Schram v Kekedo [2018] PGNC 198; N7291 (3 April 2018)

N7291

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO. 98 OF 2014

BETWEEN:
ALBERT SCHRAM
Plaintiff

AND:
JEAN KEKEDO, in her capacity as Chancellor of the Papua New Guinea University of Technology
First Defendant

AND:
VERONICA THOMAS, in her capacity as Registrar of the Papua New Guinea University of Technology
Second Defendant

AND:
THE PAPUA NEW GUINEA UNIVERSITY OF TECHNOLOGY
Third Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Nablu, J
2018: 20 March & 3 April

JUDICIAL REVIEW – application for leave – whether decision of the University Council is subject to public law – whether Vice-Chancellor employment subject to judicial review – s.28, Papua New Guinea University of Technology Act – cl.3, University Statute – Vice Chancellor’s contract of employment subject to private law – decision to terminate subject to the contract – subject to private law – not amenable to judicial review – leave refused.

PRACTICE AND PROCEDURE – form of the Originating Summons – whether jurisdiction is required to be pleaded – whether Affidavit verifying facts required –jurisdiction of the Court must be pleaded in the application for leave – lack of sufficient pleading as to jurisdiction is a fundamental error – substantial compliance – wide and unfettered discretion of the Court – dispensation of the strict requirements of the Rules – O. 16 r. 3(2)(b), 13(14), National Court Rules.

Cases cited:

Ereman Ragi v. Joseph Maingu (1994) SC459
Innovest v. Pruaitch & Others (2014) N5494
Kekedo v. Burns Philip Ltd [1988] PNGLR 122
Lupari v. Sir Michael Somare (2008) N34766
Luma v. Kali (2014) SC1401
O’Neill v. Eliakim (2016) SC1539
Peter Makeng v. Timbers (PNG) Ltd (2008) N3317
Ron Napitalai v. Casper Wallace (2010) SC1016
Timothy v. Marus (2014) SC 1403
Young Wedau v. Alfred Daniel (1995) PNGLR 357

Counsel:

E. Issac, for the Plaintiff
M.Wangatau, for the State
C. Karaiye, for the First, Second and Third Defendants

3^rd April, 2018

1. NABLU J: The plaintiff seeks leave to review the decision of the first defendant to discipline him and terminate his employment as the Vice Chancellor of the Papua New Guinea University of Technology on the 15^th of February 2018. The application for leave was made pursuant to an Originating Summons and supported by the Statement of Support which was filed on 22^nd February 2018. The plaintiff did not file an affidavit verifying the facts in the Statement of Support instead he relied on his affidavit which was also filed on the 22^nd February 2018.

2. If leave is granted the plaintiff seeks various declaratory orders, an order in the nature of certiorari to quash the decision of the second and third defendant to terminate him on 15^th February 2018 and an order in the nature of mandamus to compel the Defendants to take all necessary steps to have the plaintiff restored to his position as the Vice Chancellor within seven (7) days.

3. The State opposed the application for leave and took issue with the following leave requirements of an arguable case and exhaustion of administrative remedies. Mr. Karaiye of counsel for the first, second and third defendant was granted leave to make submissions during the hearing of the application for leave.

4. Counsel for the defendants raised issue with the form of the plaintiff’s application for leave. The first issue is that the plaintiff failed to plead the jurisdiction of the Court in the Originating Summons. The second issue is that the plaintiff has failed to file an affidavit verifying the facts of the matter as required by Order 16 Rule 3(2)(b) of the National Court Rules. Therefore, the defendants submit that the application for leave is incompetent. I propose to deal with these preliminary issues because they relate to the jurisdiction of the Court to determine the application for leave.

5. Judicial review is the Court’s inherent supervisory jurisdiction to review the decision of administrative bodies. Judicial review is an exclusive power of the Court which by its nature; empowers the Court to interfere with administrative decisions. The Supreme Court case of Kekedo v. Burns Philip Ltd [1988] PNGLR 122 per Kapi, DCJ’s (as he then was) authoritative statement which is commonly referred to as the correct statement of law in relation to the purpose of judicial review; at page 124 his Honour stated that:

“The purpose of judicial review is not to examine the reasoning of the subordinate authority with the view to substituting its own opinion. Judicial review is concerned not with the decision but with the decision-making process.”

6. Having said that, it is clear that the Courts’ inherent powers of review are derived from Section 155(4) of the Constitution and the Court procedure is found in Order 16 of the National Court Rules. The recent Supreme Court decisions of Timothy v. Marus (2014) SC 1403 and O’Neill v. Eliakim (2016) SC1539 also affirmed the view that Order 16 of the National Court Rules is the relevant procedural rules exclusively applicable to judicial review and parties intending to bring any interlocutory applications must do so by pleading the correct jurisdiction of the Court which is Order 16. Failure to plead Order 16 is a fundamental error. Whilst I do note that those Supreme Court rulings referred to, were made in relation to appeals against interlocutory applications; I am of the view that the principles are equally applicable in the originating process of the application for leave for judicial review.

7. It is not disputed that failure to plead Order 16 of the National Court Rules in the Originating Summons is a fundamental error. Notwithstanding the fact that the plaintiff has failed to plead the jurisdiction, I am of the view that the Court has a wide and unfettered discretion pursuant to Section 155 (4) of the Constitution to do justice in the circumstances of each case. Therefore, I am of the view, it was not Parliaments’ intention that the National Court Rules is to have precedence over the provisions of the Constitution (see Innovest v. Pruaitch & Others (2014) N5494). Order 16 Rule 13(14) of the National Court Rules gives the Court the discretion to dispense with the strict requirements of the Rules in appropriate cases. However, the exercise of discretion must be exercised on proper grounds and within the ambit of the law.

8. In the present case, the question posed before the Court is whether or not the plaintiff’s application for leave, that is the Originating Summons is competent? In order to answer this question, the plaintiff’s Originating Summons should be examined properly. Upon a close scrutiny of the Originating Summons it is clear that the plaintiff does not state the Court’s jurisdiction nor does it make reference to the Court’s powers of review under Order 16 of the National Court Rules and or Section 155 of the Constitution.

9. Having found that the plaintiff has committed a fundamental error by failing to plead the jurisdictional basis for the relief of leave to seek judicial review, the next question then is, whether the Court should exercise its discretion in favour of the plaintiff to dispense with the requirements of the Rules and allow the plaintiff to amend its Originating Summons.

10. Bearing in mind, that there must be good grounds for the Court to exercise its powers to dispense with the strict requirements of the Rules. The principles which the Court should consider before exercising its discretion are not hard or fast rules. In my view, the starting point is that each case is determined on its own merits. I was not referred to any authority on point, however, a brief research on this issue, I find that the Supreme Court authorities seem to point to four (4) main considerations which I have summarized as;

1. the nature of the error, breach or non-compliance (in regard to judicial review, the Court should consider whether it is a fundamental error or breach which affects its jurisdiction);
2. whether there is any explanation or reason why the error, breach or non-compliance was allowed to occur;
3. whether there would be any real prejudice or the real likelihood of prejudice caused to the parties if the breach was rectified; and
4. whether there is evidence that the defaulting party had substantially complied with the mandatory requirement of the Rules.
   

11. Now when applying the principles to the facts of the present case, and considering the nature of the error or breach; it is not disputed that the plaintiff failed to plead the jurisdiction of the Court in the Originating Summons. It is trite law that an application for leave for judicial review is commenced by way of an originating summons or a notice of motion if the plaintiff seeks other interlocutory orders (see Peter Makeng v. Timbers (PNG) Ltd (2008) N3317 and Innovest Limited v. Pruaitch & Ors (supra)). In answer to the first question, I am of the view that this error is a fundamental error.

12. The next consideration is whether there is any evidence of an explanation of why the error or breach was allowed to occur. In the present case, there was no explanation; there is no evidence of whether the plaintiff made any attempts to rectify the error. Nor did they seek leave to amend the Originating Summons at the earliest opportunity when they became aware of the error.

13. Now turning to the next consideration, the question is whether the other parties would be prejudiced if the error was rectified. There is no evidence before me to show that the defendants would be substantially prejudiced if the error was corrected. Failure to plead the jurisdiction of the Court in an application for leave is a fundamental error. However, I am of the considered view that the defendants will not suffer any real prejudice if the defect is cured.

14. Whilst I agree that this is a fundamental error, I am of the view that the plaintiff has substantially complied with the Rules. The plaintiff pleaded the decision, date of the decision and the decision maker. There is no real prejudice to the parties if the plaintiff’s application for leave was heard and determined. The Court has the power to cure any defects pursuant to Order 16 Rule 13(14) of the National Court Rules. Accordingly, I dispense with the strict requirements and will determine the plaintiff’s application for leave.

15. Another reason why I am inclined to exercise the power to dispense with the strict requirements of the Rules, is because there is no evidence from the counsel for the defendant’s that they had brought these defects to the attention of the plaintiff’s counsel prior to the hearing of the leave application. Instead they waited and raised the issues at the hearing for leave. These issues should have been raised earlier so that the plaintiff could have had the opportunity to respond or the Court could have determined the preliminary issue before hearing of the application for leave.

16. Before dealing with the substantive leave application, the defendants raised an issue in regard to the plaintiff’s failure to verify the facts in an affidavit. In my view, Order 16 Rule 3(2)(b) of the National Court Rules requires the plaintiff to file an affidavit to verify the facts which he relies on. I am of the view that under Order 16 Rule 3(2)(b), the plaintiff has two options. They can either file an affidavit simply, verifying the facts pleaded in the Statement of Support, or file an affidavit deposing to the relevant facts they rely on for the application. Therefore, in the present case, the plaintiff has deposed to an affidavit verifying the facts he relies on. Again, the Court has a wide and unfettered discretion to dispense with the National Court Rules which can be relied on, to cure the defect. However, I am satisfied that the plaintiff has filed his affidavit setting out the relevant facts he relies on which is sufficient for the leave application.

17. Now turning to the plaintiff’s application for leave, it is evident that the plaintiff has locus standi, the decision subject of review affects him. There is also no issue as to delay. The decision was made on 15^th February 2018. The plaintiff’s application for leave was filed on 22^nd February 2018 and moved a month later.

18. But before I determine the other requirements for leave, there are two pertinent issues which should be determined first before delving into the application for leave. The first issue is, to ascertain the nature of the plaintiff’s employment whether it is of a private law nature or a public law nature. The second issue is whether the decision of the first defendant is subject to judicial review.

19. In regard to the first issue, Mr Issac of counsel for the plaintiff submitted that the plaintiffs’ employment was pursuant to a Contract of Employment and the first defendant did not comply with the disciplinary process therefore, she denied the plaintiff's right to natural justice. The first defendants’ decision to terminate him is subject to judicial review because the first defendant denied him natural justice and the Contract was subject to the Papua New Guinea University of Technology Act 1986. Therefore, the decision is subject to public law and therefore subject to judicial review. It was also submitted that the third defendant was a public body because it is established under the said Act and the plaintiff’s employment was made pursuant to a contract under the University Statute and Act.

20. The State and the defendants’ counsel argued that the plaintiff did not have an arguable case because the decision of the first defendant is that of a body that was not a public or government authority. The plaintiff’s employment was of a private nature and pursuant to a contract and therefore not amenable to judicial review. The plaintiff’s remedy lies in private law and not public law. The plaintiff is at liberty to pursue a claim for damages for breach of contract or other civil remedies.

21. In determining what the nature of the plaintiff’s employment is; the status of the third defendant should be examined in order to determine the plaintiff's terms and conditions of employment. Following that determination then the question of whether the first defendant's decision is subject to judicial review can be determined.

22. The plaintiff stated in his affidavit that he commenced employment as the Vice Chancellor on 1^st November 2012. Currently, this is his second term of his contract of employment, which commenced on 1^st January 2016 for a tenure of three (3) years. The contract was due to expire on 31^st December 2019.

23. It is trite law, that employees of companies or statutory corporations are subject to private law and not public law. The relationship between the employees and employers are categorised as master and servant relationships. Therefore, they are not subject to judicial review. Their remedies lie in damages for breach of contract.

24. The case of Ereman Ragi v. Joseph Maingu (1994) SC459, is authority to support the proposition that where the nature of the plaintiff’s employment is one of private law then that gives rise to a master and servant relationship and therefore not subject to public law.

25. In Ereman Ragi v. Joseph Maingu (supra), the respondent was employed by the State Services and Statutory Authorities Superannuation Fund Board as the board secretary. In a restructure of the Board, the respondents’ position ceased to exist and he was dismissed. On appeal, the Supreme Court held that, the plaintiff’s employment was a matter at private law and not public law, therefore his remedy lies in damages.

26. In Young Wadau v. Alfred Daniel (1995) PNGLR 357, this was an appeal against the decision of the National Court to refuse leave for judicial review of Papua New Guinea Harbours Board’s decision to terminate the appellant as a legal officer. The Supreme Court dismissed the appeal and held that the nature of the appellant's work as a legal officer was not one of a “public office” therefore his rights where of a private law nature and not susceptible to judicial review. The appellant's private law rights, such as the right to seek damages for breach of contract or unlawful dismissal were unaffected.

27. This principle of law is now settled in the case of Ron Napitalai v. Casper Wallace (2010) SC1016, where the Supreme Court held that PNG Ports Corporation Ltd was not a governmental or public body and its decision was not subject to judicial review. PNG Ports was an incorporated body under the Companies Act and not a creature of statute. Judicial review was not available to the respondents whose dismissal was of a private law nature. The appeal was upheld and the decision of the trial judge in granting leave for judicial review was quashed.

28. In that case, the Supreme Court considered the facts of the earlier decisions of Ereman Ragi (supra) and Young Wadau (supra) and found that the facts of those cases were not distinguishable from the facts of that case. Therefore, the trial judge erred in law when not applying the principles in those cases. The fact that PNG Ports was not created by statute but was incorporated under the Companies Act supported the contention that the respondent’s employment was that of a private law nature as opposed to a public law nature.

29. In the present case, the plaintiff submitted that the contract of employment is subject to public law because it is a contract made pursuant to the University of Technology Act and University Statute. Mr Issac referred this Court to the cases of Lupari v. Sir Michael Somare (2008) N34766 and Luma v. Kali (2014) SC1401. I have read those written judgements and agree with the reasoning of the respective Courts and note that I am bound to follow the Supreme Court decision. However, the facts of those cases are distinguishable from the facts of the present case. In those cases, the respective contracts of the Chief Secretary to Government and the Secretary of the Department of Works are provided for under the Public Service (Management) Act and Section 193(1)(A) and (1)(C) of the Constitution. The terms and conditions of employment are stipulated in those respective laws. Therefore, the contract of employment was found to be a public contract and it’s existence derived from statute.

30. The Supreme Court in Luma v. Kali (supra) affirmed the views of His Honour Injia, DCJ (as he then was) at paragraph 38 of the judgement where his Honour stated that:

“...The contract of employment is a public contract founded on Statute; it has no independent existence. If the contract were of independent existence, the contract would quite correctly governed by private contract law and come under the exclusive domain of common law...”

31. In the present case, the applicable legislation is the Papua New Guinea University of Technology Act 2000. Section 3 of that Act states that the University is a body corporate by the name; “The Papua New Guinea University of Technology”. It states further that the University has perpetual succession, a common seal and has legal capacity to sue and be sued.

32. The governing body of the University is the Council, the Academic Board and other authorities (Section 8 of the Act). The Council is established under Section 9 of the Act. The members of the Council include the Vice Chancellor. The office of Vice Chancellor is established under Section 28(1) of the University Act. The terms and conditions of employment are prescribed by the Statutes. Section 28 of the Act provides for the appointment of the Vice Chancellor who is an officer of the University. Section 28 states that:

“1) There shall be a Vice Chancellor who shall be appointed in the manner and for the period prescribed by the Statutes subject to approval of the appointment by the National Executive Council.

2. The Vice Chancellor shall be a full time salaried Officer of the University and, subject to the Salaries and Conditions Monitoring Committee Act 1988, matters relating to his emoluments and other terms and conditions of employment shall be prescribed by Statutes.” (Emphasis mine)
   

33. Clause 3 of the University Statute provides for the appointment of the Vice Chancellor. Clause 3 states that:

1. The Council shall appoint the Vice Chancellor.
2. The Vice Chancellor shall hold office for a period of four (4) years and shall be eligible for re-appointment for further periods.
3. The emoluments and other terms and conditions of employment of the Vice Chancellor shall be determined by the Council.
4. The Council shall consider the appointment of Vice Chancellor not less than twelve (12) months before the office is due to fall vacant or at the earliest opportunity if it falls vacant during the term of office.
5. The Council shall determine the procedure to be followed in appointing the Vice – Chancellor (Emphasis mine).
   

34. Clause 3 is worded in mandatory terms. The Council determines the procedure for appointment of the Vice - Chancellor. Clause 3.3 is clear that the emoluments and other terms and conditions of employment of the Vice Chancellor shall be determined by the Council.

35. The terms and conditions of employment of the Vice Chancellor are not provided under the University Act nor the Statute. The respective laws are silent on this aspect of the plaintiff’s employment. To determine the plaintiff’s employment terms and conditions, one has to look at the contract of employment. The fact that the terms and conditions are found under the Contract means that the plaintiff’s employment is governed by private law.

36. The standard contract which was executed by the plaintiff is annexed as Annexure E of the plaintiff’s affidavit. Therefore, it is not disputed that the relationship between the plaintiff and defendant is governed by the terms and conditions that are stipulated in the contract. Therefore, the plaintiff’s terms and conditions of employment are subject to private law and not amenable to judicial review. If he is aggrieved, his remedies lies in private law and in contract law.

37. For the foregoing reasons, the plaintiff’s application for judicial review is refused and is dismissed. Accordingly, the ex parte interim injunction ordered on 23^rd February 2018 is discharged forthwith. In regard to costs, an application for leave is an ex parte application pursuant to Order 16 Rule 3 (2) of the National Court Rules. The State, who is the only party by virtue of Section 8 of the Claims By and Against the State Act to make submissions at the leave stage was present and should be awarded their costs. Counsel for the first, second and third defendant also sought and was granted leave by the Court to make submissions at the leave stage. This application should have been brought in the National Court in Lae where the decision was made instead it was filed and moved in Port Moresby. The defendants incurred costs to attend and assist the Court, therefore, I am satisfied that costs should follow the event. The plaintiff is to pay the defendants costs.

Orders accordingly,
____________________________________________________________
Emmanuel Lawyers: Lawyers for the Plaintiff
Solicitor General: Lawyers for the Fourth Defendant
Morgen Lawyers: Lawyers for the First, Second and Third Defendant