aisa’s other argument that the plaintiff was not appointed to a position established under the Act and therefore his appointment was not a public position but purely private, is not open to the respondent. An officer of the service appointed by the Harbours Board under its wide powers of administration of the service of the Board (s.9(1)), remains a public employee for all intention purposes.
18. Mr Aisa’s next argument is that the employees of the PNGHB ceased to be employees of PNGHB and became employees of PNGHBL by virtue of s.36 C of the 2002 amendment. As employees of a private corporation, their employment is the subject of private employment and its breach is not available to judicial review. Another related argument is that the first defendant is not a proper party under the 2002 amendment. It should be PNGHL.
19. It is clear however that the plaintiff was employed in 1994 under the old PNGHB Act before the 2002 Amendment Act. The subject matter of these proceedings occurred in 1996 before the amendment. These proceedings were filed on 7 December 2000 before the 2002 amendment and it remains to be considered under the law as it was then. The plaintiff’s employment ceased in 1996 and he is no longer an officer of PNGHB, who is affected by the transition provisions in s.36 C of the Amendment Act. Further, both parties have not sought to amend the grounds to base their action (or defence) under the new amendments and it is not open for the Court to invent a new set of grounds to determine the application under the 2002 Amendment.
20. In the present case, the grounds of review set out in par (ii), (breach of natural justice), (viii) (ultra vires), (ix) (bias) are proper grounds of judicial review for which the prerogative writ of certiorari, which is the primary relief claimed in relief No. 1 (certiorari), is available. The grounds pleaded in (vi), (vii) and (x) relate to breach of contract and on their own are not proper grounds for judicial review, however, because they are related to grounds of abuse of process and consequential upon grant of certiorari, they will be considered with those grounds.
21. The main grounds are: (1) Denial of natural justice. (2) Ultra vires, (3) Bias, (4) Breach of clause 1.7 of the Contract.
Relevant provisions of Contract of Employment:
22. The case turns on the construction of the relevant terms of the Contract which are Clause 1.7 and 25 of the Terms and Conditions. Clause 1.7 states:-
"Upon completion of the Contract, a new Contract may be offered to the Senior Officer in accordance with these Terms and Conditions, where a new Contract is not offered, the officer shall continue employment with the PNG Harbours Board in position other than that he occupies on Contract, otherwise he shall serve as a redundant officer of the Board."
Clause 25 sets out the disciplinary procedure as follows:-
"25. DISCIPLINARY PROCEDURES:
25.1 Serious disciplinary matters pursuant to Clause 20 hereunder, allegedly involving the Senior Officer shall be resolved through the following procedure:
- (a) Where the Senior Officer is alleged to have committed a serious offence under Clause 20, the Managing Director shall suspend the Senior Officer in writing with the offence allegedly committed and enable the Senior Officer to reply to such charges.
- (b) The Senior Officer shall formally respond to the charge in writing to the Managing Director within 7 days of the charge being laid.
- (c) The Managing Director shall submit a copy of the charge, the Senior Officer’s formal response, any other relevant evidence, together with recommended action to the Board who shall having obtained a legal opinion determine whether or not the Contract should be terminated.
- (d) The decision of the Board shall be final, and the terminated Senior Officer may seek redress through the Papua New Guinea Courts of Law in the event that he considers the termination to have been made unfairly.
25.2 Notwithstanding the above procedure, the Managing Director may following consultation with the Board formally caution or warn the Senior Officer in writing for unsatisfactory performance of duties, where the disciplinary offence is considered by the Managing Director not to warrant Termination for Cause, under Clause 20 herein."
Denial of natural justice:
23. Mr Narokobi for the plaintiff submits the plaintiff was denied the opportunity to be heard on his appeal against non-renewal of the contract as he was entitled under Clause 1.7 to be re-employed after his contract expired. Hence he was denied natural justice.
Ultra Vires:
26. This ground is worded in such fashion that it assumes that there is a statutory duty imposed on the Board to determine the charge before the expiry of the contract. I am not referred to any provision in the Harbours Board Act, which imposes such duty on the Board. Ultra Vires relates to excess of statutory power. The duty to determine the disciplinary charge once responded to arises from the common law duty to act fairly by determining the charge. I have already determined this under natural justice. In my view, this ground is misconceived and it is dismissed.
27. Also under natural justice, the plaintiff raises the issue of whether the plaintiff had a right to be heard before the Board on the question of whether or not his contract should be renewed. In my view however, I do not think the principles of natural justice under s.59 of the Constitution or the common law can be implied into the Contract of Employment in such situation, in the absence of any express provision in the Contract or in the Act. For this reason, I reject this ground.
Bias:
28. Although there is some evidence from the plaintiff that the Management’s action to charge the plaintiff may have been motivated by the plaintiff’s complaints of mismanagement against the management, there is no clear evidence to show they were so motivated by this reason. The evidence against the plaintiff on damage to the motor vehicle is well documented. This dispels any suspicion or apprehension that may arise that the disciplinary charge was fabricated for ulterior or bad motives. I dismiss this ground.
Breach of Clause 1.7 of the Contract:
29. Mr Narokobi submits the plaintiff was entitled to be re-deployed under this clause.
30. Mr Aisa submits Clause 1.7 follows the common law right of employer to hire and fire a private employee. He cites the English court of appeal decision in Malloch v Aberdeen Corporation [1971] 1 WLR 1578 at 1581 and Canadian Supreme Court decision in Wallace v United Grain Growers Ltd [1997] 152 DLC (4th) 1, at 31. Clause 1.7 gives the PNGHL the absolute right to renew or not to renew a contract which has expired and also an absolute right to retain or retrench or terminate the employment of a redundant officer whose contract has expired.
31. I accept Mr. Aisa’s submission. Clause 1.7 is broadly worded to recognize PNGHB’s absolute right to decide whether or not to renew a contract which has expired. There are no conditions to which the exercise of this right is subject to, stipulated under Clause 1.7. This Clause is clear that if the employee is not retained on another position, then he is retained as a redundant officer. As a redundant officer, his employment is liable to be terminated under Clause 19(1)(c) and paid out his entitlements under Clause 19.3. The plaintiff was not appointed to another position. He became a redundant officer, which was later terminated.
Summary of Finding on Liability:
32. In summary, I dismiss all the grounds of review except the ground on natural justice. I find that the Board decided to allow the plaintiff’s employment contract to lapse without the disciplinary charges being dealt with and therefore denied natural justice.
Appropriate relief:
33. As for the appropriate relief, an order in the nature of certiorari will be granted quashing the decision of the Respondents not to determine the charge first before the plaintiff’s contract expired. The plaintiff is not seeking an order for re-instatement. Even if he were, re-instatement would not be an option because it is beyond the jurisdiction of this Court to order the parties to enter into a Contract of Employment that has expired. The consequential relief is limited to one of damages. The award of damage should be limited to loss of earnings and other entitlements for the period from the time the plaintiff submitted his reply to the charge up to the expiry of the contract, except as otherwise provided in the Contract. It is clear from the notice of charge and suspension dated 2 September 1996 that the plaintiff was paid his "basic salary" during suspension but his "other entitlements and benefits were suspended forthwith." On this basis, the plaintiff is entitled to receive those other entitlements and benefits including unpaid basic salary which he missed out between 2 September 1996 and 31 December 1996.
Damages:
34. The plaintiff in his affidavit sworn on 20 February 2006 provides primary evidence of the unpaid balance of his "basic salary" and other unpaid allowances due to him. The plaintiff does not give particulars of termination entitlements he already received. He says the calculations were worked out between him and the then managing Director Mr Charles Punaha but there is no evidence from the First Defendant to confirm this. A termination payout document would assist in verifying the particulars of outstanding payments for salary, gratuity, accommodation, etc. Also as there is no evidence from the Defendants verifying these calculations, I will have to make an assessment based on the evidence provided by the plaintiff himself.
35. Mr Yalkwein has based his calculations on the assumption that the plaintiff would be entitled to work up to retiring age in 2006. In my view however, the plaintiff’s contract was for a fixed term and there is no provision in the contract for the plaintiff to be employed up to retiring age. In any case, the plaintiff was not a career officer of the service. He was recruited on contract for a fixed period and any suggestion of continuous employment up to retiring age is speculative and without basis. For this reason, I reject his evidence and calculations.
36. Based on the plaintiff’s calculations, I award entitlements as provided for under the Contract, for reasons stated hereunder, as follows:
| 1. | Salary for period 29/11/96 – 31/12/96= | K1,776.11 |
| 2. | Outstanding Gratuity on 25% as at 31/12/96= | K3,764.57 |
| 3. | Accommodation allowance for 29/11/96 – 31/12/96 = | K 379 .17 |
| 4. | Utility allowance for 29/11/96 – 31/12/96 = | K 58.33 |
| 5. | Money in lieu of 3 months notice under Clause 19.2 as a redundant officer= | K7,586.79 |
| 6. | Entitlements as a Redundant Officer. | |
Under Clause 19(1)(c), the plaintiff’s non-renewal of contract may be regarded as termination of employment "in the event of a redundancy" for which under Clause 19.3 he is entitled to "all accrued benefits calculated in accordance with the Terms and Conditions subject to any penalties herein." The plaintiff has calculated full net salary for the years 1999 – 2000 at total sum of K90,610 but failed to indicate if this comes under "accrued benefits." There is no provision in the contract for any salary and other benefits for any period beyond the expiry of the contract. I am not referred to any specific provision in the Terms and Conditions which says a senior Contract officer whose employment is terminated because of redundancy by virtue of expiry of contract, is entitled to be paid at a certain rate for a certain period of time. For instance, in the case of Lysenko v National Airline Commission trading as Air Niugini [1988 – 89] PNGLR 69; National Airline Commission trading as Air Niugini v Lysenko [1986] PNGLR 323 relied upon by Mr Narokobi. Clause 12 of the contract in Lysenko stated: "A pilot whose services are terminated because of redundancy shall be paid at the rate of two months salary for each year of service with the employer and shall retain irrevocable rights to re-employment and seniority for two years." A similar provision does not exist in the plaintiff’s contract. In any case, the plaintiff will receive money in lieu of 3 months notice under paragraph 6 above, and this amount comes under "accrued benefits" under Clause 19.3. Finally, the plaintiff was not career public servant of PNGHB. He was recruited from outside the service of PNGHB on contract for a fixed term. In my view he had no legitimate expectation that when his contract expired, he would be retained in another position. For these reasons, I reject this claim.
7. Superannuation (POSF):
This claim is based on plaintiff continuing to serve as a redundant officer from 1997 – 2000. I reject this claim for the same reasons given above in par.. 6.
8. General Damages for pain and distress.
The plaintiff’s evidence is that he has suffered hardship, frustration and stress as a result of being subjected to a disciplinary process which was never determined.
Mr Aisa submits particulars of this claim have not been pleaded or evidence of which has not been provided and an award should not be made. I accept that nominal damages may be awarded for "disappointment, distress, the upset and frustration suffered by the breach" of contract": Brian Hudson v The Independent State of Papua New Guinea [1985] PNGLR 303; Also see Harding v Teperoi Timbers Pty Ltd [1988] PNGLR 128. I accept the plaintiff’s evidence that he experienced a lot of anxiety, distress and frustration of having to wait for a decision by the Board on the disciplinary charge to clear his name. These are normal experiences one encounters and requires no further scientific proof by medical evidence or otherwise. I award K3,000.00.
Total K16,554.97
35. Orders:
______________________________
Narokobi Lawyers: Lawyer for the Plaintiff
Allens Arthur Robinson Lawyers: Lawyer for the Respondents
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