Toremana v Samoa Water Authority [2019] WSSC 16 (12 February 2019)

SUPREME COURT OF SAMOA
Toremana v Samoa Water Authority [2019] WSSC 16

Case name:	Levaai Faamoe Toremana v Samoa Water Authority.
Citation:	[2019] WSSC 16
Decision date:	12 February 2019
Parties:	LEVAAI FAAMOE TOREMANA of Vaielele, Apia, Samoa v SAMOA WATER AUTHORITY a statutory corporation established pursuant to Samoa Water Authority Act 2003 and SEUGAMALII JAMIE SAENA Managing Director of the Samoa Water Authority.
Judgment date(s):	12 February 2019
File number(s):
Jurisdiction:	Civil
Place of delivery:	Supreme Court of Samoa, Mulinuu
Judge(s):	JUSTICE LEIATAUALESA DARYL MICHAEL CLARKE
On appeal from:
Order:	- For the foregoing reasons, judgment is entered for the Plaintiff in the sum of $22,628.31 being her gross salary for the period of three months and one week between 12 January 2015 and 20 April 2015 against the First Defendant. - All other claims are dismissed. - The Plaintiff to file and serve Memorandum of Costs within 14 days. The Defendants to file their response within a further 14 days.
Representation:	L R Schuster for the Plaintiff S Ainuu and A Seiuli for First and Second Defendants
Catchwords:
Words and phrases:	Termination of employment; breach of employment contract; delegation of board powers; Breach of Confidentiality.
Legislation cited:	Samoa Water Authority Act 2003, Industrial Relations Act 1971 (UK), Employment Rights Act 1996 (UK), Labour Relations Act 1987 (NZ), Employment Contracts Act 1991 (NZ), Acts Interpretation Act 2015),
Cases cited:	Labour and Employment Relations Act 2013, In Liki v Samoa Breweries Ltd [2005] WSSC 3 (28 February 2005) Sapolu CJ, Brighouse v National Bank of Samoa Ltd [2004] WSSC 1 (27 January 2004), McGechan J in Stuart v Armourguard Security Ltd [1996] 1 NZLR 484 Auckland City Council v Hennessey [1982] ACJ 699 (CA), Keil v Polynesian Airlines Ltd [1991] SamoaLawRp 8; [1980-1993] WSLR 395 (8 January 1991) Court of Appeal, Marlborough Harbour Board v Goulden [1985] 2 NZLR 379, New Zealand Court of Appeal in Board of Trustees of Marlborough Girls College v Sutherland [1999] NZCA 315; [1999] 2 ERNZ 611, Mihaka v Maori Women’s Welfare League (Unreported), BC200071041 (9 February 2000), Shaw J, Echin v Southern Tablelands Gliding Club Incorporated and Civil Aviation Safety Authority [2012] NSWSC 966 at para. [12] and [13], McCallum J, Hoyle v Hoyle [2016] NZHC 3120, Clark J, New Zealand Air Line Pilot’s Association Inc v Air New Zealand [2017] NZSC 111; [2017] 1 NZLR 948 at 970, Ellen France J, Lamont v Hawkes Bay Council [1981] 2 NZLR 442 at 449), the principles in Marlborough Harbour Board v Goulden [1985] 2 NZLR 379, Faloon v Public Trustee (30 September 2010) Unreported New Zealand Judgments per Doogue ASJ, New Zealand Employment Tribunal (Umamaheswaran v Health Waikato Ltd HT (Auckland) [1998] NZ Emp T 739 (8 April 1998), New Zealand Employment Court (Health Waikato Limited v Umamaheswaran AC57/98 [1998] NZ Emp C 156, Francis v Kuala Lumpur Councillors [1962] 3 All ER 633, Faamau v Samoa Breweries Ltd [2009] WSSC 85 (26 August 2009) His Honour Sapolu CJ, Ridge v Baldwin [1963] UKHL 2; [1964] AC 40, 65; Stuart v Armourguard Security Ltd [1996] 1 NZLR 484 and Sylvester v British Columbia [1991] 2 SCR 315), Beckham v Drake [1849] EngR 843; (1849) 2 H.L.C 579 at 607 – 608 per Erie J.
Summary of decision:

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

BETWEEN

LEVAAI FAAMOE TOREMANA female of Vailele, Apia, Samoa.
Plaintiff

A N D

SAMOA WATER AUTHORITY a statutory corporation established pursuant to Samoa Water Authority Act 2003
First Defendant

A N D

SEUGAMALII JAMIE SAENA Managing Director of the Samoa Water Authority.
Second Defendant

Counsel:
L R Schuster for Plaintiff
S Ainuu and A Seiuli for the first and second Defendants

Hearing Dates: 6, 7, 8, 9 & 13 February 2018
Closing Submissions: 15 March 2018 & 27 April 2018
Decision Date: 12 February 2019

JUDGMENT

INTRODUCTION:

[1] The Plaintiff is a former employee of the First Defendant. The Second Defendant was at all material times the Managing Director of the First Defendant.

[2] By letter dated 12th January 2015, the Second Defendant purportedly summarily terminated the Plaintiff’s employment with the First Defendant. The Plaintiff’s proceedings against the First and Second Defendants relate to her purported termination by the Second Defendant.

[3] The Plaintiff was the sole witness for her claim and tendered affidavit exhibit P1.

[4] For the Defendants, the Chairman of the First Defendant Matatauali’itia Afa Lesa gave evidence and tendered his affidavit (exhibit D9). The Second Defendant also gave evidence and tendered her affidavit (exhibit D10). Other witnesses for the Defendants were employees of the First Defendant, namely Fu’a Gloria Lameko, auditor (exhibit D3), Mele Hunter-Betham Legal Consultant (exhibit D4), Heseti Sione Vaai Manager Commercial Division (exhibit D6) and Petaia Mafulele (exhibit D8). Leasi John Galuvao, former Chief Executive of the Land Transport Authority (“LTA”) also gave evidence (exhibit D7).

THE PLAINTIFF’S CLAIM:

[5] The Plaintiff pleads five alleged causes of action, in summary:

(i) First Cause of Action: Breach of Employment Contract by the First and Second Defendants.

(A) As against the First Defendant, that:

(a) the First Defendant, being the employer, was not the ‘legal authority’ that issued the termination notice in accordance with the terms of the employment contract and contrary to section 13(3)(a) of the Samoa Water Authority Act 2003 (“The SWA Act”);

(b) the First Defendant wrongfully and unlawfully allowed the Second Defendant (not being the employer) to terminate the Plaintiff’s contract arbitrarily in the absence of lawful delegated authority in accordance with the relevant provisions of the SWA Act;

(c) the First Defendant failed to act as a just and reasonable employer by retrospectively endorsing the termination of the contract without just cause or fair process relying solely on the determination of the Second Defendant without regard to the Plaintiff’s rights to natural justice or denying the opportunity for the Plaintiff to natural justice despite the Plaintiff’s written request for disclosure and an opportunity to respond to the allegations;

(B) As against the Second Defendant:

(a) the Second Defendant breached the employment contract with the Plaintiff ‘acting under authority’ as expected of a fair and reasonable managing director by:

• Unlawfully and arbitrarily terminating the services of the Plaintiff by email dated 24th December 2014 and by letter dated 12 January 2015;
• Unlawfully and unilaterally suspending the Plaintiff without notice on the 24th December 2014, ‘an action and determination that was beyond the mandate of the Second Defendant’s authority not being the employer pursuant to the contract and the Act;
• Failing to provide the Plaintiff with written documentation reasonably outlining allegations alleging the Plaintiff’s harassment and failure to follow lawful instructions;
• Failing to provide the Plaintiff with written documentation reasonably outlining allegations arising out of the improper fuel usage investigation which led to the determination of a performance review despite the Plaintiff’s written request for disclosure of such evidence;
• Failing to activate the processes for performance review in clause 5 of the contract on the Second Defendant questioning the performance of the Plaintiff arising out of the improper fuel usage investigation;
• Dealing discriminatively, directly or indirectly towards the Plaintiff’s employment inhibiting her ability to undertake her responsibilities under the contract thereby contravening section 20(2) of the Labour and Employment Relations Act 2013 (“LERA”); and
• Failing to act reasonably and fairly as managing director towards the Plaintiff pursuant to clause 2.5 ‘by aggressive conduct and issuing instructions in a manner and tone that was oppressive, disrespectful, causing injured feeling and embarrassment to the Plaintiff, a conduct that was unbecoming of a Managing Director irrespective of the Second Defendant’s status and working relationship with the Plaintiff as per contract terms’.

(ii) Second Cause of Action: The termination was unconscionable, unreasonable, arbitrary and capricious given the circumstances of the matter.

(iii) Third Cause of Action: That the Second Defendant breached the confidentiality provisions of the Plaintiff by tainting her character and reputation by deliberately disclosing the First and Second Defendant’s unfounded grounds for termination to potential employers such as Chief Executive Officer of the Land Transport Authority where the Plaintiff applied for employment subsequent to her termination and was material in the Plaintiff not getting the position due to the Second Defendant’s actions.

(iv) Fourth Cause of Action: That the Second Defendant unfairly and arbitrarily deducted $15,400.00 from the Plaintiff’s salary towards the costs of repairs to a vehicle hired by the First and/or Second Defendant for the First Defendant to undertake its services and which was driven by the Plaintiff and involved in an accident on the 11th March 2015 when the Plaintiff was on her way to undertake rural work on the southern side of Upolu.

(v) Fifth Cause of Action: That the actions of the First and Second Defendant in terminating the Plaintiff ‘without just cause’ has caused the Plaintiff financial hardship in meeting her financial obligations (children’s school fees, mortgage, family support) from the 12th January 2015 until she found employment on the 17th April 2015 in the sum of ST$22,628.31 gross less statutory deductions.

THE EVIDENCE:

[6] The Plaintiff is a qualified civil engineer having graduated from the University of Otago in 2010. She now resides in Levin, New Zealand and is employed as a Water Services Engineer with the Horowhenua District Council, a position she was appointed to on the 20th April 2015.

[7] The Plaintiff tendered her affidavit dated 6th February 2018 (exhibit P1). In her evidence, she said she originally commenced employment as a network engineer with the First Defendant in 2001. Later, she attended studies in New Zealand and returned in 2011. She resumed work with the First Defendant as an Operational Engineer. She then applied for and was appointed to the post of Manager, Rural Operations and Maintenance Division (“the Division”) in March 2011. In 2014, she was re-appointed to the post of Manager, Rural Operations Division and signed a three year Executive Contract of Service dated 28th May 2014 (exhibit P2) (“employment contract”). The Plaintiff’s annual salary was ST$84,048.00 per annum. The employment contract was signed by the First Defendant “acting by and through” the Second Defendant.

[8] In about July 2014, the Plaintiff was informed by the Second Defendant about alleged high fuel usage in the Division (exhibit P1, paragraph 5; exhibit D10 paragraph 10). According to the Second Defendant, she halted fuel payments and met with the Plaintiff to make arrangements to ensure that the work of the Division was not affected and put in place arrangements that included ensuring that fuel was approved for only essential work (exhibit D10 paragraph 11).

[9] The Second Defendant authorized an investigation to be conducted by Fu’a Gloria Lameko into the fuel usage of the Division on the 11th July 2014 (exhibit D10 paragraph 11; exhibit D3 paragraph 8). According to the Plaintiff, she had not been advised of the audit and only became aware of the audit when Ms Lameko came to the Vaitele compound of the First Defendant to conduct the investigation. The result of that audit is a report to the Second Defendant from Ms Lameko dated 18th August 2014 (“the Audit Report”) attached to exhibits D3 and D10.

[10] Following the Audit Report, a second investigation was directed by the Second Defendant to be conducted by Ms Hunter-Betham and Ms Lameko (exhibits D3 paragraph 18; D10 paragraph 14). According to the Plaintiff, she was not informed about the second investigation or its scope nor did she see a copy of that report until 3 February this 2018 when it was shown to her by her counsel (exhibit P1 paragraphs 18 and 21).

[11] According to Ms Lameko, the Plaintiff had been made aware of the second investigation. However, under cross-examination, she clarified that the Plaintiff had not been informed by them that her management and performance was also under investigation (Transcript 7 February 2018 at p. 74). Whilst Ms Lameko said in evidence that she and Ms Hunter-Betham had interviewed the Plaintiff for the second report, Ms Hunter-Betham said they did not and Ms Hunter-Betham disputes paragraph 18 of the Plaintiff’s affidavit (Transcript 8 February 2018 at p. 37). I accept Ms Hunter-Betham’s evidence that the Plaintiff was not interviewed for the second report. The Plaintiff’s name does not appear as a person interviewed for the purposes of the investigation at page 1 of the report.

[12] Ms Hunter-Betham deposes that the instructions to carry out the investigation was received by her on the 6th October 2014, however, in examination in-chief, she stated that those instructions were before the 6th October 2014 (Transcript p. 4, 8 February 2018) and sometime in September (p. 35). That report is dated 6 October 2014 and according to Ms Hunter-Betham, it was submitted on or about the 9th October 2014 to the Second Defendant.

[13] The second report reached various conclusions about the management and operations of the Division’s fuel payment system including:

(a) alleged non-adherence to “authorized practice” for the authorisation of fuel purchases to be signed by the Division Manager (the Plaintiff) (see p. 2);

(b) That the Plaintiff displayed poor management by not properly checking payment documentation before signing approvals (p. 4);

(c) That there was a careless and negligent environment within the Division concerning fuel purchases which enabled misappropriation and theft (p. 4); and

(d) The Division did not use in their vehicles running sheets and at “3” “Poor Management” concluded that “these instances are suggestive of a lack of proper and vigilant monitoring and supervision of Division employees and assets”; and

(e) In terms of findings made against the Division’s Administrative Assistant, the report states that her disciplining for incompetence “should be tempered or mitigated by the poor management and supervision of the Manager...”

[14] The report concludes by stating that the report and its findings should be put to the Plaintiff. In her evidence, Ms Hunter-Betham however confirmed that on instructions from the Second Defendant, a copy of the second report was not disclosed to the Plaintiff (Transcript, 8 February 2018 at p. 21) but interrogatories given to her to respond to (exhibit D4 paragraph 9).

[15] The interrogatories and the Plaintiff’s response to the interrogatories are attached to the affidavit of Ms Hunter-Betham. The Plaintiff’s response to the interrogatories were received on about the 28th October 2014. On the 10th of November 2014, the Second Defendant informed the Plaintiff by letter of employment ‘charges’ against her relating to alleged failures on her part in her management of the Division. The Plaintiff was given three (3) days to respond to the employment ‘charges’.

[16] By letter dated the 12th November 2014, the Plaintiff responded denying the charges against her, criticizing the three day timeframe given to her to respond and raised various other concerns including the absence of any supporting documents to support the charges so that she could be properly informed and compile a response.

[17] The Plaintiff was then called to attend a meeting of the Board of Directors held on the 18th November 2014. At that Board meeting according to the Board Minutes, the Plaintiff was placed on three (3) month interim review. According to the Board Minutes “The Chairman imparted that the Board will apply the interim review clause in her contract, the arrangements of which will be determined by the Managing Director. Interim Review period is 3 months.” The Plaintiff does not recall the Chairman referring in the Board meeting to an interim review (paragraph 36, Exhibit P1).

[18] This arrangement was documented by a subsequent letter to the Plaintiff dated 8 December 2014 from the Second Defendant to the Plaintiff (annexure “H” to the affidavit of Ms Hunter-Betham). That letter states at paragraph 9:

“If your performance is not improved after this review, I put you on notice that I will consider termination of your contract. If anything amounting to a willful breach of the terms and conditions of your employment arises under review, I will consider termination.”

[19] After being placed on ‘Interim Review’, the Plaintiff and the Second Defendant spoke by telephone on the 24th December 2014. In the first call, the Second Defendant called the Plaintiff to question her why compounds under her responsibilities were not kept tidy, referring specifically to Lefaga and Lepa according to the Plaintiff. The Plaintiff in her evidence described the Second Defendant as having called her “already upset” (6 February 2018 at p. 35). The Plaintiff says that the Second Defendant hung the phone up on her. Further calls then subsequently occurred between the Plaintiff and Second Defendant, these discussions at times heated and tense.

[20] The Plaintiff says there were 4 calls. The Defendants’ evidence is that there were 3. The number of phone calls is not relevant. What is relevant is that on the last call from the Second Defendant to the Plaintiff, the Second Defendant instructed the Plaintiff to “pack her bags and get out” (P1 paragraph 42) or according to Ms Hunter-Betham, “to pack her things and go home until further notice.” (D4 para 32).

[21] After the final phone call, according to the Plaintiff, she texted the Second Defendant, apologized and asked for forgiveness. She later went to her office. When the Plaintiff met with the Second Defendant, she again apologized. According to the Second Defendant, she told the Plaintiff she was ‘suspended’ until further notice (D10 para. 41). The Plaintiff does not recall being so told by the Second Defendant (6 February 2018 at p. 65). In any event, the Second Defendant emailed the Plaintiff on the 24th December 2014 advising the Plaintiff that “as of today 24 December 2014, you are to vacate the SWA offices and are put on suspension until further notice.” (exhibit P.13)

[22] The Plaintiff says that she went on leave and did not see the email exhibit P.13 until she returned to work on Wednesday 31st December 2014. The email states that “[a] formal letter will be prepared and will be delivered to your residence accordingly.” In her affidavit, the Plaintiff states that because it had been a week since the events of the 24th December and there was no letter received by her, she assumed it was “o.k” to continue working to the end of the day. She returned to work also on the 5th of January but she did not attend the management meeting that day because she was “not sure how things stand with Seuga and I would not know how I would handle being thrown out of the meeting in front of the management.” (paragraph 46).

[23] According to the Plaintiff, she later received a call from the Second Defendant and was told to ‘leave the office now’. The Second Defendant in her affidavit says that she called the Plaintiff to ask why she was at work and the Plaintiff replied by asking if she was getting paid whilst under suspension. When the Second Defendant replied ‘yes’, she deposes that the Plaintiff responded “oi ia” and hung up.

[24] On the 12th January 2015, the Plaintiff received a letter of termination. According to the letter signed by the Second Defendant, the reasons given for the termination of the Plaintiff’s employment were:

(a) The Plaintiff’s alleged inappropriate and unprofessional behavior on 24 December 2014 when the Plaintiff called and harassed the Second Defendant after the Second Defendant gave the Plaintiff instructions to do her job (pursuant to clause 6.2(ii) of the employment contract); and

(b) The Plaintiff’s alleged willful disobeying of a lawful order and instruction given by the Second Defendant to the Plaintiff that she was suspended until further notice but the Plaintiff disobeyed the order and continued to attend work on Wednesday 31 December 2014 and Monday 5 January 2015 pursuant to clause 6.2(v) of the employment contract.

[25] The letter of termination further alleges that the Plaintiff’s breach of her terms and conditions of her employment were “compounded by”, in summary:

(a) The Plaintiff’s seniority;

(b) The Plaintiff’s performance as manager was already under review;

(c) The Plaintiff’s alleged admission that she did not regularly monitor rural compounds under her control when this was part of her responsibilities as manager and the state of disrepair with at least one of the compounds at Lefaga;

(d) The Plaintiff’s alleged inability to be accountable for the actions of her staff “when this is part of [the Plaintiff’s] responsibilities”;

(e) The Plaintiff’s unfounded allegation of discrimination against the Second Defendant when the Second Defendant directed the Plaintiff to do her job; and

(f) The message the Plaintiff’s behavior sends to the First Defendant’s employees with reference to the Plaintiff’s alleged insubordinate phone call to the Second Defendant and with the Plaintiff’s alleged unauthorized return to work when she was suspended.

[26] The decision made by the Second Defendant of 12 January 2015 to terminate the services of the Plaintiff was noted (fa’amauina) and supported (lagolagoina) by the Board of the First Defendant on the 26th January 2015.

[27] According to the Chairman of the Board of First Defendant at paragraphs 5 and 6 of his affidavit (D9):

“5. In terms of management of employees of the Authority, this has always been the responsibility of the Managing Director of the Authority. All decisions regarding the Authority’s employees, including termination, are carried out by the Managing Director. The only employment position that the Board is concerned with is that of the Managing Director.

6. The Managing Director would then inform the Board.”

[28] The Chairman does not explain the basis upon which the Second Defendant has the authority in accordance with the SWA Act 2003 to deal with employment matters, only that the ‘management of employees ... has always been the responsibility of the Managing Director...”.

THE LAW:

Overview of the Statutory Framework:

Samoa Water Authority Act 2003.

[29] The First Defendant is continued under the SWA Act 2003. It has perpetual succession, is capable of suing and being sued and may do all acts and things lawfully able to be done by bodies corporate (section 3, SWA Act 2003). The powers of the First Defendant are to be exercised by the Board and it is the Board that must ensure that the functions of the Authority are discharged (section 4(6), SWA Act 2003). As a function of the Authority, section 9(n) provides that the First Defendant is “to be a responsible and fair employer.” The powers of the First Defendant include amongst others ‘such powers as are necessary or incidental to the proper performance of its functions.’ (section 10(1), SWA Act 2013)

[30] The Board may delegate its powers. Section 5 dealing with the power of delegation provides:

“5. Delegation of Board Powers – (1) The Board may, either generally or as otherwise provided by the instrument of delegation under its common seal, delegate to a person any of its powers and the powers of the Authority under this Act, other than this power of delegation.

(2) A power delegated under subsection (1) is, when exercised by the delegate, deemed to have been exercised by the Authority.

(3) A delegation under this section does not prevent the exercise of any power by the Board.

...” (Emphasis added)

[31] The Managing Director is appointed pursuant to section 12 on such terms and conditions as approved by the Board. The Managing Director is responsible to the Board for the effective control and management of the Authority (sub-section 12(4), SWA Act 2003). Section 13(1) of the SWA Act 2003 also provides that “the Authority may employ other staff sufficient and appropriate for the efficient performance of its functions.” (emphasis added) Section 13 relevantly further provides:

“(2) The Board shall approve policies and procedures, not inconsistent with this Act, relating to the employment of staff of the Authority and such policies and procedures shall constitute the conditions of employment of the staff of the Authority.

(3) The policies and procedures referred to in subsection (2) shall relate to the following:

“(a) the appointment and termination of appointment of staff, including retirement and retrenchment;

...

(d) disciplinary offences and procedures;

(e) the imposition of penalties for disciplinary breaches;” (emphasis added)

[32] Section 47 of the SWA Act 2003 then sets out the procedure for the making of policies and procedures. Relevantly, subsection 47(1) and (2) stipulate:

“47. Policies, Procedures, Standards and Codes of Practice – (1) Policies, Procedures, Standards and Codes of Practice made under this Act are made by resolution of the Board.

(2) Policies, Procedures, Standards and Codes of Practice come into force upon notice to that effect in Samoan and English being published in the Savali and 1other newspaper circulating in Samoa.” (emphasis added)

[33] Other than section 13, the SWA Act 2003 does not set out any other provisions relating to the termination of employees. Section 44 however deals with the protection of employees in the following terms:

“44. Protection of persons acting under authority – An officer or employee or agent of the Authority shall not be under any civil liability arising from his performance in good faith of any power or duty provided for by this Act.”

Labour and Employment Relations Act 2013:

[34] The Labour and Employment Relations Act 2013 (“LERA”) applies to public bodies including the First Defendant (section 3(4) LERA and section 2(2) and Schedule 1, Public Bodies (Performance and Accountability) Act 2001). Civil proceedings can be brought where an employer or employee seeks remedies for an alleged breach or non-performance of a contract of service (s. 77, LERA).

[35] The Plaintiff is employed on a fixed term contract. Section 53 of the LERA relevantly provides:

“53. Termination of a contract of service for a specific period or task - (1) Subject to subsection (2), a contract of service for a specific work or for a specific period of time is terminated:

(a) when the work specified in the contract is completed; or

(b) when the period of time for which the contract was made has expired.

(2) Despite subsection (1), a contract of service for a specific work or for a specific period of time may be terminated under section 57.” (emphasis added)

[36] Section 57 then provides:

“57. Misconduct and abuse - (1) An employer may terminate the services of an employee without notice nor payment instead of notice where the employee:

(a) wilfully breaches his or her terms and conditions of employment; or

(b) wilfully disobeys a lawful instruction given by the employer or the managerial personnel within the place of employment; or ...”

[37] Section 2 of LERA defines misconduct and harassment. ‘Misconduct’ means ‘behaviour which is a serious breach of the employee’s conditions of employment’ and includes verbal or mental harassment, dishonesty and behavior that brings the employer or the employer’s business into disrepute. ‘Harassment’ is defined to mean “any unwelcome and offensive conduct that induces the fear of harm or serious disturbance to a fellow employee’ including intimidation, ridicule, mockery, insult or interference with work performance.

The Employment Contract:

[38] The Plaintiff was appointed Manager Rural Operations pursuant to a contract of employment commencing on the 28th May 2014 (“commencement date”) (clause 1.1) for a three (3) year term. The Plaintiff was directly responsible to and under the direction of the Second Defendant (clause 2.2). She was to carry out all of the responsibilities and duties assigned to her under the contract in an efficient, professional and ethical manner (clause 2.3). She was also “ultimately responsible and liable for any and all plant and equipment the property of the authority under her control.” (clause 2.4)

[39] Clause 5 of the contract sets out the performance review of the Plaintiff’s performance. The review is a twelve monthly annual review (clause 5.1) and an interim review (clause 5.2). Clause 5.2 addressing interim review states:

“The Managing Director has and may exercise his or her discretion to conduct an interim review. This review is intended to provide the Contract Officer an informal opportunity to discuss with the Managing Director the progress of the Contract Officers performance to date or any issue relating to this Contract...For the removal of doubt, the timing and arrangements of the Interim Review are the responsibility of the Managing Director.”

[40] Relevantly, clause 5.5 provides that where a Contract Officer has been given an opportunity to address any areas of concern and non-compliance raised by the review pursuant to clause 5.4 (being the twelve monthly annual review) and the Authority determines that the Contract Officer’s subsequent performance in the time period allowed in clause 5.4(ii) still does not meet performance standards and targets, the Authority may terminate the contract for non-performance with one month’s written notice or payment in lieu.

[41] Clause 6 sets out termination of the Plaintiff’s employment contract. Relevantly, clause 6.1 states:

“6.1(i) Notwithstanding any other condition of this Contract, either party to this Contract may at any time and without having to provide any reasons, give the other party one (1) month notice of intention to terminate this Contract. In lieu, the Authority may consider paying out one (1) month’s notice period.”

[42] Pursuant to clause 6.2(ii), the First Defendant could also terminate the contract “without notice or payment in lieu of notice if the Contract Officer commits serious misconduct including but not limited to... inappropriate and unprofessional behavior...” Pursuant to clause 6.2(v), the First Defendant could also terminate the contract “without notice or payment in lieu if the Contract Officer willfully disobeys a lawful order, direction or instruction given by the Managing Director.”

[43] There are no contractual powers of suspension contained in the Plaintiff’s employment contract.

Common Law and Statutory Dismissal Grounds:

[44] In these proceedings, the Plaintiff has pleaded terms associated with both common law and statutory dismissal to form single causes of action. In doing so, the Plaintiff has also imported the term ‘discriminatory’, ‘unlawful’ and ‘arbitrary’ into the same pleadings. They are however different concepts in employment law.

[45] In Liki v Samoa Breweries Ltd [2005] WSSC 3 (28 February 2005), His Honour Sapolu CJ referring to English, Australian and New Zealand authorities helpfully explained that ‘wrongful dismissal’ is a common law action while ‘unjustified dismissal’ and ‘unfair dismissal’ are statutory concepts. Sapolu CJ explained:

“...All three jurisdictions: England, Australia and New Zealand had treated and still continuing to treat wrongful dismissal as a common law concept. However, in England the concept of unfair dismissal was introduced into English employment law by the Industrial Relations Act 1971 (UK). The relevant provisions of that Act are now contained in Part X of the Employment Rights Act 1996 (UK). Unfair dismissal is therefore a statutory concept, a point to be borne in mind when reading English authorities. In New Zealand, the concept of unjustified dismissal was introduced into New Zealand employment law by the Labour Relations Act 1987 (NZ) which was subsequently replaced by the Employment Contracts Act 1991 (NZ). Unjustified dismissal is therefore a statutory concept under New Zealand employment law. In Australia there is the concept of "harsh, unjust and unreasonable dismissal" which is also a statutory concept introduced into Australian employment law by way of an Award made pursuant to the Conciliation and Arbitration Act 1904 (Cth) which was subsequently replaced by the Industrial Relations (Consequential Provisions) Act 1988. Samoa has for a number of years adopted the common law concept of wrongful dismissal in its employment law but it does not have legislation on unfair, unjustified, harsh, unjust or unreasonable dismissed as in other jurisdictions. This means that when reading English, Australia and New Zealand cases which deal with the concepts of dismissal referred to, it is important to bear in mind that those concepts are statutory concepts in order to avoid any possible confusion with the common law concept of wrongful dismissal.” (emphasis added)

[46] The same applies to ‘unlawful dismissal’. ‘Unlawful dismissal’ appears in Canadian jurisprudence (Adam C Danoel Roy Lcee [1983] 1 R.C.S at 683) and in Australia under for example the Fair Work Act 2009. ‘Unlawful dismissal’ in these jurisdictions are a creature of statute that prohibits dismissal on discriminatory grounds such as membership or non-membership of a union, race, gender and other discriminatory grounds. In Samoa, unlawful dismissal would, it seems without determining the question as argument was not heard on point, be a dismissal on discriminatory grounds in contravention of section 22 of LERA.

[47] In Brighouse v National Bank of Samoa Ltd [2004] WSSC 1 (27 January 2004), the distinction between common law and statutory grounds of dismissal were further examined by Sapolu CJ:

“The general common law position in New Zealand may be found as stated in the judgment of McGechan J in Stuart v Armourguard Security Ltd [1996] 1 NZLR 484 where His Honour says at p491:

“I approach the matter as follows: The traditional common law approach in relation to employment terminable by notice recognised the employer could terminate at any time and for any reason or for none (Ridge v Baldwin [1963] UKHL 2; [1964] AC 40, 65). However, if he did so in a manner not warranted by the contract – eg, if he did not give notice required by the contract, or dismissed summarily without proper grounds – it was wrongful dismissal. The employer would be liable for damages. He was not, traditionally, obligated to hear the employee in his own defence. Subject, to any express contractual terms, fairness and natural justice did not arise.”

“This approach at common law became too restrictive for modern industrial conditions and social thinking. A statutory dismissal and wider remedy the (so-called personal grievance procedure) developed in New Zealand for ‘unjustified dismissal’. The history is traced conveniently by Casey J in Ogilvy & Mather (NZ) Ltd v Turner p649. The term ‘unjustified’ is important. It contrasts with the traditional ‘wrongful. It is has never been specifically defined, but is regarded as looking at justifiability and fairness of the dismissal, rather than common law legalities (Auckland City Council v Hennessey [1982] ACJ 699 (CA). It requires consideration whether the dismissal was just and fair, even if given on notice or occurring for cause sufficient at common law. Procedural fairness, as to manner of decision, was and is an important aspect.”

[48] In Keil v Polynesian Airlines Ltd [1991] SamoaLawRp 8; [1980-1993] WSLR 395 (8 January 1991), the Court of Appeal considered principles of natural justice in employment law in the following way:

“As to the application of public law and principles of natural justice we find that here all that existed was a pure master and servant relationship. The employer was not a public corporation or quasi-government body and the principle adverted to in cases such as Marlborough Harbour Board v Goulden [1985] 2 NZLR 379 simply have no application.”

[49] In terms of serious misconduct and wrongful dismissal, the New Zealand Court of Appeal in Board of Trustees of Marlborough Girls College v Sutherland [1999] NZCA 315; [1999] 2 ERNZ 611 addressed ‘serious misconduct’ in the following terms:

“[13]...The right to dismiss summarily for serious misconduct given by cl 3.4.3(e) is an expression of the general law applicable to a contract of employment. It is the fact of serious misconduct which is a pre-requisite to summary dismissal — was there a breach of trust so serious and of such a nature as to warrant a fair and reasonable employer deciding that the employee should be dismissed? That is an objective factual enquiry which, if in issue between the parties, falls to be decided in the ordinary way. If the conduct in question can be so classified, then dismissal is available. If it cannot, then the basis for the exercise of the power does not exist and a dismissal would be wrongful.

[14] The common law position is clear in principle. The employee sues for breach of contract in terms such as those pleaded by Mrs Sutherland in her statement of claim (para [5] above). As with actions for breach of contract generally, it is for the court hearing the claim to decide whether on the evidence before it the claim is made out. A dismissal from employment will be wrongful if two conditions are satisfied : (1) that the employee has been dismissed either before the contract has expired or without requisite notice being given, and (2) that there was no sufficient cause for the dismissal, here serious misconduct.”

Onus of Proof:

[50] In Mihaka v Maori Women’s Welfare League (Unreported) BC200071041 (9 February 2000), Shaw J dealt with a wrongful dismissal claim explained the onus of proof in a wrongful dismissal claim as follows:

“In this case the onus is on the plaintiff to prove on the balance of probabilities what the material terms of the contract were and if one or more were breached by the defendant. Where a dismissal is said to be by reason of serious misconduct it is for the employer to prove that serious misconduct.”

[51] Similarly, in Liki v Samoa Breweries Ltd (op. cit) where the Court per Sapolu CJ in dealing with onus of proof and stated:

“As to onus of proof in a summary dismissal case, it is for the plaintiff employee to establish that he was employed for an indefinite time and that he was dismissed without notice. The onus will then shift to the defendant employer to prove that the dismissal was with just cause and therefore justified: McKinley at p182.”

DISCUSSION:

First Cause of Action – Breach of Contract:

[52] The first cause of action is for alleged breach of contract by the First Defendant. The key allegation against the First Defendant is that Second Defendant had no lawful authority to terminate the Plaintiff’s employment, that is, the termination was invalid and therefore wrongful. I proceed accordingly on the question of whether the purported termination by the Second Defendant was valid or invalid.

[53] It is not in dispute between the parties that the Second Defendant had the authority to execute the employment contract with the Plaintiff on behalf of the First Defendant. I accept that it is a valid and legally binding employment contract according to its terms.

[54] It is also not in dispute that the Second Defendant wrote the letter that terminated the Plaintiff’s employment. The question then is whether the Plaintiff has established on balance of probabilities that the Second Defendant did not have the authority to terminate the Plaintiff’s employment with the First Defendant.

[55] Under the SWA Act 2003, the powers of the Authority vested in the Board for the employment of staff including termination can be devolved in one of two ways. The first is by delegation in accordance with section 5(1) of the SWA Act 2003. The second is by policies and procedures made pursuant to sections 13 and 47 of the SWA Act 2003 that authorize a person to exercise those powers on behalf of the Authority.

Delegation, Employment Policies and Authority to Terminate-

[56] The Second Defendant purportedly terminated the Plaintiff’s employment on the 12th January 2015 by letter of termination dated 12 January 2015 (exhibit P14) signed by the Second Defendant. The Second Defendant’s letter relevantly stated that “I have decided to terminate your contract.”

[57] It was not until the Board Meeting of the First Defendant on the 26th January 2015 that the Board noted and supported the termination of the Plaintiff’s employment by the Second Defendant. That notation and support by the Board did not change who it was that purportedly terminated the Plaintiff’s employment, namely, the Second Defendant. This is consistent with the process outlined by Mr Lesa in exhibit D9 at paragraphs 5 and 6.

[58] The Second Defendant purportedly terminated the Plaintiff’s employment pursuant to clause 6.2(ii) and 6.2(v) of the employment contract. Termination was for alleged misconduct for inappropriate and unprofessional behavior involving alleged harassment of the Second Defendant (clause 6.2(ii)) and for willfully disobeying a lawful order, direction or instruction given by the Second Defendant (clause 6.2(v)).

Delegations of Authority Under the SWA Act 2003:

[59] Through counsel, the Defendants in their Closing Submissions submit that the Second Defendant had the authority to terminate the Plaintiff’s employment through a delegation of that authority. The Defendants refer to the evidence of the Chairman of the First Defendant where Mr Lesa states “that it has always been the understanding of the Board that the Managing Director deals with all aspects of employment of staff including...termination.” (Defendants Closing Submissions, para.49(a)(i)).

[60] The Defendants through counsel invites the Court to give section 5(1) of the SWA Act 2003 dealing with delegation of power a ‘fair, large and liberal construction and interpretation’. Through counsel, the Defendants submit at paragraph 40(a)(vi) at p. 8 of their written submissions that section 5(1) should be interpreted to mean:

“...that the Authority may delegate a general power (such as power to employ staff which includes power to terminate) however if it seeks to be specific about the exercise of that power then it must execute a delegation instrument under seal of the Authority.”

[61] Counsel further submits at paragraph 40(a)(vi):

“Taking that interpretation into account and what the Chairman has said, as well as the understanding and practice of the Authority concerning the hire and termination of Authority employment, the Authority delegated generally its powers to hire staff of the Authority to its Managing Director.”

[62] I have a number of difficulties with these submissions. First is the evidence. The Court is being invited to make a finding of fact in the absence of any evidence of delegation having been made, whether in writing or otherwise but on an ‘understanding’.

[63] Decisions of a Board are made by directors’ resolutions. This is the same for the First Defendant (see: sections 3(3), 6(5) and 6(6) SWA Act 2003). Despite the Defendants through counsel asserting that the Authority delegated its powers to hire and conversely fire employees, no such resolutions were tendered or any evidence of such a resolution having been made. The only evidence referred to is that of the Chairman of the First Defendant who simply said “that it has always been the understanding of the Board that the Managing Director deals with all aspects of employment of staff including...termination.” The Chairman did not identify any delegation, who made it, when it was made and the contents and limits of such a delegation. The understanding and practice of the Authority does not amount to a valid delegation under section 5(1) of the SWA Act. Indeed, the Second Defendant said in her evidence on the 13th February 2018 (transcript, p. 39) that there is no specific resolution:

“Schuster yes – you said in your evidence that it was your understanding that you had the authority to terminate the plaintiff which led to your signing of that termination letter of the 12 January 2015, is that right?

Wit that’s correct

Schuster and I was asking you do you accept that there was no specific resolution made by the board delegating the authority of termination to you in relation to this particular issue of Levaai’s termination is that right?

Wit there’s no specific delegation from the board to me that says you are able hire and fire is that the question?

Schuster to terminate and employ

Wit there’s no specific resolution.”

[64] In a similar vein but more generally about whether there existed a general delegation delegating employee matters to the Second Defendant, Ms Hunter-Betham said:

“Wit so whether there was specific written delegation to the MD with regards to employee matters?

Schuster no I’m putting to you were there any general delegations that were then put in writing detailing certain responsibilities from the board to the managing director?

Wit reduced into writing?

Schuster yes

Wit no not something in writing specifically on employee matters

Schuster so you’re saying there is nothing in writing?

Wit there’s no specific instrument as stated in that section of the Samoa Water Authority Act if that’s what you’re talking about.”

[65] Secondly, the Defendants’ submission at p.8 of their Closing Submissions that the use of the word “generally’ means that a ‘general power’ may be delegated without an instrument of delegation under common seal and that if it is “to be specific about the exercise of that power”, it is to be by way of instrument is to misinterpret section 5(1). The words “The Board may, either generally or as otherwise provided by the instrument of delegation under its common seal, delegate to a person any of its powers...” does not provide a different mode of delegating the Board’s powers depending on whether the power delegated is a general or specific power. Whether it is a general or other delegation, it is to be by instrument in accordance with section 5(1).

[66] In Echin v Southern Tablelands Gliding Club Incorporated and Civil Aviation Safety Authority [2012] NSWSC 966 at para. [12] and [13], McCallum J in considering the words "either generally or as otherwise provided in the instrument of delegation" stated:

“12. So understood, in my view the claim, insofar as it is based on the deeming provision of the Acts Interpretation Act, is untenable. First, s 34AB of the Acts Interpretation Act clearly contemplates that delegation must be made by an instrument in writing. So much emerges from section 34AB(1)(a), which provides that, where an Act confers power on a person or body to delegate a function or duty or power, the delegation may be made:

"either generally or as otherwise provided in the instrument of delegation."

13. Plainly that provision contemplates the existence of a written instrument to give effect to the delegation. As already noted, the plaintiff does not suggest that any such instrument exists in the present case.” (emphasis added)

[67] I agree with McCallum J. The provision plainly contemplates the existence of a written instrument of delegation. The Defendants evidence was that no such written instrument of delegation was made nor was there any written resolution passed.

[68] It is not contested that there is no written instrument of delegation or a written instrument of delegation under common seal delegating to the Second Defendant any of the First Defendant’s powers to suspend or terminate the Plaintiff’s employment. I am also satisfied on balance that no such delegation has been made pursuant section 5(1) of the SWA Act 2003.

Employment Policies and Procedures:

[69] In her evidence, Ms Lameko gave evidence in response to a question from the Court about the existence of policies and procedures that give the Second Defendant the power to terminate employment. This point however did not form part of the Defendants’ defence. No objection was taken at the time by counsel for the Plaintiff.

[70] The alleged policies and procedures were not pleaded as a defence nor were such alleged policies discovered in the course of discovery. Furthermore, once this evidence came to light, no application was made to amend the Defendants Statement of Defence.

[71] In Hoyle v Hoyle [2016] NZHC 3120, Clark J in a case involving an intellectual property dispute stated:

“[59] In preparing my judgment I have formed the view that it would be contrary to established principle to permit the defendant to rely on his positive case against originality and ownership. As Lawton LJ stated when addressing a pleadings point in Rolled Steel Products (Holdings) Ltd v British Steel Corporation:

Pleadings are formal documents which have to be prepared at the beginning of litigation. They are essential for the fair trial of an action ... A plaintiff is entitled to know what defences he has to meet and a defendant what claims are being made against him. If the parties do not know, unnecessary evidence may be got together and led or, even worse, necessary evidence may not be led.

[60] Pleadings provide the framework and architecture for the litigation. They are the reference point for discovery and the briefing of evidence; for the preparation of each party’s case and for the conduct of the litigation from its inception to its conclusion. As the commentary to the High Court Rules states:

The modem approach to pleading requires proper disclosure of the defendant’s case and all the avenues it intends to pursue.”

[72] The defence that the Second Defendant was empowered by purported policies and procedures of the First Defendant is not available to the Defendants. It is not a pleaded defence, the purported policies and procedures were not discovered and fundamentally, it is not the defence advanced by the Defendants either in their case or in their Closing Submissions. The defence advanced was ostensibly one of the dismissal having been effected by the Second Defendant by way of delegated authority, not through the First Defendant’s purported policies and procedures provided for under the SWA Act 2003.

[73] In the event I am wrong, I am nevertheless satisfied that Ms Lameko’s evidence that the termination of the Plaintiff by the Second Defendant was pursuant to powers purportedly contained in policies and procedures of the First Defendant is not credible or reliable. This is for the following reasons.

[74] Section 13(1) of the SWA Act 2003 provides that the Authority may employ staff. Pursuant to section 13(2), the Board shall “approve policies and procedures, not inconsistent with this Act, relating to the employment of staff of the Authority...” The policies and procedures “shall” relate to “(a) the appointment and termination of appointment of staff, including retirement and retrenchment.” The use of the word ‘shall’ is to be construed as imperative (section 8, Acts Interpretation Act 2015).

[75] In accordance with section 47 of the SWA Act 2003, all Policies and Procedures are to be made by resolution of the Board and shall come into force on notice to that effect published in the Savali and 1 other newspaper circulating in Samoa.

[76] Sections 13 and 47 of the SWA Act 2003 therefore makes provision for employment policies and procedures including for recruitment and termination of employees.

[77] In her evidence, Ms Lameko said that policies and procedures empowered the Second Defendant to recruit and terminate employees (07/02/2018 at pp. 93 – 94). Ms Lameko under cross-examination agreed with counsel that for the employment policies and procedures to apply to contract employees such as the Plaintiff, it would need to be referred to in the employment contract.

[78] In her evidence however, Mele Hunter-Betham who is the First Defendant’s legal Consultant stated that the termination was based on the employee’s (ie the Plaintiff’s) contract and the interim review provisions. Ms Hunter-Betham stated:

“Ainuu and then I turn you to paragraph 9 there the plaintiff was notified that she would be terminated if anything that should occur during the interim review. Now can you explain to the Court why did you think that termination could be possible during this time the interim review? Termination by the managing director

Wit well this was instructed by the managing director and also based on what’s in her contract

Ainuu and who has the power to terminate in terms of the wording of this paragraph?

Wit it would have been the managing director

Ainuu and what it is based on?

Wit the board had referred conferred interim review to the managing director during the meeting of the 18 November 2014 which the plaintiff attended.”

[79] In her evidence, the Second Defendant herself also did not rely on any alleged employment policies and procedures of the First Defendant as the basis for her authority to terminate the Plaintiff’s employment. In her evidence, the Second Defendant stated that the authority to terminate was set out in her contract of employment with her evidence as follows at p. 40:

“Schuster and is it your evidence that you were relying on a policy that you say the authority has that deals with the recruitment, suspension and termination of employees is that where your understanding arose out of?

Wit my understanding is the authority has given to me under my contract with the board in the terms and reference for my job description and what I’m supposed to do. That’s where my understanding is where the authority comes from.”

[80] Again, the power of the Second Defendant to terminate the Plaintiff’s employment has been based on an ‘understanding’. The Second Defendant being the Chief Executive of the First Defendant was specifically questioned as to whether the authority to terminate the Plaintiff’s employment was based on policies and her response was that it was based on her own employment contract.

[81] The evidence in relation to the Second Defendant’s authority to terminate the Plaintiff’s employment varied depending on who was questioned. Only Ms Lameko however suggested it was based on employment policies and procedures, a document not pleaded as a defence, discovered or produced into evidence. In any event, in her own evidence, the Second Defendant who purportedly dismissed the Plaintiff, did not rely on any such policy or procedure as the basis of her power to terminate the Plaintiff’s employment. On the evidence, I nevertheless do not accept that the power to terminate the Plaintiff’s employment stemmed from alleged policies and procedures.

The Second Defendant’s Employment Contract:

[82] According to the Second Defendant, she said that her understanding of her authority to terminate the Plaintiff’s employment was derived from her contract of employment. The Second Defendant’s employment contract was however also not pleaded as a defence to the Plaintiff’s allegation nor did it form part of the Defendants defence to the Plaintiff’s claim. The Second Defendant’s contract of employment was also not discovered in the Defendants’ affidavit of discovery as relevant and relating to the matters in dispute in these proceedings. This defence suffers the same fate as that of the purported employment policies and procedures and is not available to the Defendants. It was also not relied on as a defence in the Defendants Closing Submissions.

[83] For completeness, I found the Second Defendant’s evidence that her power to dismiss the Plaintiff is to be found in her contract of employment to be unconvincing and uncertain. Her contract of employment is also different to an Instrument of Delegation under common seal pursuant to section 5 and it is not a document consistent with section 13 and 47 of the SWA Act 2003.

Plaintiff’s Employment Contract:

[84] The Defendants submit that the parties clause to the Plaintiff’s contract referring to the Authority “acting by and through the Managing Director” is however evidence of a delegation to the Second Defendant generally to hire staff.

[85] In Closing Submissions, counsel for the Defendants submitted that:

“Other evidence of this delegated power can be found in the parties clause of the Plaintiff’s contract. The authority is defined as:

“The Samoa Water Authority a statutory body corporate continued under the Samoa Water Authority Act 2003 acting by and through the Managing Director of the Samoa Water Authority...”

[86] First, the Defendants again did not plead this defence. Second, this was never put to any witnesses including the Plaintiff as to the meaning and understanding of the ‘parties’ clause of the contract.

[87] In New Zealand Air Line Pilot’s Association Inc v Air New Zealand [2017] NZSC 111; [2017] 1 NZLR 948 at 970, Ellen France J of the Supreme Court of New Zealand at paragraph 71 set out the principles to apply to the interpretation of employment contracts as follows:

“[71] The summary of principles of contractual interpretation set out in the Employment Court has now been overtaken by the discussion of this Court in Firm PI 1 Ltd v Zurich Australian Insurance Ltd (Firm PI). The Chief Judge’s summary in the present case should be put to one side. As was said in Firm PI:

[60] ... the proper approach is an objective one, the aim being to ascertain “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”. This objective meaning is taken to be that which the parties intended. While there is no conceptual limit on what can be regarded as “background”, it has to be background that a reasonable person would regard as relevant. Accordingly, the context provided by the contract as a whole and any relevant background informs meaning.”

[88] It does not follow that the power to terminate can be reasonably inferred to have been delegated to the Second Defendant by the parties clause of the Plaintiff’s contract. This is because (a) the contract was signed by the Second Defendant herself and (b) is akin to the Second Defendant delegating to herself the power of delegation. In circumstances where the Second Defendant also states that her power to terminate came from her own contract, I do not agree with the submissions on behalf of the Defendants.

[89] Furthermore, I do not accept that the powers vested in the ‘Authority’ under contract can be exercised by the Second Defendant by virtue of the wording in the parties clause. This is because the Plaintiff’s employment contract expressly differentiates between those contractual powers vested in the Second Defendant to exercise (eg. Clauses 2.1, 3.6, 4.3 and 5.0) and those vested in the “Authority” to exercise (eg. Clauses 1.2, 5.5, 6.1, 6.2). To give the contract the interpretation advanced by the Defendants would render that distinction in the contract meaningless. The contract would simply refer in those circumstances to the Second Defendant, which it does not.

[90] Accordingly, I am satisfied that the Second Defendant had no authority to terminate the Plaintiff’s employment on behalf of the First Defendant and the termination was therefore invalid and therefore wrongful.

Endorsement of Termination by First Defendant:

[91] The purported termination of the Plaintiff’s employment was made by the Second Defendant on the 12th January 2015. On the 26th January 2015, the Board of the First Defendant at its Board meeting noted the Plaintiff’s termination and supported the decision by the Second Defendant to terminate the Plaintiff’s employment. By noting and supporting the Second Defendant’s decision to terminate the Plaintiff’s employment, the Board did not alter who made the purported decision to terminate. The notation and support of the Second Defendant’s decision to terminate the Plaintiff’s employment was also not a (retrospective) delegation of the First Defendant’s powers under section 5 of the Act nor was it in accordance with sections 13 and 47 of the SWA Act 2003.

[92] I also note that under the SWA Act 2003, there is no power vested in the Board or the Authority to retrospectively cure irregularities (see: Lamont v Hawkes Bay Council [1981] 2 NZLR 442 at 449). The noting and supporting of the decision by the Second Defendant by the Board of the First Defendant did not validate the invalid termination of the Plaintiff’s employment by the Second Defendant.

The Second Defendant’s Breach of the Employment Contract:

[93] The first cause of action is pleaded as a breach of contract against both the First and Second Defendants. The Second Defendant however was not a party to the contract, having purportedly signed the contract for and on behalf of the Second Defendant. As the Second Defendant is not a party to the contract, she cannot be in breach of the terms of a contract to which she is not a party.

[94] In terms of the Second Defendant’s termination of the Plaintiff’s employment, that has been dealt with above. The cause of action as pleaded against the Second Defendant for breach of contract cannot succeed.

[95] The Plaintiff pleads against the Second Defendant breach of contract by virtue of discrimination against her in breach of section 20(2) of LERA. Section 20((2) of LERA however prohibits discrimination against employees on the grounds of ethnicity, race, colour, sex, gender, religion, political opinion, national extraction, sexual orientation, social origin, marital status, pregnancy, family responsibilities, real or perceived HIV status and disability. I do not find on the evidence any conduct by the Second Defendant in breach of section 20(2).

The Defendants Defence of Breach of Contract by Plaintiff:

[96] As I have set out, the Second Defendant had no authority to terminate the Plaintiff’s employment. It was invalid and therefore wrongful. It is therefore not necessary to determine whether, as pleaded by the Defendants, the Plaintiff had been in breach of the contract thereby warranting her summary dismissal without notice by her employer.

[97] As it has been raised, I will however touch on this only briefly. I am not satisfied that the Defendants have proven on balance of probabilities that the Plaintiff had committed serious misconduct in breach of section 6.2(ii) or was in breach of clause 6.2(v) of her contract. In this context, I am not satisfied on the evidence that the Plaintiff’s interaction with the Second Defendant on the 24th of December was inappropriate and unprofessional behavior such as to warrant summary dismissal in accordance with clause 6.2(ii) of her contract.

[98] In terms of clause 6.2(v) of her contract, an employee can be summarily dismissal if the employee has willfully disobeyed a lawful order, that is the alleged disobeying of the order of suspension. I am not satisfied that the suspension order was lawful. There is no powers of suspension in the Plaintiff’s contract of employment nor is there one in the SWA Act 2003. Whilst it may be arguable that such a power may be derived from the section 23(e) of the Acts Interpretation Act 1974, the relevant Act as at the time of purported termination, I am satisfied that if it existed, it is a power vested in the First Defendant and not the Second Defendant unless delegated to the Second Defendant or set out in the First Defendant’s procedures.

[99] More fundamental however is that the allegations against the Plaintiff that (i) she behaved inappropriately and unprofessionally on the 24th of December; and (ii) that she disobeyed lawful instructions were allegations made by the Second Defendant against the Plaintiff involving the Second Defendant herself.

[100] In this context, the Plaintiff was (i) not given an opportunity to respond to these two allegations against her which were the principle reasons given for her dismissal; and (ii) the allegations were allegations made by the Second Defendant herself. Bearing in mind the Court of Appeal’s judgment in Keil v Polynesian Airlines Ltd (op. cit), the principles in Marlborough Harbour Board v Goulden [1985] 2 NZLR 379, and section 9(n) of the SWA Act 2003, it was unwise and ill-considered of the Second Defendant in those circumstances (even if she was validly authorized, which she was not) to dismiss the Plaintiff from her employment. I do not need to say more on this point.

Second Cause of Action: Termination Unconscionable, Unreasonable, Arbitrary and Capricious Given Circumstances of the Matter.

[101] The second cause of action is difficult to understand, imprecise and ambiguous. It pleads purported equitable (‘unconscionable’) and statutory dismissal grounds for relief together with alleged breach of natural justice. It also does not however clearly articulate or particularize the alleged cause of action and how the Defendants are said to have breached any obligation or duty.

[102] The Plaintiff’s written submissions also do not assist with understanding the alleged cause of action as it was not addressed expressly. It was also not addressed in any detail in oral Closing Submissions though it was clarified that this cause of action is not an equitable action.

[103] In Faloon v Public Trustee (30 September 2010) Unreported New Zealand Judgments per Doogue ASJ, the Court stated:

“[12] It is not for the Court or the defendant to painstakingly analyse an unintelligible pleading and by a process of logical progression demonstrate that the pleading is incoherent. If the document when subjected to an open-minded and careful consideration is confusing, uncertain in its meaning, ambiguous and unclear, it ought not to remain on the Court file. Such a document is the antithesis of what the rules require. A defendant ought not to be subjected to a pleading to which such a document is of central importance. The statement of claim in this proceeding offends in all the ways which I have just stated.”

[104] The second cause of action is unclear, not tenable, made out and is accordingly dismissed.

Third Cause of Action: Breach of Confidentiality.

[105] The third cause of action pleaded is ‘breach of confidentiality’ ‘tainting the character and reputation of the Plaintiff’’. It is in reality is a claim for alleged defamation against the Second Defendant.

[106] This cause of action was withdrawn by the Plaintiff. That withdrawal was appropriate given the evidence which did not establish defamation of the Plaintiff by either Defendants.

Fourth Cause of Action: Arbitrary and Unfair Deductions of Salary for Vehicle Repairs.

[107] The fourth cause of action against the Second Defendant relates to deductions made from the salary and entitlements of the Plaintiff following a car accident involving the Plaintiff. The undisputed facts are that on the 11th of March 2014, the Plaintiff was driving a rental car hired by the First Defendant for work of the Authority from Apia to Siumu. The Plaintiff was the driver of the car when it collided with a Development Bank of Samoa car exiting from the SPREP road, Vailima. The car driven by the Plaintiff was uninsured.

[108] The repair and off-road costs to the rental vehicle deducted from the salary of the Plaintiff amounted to $15,400.00. These were deducted following a request by the Plaintiff to the Second Defendant to make the deductions (exhibit D10 annex L). According to the Plaintiff, she was asked by the Second Defendant to write the Memorandum (exhibit D10 annex L) by the Second Defendant.

[109] In her evidence, the Plaintiff says that deductions were made from her salary at the rate of $500.00 per fortnight to pay for the damage to the rental car and the off road costs. When she was terminated, approximately $8,500.00 had been paid by deductions and the balance amount of $6,900.00 was then deducted from her annual and sick leave entitlements.

[110] In her affidavit (exhibit P1), the Plaintiff makes no mention of her Memorandum (exhibit D10 annex M) to the Second Defendant. She also makes no mention of any request for repayment of those payments back to her after charges against her were dismissed in the District Court. In her oral evidence however, the Plaintiff referred to the Memorandum (exhibit D10 annex M) and to having requested repayment of the deductions that had been made after the traffic charges against her were withdrawn (Transcript, 6 February 2018, p. 41).

[111] In her evidence, the Second Defendant said that the Plaintiff had admitted that she was at fault for the accident and the Second Defendant therefore directed her to pay for the costs of the rental vehicle (Cross examination of Second Defendant, Transcript, 13 February 2018). The Plaintiff however rejected when cross-examined that she had admitted being at fault in terms of the accident.

[112] There is no clear cause of action for ‘arbitrary’ and ‘unfair’ deductions in the way pleaded. I also note that the Amended Statement of Claim does not particularize what was arbitrary and unfair about the deductions made from the Plaintiff’s salary.

[113] In any event, I find that there was nothing arbitrary about the deductions made by the First Defendant from the Plaintiff’s salary. The deductions were made in accordance with the Memorandum dated 19th June 2014 from the Plaintiff to the Second Defendant (see Annexure ‘M’ to exhibit D10) requesting deductions at the rate of $500.00 per fortnight., understanding “the full amount owing is $15,400.00”. In reaching this conclusion, the Plaintiff says in her Memorandum to the Second Defendant:

“I have come to this conclusion following an unsuccessful consultation with DBS to cover the damages under their third party insurance and the rental vehicle having no insurance policy offered no assistance. It has been a major lesson learned on my part especially on hiring vehicles without insurance as well as taking extra care on the roads and our vehicles...”

[114] I am also not satisfied that the deductions were unfair. The deductions were made in accordance with a request by the Plaintiff to the Second Defendant. Whilst it is accepted by the Second Defendant that she had directed the Plaintiff to pay for the costs of the damage, I am satisfied that the Plaintiff accepted responsibility for making the payments (annex M, exhibit D10). There is no evidence that she objected to the payments being made by her. There was also nothing in the Plaintiff’s Memorandum dated 19th June 2014 to the Second Defendant making any such payments conditional or open to refund.

[115] Ultimately, the key question is whether the Plaintiff has proven on balance of probabilities that deductions were unlawfully made by the Second Defendant on behalf of the First Defendant. The Plaintiff has failed to do so.

[116] Equity has jurisdiction to set aside transactions, including gifts, procured by unconscionable conduct. These may include for unconscionable bargains which the learned authors in the Laws of New Zealand (5) Defective or Unconscionable Transactions (online looseleaf edn, LexisNexis) at [145] explain as follows:

“Such unconscionable bargains ordinarily arise from the conjoining of three factors:

• (1) a relationship between the parties within which, to the knowledge of the donee, the donor is at a special disadvantage;
• (2 )the donee’s unconscionable exploitation or taking advantage of the donor’s disadvantage; and
• (3) the consequent impairment of the donor's judgmental capacity whereby the donor is unable to make a worthwhile and independent judgment as to what is in his or her best interests.”

[117] The Plaintiff however has not pleaded her cause of action on this equitable basis to set aside the bargain. In any event, even if she had, the evidence as it stands nevertheless does not satisfy me that the bargain was unconscionable.

Fifth Cause of Action: Financial Loss Due to Termination.

[118] The fifth cause of action is not a cause of action. It is the damage allegedly suffered by the Plaintiff due to her termination. There was also no evidence of the alleged damage (claimed to be school fees, mortgage, family support) and in any event, these were costs and expenses the Plaintiff would have incurred whether she was employed or not.

[119] The Plaintiff appropriately withdrew this cause of action.

MEASURE OF DAMAGES.

[120] The Plaintiff in her prayer for relief seeks, amongst other claims, damages for the unexpired portion of her contract from the termination date, 12 January 2015 to 28 May 2017 plus $22,628.31 for the period the Plaintiff was not employed. The Plaintiff relies on decisions of the New Zealand Employment Tribunal (Umamaheswaran v Health Waikato Ltd HT (Auckland) [1998] NZ Emp T 739 (8 April 1998) and on appeal to the New Zealand Employment Court (Health Waikato Limited v Umamaheswaran AC57/98 [1998] NZ Emp C 156 for its submission that the Plaintiff is entitled to the unexpired portion of her contract.

[121] I do not accept the submissions on behalf of the Plaintiff. First, the employee’s proceeding was a personal grievance for alleged unjustified dismissal brought pursuant to the New Zealand statutory regime. This is different to the common law action in this case for wrongful dismissal.

[122] Second and more importantly, the Tribunal held that the employee had a legitimate and reasonable expectation of an entitlement to 2 years employment. Alternatively, she had a collateral contract, that is a promise of 2 years employment by the employer. On appeal however, the Employment Court stated that the Tribunal had been in error because the express clauses of the contract must prevail “and any such ‘expectation’ cannot be contrary to the contract.”

[123] In this case, the Plaintiff had a three (3) year contract that expressly provided for termination by either party giving one month’s notice of intention to terminate the contract. There could not be a legitimate or reasonable expectation by the Plaintiff in those circumstances of a fixed full three (3) year contract.

[124] The question in my view is what is the relief an employee is entitled when the employee is wrongfully dismissed by way of an invalid termination. In Vine v National Dock Labour Board [1956] 3 All E.R 939 Jenkins LJ at 944 addressed the distinction between an invalid dismissal and a wrongful dismissal summarily or because insufficient notice was given and stated:

“”...it follows from the fact that the plaintiff’s dismissal was invalid that his name was never validly removed from the register, and he continued in the employ of the National Board. This is an entirely different situation from the ordinary master and servant case. There, if the master wrongfully dismisses the servant, either summarily or by giving insufficient notice, the employment is effectively terminated albeit in breach of contract. Here, the removal of the plaintiff’s name from the register being, in law, a nullity, he continued to have the right to be treated as a registered dock worker with all the benefits which, by statute, that status conferred on him.”

[125] In Francis v Kuala Lumpur Councillors [1962] 3 All ER 633, a matter also involving the dismissal of an employee from a city council by the city council and not by the President of the Council who was so empowered to dismiss the employee, the dismissal was held to be irregular and accordingly, wrongful. In the judgment of the Privy Council delivered by Lord Morris at 637:

“Accepting, however, the decision of the Court of Appeal, which has been pointed out, has not been the subject of any cross-appeal, the position on 1 Oct. was that the removal of the appellant was a removal by the council and not by the president. The council were his employers, but having regard to the provisions of the ordinance, their termination of his service constituted wrongful dismissal.”

[126] In the assessment of damages in Francis v Kuala Lumpur Councillors (op. cit) which a lower Court to the Privy Council awarded as three months salary, Morris LJ at 636 relevantly added in terms of the irregular termination:

“In their Lordships’ view the circumstances of the present case are not comparable with those in Vine’s case and are not such as to make it appropriate to give a declaratory judgment in the manner contended for on behalf of the appellant. The appellant’s employment must be treated as having in fact come to an end on Oct. 1, 1957, and the appellant’s remedy lay in a claim for damages. Their Lordships express no view as to the amount of the damages awarded beyond saying that no ground for their increase has been shown.”

[127] In my view, similarly, in the circumstances of this case, the Plaintiff’s employment must be treated as having in fact come to an end on 12th January 2015. From that point, she ceased her employment with the First Defendant, applied for other jobs and subsequently secured employment which she now holds in New Zealand on the 20th of April 2015.

[128] The question then is, what is the measure of damages? In Faamau v Samoa Breweries Ltd [2009] WSSC 85 (26 August 2009) His Honour Sapolu CJ (relying on a long list of authorities: Ridge v Baldwin [1963] UKHL 2; [1964] AC 40, 65; Stuart v Armourguard Security Ltd [1996] 1 NZLR 484 and Sylvester v British Columbia [1991] 2 SCR 315) stated in terms of damages:

“27. What that means is that an employer is liable in damages at common law for wrongful dismissal if he terminates the contract of employment with his employee in a manner not warranted by the contract. Thus, if the contract of employment contains an express or implied term that either party to the contract may only terminate the contract with reasonable notice and the employer terminates the contract without reasonable notice, then the employer can be liable at common law to the employee for wrongful dismissal because the dismissal would be in breach of the contract.

...

32. What the plaintiff has done, and which the defendant seeks to strike out, is to plead that the contract of employment contains an implied term that either party to the contract may terminate the contract with reasonable notice and that the defendant terminated the contract with defective notice. He then seeks in paragraph (b) of his prayer for relief damages for loss of income from the date of termination to the beginning of July 2009, the time around which the contract might naturally have come up for removal or been brought to an end. This is not correct and should be amended in view of what has just been said. The correct measure of damages is the salary the employee would have earned during the period of the notice that should have been given by the employer.”

[129] That measure of damages however is where the employer has dismissed the employee wrongfully. In this case, it was not the employer that dismissed the employee but the Second Defendant who did so invalidly and therefore wrongfully. In McGregor on Damages, Fourteenth Edition, Sweet and Maxwell Limited at [933] to [944], the learned authors state:

“[933] The measure of damages for wrongful dismissal is prima facie the amount that the plaintiff would have earned had the employment continued according to contract subject to a deduction in respect of any amount accruing from any other employment which the plaintiff, in minimizing damages, either had obtained or should reasonably have obtained. The rule has crystallised anomalously in this form. It is not the general rule of the contract price less the market value of the plaintiff’s services that applies; instead the prima facie measure of damages is the contract price, which is all the plaintiff need show. This is then subject to mitigation by the plaintiff who is obliged to place his services on the market, but the onus here is on the defendant to show that the plaintiff has or should have obtained alternative employment.” (emphasis added)

[130] In the footnotes at 3 referring to Beckham v Drake [1849] EngR 843; (1849) 2 H.L.C 579 at 607 – 608 per Erie J, the learned authors continue:

“...per Erie J advising their lordships. His is the best and fullest statement of the measure to be found in the reports, and runs thus: “The measure of damages...is obtained by considering what is the usual rate of wages for the employment here contracted for, and what time would be lost before a similar employment could be obtained. The law considers that employment in any ordinary branch of industry can be obtained by a person competent for the place, and that the usual rate of wages for such employment can be proved, and that...it is the duty of the servant to use diligence to find other employment...”

[131] That approach is consistent with the approach of the Privy Council in Francis v Kuala Lumpur Councillors (op. cit) involving invalid (referred to as ‘irregular’) termination and is the approach I will apply given the invalid termination by the Second Defendant.

CONCLUSION:

[132] Given my findings at the causes of action pleaded, I do not need to consider section 44 of the SWA Act 2003.

[133] I accept that the Plaintiff’s employment must be treated as having come to an end on the 12th January 2015. I am also satisfied that the Plaintiff’s termination was invalid and therefore wrongful (Francis v Kuala Lumpur Councillors, (op. cit)). The Second Defendant had no authority to dismiss the Plaintiff from her employment.

[134] I am also satisfied that the Plaintiff acted to mitigate her damages by seeking employment following her termination on the 12 January 2015 and her re-employment on the 20th April 2015 with the Horowhenua District Council, a period of three months and one week. There is certainly no evidence from the Defendants to show that the Plaintiff should have obtained alternative employment earlier. The prayer for relief at (f) is successful.

[135] In terms of the relief sought by the Plaintiff:

(a) the Plaintiff’s claim for the payment of her salary from the 12th January 2015 to the end of the contract period at prayer (a) and the reimbursement of $15,400.00 at prayer (b) are not granted for the reasons abovementioned;
(b) There was no evidence of any transport allowance payable to the Plaintiff as pleaded nor as to how the amount claimed of $10,950.00 was reached in support of prayer (c) nor am I satisfied that it is payable;
(c) The claim for $109,500.00 at (d) is not made out and the claim for alleged defamation at (e) for $20,000.00 was withdrawn.

RESULT:

[136] For the foregoing reasons, judgment is entered for the Plaintiff in the sum of $22,628.31 being her gross salary for the period of three months and one week between 12 January 2015 and 20 April 2015 against the First Defendant.

[137] All other claims are dismissed.

[138] The Plaintiff to file and serve Memorandum of Costs within 14 days. The Defendants to file their response within a further 14 days.

JUSTICE CLARKE