Rutherford v Secretary for Justice [1982] NRSC 3; Civil Action 2 of 1982 (12 May 1982)

[1969-1982] NLR (A) 209

IN THE SUPREME COURT OF NAURU

Civil Action No. 2 of 1982

GRAHAM HUGH RUTHERFORD

v.

SECRETARY FOR JUSTICE

12th May, 1982.

Contract - offer - more than one document to be read together to ascertain terms of offer - question of fact whether term included in offer - objective test of intention.

Constitution - power to appoint to public service - power vested in Chief Secretary and not delegable - Chief Secretary appointing through agent - extent of agent's authority.

Constitution - power to appoint to public service - whether only Chief Secretary can fix terms and conditions of appointment.

Action to recover moneys alleged to be payable to the plaintiff by the Republic under the terms of his contract of service. The plaintiff answered an advertisement placed in a New Zealand newspaper by the Consul-General for Nauru in that country inviting application to be made to him for appointment to certain offices in the public service in Nauru. The plaintiff received an offer of appointment; before accepting it he sought from the Consul-General information regarding certain terms and conditions of the offer. He received an oral reply but asked that the information be given to him in writing. After some time he received a formal offer of appointment signed by the Acting Chief Secretary; it was accompanied by two letters signed by the Consul-General. One of the letters informed him that the offer related to a more senior office than that to which the original offer related. The other letter contained the information already given orally and concluded by referring to the "two copies of your contract" and asking for the original to be signed and returned to the Consul-General. The plaintiff signed it and returned it, believing the terms and conditions referred to in the letter to be incorporated in the contract, although not contained in the document he signed. One of those terms was that an allowance of $725 per annum would be paid to the plaintiff if he left his son at school in New Zealand. Having left his son at school in New Zealand and come to Nauru, he sought payment of the allowance. The Republic refused to pay it as the information given about it to the plaintiff by the Consul-General was incorrect and given without the Acting Chief Secretary's authority. The defendant argued that, even if a normal employer acting through an agent would have been bound in the circumstances by his agent's promise, the Republic was not bound by the Consul-General's promise and statement in excess of his authority because by virtue of Article 68 of the Constitution of Nauru only the Chief Secretary can bind the Republic as to terms and conditions of appointment to the public serve.

The relevant provisions of Article 68 are -

"68. (1)........, there is vested in the Chief Secretary the power -

(a) to appoint..... persons to hold or act in offices in the public service;

(b) to exercise disciplinary control over persons holding or acting in such offices; and

(c) to remove such persons from office.

(2) The Chief Secretary may, by instrument in writing under his hand, delegate to a public officer power to exercise disciplinary control over persons holding or acting in such offices ............"

Held: (1) Where not all the terms of an offer are contained in one document but are supplemented by terms and conditions contained in other documents, it is a question of act whether a particular term or condition referred to in one of those documents is included in the offer. That depends on the intention of the offeror as it would have appeared to a reasonable person in the position of the offeree. In this case the plaintiff would have understood the offer to be intended to include the term as to payment of the allowance.

(2) The Chief Secretary is obliged to act through agents when recruiting overseas for the public service. Article 68 does not prevent him from doing so. However, only he can make the actual appointment to the public service.

(3) Article 68 does not prevent persons other than the Chief Secretary fixing the terms and conditions of appointment of officers to the public service. Even though an agent of the Chief Secretary has no actual authority to fix any such term or condition, nevertheless, if his agent acts within what reasonably appears to be the scope of his authority in informing an offeree of particular terms and conditions of appointment and the offeree accepts the offer in that belief, the Republic is bound by those terms and conditions.

Claim allowed. Judgment for plaintiff for $725 and costs.

Mrs M.L. Billeam for the plaintiff.
Defendant in person

Thompson CJ.:

The facts of this case are agreed. Sometime in 1980 the plaintiff read an advertisement in a newspaper in New Zealand. According to the advertisement the Republic of Nauru had a number of vacancies in its public service and invited persons interested in being appointed to any of them to apply to the Consul-General for Nauru in Auckland. Two of the posts referred to in the advertisement were Instructor at the Trade School in Nauru and Chief Instructor at the same school. The plaintiff sent an application to the Consul-General. He was interviewed by the Consul-General. In October, 1980, he received a telegram offering his appointment as Instructor. He did not accept it immediately because he was awaiting a letter from the Consul-General confirming information which the Consul-General had given him orally at the interview. Interalia that information related to an entitlement to an allowance of $725 payable to the plaintiff if he was appointed and his son remained at school in New Zealand. When no letter had arrived by 3rd November, 1980, the plaintiff wrote to the Consul-General suggesting that a letter from the Consul-General might have gone astray and asking him to answer certain questions; one of them related to the allowance.

On 6th November, 1980, the Acting Chief Secretary decided to offer the plaintiff appointment to the post of Chief Instructor; accordingly he signed a letter addressed to the plaintiff. It contained a formal offer of appointment, was called a Letter of Appointment and had annexed to it a schedule headed "Conditions of Service". The offer was expressed in the letter to be subject to the terms set out in the Schedule. However, it offered appointment simply to "the Public Service of Nauru", not to the post of Chief Instructor. The Acting Chief Secretary sent that letter, with its schedule, to the Consul-General and instructed him to send it to the plaintiff as an offer of appointment to the post of Chief Instructor.

On 13th November, 1980, the Consul-General sent the Acting Chief Secretary's letter, with its schedule, to the plaintiff. He sent with it a letter which did not expressly refer to the Acting Chief Secretary's letter but, after referring to the offer previously sent by telegram, continued "I have now been asked to offer you the post of Chief Instructor". It went on to deal with matters such as medical examination, travel arrangements and the like and concluded with the following sentence: "Should you have any further queries or wish to obtain more information please do not hesitate to ring me."

That letter and the Acting Chief Secretary's letter, with its schedule, were accompanied in the same envelope by another letter addressed to the plaintiff and signed by the Consul-General. In that letter he first answered the questions asked by the plaintiff in his letter of 3rd November. In respect of the allowance, he stated: "An allowance of $725 p.a. is payable in the event of your leaving your 17 year old son at school in New Zealand." After answering the questions, the letter concluded "I enclose two copies of your contract and would be grateful if you would sign the original and return it to me in due course, together with other papers listed in my separate letter" (i.e. the visa application, medical examination report forms, etc.).

The forms set out in the schedule headed "Conditions of Service" did not include any relating to the allowance about which the plaintiff had asked. However, having expressly asked for the information about it to be given to him in writing and as it was given in a letter which accompanied the formal offer of appointment, the plaintiff regarded it as a term of the contract and accepted the offer in that belief. Unfortunately the Consul-General had no actual authority to give the plaintiff the information about the allowance. The Republic does not regard it as a term of the contract and has refused to pay $725 to the plaintiff.

It is lamentable that the plaintiff, who acted most reasonably in making the inquiry and in requiring that the information be given to him in writing and who undoubtedly acted in perfect good faith, should have been obliged to bring these proceedings and that, in the circumstances, the Republic should insist on standing on what it believes to be its strict legal rights. But, as it has done so, it is necessary for this Court to decide whether as not it is correct as to those legalities. Whatever this Court may feel about the moral issues involved, the matter must be decided on the law.

The first legal issue raised by the defendant is whether the statement made by the Consul-General regarding the allowance was a part of the offer made to the plaintiff or a mere representation. There is no doubt that, although couched in terms of the allowance being payable (prima facie a statement of fact), it was intended in the circumstances to be a promise as to what would in the future be paid to the plaintiff. It was, therefore, by its nature appropriate to be included as a term of the contract. The plaintiff was obviously interested in it on that basis. Although not included in the schedule of conditions of service, the statement was in a letter accompanying the Acting Chief Secretary's letter. The Acting Chief Secretary's letter, on its face, did not contain all the terms of the contract; in particular, it did not state the post for which the plaintiff was being offered appointment. The plaintiff had to look to one of the two letters of the Consul-General for amplification of the terms of the offer in that regard. That being so, it was, in my view, reasonable for him to believe that other amplification of those terms might be included in those letters and to regard the statement relating to the allowance as such amplification. Possibly the Consul-General did not intend it to be so regarded; but the test for ascertaining the intention of parties when entering into a contract is not subjective but objective. The Court must decide what a reasonable person looking on would have considered their intentions to be (See e.g. Smith v Hughes (1871) L.R. 6 Q.B. 597.) I have no doubt such a person would have considered that the parties intended the promise to pay the allowance to be a term of the contract.

The other legal issue raised by the defendant is that the addition by the Consul-General of the term relating to the allowance to the Acting Chief Secretary's offer was incapable of resulting in that term being incorporated in the contract because only the Chief Secretary had power to make the offer and to state the terms of employment. He relied on Article 68(1) of the Constitution, which vests in the Chief Secretary the power to appoint persons to the public service of Nauru. He submitted, correctly in my view, that the power cannot be delegated. He admitted that the Chief Secretary would employ an agent in making appointments but submitted that the agency should be limited to acting as a channel of communication between the Chief Secretary and persons being appointed to the public service. He accepted that a person dealing with such an agent would not be aware whether a communication received by him in respect of an appointment was authorised by the Chief Secretary or not. Although the defendant did not concede the point, there can be no doubt that the Acting Chief Secretary had held out the Consul-General to be his agent in the broadest of terms. The advertisement in the newspaper asked for applications to be sent to the Consul-General. The Consul-General conducted the interview. The result was an offer, albeit incomplete, signed by the Acting Chief Secretary. Any reasonable person in the plaintiff's position would have regarded the Consul-General as the Acting Chief Secretary agent with wide powers, including the power to state terms of the offer of appointment. So, unless the defendant succeeds on the constitutional point, the plaintiff must succeed with his claim.

The defendant has submitted that the power to appoint to the public service vested in the Chief Secretary by Article 68 (1) includes a power, exclusive to himself, to fix the terms and conditions of the employment in the posts to which appointment is made. If that is so, all the provisions of the Public Service Act 1961-1971 relating to salaries, allowances, leave and even tenure of office must be void. If by virtue of Article 68(1), the Chief Secretary has the exclusive power to fix the terms and conditions of employment in the public service, Parliament has no power to legislate for those matters. There is, in my view, no good reason for construing Article 68(1) so that it has that effect. It is most desirable that Parliament should have that power. Article 27 of the Constitution empowers Parliament to make laws for the peace, order and good government of Nauru. That clearly is broad enough to encompass laws relating to the public service. Certainly the power is given "subject to this Constitution"; Parliament cannot legislate so as to take away or interfere with a power conferred by the Constitution. But the power to fix terms and conditions of employment in the public service is not expressly vested in the Chief Secretary. There is no good reason why he should not appoint on terms and conditions prescribed by Act of Parliament. I am satisfied, therefore, that the expression "appoint" in Article 68(1) (a) must be given its normal meaning and not the extended meaning for which Mr. Lang argued.

The fact that no law has been made yet by Parliament to fix the terms and conditions of employment of persons appointed to the public service otherwise than as permanent officers or temporary employees cannot alter the effect of Article 68(1). Nor is it necessary for me to explore the question where the power to fix those terms and conditions now lies. All that is relevant to these proceedings is that they are not vested exclusively in the Chief Secretary; nor, to the extent that he may possess them, is there any provision of the Constitution making them non-delegable. Consequently the defendant's argument that the Republic is not bound by the unauthorised act of the Acting Chief Secretary's agent because it was ultra vires the Constitution must fail. The Consul-General had ostensible authority to include the term in the offer to the plaintiff and the plaintiff entered into the contract on that basis. It is not disputed that the plaintiff has not been paid the allowance to which the term relates. He is, therefore, entitled to succeed on his claim.

Before I conclude this judgment, it is pertinent to comment that the risk of such unauthorised conduct by agents of the Chief Secretary as apparently occurred in this case would be obviated if the terms and conditions of employment were drawn up clearly (particularly where allowances are paid in certain circumstances but not in others), notified to all overseas offices of the Republic engaged in recruiting and then not changed without adequate notice to those offices.

Judgment is given for the plaintiff for $725 and his costs.