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Cooper v Public Trustee Corporation Ltd [2011] FJHC 595; HBC82.2000 (23 September 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION HBC 82 OF 2000

BETWEEN:

ANTHONY WILLIAM COOPER
Plaintiff

AND:

PUBLIC TRUSTEE CORPORATION LIMITED
First Defendant

AND:

PERMANENT SECRETARY FOR THE DEPARTMENT OF PUBLIC ENTERPRISES
Second Defendant

AND:

ATTORNEY-GENERAL OF FIJI
Third Defendant

Mr K Muaror for the Plaintiff
Ms N Karan for the Second and Third Defendants

JUDGMENT

In this action the Plaintiff commenced proceedings by Writ in March 2000. The Plaintiff claimed damages against the First Defendant for breach of contract of employment. There was no claim pleaded against the Second Defendant. The Third Defendant was joined pursuant to the requirement that is specified in section 12 of the State Proceedings Act Cap 24.

The nature of the Plaintiff's claim against the First Defendant and the relevant facts are set out in my Ruling delivered on 20 April 2011.

It would appear that prior to the first trial of this action before Pathik J the First Defendant was deemed to have been dissolved on 4 March 2002 pursuant to section 284(4) of the Companies Act Cap 271. From that date it ceased to exist.

In a judgment delivered on 13 July 2006 Pathik J awarded the Plaintiff $95,500.00 damages together with interest at 5% from 1 January 2000 to 13 July 2006 with costs fixed at $2000.00 against all the Defendants.

The Defendants appealed the decision. In its judgment delivered on 9 March 2007 the Court of Appeal in Public Trustee Corporation Limited and Others –v- Anthony William Cooper (unreported civil appeal No.88 of 2006) set aside the award against "the defunct company" and as a result allowed its appeal. In respect of the Second and Third Defendants the Court of Appeal set aside the judgment and ordered that the case against them be referred back for determination in the High Court.

The Court of Appeal noted that the Plaintiff's Statement of Claim had not pleaded any separate cause of action against the two remaining Defendants. The Court indicated that on the material before it the Plaintiff could have pleaded that the Permanent Secretary (the Second Defendant) (and the Government) knowingly and intentionally procured a breach of the Plaintiff's contract. The Court also noted that acting in the public interest under section 58 of the Public Enterprise Act 1996 would be reasonable justification, but only if proper compensation was offered.

The Court of Appeal expressed the view that since the matter had not been properly agued before the learned trial Judge or before the Court of Appeal, it would be unjust to dispose of the matter on appeal without submissions on the suggested cause of action.

The Court of Appeal agreed with the learned judge's finding that the contract of employment was for a fixed term of three years with no express or implied term that it could be terminated on reasonable notice or on the grounds of a change in government policy.

Pursuant to the decision of the Court of Appeal (supra) the Plaintiff filed a Statement of Claim dated 4 December 2007. The Second and Third Defendants filed an amended Defence dated 25 April 2008.

The hearing proceeded before me by way of oral submissions presented by Counsel in accordance with the directions given by the Court of Appeal. The central issue before me was whether the Second Defendant is liable in tort for knowingly procuring the First Defendant to break its contract of employment with the Plaintiff. Such a cause of action has existed in respect of contracts for personal services since the decision in Lumley v Gye (1853) 2 E and B 216. The tort has since been extended so as to apply to contracts of all kinds (see Jasperson v Dominion Tobacco Co. [1923] AC 709 at page 713).

In order to succeed the Plaintiff must establish on the balance of probabilities that the Second Defendant acted with the requisite knowledge of the existence of the contract of employment and acted with the intention to interfere with its performance. (Merkur Island Shipping Corp. –v- Laughton and Others [1982] 2 All ER 189).

The Plaintiff and the First Defendant entered into an employment contract which was in writing and dated 21 January 1999. It was a contract for three years commencing on 1 January 1999 unless terminated earlier pursuant to clause 9 of the contract. Clause 9 allowed for earlier termination by the First Defendant in three sets of circumstances, none of which applied to the Plaintiff in these proceedings. Furthermore, as the Court of Appeal in its decision (supra) noted, the contract did not contain any express or implied term that it could be terminated on reasonable notice (alone) or on the grounds of a change in government policy.

In a letter dated 21 January 1999 from the Chairman of the First Defendant's Board addressed to the Plaintiff there was confirmation that the terms and conditions of the Plaintiff's appointment as Chief Executive Officer of the First Defendant were contained in the written Employment Contract a copy of which was enclosed with the letter.

It would appear that during the course of 1999 a decision was taken by the Second and Third Defendants concerning the future direction of the First Defendant. Arrangements were made concerning the winding up of the First Defendant. By letter dated 29 October 1999 addressed to the Chairperson of the Board of the First Defendant from the Permanent Secretary for Public Enterprises (the Second Defendant) the Plaintiff was requested to report to the Permanent Secretary for Justice on Monday 1 November 1999 at 8.30 for future work assignments.

It appeared not to be disputed that the Plaintiff had complied with that requirement.

At an extraordinary general meeting of the First Defendant held on 4 November 1999 the Government shareholders resolved that the contracts of all employees of the First Defendant be terminated and compensation established by the Government.

By letter dated 28 December 1999 addressed to the Plaintiff, the Second Defendant stated:

"This is to advise that your employment with the Public Trustee Corporation Limited has been terminated with effect from 31 December 1999 as a result of change in Government policy. A recent meeting of the shareholders held on 4 November had also resolved that the employees' contracts be terminated".

I am satisfied that the material that has been placed before this Court and which was before the Court of Appeal supports the conclusion that the Second Defendant (and the Government) knowingly and intentionally procured a breach of the Plaintiff's contract of employment with the First Defendant. The contract had been terminated in a manner that constituted wrongful dismissal.

It is apparent that the Second Defendant has directed the First Defendant to terminate the Plaintiff's contract of employment. It is also apparent that the reason for the decision to give that direction was a change in government policy. As noted earlier in this decision that reason was not a basis upon which the First Defendant could either expressly or impliedly terminate the Plaintiff's contract of employment.

Counsel for the Defendants submitted that the Second Defendant acted in accordance with section 58 of the Public Enterprise Act. Section 58 states:

"(1) The Public Enterprise Minister may give the Government Commercial Company's Board a written direction in relation to the Government Commercial Company and its subsidiaries, if the Public Enterprise Minister is satisfied that, because of exceptional circumstances, it is necessary to give the direction in the public interest.

(2) The Board shall ensure that the direction is complied with in relation to the Government Commercial Company and shall, as far as practicable, ensure that it is complied with in relation to its subsidiaries.

(3) _ _ _

(4) _ _ _ ".

During the course of her submissions Counsel for the Defendants appeared to rely upon the powers given to the relevant Minister under section 38 of the Act as the basis for the directions that were given under section 58. However section 38 appears in Division 7 of the Act which sets out provisions for structural changes towards corporatisation. More specifically section 38 is concerned with a regulation making power to facilitate the transition of a government entity to a Government Commercial Company. As the First Defendant had already been declared a Government Commercial Company and had as a result already completed the transition to which reference is made in section 38, it appears to me that section 38 is of no assistance to the Defendants.

In any event the Court of Appeal indicated that even if the Defendants had acted in the public interest under section 58 thereby constituting reasonable justification, the Plaintiff was still entitled to reasonable compensation.

Therefore the remaining issue concerns the amount of compensation to be awarded to the Plaintiff. I accept that the Court of Appeal indicated in its decision (supra) at page 10 that it would have upheld the learned trial judge's assessment. However it does appear that the question of the quantum of compensation was not agued before the Court of Appeal.

The Defendants' position on the question of quantum was set out in paragraph 31 of the submission filed on 22 October 2007.

"Based on the above the Second and Third Defendants state that the Plaintiff is only entitled to damages which included the salary and benefit for the unexpired portion of his contract."

In a letter dated 4 January 2000 from the legal practitioners acting for the Plaintiff addressed to the Second Defendant it was acknowledged that the Plaintiff had received for the period up to 31 December 1999 an amount of $32,103.84 (gross) or $18,855.26 (net) together with severance pay in the sum of $15,294.23(gross) or $10,300.00 (net). Total payments received were $47,398.00 (gross) or $29,155.26 (net).

The learned trial judge awarded one year's loss of wages as compensation. His Lordship had concluded that allowing for mitigation the Plaintiff was entitled to only one of the two remaining years of his contract. In my view it is that finding which the Court of Appeal indicated it would have upheld.

The learned trial judge calculated the gross amount to which the Plaintiff was entitled for one year under the contract as being $105,800.00. In my opinion the amount that should be deducted from that figure is the total gross amount paid to the Plaintiff as severance pay. That amount was agreed upon in the sum of $15,294.23. Therefore I would award the Plaintiff the sum of $90,505.77 together with interest at 4% from 1 January 2000 up to the date of this judgment with costs for the present proceedings before me fixed summarily in the sum of $1,650.00.

Order: (1) Judgment for the Plaintiff in the sum of $90,505.77

(2) Interest at 4% on that amount from 1 January 2000 to the date of this judgment.

(3) Costs to the Plaintiff in the sum of $1,650.00.

W D Calanchini
JUDGE

23 September 2011
At Suva