Muhammad v Attorney-General [1995] KIHC 1; HCCC 03.95 (1 February 1995)

IN THE HIGH COURT OF KIRIBATI
HCCC NO. 3/95

IN THE MATTER OF:
An application under Order 58 of the High Court (Civil Procedure) Rules, 1964 and

BETWEEN:

THE HON. FAQIR MUHAMMAD
CHIEF JUSTICE
Applicant

AND:

THE HON. ATTORNEY GENERAL
on behalf of the Government of The Republic of Kiribati
1st Respondent

AND:

MR KAIARAKE TABURUEA,
Under Secretary of the Public Service Division
2nd Respondent

HCCC NO. 4/95

BETWEEN:

THE HON. ATTORNEY GENERAL
on behalf of the Government of the Republic of Kiribati
Applicant

AND:

THE HON. FAQIR MUHAMMAD,
CHIEF JUSTICE OF THE HIGH COURT OF KIRIBATI
Respondent

(BEFORE THE RIGHT HONOURABLE SIR HARRY GIBBS)

Mr. B. Berina for the Applicant in HCC No.3/95
and for the Respondent in HCCC No. 4/95

The Honourable the Attorney-General for the Respondents in HCCC No. 3/95
and for the Applicant in HCCC No. 4/95

JUDGMENT

These two matters raise questions concerning the tenure of office of The Honourable Faqir Muhammad as Chief Justice of Kiribati, the validity and effect of an Agreement of Service made on 18 March 1994 between The Honourable Faqir Muhammad and the Under Secretary, Public Service Division, on behalf of the Government of Kiribati, the rights of the Chief Justice under that Agreement and under the National Conditions of Service and the rights, powers and duties of the Government of Kiribati in relation to the appointment of the Chief Justice and his entitlements under the Agreement of Service and the National Conditions of Service. The two matters have been heard together and of necessity the evidence, which has been on affidavit, and the arguments have been transmitted by fax from Kiribati to Australia.

On 27 November 1988 by an Agreement made between the Crown Agents (U.K.) as agents on behalf of the Government of Kiribati and Mr Faqir Muhammad it was agreed that Mr Muhammad would proceed to Kiribati and there perform the duties of High Court Judge for a period of resident service of 21-27 months and that the length of tour might be converted by mutual agreement to one of three years. In February 1991, the former Chief Justice of Kiribati having ceased to hold office, it was agreed that Mr Justice Muhammad's contract be converted to a three year contract as Chief Justice. In December 1991 the Government of Kiribati approved an extension of the Service Agreement for a further period of two years. By a formal instrument dated 22 February 1991 the Beretitenti appointed The Honourable Mr Justice Muhammad to be Chief Justice of Kiribati with effect from 6 February 1991 to 5 February 1993.

The service of Mr Justice Muhammad up to this time had been funded by the British Government. In January 1993 the Secretary to the Cabinet of Kiribati requested the British High Commission for funding to enable a further extension of the contract of the Chief Justice for two years, but the High Commissioner agreed only to a one year extension. However, by a formal instrument dated 4 February 1993, the Beretitenti appointed Mr Justice Muhammad to be Chief Justice of Kiribati with effect from 6 February 1993 to 6 February 1995. It appears that the Government of Kiribati had decided to seek funding from another source to cover the second year, and that although Mr Justice Muhammad was then formally appointed for this two year period, there was at that time no Agreement of Service between him and the Government of Kiribati covering the second year.

Mr Justice Muhammad was due to leave Kiribati on leave in March 1994. By that time the necessary funds had been obtained from the New Zealand Government to enable his term to be extended. A draft Service Agreement was prepared by the Public Service Division of Kiribati, using as a precedent the Agreement of 27 November 1988 and this, with some amendments, was the basis of an Agreement bearing date 18 March 1994 which was signed at Nadi in Fiji by the Secretary to the Cabinet on behalf of the Government of Kiribati and by Mr Justice Muhammad. There is a conflict of testimony as to whether, in the course of the discussions which preceded the signing of the Agreement, mention was made of the meaning of the expression "resident service". That conflict cannot be resolved in these proceedings where it has not been possible for the witnesses to be cross-examined, but in any case the conflict is immaterial. The written terms of the Agreement of 18 March 1994 were clearly intended to express the whole of the agreement between the parties, and the general principle that in these circumstances extrinsic evidence may not be given to contradict or vary the terms of the written instrument applies in the present case (see Halsbury 4th Edition, Volume 9, paragraph 287).

The terms of the Agreement which are material to the present case are set out below. The Agreement refers to Mr Justice Muhammad as "the person engaged". Paragraph 1 provides as follows:

"1. IT IS HEREBY AGREED AS FOLLOWS:

(a) The person engaged will proceed to the Republic of Kiribati in accordance with directions which will be given to him by the Government or its appointed agents and will there diligently and faithfully perform the duties of Chief Justice as prescribed under the Constitution and other laws of Kiribati as the Government may reasonably require for the period of resident service of one year commencing on the date of his arrival in the Republic of Kiribati, on which date he shall be deemed to have assumed the duties of his office.

(b) The person engaged will arrive in Kiribati on 8th May, 1994.

(c) The term of the engagement hereunder shall continue until the last day of the period of resident service referred to in paragraph (a) of this clause or until the same is determined in any of the ways hereinafter mentioned unless the person engaged is being re-engaged for further service in accordance with the provisions of Clause 14 in which case the terms of engagement shall be deemed to be completed on the date on which any leave granted to the person engaged following the completion of his tour of service under this Agreement expires."

In paragraph 1(b), "8th May 1994" was later amended to "3rd May 1994" when the Chief Justice returned to Kiribati earlier than had been expected.

Paragraph 2 provides as follows:

"2. DUTIES

The person engaged will:

(a) Act in all respects according to the constitution and any other laws of Kiribati;

(b) Place his whole time at the disposal of the Government and will not be engaged or concerned in any other business, trade or profession;

(c) Save insofar as in herein otherwise expressly stated or as may be inconsistent herewith, be subject to and entitled to the benefits of the National Conditions of Service or other Government or departmental orders or instructions for the time being in force insofar as the same are applicable;

(d) Discharge without delay any debts due to the Government which may be incurred during the period of service whether in respect of monies advanced to the person engaged, services rendered or goods purchased from the Government or otherwise in the event of there being any outstanding debts due to the Government for any cause whatsoever the person engaged shall be liable for and consent to a deduction from terminal benefits which may be granted to the full amount thereof in one lump sum."

Paragraph 3 provides for the payment of salary and for present purposes it is necessary to refer only to sub-paragraph (c) of paragraph 3 which reads as follows:

"(c) The person engaged shall commence receiving salary calculated at half Local Salary plus half Supplement upon departure from his actual place of residence in Manchester. Full Salary and full Supplement will be paid from the date of his/her arrival in Kiribati."

Paragraph 4 provides as follows:

"4. LEAVE AND TERMINAL PAYMENT

(a) The person engaged shall be eligible to receive so far as the exigencies of the Public Service permit at the rate of 6 working days for each completed month of Service. In addition, the person engaged shall be eligible to receive travelling time for such leave of 6 days each way. The same collectively constitute leave. He shall normally be entitled to midtour leave after 12 months completed service.

(b) On completion of the terms of engagement under this Agreement or if the engagement is terminated in accordance with Clause 11 the person engaged shall subject to his service having been in all respects to the satisfaction of the Government but not otherwise, be granted a payment (hereinafter called "a terminal leave payment").

(c) In addition to the leave entitlement, there shall be a terminal leave payment which shall consist of a sum equal to:

(i) one month's basic local salary; and

(ii) one month's supplement per year or part thereof of completed service under this Agreement."

Paragraph 5 contains, in sub-paragraph (a), certain definitions, including that of "child" which means a dependent child below the age of 21 years. Sub-paragraphs (b) and (c) of paragraph 5 provide as follows:

"(b) Subject to the provisions in connection with dismissal on disciplinary grounds under the constitution and laws of Kiribati passage will be provided for the person engaged and family:

(i) on first appointment from UK to Kiribati;

(ii) for mid tour leave from Kiribati to Manchester and back, and

(iii) on completion of the full term of engagement from Kiribati to Manchester.

(c) In addition to the passages provided for in sub-clause (b) hereof, return passages will be provided for dependent children receiving education not more than three times a year for the purposes of school holidays. The cost of passage shall be limited to A$40,000 per annum."

Paragraph 9 provides as follows:

"9_. MEDICAL TREATMENT

(a) The person engaged shall be eligible to receive medical treatment within Kiribati on the terms and subject to the conditions set out in the National Conditions of Service.

(b) The Government may on receipt of a report from its Chief or Principal Medical Officer that the person engaged or a member of the family needs medical treatment which is not available in Kiribati, meet the cost of a return air ticket at first class from Bonriki to any neighbouring overseas country from the cash grant in aid under the New Zealand Technical Assistance Programme."

Paragraph 11 provides as follows:

"11. TERMINATION OF AGREEMENT BY GOVERNMENT

This contract may be terminated by Government either:

(a) Under the provisions of the Constitution

OR

(b) By agreement between the parties

OR

(c) In accordance to the agreement."

By paragraph 12, the person engaged may terminate the Agreement in certain circumstances.

Paragraph 13 provides as follows:

"13. DISMISSAL

If the person engaged shall at any time after the signing hereof neglect or refuse to comply with any of the provisions of the constitution or any other laws of Kiribati then his engagement may be terminated in accordance to laws relating to his duties as Chief Justice. The Government may terminate the engagement forthwith thereupon all rights and advantages deserved [sic] under this Agreement shall cease, and the person engaged shall be liable to repay on demand to the Government or to its appointed agent, any amount paid for, or on account of the passages to the Republic of Kiribati for the person engaged and the family and shall also be liable for any damages from breach of contract."

Paragraph 15 provides as follows:

"15. PRINCIPAL CONDITIONS OF SERVICE/STANDING ORDERS

Matters not covered by the terms of this Agreement shall be governed by the National Conditions of Service and other orders and regulations in the Republic of Kiribati for the time being in force."

As I have said, the Chief Justice returned to Kiribati in May 1994 and resumed his duties as Chief Justice. In the same month the Maneaba ni Maungatabu was dissolved and during the period when there was a vacancy in the office of the Beretitenti, the functions of the Beretitenti were performed by the Council of State, of which the Chief Justice was a member (see sections 35 and 49 of the Constitution). Following a General Election there was a change of Government and the present Beretitenti assumed office on 1 October 1994.

On 11 November 1994 the Maneaba ni Maungatabu resolved that a tribunal should be established pursuant to section 83(4) of the Constitution to investigate the work of the Chief Justice and some days later the Beretitenti, intending to act under section 83(5) of the Constitution, suspended the Chief Justice from performing the functions of his office. The Beretitenti subsequently executed an instrument appointing a tribunal to inquire whether or not an advice should be made to the Maneaba ni Maungatabu to remove the Chief Justice from office for inability to discharge the functions of his office or for misbehaviour and made a second order suspending the Chief Justice. Neither the resolution of the Maneaba ni Maungatabu nor the instrument executed by the Beretitenti made any specific allegation of inability or misbehaviour that had given rise to the question of removing the Chief Justice from office. After a hearing in Kiribati on 7 December 1994 I concluded that serious questions arose for decision as to the validity of these instruments and reserved certain questions for the Court of Appeal. I made an Interlocutory Order in the following terms:

"Order that until the determination by the Court of Appeal of the questions of law reserved, or earlier order, that:

(i) The order appointing the Tribunal shall cease to have effect;

(ii) the suspension of the Chief Justice shall cease to have effect."

On 16 December 1994 the Chief Justice received a letter from the Public Service Division which set out his leave entitlements and the financial benefits said to be due to him. The leave, supplement and local salary were calculated by reference to a period ending on 2 May 1995. The letter stated that the "leave period inclusive of travel time" was from 17 January 1995 to 2 May 1995. The Chief Justice believed that the letter intended to convey the message that he should leave on 17 January 1995. On 20 December 1994 the Chief Justice replied to that letter stating that his one year's resident service would be concluded on 2 May 1995 and that he would then have earned the benefits which he went on to specify in his letter. These included (amongst other claims) amounts in respect of leave, sick leave for dental treatment, local salary and supplement and the cost of holiday packages for his three children. Correspondence ensued, some of which was marked "Without Prejudice". On 30 December 1994 the Under Secretary of the Public Service Division wrote to the Chief Justice saying that in accordance with the National Conditions of Service he was granted leave commencing on 10 January 1995 and adding that paragraph F5(a) of the National Conditions required that leave be taken during a leave year and that he was not entitled to commute leave to cash. The Chief Justice replied on 3 January 1995 and asserted that his Agreement for Service was up to 2 May 1995, that there was no provision for taking any leave during that period of resident service and that his leave would commence on 3 May 1995. He added:

"Since this is expressly stated in the Agreement, the provisions of paragraph 2(c) do not apply and therefore the National Conditions of Service are irrelevant. However, even if they had any relevance I doubt that you could order me to take leave."

To this letter the Under Secretary of the Public Service Division replied as follows on 5 January 1995:

"1. It is not correct that there is anything special or express in the use of the words "resident service" in your 18 March 1994 agreement. The same term "resident" service was used in your original 1988 contract in the same context as clauses 1(a) and 1(c) in your 1994 agreement. Indeed in your most recent application for leave on 1.6.93.

"Resident service" in your "1 year term of duty" (1.5.93-1.4.94) is defined as 2.5.93-21.3.94 = 10 months and 19 days and you in fact took leave from 21.3.94 to 1.5.94 during your above mentioned year of duty.

2. You are again ordered to take leave from 10.1.95, failure to comply with this order would constitute misconduct under the National Conditions of Service and would also give grounds for dismissal under clause 13 of the Agreement.

Please advise immediately whether you intend complying with this order. Accumulation of any further leave is refused."

The Chief Justice did not depart on leave as this letter demanded.

There can be no question that, apart from the possible effect of section 83 of the Constitution, the Agreement of 18 March 1994 was valid and binding. The Agreement unambiguously provides that Mr Justice Muhammad shall perform the duties of Chief Justice for a period of resident service of one year commencing on the date of his arrival in Kiribati, which it is agreed was 3 May 1994, and that the term of his engagement will continue until the last day of that period of resident service, unless the Agreement is determined or he is re-engaged. The Agreement does not expressly provide that the Government of Kiribati will employ the Chief Justice for that period, but it is logically implied from the words of the Agreement that the Chief Justice will be so employed unless the Agreement is determined. Apart from the fact that from a commercial point of view it would be unlikely that the parties would contemplate that the person engaged should travel from Manchester to Kiribati with no right to be employed on his arrival there, the provisions of the Agreement (particularly those entitling the person engaged to leave, terminal payment, passage and freight allowance on completion of the full period of residential service, passages for children during school holidays and medical treatment) all indicate that it was fundamental to the contract that the Chief Justice should be engaged as such for a period of one year's resident service, subject to possible termination. “It is a general rule applicable to every contract that each party agrees, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract": See Secured Income Real Estate (Australia) Pty Ltd v. St. Martins Investments Pty Ltd. [1979] HCA 51; (1979) 144 CLR 596 at p. 607 and cases there cited. It cannot be doubted that the Government of Kiribati agreed to employ the Chief Justice for a "period of resident service of one year commencing on the date of his arrival in the Republic of Kiribati" provided that the agreement was not lawfully terminated before the end of that period.

The important question that arises is what is the meaning of the expression "period of resident service of one year commencing on the date of his arrival in the Republic of Kiribati" in paragraph 1(a) of the Agreement. In their ordinary and natural sense, those words refer to a period of service for one year during which the person engaged is resident in Kiribati. The words of paragraph 1(c) strongly support the conclusion that the words of paragraph 1(a) were used in that sense. The words, "The term of engagement hereunder shall continue until the last day of the period of resident service" unambiguously indicate that the period of service extends until the last day of the period of one year during which the person engaged is resident in Kiribati. The qualifying words of paragraph 1(c), which commence "unless the person engaged" relate to the situation where the Agreement has been determined or the person has been re-engaged and do not detract from the force of the opening words of that sub-paragraph. In other words, the unambiguous effect of paragraph 1 is that the Government of Kiribati agreed to appoint Mr Justice Muhammad as Chief Justice for a period ending on the 2nd May 1995, unless the Agreement was earlier determined or the Chief Justice was re-engaged.

However, the Attorney-General submits that the intention of the parties expressed in the Agreement is that the period of the engagement shall be for one year and that whenever during that year the Chief Justice is on duty performing and exercising his judicial functions, the Chief Justice shall reside in Kiribati and that during the year the Chief Justice is entitled to take a certain amount of leave and that the combined period of duty and leave shall comprise the one year of his engagement. Put in another way, the submission is that the period of resident service is to be calculated by deducting from the full year the amount of leave due in respect thereof. It may be said immediately that there is nothing in the words of paragraph 1 to support this submission. However, the Attorney-General places some reliance on paragraph 4(a) of the Agreement, which entitles the person engaged to receive leave "for each completed month of service " and on paragraph 4(c) which provides for a terminal payment calculated "per year or part thereof of completed service." Although those provisions contemplate that the entitlements to which they refer may arise after a period of less than one year (as of course they might if the Agreement were earlier terminated) they do not cast the slightest doubt on the ordinary meaning of paragraph 1. On the other hand, the use in paragraph 4(b) of the words "on completion of the term of engagement under this Agreement" supports the view that the engagement was for the period mentioned in the Agreement, namely in paragraph 1. Paragraph 6(a), which entitles the person engaged to receive a freight allowance on "completion of the full period of resident service" also supports that view.

The Attorney-General in his submission further relies on the provisions of the National Conditions of Service which are rendered applicable by paragraphs 2(c) and 15 of the Agreement, unless they are inconsistent with the Agreement. It is to be observed that although paragraph 3 of the Agreement, which deals with salary, expressly mentions the National Conditions of Service, paragraph 4 which deals with leave, does not. The provisions of the National Conditions of Service which deal with leave appear in section F. Paragraph F1(a) lays down an entitlement to annual leave which is inconsistent with the express entitlement conferred by paragraph 4(a) of the Agreement. Paragraph F2 provides that "The leave year is from the 1st January to the 31st December and annual leave may be taken at any time during the leave year subject to the approval of the employee's Head of Division or Responsible Senior Officer." That paragraph is inconsistent with the provision of paragraph 4(a) that the Chief Justice shall normally be entitled to mid-tour leave after twelve months completed service. Further, there is no person who can rightly be described as the Head of Division or Responsible Senior Officer of the Chief Justice, and as I shall later point out, there would be constitutional objections to applying such a provision to a person in the position of the Chief Justice. Paragraph F3, which deals with a change in leave rates, has no application to a person employed under the Agreement which does not provide for a change in leave rates. Paragraph F4, which deals with the case of an employee who will not complete a full leave year, is inconsistent with paragraph 4 of the Agreement which deals exhaustively with the Chief Justice's leave entitlements. The Attorney-General particularly relies on paragraph F5(a) which reads as follows: "Annual leave, should, if possible, be taken during a leave year. A Responsible Senior Officer may approve or require an accumulation of annual leave for a maximum of two years." Apart from the fact that there is no person who can rightly be described as a Responsible Senior Officer in relation to the Chief Justice, paragraph F5(a) is inconsistent with the express terms of paragraph 4 of the Agreement which have the effect that, except for mid-tour leave, the leave entitlement arises on completion of the term of the engagement. Paragraph 4(c) plainly indicates that the leave entitlement arises at the same time as the terminal leave payment which, as paragraph 4(b) shows, is due "on completion of the term of the engagement." There are other provisions of section F which it is unnecessary to discuss, which are also plainly inapplicable to the situation of the Chief Justice. The provisions of the National Conditions of Service regarding leave seem quite inapplicable to the position of the Chief Justice, but in any case do not in any way affect the meaning of paragraph 1 of the Agreement.

The Attorney-General also relies on the fact that under the Agreement made in 1988 the Chief Justice had made applications for leave in a form which suggested that he was accepting that the term of his engagement ended at a date arrived at by deducting the amount of leave due from what would otherwise have been the full term of his engagement. This argument was weakened by the fact that the provisions for leave in the earlier Agreement differed from those in the Agreement made on 18 March 1994. In any case this evidence is irrelevant. The general rule is that the subsequent actions of the parties under a contract cannot be admitted in evidence as a guide to the meaning of the contract; the parties' intentions must be ascertained from the words they have used, and if on the true construction of a contract a right is given to a party, that right is not diminished because during some period the existence or extent of the right was not appreciated: Schuler A.G. v. Whickman Machine Tool Sales Ltd [1973] UKHL 2; 1974 AC 235.

I conclude therefore that Mr. Justice Muhammad had a contractual right to be appointed Chief Justice for a period ending on 2 May 1995 unless the Agreement is invalid for reasons later to be discussed.

Section 81(1) of the Constitution provides as follows:

"81(1) The Chief Justice shall be appointed by the Beretitenti, acting in accordance with the advice of the Cabinet tendered after consultation with the Public Service Commission."

Council for Mr Justice Muhammad has submitted that the then Beretitenti effectively appointed Mr Justice Muhammad to be Chief Justice when he authorised the Agreement of 18 March 1994 to be entered into. He submitted that the Constitution does not require that a Chief Justice be appointed by means of a formal instrument and relied on the distinction between section 81 of the Constitution, which does not specify the manner of appointment, and sections 84 and 91 which deal with the appointment of Commissioners and Judges of the Court of Appeal respectively, and which refer to "the instrument of appointment". This submission must fail for a number of reasons. In the first place, although section 81 does not specify the method of appointment of a Chief Justice, clearly some formal act placing the appointee in the position of Chief Justice is necessary. The fact that section 84 contemplates that it may be desirable to place limitations and conditions on the appointment of a Commissioner and that section 91 similarly refers to limitations on the appointment of Judges of the Court of Appeal appointed under section 91(1)(b), made it necessary for those sections to refer to the instrument of appointment in which the limitations or conditions were to be specified. It cannot be concluded that because an instrument of appointment is mentioned in sections 84 and 91 and not in section 81 that no instrument is necessary to effectuate the power given by section 81. Having regard to the nature of the office of Chief Justice, the formal method of appointment would be by commission.

In any case, in principle there is a distinction between an agreement to appoint and an actual appointment. If authority is needed for that proposition it is provided by Chalmers Property Investments Co. Ltd. v. MacColl 1951 SLT 50 at pp 53, 54, where it was held that an agreement to appoint an arbitrator was not an appointment of the arbitrator. In the present case there was no actual appointment of the Chief Justice for a period extending until 2 May 1995 but only an agreement to appoint him for that period.

It is further fatal to this submission that the Beretitenti himself was not a party to the agreement. Under the Constitution, the power of appointment of a Chief Justice is vested in the Beretitenti acting in accordance with the advice of the Cabinet tendered after consultation with the Public Service Commission. The Beretitenti must act in accordance with the advice of the Cabinet although he is not obliged to act in accordance with the advice of the Public Service Commission - section 139 of the Constitution. Even if, contrary to the view that I have expressed, the agreement could be held to be an actual appointment, it was not appointment by the Beretitenti who was not a party to agreement. The agreement was made on behalf of the Government, and the Beretitenti, although a member of Government and indeed the head of it, is not identical with the Government. Some reliance was placed on the evidence of Mr Teatao Teannaki, who was the Beretitenti from 1991 until May 1994 and who states on Affidavit that the Cabinet in about early 1994 resolved to appoint The Honourable Faqir Muhammad for another year's resident service and that the Agreement of 18 March 1994 was consistent with his decision and with the decision of Cabinet. This evidence is challenged on the basis that there is no Cabinet minute to support it but in any case it does not show that the Beretitenti actually appointed Mr Justice Muhammad as Chief Justice, but only that he resolved to do so.

It is therefore clear that Mr Justice Muhammad's commission will expire on 6 February 1995. The Attorney-General submitted that insofar as the Agreement purported to require the Government to employ Mr Justice Muhammad as Chief Justice beyond that date it was invalid, as contrary to section 83(1) of the Constitution, which provides that the office of a Judge shall become vacant upon the expiration of the period of his appointment to that office. It was said that the invalid part should be severed from the Agreement, and rectification was claimed. However, neither section 83(1) nor section 81 has any effect on the validity of the Agreement. Those provisions deal with the manner of appointment of the Chief Justice and the duration of his tenure of office, but they have nothing whatever to say about the validity of a contract to appoint a Chief Justice for a particular term. There is every practical reason why the Government of Kiribati should be able to validly to contract to appoint a Chief Justice; if the actual appointment was for a period less than that stipulated in the contract, the result would not be that the contract was invalid, but that the stipulation was not fulfilled. The Agreement was valid.

As an alternative to the argument (dealt with above) that Mr Justice Muhammad was in fact appointed, it is submitted on behalf of Mr Justice Muhammad that the Court should grant specific performance of the Agreement. The fact that the Beretitenti is not a party to the Agreement is fatal to this submission also. If an order for specific performance were made against the Government, the Beretitenti could still decline to exercise the constitutional power which is vested in him personally. In other words, an order for specific performance would be futile, since it could not be enforced against the Beretitenti, and for that reason should be refused. It is therefore unnecessary to consider whether, if the Beretitenti had contractually bound himself to make the appointment, specific performance of the Agreement could be granted. There is no precedent for making an order to compel a person in the position of the Beretitenti to exercise his constitutional discretion by appointing a particular person as a judicial officer even when he has agreed to do so.

The question then is whether Mr Justice Muhammad is entitled to damages if he is not in fact appointed for the period from 6 February to 2 May. On behalf of the Attorney-General it was submitted that the Government was entitled to terminate the Agreement under paragraph 11 of the Agreement, which provides that the Contract may be terminated by the Government under the provisions of the Constitution. It was submitted that the Beretitenti was entitled to decline to appoint the Chief Justice from 6 February to 2 May and that if he did exercise his constitutional discretion by deciding not to appoint the Chief Justice the Agreement would be terminated. As I have already said, the Beretitenti was empowered to decline to appoint Mr Justice Muhammad for the further period, but if he did so decline the result would be, not that the Agreement was terminated, but that the Government would be in breach of it. When paragraph 11 of the Agreement refers to a termination of the Agreement under the provisions of the Constitution, the only relevant provision of the Constitution for this purpose is section 83. If a Chief Justice is removed under section 83, the Agreement for his employment could be terminated. In the present case the procedure of section 83 had been invoked, but in circumstances in which there was a doubt as to the validity of the procedure followed, and the questions that arose in this regard were referred to the Court of Appeal. However, Mr Justice Muhammad has not been removed under section 83 and could not be so removed unless the questions reserved to the Court of Appeal were decided against him and the Tribunal, which would then be free to inquire into the matter, advised the Maneaba ni Maungatabu that the Chief Justice should be removed and the Maneaba ni Maungatabu resolved accordingly.

A reference was made in the course of this submission of the Attorney-General to section 136 of the Constitution. That section does show that where the Constitution gives power to remove a Chief Justice there is consequential power to terminate the Contract under which the Chief Justice is employed, but it does not expressly or impliedly give power to terminate such a Contract in any other case.

On behalf of the Attorney-General it was submitted that the refusal of the Chief Justice to take leave, when ordered, was misconduct which would justify his dismissal, or which could be considered by the Beretitenti in deciding whether to appoint him for a further period. In support of this submission it was argued that the reference in paragraph 13 of the Agreement to "any other laws of Kiribati" includes a reference to the ordinary law of employer and employee and that the power to terminate the Agreement under that provision would extend to the case where the Chief Justice has disobeyed a lawful order given by his employer. Reliance was placed on paragraph D3 of the National Conditions of Service which reads as follows: "All employees are subject to the orders, regulations and general instructions issued by the Government from time to time and to lawful orders of senior officers. Failure to comply with such orders and instructions will be regarded as misconduct." Paragraph D25 goes on to lay down the punishments which may be imposed for misconduct; they include dismissal.

For the reasons I have already given, the provisions relating to leave in the National Conditions of Service did not apply to the Chief Justice, and the Under Secretary of the Public Service Division had no power to order him to take leave. For that reason alone it did not amount to misconduct to disobey that order, which was not a lawful one.

Neither the common law of Kiribati nor the provisions of paragraph D3 of the National Conditions of Service, entitle the Government, or any officer of it, to give orders or instructions to the Chief Justice. Although the Chief Justice is in one sense an employee of the Government, he stands in a very special position. It is essential to the nature of the judicial office that a judge should be independent of the Executive since it is the function of the judiciary to determine disputes not only between subject and subject but also between subjects and the State. It is a fundamental principle of the constitutional law of England, and therefore of Kiribati that judges are independent of the Government in the exercise of their functions. If a judge could be compelled to take leave at the will of the executive, it would be possible seriously to interfere with the exercise of the judicial function. The position is put beyond doubt by section 83 of the Constitution. Even if the provisions of paragraphs D3 and D25 of the National Conditions of Service formed part of the Agreement (which they do not) those provisions would be contrary to the Constitution and invalid. The only method of removal of a judge is that provided by section 83 of the Constitution and any contractual provision which purported to allow a judge to be dismissed other than under section 83 would be invalid.

I conclude therefore that under the Agreement Mr Justice Muhammad was entitled to hold the position of Chief Justice until 2 May 1995 and that if he is not appointed to that position for that period he will be entitled to damages which, on ordinary principles, will be such sum as will, so far as possible, place him in the same position as if the Contract had been fulfilled.

It is then necessary to consider some particular questions as to the entitlements of Mr Justice Muhammad under the Agreement which have been raised by the Originating Summons and Notice of Motion. Clearly he is entitled to be paid his salary up to 2 May 1995 and for the reasons I have already given he is be entitled to payment for leave calculated on the footing that the entitlement arises at the end of the term of the appointment, i.e. 2 May. It should be made clear that this is not commutation of leave. If the Contract were fulfilled Mr Justice Muhammad would be entitled to leave in accordance with paragraph 4 of the Agreement at the rate of 6 days for each completed month of service up to 2 May 1995. If the Contract is not fulfilled he will be entitled to damages equivalent to the leave to which he would have been entitled. Also, the question of the accumulation of leave does not arise. The National Conditions of Service regarding accumulation have no application and the position simply is that the leave entitlement arises at the end of the period of service fixed by the Agreement.

Mr Justice Muhammad also claimed an amount to enable him to have dental treatment in Australia. On 17 October 1994 Dr Naing, a senior dental officer in Kiribati, submitted a clinical summary stating that Mr Justice Muhammad complained of severe pain in his teeth especially when chewing and that in his opinion it was advisable to have complete root canal therapy and capping (with a full veneer crown) overseas. In an attached memorandum Dr Naing stated that there was no laboratory nor dental technician to do the necessary work in Kiribati and he recommended that the patient have the appropriate treatment overseas. On 28 October 1994 Mr Justice Muhammad submitted these documents to the Under Secretary, Public Service Division and requested payment of air fares and cost of treatment in Hawaii. On 7 November 1994 the Under Secretary replied stating that in accordance with clause 9(b) of the Contract payment of the cost of travel for medical treatment overseas was approved. By a further memorandum of 17 November 1994 he indicated that the correct interpretation of clause 9(b) was that the Government of Kiribati would meet the cost of return air fare only; apparently the earlier letter had intended to approve payment of the cost of the treatment and subsistence, but the later letter resiled from this.

The Affidavit of the Attorney-General denies that Mr Justice Muhammad has been suffering toothache since October 1994 and says that he is suffering only tenderness on percussion which has been treated by antibiotics. This rather ungenerous assessment does not do justice to the reports of Dr Naing which clearly show that Mr Justice Muhammad is suffering from a painful condition for which he badly needs dental treatment which cannot be obtained in Kiribati.

The submission of the Attorney-General now is that paragraph 9 of the Agreement confers no right to medical treatment overseas, but rather gives the Government a discretion to provide air fares to allow such treatment to be obtained and that in any case this discretion does not extend to the provision of air fares for dental treatment. The Attorney-General also submits that the condition precedent mentioned in paragraph 9(b) - the receipt of a report from the Chief or Principal Medical Officer - has not been satisfied since the report was given by a Senior Dental Officer. This technical objection was not taken at the time and could be met if a report could now be obtained from the Chief or Principal Medical Officer.

Paragraph 9 of the Agreement, which deals with medical treatment, distinguishes between medical treatment within Kiribati and medical treatment not available in Kiribati. By paragraph 9(a) the right to medical treatment within Kiribati is granted "on the terms and subject to the conditions set out in the National Conditions of Service". Medical treatment within Kiribati is dealt with by paragraphs I.1, I.2 and I.3 of the National Conditions of Service. Paragraph I.1 provides as follows: "Except as otherwise provided in these orders, all employees, their wives and children are entitled to free medical and dental treatment by Government medical staff. Essential medicines and surgical materials provided by the Health Service will be supplied free of charge on prescription by Government medical staff". Paragraph I.2 refers to the supply of spectacles and dentures and surgical appliances. It is clear that the words "medical treatment within Kiribati" in the heading of section I of the National Conditions of Service include dental treatment. Since paragraph 9(a) expressly incorporates the terms and conditions of the National Conditions of Service, it is proper to conclude that the word "medical" in paragraph 9 is intended to have a wide meaning which would include dental.

Whereas paragraph 9(a), read in conjunction with paragraph I.1 of the National Conditions of Service, clearly entitles the Chief Justice to free medical and dental treatment within Kiribati by Government medical staff, paragraph 9(b) does not confer any similar right to medical or dental treatment outside Kiribati. It gives the Government a discretion to meet the cost of return air fares to a neighbouring overseas country when the person engaged needs treatment not available in Kiribati. Paragraph 9(b) does not confer a right to treatment and it does not refer to the cost of treatment as well as to the cost of air fares. The Under Secretary, as delegate of the Beretitenti (see paragraph A5 of the National Conditions of Service) did approve the cost of air travel, but those costs have not in fact been met.

It is a settled principle that where a party to a contract has a discretion or option as to whether or not he shall perform an obligation, there is no contract on which an action can be brought: Placer Development Ltd. v. The Commonwealth [1969] HCA 29; (1969) 121 C.L.R. 353 at p. 356; Meehan v Jones [1982] HCA 52; (1982) 149 C.L.R. 571, at p. 581. Paragraph 9(b) of the Agreement therefore did not create an enforceable obligation on the Government. The National Conditions of Service are of no assistance in this regard; paragraph 9 incorporates only those terms and conditions of the National Conditions of Service that relate to medical treatment within Kiribati, and in any case paragraph I.4 of the National Conditions, which deals with medical treatment outside Kiribati, does not entitle an employee to free treatment or transport.

Mr Justice Muhammad accordingly had no contractual right to have the cost of overseas dental treatment and airfares for the purpose of obtaining such treatment paid by the Government.

The next matter to be considered is whether Mr Justice Muhammad is entitled to be paid the amount it would have cost him to bring his children to Kiribati during the school holidays at Christmas time 1994. Paragraph 5(c) of the Agreement provides that "return passages will be provided for dependent children receiving education not more than three times a year for the purpose of school holidays" and limits the cost to $A40,000 per annum.

On 21 October 1994 Mr Justice Muhammad requested payment of an amount representing the cost of the economy class airfares to enable his three children to make their Christmas visit to Kiribati. He was told that bookings would be arranged, but when nothing had been done he wrote another letter, on 9 December 1994, this time proposing that he be allowed to travel home, where he could have his dental treatment, at the same time meet his family, and requested the payment of the fare of one of his daughters from the U.S.A. (where she was studying) to Manchester and back. This request was refused.

The Attorney-General submits that under paragraph 5(c) it is necessary for audit and other purposes for Mr Justice Muhammad to pay for the air tickets and then to seek reimbursement. However convenient such a requirement may seem for audit purposes that is not the effect of the paragraph. The Government is obliged to provide "return passages" and that means that it is obliged to pay for the movement of the children to and from Kiribati. The Attorney-General further submits that the claim made by Mr Justice Muhammad was rejected because he asked the Government to pay for the fares of one daughter, Aysha, from the United States, rather than from Manchester. That excuse cannot be accepted; the Government was obliged to pay the fares of the three daughters from Manchester to Kiribati, and if one daughter happened to be in the United States that did affect the obligation to the amount it would cost to transport her from Manchester Kiribati and back.

The failure of the Government to provide return passages for the children during the Christmas vacation was a breach of the Agreement.

The Attorney-General further submits that Mr Justice Muhammad is not entitled to damages for this breach since he has not suffered any financial loss. Even though it may seem unfair that the Government should be enriched by its own breach of contract, this breach does not entitle Mr Justice Muhammad to recover the cost of the fares which he has not paid. Since he has not in fact paid the fares he has not suffered financial loss.

However, the fact that Mr Justice Muhammad is not entitled to be paid the amount of the airfares that should have been provided does not mean that he is not entitled to damages. Substantial damages may be awarded for inconvenience or loss of enjoyment where the injury, inconvenience or loss was within the presumed contemplation of the parties as likely to result from a breach of contract: see Halsbury (4th ed.), vol. 12, para. 1188 and cases therein cited, and Athens v. MacDonald Travel Service Pty Ltd v. Kazis (1970) SASR 264. Clearly Mr Justice Muhammad is entitled to damages for loss of the enjoyment which the Agreement was intended to secure for him, and the frustration, annoyance and disappointment associated with that loss.

I would require further submissions to enable me to quantify those damages, if the parties wish me to do so.

The final question that arises is whether Mr Justice Muhammad is entitled to a terminal leave payment, consisting of one month's supplement and one month's basic local salary. By clause 4(b) of the Agreement he is so entitled "subject to his service having been in all respects to the satisfaction of the Government but not otherwise".

This is not a question that it is possible to answer in these proceedings. The Attorney-General has given a number of reasons why the Government would be entitled to form the view that the conduct of Mr Justice Muhammad has not been satisfactory. The most important complaints against Mr Justice Muhammad are made only on hearsay and the evidence in support of them is not admissible. In fairness to the Chief Justice, however, the following comments should be made. The Attorney-General submits that the service and conduct of the respondent has been unsatisfactory in three ways. First it is said that he has refused, failed or neglected to carry out his judicial functions. Put shortly the complaints made in this regard are that there is a backlog of 34 criminal cases, some of which have been outstanding for two years, that Mr Justice Muhammad has refused on occasion to go to the outer islands and has brought cases from these islands to Tarawa and that there have been delays in giving judgment in criminal cases and sometimes the Chief Justice has returned appeals from the magistrates' courts for retrial. It would be impossible to pass judgment on these complaints without knowing in detail the reasons for the backlog and the delay and the extent of the demands on the time of the Chief Justice. He himself has said that in some cases delays were the fault of the prosecution and in any case it must be pointed out that he was the sole judicial officer in a jurisdiction which is geographically vast and which was formerly served by a puisne judge in addition to the Chief Justice. Moreover, for a substantial period of time since the Agreement was entered into the Chief Justice was called on to perform the duties of a member of the Council of State. It cannot be said that the Chief Justice was wrong in requiring cases to be heard in Tarawa rather than in the outer islands, or in sending matters back to the magistrates court for retrial, without knowing all the circumstances of the cases. The second head of complaint made by the Attorney-General is that there are serious objections to the conduct in court of the Chief Justice. This is supported by the evidence of two advocates that the Chief Justice intervened in the proceedings and shouted in a loud and aggressive manner which had the effect of embarrassing and confusing some of the witnesses. These complaints would need to be assessed in the light of the fact that the advocates concerned are comparatively inexperienced and it would not be possible to regard their evidence as warranting a finding that the conduct of the Chief Justice had been unsatisfactory without a much fuller knowledge of the circumstances.

Thirdly, the Attorney-General has submitted that Mr Justice Muhammad had engaged in conduct and activities which would appear to suggest that he was favouring members of the previous Government. It is enough to say that there is no evidence sufficient to support those charges and that one serious allegation of partiality which was made against the Chief Justice (in paragraph 3 of the first Affidavit of the Attorney-General) was later withdrawn.

Although the satisfaction mentioned in paragraph 4(b) is that of the Government, the Government must act honestly, or perhaps honestly and reasonably, in deciding whether the service was satisfactory: Meehan v. Jones [1982] HCA 52; (1982) 149 C.L.R. 571. The question whether the Government, acting honestly and reasonably, could reach the conclusion that the service of the Chief Justice was unsatisfactory could only be answered in proceedings based on proper evidence which had been tested by cross-examination.

The Originating Summons and the Notice of Motion both seek declaratory relief. They raise common questions, some of which are repetitious. Rather than make separate orders in the two proceedings it is convenient to make one order in both matters.

I declare as follows:

1. The Agreement of Service between the Government of Kiribati and The Honourable Faqir Muhammad dated 18th March 1994 for the employment of the Honourable Faqir Muhammad as Chief Justice from 3 May 1994 to 2 May 1995 is valid.

2. Under section 81 of the Constitution the Beretitenti may in his discretion refuse to appoint The Honourable Faqir Muhammad as Chief Justice after his present commission expires on 6 February 1995.

3. The Attorney-General is not entitled to have the said Agreement rectified or set aside or to terminate it.

4. If The Honourable Faqir Muhammad is not appointed Chief Justice for the period from 6 February 1995 to 2 May 1995 there will be a breach of the said Agreement entitling him to damages to compensate him for the loss of his entitlements and other benefits under the Agreement up to 2 May 1995, including salary up to that date and payment for leave accruing at that date.

5. That the Honourable Faqir Muhammad is not entitled to specific performance of the said Agreement.

6. (a) The Honourable Faqir Muhammad was entitled under the said Agreement to take leave at the expiration of his service on 2 May 1995.
   

(b) The Under Secretary of the Public Service Division was not entitled to require The Honourable Faqir Muhammad to take leave before the expiration of his service or at all.

(c) The Honourable Faqir Muhammad was not guilty of misconduct in refusing to take leave when ordered to do so by the Under Secretary of the Public Service Division.

7. The Government of Kiribati was not bound to pay the cost of air fares to enable The Honourable Faqir Muhammad to have dental treatment overseas or the cost of such treatment.

8. The Government of Kiribati was bound to pay the cost of the passage of the children of The Honourable Faqir Muhammad to and from Kiribati during the 1994 Christmas holidays and The Honourable Faqir Muhammad is entitled to damages for the loss of enjoyment and the frustration, annoyance and disappointment caused by the breach of paragraph 5(c) of the said Agreement.

9. The question whether The Honourable Faqir Muhammad is entitled to a terminal leave payment under the said Agreement cannot be answered in the present proceedings.

In all the circumstances I order that The Honourable The Attorney-General on behalf of the Government of Kiribati pay the costs of The Honourable Faqir Muhammad in both matters. I request Counsel for the Honourable Faqir Muhammad to make a submission as to the quantum of costs, and the Attorney-General to reply, to enable me to fix the costs.

I grant liberty to apply in case any party considers that any matter necessarily involved in these proceedings requires further mention.

HONOURABLE SIR HARRY GIBBS

1/2/1995