Kiribati Shipping Company Ltd v Kiribati Shipping Union [2003] KICA 11; Civil Appeal 03 of 2003 (16 August 2003)

IN THE KIRIBATI COURT OF APPEAL
CIVIL JURISDICTION
HELD AT BETIO
KIRIBATI

Civil Appeal No 3 of 2003

BETWEEN:

KIRIBATI SHIPPING SERVICES LIMITED
Appellant

AND:

KIRIBATI SHIPPING UNION
Respondent

Before: Hardie Boys JA, Tompkins JA, Penlington JA

Counsel: Jacqueline Huston for appellant
Banuera Berina for respondent

Date of hearing: 12 August 2003
Date of judgment: 16 August 2003

JUDGMENT OF THE COURT

Introduction

[1] The appellant has applied for leave to appeal to this court against orders made by the Chief Justice on 19 February 2003 in respect of an application for directions relating to an award made on 24 February 1999, pursuant to s 14 (1) of the Industrial Relations Code, and to a second award made on 22 October 2001.

[2] An affidavit was filed in support of the application for leave, explaining the reasons for the delay. Neither counsel made any reference to this application in their submissions. In effect, it was unopposed. Leave is granted.

[3] The award of 24 February 1999, which was released on 1 March 1999, recites that the arbitrator was appointed by the Honourable Minister of Labour to conciliate on matters in dispute concerning reinstatement of overtime to all sea going personnel of the appellant. It reviews the relevant issues, and records the following agreement reached:

"Agreement reached:

[1] That KSSL will form a committee to activate revising of the present workers Condition of Service.

[2] That members of the committee to come from the various divisions/department inherent within the Kiribati Shipping Services Ltd.

[3] That workers demand on a "over time" to be reflected or addressed in the new revised Condition of Service.

[4] That all Sea Going Personnel now must continue to comely and abide by a current Condition of Service."

[4] The award went on to record that following a meeting on 24 February 1999 agreement had been reached in the terms set out in the preceding paragraph. The arbitrator affirmed that the agreement appears to be a good compromise in settling the dispute and it should be "enforced well and accordingly" by the management of the appellant. However, despite the hopes expressed, it was perhaps unsurprising in view of the uncertain terms of the agreement that it did not result in a resolution. The parties referred the matter back to the arbitrator for a "clear interpretation" on the award to be made by the arbitrator.

[5] On 26 October 2001 the arbitrator issued what was referred to as a "Re-affirmation on the interpretation of the Award ..." He recited the contentions of the parties and the events that had occurred since the award. He recorded under five headings the "Justification on the Payment of Overtime." He concluded:

"Interpretation To Arbitrator's Award Delivered on 24/02/99 as referred to findings (3), "that workers demand on overtime be reflected and addressed in the new revised condition of service". In this particular instance there are three things required this include (sic):

[a] the present workers condition of service should he revised in order to facilitate the payment of overtime to all Sea Going Personnel working for KSSL.

[b] That overtime payment should be made payable to KSSL Sea Going Personnel.

[c] that payment of overtime should be made effective from the time the new revised Workers Condition of Service is completed."

[6] We were informed by counsel that no agreement was reached.

The proceedings in the High Court

[7] On 7 May 2002 the respondent took out a summons "asking for determination of certain questions:-

(1) Whether or not the Award made it obligatory for the Defendant to revise its conditions of service so that overtime allowance is made payable to all sea going personnel.

(2) If so, whether or not the Defendant has the duty to revise its conditions of service within a reasonable period after the making of the award.

(3) If so, whether or not a period over 6 months taken by the Defendant to revise its conditions of service is reasonable.

(4) If unreasonable, whether or not, by its delay, the Defendant has acted and is continuing to act in breach of the terms of the award."

[8] No affidavit was filed in support of the summons, nor was any oral evidence given at the hearing in the High Court. The award and the second award were produced by consent. In a brief judgment the Chief Justice answered the questions in the summons:

(1) Yes

(2) Yes

(3) Not reasonable

(4) The defendant is in breach

[9] He went on to observe that counsel for the appellant (not the counsel who appeared in this court) could advance no reasons on behalf of his client why he should not make the following declarations, which he duly made:

(1) That the Defendant was obliged by the award of the Arbitrator, made on or about 20 October 2001 to revise its conditions of service so that overtime allowance is made payable to all sea going personnel.

(2) That the defendant has the duty to revise its conditions of service within a reasonable period after the award is made.

(3) That the period of over 6 months taken by the Defendant to revise its conditions of service is unreasonable.

(4) That by its delay, the Defendant has acted and is continuing to act in breach of the terms of the award and ought to comply with the same forthwith and that all allowances are due from 7 May 2002 and payable within 14 days.

The challenge to the decision in the High Court

[10] Counsel for the appellant submitted that the court had no jurisdiction to review the arbitration decision "save on the ground of lack of jurisdiction". She advanced a number of detailed reasons why, if the High Court had jurisdiction to reinterpret or review the award, the Chief Justice erred in making the orders that he did.

[11] For the respondent it was submitted that, in making the orders he did, the Chief Justice was interpreting the award. No further determination by the arbitrator was required. Had the appellant, prior to the hearing in the High Court given notice that it was taking issue with the jurisdiction of the court to interpret the award or to the nature of the orders the High Court should make, evidence would have been called. He submitted that as overtime payments were in accordance with an existing table, there was no need for the nature of these payments to be prescribed. However he accepted that if overtime were to be paid to the appellant's members, there would need to be an adjustment to the seagoing allowance, and that would require amendments to the conditions of service.

Conclusion

[12] Section 9(1) of the Industrial Relations Code provides:

9. (1) Every award of a tribunal in relation to a trade dispute shall be final and shall not be liable to be challenged, reviewed, questioned or called in question in any court save on the ground of lack of a jurisdiction.

[13] This was a trade dispute. No issue of jurisdiction arose in the present case. However, we do not consider that s 9(1) ousts the jurisdiction of the High Court, acting under O 58 r 1 of the High Court Civil Procedure Rules 1964, to make a determination of any question of construction or to declare the rights of parties. That rule provides:

1. Any person claiming to be interested under a deed, will, or other written instrument, may apply by originating summons for the determination of any question of construction arising under the instrument, and for a declaration of the rights of the persons interested.

[14] The awards were written instruments. The respondent was a person claiming to be interested under them. So the High Court can determine any question of construction of the award and can declare the rights of the appellant and the respondent, they being the parties to the award. But what it may not do is review, amend or add to the award.

[15] It is clear from the conclusions of the arbitrator on the second award that he had not made a final determination. The first paragraph said that the condition of service "should be revised" to facilitate payment of overtime. The third paragraph provided that overtime should be effective "from the time the new revised workers conditions service is completed." In the absence of any final determination by the arbitrator, any revision of the conditions of service would require the agreement of both parties. Similarly, the revised workers' conditions of service can only be completed, in the absence of a determination by the arbitrator, by the parties' agreement.

[16] Further, as Mr Berina responsibly acknowledged, if the payment of overtime is to be incorporated into the conditions of service, there must be an adjustment to the seagoing allowance. It was accepted by counsel that it is not appropriate for there to be payment of overtime and also payment of the full seagoing allowance.

[17] Declarations 1, 2 and 3 made by the Chief Justice proceed on the assumption that revision of the conditions of service is the responsibility of the appellant only. That is not our understanding. The conditions of service can be revised by the agreement of the parties or, failing agreement, by order of the arbitrator. We accept that revision of the conditions of service can be frustrated by the refusal of one party to co-operate, but in the absence of evidence, no finding in that respect can be made. In any event, even if there were evidence that one party was not co-operating, that is not a matter for the court. In the absence of agreement, only the arbitrator can make a binding determination.

[18] Declaration 4 made by the Chief Justice provides that all allowances are due from 7 May 2002 and payable within 14 days. This declaration is not an interpretation of either of the awards as the awards do not make any reference to the time from which the overtime payments are to be made. In making that order the Chief Justice was varying or adding to the terms of the awards, which was in effect a review of the awards, contrary to s 9(1).

[19] For the reasons we have expressed, we are satisfied that the declarations made by the Chief Justice were made without jurisdiction.

Result

[20] The appeal is allowed. The declarations made by the Chief Justice are set aside. Counsel accept that it is not appropriate to refer the matter back to the High Court as it lacks the jurisdiction to make the orders necessary to resolve the outstanding issues between the parties. Only the arbitrator has that jurisdiction.

[21] Neither do this court or the High Court have jurisdiction to refer the matter back to the arbitrator. But that clearly is what should occur, either by agreement between the parties or, failing agreement, on the application to the Minister under s 7 to appoint an arbitrator, preferably the same arbitrator, to determine the matters still in dispute. The dispute has dragged on for far too long, which no doubt motivated the Chief Justice to attempt to bring it to a conclusion. That this attempt was unsuccessful does not lessen the need for a speedy resolution.

[22] The appellant is entitled to costs in this court and in the High Court to be agreed or taxed

Hardie Boys JA
Tompkins JA
Penlington JA