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Ports Authority v Betham [2014] WSCA 4 (2 May 2014)

COURT OF APPEAL OF SAMOA

Ports Authority v Elon Betham [2014] WSCA 4

Case name: Ports Authority v Elon Betham

Citation: [2014] WSCA 4

Decision date: 2 May 2014

Parties: SAMOA PORTS AUTHORITY a statutory body established by the Ports Authority Act 1998 (Appellant) and TOLEAFOA ELON BETHAM of Tulaele, Businessperson (Respondent)

Hearing date(s): 30 April 2014

File number(s): CA 21/13

Jurisdiction: Civil

Place of delivery: Mulinuu

Judge(s):
Justice Fisher
Justice Hammond
Justice Blanchard

On appeal from: Samoa Ports Authority v Toleafoa Elon Betham (Supreme Court matter)

Order:

Representation:
A Sua for Appellant
R Faaiuaso for Respondent

Catchwords:

Words and phrases:

Legislation cited:

Cases cited:

Summary of decision:

IN THE COURT OF APPEAL OF SAMOA

HELD AT MULINUU

FILE NO: C.A21/13

BETWEEN

SAMOA PORTS AUTHORITY, a statutory body established by the Ports Authority Act 1998

Appellant

A N D:

TOLEAFOA ELON BETHAM of Tulaele, Businessperson

Respondent

Coram: Honourable Justice Fisher

Honourable Justice Hammond

Honourable Justice Blanchard

Counsel: A Sua for Appellant

R Faaiuaso for Respondent

Hearing: 30 April 2014

Judgment: 2 May 2014

JUDGMENT OF THE COURT

Introduction

[1] This is an appeal in a dispute relating to an employment contract.

[2] Mr Betham was General Manager of the Samoa Ports Authority from 2005 to 2011. During the first three years there was no written contract. For the second three year term, a written contract was executed.

[3] At the end of that second term, a dispute arose as to Mr Betham’s end of contract entitlements. The matter went to trial. By a judgment delivered on 29 August 2013, Vaai J entered judgment for Mr Betham as follows:

(a) $3,690.84 for untaken sick leave.

(b) $15,817.68 for “contract benefit.”

(c) $34,272.01 for “the 30% current salary less any capital NPF, Tax and ACC contribution owing.”

[4] The Ports Authority accepts liability for (a). It seeks to have (b) and (c) set aside.

[5] Mr Betham seeks to have the appeal dismissed in its entirety; costs in both the Supreme Court and this Court; and an award of interest.

[6] The appeal turns on what the relevant terms between the parties were.

The appeal process

[7] Counsel for the appellant in their submissions devoted much attention to the basis on which an appeal of this kind can be maintained to this court. There are jurisdictions, such as New Zealand, where the construction of employment agreements can only be determined by specialist tribunals. But in Samoa this dispute is governed by the regular law of contract. Appeals are maintainable as of right to this Court.

[8] Such an appeal is by way of rehearing, by which is meant on the evidence taken in the Supreme Court, save where for good and sufficient reasons this Court allows further evidence to be submitted. There is no further evidence in this instance.

[9] The onus is on the appellant, on that record, to show that the trial judge was wrong in some material respect.

What was the contract between the parties?

[10] The trial Judge found that a draft of the proposed contract was given to the Minister of Works who was also Chairman of the Ports Authority Board of Directors. He in turn gave a copy to the Audit Office for its opinion. That opinion was given in writing, recommending five amendments, four of which were attended to and incorporated into the draft.

[11] Vaai J found that Mr Betham then signed the contract when he was sent for by the Minister to execute it. And each page of the contract including schedules A and F were initialed by the parties.

[12] Clause 10 of the agreement provided as follows:

“10.1 The Employee is entitled, in accordance with Schedule B hereto, to payment of the equivalent of:

10.1.2 thirty per cent (30%) of current salary at the time the Contract Term ends or upon retirement.

10.1.3 one hundred per cent (100%) of Untaken Annual Leave; and

10.1.4 forty per cent (40%) of Untaken Sick Leave.

10.2 The end of Contract entitlements are calculated on a pro rata basis where the parties agree in writing to extend the Contract term.”

[13] Clause 15.1 of the Memorandum provided:

Upon the expiration of this Contract or its termination pursuant to clause 12, the Employee will be entitled to the entitlements set out in Schedule F hereto.

[14] The agreement did not contain a Schedule B. Annexed to the agreement and initialed by the parties was a Schedule F, which provided as follows:

SCHEDULE F

End of Contract Entitlements

Annual Leave

1. Any accrued and untaken annual leave must be paid to the Employee upon the expiration or termination of the Contract.
2. If the Employee has not obtained approval from the Minister to carry forward their accruals, the Employee will only be paid for any accrued and untaken annual leaver for the final year of the Contract.
3. If the Employee has obtained approval from the Minister to carry forward their accruals, the Employee will be paid for any accrued and untaken annual leave at the rate of pay at the time of the accrual of the leave, and not at the rate of pay at the date of expiration or termination.

Sick Leave

4. Any accrued and untaken sick leave for the final year of the Contract must be paid to the Employee upon the expiration or termination of the Contract at the rate of 30% of the rate of pay at the date of expiration or termination of the Contract.

End of Contract Payment

5. Upon expiration or termination by the Employer of this contract, the Employee is entitled to a payment of the equivalent of 12 working days for every year of the Contract served, to be paid at the rate of pay at the date of expiration or termination of the contract.
6. The Employee shall not be entitled to the end of contract payment where the Employee has terminated the contract under clause 14.1 of this contract.

[15] Clause 20 provided: “The Contract, Schedule A and Schedule B attached hereto constitute the entire contract between the parties.”

[16] Vaai J dealt with the conundrum he was faced with - no Schedule B - in this way:

Contract Benefit

30. Payment of the Contract benefit pursuant to the Schedule F was denied by the defendant on the basis schedule F was not part of the Contract. It is the defendant’s stance that schedules A and B only, pursuant to clause 20 constitute the entire contract.

But there is no schedule B. What is blatantly obvious is that the contract should have two schedules only. Schedule F was obviously meant to be B; it was not intended to vary any term of the contract. As stated above, schedule F was obviously intended to put in place the Board’s policy covering the retirement benefits for its long serving and contractual employees.

31. Both parties intended schedule F to be part of the contract. It follows the contract benefit amounting $15,817.68 should be paid to the plaintiff.

[17] The Judge reached that view by the following reasoning. He said when parties enter a contract, and in considering whether the negotiating parties have actually formed a contract, is a question to be determined objectively. It is permissible to look beyond the words of their agreement to the background circumstances from which it arose; what the Judge termed “the matrix of facts.”

[18] He observed that when Mr Betham’s contract was negotiated there were already in place written contracts for the Assistant Managers of the Authority, which contracts include benefits approved by the defendant’s Board of Directors for its long serving and contractual employees but not included in a cabinet directive. He then noted “the benefits approved by the Board of Directors are not stipulated in Clause 10 of the contract but it is so specified by Schedule F.”

The Arguments

[19] The essence of the Appeal is a proposition that the trial Judge wrongly construed Schedule F to be part of the contract.

[20] Mr Sua made extensive written submissions for the appellant. He enlarged on these orally. These were under five heads:

1. The trial Judge wrongly construed Schedule F to be part of the contract, when the contract consistently throughout refer to Schedule B and pursuant to clause 20.
2. The trial Judge failed to give reasons or any proper reasons as to why he made the inference that “Schedule F was obviously meant to be B.”
3. The trial Judge did not properly establish the relevant facts to which he made his inference thereon that “Schedule F was obviously meant to be B.”
4. The trial Judge’s inference that Schedule F was obviously meant to be B was not a proper inference to be made in light of the context of the contract.
5. The trial Judge did not properly compare and contrast the content of schedule F from the contract which according to the Appellant are two different documents referring to different contract benefits for the Respondent

[21] All of these arguments were, in one way or another, directed to an endeavour to persuade us the unaccounted for Schedule B governs matters in issue in this case.

[22] As we have noted in [16] – [18],Vaai J dealt with this in a robust way, by saying “Schedule F was meant to be Schedule B.” In other words this was a simple error, although the Judge thought external matters threw some light on how things had come about.

[23] We have not found it necessary to traverse here Mr Sua’s arguments in detail, although we have carefully considered them all. We agree with the outcome of Vaai J’s deliberations, and we think the result is justified on perfectly orthodox and straightforward contract principles.

Discussion

[24] The first point to note is that the Supreme Court dismissed out of hand an argument that this contract (or at least the presence of schedule F) had come about in a fraudulent manner. There is no cross appeal on this point. Nothing more need be said about it.

[25] Second, there has been no application for rectification of the contract. It is difficult to see how this could have had any legs as a runner on the evidence adduced in the Supreme Court. But the important and short point is that the contract stands in law, as it is.

[26] Third, as to that contract, it is complete. It is the Memorandum, including clause 15.1 and schedule F. This is the executed agreement of the parties. Both counsel agreed on this point. It is not a question of reading something into the document or out of it. The question is simply: what obligations did each of the parties assume under the contract as so identified?

[27] Fourthly, as to that issue, the respondent was entitled – under express terms of the agreed contract - to the sums awarded by the trial Judge. Schedule B was not part of the contract.

[28] To enlarge on that point, the awards made by the trial Judge were made under what counsel accepted to be express clauses of the agreement. The award of $15,817.68 for Contract Benefit was made under Sch F. The award of $34,272.01 was made under Cl 10.1.12. It is simply not open to say, as the appellant has endeavoured to say, that any such awards should have been made under some other provision which is not in the agreement or as the appellant would wish to reconstruct the agreement.

[29] It is unnecessary for us to consider the submissions as to what the quantum would have been, had the appellant’s arguments been made out.

Interest

[30] The respondent pleaded, and the case went to trial on the basis of, a claim to the statutory rate (8 %) from the date of judgment in the Supreme Court (29 August 2013) on a sum of $35,435.75. In the judgment as delivered, the sum is $34,272.01.

[31] VaaiJ did not deal with the issue of interest. Before us, Mr Faaiuaso endeavoured to broaden the reach of the interest claim (to all sums) and at a higher rate (of 12%). Wisely recognising this to be inappropriate without a cross appeal, and at this late stage, he did not pursue the point.

Costs

[32] The parties have been unable to resolve costs in the Supreme Court. That is unfortunate, and inefficient. That issue will have to be remitted to the Supreme Court for resolution. We urge the parties to reach agreement without a further hearing.

[33] In this Court, the respondent will have costs of $5000 and usual disbursements, if necessary as fixed by the Registrar.

Result

1. The appeal is dismissed.
2. The respondent will have interest on $34,272.01 from 29 August 2013 at 8%.
3. The respondent will have costs of $5000 in this Court and usual disbursements, if necessary as fixed by the Registrar.
4. The proceeding is remitted to the Supreme Court for costs to be fixed, if necessary, in that Court.

Honourable Justice Fisher

Honourable Justice Hammond

Honourable Justice Blanchard