Saiho v Solomon [2016] PGNC 282; N6474 (7 October 2016)

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AND:
ANNA SOLOMON
ACTING SECRTARY – DEPARTMENT OF COMMUNITY DEVELOPMENT
- First Defendant -

EMPLOYMENT LAW – public servant - written contract - breach of contract and constitutional rights - whether private law or public law apply - tests to apply by the court to determine whether private or public law should apply discussed - effect of section 18(6)(b) of the Public Services (Management) Act discussed

The plaintiff signed a contract of employment with the defendants for three (3) years. Before his term was up, he signed a new contract of employment for another three (3) years. During the term of his employment under the second contract, he was suspended and then terminated. The plaintiff sought review before the Public Service Commission. The Public Service Commission annulled the defendants' decision to terminate him and he was re-instated to his substantive position. Not long and whilst waiting to be re-instated, the plaintiff was put off from the payroll. The plaintiff lodged another review with the Public Service Commission. Whilst waiting for the review, the plaintiff commenced this proceeding. Whilst this proceeding was pending, the Public Service Commission annulled the defendants' decision to suspend the plaintiff and ordered his reinstatement with all this outstanding entitlements to be paid. The plaintiff resumed employment with the defendants. He was later transferred to and is now working with another department of the third defendant. The plaintiff continued with this proceeding. He also claims that his outstanding entitlements are still owed to him.

(ii) The subject action or decision must be of public importance and interest. It must be a subject of an exercise of power.

(iii) If the employing agency is not created under a statute but is incorporated under the Companies Act 1997, the termination is of a private law nature and the remedy of judicial review is not available to the aggrieved party.

Ambrose Vakina v. Thaddeus Kambanei (2004) N3094
David Nelson v. Patrick Puraitch (2004) N2536
Ereman Ragi v. Joseph Maingu (1994) SC459
Gabriel Yer v. Peter Yama (2009) SC996
Joel Luma v. John Kali (2014) SC1401
Jomino Holee, Paula Vuvu and Gauealele Samuel v. Sem Vegogo, Pascoe Kase & the State (2013) N5101
Tom Gesa v. Bernard Kipit (2003) N2457
Zachary Gelu v. Francis Damen (2004) N2762

1 ANIS AJ: The plaintiff is a public servant. He currently works with the Department of Provincial and Local Level Government Affairs. Prior to that, the plaintiff was employed by the Department of Community Development (2nd defendant).

2. The cause of action relates to his earlier employment with the 2nd defendant. The plaintiff alleges that at the material time, he was legally employed by the 2nd defendant under a written contract and that he was unlawfully terminated by the defendants. The plaintiff seeks damages. The plaintiff also alleges events, during the time when he was challenging his termination or suspension, and claims his various constitutional rights were infringed and he seeks compensation for that.

3. The trial commenced on 16 June 2016. The plaintiff tendered his evidence without objections from the defendants. He tendered nine (9) affidavits.

4. The defendants tendered one (1) affidavit, which is the Affidavit of the Anna Solomon (1st defendant). The plaintiff objected. I over-ruled the objection. I held that the objections relate to alleged defects in the affidavit and concern the principle of hearsay evidence. I said these were matters, which should be for submission and that it should not prevent the defendants from tendering their evidence. The Court then accepted the evidence.

5. In the plaintiff's written submission filed after the trial on 1st of July 2016, he said the 1st defendant did not sign at pages 2 and 3 of her affidavit. As such, he objected strenuously to the use of the affidavit. This fact is correct. But I also note that the 1st defendant did sign at the last page of her affidavit and that it was duly witnessed by a Commissioner for Oaths. This is not an uncommon error or over-sight when dealing with affidavit evidence. I consider this as a minor defect. It is actually the duty of the Commissioner for Oaths officer to ensure that the affidavit was properly administered. The error is minor and I overrule the objection. Of course, the evidence, like the others, will be considered in my judgement and I will have to decide in the end how much weight I should give or not give to it. That is a matter of discretion. That includes addressing the issue of hearsay evidence.

6. Each affidavit was marked as an exhibit. Let me set them out here in a table format:

Exhibit No.	Description	Date
“P1”	Affidavit of Bruno Saiho, sworn & filed	24/5/13
“P2”	Affidavit of Louise Kinginapi, sworn & filed	24/5/13
“P3”	Affidavit of Brian Nakrakundi, sworn & filed	24/5/13
“P4”	Affidavit of Carol Saiho, sworn & filed	24/5/13
“P5”	Affidavit of Kori Dingu, sworn & filed	24/5/13
“P6”	Affidavit of Marcus Yoko, sworn & filed	24/5/13
“P7”	Affidavit of Felix Kinginapi, sworn & filed	24/5/13
“P8”	Affidavit of Bruno Saiho, sworn & filed	21/10/13
“P9”	Affidavit of Bruno Saiho, sworn & filed	18/5/15
“P10”	Affidavit of Itu Boeagavi, sworn & filed	03/8/15
“D1”	Affidavit of Anna Solomon, sworn & filed	08/6/16

8. At the end of the trial, the Court asked counsel whether a different date should be set for the parties to file and present their written submissions to the Court. Counsel chose not to have a second hearing but instead an order for them to file written submissions.

9. The Court issued orders to that effect. I note that both parties have filed their written submissions, the plaintiff on 1 July 2016 and the defendants on 30 June 2016.

(ii) If yes, whether the findings and determination of the Public Service Commission of 27th August 2012 reinstating the Plaintiff with all his salaries and entitlements restored is binding and enforceable on the Defendants after 30 days pursuant to section 18 of the Public Service (Management) Act 1995 (as amended);

(iii) Is the plaintiff's contract of employment void ab initio as alleged by the defendants for want of compliance with General Order 9 and 10 of the Public Service Regulations?

(iv) If the plaintiff was unlawfully terminated and then reinstated by the Public Service Commission in accordance with law than what entitlements is he entitled to?

(v) Is the Plaintiff entitled to the relief, damages for breach of his constitutional rights as claimed and particularised under paragraph 72 of the statement of claim?

11. The plaintiff says he signed a valid contract of employment with the defendants on 21 March 2011 (the contract). Obviously, the Court must firstly be satisfied that the contract was valid. I note that the defendants, in their defence, deny the validity of the contract.

12. The contract is marked as Annexure G to Exhibit P1. The document appeared duly signed by the parties. However, I do not think that is the real issue.

13. The real issue under this heading, in my opinion, is whether the contract is a private contract where private law shall apply, or whether the contract is a public contract where public law shall apply. I say this following the case law on point. Courts have held that it is important to address application of private or public law, in cases where public servants sign individual contracts with the State. [See cases: Zachary Gelu v. Francis Damen (2004) N2762; Tom Gesa v. Bernard Kipit (2003) N2457; David Nelson v. Patrick Puraitch (2004) N2536; Ereman Ragi v. Joseph Maingu (1994) SC459; Joel Luma v. John Kali (2014) SC1401)

14. Let me begin my discussion by stating what Justice Kandakasi has held in the case Tom Gesa v. Bernard Kipit (supra). His Honour held and I read:

The question that I need to consider therefore in this case is this, what did the parties agree to in terms of the written contract between them? This requires an interpretation of the terms employed by the parties in their contract to the exclusion of any extrinsic evidence.

15. The above citation makes logical sense. It should in my opinion, be the first approach a court must take if faced with similar type situations. That is, in a case where the Court is considering whether public or private law should apply to a public servant or a State employee who has a written contract, the Court should begin by looking at the express terms of the contract. The reason is that regardless of whether the person is a public servant or a private employee, he or she has signed written contract and the general law of contract will apply. Now, that in itself (i.e., application of contract law), in my opinion, is not the determining factor or means therefore that private law would apply. Rather and as correctly stated by Justice Kandakasi, one must first read the terms of the written contract. The plaintiff in the case of Tom Gesa v. Bernard Kipit (supra) applied for leave to apply for judicial review regarding his written contract. The Court found that the plaintiff's employment with the defendant was a private matter outside the domain of public administrative law. His Honour refused leave to apply for judicial review.

16. The next case I refer to, to assist me, is the case of Joel Luma v. John Kali (supra). The Supreme Court set three (3) basic principles or tests, that is, for the Court to determine whether a contract is a private or a public one. They are and I read:

We consider that the Court must be guided by the following basic principles; first, it must look at the process of appointment and revocation. If it is governed by the Constitution or statute, it is open to judicial review. If not, it is a matter of private law where the appropriate remedy is damages for breach of contract.

55. Secondly, the subject action or decision must be of public importance and interest. It must be a subject of an exercise of power. The third consideration is that if the employing agency is not created under a statute but is incorporated under the Companies Act, the termination is of a private law nature and the remedy of judicial review is not available to the aggrieved party: Ron Napitalai v. Caspar Wallace (2010) SC1016.

17. This was in relation to a judicial review appeal. However, in my opinion, the three (3) tests should similarly apply for cases such as this where the Court is considering whether a proceeding filed by way of writ of summons of this nature falls under public or private law. I note that most reported cases in this jurisdiction relate to parties who have approached the Courts by way of judicial review proceedings on the question of whether public or private law apply. Nevertheless and in my opinion, this is a question of law, which this Court can address.

18. Now, the practical application of what the Court has held in Tom Gesa v. Bernard Kipit (supra) and Joel Luma v. John Kali (supra) is this: The Court should firstly consider and interpret the terms of the written contract in question. When considering the terms of the contract, the Court should apply the three (3) tests. The Court should then be able to make a finding on whether private or public law apply to a written contract of a public servant or an employee of a State agency or body.

19. I now turn to the contract. It is not necessary to re-cite everything here. In my opinion, the relevant parts are clauses 1.1, 2.1, 2.2, 6.1, 6.2 and 8. Let me set them out here:

1.1 In this Agreement, the following words and expressions shall have the meaning assigned to them except where the context otherwise requires:

(a) "The Act" shall mean the Public Services (Management) Act and all Regulations and General Orders made under the Act.

(b) "The Departmental Head" means the Head of the Department within which the Employee occupies an office created under the Act.

2.1 The Employer shall employ the Employee and the Employee shall serve the Employer for the period upon and subject to the terms and conditions of this Agreement.

2.2 The Employee is by this Agreement made an Employee of the Employer under and by virtue of the provisions of the Public Services (Management) Act.

6.1 The Employee acknowledges that the terms and conditions of his employment shall be those contained in the Act and General Orders unless specifically provided for in the Agreement.

6.2 The Employee may terminate the employment in accordance with Clause 7.2, in the event that the Secretary, Department of Personnel Management varies the contract to the Employee's detriment.

20. The key provision in the contract in my opinion is clause 2.2. Pursuant to the said clause, it simply states that the contract makes the plaintiff an employee of the State "under and by virtue of the provisions of the Public Services (Management) Act".

21. Let me apply the three (3) tests set out in Joe Loma v. John Kali (Supra). When I apply the first test, in regard to the process for appointment and revocation of the contract, I find that the contract states that it shall be read in line with, or is governed by or is subject to the General Orders (GO) and the Public Services (Management) Act (PSMA). This means that the contract could not have been a private contract. When I apply the second test, clause 8 of the contract points to the disciplinary offence as defined under the GO and states that if the Departmental Head is satisfied that an offence has been committed, he may terminate the contract. Again, this points to the application of public law. An exercise of power to terminate the contract by a departmental head, which is a public authority, means or supports the finding that private law did not apply but public law did. In this case for example, the legal question would be whether the GO or the disciplinary process for dismissal set out under the PSMA had been complied with before the plaintiff was terminated from his employment at the material time. I note that the plaintiff also pleads that at paragraph 30 of his statement of claim. He alleges that the Departmental Head did not serve him with the disciplinary charges at the material time. He also alleges breach of his right to be heard under the Constitution at the material time. These, in my opinion, show that the contract was a public contract. When I apply the third test herein, I note that the second defendant is a government department of the State. The Department for Community Affairs is not created under the Companies Act 1997. The department is a State entity. Consequently, the contract meets the third test.

22. Before I conclude, let me briefly refer to a similar decided case. I refer to the case of Zachary Gelu v. Francis Damen (supra). The plaintiff was a departmental head. He filed a writ of summons seeking declarations in regard to his written contract. Her Honour Justice Davani ruled that the plaintiff's contract was a public contract and said that the appropriate mode of proceeding should be by way of judicial review. Her Honour said and I read:

The plaintiff is a public official. From my quick review of the facts, he is employed under a Contract of Employment and his conditions of service are governed by the terms of the Contract, the PSMA, the Public Service General Orders, the Attorney-Generals Act, the Constitution of Papua New Guinea and the Public Service (Management) (criteria and procedures for suspension and revocation of appointment of departmental heads and provincial Administrators) Regulation 2003. The Contract is a public document which is in similar or same terms to many other Contracts that departmental heads are employed under. It was not created specific to the plaintiffs needs only, but for departmental heads. There is an elaborate process in the legislations referred to above that must be reviewed by the court, if the court is to find that administrative procedure was properly complied with, or not. (see Francis Damem and Attorney-General, Department of Justice and Attorney-General v Hon. Mark Maipaka MP Minister for Justice and Hon. Sinai Brown MP Minister for Public Service and Ken Kaiah Government Printer and the Independent State of PNG N2730 dated 24th November 2004; Frederick Martins Punangi v Hon. Sinai Brown – Minister for Public Service and 2 ors OS 457 of 2004 dated 30th November 2004).

In this case, the plaintiff is seeking a remedy, as though his were a private right, that the contract of employment is a “private” contract of employment. As I have seen, the contract of employment before me is a public contract and incorporates principles of natural justice through its disciplinary procedures. The plaintiff is seeking to protect the Public Service Commission’s decision of 23rd August 2004 and to proclaim that the first defendant’s decision not to reinstate him is null and void and of no effect. Is this relief available to him? The Deputy Chief Justice dealt with this issue in David Nelson v Patrick Pruaitch [2004] N 2536 at pg. 6 where he said;

In my view when a statute or contract of employment entered into under a statute describes disciplinary procedures designed to ensure fair play or fairness or to put it in another term, to ensure compliance with principles of nature justice, in any exercise of disciplinary power as provided under the contract of employment, is a proper matter for judicial review. Such a contract of employment is a public contract of employment for service. I use the term “Public Contract of Employment” to connote the exercise of statutory power on the part of an authority of the State to enter into a Contract of Employment for a service, with a person, for that person to discharge public functions prescribed under statute. Upon his engagement under the contract, he becomes a public official.”

23. Now, when I look at the plaintiff's evidence and in particular, Exhibit P1 and Exhibit P9, I note that the plaintiff had applied twice to the Public Service Commission (PSC) for review of the decisions of the 1st defendant to terminate and also to suspend him, and I note that on both occasions, the PSC upheld his reviews. These in my opinion, support the Court's finding that the plaintiff's contract of employment was a public contact.

24. In conclusion, I rule that the contract is a public contract and public law apply. The plaintiff should have commenced judicial review proceeding rather than proceeding in this manner as if the contract was a private contract. This Court therefore cannot proceed to determine the validity of the contract as if the contract was a private contract where private law would apply. But let me ask myself this question: Should the plaintiff proceed by way of judicial review if he intends to continue from here? I addressed that point under the sub-heading REMARKS below in my judgment.

25. I note that the plaintiff's claim for breach of constitutional rights is related or collateral to his claim for breach of contract. As such, I refuse to determine them as well. Based on the pleading, they cannot be determined without the Court determining the main issues. Well, this Court has now ruled that the main issues based on the Court's findings above, are no longer applicable or available for consideration by this Court.

26. I note that in relation to the plaintiff's contract, the PSC has annulled the first defendant's decision in terminating him on 27 August 2012. The facts showed that the 1^st defendant did not immediately re-instate the plaintiff. Then shortly after, the 1^st defendant suspended the plaintiff from the payroll. The plaintiff lodged another review to the PSC after that regarding his suspension. On 12 May 2014, the PSC annulled the suspension of the plaintiff and ordered the plaintiff to be re-instated. The plaintiff was able to file this proceeding whilst he was awaited the decision of the PSC concerning his suspension from the payroll.

27. The law and case law are settled regarding a decision of the PSC. That is, section 18(5)(b) and section 18(6)(b) of the PSMA state that the decision of the PSC is binding upon the parties after 30 days from the date it is made. If the decision is not challenged within the 30 days, it is binding and tantamount to a court order; it gives no right to a departmental head to refuse to implement it. [see cases: Jomino Holee, Paula Vuvu and Gauealele Samuel v. Sem Vegogo, Pascoe Kase & the State (2013) N5101; Ambrose Vakina v. Thaddeus Kambanei (2004) N3094]

28. In my opinion, the appropriate step to take when the 1st defendant had refused to re-instate the plaintiff should have been to simply file an Order 4 originating summons under the National Court Rules seeking to enforce the decision of the PSC. I say this with authority from the Supreme Court in the case of Gabriel Yer v. Peter Yama (2009) SC996. I refer to the remarks made by the Supreme Court at paragraph 23 of its judgment which I think is useful to note. I read:

23. If in substance the plaintiff is not seeking one of the prerogative writs such as mandamus it will not be necessary to use an Order 16 originating summons. If all that the plaintiff is seeking is a declaration or an injunction than even where the defendant is a governmental body or public authority an Order 16 originating summons will not be necessary and the plaintiff will not have to obtain leave for judicial review. An Order 4 originating summons will be sufficient (Telikom PNG Ltd v ICCC & Digicel (PNG) Ltd (2008) SC906). Similarly, if in substance the plaintiff is seeking orders to enforce private law rights under a contract rather than rights or obligations arising under public law, an Order 16 originating summons will not be necessary and the plaintiff will not have to obtain leave for judicial review (Frederick Martins Punangi v Sinai Brown, Minister for Public Service (2004) N2661; Mision Asiki v Manasupe Zurenuoc (2005) SC797).

29. I find it necessary to make these remarks because I have observed that litigants and even lawyers still tend to have trouble choosing the correct, suitable or an efficient mode of proceeding to pursue their or their clients' interests in terms of seeking justice. I can only hope that this ruling will be beneficial to future litigants who may be faced with similar type issue or situation.

30. In relation to the first issue that is Whether the plaintiff was unlawfully terminated? my answer is "the said claim is not available to the plaintiff because it is a claim that exists under private law; the plaintiff's claim exists under public law". Because I have made this finding in relation to the first issue, issues (ii), (iii), (iv) and (v) are not relevant for this Court to go on to look at.

32. I note that the plaintiff is not successful and in the normal course, cost should follow the event. I will exercise my discretion against awarding cost of the proceeding against the plaintiff. In my view, there is overwhelming evidence that shows that it was the actions of the defendants, which had caused the plaintiff to go at great lengths to fight for his rights. The plaintiff is a simple public servant and he would have obviously incurred a substantial cost for engaging lawyers to represent him. I also note evidence filed by the plaintiff, which shows that this proceeding, no matter how frivolous it may be, has assisted in terms of causing the parties to reach some compromise whilst this proceeding was pending. For example, the plaintiff has been re-employed by the State.

B.S. Lai Lawyers : Lawyers for the Plaintiff
Solicitor General : Lawyer for the Defendants

National Court of Papua New Guinea

Saiho v Solomon [2016] PGNC 282; N6474 (7 October 2016)