Maris v Kwa [2022] PGNC 461; N9935 (23 September 2022)

N9935

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 66 OF 2022

BETWEEN:

PAUL MARIS

- Plaintiff-

AND:

DR ERIC KWA AS THE SECRETARY OF THE DEPARTMENT OF JUSTICE & ATTORNEY GENERAL AND THE PRINCIPAL LEGAL ADVISOR OF THE NATIONAL EXECUTIVE COUNCIL

-Defendant-

Waigani: Tamade AJ

2022: 12^th August, 23^rd September

SECTION 5 NOTICE – extension of time to serve a Section 5 Notice on the State – Section 5 (2) (c) (ii) Claims By and Against the State Act – claim against National Airports Corporation Limited – whether a Section 5 Notice should be served on the State before making a claim against NAC – National Airports Corporation Limited created under the Companies Act and separate from the State – private contract of employment between parties – proceedings dismissed.

Cases Cited:

National Agriculture Quarantine & Inspection & Inspection Authority v Tetaga [2009] PGNC 220; N4030
Bob Kaupa v Kala Aufa & Ors (2015) PGNC 262; N6130
Peter Bire & Ors v Philip Kereme and Ors (2016) PGNC 93; N6328
Vanimo Jaya Limited & Anor v PNGFA and Ors (2022) PGNC 358; N9750
Rawson Construction Ltd v Department of Works [2005] PGSC 39; SC777

Legislation:

Claims By and Against the State Act and Claims By and Against the State (Amendment) Act 2015 and 2022

Civil Aviation Act and Civil Aviation (Amendment) Act 2010

Counsel:

Mr Soa Gor, for the Plaintiff

23^rd September, 2022

1. TAMADE AJ: These are proceedings essentially seeking an Order from the Court pursuant to Section 5(2) (c) (ii) of the Claims By and Against the State Act for the Plaintiff to serve the Attorney General or the Solicitor General a Notice of his intention to sue the National Airports Corporation Limited (NAC) as required under section 5(1) of the said Act.

2. The Plaintiff claims that he is a former employee of NAC having commenced employment with NAC on 4 September 2017 as the Airport Operations Manager at Tokua Airport, East New Britain Province. The Plaintiff is seeking to claim against the NAC that his termination of employment was unlawful as he was taken through a disciplinary process on certain allegations levelled against him and he had responded to those allegations. The Plaintiff alleges that he was not charged with any disciplinary offence during the time he was relieved from his duties however he was terminated subsequently on 24 December 2019. After writing to the NAC on 26 December 2019 to reconsider his termination, the NAC maintained it’s decision to terminate the Plaintiff in a letter dated 13 January 2020. The Plaintiff then followed up again this time with a letter dated 27 January 2022 to the board of the NAC however the NAC through their Board Chairman in a letter dated 21 February 2022 maintained NAC’s decision to terminate the Plaintiff.

3. The Plaintiff then approached the Department of Labour and Industrial Relations (DLIR) and the DLIR urged the NAC to review its decision however the NAC has maintained it’s decision to terminate the Plaintiff and therefore the Plaintiff is seeking to make a claim against the NAC. The Plaintiff has filed these proceedings on the premise that NAC is a State Entity subject to the Claims By and Against the State Act and therefore the Plaintiff is seeking leave of Court to serve a section 5 notice pursuant to the Claims By and Against the State Act out of time in order to sue the NAC.

Is the NAC subject to the Claims By and Against The State Act?

4. Mr Gor for the Applicant has not made any submissions addressing the relevant point of whether NAC is an entity subject to the Claims By and Against the State Act. Mr Gor simply relies on the case of Rawson Construction Limited v Department of Works which is that an applicant has to show sufficient cause for not giving notice within the time stipulated under section 5 of the Claims By and Against the State Act and the principles of “sufficient cause” for failing to give notice within the time required under the Act.

5. The Civil Aviation (Amendment) Act 2010 states that in regard to the National Airports Corporation, section 3 of the Principal Act is amended to mean that:

"NAC" means National Airports Corporation Ltd and is the company incorporated under the Companies Act 1997 pursuant to Section 132;";

6. NAC is therefore created as a corporation or company pursuant to section 147A of the Civil Aviation (Amendment) Act 2010 as stated as follows:

"147A. INCORPORATION OF NATIONAL AIRPORTS CORPORATION LTD BY MINISTERS.

"(1) A company has been incorporated pursuant to Section 132 under the Companies Act 1997 for the purpose of owning, operating, managing and maintaining airports and providing all related services in Papua New Guinea.".

"(2) The company referred to in Subsection (1) is called National Airports Corporation Ltd." (NAC) or, subject to the approval of the Registrar of Companies, such other name as the Ministers and the shareholders may decide from time to time.

"(3) In furtherance of its principal airport function under Subsection (1), the functions of NAC shall include any function as determined by the shareholders and included in its constitution approved by the Registrar of Companies.".

7. The definition of State in the Attorney General (Amendment) Act 2013 refers to “State” as:

" "State" in relation to the functions and powers of the State Solicitor, means government Departments, Provincial and Local level Governments and an arm, department, agency or instrumentality of the National Government or a Provincial Government and includes a body set up by statute or administrative act for government or official purposes;

8. Section 13(B) of the Attorney General (Amendment) Act 2013 provides the functions of the State Solicitor as:

"13B. FUNCTIONS OF THE STATE SOLICITOR."

"(1) The primary functions of the State Solicitor are -

(a) to provide legal advice and opinion to the State and its agencies and instrumentalities in all matters affecting the State; and

(b) to be the legal representative of the State in all matters affecting the State including negotiations entered into by the State; and

(c) to provide legal clearance on all matters in which the State is a party, in so far as it relates to —

(i) contracts of employment for appointments made by the Head of State; and

(ii) consultancy agreements; and

(iii) commercial agreements; and

(iv) international treaties, conventions and agreements which are bilateral or multilateral or any other public international instruments; and

(v) lease agreements; and

(vi) memorandums of agreement; and

(vii) memorandums of understanding; and

(viii) any other documents that seek to legally bind the State; and

(d) to consider and provide legal clearance on the necessity of —

(i) proposed legislation; and

(ii) proposed amendments to existing legislation; and

(iii) proposed regulations; and

(iv) proposed amendments to existing regulations,

before submission to the National Executive Council for its approval; and

(e) to make appearance on behalf of the State before tribunals outside of the National Judicial System; and

(f) to perform any other functions consistent with his advisory functions.

10. It is therefore clear that the functions and management of the NAC is governed by its board of directors as a company under the Companies Act and as is set up by the Civil Aviation Act and does not fall under the prerogative of State under the Attorney General’s Act where it would be subject to the function of the State Solicitor on matters of legal advice and or opinion, legal representation and clearance etc. It is clear that the Solicitor General is the advocate of the State^[1] and all State instrumentalities where the definition of “state” extends to as under the Attorney General’s Act.

11. In the matter of Vanimo Jaya Limited & Anor v PNGFA and Ors (2022) PGNC 358; N9750, I considered the issue of whether PNG Forest Authority was the State in an issue raised by the Plaintiffs and whether Emmanuel Lawyers had the authority to represent PNGFA as it was objected that the PNGFA was the State and therefore Emmanuel Lawyers should have received clearance from the Attorney General prior to acting for the PNGFA. I found in that case that PNGFA is a corporation and therefore it had the autonomy to run its own affairs including engaging lawyers to represent and protect its interest. It is important to note my remarks in that case as follows:

“Does the Court have to go any further to look whether the PNGFA is the State? To my mind, the PNGFA as a creature of the Forestry Act maybe subject to the control of the State in where the Forestry Act expressly provides for in terms of it’s functions, the composition of it’s board, and that it is subjected to the Public Finances (Management) Act and the Audit Act, however, it is given autonomy in the very nature of it being a corporation. Legal fees incurred by the PNGFA are the responsibility of the Authority managed by its board. The question a third party raises as to the power of a board to appoint and engage its own lawyers unless expressly prohibited by a provision in the Forestry Act goes against the recognition of that Authority as being autonomous and being a corporation having a legal persona to stand on its own and defend itself, to engage the lawyer to its own choosing in the conduct of its business that the price for such a decision is on the shoulders of that entity squarely again, unless, there is an express provision in the governing legislation or elsewhere that controls exclusive engagement of the Attorney General over PNGFA or such an entity. “

12. I, therefore, adopt those remarks as to NAC that though it is created by Statute to exist as a company pursuant to the Companies Act and though it’s board membership maybe dictated by the Civil Aviation Act and it’s functions derived from the Act, the very nature of it being a company should sever it from the control of the Attorney General, the State Solicitor and or the Solicitor General as under the Attorney General’s Act unless it is specifically permitted for by an express provision of the legislation.

13. In the recent amendments to the Claims By and Against the State Act 2015, Kumul Minerals Company and its related companies or subsidiaries being entities owned by the State are specifically stated not to be subjected to the Claims By and Against the State Act. I, therefore, take it that these companies or corporations are severed from any control from the State and have full autonomy to run and manage their own affairs independently. I would take NAC to be independent of the State in a similar vein.

What then is the purpose of section 5 of the Claims By and Against the State Act?

14. Section 5 of the Claims By and Against the State Act is in the following terms:
5. NOTICE OF CLAIMS AGAINST THE STATE.

(1) No action to enforce any claim against the State lies against the State unless notice in writing of an intention to make a claim is given in accordance with this section by the claimant to–

(a) the Departmental Head of the Department responsible for justice matters; or
(b) the Solicitor-General.

(2) A notice under this section shall be given–

(a) within a period of six months after the occurrence out of which the claim arose; or
(b) where the claim is for breach of a contract, within a period of six months after the claimant became aware of the alleged breach; or
(c) within such further period as–

(i) the Principal Legal Adviser; or
(ii) the court before which the action is instituted,

on sufficient cause being shown, allows.

(3) A notice under Subsection (1) shall be given by–

(a) personal service on an officer referred to in Subsection (1); or
(b) leaving the document at the office of the officer with the person apparently occupying the position of personal secretary to that officer between the hours of 7.45 a.m. and 12 noon, or 1.00 p.m. and 4.06 p.m., or such other hours as may from time to time be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act 1953.

15. A new section 5A as amended to the Claims By and Against the State Act^[2] is in the following terms:

NEW SECTION 5A.

The Principal Act is amended by inserting immediately after Section 5, the following new section:

"5A. DETAILS OF TORTFEASOR AND BREACH OF CONTRACT ETC.

(1) A notice under this section must contain full details of the claim including -

(a) the name of the alleged tortfeasor; and

(b) the date of the alleged cause of action; and

(c) the time of the alleged cause of action; and

(d) the nature and circumstances of the alleged cause of action; and

(e) any other information relevant to the alleged claim that the Solicitor-General may deem necessary.

(2) A notice under this section must contain full details of the alleged breach of contract including -

(a) a copy of the contract; and

(b) the date of the alleged breach of contract; and

(c) the time of the alleged breach of contract; and

(d) the nature and circumstances of the alleged breach of contract; and

(e) the location of the alleged breach of contract; and

(f) any other information relevant to the alleged breach of contract that the Solicitor-General may deem necessary.".

16. I am of the view that section 5 notice as per the Claims By and Against the State Act is a due diligence mechanism for the State and it’s various departments and agencies and or any entity that falls within the ambit of the State and the Solicitor General as it’s advocate under the Attorney General’s Act with the State Solicitor as it’s Solicitor to allow for careful and prudent investigations and or it provides a verification process to ascertain the veracity of any claim as against the State to allow the State to respond amicably prior to the matter ending up in Court as the State can carry out its due diligence on the claim.

17. It, therefore, serves no purpose if an entity by its corporate nature, has a company veil that keeps the State as a shareholder out of its function as a management. The State as the only shareholder of most of its’ companies therefore has by its own word in legislation has created these creatures of law as corporate vehicles and therefore they should run and be managed as autonomous entities having the full legal persona as separate legal entities subject to of course various restrictions and or limitations by Statute in their purpose.

Employees employed by the State

18. In relation to whether employees engaged under the various entities created by Statute as performing State functions and whether their employees are subject to the Public Service Commission as public servants, the Courts have held that the Public Service Commission had no power to review their employment as the various legislation creating these entities did not give the power to the Public Service Commission.^[3]

19. I, therefore, find that the employment contract between the Plaintiff and the NAC is a private contract of employment and it follows that as NAC is a company subject to the Companies Act, the State should not have any interest in the matter.

20. The Plaintiff’s intended claim is not a claim against the State as the NAC is a company subject to the Companies Act as created by Statute and therefore the application seeking leave to give section 5 notice pursuant to the Claims By And Against the State Act out of time is misconceived.

21. The Court, therefore, makes the following orders:

1. These proceedings are dismissed in their entirety.
   

Orders accordingly.

________________________________________________________________

Fiocco & Nutley Lawyers: Lawyers for the Plaintiff

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^[1] Section 13 of the Attorney General’s Act
^[2] Date of Amendment to the Claims By and Against the State Act – 12/4/22
^[3] National Agriculture Quarantine & Inspection & Inspection Authority v Tetaga [2009] PGNC 220; N4030, Bob Kaupa v Kala Aufa & Ors (2015) PGNC 262 and the case of Peter Bire & Ors v Philip Kereme and Ors (2016) PGNC 93