Prasad v Lincoln Refrigeration Ltd [2016] FJHC 198; HBC10.2015 (22 March 2016)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

Civil Action No: HBC 10 of 2015

BETWEEN:

NAVNEET VISHAL PRASAD of Namara Labasa
PLAINTIFF

AND:

LINCOLN REFRIGERATION LTD a limited liability
company having its registered office at HLB Crosbie & Associates, Top Floor, HLB House, 3 Cruickshank Road, Nadi Airport.
DEFENDANT

Appearances : Mr. A Kohli of Kohli & Singh for the Plaintiff
Mr. Narayan of AK Narayan for the Defendant

Date of Hearing : 6 August 2015

RULING

Introduction

[1] This is an application by summons dated the 26 June 2015 to dismiss the plaintiff's action on the grounds that it discloses no reasonable cause of action, that it is frivolous and vexatious and that it is an abuse of the process of this Honourable Court. The application was made pursuant to Order 18 rule 18.

[2] Alternatively the defendant prays that the plaintiff's action be dismissed on a trial of the preliminary issue that the plaintiff's action is barred by virtue of section 25 of the Workmen's Compensation Act Cap. 94. The preliminary issue is the question of whether or not estoppel applies in the circumstances which led the defendant to pay to the Labour Officer the sum of $9,100 as the quantum of damages for negligence.

[3] This application is supported by an affidavit of one Ms. Louisa Mitchell who is employed by Tower Insurance Fiji Limited as a claims executive.

Background

[4] The action is a claim for damages arising from an alleged negligence of the defendant which resulted in the plaintiff suffering injuries whilst he was employed by the defendant company. For the purpose of this application it is not important to provide the particulars of the injury, nor the details of the negligent act, what is important though is the representation made by the Labour Officer from the Department of Employment, Productivity & Industrial Relations to the defendant on completion of their investigation into the accident.

[5] It is clear from the affidavits that the plaintiff first went to the Labour Officer at the office of the Department of Employment, Productivity & Industrial Relations, Labasa to report his accident at work. An investigation was then undertaken whereupon a notice of assessment of damages claim for a particular sum was made to the defendant by letter of 19 November 2014. The defendant company then referred the matter to its insurer, Tower Insurance Company, who duly wrote out a cheque and sent it to the Department of Employment, Productivity & Industrial Relations for payment to the plaintiff.

[6] It is this letter to the defendant which, contained the representation relied upon as estopping the plaintiff from taking any civil action against the defendant.

[7] The Department of Employment, Productivity & Industrial Relations on receipt of the cheque then advised the plaintiff that if he accepts the payment to enter into a Section 16 agreement for the purposes of settling the claim. The section 16 agreement is a formal agreement entered into between the employee and the employer when the quantum of damages calculated is accepted by the parties.

[8] Section 16 of the Workman's Compensation Act states:-

Agreement as to compensation
16.-(1) The employer and workman may, with the approval of the Permanent Secretary or a person appointed by him, in writing, in that behalf, after the injury in respect of which the claim to compensation has arisen, agree, in writing, as to the compensation to be paid by the employer. Such agreement shall be in triplicate, one copy to be kept by the employer, one copy to be kept by the workman, and one copy to be retained by the Permanent Secretary:
Provided that-

• (a) the compensation agreed upon shall not be less than the amount payable under the provisions of this Act; and
• (b) where the workman is unable to read and understand writing in the language in which the agreement is expressed the agreement shall not be binding against him unless it is endorsed by a certificate of a district officer or a person appointed by the district officer or Permanent Secretary, in writing, in that behalf, to the effect that he read over and explained to the workman the terms thereof and that the workman appeared fully to understand and approve of the agreement.

(2) Any agreement made under the provisions of subsection (1) may, on application to the court, be made an order of the court.
(3) Where the compensation has been agreed the court may, notwithstanding that the agreement has been made an order of the court under the provisions of subsection (2), on application by any party within three months after the date of the agreement, cancel it and make such order (including an order as to any sum already paid under the agreement) as in the circumstances the court may think just, if it is proved-

• (a) that the sum paid or to be paid was or is not in accordance with the provisions of subsection (1);
• (b) that the agreement was entered into in ignorance of, or under a mistake as to, the true nature of the injury; or
• (c) that the agreement was obtained by such fraud, undue influence, misrepresentation or other improper means as would, in law, be sufficient ground for avoiding it.

(4) All agreements made under this section shall be exempt from the payment of stamp duty.

[9] The section 16 agreement is clearly discretionary in that either the employer or the employee may, with the requisite approval, agree to the assessment made and accept the payment calculated. There is however a proviso in the section 16 agreement, that even where both parties agree to the amount paid and after the agreement has been made an order of the Court, either party can still, within three months after the agreement was reached (the cooling off period), apply for the cancellation of the agreement.

[10] The plaintiff, however, prior to entering into the section 16 agreement sought legal advice and was advised not to accept the sum offered but to institute a civil claim instead.

[11] The defendant's submission is that the plaintiff cannot rely on the provisions of sections 16 or 25 because estoppel by representation has now intervened.

[12] The relevant part of Section 25 states:-

25.-(1) Where the injury was caused by the personal negligence or wilful act of the employer or of some other person for whose act or default the employer is responsible, nothing in this Act shall prevent proceedings to recover damages being instituted against the employer in a civil court independently of this Act:
Provided that-
(a) a judgment in such proceedings whether for or against the employer shall be a bar to proceedings at the suit of any person by whom, or on whose behalf, such proceedings were taken, in respect of the same injury under this Act;
(b) a judgment in proceedings under this Act whether for or against the employer shall be a bar to proceedings at the suit of any person by whom, or on whose behalf, such proceedings were taken, in respect of the same injury independently of this Act;
(c) an agreement come to between the employer and the workman under the provisions of subsection (1) of section 16 shall be a bar to proceedings by the workman in respect of the same injury independently of this Act. (emphasis added)
.....

[13] By virtue of section 25 of the Workers Compensation Act, a person is precluded from instituting a civil proceedings arising from the same accident if that person enters into a section 16 agreement. But presumably section 25 applies after the three month period in the proviso.

The Determination

[14] Both Counsels prepared and presented well written submissions and although I do not wish to refer to both the submission in detail I shall be referring to them in this determination.

[15] In order to determine the issue of estoppel by representation properly it is important to consider firstly the relationship between the plaintiff and the Labour officer. This is so because a party cannot represent another in any matter without authority. The relationship between the parties is derived from the statutory authority given to the Labour Officer under section 2(4) of the Workmen's Compensation Act. Cap. 94. This provision states:-

....
(4) The Permanent Secretary and any labour officer or any labour inspector authorised by the Permanent Secretary in writing may institute or appear or both institute and appear on behalf of any workman or where the workman is dead on behalf of his dependants in any civil proceedings by the workman or any dependants of his, as the case may be, in respect of any matter or thing or course of action arising out of or in the course of employment of such workman under any of the provisions of this Act.

[16] The above provision allows the Permanent Secretary, Labour Officer or any labour inspector authorised by the Permanent Secretary, to appear on behalf of any workman in any civil proceedings by the workman or in any matter arising from the course of employment of the workman. This also applies to the dependants of a deceased workman.

[17] The defendant submits that a nexus can be seen within the ambit of the statutory authority upon which the Labour Officer acts as a representative of the plaintiff. The result of which is that the Labour officer is now the legal representative of the plaintiff. Therefore when he represents to the defendant the amount of damages assessed he is acting as a legal representative of the plaintiff.

[18] I do not think that there is any difficulty in accepting that there is a legal relationship between the parties derived from the Workmen's Compensation Act when the representation was made.
The Letter of 19 November 2014

[19] This letter from the Labour Officer to the defendant company states:

Dear Sir,
I refer to the accident on 25/03/13 sustained by Navneet Vishal Prasad arising out of and in the course of his employment with you as an Electrician. I have now received a medical report from Dr. Alaot Biribo which the degree of permanent incapacity suffered by the workman has been assessed at twenty five [25] per cent. The amount of compensation payable to the injured workman in respect of permanent partial incapacity, assessed in accordance with Section 8 of the workman's Compensation Ordinance and based on his average weekly earnings of $140.00 is as follows:-

(a)	Gross Weekly Earnings	=	$140.00
(b)	260 Weeks of Earning	=	$36,400.00
(c)	Degree of Incapacity	=	25%
(d)	Compensation payable	=	$9,100.00

The net compensation payable is $9,100.00. If you agree with this assessment please send to this office your cheque for $9,100.00 made payable to the Permanent Secretary for employment. On receipt of your cheque, a formal agreement under Section 16 of the Ordinance will be prepared for signature by yourself and the workman. A formal notice of claim on behalf of the workman is enclosed.
In the event of the claim being disputed please state in writing the ground thereof.
Yours faithfully

[20] The defendant in its submission states that the paragraph beginning with "The net compensation ..." contains the representation relied upon. It acted on receiving this letter from the Labour Officer. It did not dispute the claim and instead sent a cheque to the Permanent Secretary for Employment as requested.

[21] The letter further states that on receipt of the cheque a formal agreement under section 16 of the Ordinance will be prepared for signature by the defendant and the workman. This is the key to the defendant's application, it is at this point according to the defendant, that estoppel by representation came into play notwithstanding the provisions of section 16 or 25 of the Workman's Compensation Act.

[22] As a result of the defendant making the payment on reliance on the representation, it now makes the application that firstly, that the Court should now look at the application of the equitable principle of estoppel by representation arising from the above and thereafter rule that this issue should be determined as a preliminary point under Order 33.

[23] The Court accepts that this novel issue ought to be determined first as a preliminary point under Order 33 in the circumstances because if it was found that estoppel applies then it follows that there is no cause of action against the defendant and strike out the action under Order 18 rule 18.

Order 18 rule 18

[24] This order states that:-

18.-(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that-

• (a) it discloses no reasonable cause of action or defence, as the case may be; or
• (b) it is scandalous, frivolous or vexatious; or
• (c) it may prejudice, embarrass or delay the fair trial of the action; or
• (d) it is otherwise an abuse of the process of the court;

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
(2) No evidence shall be admissible on an application under paragraph (1)(a).
(3) This rule shall, so far as applicable, apply to an originating summons and a petition as if the summons or petition, as the case may be, were a pleading.

[25] The defendant presumably is of the view that if the doctrine of estoppel by presentation applies then the action can be struck out not only because there is no cause of action against it but also because it is an abuse of the process of the court.

[26] This is not a normal striking out application where the Court's power to strike out is used sparingly allowing an amendment to the pleadings or deciding that there are important or serious questions to be determined, rather this is one where equity has arisen which may act as a bar to further proceedings. There is a cause of action that much is acknowledged by both parties but the question is whether the cause of action is an abuse of the process of the court.

[27] Lord Denning in McIlkenny –v- Chief Constable of the West Midlands & Anor (1980) 1 QB 283 when discussing situations where issues had previously been determined states at 322:

"The truth is that at the date of those cases the doctrine of issue estoppel had not merged as a separate doctrine. So the courts found it necessary to put it on "abuse of the process of the court". Now that issue estoppel is fully recognised, it is better to reach the decision on that ground; rather than on a vague phrase "abuse of process of the court". Each doctrine is based on the same considerations and produces the same result."

[28] In approaching the striking out application from this point the considerations are centred solely on the application of estoppel by representation as relied upon by the defendant. It is probably the first time in this jurisdiction in which an application to strike out an action has been approached from the principles of equity and in particular through estoppel by representation.

[29] As a result of the above proposition the defendant's alternative prayer that the plaintiff's action be barred by virtue of section 25 of the Workman's Compensation Act becomes a relevant consideration under Order 33 rule 7 as a preliminary issue.

[30] I am not certain that this proposition applies because in taking this alternative course we are usurping the statutory provision designed to protect the workman. The Court would rather consider whether estoppel applies as a preliminary point and then if necessary determine whether there is no cause of action against the defendant. Further the estoppel in section 25 applies only where there is a section 16 agreement.

[31] The plaintiff's position on the other hand is very clear. His counsel submits that section 16 of the Workman's Compensation Act gives the plaintiff an option, the option being that even if he accepts the Labour Officer's assessment of the damages and signs the section 16 agreement he can still withdraw from accepting the assessment (within three months) and take another course of action. In other words he is not bound by the Labour Officer's assessment and therefore has an option not to accept the assessment and can refuse to sign the section 16 agreement.

[32] Further in the plaintiff's view the option to not accept the Labour Officers assessment and then not entering into a section 16 agreement does not preclude him from exercising his right to institute any civil proceedings against the defendant.

[33] But where does that leave the Labour Officer's representation to the defendant as to the assessed amount of damages that ought to be awarded to the plaintiff? As far as the defendant is concerned the labour officer is bound by the defendant's acceptance of that representation and therefore a contract exists between them which has to be fulfilled. Therefore any refusal by the plaintiff by not signing the Section 16 agreement is a matter between the Labour officer/Ministry of Labour and Industrial Relation and the plaintiff.

Order 33 rule 7

[34] Order 33 rule 7 relates to the dismissal of actions after the determination of a preliminary issue, the Order states:-

7. If it appears to the Court that the decision of any question or issue arising in a cause or matter and tried separately from the cause or matter substantially disposes of the cause or matter or renders the trial of the cause or matter unnecessary, it may dismiss the cause or matter or make such other order or give such judgment therein as may be just.

[35] This order allows the Court to make a decision on any question or issue arising from a matter if the Court is of the view that that decision on the preliminary issue will determine the matter without the need for a trial. This is one way of curtailing lengthy trials and saves the Court time and the party's unnecessary costs. I agree that this Court should look at this preliminary point and then determine whether there is a cause of action against the defendant or that the action is an abuse of the process of the court.

The representation

[36] The paragraph which contains the representation consists of four sentences. The first sentence informs the defendant of the net compensation payable. "The net compensation payable is $9,100:00.

[37] The second sentence states that if the defendant agrees with the assessment to please send to the office a cheque for $9,100:00 payable to the Permanent Secretary for Employment. If you agree with this assessment please send to this office your cheque for $9,100.00 made payable to the Permanent Secretary for employment.

[38] Here the sending of the cheque depends on whether the defendant agrees to the calculated amount. If he does not agree then he provides the Labour Officer of the grounds on which he disagrees. Further the Labour Officer is itself uncertain about whether the defendant will accept its calculation of the compensation payable, in other words the door is still open to consider other alternatives by the defendant or the plaintiff for that matter.

[39] The third sentence states that on receipt of the defendant's cheque a formal agreement under section 16 of the ordinance will be prepared for signature by the defendant and the plaintiff. In other words that upon the defendant not disputing the calculated amount of compensation payable and its acceptance by the sending of the cheque, a formal agreement under section 16 will be prepared for signature by the defendant and the plaintiff. This is a statutory requirement.

[40] This sentence in my view allows the Labour officer to formalise the defendants acceptance with the plaintiff's through a section 16 agreement. A full understanding of this sentence will depend on the meaning of section 16 of the Workman's Compensation Act.

[41] This section allows the parties to enter into an agreement in writing as to the compensation payable but enables either party to reconsider the agreement under paragraph (3). This paragraph allows either party, that is, the defendant or the plaintiff, to make an application to the Court within three months after entering into the agreement to cancel or vary the agreement.

[42] What this shows in my view is that there are alternatives available to either party before the payment of compensation is finally accepted. The statue still gives the parties an opportunity to seek the Courts consideration on whether the agreement was fair. This is in my view the Labour officer's statutory duty.

[43] The representation relied upon appears to be uncertain and not unequivocal, it gives alternatives depending on what option both parties wish to accept. The issue of certainty in the language of representation which give rise to estoppel has been the issue of much intellectual and judicial consideration.

[44] In Walton's Stores (Interstate) Ltd –v- Maher (1988) 164 CLR 432 his Lordship Justice Brennan on the elements of propriety estoppel observed that the representation or conduct inducing the assumption or expectation relied upon, and the assumption or expectation itself must be clear and unambiguous.

[45] In Woodhouse AC Israel Cocoa Ltd –v- Nigerian Produce Co Ltd (1971) 2QB 23 His Lordship Lord Denning stated at p60;

"...In my opinion a man who receives a written representation must give to it its true meaning – or what the judge holds afterwards to be its true meaning – and not a different meaning of his own choosing. The judge must give the written representation the same meaning, no matter whether it is put forward as a variation or as an estoppel. But that is subject to this difference: If the representation is put forward as a variation, and is fairly capable of one or other of two meanings, the judge will decide between those two meanings and say which is right. But, if it is put forward as an estoppel, the judge will not decide between the two meanings. He will reject it as an estoppel because it is not precise and unambiguous. There is good sense in this difference. When a contract is varied by correspondence, it is an agreed variation. It is the duty of the court to give effect to the agreement if it possibly can: and it does so by resolving ambiguities, no matter how difficult it may be. But, when a man is estopped, he has not agreed to anything. Quite the reverse. He is stopped from telling the truth. He should not be stopped on an ambiguity. To work an estoppel, the representation must be clear and unequivocal..."

[46] Nine years later in 1980 Lord Denning wrote in McIlkenny v Chief Constable of West Midlands 1980 QB 283 at 317

"... the word estoppel only means stopped. You will find it explained by Coke in his Commentaries on Littleton (19th Ed., 1832) Vol. II. It was brought over by the Normans. They used the old French "estoupail". That meant a bung or cork by which you stopped something from coming out. It was in common use in our courts when they carried on all their proceedings in Norman-French....
"From that simple origin there has been built up over the centuries in our law a big house with many rooms. It is the house called Estoppel.
"In Edward Coke's time, it was a small house with only three rooms, namely estoppel by matter of record, by matter of writing and by matter 'in pais'. But by our time, we have so many rooms that we are apt to get confused between them. Estoppel per rem judicatum, issue estoppel, estoppel by deed, estoppel by representation, estoppel by conduct, estoppel by acquiescence, estoppel by election or waiver, estoppel by negligence, promissory estoppel, proprietary estoppel, and goodness knows what else.
"These several rooms have this much in common: they are all under the same roof. Someone is stopped from saying something or other, or doing something or other, or contesting something or other. But each room is used differently from the others. If you go into one room, you will find a notice saying 'estoppel is only a rule of evidence'. If you go into another room you will find a different notice: 'estoppel can give rise to a cause of action'.
"Each room has its own separate notices. It is a mistake to suppose that what you find in one room, you will find in the others."

[47] Lord Denning then went on to describe that upon entering this big house one is to find that the rooms contain chairs to sit on. The chairs are metaphors for various concepts in the rooms of the house called estoppel. In the room described as estoppel per rem judicatum there is an alcove called issue estoppel. In this room there are two chairs one is called doctrine of privity and the other the doctrine of mutuality. Both of these chairs appear rickety meaning that the concepts are now in question. In other words estoppel has evolved somewhat during this period but it appears that the equitable right to estop remains.

[48] In the High Court of New Zealand Justice Katz in Fanshawe136 Limited –v- Fanshawe Capital Limited (2013) NZHC 3395 said at paragraph 49 of his judgement that:-

"New Zealand Courts now recognise a unified doctrine of equitable estoppel. The underlying principle is that a party will not be permitted to deny any assumption, belief or expectation that it has allowed another to rely on, where such a denial would be unconscionable. The Court will prevent a party from going back on their word (whether express or implied) when it would be unconscionable to do so."

[49] The concept of estoppel often describes the means by which a party in litigation can prevent (stop) the other party denying a set of circumstances or affairs existed between them. There are many types of circumstances or state of affairs which can be used to stop a party from litigating further as described above.

[50] The defendant submits that the plaintiff cannot deny that a representation was made on its behalf by the Labour officer, that the plaintiff would accept the sum of $9,100:00 as damages from the defendant. That the defendant upon reliance on the said representation paid out to the Labour officer the amount of damages calculated and represented. That notwithstanding the operation of sections 16 and 25 of the Workman's Compensation Act the plaintiff is estopped from taking any action against the defendant and any further remedies the plaintiff may now seek in respect of the injury is a matter between the plaintiff and the Labour Officer. In other words the plaintiff as far as the defendant is concerned, is now precluded from instituting or asserting any right inconsistent with the fact the other party has acted on the representation: Thompson -v- Palmer [1933] HCA 61; (1933) 49 CLR 507; Grundt –v- Great boulder Pty. Gold Mines Ltd [1937] HCA 58; (1937) 59 CLR 641.

[51] An equity of this kind, as observed by His Lordship Justice Brennan, in Commonwealth –v- Verwayen (Voyager Case) (1990) 170CLR 394 "trenches upon the liberties or immunities of the person who is bound".

[52] It appears at least at this point that the requirement necessary for the satisfaction of a propriety estoppel or estoppel generally was that a statement in a representation to be accepted it must be clear and certain as to what was being represented. Therefore any imprecision or ambiguity in the representation would invariably be fatal. We will see later that this is not necessarily true as the flexible arm of equity has reached beyond imprecision or ambiguity in representation and regards the context in which the representation was made as an important consideration. In the Supreme Court of Victoria His Honour Justice Brooking stated in Flinn v Flinn (1999) 3 VR 712 at 743:-

"As the review of the authorities over the last 200 years shows, uncertainty preventing the creation of contract has never been regarded as necessarily preventing the beneficial intervention of equity. Time and again an equity has been held to exist where no contract had arisen, the court often going a long way in giving effect to what the law of contract would ignore as an impossibly loose arrangement. The present case lies within the reach of the long and flexible arm of equity."

[53] His Honour's observation was clearly that the assessment of the degree of certainty was not to be considered in isolation from all the circumstances, including preceding, contemporaneous and subsequent events. Brooking JA Flinn v Flinn further found ..."that the representation was not too uncertain to found a propriety estoppel. The promises were to be considered in their total factual context, including the background circumstances. The uncertainty of the condition of payment, similarly, although fatal to the existence of a contract, did not prevent an equity from arising".

[54] Therefore in my view the letter of 19 November 2014 must be understood within the context in which it was made. The Labour officer was acting under the authority of the Workmen's Compensation Act Cap.94. His power to so act is derived from Section 2 subsection 4 of the said act. This provision allows the Labour Officer to act on behalf on the workman in any civil proceedings or in respect of any course of action arising out of or in the course of employment of such workman under any of the provisions of the Act. It is therefore within the background of this act that the representation must be construed.

[55] The Labour Officer after investigating the incident and then calculating the quantum of damages in accordance with the provisions of the Workmen's Compensation Act, has to inform the parties of the assessment and whether the assessment is acceptable to both of them. Upon acceptance, an agreement under section 16 is then signed by both the parties. Both the parties can, within three months of signing the section 16 Agreement, chose not to accept the assessment and institute civil proceedings instead.

[56] The letter to the defendant states that if he agrees to the assessment then to send his cheque to the labour office payable to the permanent secretary for employment. It further states that upon receipt of the cheque an agreement under section 16 will then be prepared for signing by both the defendant and the plaintiff. It is this agreement which determines whether the assessment is accepted by both parties. It is within this context that the letter was written. It is the requirement of the act that a section 16 agreement be entered into before the acceptance of the assessment of the calculated quantum of damages.

[57] If neither of the parties disagrees or has second thoughts about the effect of section 16, after the three month period, then the provision of section 25 becomes a statutory bar to further civil action in respect of the same injury.

[58] Section 16 is a mandatory provision, the Labour Officer cannot distribute the funds unless this provision has been complied with, therefore any acceptance by the employee or the employer is subject to this provision. It is mandatory in respect of the distribution of the funds but discretionary in that it gives both parties the choice to accept the assessment or to take common law action. Therefore, it is my view that the letter written by the labour officer must be accepted within the context of the requirement of the statutory power given to the officer.

The Traditional Rule

[59] The traditional view is that estoppel by representation cannot interfere with the exercise of a statutory power or the performance of a statutory duty by an administrative body. A representation of a statutory body may concern the future performance of an administrative body's statutory functions.

[60] In Southend-on Sea Corporation –v- Hodgson (Wickford) Ltd (1962) 1 QB 417 there was an implicit representation by the South-end-on Sea Corporation that its statutory power to serve an enforcement notice would not arise in future. The case concerns the grant of a right to use a portion of land as builder's yard. It granted the use of the land to the company saying that the land had an existing user right and that no planning permission was necessary. It then represented that it would not serve an enforcement notice in future. The Southend-on Sea Corporation was incorrect in saying that the land had an existing user right. When the company was served with an enforcement notice, it tried to use estoppel by representation to contest the validity of the enforcement notice. The Court ruled however, that because the representation concerned the future exercise of the Southend on Sea Corporations statutory functions, the traditional rule prevented the representation from giving rise to an estoppel. Lord Parker C.J. stated at 423-424 that:-

"...I can see no logical distinction between a case such as that of an estoppel being sought to be raised to prevent the performance of a statutory duty and one where it is sought to be raised to hinder the exercise of a statutory discretion"

[61] In the High Court of Australia Justice Windeyer J in Brickworks Limited –v- Warringah Corporation [1963] HCA 18; (1963) 108 CLR 568 agreed with the principle (in Southend-on Sea) that estoppel by representation cannot prevent the performance of a statutory duty or the exercise of a statutory discretion but distinguished the matter on the facts and held the Council to the representation by saying that this did not affect the Council's exercise of its statutory function in the future.

[62] In Maritime Electric Company Limited –v- General Dairies Limited [1937] UKPC 16; (1937) AC 610 the problems of transposing estoppel into a statutory context were considered by the Privy Council. The Maritime Electric Company were a public utility company within the meaning of the Public Utilities Act of New Brunswick and was accordingly under a statutory duty to furnish reasonably adequate service and facilities and was strictly limited as to the charges it could make. Through an error it undercharged General Dairies Limited and when it realised its mistake it sued General Dairies for the balance. General Dairies argued that the electricity company had represented by its conduct that it had been charging the correct amount and therefore was estopped from denying this. Lord Maugham who delivered the reasons for the Privy Council said at 620:-

"...The sections of the Public Utilities Act which are here in question are sections enacted for the benefit of a section of the public, that is, on the grounds of public policy in a general sense. In such a case - and their Lordships do not propose to express an opinion as to statutes which are within this category - where, as here, the statute imposes a duty of a positive kind, not avoidable by the performance of any formality, for the doing of the very act which the plaintiff seeks to do, it is not open to the defendant to set up an estoppel to prevent it".

[63] In this matter the Department of Employment, Productivity & Industrial Relations through the Labour Officer is hindered, if estoppel applies, in completing its statutory functions any further. It could not ensure that the rights of the worker and the employer is protected by the Section 16 agreement neither could the estoppel, protecting the employer, under section 25 apply.

[64] For the above reasons I am of the view that the defendant's application to strike out the claim fails.

Costs

[65] Neither party in their written submission made any reference or application as to costs and given the fact that the application is unusual I am of the view that under the circumstances that costs be in the cause.

Conclusion

[66] That the Court agrees that the issue of estoppel by representation be considered first as a preliminary issue under Order 33 of the High Court Rules.

[67] The Court further finds that although a representation was made in the letter of 19 November 2014 the representation must be taken in the context of the statutory authority in which it is made and therefore estoppel by representation does not apply.

[68] The Court further finds that estoppel cannot interfere with the exercise of the statutory power of the Labour Officer, who was exercising a power under the provisions of the Workmen's Compensation Act.

Orders

1. The application to strike out the claim is therefore denied;
2. That costs be in the cause;
3. That the plaintiff is given 14 days to file a reply to the defence; and
4. That the matter be further put before the Master for directions on the 15 April 2016.
   

H Robinson
Master
Labasa High Court

22 March 2016