Kalinoe v Kereme [2018] PGNC 286; N7383 (25 July 2018)

N7383

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) No. 638 of 2015

Between:
Dr. LAWRENCE KALINOE, Secretary, Department of Justice & Attorney General
Plaintiff

And:
Dr. PHILIP KEREME in his capacity as the Chairman of the Public Services Commission
First Defendant

And:

JOSEPH WANNE

Second Defendant

And:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Defendant

Waigani: Higgins, J
2018: 20^th & 25^th July

JUDICIAL REVIEW – Departmental Head deciding not to renew employment contract – Public Services Commission upholds appeal – Whether PSC exceeded its powers – It did not – Whether decision of PSC was defective for unreasonableness – Wednesbury principle – PSC decision affirmed – Public Services (Management) Act 2014, s.218

Cases Cited:
Papua New Guinea Cases

Godfrey Niggints v Henry Tokam & ors [1993] PNGLR 66

Mision Asiki v Manasupe Zurenuoc & Ors [2005] SC 797

Ombudsman Commission v Yama [2004] PGSC 30; SC 747)

Papua Club Inc v Nasaun Holdings [2004] PGNC 178; N2603

Premdas v The State [1979] PNGLR 329

Telepage Pty Ltd v Post and Telecommunication Corporation Act [1987] PGNC 3; N605)

Overseas Cases

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1KB 223
Mercantile Credits Ltd v Shell Company of Australia Ltd [1976] HCA 9; 136 CLR 326.
Commonwealth v Amman Aviation Ltd [1991] HCA 54; (1992) 174 CLR 64

COUNSEL:

Mr L. Kandi, for the Plaintiff
Mr R. Simbil, for the First Defendant
The Second Defendant in Person
Mr G. Geroro, for the Third Defendant

25^th July, 2018

1. HIGGINS, J: This is the hearing of an application for Judicial Review pursuant to an Originating Summons filed by the plaintiff, Dr. Lawrence Kalinoe, Secretary of the Department of Justice and Attorney General pursuant to leave granted on 12 February 2016.
   
2. The plaintiff seeks to set aside a decision of the Public Services Commission of which Dr. Philip Kereme, the first respondent, is the Chairman.
   
3. The decision relates to Mr. Joseph Wanne, a legal officer employed in the Department of Justice and Attorney General. He is the second respondent. The third respondent is the State.
   
4. The Statement Pursuant to Order 16 Rule 3(2)(a) of the National Court Rules reveals that the plaintiff seeks to set aside a decision of the first respondent/defendant which annulled a decision of the plaintiff, of 24 March 2015, as Chairman of the Contract Review Committee. The annulment was notified on 31 August 2015.
   
5. On 24 March 2015, the plaintiff decided not to renew a Contract of Employment of the second respondent/defendant as a Principal Legal Officer employed with the Department of Justice & Attorney General.
   
6. The second defendant appealed to the Public Services Commission against that decision. In response, after taking submissions from all relevant parties, the Commission decided as follows:
   

“That the Commission annuls the decision of the Contract Review Committee dated 24^th March 2015.”

7. The original decision was notified by the plaintiff to the second defendant in the following terms: (RB 98)
   

“This is to inform you that your Employment Contract to the position PLO 6 (Mt Hagen), Position No: DJAGSG. 12, Grade 18 has been considered for review, unfortunately your contract of employment has been refused renewal based on non-performance as a Principal Legal Officer and your inability to appear in court and to assist junior lawyers to progress within the Office of the Solicitor General.

Please note that the position will be advertised publicly and you are required to apply like any other applicant for consideration.

Thanking you for your understanding.”

8. The Contract referred to was dated 27 February 2012 and its term was for 3 years, ie until 26 February 2015. Sub-paragraph (14) provided:
   

“In the event that the Contract terminates or is terminated on any grounds, the future employment of the Senior Officer [ie the 2^nd defendant] shall be determined by the Departmental Head [ie the plaintiff] in accordance with the Public Service (Management) Act.”

9. The second defendant applied to the Public Services Commission to review the decision of the plaintiff. To that the plaintiff responded on 20 July 2015 defending the non-renewal decision on the ground of under-performance and enclosing prior Performance Based Appraisal forms.
   
10. There was one such appraisal only for July to December 2014. The appraiser, Mr. Geita, concluded:
    

“Mr Wanne performs at well below the required level of a Grade 18 lawyer and I recommend that his contract of employment which is performance based, is not renewed or certainly not as a senior lawyer.”

11. The next step was advice from the Solicitor-General (Ms. F. Barton-Keene) to the Contract Review Committee (RB 161-163). She recommended non-renewal of the second defendant’s contract, adding a recommendation that:
    

“the Committee consider moving Mr. Wanne to another part of DJAG where he can utilize his research writing and other skills which are marginally better than his litigation ability” (9 March 2015)

12. On 21 July 2015 the second defendant offered to the PSC a “rebuttal” of the plaintiff’s submission to the PSC (RB 165-170).
    
13. Having received and considered both sides, the PSC, via the first defendant, notified its decision to the plaintiff.
    
14. That decisions and reasons for it appear at RB 179-184.
    
15. As that decision is challenged on grounds including unreasonableness (see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1KB 223), I set out in full the decision of 31 August 2015:
    

Papua New Guinea

PUBLIC SERVICES COMMISSION

Office of the Chairman

Reference: PSC2-11-JAG:44/2015 Date: 31 August, 2015

Dr. Lawrence Kalinoe, PhD

Secretary

Department of Justice & Attorney General

P.O Box 591

WAIGANI

National Capital District

Dear Sir,

RE: ADVICE ON THE FINDINGS AND DECISIONS IN THE MATTER OF AN APPLICATION FOR REVIEW OF A PERSONNEL MATTER BETEWEEN MR JOSEPH WANNE AND YOU AS THE SECRETARY FOR THE DEPARTMENT OF JUSTICE & ATTORNEY GENERAL REGARDING A NON-RENEWAL OF CONTRACT MATTER.

We wish to inform you that the Public Services Commission has completed its review on the above matter and the following are the decisions made and reasons given in respect of the decisions.

1. DECISIONS:
   

1:1 That the Commission annuls the decision of the Contract Review Committee dated 24 March 2014 not to renew Mr. Wanne’s Contract of Employment;

1.2 That Mr. Wanne’s Contract of Employment be renewed for another 3 years due to breaches of provisions in his Contract of Employment and General Order 9; and

1.3 That Mr. Wanne be re-employed by the Department of Justice and Attorney General immediately as the Principle Legal Officer, Grade 18, he occupied prior to the non-renewal of his contract of employment.

2. FINDINGS & ANALYSIS:
   

2.1 From the grounds of review and submissions before the Commission, the only relevant issue we find that needs addressing here is the issue of whether or not the non-renewal of Mr. Wanne’s Contract of Employment was done in accordance with law.

2.2 Firstly, all Senior Contract Officers in the National Public Service are employed on “Performance Based Contracts”. This is also the case for Mr. Wanne. Performance based contracts basically mean that the officer’s continued employment in the public service is subject to his or her performance in meeting the tasks and job descriptions in that position. To measure that performance, performance appraisals have to be carried out regularly which will reflect fairly on the officer’s performance over the course of the three (3) year duration of the contract. In fact, Schedule 1.1 of Mr. Wanne’s contract provides as follows:

“The contract enables the Departmental Head and the Senior Officer to develop a set of performance targets or indicators in accordance with the job Description for the position and priorities set by the Departmental Head to which the Senior Officer is then committed and against which his or her performance can be measured through regular performance assessments”. (Our underlining)

Schedule 2.3 of the Contract is also in the same light and reads:

“The Departmental Head shall determine the progress achieved by the Senior Officer in complying with the performance commitments at regular intervals”. (Our underlining)

These two provisions are further supported by General Order 9.27 which states that:

“The Senior Officer’s work performance shall be subject to regular, periodic Performance Reviews by his/her Departmental Head, which shall be administered in accordance with General Order 13. The Performance Review conducted utilizing the Guidelines and the Performance Appraisal process under General Order 5 shall be utilized by the Departmental Head in assessing the Senior Officer’s entitlement for salary increments, and for making decisions as to contract renewal, or termination.”

2.2 These performance assessments will then show whether or not the officer is performing and whether further training or coaching is needed to improve the officer’s performance. In Mr. Wanne’s case, this is provided for under Schedule 1.2 of his Contract which reads:

“The contract enables the Departmental Head to identify specific weaknesses in the Senior Officer’s competencies as outlined in the job description and to establish a remedial training and self-development program to improve upon those competencies which are weak”.

2.3 If the Departmental Head is of the view that the senior officer has not improved despite the actions taken to improve his or her performance, then the Contract can be terminated prematurely on the grounds of poor performance. That however, is subject to the officer being given an official warning about the concerns on his or her performances. This is clearly laid out under Schedule 3(8) of Mr. Wanne’s Contract which states:

“Pursuant to clause 1(b), in the event that the Departmental Head becomes concerned about consistently poor work performance by the Departmental Head, the Departmental Head shall, issue a warning in writing to the Senior Officer to improve his or her performance and or to overcome weaknesses in conduct within a reasonable period as determined by the Departmental Head”. (Our underlining)

General Order 9.68 is in support of this and reads as follows:

“Each Contract Agreement enables the Agency Head to terminate the contract for non-performance following a warning process and opportunity to improve their performance. Department of Personnel Management Review of Agency Head Recommendations on Contract Renewal or Termination (Where Powers Have Not Been Delegated Under General Order 9.4)”. (Our underlining)

2.4 In light of the above, the Commission finds that Mr. Wanne was not appraised for the full period of 3 years. From evidence before the Commission, he was only appraised for the periods of January to June 2014 and July to December 2014. There was no appraisal done on Mr. Wanne’s performance for 2012 and 2013 which is a total breach of the Contractual provisions as well as the General Orders. This was confirmed by the Solicitor General’s Inter Office Memo to the Senior Managers Contract Review Committee dated 9 March 2009 at paragraph 6.

2.5 For the January to June 2014 appraisal, his performance rating was 3. It is noted that the appraisal was not signed by the Appraiser and the Human Resource Manager. In part “G” of the Appraisal Form “Promotional Potential” rating 3 is “Sound Potential for Promotion”. The Supervisor (Team Leader) made his comments on Mr. Wanne’s appraisal on the 22 August 2014 and was only passed onto Mr. Wanne on the 13 January 2015 who in turn made his comments on the 14 January 2015. This was an unnecessary delay since the appraisal was passed onto him after 4 months. This denied him the opportunity to respond to the appraisal and its findings against him. It was, therefore, in breach of Schedule 2.4 of Mr. Wanne’s Contract which gives him the right to respond to any appraisal done to him. This provision reads:

“The views of the Senior Officer as to his or her success or otherwise in complying with the Performance Commitments shall be taken into account by the Departmental Head in a performance assessment process”

Furthermore, if this appraisal was passed onto him earlier he would have improved on his performance. Furthermore, in the second appraisal for the period July to December 2014, the Appraiser, Team Leader, Judicial Review and Commercial Litigation, Mr. E’ava Geita signed the appraisal form on 18 December 2014. The Executive Manager Human Resource Management Mr. Rex Bua signed the appraisal form on the 9 March 2015. This was well after Mr. Wanne’s contract of employment had expired on the 2 February 2015.

2.6 The Commission finds that no evidence of warnings were issued to Mr. Wanne to improve on his performance. It was clearly a failure on your part not to have conducted periodic appraisals on Mr. Wanne for the years 2012 and 2013 in order to assess his performance and undertake remedial action to improve his performance. We note from the Solicitor General’s aforementioned Inter Office Memo which recommended the non-renewal of Mr. Wanne’s contract based on “Work Performance” issues such as his “poor litigation and Court attendance skills” and his “Personal Behavior” in the office with serious allegations concerning his threatening nature towards other staff. Under the contractual provisions and General Orders highlighted above, remedial steps should have been taken to address those issues. Due to your failure in conducting his appraisal for the period of 2012 and 2013, no warnings or steps were conducted to address these situations. If the appraisals were conducted, Mr. Wanne could have improved his performances and behavior.

2.7 The Commission also finds that Mr. Wanne had appealed your decision not to renew his contract of employment on the 15 January 2014. You, however, failed to respond to Mr. Wanne’s appeal and provided reasons as to why his contract of employment was not to be renewed. The reasons for non-performance are too general. Mr. Wanne claimed that he had attended Court but Mr Geita had failed to specify the occasions on which he did not attend Court. This was a genuine rebuttal to the appraisal and, therefore, it was very important that reasons supported with evidence was produced to address and negate this claim since it was one of the sole basis he was scored lowly resulting in the non-renewal of his contract.

2.8 Secondly, the Commission finds that the contract renewal process was not properly followed. The process was abused in that certain steps were omitted or overlooked by the Contract Review Committee. The review process was to commence 6 months prior to the contract termination date and completed three months prior to the termination date of the contract and a decision made. This is to give ample time to the officer concerned to make a decision to seek employment elsewhere or seek redress pertaining to his contract. This is provided for by General Order 9.58 which reads:

“A review process will commence six months prior to the contract termination date. The Departmental Head shall complete a review of each contract officer’s performance three months prior to the termination date of a contract. The purpose of this review is to make a decision whether or not to renew or not renew the contract”.

We find that the Review Committee met on the 16 March 2015 and the decision not to renew his contract was made on the 24 March 2015 after Mr. Wanne’s contract expired on the 2 February 2015. It was totally unfair on Mr. Wanne. This process should have commenced 6 months prior to the contract expiry date and completed 3 months prior to the contract expiring. In Mr. Wanne’s case the notice of non-renewal of his contract was issued to him 3 weeks and 2 days after his contract had expired. This is an abuse of the contract renewal process stipulated in General Order 9 which governs the administration of contracts.

2.9 Furthermore, Mr. Wanne had appealed the appraisal done by Mr. Geita. You however, failed to respond to his appeal. This is in clear breach of General Order 9.63 which states:

“An Agency Head is required to “show cause” why a contract should not be renewed, namely through a failure by the contract officer to comply with the contractual requirements, and in particular, has failed to perform adequately against the approved job description and the performance commitments entered into, or has committed serious disciplinary offences, for which warnings are current on the officer’s record”.

2.10 We also find that no good reasons were given for the non-renewal of Mr. Wanne’s Contract of Employment in your letter dated 24 March 2015 to Mr. Wanne. You had made up your mind not to renew Mr. Wanne’s contract of employment, however, you were unequivocally required to provide reasons for that decision. It should be noted that failure to provide reasons amounts to denial of “natural justice”. In the Supreme Court case of Mision Asiki v Manasupe Zurenuoc & Ors [2005] SC 797, their Honors Justice Jalina, Cannings and Manuhu held that:

“The duty to give reasons for an administrative decision is an integral part of the duty to accord natural justice. If no reasons are given it is to be inferred that there were no good reasons for the decision being made. Godfrey Niggints v Henry Tokam, Paul Songo and The State [1993] PNGLR 66 approved.”

The Supreme Court thereby nullified the Provincial Administrator’s decision and reinstated the applicant back to the Morobe provincial administration with the payment to him of the salary and emoluments lost because of his unlawful dismissal.

In addition, in the National Court case of Godfrey Niggints vs Henry Tokam, Paul Songo and the State [1993] PNGLR 66, His Honor Justice Amet (as he then was), commenting on the Departmental Head’s disciplinary powers clearly stated that a Departmental Head’s power to discipline officers cannot be exercised arbitrarily, and he does not have an absolute and unfettered power. This is crucial because where the Departmental Head’s decision affects substantial interests and the welfare of an officer disciplined and his/her family, the Departmental Head must give reasons and good reasons. Even though the Niggints Case concerns the disciplinary process, the principle also applies to the contract renewal process in the Public Service which is subject to administrative law. Thus, failure to give reasons for the decision to dismiss amounts to a denial of natural Justice. Hence, the decision not to renew Mr. Wanne’s contract of employment is also vitiated and invalid on this basis.

2.11 The appraisals of 2014 alone cannot be relied on for the renewal or non-renewal of the contract as they are a component of an incomplete appraisal process that should have occurred over the life of the “Performance Based Contract of Employment”. Thus, in this instance, there was a serious miscarriage of justice committed against Mr. Wanne when renewal of his contract was based on appraisals for only a single year. In such a situation, it would be only fair that his contract of employment be renewed for another three years.

2.12 In conclusion, the Commission finds that there was no appraisal done for the years 2012 and 2013. Even though a lot of allegations were raised against him concerning his performance and behavior, no warnings or remedial actions were taken to improve his performance and behaviour. It was only left to the last year of his contract that these issues were brought to light in his appraisal and therefore this is clearly unfair to him. In other words, it can be said that you and those responsible for monitoring his performance, failed in your duties to properly manage his performance based contract thereby acquiescing or consenting to the deterioration in his performance and therefore you should be barred from trying to use this as a reason for non-renewal of his contract.

Please take note that pursuant to Section 18 of the Public Services (Management) Act 2014 the decision of the Commission becomes legally binding after a period of 30 days from the date of the decision.

All queries should be made to the Office of the Chairman of the Public Services Commissions. [sic]

Yours faithfully.

(Signed)

DR. PHILIP KEREME (Ph.D.)

Chairman

cc: Mr. Joseph Wanne

P.O. Box 41

WATER FRONT

National Capital District

cc: Mr. John Kali, OBE

Secretary

Department of Personnel Management

P.O Box 519

WAIGANI

National Capital District

16. That decision annulled the decision notified by the plaintiff to the second defendant and directed the reinstatement of the second defendant on terms that his contract be renewed for a further 3 years.
    
17. The challenge to that decision was, as Mr. Kandi, for the plaintiff submitted, on the grounds that:
    
    1. The decision was contrary to s.18(5) of the Public Service (Management) Act 2014.
       
    2. The decision to order renewal of the contract was not valid by reason of the expiry of the original contract of 21 February 2015.
       
    3. The decision to order renewal of the contract was unreasonable within the meaning endorsed in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1KB 223 (Wednesbury unreasonableness)
       
18. Mr. Kandi further submitted that there was a flaw in the review process in that the PSC had not summonsed the departmental head of the Department of Personnel Management. It is unnecessary to determine if compliance in that respect with s.18(3) of the Act is mandatory because, as is disclosed at RB 133, such a summons was issued and(RB 134) duly served.
    
19. The PSC is established by virtue of s.190 Constitution. It has, pursuant to s.191(1)(a) thereof, responsibility for:
    

“the review of personnel matters connected with the National Public Service.”

20. Such matters are defined under s.195, to mean:
    

“... decisions and other service matters concerning an individual whether in relation to his [or her] appointment, promotion, demotion, transfer, suspension, disciplining or cessation or termination of employment (except cessation or termination at the end of his [or her] normal period of employment as determined in accordance with law), or otherwise.”

21. This provides an ample constitutional mandate to empower the PSC to deal with and determine the second defendant’s appeal against the plaintiff’s decision. In this context, the expiry of the contract was not the termination of the second respondent’s “normal period of employment.” It was subject to the right of the second defendant to apply for a renewal of his contract of employment. In the context of such renewable appointments, the appointee has a legitimate expectation of re-appointment, just as a lessee of an estate in land has a reasonable expectation that an option for renewal will be honoured unless there is reasonable cause not to. (see Mercantile Credits Ltd v Shell Company of Australia Ltd [1976] HCA 9; 136 CLR 326). In Commonwealth v Amman Aviation Ltd [1991] HCA 54; (1992) 174 CLR 64, whilst acknowledging a power not to renew a contract, the High Court held that, nevertheless, in making such a decision, the Commonwealth was under a duty to act fairly. This was not a case of real property at issue but a contract to conduct aerial surveillance on behalf of the Commonwealth.
    
22. It is arguable that the decision in Premdas v The State [1979] PNGLR 329 would deny to the plaintiff a right to dispute the decision of the PSC reviewing his decision to deny contract renewal to the second defendant. The situation is not analogous to the expiration of a State Lease where, on the authority of Papua Club Inc v Nasaun Holdings [2004] PGNC 178; N2603, the former lessee had no legitimate expectation, in the absence of the exercise of an option for renewal, that the lease would be renewed. (see also Telepage Pty Ltd v Post and Telecommunication Corporation Act [1987] PGNC 3; N605)
    
23. It follows that it was reasonable for the PSC to accept that the plaintiff, in deciding whether or not to renew the second defendant’s contract of appointment as a Principal Legal Officer (PLO) and the term of that re-appointment had a duty to act fairly. The PSC decision held that the plaintiff had failed to act fairly and that, on the merits, should have decided to renew the second defendant’s contract. That conclusion was clearly open to the PSC. There was not only power to entertain the second defendant’s appeal but reasonable grounds to uphold it.
    
24. It should be borne in mind that the Judicial Review process is a process enquiry not a merits review. By way of contrast, the review the PSC was empowered to make included the merits of the challenged decision. It was a power to make the decision which the original decision maker ought to have made (see Ombudsman Commission v Yama [2004] PGSC 30; SC 747).
    
25. That was the approach of the PSC. It considered that the plaintiff had overlooked or disregarded the lack of proper appraisals of the second defendant’s ongoing performance. Those appraisals, as the PSC rightly observed, were not only to monitor the second defendant’s performance but also to give him a fair opportunity to remedy any short falls in that performance.
    
26. There is therefore, no substance in any of the contentions raised by the plaintiff. The plaintiff’s claim for judicial review of the decision of the first defendant is dismissed with costs. That latter decision is affirmed.

______________________________________________________________
MS Wagambie Lawyers: Lawyers for the Plaintiff
Public Services Commission In-House Lawyers: Lawyers for the First Defendant
Lawyers for the Second Defendant: The Second Defendant in Person
Office of the Solicitor General: Lawyers for the Third Defendant