Enga v National Broadcasting Corporation Board [2017] PGNC 80; N6726 (21 April 2017)

N6726

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO. 89 OF 2016

BETWEEN:
MECTHILDA ENGA
Plaintiff

AND:
NATIONAL BROADCASTING CORPORATION BOARD
First Defendant

AND:
NATIONAL BROADCASTING CORPORATION
Second Defendant

AND:
KORA NOU, ACTING MANAGING DIRECTOR, NATIONAL BROADCASTING CORPORATION
Third Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Nablu, J
2017: 10^th March
21^st April

JUDICIAL REVIEW – Decision of the National Broadcasting Corporation Board – Not to renew the Plaintiff’s contract of Employment – Sections 21A, 21B(5), 22, 23 and 29, Broadcasting Corporation Act – Whether the power to execute or renew a contract of employment vested in the Managing Director – Power to appoint officers vested in the Board – Power to execute contracts of employment vested in the Board – The terms and conditions of employment as determined by the Corporation(Board) – applicable terms and conditions as per the National Broadcasting Corporation Staff Determination No. 1 of 1975 (as amended) – Judicial Review dismissed.

Cases cited:
Kapera v. Yaruso (2016) SC 1533
Kekedo v. Burns Philip Ltd[1988-89] PNGLR 122
Wolfgang Bandishch v. National Capital District Botanical Enterprises Ltd (No. 1) (2009) N3806
Rai v. Kapera (2014) N5806.

Counsel:

P. Pato, for the Plaintiff
L. Kandi, for the First, Second and Third Defendants
I. Mugugia, for the Fourth Defendant

21^st April, 2017

1. NABLU, J: MecthildaEnga seeks to review the decision of the National Broadcasting Corporation Board not to renew her contract of employment. The plaintiff was employed as the Executive Director of Finance. The decision subject of review was made on 22^nd October 2015 and conveyed to the plaintiff in a memo by Kora Nou, the Acting Managing Director on 22^nd February 2016.

2. The background facts are that the plaintiff was appointed the Executive Director for Finance in July 2011. The plaintiff executed a contract of employment with the second defendant for a term of three (3) years. The contract expired on 20^th July 2014.

3. The facts which are disputed is that the plaintiff’s contract of employment was renewed on the 22^nd September 2015. The contract was allegedly executed by the former Managing Director, Mr Memafu Kapera. The contract was made retrospective from 20^th July 2014, the date the initial contract expired. The plaintiff was alleged to have continued working as the Executive Director of Finance despite the absence of a formal contract of employment.

4. It is not disputed that the National Broadcasting Corporation Board (the Board) then reviewed all its employee’s contracts that were due for renewal. The Board decided not to renew all those contracts, one of which was the plaintiff’s contract.

5. Unbeknown to the defendant’s, the plaintiff then produced a written contract which was purportedly executed by the former Managing Director.

6. The plaintiff seeks to quash the Board’s decision and compel the defendant’s to give effect to her contract of employment which was executed on 22^nd September 2015.

7. The plaintiff filed and relied on her affidavits filed on 26^th February 2016, 7^th March 2016, 2^nd May 2016 and 25^th August 2016. All the affidavits were contained in the Review Book.

8. In response the defendants relied on the affidavits of Mr Kora Nou, the third defendant which were filed on 2^nd February 2016, 29^th April 2016 and 25^th August 2016.

9. The grounds of review which the plaintiff relied on to challenge the decision of the first defendant and seek relief, were as follows:

1. the decision of the Board is ultra vires: the Board had no authority to refuse to renew the plaintiff’s contract and the Managing Director was the appropriate authority;
   
2. the first defendant’s decision is unfair and unreasonable; and
   
3. the plaintiff’s right to natural justice was breached, that is, the Board denied her the opportunity to be heard before refusing to renew her contract.
   

10. The issues for determination by the Court are:

1. whether or not the first defendant has the power to recruit, renew or not to renew a contract of employment and to terminate a contract of employment for an officer of the second defendant;
   
2. whether or not the decision of the first defendant of 22^nd October 2015 is unfair and unreasonable;
   
3. whether or not the plaintiff was given an opportunity to be heard on the first defendant’s decision of 22^nd October 2015 communicated to the plaintiff by the third defendant on 22^nd February 2016; and
   
4. whether or not the second Contract entered into between the plaintiff and the former Managing Director, Memafu Kapera on 22^nd September 2015 is legally valid.
   

11. The plaintiff argued that the Board did not have the power to refuse to renew the plaintiff’s employment contract. The main basis for this argument is that the Managing Director was vested with the power to renew contracts of employment. Another reason is that the plaintiff’s contract had already been renewed by the former Managing Director so the Board was ceased of the power and could not exercise that power to review the plaintiff’s contract.

12. On the otherhand, the first, second, and third defendants argued that the proper process for renewal of the contract of employment is made through a decision of the Board and not the Managing Director. The defendants argued that the purported contract of employment was invalid, null and void for the reason that the Managing Director was not the correct person to execute the contract on behalf of the first defendant. Furthermore, the plaintiff’s first contract had expired on 20^th July 2014. The contract could not be renewed because of the lapse of time. The space of time since the expiration and the alleged renewal was over a year, therefore this contract is not valid because such employment contracts cannot have retrospective effect. The defendants argued that the decision by the Board was correct.

13. Ms Mugugia of counsel for the State submitted that the fourth defendant was a nominal defendant and did not take any position in this review.

Ground One: Board acted ultra vires.

14. The plaintiff submitted that the Managing Director is the appropriate authority to execute or renew contracts of employment. Counsel submitted that Section 21A of the Broadcasting Corporation Act 1973 states that the Managing Director, the Deputy Managing Director and such other officers appointed under Section 22 of the Act constitute the Service of the Corporation. According to Section 21B(5) of the Act, one of the responsibilities of the Managing Director is to ensure the efficient use of staff and resources of the Corporation.

15. Mr Pato of counsel for the plaintiff, also submitted that the power to execute contracts is provided for under Section 29 of the said Act. The Managing Director is responsible for the execution of contracts and that Mr Kapera had duly executed the contract between the plaintiff and the Corporation.

16. Mr Kandi submitted the correct authority to execute contracts of employment is the Board through the Chairman.

17. The Corporation is established under Section 3 of the Broadcasting Corporation Act.It is a corporation with perpetual succession and can be sued in its’ corporate name. The Board is established under Section 4. The Board is responsible for the affairs of the Corporation. The Constitution of the Board, the terms of appointment for the members and the rules that govern the board meetings are provided under Sections 12 to 14 of the Act. The Chairman and the Deputy Chairman are appointed pursuant to Section 16 of the Act.

18. The Board may delegate its powers in writing to any person by virtue of Section 15 of the Act. The functions of the Chairman are spelt out in Section 20, apart from presiding over meetings and formulating the policies of the Corporation, the Chairman “...inconjunction with the Board, ...assess the output and performance of the Management of the Corporation (Section 20(f) of the Broadcasting Corporation Act)”.

19. Under Section 22, the Corporation is vested with the power to appoint persons to be officers. Subject to this Part and the regulations, the officers hold office on such terms and conditions as the Corporation determines.

20. I am of the view that the term “Corporation” refers to the Board of the National Broadcasting Corporation and not the Managing Director or Deputy Managing Director. The Managing Director and Deputy Managing Director are only providing a service to the Corporation, therefore, they are referred to as the Service of the Corporation. (See Section 21A of the Broadcasting Corporation Act).

21. The head of the Corporation is the Board. Section 21B(5) is clear that the Managing Director’s powers is only to “...ensure the efficient use of staff and resources of the Corporation.” The power to appoint officers is a power that is vested in the Corporation, that is, the Board.

22. My view is re-inforced by the fact that Section 24 states that temporary and casual employees are also appointed by the Corporation. The terms and conditions of such employees are also determined by the Corporation. Therefore, the law is clear the appointment of the officers of the Corporation and their terms and conditions are determined by the Board.

23. Mr Pato submitted that the NBC Staff Determination was not applicable to contract officers. I do not accept this submission. The terms and conditions of officers are spelt out in the NBC Staff Determination 1973. There is no evidence that the determination was repealed and therefore not applicable. Furthermore, the Supreme Court in Kapera v. Yaruso(2016) SC1533 held that the applicable law is the Determination which appears to be still in force.

24. The plaintiff also argued that the Managing Director is responsible for execution of contracts by virtue of Section 29 of the Broadcasting Act.

25. I reject these submissions for two reasons, the first reason is that the Corporation is the lawful authority to execute contracts. There is no evidence that the Board delegated the power to execute contracts of employment to the Managing Director. The second reason, is that the structure of the legislation indicates to me, that Section 29 is applicable to contracts other than contracts of employment. This provision is captured under Part VII – Miscellaneous. If it was intended to apply to contracts of employment it would be provided for under Part V where the provision for appointment of officers is contained. Section 22(3) is clear that the Corporation determines the terms and conditions of appointment, whether that be via a formal contract of employment or other. This provision implies that the Corporation is responsible for the execution of contracts of employment as well. The Corporation is the National Broadcasting Corporation Board.

26. Again, the Determination re-inforces this view, in particular, where there are any inconsistencies the Broadcasting Commission Act and theRegulations the Determination prevails. Clause 5 states that the Chairman can engage a person on contract to perform the duties of an office of the Commission. Clause 5(2) is also clear that the Determination is intended to prevail where there is a conflict with the terms of the contract. The person employed under contract is still treated as if he or she was employed under Part 13 of the Determination.

27. Therefore, the Board in my view did not exercise a power it did not have. The Board had the power to refuse to renew the Contract. Such exercise of power was valid and within its jurisdiction. This ground of review is misconceived and is therefore dismissed.

Ground Two: Unfair and unreasonable decision

28. Under this ground, the plaintiff challenged the decision on the basis that the first defendant’s decision was unfair and unreasonable. The plaintiff argued that the Board’s decision was unfair and unreasonable because she was employed under a valid contract. There was no contract for renewal. The Managing Director was authorised to execute the contract.There was no valid performance assessment as required by the contract.Furthermore, the third defendant was required to be at that Board meeting but he was not, therefore, any decision made without his input is invalid.

29. These submissions are without merit because the Managing Director did not have the authority to execute the contract in the first place. As stated earlier in the judgement, the Board is the corporate head responsible for execution of contracts of employment. That contract is not valid because it is signed by the Managing Director. There is no evidence to prove that Mr Kapera was delegated that power. There is also no evidence by the Board that they renewed the second contract which the plaintiff is relying on.

30. Furthermore, the plaintiff has not disclosed the initial contract inorder for us to ascertain the renewal options. In absence of that, recourse is had to the Determination. The plaintiff in her affidavit annexed copies of the Determination which appear to have been expanded. Clause 5A.4 states that the issuance and termination of the contracts of employment is effected by the Board, acting on advice of the Chief Executive. Clause 5A. 6(2) states that the contract officers work performance review is also made by the Chief Executive in order to assess the officer’s salary increment. The Chief Executive also initiates the contract renewal process by making recommendations to the Board. The renewal or termination of a contract, is initiated when the Managing Director informs the contract holder that the contract is up for renewal. The decision whether to renew the contract or not must be made between three (3) months and no later than one (1) month before the contract completion date (Clause 5A.17 (1) of the Determination). A contract officer whose contract is terminated is retained as an unattached officer until he or she secures an alternative position or is retrenched.

31. Those provisions of the Determination are clear that the Managing Director is required to initiate the renewal or termination process three (3) months before the contract expires. The process must not be initiated one (1) month before the expiry of the contract. Effectively, the parties have two (2) months to finalise any performance appraisals and renewal applications. The Board can either renew or terminate the contract following consideration of the Managing Director’s recommendation.

32. There is no evidence that this process was followed. The plaintiff states at page 29 of the Review Book that the Contract was signed and witnessed by the Board Secretary. I am not convinced that process was lawful. There is no evidence that the Managing Director made a recommendation to the Board to renew her contract.

33. Judicial review is concerned with the process and not the decision (Kekedo v. Burns PhilipLtd [1988-89] PNGLR 122). I am not convinced that the statutory process was followed. The evidence is not sufficient to prove the second ground of review, therefore the second ground of review is dismissed.

Ground Three: Denial of National Justice

34. The plaintiff argued that she was denied the opportunity to be heard and therefore denied Natural Justice. Counsel submitted that the decision not to renew was not produced in evidence. The Board did not communicate clear reasons for refusing to renew. The plaintiff also argued that she was not accorded the opportunity to address the Board before they made the decision to refuse to renew her contract.

35. I am of the view that this ground of review is misconceived.

36. The plaintiff’s initial contract was deemed to have been terminated when it expired on 20^th July 2014. Any renewal of the contract should have been initiated between 20^th April 2014 and 20^thJune 2014. Failure to do that, the contract in my view, expired and was therefore terminated. The plaintiff by continuing to be employed in that position is said to be an employee at will whose term of employment is per the employer’s whim. The plaintiff was employed by an implied oral contract on the same terms and conditions as her expired contract. The Board was entitled to terminate the oral contract without cause or notice (see the cases of Wolfgang Bandishch v. National Capital District Botanical Enterprises Ltd (No. 1) (2009) N3806 and Rai v. Kapera (2014) 5806.

37. Even if I am wrong, the Determination does not provide a statutory or implied right for the contract officer to be heard on renewal of contracts. It is the first defendant’s prerogative whether to renew or terminate contracts of employment. I would think the contract officer’s right to be heard would be afforded to them during the course of the performance review. The Managing Director then following the review makes a recommendation to the Board to renew or terminate.

38. There is no evidence to prove that a performance review was conducted and the Managing Director did make a recommendation to the Board. The plaintiff did concede to this fact, she did not produce any evidence to support her contention that the Managing Director was authorised or delegated the power to execute the contract (see the Affidavits of Mecthilda Enga in the Review Book). I am not convinced the Board denied the plaintiff the opportunity to be heard.

39. There is no evidence that the Board denied the plaintiff’s right to Natural Justice, particularly, the opportunity to be heard. I dismiss the third ground of review.

40. The plaintiff has failed to prove the grounds of review. The grounds of review are without merit and are therefore dismissed forthwith. Costs will follow the event.

41. For the foregoing reasons and in the exercise of my discretion the plaintiff’s application for judicial review is dismissed forthwith. The plaintiff is to pay for the defendant’s costs to be agreed if not taxed. The consent order of 23^rd June 2016 are discharged forthwith. Time for entry of these orders is abridged to the date of settlement by the Registrar which shall take place forthwith.

Orders accordingly.

Parker Legal Lawyers: Lawyer for the Plaintiff
MS Wagambie Lawyers: Lawyer for the First and Third Defendant
Office of the Solicitor – General: Lawyer for the Fourth Defendant