State v Permanent Secretary for Labour and Industrial Relations, Ex parte, Labasa Town Council [2006] FJHC 112; Judicial Review 41.2003 (23 February 2006)

IN THE HIGH COURT OF FIJI

AT LABASA

CIVIL JURISDICTION

JUDICIAL REVIEW NO. 41 OF 2003

Between:

STATE

v

1. THE PERMANENT SECRETARY FOR LABOUR AND INDUSTRIAL RELATIONS

2. THE DISPUTES COMMITTEE

3. FIJI LOCAL GOVERNMENT OFFICERS ASSOCIATION

4. JAGDISH PRASAD
Respondents

Ex-parte:

LABASA TOWN COUNCIL
Applicant

Mr. H. Nagin for the Applicant
Mr. A Tuilevuka for 1^st and 2^nd Respondents
Mr. G.P. Shankar for 3^rd & 4^th Respondents

Date of Judgment: 23 February 2006

JUDGMENT

Pursuant to leave granted on 23 May 2005, Labasa Town Council (the 'applicant') applies for judicial review of the decision of The Disputes Committee (the 'second respondent') given on 22 July 2003 which ordered that Jagdish Prasad (the 'fourth respondent') be reinstated to his former position of Chief Executive Officer from the cute of transfer and demotion without loss of any pay or benefits.

Reliefs sought

The reliefs sought are as follows:-

(a) An Order of Certiorari to remove the said decision of the Disputes Committee dated the 22^nd day of July 2003 into this Court and the same be quashed.

(b) A Declaration (in any event) that the Disputes Committee's decision dated the 22^nd day of July 2003 is unlawful, invalid, void and of no effect.

The Grounds for judicial review

The grounds on which relief sought are:-

(a) The Disputes Committee failed to give any reasons for its decision.

(b) The Disputes Committee's decision was arbitrary and unreasonable.

(c) The Disputes Committee failed to take into consideration the following relevant matters when arriving at its decision particularly:

(i) Jagdish Prasad had been shown to be dishonest in his position as Executive Officer of the Applicant Council and his conduct otherwise was also unacceptable.

(ii) The Applicant Council had a right to transfer and subsequently terminate, Jagdish Prasad for abuse of trust.

(iii) Jagdish Prasad had been shown to be negligent in his duties as Executive Officer of the Applicant Council.

(iv) Jagdish Prasad had been warned with termination on previous occasions.

(v) He had also threatened other staff members.

(d) The Disputes Committee erred in law in not holding that Jagdish Prasad's actions amounted to a serious breach of his terms of employment with the Applicant entitling the Applicant to terminate his employment.

The decision impugned

The decision impugned is that of the Disputes Committee delivered on 22 July 2003 being on the same day as the hearing of the dispute ordering to reinstate the grievor (Mr. Jagdish Prasad) "from the date of transfer and demotion without loss of any pay and benefits".

The Committee did not give any reason for its decision. It merely stated:

"Now therefore after hearing the submissions made by the Union and the employer on 22^nd July 2003, the Disputes Committee (hereinafter referred to as the "Committee") decided as follows":

Applicant's submission

The background facts leading to the applicant's dismissal are set out in detail in Mr. Nagin's written submission (at p2-3) as follows:

The Applicant is a Local Government Authority constituted under the Local Government Act Cap 125 of the Laws of Fiji.

The Fourth Respondent, Jagdish Prasad, was an employee of the Applicant as an Executive Officer. He was also a member of Third Respondent which is a duly registered Trade Union. In his capacity as a Executive Officer the Fourth Respondent had abused his powers and has tried to defraud the Applicant. He was in charge of the Revenue Office where the accurate cash and book records are always kept. The Council had faith and confidence on him as an employee but he betrayed the trust and had been manipulating records and was discharging his duty unfaithfully and dishonestly.

The Council had proved beyond reasonable doubt that the Fourth Respondent had acted fraudulently in relation to the Councillor's direct deduction payment system when he stopped paying Housing Authority and paid the moneys in his own personal account without the knowledge and consent of the superiors. The Council had found him to be dishonest and in breach of his terms of employment. The council had lost trust and confidence in him. In such cases reinstatement is never granted.

Submissions

As ordered the parties herein filed their written submissions.

First and second respondents' submission

The first and second respondents both concede that the Disputes Committee failed to give reasons for its decision. Even the Chief Executive (of the 1^st Respondent) and the Chairman of the Committee admitted that to be so.

In the submission it is stated that although there is no statutory requirement for the Disputes Committee to give reasons for its decision, it has been held by the Court of Appeal that any administrative body which is obliged to act fairly has to give reasons to those affected by the decision [The Permanent Secretary for Labour and Industrial Relations and the Disputes Committee v Air Pacific Limited and Fiji Aviation Worker's Association (Civil Appeal No. ABU0023 of 2002S - upholding Pathik J)].

Third and Fourth Respondents' submission

The submission by the third respondent is that all material including allegation of dishonesty was before the Committee and the Committee "must have considered all the facts before the Committee and the oral and written submissions".

Counsel made legal submissions on the giving of 'reasons' and 'reasonableness' of the decision.

Mr. Shankar submits that, although Surend Shiudin as Chairman does not state the reason in the decision, according to his affidavit filed herein he says that "the reasons were stated and made known to the representative of the parties at the hearing of the dispute on the date assigned for the sitting of the Disputes Committee".

The Chairman further says in his affidavit that "the outcome of the decision of the Disputes Committee is the result of both party representatives concurring on the final decision made and that it being a contractual relationship between the parties the Disputes Committee is only obliged to act as a third party machinery in such cases".

Counsel submits that in the circumstances it is unconscionable for Labasa Town Council to come to Court on a judicial review.

Consideration of the application

The decision impugned is that of the Disputes Committee which ordered the reinstatement of Jagdish Prasad without loss of pay.

The two main grounds on which this judicial review application is made are that 'no reasons' were given for the decision and that the decision was arbitrarily 'unreasonable'.

In a judicial review the Court is not as much concerned with the merits of the decision as the manner in which it was reached. It is available 'where the decision-making authority exceeds its powers, commits an error of law, commits a breach of natural justice, reaches a decision which no reasonable tribunal could have reached or abuses its powers.' [Lord Templeman in Reg. v Inland Revenue Commissioners Ex parte Preston [1984] UKHL 5; (1985) A.C. 835 at 862].

Dealing with grounds for review

In the instant case bearing in mind the facts surrounding this case the question arises is whether the Disputes Committee has acted intra vires and within the discretion conferred reasonably and fairly.

(i) The giving of reasons

As is clear from the evidence the Committee gave no reasons at all for its decision.

The Committee's assertion afterwards at the hearing in the form of an affidavit from the Chairman to the effect that the parties ought to have known the reasons is not acceptable.

If ever there was a case in which reasons ought to he given it is this case.

The nature of the case was such that with allegations of dishonesty, incompetency and misconduct etc on the part employee Jagdish Prasad should have put the Committee on guard that it is only fair and reasonable that reasons ought to have been spelt out in so many words rather than leaving it to he implied.

What the applicant will have been interested in is what consideration was given to the type of employee the applicant was grappling with particularly with his alleged gross misconduct. The giving of reasons becomes much more imperative in view of the allegation that the applicant as an employer has no trust and confidence in the employee.

Although there is no established right at common law to give reasons, there are now commonly procedural rules which require tribunals to give reasons for their decisions.

When there is a failure to give reasons, it may lead to the clear inference that the decision is arbitrary and unreasonable. It may be that once proceedings for judicial review have commenced the decision-maker is obliged to provide reason so as to explain fully what has occurred and why (Lord Donaldson M.R. in R v Lancashire County Council ex p Huddleston [1986] 2 All E.R. 941). Lord Donaldson at p.945-946 said:

"But authorities assist neither themselves nor the courts, if their response is a blanket assertion of having acted in accordance with law or one which begs the question. If the issue is whether an authority took a particular factor into account, it will be a sufficient response to show that it did. But if the allegation is that a decision is prima facie irrational and that there are grounds for inquiring whether something immaterial may have been considered or something material omitted from consideration, it really does not help to assert baldly that all relevant matters and no irrelevant matters were taken into consideration without condescending to mention some at least of the principal factors on which the decision was based."

In the instant case as I stated before there is no sign of any reasons.

In a case such as this the factors which are to be kept in mind in considering the review of a decision are set out in the following passage from the judgment of Lord Lane C.J. in Regina v Immigration Appeal Tribunal, ex parte Khan (Mahmud) (1983) 2 W.L.R. 729 at 762-3 which is apt:

"Where one gets a decision of a tribunal which either fails to set out the issue which the tribunal is determining either directly or by inference, or fails either directly or by inference to set out the basis upon which they have reached their determination upon that issue, then that is a matter which will be very closely regarded by this court, and in normal circumstances will result in the decision of the tribunal being quashed. The reason is this. A party appearing before a tribunal is entitled to know, either expressly stated by the tribunal or inferentially stated, what it is to which the tribunal is addressing its mind. In some cases it may be perfectly obvious without any express reference to it by the tribunal; in other cases it may not. Secondly, the appellant is entitled to know the basis of fact upon which the conclusion has been reached. Once again in many cases it may be quite obvious without the necessity of expressly stating it, in other cases it may not."

In this case it was the duty of the Committee to see whether it was open to the employer (Labasa Town Council) acting fairly and reasonably to see whether the termination was justified.

The Court of Appeal has stated that "in carrying out its task the Disputes Committee must operate within the law and comply with the rules of natural justice". [The Permanent Secretary for Labour and Industrial Relations and The Disputes Committee v Air Pacific Limited and Fiji Association Workers' Association (Civil Appeal No. ABU0023 of 2002S)].

On the giving of reasons the Court of Appeal has given certain guidelines in the Said Air Pacific case at p.21 when it said:

"The question of whether or not failure to give reasons will invalidate a decision is dependent on circumstances and to some orient on the stature of the deciding body whose decision is under consideration. The nature and effect of the decision is also relevant. Decisions subject to appeal are these where reasons will almost always be required, as in their absence the appellate authority will be quite unable to assess the validity of the decision under appeal. On the other hand failure to offer reasons for a decision will not necessarily affect the decision of a body where the relevant legislation does not provide an appeal and where the nature of the dispute is such that no reconsideration or review is to be expected. It is unlikely that a Court would consider setting aside, for example, the decision of a small claims tribunal on such a ground.

As to the desirability of giving reasons see Fiordland v. Min. of Agric. 1978 2 NZLR 341 and J. Flexman Ltd. v. Franklin Cty Council 1974 1 NZLR 690. The question arises as to where the decision of the committee in this case lies. The committee has power to affect the rights of citizens in a very significant way. The sums of money involved maybe substantial. The effect on a person's present and future employment may be great. There are good grounds for arguing that such decisions should be open and transparent and supported by reasoning by which they can be considered. On the other hand the committee is in part comprised of persons who may have little knowledge of the legal principles on which they are required to act, and the jurisdiction is one where technicalities and legalistic agreement ought to be avoided."

Because of the importance of a case of this nature where a person's employment is concerned and which ends up before a tribunal, the following passage from Air Pacific Ltd case ibid at p.22 is apt, which I quote at the risk of being lengthy:

"If a committee such as that involved in this case is required to give reasons these need not be long or detailed, and the lay nature of the committee members would undoubtedly be taken into account by a Court in considering whether or not a decision should be interfered with. The committee is statutory in nature. The chairperson is appointed by the Permanent Secretary who one would have thought normally would appoint a person sufficiently experienced in employment law to be able to ensure the approach was according to established principles. We are of the opinion that in this case at least the nature of the dispute and the general thrust of the Trade Disputes Act are such that the committee ought to have given reasons for its decision. Its failure to do so combined with the use of a term on the face of the decision which at least suggests a wrong approach was adopted means in our view that the decision must be seen as invalid."

To conclude, on the subject of giving reasons, bearing in mind the authorities, I find that this is one case in which adequate and proper reasons for the decision should have been given and communicated to the parties after the hearing. I am not unmindful of the fact that it was not a case where the reasons 'were easily discernible and albeit not expressed or where no other conclusion than that reached was realistically possible' and hence judicial review was unlikely to succeed. (Hooper J in Regina v Ministry of Defence Ex p. Murray 1997 TLR (C.A.)).

For these reasons the applicant succeeds on the ground of judicial review that no 'reasons' were given for the decision of the Disputes Committee.

(ii) Is this a case of Wednesbury unreasonableness?

All errors of law made by public bodies in the process of reaching their decision on matters of fact are liable to judicial review.

These are the types of cases in which Wednesbury principle of 'inherent unreasonableness' has particular importance. It is on this basis that a decision is capable of being reviewed where it is one that no authority properly directing itself on the relevant law and acting reasonably could have reached.

Once such instance where the principle of unreasonableness will come into play is where decision has been reached without any evidence to support it. [Islam v London Borough of Hillingdon [1983] 1 A.C. 688].

In the instant case it is entirely unclear in the absence of reason for decision whether the applicant's accusation against the employee in regard to assault on a fellow Council employee, the use of abusive language etc were taken into account or not or what weight or consideration was given to such alleged incidents in arriving at the decision.

In these circumstances, one can only assume that the Committee failed to take relevant considerations into account and instead acted on irrelevant considerations.

This process of arriving at the decision makes the decision Wednesbury unreasonable. The decision is definitely ultra vires and an abuse of the discretion vested in the Committee.

It is the principle that a body must not act unreasonably. As Fordham in Judicial Review Handbook 3^rd Ed. at p.789 has said:

"Unreasonableness (often called "irrationality" and sometimes "perversity") means no more than that the public authority has done something which was not reasonably open to it. This principle involves interfering with question of substance, and including matters of fact and degree, discretion, judgment and policy. Since these are entrusted to the public body as primary decision-maker, with built-in latitude, the reasonableness standard will only permit interference in a clear case. The threshold for unreasonableness is deliberately high, so as to prevent the Court simply substituting its own view."

The guiding principles on unreasonableness has been well stated in the leading case of Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1947] 2 All ER 680 on the question of Court's powers in reviewing administrative decisions.

Lord Greene ibid at page 682 stated:

"When an executive discretion is entrusted by Parliament to a local authority, what purports to be an exercise of that discretion can only be challenged in the courts in a very limited class of case. It must always be remembered that the court is not a court of appeal. The law recognizes certain principles on which the discretion must be exercised, but within the four corners of those principles the discretion is an absolute one and cannot be questioned in any court of law."

He went on to say at 682-683

"It is frequently used as general description of the things that must be done. For instance, a person entrusted with a discretion must direct himself properly in law. He must call his own attention to the matter which he is bound to consider. He must exclude from his consideration matters which are irrelevant to the matter that he has to consider. If he does not obey those rules, he may truly be said, and often is said to be 'acting unreasonably'. Similarly, you may have something so absurd that no sensible person could ever dream that it lay within the powers of the authority."

And at p685 he concluded by saying:

"The Court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or, conversely, have refused to take into account, or, neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, I think the Court can interfere".

The following extract from the judgment in Puhlhofer & Another v Hillingdon London Borough Council [1986] UKHL 1; [1986] AC 484 at 518, on unreasonableness in application of Wednesbury principle (supra) is apt and have been borne in mind by me in considering unreasonableness in this case:

"The ground upon which the courts will review the exercise of an administrative discretion is abuse of power e.g. bad faith, a mistake in construing the limits of the power, a procedural irregularity or unreasonableness in the Wednesbury sense - unreasonableness verging on absurdity. ... Where the existence or non-existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the court to leave the decision of the fact to the public body to whom Parliament has entrusted the decision-making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely."

Taking into account my comments on the process by the Committee there has been unreasonableness in the Wednesbury sense.

Therefore, this ground of judicial review succeeds.

(iii) Conclusion

Upon a careful consideration of all the affidavit evidence filed herein and upon hearing counsel and considering their useful written submissions and bearing in mind the authorities, for the reasons given, the applicant the Labasa Town Council succeeds in its application for judicial review of the Dispute Committee's decision.

(iv) Order

In the exercise of my discretion I order that certiorari go to quash the decision of the Disputes Committee dated 22^nd July 2003 to reinstate the fourth respondent Jagdish Prasad AND it is declared that the Disputes Committee's said decision was unlawful, invalid and void AND it is further ordered that the third and fourth respondents pay costs to the applicant's solicitors in the sum of $200.00 each to be paid within 21 days.

D. Pathik
Judge

At Suva
23 February 2006