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'Atenisi Institute Inc v Tonga National Qualifications and Accreditation Board [2021] TOCA 18; AC 9 of 2021 (1 October 2021)

IN THE COURT OF APPEAL OF TONGA

CIVIL JURISDICTION

NUKU’ALOFA REGISTRY


AC 9 of 2021

[CV 23 of 2020]


BETWEEN ‘ATENISI INSTITUTE INC

Appellant


AND TONGA NATIONAL QUALIFICATIONS AND ACCREDITATION BOARD

Respondent


Court: Hansen J
Randerson J
White J


Counsel: Dr M Horowitz, counsel pro se for Appellant
No appearance by or for Respondent


Hearing: 23 September 2021


Judgment: 1 October 2021


__________________________________________________________________________________


JUDGMENT OF THE COURT

__________________________________________________________________________________


Background

[1] The appellant, ‘Atenisi, is a tertiary education provider in the Kingdom of Tonga. It has been in dispute with the respondent Board in respect of certain requirements under the Tonga National Qualifications and Accreditation Act since at least 2009. This has resulted in litigation in relation to the Board’s approach under the Act to several issues: registration of ‘Atenisi as a university; accreditation of its educational courses; and the validity of compliance notices issued by the Board purporting to ban ‘Atenisi from enrolling students for unaccredited courses. The matters before us are now limited to a claim for damages for losses attributable to the issue of the compliance notices which were later found to be unlawful. But a brief description of the earlier litigation is necessary background.
[2] In 2010 the Board refused ‘Atenisi’s application to register under the Act as a university. ‘Atenisi commenced proceedings which were settled on the basis that it would be registered as a tertiary institute. There is no issue for determination before us about ‘Atenisi’s eligibility for registration as a university but we understand it remains a concern to ‘Atenisi.
[3] Registration was renewed by the Board on several occasions including a condition that ‘Atenisi apply for accreditation of its courses. The accreditation process proved to be lengthy and fraught. As we understand it, this process has still not been completed. ‘Atenisi’s view is that the Board’s requirements and approach to accreditation is unnecessary and unreasonable but the Board disputes this.
[4] The dispute over accreditation came to a head when the Board issued a compliance notice in February 2018 requiring ‘Atenisi to cease recruitment of new students in 2018 for all unaccredited programmes. The notice sought a response from ‘Atenisi within 10 working days and an action plan setting out what would be done to gain accreditation of the programmes within 2018.
[5] Shortly afterwards ‘Atenisi issued legal proceedings against the Board which Paulsen LCJ dir to proceed in the fthe form of judicial review.[1]
[6] The dispute over accreditation was not resolved and the Board issued a second compliance n to ‘Atenisi on 21 Fe21 February 2019 which was expressed in similar terms to the earlier notice and extended the recruitment ban for 2019.
[7] The judicial review proceeding came before Whitten LCJ who distilled the relevant issues into two points:
[8] The Lord Chief Justice found in a judgment delivered on 15 October 2019 that ‘Atenisi was not exempt from the Act but that the compliance notices were ultra vires and of no effect. The Lord Chief Justice also dismissed an associated claim for damages for alleged loss of external funding sources arising from an allegation that there was an implied contract between ‘Atenisi and the Board.
[9] ‘Atenisi lodged a limited appeal against the findings in the judgment. These related to several issues which this Court found were incidental to the decision but did not challenge the decision ultimately made. The appeal was dismissed.[2]

This appeal

[10] The proceedings at issue in this appeal were commenced by ‘Atenisi in April 2020.[3] ‘Atenisi claimed damages said to arise from the recruitment bans that had been found to be unlawful. Liability was not in dispute in the lower court nor before us. Damages were sought by ‘Atenisi under two headings:
[11] In the court below, the Lord Chief Justice found:

Grounds of Appeal

[12] ‘Atenisi’s notice of appeal challenges two of the findings in the court below:
[13] The notice of appeal sets out a number of grounds in support which, in conventional legal terms, we would describe as essentially a contention that the challenged findings were not reasonably available on the evidence. There are a number of subsidiary points referred to which we will deal with in more detail below. There is no challenge to the award of damages of TOP$5,000 for loss of recruitment revenue.

The trial and pleadings

[14] The trial occupied three days with the Lord Chief Justice delivering a comprehensive ex tempore judgment on the third day. Published reasons for the judgment, edited only as to form and not substance, were delivered on 8 March 2021. The trial proceeded by way of affidavit evidence solely from ‘Atenisi and cross-examination of some but not all of its deponents. Although Dr Horowitz was the Dean of ‘Atenisi and had been for many years, he did not file any affidavit nor give sworn evidence at trial. Dr Horowitz is not qualified as a lawyer but he was permito appear on behalf of ‘Atenisi and was also allowed owed to make unsworn statements from the Bar table. Although in our view it would have been preferable to require Dr Horowitz to give sworn evidence if he wished to have his unsworn statements taken into account, we do not consider there was any unfairness to Dr Horowitz or ‘Atenisi in consequence.
[15] The judgment below commences with a description of the Amended Statement of Claim filed by ‘Atenisi in July 2020. This begins with a clear allegation in the first three paragraphs that ‘Atenisi had sustained injuries from the recruitment bans which had been held to be unlawful. Although the Amended Statement of Claim makes reference to ‘Atenisi’s application for accreditation of its courses, the judgment below records[4] that no further action had been taken by ‘Atenisi in relation to any potential claim in respect of any decision or lack of decision by the Board in that respect. The judgment also records a ruling given on 23 June 2020 in which it is stated in respect of the accreditation issues that:[5]

Dr Horowitz agreed that any such claim should be excised from the proceedings and that it would only concern the Plaintiff’s claim for compensation which it alleges has been caused by the Defendant’s recruitment ban.

[16] We draw attention to this point since the Lord Chief Justice was rightly concerned to ensure that the precise nature and parameters of the legal cause of action were identified. The Amended Statement of Claim and the submissions Dr Horowitz has made on appeal repeatedly refer to “the belligerence” of the Board over various time periods prior to Dr Gonschor’s resignation in November 2019. For example, the Amended Statement of Claim describes the “First injury” in a heading as the “Loss of Key Administrator in 2019 Partly Due to the Belligerence of the Defendant in 2018.”
[17] The prayer for relief under this heading was stated in these terms:
  1. The defendant’s unlawful belligerence engendered a repressive academic environment that catalysed Dr Gonschor’s resignation;
  2. Partly as a result of said belligerence, the Plaintiff lost a key administrator it had intermittently spent eight years recruiting and four months continually training.

[18] The Amended Statement of Claim again claims in its prayer for relief for the “Second Injury” (loss of tuition fees) that:

The Defendant’s belligerence hindered the Plaintiff from collecting tuition revenue in 2018 and 2019 it would otherwise have obtained.

[19] The theme of claiming losses due to the “belligerence” of the Board in 2018 and 2019 is continued under the heading “Inventory of damage” but is limited to the two heads of damage identified above.[6] It should go without saying that belligerence does not constitute a legal cause of action.

The judgment under appeal

[20] The Lord Chief Justice undertook an extensive review of the evidence. Much of the relevant factual material is not in dispute. Rather it is the interpretation and assessment of the evidence that is in issue. The principal evidence was contained in Dr Gonschor’s affidavit At the time of trial Dr Gonschor was employed by the University of French Polynesia in Tahiti and he appeared by video-link at trial for cross-examination. Dr Gonschor deposed that h employed by ‘Atenisienisi as Dean of Faculty between July 2017 and November 2019. He had first met Dr Horowitz in November 20d was advised that Dr Horowitz was seeking a competent academic to replace him at ‘At16;Atenisi. The two men remained in contact subsequently during which time Dr Gonschor completed a PhD in political science at the University of Hawaii in December 2016.
[21] In July 2017, ‘Atenisi and Dr Gonschor signed an employment agreement for the period 10 July to 10 November 2017. Dr Gonschor was employed as senior lecturer in liberal arts, Dean of Faculty and librarian. The agreement provided that, pending satisfactory performance, ‘Atenisi would employ Dr Gonschor on similar terms from 8 July 2018 to 31 May 2019. Dr Gonschor deposed that he had remained as Dean of Faculty at ‘Atenisi until November 2019 when he resigned and took up his position with the University of French Polynesia.
[22] Dr Gonschor stated he was aware in 2017 that the Board had declined to register ‘Atenisi in 2010 but accepted assurances from Dr Horowitz that ‘Atenisi had been continually registered since 2011 and that he, Dr Horowitz, was optimistic ‘Atenisi’s registration would be renewed later that year (2017) and that it would obtain accreditation by the end of the 2017 academic year.
[23] Dr Gonschor deposed that he became aware in September 2017 that the Board would not modify what he described as its “reductionist assessment metric” for accreditation of courses. Dr Gonschor considered this was inappropriate for an exploratory liberal arts academy and he assumed that the metric would soon be moderated. However, he was “stunned to learn” in early March 2018 that the Board had sought to ban ‘Atenisi’s recruitment of new students. He thought this was “venomous” given that ‘Atenisi was struggling at the time with damage caused to its campus as a result of Cyclone Gita.
[24] Dr Gonschor went on to say that between March 2018 and September 2019 he often found his workplace too disruptive for concentration primarily because he was often demoralised by what he perceived as the unreasonable enmity of the defendant; concerns about his international reputation as a scholar if ‘Atenisi were perceived as operating illegally; and being frequently required to assemble historical documents on short notice to support ‘Atenisi’s claims in CV 13 of 2018.
[25] In August 2019, he concluded that his tenure at ‘Atenisi had not fulfilled legitimate expectations and informed Dr Horowitz as Dean that he would likely be resigning effectively from November 2019. He described the Board’s behaviour as “callous and unlawful” and felt ‘Atenisi was under “constant attack” from the Board.
[26] In his oral evidence, Dr Gonschor explained that in the period July to August 2019 he was exploring employment opportunities in Tahiti and Hawaii. He reiterated his concerns as expressed in his affidavit stating that the main issue was “the climate of belligerence and hostility”. He felt insecure about his academic future and ‘Atenisi’s status as a university. After the Court’s judgment lifting the bans he had some hope that the Board’s “belligerence” would subside. However, there was no immediate resolution of the situation and he had no confidence that the state of affairs would not continue. When asked about how much of a part the bans played in his resignation, Dr Gonschor said they were the “tipping point” and later that they were “a significant factor contributing to demoralising his feelings about his future position at ‘Atenisi.”
[27] In answer to a question from the Bench, Dr Gonschor said “if the status of ‘Atenisi Institute as a recognised and accredited university was resolved or regularized quickly, I would have stayed”.
[28] In cross-examination, Dr Gonschor said that although his employment contract with ‘Atenisi had expired in May 2019, his understanding from Dr Horowitz was that his contract would be renewed and that, “if the court case went in a good way” his contract would be renewed. However, as at the date he tendered his resignation, he had not received any formal renewal or written offer. Between June and November 2019, he was not regularly paid by ‘Atenisi because he had been asked by Dr Horowitz to assist him in preparation for the upcoming court proceedings and he did so during that period. He added that even with the partially favourable judgment in October 2019, if he had stayed, ‘Atenisi would have to keep fighting “a possibly indefinite or endless war” with the Board in relation to the original unresolved issues of registration and accreditation. This might have had the result that he would never resume his teaching duties. Dr Gonschor gave the unqualified response to the Board’s counsel that the reason he resigned was because the courses had not been assessed or accredited and because he was not satisfied with the Board’s assessment metrics.
[29] In further answer to questions from the Bench about whether he would have remained but for the recruitment bans, Dr Gonschor was clear that he would have stayed “if the status of ‘Atenisi as a recognised and accredited university had been regulated and without further complications yes”. He reiterated in further questioning by Dr Horowitz that he might have stayed if the other issues relating to recognition and accreditation had been quickly resolved.
[30] Finally, Dr Gonschor clarified that it was not until November 2019, after the recruitment ban was lifted, that he applied for and received an offer of employment from the University of French Polynesia and decided to resign from ‘Atenisi to take up that offer.
[31] ‘Atenisi also filed supporting affidavits from four academics based in New Zealand. Mr Edward Jenner deposed that he had a conversation with Dr Gonschor in May 2019 in which Dr Gonschor had expressed his concerns about the relationship between ‘Atenisi and the Board including the assessment metric for accreditation purposes. He had informed Mr Jenner that he was “more repelled” by what he regarded as the Board’s illegal recruitment ban. He formed the view that it was likely Dr Gonschor would decline to renew his contract with the Board in November 2019.
[32] Mr Paul Janman, a lecturer at AUT University, deposed that he had reviewed Dr Gonschor’s affidand tand two brief affidavits from Dr Petra Butler and Dr Jack Heinemann. These related to whether or not it was reasonable for an academic to resign in the fa a ban on the recruitment of students to a tertiary institustitution. Dr Petra Butler described the recruitment issue as a critical factor affecting whether an academic would remain on the faculty of a university. Dr Heinemann was of the opinion that Dr Gonschor’s decision to resign because of these restrictions was both reasonable and predictable based on the opinions of Drs Butler and Heinemann and his own view. Mr Janman deposed that Dr Gonschor’s resignation was the “proper response of a scrupulous global academic”.
[33] The Lord Chief Justice noted in his judgment that the reasonableness or otherwise of Dr Gonschor’s resignation was never an issue in dispute. No issue was raised at trial as to whether, as a matter of law, the Board could be liable for damages for acting ultra vires or outside its powers but we should not be taken as endorsing the availability of damages in such circumstances beyond conventional claims for negligence, breach of statutory duty or misfeasance in public office. The only factor in dispute was causation.

The reasoning in the court below on the causation issue

[34] ‘Atenisi has not challenged the legal principles adopted by the Lord Chief Justice with regard to the assessment of damages.[7] Noting that there were distinctions between a claim in negligence and a claim for a breach of statutory duty or an act in excess of statutory power, the Lord Chief Justice adopted as a matter of general principle that the purpose of a damages award was to place the Plaintiff as best money could achieve it, in the position it would have been in had the wrong not been committed. By analogy with the law of negligence, the question was whether an identified act or omission of the Defendant was “so connected with the Plaintiff’s loss or injury that as a matter of ordinary common sense and experience it should be regarded as a cause of it”.[8]
[35] The “but for” test was described by the Lord Chief Justice as a relevant but not exclusive test for determining whether the demonstrated breach was a cause of the damage. It was not sufficient on its own to demonstrate a causal link for legal purposes. However, a sufficient causal connection would, generally speaking, be established if it appears that the Plaintiff would not have suffered the damage complained of but for the Defendant’s breach.[9] The Lord Chief Justice went on to discuss the test for remoteness[10] but we do not consider any issue arises in that respect.
[36] The preliminary part of the reasoning of the court below on the causation issue[11] may be summarised in these terms:
[37] The substantive part of the conclusions reached in the court below are best cited in full:
  1. Until October 2019, the combination of the underlying disputes in relation to registration and accreditation compounded, no doubt, by the recruitment bans issued in early 2018 and repeated in 2019, were operative factors in Dr Gonschor’s plans to look for other employment and, if offered, to leave ‘Atenisi.
  2. However, in my view, the judgment of this court on 15 October 2019 declaring the recruitment bans unlawful, and thereby lifting them, was a break in the chain of causation, or, in the parlance of tort law a novus actus interveniens. That is, the bans no longer operated as an infringement on any academic freedom which was the basis for Dr Gonschor’s concerns as echoed by the other academics who provided affidavits in support of the Plaintiff’s claim in this regard. Therefore, as at 15 October 2019, it could not be said that the bans were an operative cause of Dr Gonschor’s resignation.
  3. At that time, there remained ongoing uncertainty about the Defendant’s attitude to the registration and accreditation issues. Dr Gonschor feared that that ‘war’ would continue. I do not accept the proposition that Dr Gonschor did not know what the Defendant might effectively ‘throw at ‘Atenisi thereafter by way of further obstacles. That is a subjective characterization of what was in fact going on. The Defendant was endeavouring to give effect to and enforce its statutory mandate when in 2017 it required ‘Atenisi to have its courses accredited. For several years prior to that, the TNQAB took a ‘soft approach’ with all providers before more recently taking a firmer position in requiring all providers to have their courses accredited. The issue of registration as a university was in one sense a non-issue because, as was explored in the first proceeding, there was in fact no formal application before the Defendant for that status in 2017. There had been a dispute between the parties as early as 2009 or 2010 which led to litigation commenced by ‘Atenisi and which was ultimately settled on terms by which it agreed to adopt the title ‘Institute’ rather than ‘University’.
  4. On the accreditation issue, the judgment in CV 13 also identified that, on the evidence presented, ‘Atenisi provided the Defendant with all the information required including the completion of the templates about which ‘Atenisi had previously complained. The only real issue in my view which lingers, as it were, is the time the Defendant is taking to complete its assessment of that application. That is something which was referred to in the primary judgment and which the Court of Appeal noted when considering the relevant regulation requiring the Defendant to complete its work in this regard ‘promptly’. But this is not an occasion to revisit those underlying issues.
  5. Therefore, on the Gonschor claim, for the reasons outlined, I am not satisfied that the Plaintiff has demonstrated a sufficient causal nexus between the unlawful recruitment bans and Dr Gonschor’s resignation.

‘Atenisi’s submissions

[38] Dr Horowitz raised many points in his written submissions in support of his essential point that the Board had “engendered a repressive academic environment that catalysed the resignation”. It was submitted that the court below had disregarded the residue of the Board’s previous belligerence; that the lifting of the recruitment ban could “neither erase [Dr Gonschor’s] harrowing memory of the respondent’s 18-month belligerence, nor for that reason, retard the momentum of his defection”. Dr Horowitz highlighted that the Court in CV 13 of 2018 had found that “the imposition of a recruitment ban, if valid, is likely to be highly detrimental to the academic and financial operation of any education provider; it could threaten that provider’s very future existence ...” Finally we were reminded that it was undisputed that the resignation was reasonable.
[39] Dr Horowitz made some additional points in his oral submissions emphasising that the bans had been in place for 19 or 20 months and the impact that had on Dr Gonschor’s concerns about his position. In answer to questions from the Court about the position after the judgment of 25 October 2019, Dr Horowitz pointed out that there was a period of only 6 weeks after that before Dr Gonschor resigned at the end of November and submitted that ‘Atenisi had effectively lost him before the judgment was delivered.

Our conclusions on the issue of causation

[40] We have concluded that the court below erred in determining that the recruitment ban was not an operating cause of Dr Gonschor’s resignation at the time that occurred. We recognise that his resignation did not happen until after the bans were lifted and that Dr Gonschor ted in evidence thce that he would or might have stayed if the accreditation issues had been properly resolved. However, we consider that his ultimate decision to resign cannot be divorced fre overall factual context aext and what had occurred in the lengthy period of disputes prior to that time.
[41] Dr Gonschor had become aware of the ongoing disputes between ‘Atenisi and the Board on several issues including registration as a university and accreditation of its courses. These in themselves were serious but it was the Board’s recruitment bans in February 2018 and 2019 which had the most profound effect as the Supreme Court found in CV 13 of 2018. Effectively, they threatened the very existence of the institute and gave rise to justifiable concerns by Dr Gonschor about iability of y of his ongoing employment at ‘Atenisi and his reputation in academic circles if he continued his association with the institute.
[42] Thd him from mid-2019 onwards to explore opportunities for acor academic employment elsewhere in the Pacific. The request to devote his attention to assisting Dr Horowitz in preparing its legal challenge to the validity of the recruitment bans meant he ceased conducting normal teaching and research responsibilities as the Judge found. He remained in a state of limbo until the bans found to be unlawful in then the judgment issued on 15 October 2019.
[43] Dr Gonschor did not make a final decision to resign until after that date and, at least for a short time, hoped that the other issues with the Board such as accreditation could be promptly resolved. However, this appeared to be unlikely and in November 2019 he applied for and sought a new position with the University of French Polynesia.
[44] The court below rightly accepted that the combination of the underlying disputes on registration and accreditation were compounded by the recruitment bans and were operative factors in Dr Gonschor’s plans to seek other employment. But we part company from the Judge in his conclusion that there was a break in the chain of causation after the court ruled on 15 October 2019 that the bans were unlawful.
[45] We accept that the lifting of the bans removed that part of the ongoing dispute between ‘Atenisi and the Board but to conclude that the bans were no longer an operative factor is to underestimate their impact on ‘Atenisi’s viability and their ongoing potency in Dr Gonschor’s ultimate decision to resign. The bans had been in place for two academic years between February 2018 and October 2019 and had a major impact on both ‘Atenisi as a whole and on Dr Gonschor in particular. By the time the bans were lifted, he had already explored alternative employment, for which there can be no criticism. When he made his final decision to leave, his reasons for doing so were necessarily informed by the entire context of the long history of disputes between ‘Atenisi and the Board and his ultimate recognition these were unlikely to be resolved promptly.
[46] We do not overlook Dr Gonschor’s statements in cross-examination and in answer to questions from the Bench that he would or might have stayed if the other disputes had been properly resolved. But his testimony must be considered in the light of all that had gone before in shaping his decision and his overall loss of confidence in his future at ‘Atenisi.
[47] We recognise as the Judge identified, that the focus must be on the loss caused by the imposition of the recruitment bans but the full factual context must inform that assessment. We conclude that the recruitment bans continued to be at least an operative factor in Dr Gonschor’s ultimate decision to resign despite the uplifting of the bans in the month before.

Quantum of loss arising from the unlawful recruitment bans

[48] As already noted, ‘Atenisi claimed TOP$50,000 for losses arising from the resignation of Dr Gonschor. ‘Atenisi’s approach was to calculate the cost of replacing Dr Gonschor. The total cost was broken down in the Statement of Claim as follows:

$2,000 for international recruitment advertising

$30,000 for international airfares for prospective candidates

$7,000 local per diem for prospective candidates

$4,000 for local settling-in of the appointed administrator

$7,000 for 8-months on-site training of the appointed administrator concurrent with said administrator’s first year of service

[49] At trial, ‘Atenisi’s President and chair of its Board of Directors, Cornelius Velt, had initially filed a brief affidavit providing some background to Dr Gonschor’s appointment but did not refer to the cost of replacement following Dr Gonschor’s resignation. However, he was permitted during the trial to file a second affidavit dealing with quantum. This was based on the replacement of the Dean of Faculty with a candidate at least approaching the competence of Dr Gonschor. The judgment in the court below accurately summarises the content of Mr Velt’s second afit:[12]
[50] Exhibits were attached to Mr Velt’s affidavit the content of which is summarised in the judgment[13] but we do not need to refer to these in detail.
[51] The judgment in the court below also accurately summarises the content of answers given by Mr Velt in supplementary evidence in chief as well as in cross-examination by the Board’s then counsel, Mr Tu’utafaiva and in response to questions from the Bench:

85. ...

(a) in answer to a question from Mr Tu’utafaiva as to whether ‘Atenisi had ever spent anywhere near $50,000 in the past to recruit any of the deans shown on the graph at CB 79, Mr Velt explained that Dr Horowitz and Mr Beck were already in Tonga as volunteers and that it was otherwise very unlikely that that amount of money was ever paid to recruit any dean to take up employment with ‘Atenisi;

(b) similarly, when then asked whether ‘Atenisi paid $50,000 for any process leading to the recruitment of Dr Gonschor, Mr Velt said he was not sure, but he recalled that Dr Horowitz had met Gonschor in Hawai’i some years ago;

(c) since Dr Gonschor’s resignation in November 2019, ‘Atenisi had not saved or provisioned anything like $50,000 for the process said to be required to replace Dr Gonschor, and that:

(i) its financial circumstances were ‘bad’;

(ii) as yet, no action at all had been taken to replace Dr Gonschor;

(iii) ‘Atenisi may have to find other ways or the position may not be filled, or it might be filled with what he described as an ‘inferior person’;

(iv) he was hopeful that ‘Atenisi might procure money from other sources or from the sale of land it owns; and

(v) for now, at least, Dr Horowitz was staying on;

(d) ‘Atenisi had never previously advertised in the Chronicle of Higher Education and that, in the past, when ‘Atenisi had a larger faculty, there were contacts amongst those academics and other people that were prepared to move around and to come and serve at ‘Atenisi;

(e) the recruitment process described in [5] of his affidavit, including the requirement to shortlist three candidates, was not employed for the recruitment of Dr Gonschor, although Mr Velt added that ‘Atenisi was not then looking for a dean. It was not clear whether Mr Velt was aware of the email exchanges between Dr Horowitz and Dr Gonschor leading to his engagement including the reference to the possibility that he might end up being the dean;

(f) indeed, in answer to a series of questions from the Bench, Mr Velt confirmed that the recruitment procedure set out in his affidavit had never been employed by ‘Atenisi at all;

(g) in relation to the claimed requirement for four days of interview, Mr Velt refined that to suggesting that the process would not take one day, nor a few weeks, but that it might take a “few days”;

(h) he was not aware of whether the claim for separate training of the incoming dean by the outgoing dean had been paid for separately in the past. Mr Velt said that it had never really been talked about and he was not aware whether two salaries would have to be paid during any such period;

(i) when asked about the claim for 140 hours of instruction over a period of 8 months, he said that would be “for all the work involved’ but that he could not speak from his own experience. From his own experience, when he became associate dean at ‘Atenisi, he said that his training took ‘a couple of days’. He was not aware, for instance, how long Dr Horowitz spent training Dr Gonschor or whether any dean had been trained in the past. He understood it as simply part of Dr Horowitz’s role and, for which, ‘Atenisi did not make any separate payment to Dr Horowitz for any such training;

(j) in relation to the claim for accommodation, Dr Gonschor’s contract did not provide for same, for two months or at all. Mr Velt described that claim as being included ‘to be on the safe side’;

(k) when asked about his evidence that the Chronical of Higher Education was ‘the appropriate venue’ for recruiting promising young academics, Mr Velt said that he was simply following what Dr Horowitz had suggested;

(l) he was not aware of any policy or written procedure within ‘Atenisi for the recruitment process as described in his affidavit. He said that, based on his knowledge as a member of the Plaintiff’s Board, Dr Horowitz had been ‘given a free hand’ in relation to this part of the claim and his formula or design, as it were, for the proposed recruitment process; and

(m) he was not aware of whether the Board had ratified the recruitment process proposed by Dr Horowitz.

[52] The Lord Chief Justice considered the issue of damages only on the footing that it would become relevant if his conclusion on causation was found to be wrong. He found at the outset that the basis of the damages claim was misconceived.[14] His overall reasoning is best set out in full:
  1. Dr Gonschor, like any other member of a tertiary institution, or any other employee of an organization for that matter, would, in the ordinary course at some point in the future, have to be replaced, due to natural attrition, early retirement (even though Dr Gonschor’s contract had already expired), or possibly even death. Institutions such as the Plaintiff have to provision for the expenses of replacing staff from time to time if they wish to incur them.
  2. What in fact occurred here was nothing more than an acceleration or bringing forward of the time when ‘Atenisi would be faced with deciding whether, and if so, how it was going to go about replacing Dr Gonschor. As Mr Velt explained, nothing has been done to date in that regard. There are some likely and obvious reasons for that. In addition to ‘Atenisi’s admitted parlous financial condition, 2020 has been dominated by the disruptions of a pandemic. Be that as it may, there is no evidence that ‘Atenisi presently has the wherewithal to undertake a recruitment process such as that claimed in this proceeding.
  3. Further, by reference to Mr Velt’s evidence, I make the following findings.

(a) The claimed process has never been employed by ‘Atenisi in the past.

(b) that process is not the subject of any stated or written policy or procedure which has been put in place by ‘Atenisi.

(c) the claimed procedure was designed by Dr Horowitz, not Mr Velt.

(d) it has not been ratified by the Board of ‘Atenisi. That is a matter of significance because without that ratification, it follows that the Board has no idea about the expense expected to be incurred if it were to undertake that process. It will be recalled that Mr Velt, the current President of the Plaintiff’s Board, frankly stated that if the Plaintiff cannot afford to conduct the recruitment process in the manner claimed, it will have to do something else.

(e) it is also notable that the claimed procedure was not employed for the recruitment of Dr Gonschor, which, as the evidence revealed, simply occurred through a series of meetings early on and then an exchange of emails. Nothing more elaborate was required. I do take into account that, at that time, ‘Atenisi was not looking to fill a vacancy in its faculty or replace a dean. But it is clear from Dr Horo#8217;s emails that he t he had Dr Gonschor in mind as a likely successor upon his retirement later this year.

(f) The $5 claimed exceeds the total amount of tuition revenue for 2017 as the benchmark used for ther the second claim. That suggests a degree of unreasonableness in the steps proposed to be taken and their attendant expense and one which simply could not be supported by the normal revenue streams enjoyed by ‘Atenisi. That, in turn, smacks of opportunism which is not to be condoned by the Court in an exercise such as the present.

(g) In terms of breaking down the procedure proposed, and the component costs claimed, ‘Atenisi has never used the Chronicle of Higher Education for advertising for a position vacant within its faculty or at all. There was no rational explanation offered for two advertisements or at 1/5 of a page size at a total cost of $14,000 odd. Mr Velt’s attempt to support the use of that size advertisement because it could contain images, on the basis that ‘a picture paints a thousand words’, was, with due respect to him, unhelpful. There was no evidence about what sort of advertisement and composition, images or otherwise might have been reasonable and necessary to gain the attention of suitable candidate in the United States. I also note the substantial increase from the pleaded amount for that item of $2,000 to over $14,000 in Mr Velt’s second affidavit.

(h) the asserted requirements for funding the travel expense of the shortlisted candidates, to teach a class, deliver a community lecture and meet with the faculty, and to personally tour the campus, all lacked objective foundation in terms of policy or procedure enshrined within ‘Atenisi for this type of exercise. The strident statement at paragraph 5 of Mr Velt’s second affidavit that the Plaintiff ‘declines to remotely recruit a dean of faculty’ again was without substantiation. In modern times, and particularly with the border closures and quarantine requirements imposed by the current pandemic, the availability of audio-visual communications for the purposes of conducting meetings or to actually show any prospective candidates what the campus looks like, require, at a minimum, nothing more sophisticated than a smart phone. In my view, and in the prevailing circumstances, this aspect of the claim was neither reasonable nor necessary.

(i) There was no objective evidence to support the claim for 140 hours tuition. Similarly, there was no satisfactory evidence to support the assertion that a lecturer is paid by the Plaintiff $33 per hour. By contrast, Dr Gonschor’s contract specified his remuneration at $600 per month. I therefore have difficulty understanding the basis for the claimed $33 per hour. In any event, there is again no evidence to support a claim in addition to whatever salary the current dean would be receiving through any period of actual training of an incoming dean. Mr Velt gave a far more conservative estimate of the time required to train him as associate dean and said that he expected any such training to simply be absorbed as part of the current dean’s role and therefore paid for within his salary. In that regard, Dr Horowitz did not receive any additional payments when he trained Dr Gonschor. For those reasons, this part of the claim is totally unsubstantiated.

(j) Finally, the claim for accommodation was also unsupported by any objective evidence. It was also at odds with the Gonschor contract of employment which did not provide any such term.

  1. Accordingly, on the Gonschor claim, I am satisfied on the evidence, that the Plaintiff has established any actual or prospective loss of the kind or amount claimed, or at all.

Appellant’s submissions on quantum

[53] Dr Horowitz raised a number of points in his written submissions on quantum: he submitted that the court below was prejudiced against ‘Atenisi given the finding that there was no causal connection between the recruitment bans and the claimed losses; ‘Atenisi had a “discretionary privilege in respect of academic freedom”; remote vetting of candidates was not an appropriate method of recruitment for the position; the fact that ‘Atenisi had operated frugally since its inception in 1975 was not an a valid ground to decline relief; the fact that the Dean of Faculty would have had to be replaced in due course in any event was not relevant nor was the fact that the Dean of Faculty’s tenure at the academy could not be predicted.
[54] Dr Horowitz had submitted there should be an immediate award of TOP$50,000 or alternatively there should be a sequestered fund of that amount to be released when the court below determines that summoning overseas candidates for the Dean of Faculty position is viable or alternatively the court could monitor and control the expenses. He had further submitted that this Court could refer quantification to a mediation panel. However, before us, he accepted this last suggestion was unlikely to bear fruit.
[55] In answer to questions from the Court, Dr Horowitz accepted that the recruitment process described by Mr Velt had not previously been used by ‘Atenisi but submitted it was appropriate in the circumstances to attract a candidate of Dr Gonschor’s standing. He maintained that recruitment by electronic means was no substitute for interviews in person. No steps had yet been taken to recruit a replacement but the Board’s inability to do so at present for financial reasons should not be a bar to damages.

Our conclusions on the issue of quantum

[56] We reject immediately any suggestion of unfairness or prejudice towards ‘Atenisi or Dr Horowitz.is plain from a re a review of the judgment and the transcript of evidence that the Lord Chief Justice approached the case with conspicuous fairness throughout including extending advantages to Dr Horowitz and ‘Atenisi which would not ordinarily be extended to a party legally represented.
[57] Secondly, the suggestion that this Court should defer the assessment of quantum by some form of sequestering or referral to mediation is inappropriate. The proceeding in the case under appeal was at all times a claim for damages and responsibility lay on ‘Atenisi as the plaintiff to adduce all relevant evidence on that issue and to satisfy the Court that an award was justified. There is no basis to suggest that the damages assessment should somehow be deferred.
[58] We have some reservations about the observations made in the court below at para 103, including references to ‘Atenisi’s parlous financial condition and the disruptions caused by the current pandemic. The inability of a plaintiff to incur expenditure may not be a ground to deny relief particularly if that state of affairs may have been caused or contributed to by the defendant. There was no finding as to the causes of the parlous state ‘Atenisi was in but the actions of the Board may have contributed to this to some unquantified extent beyond the assessed loss of tuition fees. As well, supervening events such as the pandemic may only defer the time when it becomes necessary to find a replacement for Dr Gonschor. The point that it would in due course have been necessary to replace him in any event is noted but on ‘Atenisi’s case the impugned conduct by the Board resulted in the time to do so being brought forward. When this would otherwise have been occurred is necessarily speculative but may have been some years later as Dr Horowitz submitted.
[59] However our conclusion, despite these reservations, is that the Lord Chief Justice was correct to conclude, substantially for the reasons he gave, that there was no satisfactory evidence to establish any actual or prospective loss associated with the need to replace Dr Gonschor following his resignation. The evidence of Mr Velt showed that the recruitment processes he described had never been employed previously to replace a Dean of Faculty and neither the process nor the claimed expenditure had been approved or required by the Board in the present case. ‘Atenisi is a relatively small tertiary institution with limited resources which Dr Horowitz says has always operated frugally. It is difficult in these circumstances to accept that it would have contemplated expenditure of the magnitude claimed or at all. Rather as the Lord Chief Justice found, it would likely have adopted modern electronic methods of communication and used academic networks and personal contacts in the relevant field. This would have obviated the need for candidates to personally visit Tonga and there would be no need for expensive advertising, airfares and accommodation to be incurred. The training of new staff would typically be undertaken and absorbed as part of the responsibilities of the Dean of the Institute as had occurred in the past. We also take into account that we have found that the recruitment bans were only a factor in Dr Gonschor’s decision to resign. The difficulties inherent in establishing the relative weight to be attached to this factor rather than other reasons for his resignation only add to the conclusion that entitlement to an award of damages was not satisfactorily established.

Result

[60] For the reasons given the appeal is dismissed. There is no order for costs.

Hansen J


Randerson J


White J

[1] ‘Atenisi Institute v Tonga National Qualifications and Accreditation Board CV 13 of 2018
[2] ‘Atenisi Institute v Tonga National Qualifications and Accreditation Board AC 10 of2019.
[3] ‘Atenisi Institute v Tonga National Qualifications and Accreditation Board CV 23 of 2019
[4] At para 11.

[5] The Amended Statement of Claim mentions the accreditation issue in paragraph 27 and states that relief for this injury is “reserved” but it was in fact agreed to be excised as already noted.
[6] At para 10.
[7] Judgment at paras 42–48.
[8] March v E and M.H. Stramare Pty Ltd and Anor [1991] HCA 12; [1991] 171 CLR 506 at 522 per Dean J.
[9] Shire of Wakool v Walters [2005] VSCA 216.
[10] Judgment at para 48.
[11] Judgment at paras 91–99.
[12] Judgment at para 80.
[13] Judgment at para 81.
[14] Judgment at para 101.

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