New Zealand Pacific Training Centre Ltd v Training & Productivity Authority of Fiji [2005] FJHC 370; HBC0262J.2001L (16 December 2005)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. 0262 OF 2001

Between:

NEW ZEALAND PACIFIC TRAINING CENTRE LIMITED
a limited liability company having its
registered office at Lautoka trading as
“NEW ZEALAND PACIFIC TRAINING CENTRE”.
Plaintiff

- and -

TRAINING & PRODUCTIVITY AUTHORITY OF FIJI
previously known as
FIJI NATIONAL TRAINING COUNCIL
a body corporate Established Pursuant to the Fiji National Training Act (Cap. 93)
Defendant

Counsel: Mr. C.B. Young for the Plaintiffs
Ms. S. Devan and N. Sivam for the Defendants

Date of Hearing: 7th and 14th November 2005
Date of Judgment: 16th December 2005

JUDGMENT

On 25th of March 2001 the following notice appeared in the newspaper The Fiji Sun–

“Notice To All Levy Paying Employers All levy paying employers are hereby advised that the Council’s approval for ALL grant claimable courses conducted by New Zealand Pacific Training Centre (NZPTC) has been withdrawn indefinitely with effect from 20th of March, 2001.

The Council has been forced to withdraw approval for ALL courses as NZPTC has continued to breach the terms and conditions under which approval has been granted by the Council.

Employers are notified that courses attended by their employees upto and including 20th of March 2001 will be paid grant in the usual manner. You will be further advised of any changes so the grant claimable status of courses conducted by NZPTC.

For further clarification employers are to contact the Council’s Grant Section staff ...

Jone Usatame

Director General”

This is document 23 in the defendant’s bundle, Volume 2, (D.2/23).

On 23rd of March 2001 (D.2/22) the defendant’s Director General had written to the plaintiffs informing them that at a meeting on Tuesday the 20th of March 2001, the defendants had decided that approval for all courses conducted by the plaintiffs would be withdrawn effectively from 20th of March 2001. They cited the reasons as the plaintiff’s “blatant and continuous disregard for the Council’s instructions and conditions under which all approval for grant claimable courses were granted”. They then cited the dates of some eight letters over the period from the 27th of January 1999 to 13th December 2000 when they state that they had advised the plaintiffs to refrain from using any other words or slogans apart from the words “grant claimable courses”.

The Council was very concerned that after numerous reminders and warnings the plaintiffs continued to display the phrase “recognised and accredited by FNTC” in its certificates of participation.

They stated the cancellation of approval would remain in force until such time as the plaintiffs were “able to show cause as to why such an approval should be reinstated”.

In their amended statement of claim filed on the 29th of September 2005 the plaintiff’s described themselves as carrying on “the business of training and offering courses for including (but not limited to) business studies and computer studies”, (paragraph 1).

The plaintiffs claim that:

First cause of action – the defendant’s letter of the 23rd of March 2001 “was written in breach of the representations (made to the plaintiff) and was so written with the intention of causing loss and damage to the plaintiff”.

Second cause of action – the defendants “in furnishing the approval to certain courses to the plaintiff to conduct by its aforesaid letter engaged in misleading and deceptive conduct and was in breach of section 54 of the Fair Trading Decree 1992”.

Third cause of action – “in threatening to withdraw and thereafter withdrawing the plaintiff’s right to represent to the public that the courses it was providing (as the plaintiff had previously done) were “grant claimable courses” for the reason that the plaintiff had used the additional words “recognized and accredited by FNTC” the defendant acted ultra vires knowing that the withdrawal of the right of the plaintiff to represent that it was providing “grant claimable courses” would cause harm and damage to the plaintiff’s business.

Alternatively the defendants were under an implied duty not to act discriminatorily, arbitrarily or oppressively towards the plaintiff but in issuing the letter of the 23^rd of March 2001, they breached that duty”.

The Fiji National Training Council, the defendants, were established under the Fiji National Training Act¸ Cap. 93 which in its preamble reads “An Act to establish the Fiji National Training Council, to provide for training of persons, and to provide for the imposition of levies connected therewith”. Various amendments were made by the Fiji National Training (Amendment) Act 2002 in particular changing the name of the Council to “The Training and Productivity Authority of Fiji”. I will refer throughout this judgment to the defendants as FNTC.

Section 9 of Cap. 93 sets out the functions of the FNTC. They are “in the national interest, and on such terms and conditions as it shall from time to time deem necessary,

(a) to provide arrange for or regulate the appropriate training, of persons or classes of persons, whether by way of apprenticeship or otherwise, to assist such persons or classes of persons in connection with employment;

(b), (c), (d), (e), (f), (g), (h), (i) ...

(j) to make grants or loans to persons providing such courses or other training facilities the Council may approve;

(k) to assist and contribute towards the costs of training, and the promotion of training, of any persons or class of persons;

(l) make provision for the registration of such training courses or facilities of such category as it shall direct, and for the approval of such courses or facilities;

(m), (n), (o), (p) ...”

There is in Fiji a system to finance training in industry and in the work place. There is a 1% levy upon employers which goes to the Training Council. This finances the activities of the Training Council. Independent companies, such as the plaintiffs, can then offer courses in business studies, computing, commerce, etc. If an employer sends one of his or her employees on such a course then most of the cost of the course is recoverable by the employer from FNTC.

Before a course can be offered, the independent course provider must obtain approval from the FNTC. The FNTC checks the validity of the course, the content, ensures that there are no breaches of copyright, ensures there are trained and competent teachers and ensure there are suitable venues and facilities. Once this has been done the FNTC approves the course and the course provider can advertise it to employers as being one in which they can recover most of the cost of the course. These are referred to as “grant claimable courses”.

This system does not preclude any independent course provider from offering whatever courses he or she wishes. However, if an employer chose to send an employee on such course then the cost would not be recoverable from the FNTC. It is therefore clear that a course will be far more attractive to industry if it can be labelled “grant claimable” than if the course does not come with that label and the ability to reclaim costs.

The plaintiffs say that over the years they had applied for and been granted grant claimable status for many courses. They say that letters from the defendants were entitled “Accreditation of Training Programmes”. The FNTC was informing them that their courses met all the criteria. The plaintiffs therefore say that there can be no complaint when they advertised their courses as accredited training programmes and recognised and accredited by FNTC.

The plaintiffs say that FNTC then started, without any cause or basis, attaching to the approval of courses the condition that only the words “grant claimable course” could be used in any material produced and that training providers should not make any reference to accreditation or recognition by FNTC. The plaintiffs say that such reference would naturally flow from the very fact their courses had been approved.

They accept that FNTC wrote a number of letters over the years concerning the limitations placed upon what they were saying in their advertisements, letterheads, certificates etc. They say that the FNTC had no power to do this. Further, they had already given permission for those words to be used, they necessarily followed from the circumstances and that, despite what FNTC was saying, others were doing the same without being stopped. They themselves were being discriminated against and told not to use those words.

The plaintiff further complained that having done nothing wrong as far as the law was concerned their grant claimable status for all their courses was arbitrarily, unlawfully and unilaterally withdrawn on the 23rd of March 2001. Further, they say that by placing the advertisement in the newspaper FNTC damaged their business substantially.

The plaintiffs have portrayed themselves as a dynamic, go ahead and expanding company. They say that despite the fact that there were increases in turnover in the following years the actual profits were substantially reduced by the defendants’ actions and that their losses in that regard should be extended over some seven years from 2001. They called a qualified accountant to substantiate these claims.

The defendants responded that they were and are the body that regulates training in Fiji. They had found that independent training providers were misusing terms such as “FNTC accredited” and “recognized by FNTC”. They said the recognition applied to each individual course and not to the training provider itself. Having perceived this practice and its potential and reality for misleading they notified all those training providers concerned to cease using all such logos and slogans save for the words “grant claimable course”. They say that over a period of time training providers did comply, except for the plaintiffs. They were given a number of warnings. They stated when these had no effect they had no alternative but to withdraw the grant claimable status of the plaintiffs’ courses. They say they were within their powers under the Act to do this and that it was a proper function of the FNTC. It would be discriminatory against training providers that had ceased to use such words to allow the plaintiffs to continue using them.

I have heard the evidence of Subhas Chandra, Ranjit Lal, Savutini Chauhan, Avikash Anand Kumar and Neil Underhill for the plaintiffs. I have heard the evidence of Surajani Kishun and Willy Kwon Sing for the defendants. I have bundles of documents from the parties, their closing submissions and supporting legal authorities.

Mr. Subhas Chandra gave evidence. He is a Director of NZPTC. He said that by May 1997 some 17 courses of NZPTC had been accredited. He said he had used words such as “recognized and accredited by FNTC” on certificates and the like. He said he had a lot of contact with the previous Director General of FNTC, Nelson Delailomaloma. He said that Mr. Delailomaloma was happy with the way he was using these words and that they supported him.

Mr. Chandra said his business was expanding and new centres were being set up all the time and applications being made for new courses. He said members of the business community were coming to him at regular intervals asking for him to set up and run more courses and in more places, for example in Sigatoka, Ba, Nausori. He said he had received FNTC’s letter of the 23rd of March 2001 by fax at approximately 4.30 p.m. in the evening. It was a Friday. There was then nothing he could do about the matter. He said the effect of the letter and the advertisement was “we virtually lost all the land from under my legs”. He said that FNTC themselves were running courses in competition with his. He felt that this might be part of the motive for their actions and they were acting as “referee and player” in the provision of courses. There was no dispute about the various documents going back and forth.

When it was put to him in cross-examination that it was the courses that were being accredited not the institution he basically stated that he considered FNTC had been given him the approval to use the kind of wording he had and that they had no power to forbid him.

Document D.1/10 a letter of 2nd July 1988 was put to him. It gave approval for a particular course. Condition 5 stated that “apart from the words ‘grant claimable’, no other words or slogans shall be used to convey attachment/recognition/association with FNTC for publicising, marketing or advertising purposes”. He said he didn’t accept that, as the words “FNTC accreditation” were already on the plaintiffs’ letterheads. He said he saw nothing in law or by act or anything else for FNTC to rely on to bring about this change. He said he was running a business and he had to continue. He stated competition was strong and it was legitimate for him to publicise the fact that his company was FNTC accredited in those courses.

He did accept that despite the warnings being given the new courses he applied for were still being accredited.

Ranjit Lal, Administration Manager for Denim Fiji Limited stated that when the plaintiffs ceased to be accredited they stopped sending employees to them. Savutini Chauhan stated he was a director of the plaintiff company. He said that in response to FNTC’s requests about what slogans could be used they had changed all their boards but he had seen one company, CMTS in Lautoka, who still use the letters FNTC. Avikash Kumar stated he was a tutor at NZPTC. He joined in June 2005 having previously worked at CMTS. He stated whilst there they had used words such as “FNTC grant claimable”. He recognized CMTS’s sign board with those words on it. It was there until June 2005. Neil Underhill is a qualified accountant. He was called to deal with the question of damages and future loss.

Surajani Kishun is the grants officer for FNTC. She has worked there for some eight years. She set out the defendant’s case in detail. In particular, she states how FNTC in the late 90s became concerned at how words such as “FNTC accredited” were being used. She went through the various letters and documents that were sent out to training providers and set out the defendants policy that only the words “grant claimable course” could be used.

Mrs. Kishun stated complaints were being received concerning training providers using various forms of words to bolster their image in the eyes of employers and the public generally. She denied there was any kind of discriminatory action against the plaintiffs. She stated that other employers had followed their directions and there were no problems with them. The only institution that was allowed to use FNTC accredited itself was in Labasa and that was run under the direction of FNTC. It ran FNTC produced courses only and there were no other course providers in Labasa. She further stated that that accreditation was fairly quickly withdrawn and indeed legal proceedings had to be issued to compel compliance with their directives.

Willie Kwan Sing the corporate manager for FNTC also gave evidence for the defendants. He has only recently joined FNTC and supported Surajani Kishun in her description of the policies of the defendants.

There is little dispute upon the facts in this matter. A close look at the documents sent over the years is important. That shows that in 1997 and in 1998 there were no explicit directions as to precisely what course providers could put on their certificates and advertising material.

It is clear that what was being accredited were the courses and not the training providers or training centres. This is fundamental to the resolution of this case. At no stage do FNTC specifically grant permission or state that anyone can describe themselves as an FNTC accredited provider or centre (save for the isolated Labasa example). The wording of the documents and the very way in which applications are made, considered and decided shows that what is being considered is the course. A centre might well run accredited courses. That did and does not mean that the centre itself is FNTC accredited. It might well run other courses which do not have that accreditation.

The importance of this difference is that FNTC has the task of developing training in Fiji. The funds collected from employers are channelled through FNTC. Most of the funds come back to employers through use of courses which are accredited. An employer will wish to know whether or not fees for a course are reclaimable or not. The fact that a course is grant claimable also attaches a quality label to it according to the standing of the FNTC.

I therefore find that FNTC had a duty and a legitimate interest in ensuring that employers and the general public are and were not misled in the way training providers used the name of FNTC in their advertising, certificates, letterheads and other material. There were problems in 1997 and 1998 where training providers were trying to steal a march upon each other by representing that the providers themselves, and impliedly all their courses, were FNTC accredited (see D.1/5). FNTC took the decision to remove the scope for misrepresentation. They made it a condition of granting accreditation for a course that the service provider only used the words “grant claimable course” in relation to the course and could not use any other words to suggest FNTC approval or accreditation.

A general notice was sent out to all employers. By mid to late 1998 there was general compliance with FNTC’s requirements. The plaintiffs were the exception to this. Further letters of warning were sent out. It was made clear that grant claimable status for courses could be withdrawn if there was a failure to comply with conditions. The plaintiffs persisted in using the offending wording.

It is pertinent to note that in a letter (D.2/18) dated 12th October 2000, the plaintiffs’ Centre Director did not challenge the legality or reason for FNTC insisting on what they did, but said that failure to comply was a question of oversight and the use of old stationery. They also suggested it was too expensive to change one advertising board which had been made overseas.

FNTC however found that compliance was still not forthcoming. By a letter (D.2/20) dated 13th December 2000 FNTC told NZPTC “The Council will be monitoring ... Please treat this matter as top priority as the Council will withdraw/cancel its grant approval should these requirements not be met immediately”. The letter was signed by Jone Usamate, the Director General.

I do not find that there was any representation by FNTC that the plaintiffs could use the various logos or slogans which they did. I have not heard any evidence from Mr. Delailomaloma. Given all the documents in this case, in particular, the letters to NZPTC, I can accept Mr. Chandra’s evidence when he says Mr. Delailomaloma was encouraging. I do not accept it when he says he was given the right or open-ended permission to use the slogans.

On the facts as I find them, there has been no misleading or deceptive conduct. I cannot see any breach of section 54 of the Fair Trading Decree 1992. (Section 54(1) states “A person shall not, in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”)

Approval for courses was given for a limited time. By the end of 2000 all approvals for the plaintiffs’ courses had the warning conditions attached. I do not find there was any intention to cause loss or damage to the plaintiffs’ business. I do not find there was any discriminatory action against the plaintiff. Indeed, had the plaintiff been allowed to continue using the offending slogans and logos then the rest of the training providers would be complaining it was them who were being discriminated against, (see D.2/14). The use of “FNTC Accredited” is and was perceived as giving a marketing advantage to whoever used those words.

I accept the evidence of Surajani Kishun. Where it differs from that Subhas Chandra I prefer her evidence. There is little that is controversial in the evidence of the other witnesses, save for Neil Underhill.

The question does arise as to whether or not the defendants should have put an advertisement in the newspaper and whether or not they should have first warned the plaintiffs they were going to do that.

The plain fact is that the only option left to FNTC was to withdraw the grant claimable status of the plaintiffs’ courses. If that was going to take place then it was right that employers and the general public should know that had occurred. In those circumstances an advertisement in the newspaper was the only way to reach the general public. It was worded in a moderate way. I do not find that the plaintiffs’ claims are made out for the fact that the defendant did not give a specific warning that an advertisement would be placed.

It is suggested that there was some kind of covert agreement to assist a rival company as their advertisement for courses appeared in the same newspaper as FNTC’s notice of withdrawal of accreditation for all the plaintiffs’ courses. There is no further evidence to support this suggestion beyond the coincidence of FNTC’s notice appearing at the same time as the course advertisement for another training provider. That in itself is insufficient for me to find the plaintiffs’ allegation proved on the balance of probabilities.

The plaintiffs have alleged that they have been victimised in that others were allowed to continue using the offending wording and logos whereas they were not. Only one instance of this (CMTS) has been shewn in evidence, and that was a minor breach. That is far from sufficient to support the plaintiff’s claim.

There is next the question as to whether due authorities were obtained in cancelling all the accreditations. There is also the question as to whether or not the FNTC complied with its own conditions when issuing course approval, namely when it stated that it would be the Council who withdrew any recognition, (see for example the letter at D.2/5.) There is a framework of power and authority which derives from the act itself, through the Council and to the Director General and the rest of the defendant organisation. It is clear that the Director General had discussed these matters with the Grants Council. The Grants Council is the body within the FNTC that has the power to approve courses. They had come to the conclusion that the plaintiffs’ accreditation for the various courses should be withdrawn for failure to comply with course conditions.

It is a draconian act to blanket cancel all course accreditations. It was not done on the basis of defects in the courses provided by the plaintiff. The reasons were extraneous to the courses themselves. However, given the persistence of the plaintiffs’ failure to comply, the misapprehension and feelings of arbitrariness that could occur by de-accreditation of only some courses, the fact that the credibility of the courses depended upon FNTC approval, the logo warning conditions that were attached to each approval and fairness to other providers I find that it was open to the defendants to withdraw course accreditation in the way they did.

In these circumstances I find that the plaintiff’s claims must fail. There is no need for me to consider the evidence of Mr. Underhill.

These claims are therefore dismissed.

(R.J. Coventry)
JUDGE