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Kereme v Kalinoe [2020] PGSC 19; SC1933 (26 March 2020)

SC1933

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]


SCM NO 19 OF 2018


DR PHILIP KEREME, CHAIRMAN, PUBLIC SERVICES COMMISSION
Appellant


V


DR LAWRENCE KALINOE,
SECRETARY, DEPARTMENT OF JUSTICE & ATTORNEY-GENERAL
First Respondent


JUBILEE TINDIWI
Second Respondent


Waigani: Cannings J, Logan J, Thompson J
2020: 25th February, 26th March


STATE SERVICES – National Public Service – disciplinary proceedings against officer – review by Public Services Commission of decision to find officer guilty of disciplinary offence and dismiss her from National Public Service – nature of disciplinary proceedings dependent on whether officer was employed under a contract of employment – Public Services (Management) Act 1995, s 41 (contracts of employment).


The Public Services Commission appealed against a decision of the National Court to grant judicial review of its decision on a personnel matter. The Commission had found, upholding a complaint by an officer (the second respondent) of the Department of Justice and Attorney-General who had been appointed to a senior management office and employed under a contract of employment, that the officer was improperly charged, found guilty of a disciplinary offence and dismissed from the National Public Service due to the Departmental Head (the first respondent) wrongly applying the provisions of Part XIV (discipline) of the Public Services (Management) Act, instead of applying the provisions of the contract, in accordance with s 41(3) of the Act, which provides: “Notwithstanding the provisions of this Act relating to discipline of officers, a contract of employment shall make specific provision for discipline and an officer employed under a contract of employment is exempted from the provisions of Part XIV of this Act.” The Commission annulled the Departmental Head’s decision and decided that the officer be reinstated and paid salaries and emoluments for the period from the date of her dismissal to the date of reinstatement. The Departmental Head applied for judicial review of the Commission’s decision. The National Court granted judicial review and quashed the Commission’s decision, ruling that the officer was not employed under a contract and that she had been properly charged, found guilty and dismissed from the National Public Service under Part XIV of the Public Services (Management) Act. The primary issue on appeal was whether the National Court erred in finding that the officer was not employed under a contract of employment.


Held:


(1) Per Cannings J and Thompson J: The officer’s contract had expired and not been renewed or replaced by another contract of employment. Though it was arguable that the officer was entitled by virtue of provisions of the Public Service General Orders to automatic renewal of her contract, in fact and law it had neither been renewed nor replaced. The officer was not exempt from the provisions of Part XIV of the Public Services (Management) Act. The National Court did not err in finding that the Public Services Commission erred and ordering that the Commission’s decision be quashed.

(2) Per Logan J (dissenting): The officer was entitled, per force of the Public Service General Orders and the failure of the State to conduct a performance review, consistently with s 41(3) of the Public Services (Management) Act, to automatic renewal of her contract and was properly regarded as still being employed under that renewed contract of employment at the relevant time. She was not lawfully charged, found guilty and dismissed under Part XIV of the Act. The National Court erred in law in finding that the Public Services Commission had erred in law.

(3) By majority: Appeal dismissed; National Court decision affirmed.

Cases Cited


The following cases are cited in the judgment:


Papua New Guinea Cases


Ayleen Bure v Robert Kapo (2005) N2902
Bandisch v National Capital District Botanical Enterprises (2009) N3806
Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705
Jimmy Malai v PNG Teachers Association (1992) SC431
Kalinoe v Kereme (2018) N7383
Kereme v O’Neill (2019) SC1781
Mision Asiki v Manasupe Zurenuoc (2005) SC797
Porgera Joint Venture v Robin Kami (2010) SC1060
Tzen Pacific Ltd v Kanawi Pouru and Ors (2016) SC1550
Wolfgang Bandisch v National Capital Botanical Enterprises Limited (2009) N3806


Overseas Cases


Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101
Re Minister for Immigration, Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6; (2003) 214 CLR 1


APPEAL


This was an appeal against a decision of the National Court, granting an application for judicial review of a decision of the Public Services Commission.


Counsel


R M Simbil, for the Appellant
T M Kamuta, for the First Respondent
J Tindiwi, the Second Respondent, in person


26th March, 2020


1. CANNINGS J: The Public Services Commission (through its Chairman, Dr Philip Kereme) has appealed against a decision of the National Court, constituted by Justice Nablu, to grant judicial review of the Commission’s decision on a personnel matter concerning a former officer of the Department of Justice and Attorney-General (the second respondent, Jubilee Tindiwi).


2. The Commission had found, upholding a complaint made by Ms Tindiwi under s 18 (review of personnel matters connected with the National Public Service) of the Public Services (Management) Act, that she was unlawfully charged, found guilty of a disciplinary offence and dismissed from the National Public Service. The Commission decided that the Departmental Head (the first respondent, the then Secretary of the Department of Justice and Attorney-General, Dr Lawrence Kalinoe) wrongly applied the provisions of Part XIV (discipline) of the Public Services (Management) Act, instead of applying the provisions of the contract under which Ms Tindiwi was employed, in accordance with s 41(3) of the Act, which provides:


Notwithstanding the provisions of this Act relating to discipline of officers, a contract of employment shall make specific provision for discipline and an officer employed under a contract of employment is exempted from the provisions of Part XIV of this Act.


3. The Commission on 30 May 2016 annulled Dr Kalinoe’s decision and decided that Ms Tindiwi be reinstated without loss of salaries and entitlements. Dr Kalinoe applied for judicial review of the Commission’s decision.


4. The National Court on 17 July 2018 in OS (JR) No 434 of 2016 granted judicial review and quashed the Commission’s decision, ruling that Ms Tindiwi was not employed under a contract of employment and that she had been properly charged, found guilty and dismissed from the National Public Service under Part XIV of the Public Services (Management) Act.


5. Subsequent to the National Court’s decision, the Supreme Court declared in Kereme v O’Neill (2019) SC1781 that the Public Services (Management) Act 2014 (under which all decisions of the parties, and the National Court, were based) was unconstitutional and invalid. However, the Supreme Court also ruled that its declaration of invalidity would have prospective operation, so that actions and decisions taken under the 2014 Act would remain valid. The practical effect is that the Public Services (Management) Act No 19 of 1995, which was repealed and replaced by the 2014 Act, is again the prevailing law.


6. The critical provision for the purposes of the judicial review in the National Court and for the purposes of this appeal is s 41(3). This provision is expressed in the same terms in the 1995 Act as in the 2014 Act. The decision in Kereme v O’Neill (2019) SC1781 therefore has no effect on the determination of this appeal.


DID THE NATIONAL COURT ERR IN FINDING THAT MS TINDIWI WAS NOT EMPLOYED UNDER A CONTRACT OF EMPLOYMENT?


7. The central issue is whether the National Court erred in finding that Ms Tindiwi was not employed under a contract of employment. It is agreed that:


8. Mr Simbil, for the Commission, submitted that Ms Tindiwi was upon expiry of the three-year term in February 2014 entitled to automatic renewal of the contract by virtue of General Order 9.64 (made under the Act), which provides:


The Agency Head shall not make an arbitrary recommendation not to renew a contract. Provided that the contract officer has performance reviews with ratings of not less than 4, then renewal of the contract shall be automatic. Performance ratings of 3 should result in renewal of the contract, provided that no serious disciplinary offences are current, and most other work targets have been achieved.


9. Mr Simbil submitted that the fact that Ms Tindiwi did not formally execute an instrument of renewal or a new contract after the expiry of the original contract is of no consequence. She must either be regarded as having an implied contract of employment (as found by the Commission in its May 2016 decision) or be regarded, by force of the Act and the General Orders, as employed under a contract of employment. In either case she was by virtue of s 41(3) exempt from the provisions of Part XIV of the Act. She was not an “unattached officer”, Mr Simbil submitted. Ms Tindiwi, who was named as second respondent to the appeal and appeared in person, supported the submissions of Mr Simbil.


10. I am not persuaded by those submissions. Though it is arguable that Ms Tindiwi should have been granted renewal of the original contract, renewal of it was contingent on a performance rating of not less than 4.


11. I am persuaded by the submissions of Mr Kamuta, for Dr Kalinoe, that because there was no performance review and no performance rating was given, there was no trigger for automatic renewal. And there was no ‘manual’ renewal either, as Ms Tindiwi did not accept the offer of a new contract that would have required her to relocate to Kokopo.


12. The trial judge did not err in rejecting the argument that Ms Tindiwi was employed under an implied contract, as was the case in Bandisch v National Capital District Botanical Enterprises (2009) N3806. The facts and issues in that case are very different from those of the present case. At issue in Bandisch was a claim for damages for breach of contract. At issue in the present case is whether an officer was “employed under a contract of employment” for the purposes of s 41(3) of the Act. That is the central issue as its resolution is the indicator of whether Ms Tindiwi was exempt from the provisions of Part XIV.


13. It is of no consequence, in my view, whether Ms Tindiwi is regarded as an “unattached officer”, and indeed whether the trial judge erred in concluding that Ms Tindiwi was such an officer as defined by s 2 of the Act. The critical finding is that she was not “employed under a contract of employment”.


14. The learned trial judge found correctly that, at the relevant time, from the date of laying of the charge to the date of the decision to impose the penalty of dismissal, Ms Tindiwi was not employed under a contract of employment. She was not exempt from the provisions of Part XIV of the Act. It follows that Dr Kalinoe acted lawfully in applying the provisions of Part XIV.


15. The National Court did not err in finding that the officer was not employed under a contract of employment.


COMMENT


16. In its decision of 16 May 2016 the Public Services Commission decided, alongside its decision to annul Dr Kalinoe’s decision, that all records relating to the disciplinary proceedings against Ms Tindiwi must be destroyed. The Commission, in my view, has no power under s 18 of the Act or any other law to make such a decision. It should refrain from making such decisions in future cases.


CONCLUSION


17. I would order that the appeal be dismissed, that the order of the National Court be affirmed and that the parties bear their own costs.


18. LOGAN J: In 2011, Ms Jubilee Tindiwi, the second respondent, entered into a contract with the State to perform the duties of Principal Legal Officer (PLO) (Mount Hagen) Grade 18. It is common ground that this office was, for the purposes of Part X of the Public Services (Management) Act 2014 (PSM Act) and equivalent predecessor legislation a designated senior office.


19. Oddly, with respect, the Secretary, as Permanent Head of the Department of Justice and Attorney-General (Dr Lawrence Kalinoe), the first respondent, apparently felt some inhibition in providing Ms Tindiwi with a copy of the 2011 contract for the purposes of a review which the Public Services Commission (Commission) came to conduct under s 18 of the PSM Act in respect of a disciplinary decision which the Secretary made, or at least purported to make in relation to Ms Tindiwi. The then Chairperson of the Commission (Dr Philip Kereme) instituted the present appeal against a judgment of the National Court in respect of the Commission’s decision on that review.


20. While this administrative inhibition explains why the 2011 contract was not in evidence in the National Court, its absence in evidence is of no present moment. The Commission made an administrative finding in that review that there was such a contract. Further, it is common ground that its terms were one and the same, save for the position concerned, to a draft contract tendered to Ms Tindiwi on 4 December 2014 (2014 draft contract) and signed by the Secretary that day. Thus the term of the 2011 contract was for three years, expiring in February 2014.


21. The tendering of that draft contract to Ms Tindiwi was a sequel to a direction to her by the Secretary on 22 October 2014 that she relocate to Kokopo as PLO (New Guinea Islands). Ms Tindiwi declined to sign the 2014 draft contract or to relocate as directed.


22. To this chronology of events, the following should be added. During the term of the 2011 contract, Ms Tindiwi was, in February 2013, appointed to act as Solicitor-General. She continued to act as Solicitor-General until 18 June 2014 when her acting appointment was revoked by the then Attorney-General. The 2014 draft contract contemplated that it would take effect between the parties on and from 28 June 2014, in other words, shortly after Ms Tindiwi had ceased to act as Solicitor-General.


23. Initially, the subject of Ms Tindiwi relocation’s to Kokopo was defused by her taking a period of approved leave. This leave came to an end in March 2015. Once again, Ms Tindiwi refused to relocate to Kokopo as directed. She persisted in this refusal, remaining instead (and presumably performing duties) at Waigani. On 24 June 2014 the Secretary suspended her from duty and charged her with three disciplinary offences under Part XIV of the PSM Act. It is not presently necessary to detail those alleged offences. Suffice to say, they related in one way or another to her conduct in refusing to relocate as directed. On 3 August 2015 the Secretary decided that the charges were proved and that the appropriate penalty was the dismissal of Ms Tindiwi from the public service.


REVIEW BY THE PUBLIC SERVICES COMMISSION


24. It was this dismissal decision that the Commission came to review on Ms Tindiwi’s complaint. On 30 May 2016, for reasons given in writing that day, the Commission, in the exercise of its merits review power under s 18 of the PSM Act, annulled the Secretary’s decision. The Commission did so on the basis of its conclusion that, at the time when she was dealt with via the disciplinary procedures mentioned she was an officer employed under a contract of employment and thus exempt from Part XIV of the PSM Act by virtue of s 41(3) of the PSM Act. The Commission concluded that, though the term of the 2011 contract had expired, Ms Tindiwi continued to be employed under an “implied contract” with the State. For this conclusion, it relied, by analogy, with the position found to exist in Wolfgang Bandisch v National Capital Botanical Enterprises Limited (2009) N3806 (Bandisch v NCBE).


25. The Secretary then challenged the Commission’s review decision in a judicial review proceeding in the National Court.


JUDICIAL REVIEW OF COMMISSION’S DECISION


26. The learned primary judge concluded that Bandisch v NCBE was distinguishable, because it concerned employment to which the Employment of Non-Citizens Act was applicable. Her Honour found that, upon the expiration of the term of the 2011 contract, Ms Tindiwi had become an unattached officer of the Public Service, albeit one then acting as Solicitor-General. However, neither then nor thereafter was she employed under a contract in her Honour’s view. She concluded that the effect of s 41(2) of the PSM Act was that the renewal or extension of the 2011 contract could only occur by a contract executed by the Permanent Head of the Department of Personnel Management (or delegate) and the appointee. That not having occurred, her Honour found that, when Ms Tindiwi ceased to act as Solicitor-General, she reverted just to being an unattached officer and hence a person subject to the disciplinary provisions of Part XIV of the PSM Act. Accordingly, her Honour quashed the Commission’s decision, thereby restoring the Secretary’s dismissal decision. It is against this order that the Commission has appealed to this Court.


27. On the hearing of the appeal, the submissions of the parties largely mirrored the competing positions earlier adopted. Thus the Commission, with Ms Tindiwi’s support, promoted the correctness of the conclusion which it had reached in its review. The Secretary, on the other hand, promoted the correctness of the conclusions of the learned primary judge. The Commission though made additional reference to General Orders in force under the PSM Act, as an alternative foundation for the correctness of its conclusion. The applicability of these was contested by the Secretary. The provisions concerned and their relevance are discussed below.


VALIDITY OF PUBLIC SERVICES (MANAGEMENT) ACT 2014


28. Before embarking upon a consideration of the merits of the appeal, reference should be made to a development in national jurisprudence concerning the PSM Act which occurred after the learned primary judge gave judgement.


29. On 28 March 2019, this Court gave judgement in Kereme v O'Neill (2019) SC1781. Materially, the Court’s order in that case declared invalid forthwith, as having been made without complying with the mandatory requirements of s 14(2)(b) of the Constitution and the latter part of s 14(2), the PSM Act. However, the Court (at paragraph 53) expressly stated that its judgement would have prospective effect only and further ordered that “Actions taken under the amendments shall remain valid.” In these circumstances and notwithstanding a reservation voiced somewhat tentatively in submissions made on behalf of the Secretary, my view is that the present appeal falls for determination on the footing that the PSM Act and the review and at least purported dismissal decision made thereunder in relation to Ms Tindiwi were not affected by the invalidity later found to have occurred in respect of the enactment of the PSM Act.


SECTION 41


30. It is now desirable to set out s 41 (contracts of employment) of the PSM Act:


(1) Subject to the Salaries and Conditions Monitoring Committee Act 1988 an officer appointed to a management position shall be employed under, and hold office in accordance with, the terms and conditions of a contract of employment with the State.

(2) A contract of employment under Subsection (1) shall be executed by the appointee and, on behalf of the State, by —

(3) Notwithstanding the provisions of this Act relating to discipline of officers, a contract of employment shall make specific provision for discipline and an officer employed under a contract of employment is exempted from the provisions of Part XIV of this Act.

(4) Notwithstanding the provisions of this Act relating to promotion and appointment, where —

employment in the Public Service is terminated on conclusion of the due notice period.


31. The parties were agreed that, at least in relation to an initial appointment under contract (here, the 2011 contract) was concerned, the provisions of s 41(2) of the PSM Act were mandatory. In my view, this agreement as to the effect of s 41(2) of the PSM Act was not misplaced. A study of the PSM Act discloses that the departmental head of the Department of Personnel Management was to have important and overarching responsibilities in relation to the Public Service. It is entirely consistent with these responsibilities that the acquiescence via contractual execution of that permanent head (or delegate) to the appointment of persons to designated senior officer positions under contract, as well as by the appointee, should be regarded as a mandatory requirement.


32. It does not necessarily follow from this conclusion that the “subsequent renewal” of a contract, to which reference is made in s 41(4)(a) of the PSM Act, must also be the subject of a contract executed both by the permanent head (or delegate) and the appointee. In truth, though s 41 is prescriptive as to the formation of the contract in respect of a designated senior officer position, the section is silent as to the manner and form of any renewal thereof.


33. Of course the General Orders cannot be inconsistent with that Act. However, the 2011 contract (clause 1) expressly contemplated that the General Orders would comprise part of its terms and conditions. Put another way, the contract which it is accepted was executed in accordance with the requirements of s 41(2) of the PSM Act itself made provision for how it might be renewed. So there is no question of any inconsistency between s 41 of the PSM Act and the General Orders in this case. All that the General Orders do is to make detailed prescription in relation to how and if renewal of a senior officer’s contract will occur in circumstances where the PSM Act is silent on that subject.


GENERAL ORDERS


34. The General Order upon which the Commission and Ms Tindiwi came to rely in submissions is General Order 9.64, which provides:


9.64 The Agency Head shall not make an arbitrary recommendation not to renew a contract. Provided that the contract officer has performance reviews with ratings of not less than 4, then renewal of the contract shall be automatic. Performance Ratings of 3 should result in renewal of the contract, provided that no serious disciplinary offences are current, and most other work targets have been achieved.


35. General Order 9.64 is preceded by a number of other General Orders which make particular provision in relation to the review of expiring contracts for the purpose of renewal or nonrenewal. These are designed to mesh in with performance reviews conducted in respect of the senior contract officer concerned over the life of the contract term. The evidence in this case disclosed that no performance reviews of the kind contemplated were conducted in relation to Ms Tindiwi. It may be that the explanation for this lies in the fact of her acting as Solicitor-General for a substantial portion of the 2011 contract’s three-year term. Whatever may be the explanation, no review was undertaken.


36. In these circumstances, the question becomes whether the State, by not conducting a review, can deprive an officer of the benefit of the automatic renewal which would follow from a rating of not less than 4 if a review were conducted. The question is one of construction. The first sentence of General Order 9.64 is apparently the leading one. It banishes arbitrary decisions not to renew the contracts of designated senior officers. It contemplates that non-renewal will only occur for cause. That cause, as the second sentence of the General Order contemplates, may be found in a lower than designated performance appraisal outcome. The specification of that cause is obviously for the benefit of the State. However, if the State chooses not to take up that benefit, to construe the second sentence of General Order 9.64 as thereby denying the senior officer automatic renewal would, in effect, be to countenance arbitrary non-renewal of that officer’s contract by an indirect means. It would completely subvert the apparent purpose of the General Order.


AUTOMATIC RENEWAL


37. In these circumstances, the better construction of General Order 9.64, reading it as a whole and in context, is that if the State for whatever reason does not conduct a performance appraisal, it has waived the benefit of it and renewal of the existing contract is automatic.


38. In this case, what was renewed was a contract, the 2011 contract, in relation to which there has never been any question that it was executed as s 41(2) of the PSM Act required. As that contract was automatically renewed in accordance with its terms, which included the General Orders (and 9.64 in particular) there was no need for any further contract to be executed in conformity with s 41(2) of the PSM Act.


39. What is renewed under General Order 9.64 is the existing contract on its existing terms. Those terms materially include a three-year duration clause. Since February 2014 there have been at least two three-year renewals in this fashion with another either having just occurred or shortly to occur. The evidence as to from when the 2011 contract term ran was, lamentably but not through the fault of either the Commission or Ms Tindiwi, unclear on the state of the evidence in the National Court.


40. So comprehensive is the provision by General Order in relation to how renewal of a contract is to occur that there is no room for the operation of any doctrine of “implied contract”. Further, the learned primary judge was correct to conclude that Bandisch v NCBE was distinguishable. It could hardly be concluded otherwise given the very different scheme for which the PSM Act and the General Orders provide in relation to the formation and renewal of senior officers’ contracts.


41. What follows from the foregoing is that, although the learned primary judge correctly concluded that the 2011 contract was not renewed by implication, her further conclusion that Ms Tindiwi was therefore an unattached officer amenable to discipline under Part XIV of the PSM Act, was erroneous. In fairness to her Honour, it does not appear that her attention was not drawn by the parties to General Order 9.64 in the course of submissions.


42. For completeness, I should mention that the Secretary sought to gain comfort in relation to Ms Tindiwi’s employment being that of unattached officer after the expiry of her three-year contract term from General Order 9.74, which provides:


9.74 A contract holder whose contract is to be terminated shall be retained within the Agency as an unattached officer, following a decision by the Secretary, Department of Personnel Management, until such time that either:


(i) the officer secures an alternative position; or

(ii) the officer is transferred to another position by mutual agreement with the officer; or

(iii) the officer is terminated from the Public Service by the Agency Head with approval from the Secretary, Department of Personnel Management.


43. The short answer to this submission is that, not only was there no evidence of a retention decision by the Secretary, Department of Personnel Management but also that none of the posited alternatives in this General Order was applicable. It did not apply so as to make Ms Tindiwi an unattached officer amenable thereby to the disciplinary provisions of Part XIV of the PSM Act.


WAS THE OFFICER EMPLOYED UNDER A CONTRACT OF EMPLOYMENT?


44. The result then is that Ms Tindiwi was an officer employed under contract at the time when she was purportedly subjected to the disciplinary process for which Part XIV of the PSM Act provides. Because she was a contract officer, the effect of s 41(3) of the PSM Act was that Part XIV of that Act had no application to her. Thus, while the Commission’s reasoning for its conclusion on review that those provisions had no application to her was misconceived, the conclusion itself and its annulment sequel were correct. Put another way, the Commission reached the correct conclusion for the wrong reasons.


45. It is possible to reach this conclusion without passing, one way or the other, about the notion of a “legitimate expectation” of renewal, a proposition which attracted Higgins J in Kalinoe v Kereme (2018) N7383. The Commission and Ms Tindiwi made reference to this case in submissions. I would merely respectfully observe that the notion that a “legitimate expectation” may be a source of other than a procedural right is not one which has found favour in Australian public law: Re Minister for Immigration, Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6; (2003) 214 CLR 1. An alternative conception favoured by Professor Aronson in his article, ‘Private Bodies, Public Power and Soft Law in the High Court’ [2007] FedLawRw 1; (2007) 35 Federal Law Review 1, 5, instead of “legitimate expectation”, is “reasonable assumption”. There is no need in this case further to explore this subject because, on its true construction, General Order 9.64 was the source of a right of renewal in the circumstances.


REMEDIES


46. While the appeal ought, in my view, to be allowed, it does not follow that the Commission is entitled to all of the relief which was sought in the originating summons. That relief included an order that, “all charges and documents relating to the disciplinary action against Ms Tindiwi be destroyed in her presence”. The records relating to the charges made against Ms Tindiwi are public records. Their preservation and destruction is governed by the National Library and Archives Act 1993. That Act provides no authority for the present destruction of those public records. This aside, though the Commission’s annulment of the dismissal of Ms Tindiwi must be restored it does not follow from this that she is immune from any disciplinary proceeding. The upholding of her (and the Commission’s) contention that she was and has remained a contract officer necessarily means that the terms of her contract (materially, schedule 3) are (and materially always have been) applicable to her. However, as she was never lawfully dismissed, she is entitled to all of her arrears of salary under her contract as automatically renewed. Further, she will remain so entitled unless and until her contract is terminated according to law.


ORDER


47. For those reasons, I would order that the appeal be allowed, that the orders of the National Court be set aside, and that in lieu thereof, it be ordered that the plaintiff’s (first respondent on the appeal) application by originating summons be dismissed such that the first defendant’s (appellant’s) annulment on 30 May 2016 of the plaintiff’s decision to dismiss the second defendant (second respondent) from the Public Service remains operative. For the avoidance of doubt, it would be declared that the second respondent’s contract of employment as a senior officer has not lawfully been terminated and she is entitled to salary and arrears of salary and other contractual entitlements unless and until that contract is terminated according to law.


COSTS


48. The Commission and Ms Tindiwi sought costs in respect of the appeal and in the National Court. Costs are a subject for the exercise of a judicial discretion. True it is that costs usually follow the event. But this is hardly a usual case. Instead, one branch of the Executive Government, the Secretary, chose to sue another (the Commission), with Ms Tindiwi a necessary party but one who chose to represent herself. The litigation has served an important public interest in clarifying the operation of the PSM Act and the General Orders in relation to the renewal of the contracts of those holding designated senior offices. Though costs orders have been made in the past in what one may term intra-government litigation, the purpose of a costs order is compensatory, not punitive. Papua New Guinea has but one consolidated revenue fund. To make an order for costs in favour of the Commission would in substance be nothing more than an accounting exercise within that consolidated revenue fund, wasteful in public resources in its implementation. Ms Tindiwi has not been a passive party albeit that she has largely adopted the Commission’s submissions. Without passing on whether a person who appears for him or herself and who happens to be an admitted legal practitioner should for that reason alone be entitled to costs in circumstances where a person who appears in person but is not so qualified should be so entitled, I do not consider that this is an apt case in which to make an order for costs in her favour. Rather, the order I would make is that each party bear their own costs.


49. THOMPSON J: The second respondent (“JT”) was employed under a contract, which she did not put in evidence, but which she said commenced in February 2011 and expired in 2014, as PLO Grade 18, Islands Region.


50. During that contract period, in February 2013 she was appointed Acting Solicitor-General. It was said that pursuant to General Order 4.40, an acting officer shall retain their substantive position. The contract for the substantive position expired in February 2014. JT’s appointment as Acting Solicitor-General was revoked on 26 June 2014. There was no evidence that JT occupied any position or performed any work since 27 June 2014.


51. In October 2014 JT was offered a contract as a PLO Grade 18, Islands Region, with effect from 28 June 2014. This was said to be a contract in the standard form, with standard terms and conditions. This contract stated that it was made pursuant to s 41 of the Public Services (Management) Act ( ‘the Act ‘), and the contract was said to include the General Orders made pursuant to the Act. Clause 1 provided that the contract was for three years, subject to the termination provisions. Clause 2(c) provided that she shall obey and comply with all lawful orders and directions. Clause 2(e) provided that she shall observe and comply with the Code of Ethics and Conduct. Clause 10 provided that on termination, under no circumstances shall an unrestricted termination payment be made for the unexpired period of the Contract.


52. The Termination Provisions clause 1(d) provides that she may be terminated for cause as a result of breach of contract following disciplinary action. Clause 4 says that in the event of termination under clause 1(d), the employment shall cease in accordance with the Termination Procedures.The Termination Procedures are in clause 5, which provides in clause 5(a) that termination may be effected under various clauses of the contract by giving 3 months’ notice or pay in lieu. Clause 5(b) says that termination pursuant to clause 1(d) for cause, shall be with or without 3 months’ notice or pay in lieu.


53. On 5 November 2014 JT said that she accepted the contract but requested that she take leave before taking up the position in Kokopo. On 7 November 2014 JT was informed that her request was granted, on the condition that JT set a date for commencement of the position. She gave that date as 12 March 2015.


54. JT did not then attend work, in either Port Moresby or Kokopo. On 8 April 2015 JT was given notice that she had been absent from duty without authorization, and she was directed to immediately take up the position in Kokopo. She was warned that her failure to do so would result in serious disciplinary charges. JT did not take up the position.


55. On 12 May 2015 she was directed to take up the position by 25 May 2015. She did not do so, and she refused to sign the contract.


56. On 18 June 2015 JT was directed to move out of the office. She refused to do so, and on 21 June 2015 the files were removed from the office. JT was then alleged to have behaved in a disrespectful manner.


57. On 24 June 2015 JT was suspended and disciplinary charges were laid against her under s 51 of the Act, which provides that an officer who wilfully disobeys or disregards a lawful order, is guilty of a disciplinary offence. JT was invited to and did, give a written response to the charges. She denied the merits of the charges, and did not raise any issue as to their correctness.


58. On 15 July 2015 JT was found guilty of two of the charges, and after being given an opportunity to make further submission on penalty, she was dismissed, pursuant to para 15.33(e) of the General Orders.


59. On 13 August 2015 JT made an application for review of that decision, by the Public Services Commission. She again did not raise any issue as to the correctness of the charges. She sought an order to quash the decision to dismiss her, and orders that she be reinstated with back pay.


60. The PSC raised the issue of whether or not the charges had been correctly laid under the Act, or if JT was a contract officer at the time of the disciplinary proceedings and so charges should have been laid under the provisions of the contract.


61. On 30 May 2016 the PSC annulled the decision to dismiss JT, ordered that she be reinstated “on the same substantive level and position she held prior to her dismissal”, that she be paid back pay, and that “all charges and other documents relating to the disciplinary action ... be destroyed in her presence”.


62. The 1st respondent issued proceedings for judicial review of that decision. On 17 July 2018 the Court found that JT’s employment under the 2011 contract had not been renewed after it lapsed, it was not impliedly renewed, she did not sign a new contract, and so was unattached at the time of her termination, and was correctly charged under the Act. The Court upheld the review and set aside the PSC decision.


63. The appellant then issued this appeal, on the grounds that the primary judge erred in finding that the contract had not been impliedly renewed, erred in finding that the PSC was wrong in applying Wolfgang Bandisch v National Capital District Botanical Enterprises (2009) N3806, and erred in finding that JT was not a contract officer. The appellant sought an order confirming the PSC decision.


ISSUES


64. The PSC had found that JT was not an unattached officer, and that her “contract was still in place when her appointment as acting Solicitor General was revoked”, because either by virtue of her acting appointment, there was an implied renewal of her substantive contract, or she was offered a position in October 2014 which she accepted, which created a renewal of her existing contract.


65. Neither of those reasons for the finding of a contract, were correct. There is nothing in the legislation, General Orders or contract which provides that a substantive contract is automatically renewed on expiry, if the officer is acting in a different position. The offer of a position in October 2014 was not accepted, it was rejected by JT, and so could not have acted as a renewal of her expired contract.


66. The PSC essentially found that JT was impliedly renewed because she stayed on the payroll. However, staying on the payroll is not the same as being employed on a contract.


67. Based on the finding that JT had an implied contract, the PSC found that she was wrongly charged under s 52 the Act, instead of under the relevant provisions of the Contract.


GENERAL ORDERS


68. The General Orders were not put in evidence in the National Court, and so were not in the appeal book.


69. The appellant’s counsel provided copies of what was said to be extracts from General Orders 4 and 9. No application was made to adduce fresh evidence, and the status of these documents was not clear.


70. Para 9.17 of General Order 9 says that in the event of any conflict between the contract and the General Orders, then the contract shall prevail.


71. Para 9.29 says that the Disciplinary Procedures require the officer to be charged and suspended, and given the right to respond to the charge before the decision is made.


72. Para 9.36 says that the contract may be terminated at any time by either party, in accordance with the contract provisions.


73. Para 9.39 says that upon termination, following termination of the notice period, the officer’s employment in the Public Service will cease.


74. Para 9.40 says that upon termination, unless the contract is renewed, then employment in the Public Service will terminate.


75. Paras 9.58 to 9.62 provide for a performance review process to be commenced within 6 months, and completed with 3 months, of the expiry of the contract.


76. There was no evidence that a performance review process had been carried out. If JT was employed on a contract, she could have applied in that period to the DPM, or to the court for an order for mandamus compelling the review to be undertaken. She did not do so.


77. Para 9.64 says that “Provided that the Contract Officer has performance reviews with ratings of not less than 4, then renewal of the contract shall be automatic”.


78. JT did not have a performance review with a rating of not less than 4. The renewal of her contract was therefore not automatic.


79. It follows that in the absence of an automatic renewal due to a performance rating of not less than 4, the contract could only be renewed by a decision to do so.


80. There was no evidence, and it was not in dispute, that no decision was ever made to renew a contract of an employment for JT. The sole basis of her claim was that her 2011 contract had been “silently” or impliedly renewed. If so, this must have taken place in February 2014.


PRINCIPLES OF INTERPRETATION


81. The rule of interpretation of a document, often called ‘the golden rule’, is that:


The words which the parties have used...being ordinary words of the English language, must be construed in their ordinary and natural meaning unless the context otherwise requires.’ (The Interpretation of Contracts, Lewison, 5th ed, 2011, at 5.01.)


82. In Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; [2009] 1 AC 1101, the Court said:


It is of course true that the fact that a contract may appear to be unduly favourable to one of the parties, is not a sufficient reason for supposing that it does not mean what it says.


83. The wording of para 9.64 uses ordinary words which are clear and unambiguous, and which must be construed in their ordinary and natural meaning. The context of the document makes it plain that there is a process for renewal of a contract . Where the process is followed and the ratings are below 3, the contract shall not be renewed. It is only where the process is followed and there are ratings of not less than 4, that renewal is automatic. If there are no ratings, the officer cannot have either the benefit of automatic renewal, or the penalty of automatic non-renewal. The only result is that a decision must be made as to whether or not the contract will be renewed.


84. The wording is therefore not unduly favourable to one party, and even if it was, it is not a reason to alter their plain meaning. There is no room in the plain wording of the clause, to imply a different interpretation which produces the opposite result, namely, that where the process is not followed and there are not ratings of not less than 4, the renewal is automatic.


85. Paras 9.66 and 9.67 provide that if an officer can be charged with a disciplinary offence, or a deliberate refusal to perform her duties, then the officer must be charged, and they must not wait for the contract to expire.


86. Para 9.74 says that where a contract is to be terminated, the officer shall be an unattached officer until the officer is terminated.


87. On this point, s 2 of the PSM Act defines an unattached officer as being an officer who is not occupying an office. This of course does not mean sitting in a physical office, it means holding a position in the Public Service. Para 9.74 does not define the only circumstances in which an officer becomes unattached. Para 9.74 merely clarifies the officer’s position between when a decision has been made to terminate, and when that decision is implemented.


88. The 2011 contract expired in February 2014. It was said that pursuant to General Order 4.40, on appointment to an acting position, JT retained her substantive position. This could only mean that, at the date of her acting appointment, she retained her substantive position which would expire in accordance with the contract, in February 2014.


89. She could not retain a substantive position which she did not have. Her substantive position under the contract had already expired in February 2014.


SECTION 41


90. Section 41 of the PSM Act provides that, notwithstanding the provisions relating to promotion and appointment, where a contract of employment terminates or is terminated and is not subsequently renewed, and the appointee under the contract of employment is not reappointed to another office under this Act, employment in the Public Service is terminated on conclusion of the due notice period.


91. JT’s contract terminated in February 2014. She rejected, and so was not reappointed to, another office under the Act. The only way in which her employment in the Public Service did not then terminate in February 2014, was if her contract was renewed. It is not in dispute that no decision was made in February 2014 to renew her contract. The PSC merely says that her contract was impliedly renewed.


92. There is no room for implying any renewal of a contract, when there are a large number of specific and detailed provisions setting out how renewal is able to be effected, and the consequences of renewal not being so effected.


93. The PSC and JT submitted to this Court, but not to the primary judge, that her contract was automatically renewed pursuant to General Order 9.64. A party is not generally entitled to rely on an argument first raised on appeal (Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705). Nevertheless, the point was raised and argued.


94. Para 9.64 is clear and unambiguous: it is only where the officer has a performance review rating of not less than 4, that renewal is automatic. JT did not have a rating of not less than 4. Her renewal was not automatic. Any renewal therefore could only be as a result of a decision to renew her contract, and it is not in dispute that no such decision was made.


95. As the contract could not have been renewed automatically, and as no decision was made to renew it, it follows that by the end of February 2014, the contract had terminated.


96. At this time, JT was occupying another temporary position. When that ended in June 2014, she had no substantive position to return to, so that she was then not employed under a contract, but was either unattached, or not employed at all. As she continued to be on the payroll, but did not occupy any office, the presumption is that she was employed, and unattached.


97. She was subsequently offered a contract position, but she refused it, and refused to sign a contract. It follows that at the date when the disciplinary charges were laid in 2015, JT was either not employed at all, or was still an unattached officer, in that she was not occupying any office.


THE OFFICER WAS CORRECTLY CHARGED


98. On either view, she was not a contract officer, and she was correctly charged under s 52 of the PSM Act. The learned primary judge therefore did not err in reaching this conclusion. The learned judge also did not err in finding that Wolfgang Bandisch v National Capital Botanical Enterprises Ltd (2009) N3806 was completely distinguishable, and of no application to employment in the Public Service.


REMEDIES


99. Even if JT had been employed under a contract at the date when the disciplinary charges were laid, so that it was shown that the wrong procedure had been followed, the judge would then have been obliged to consider whether or not any relief should be granted. A plaintiff who successfully establishes grounds for judicial review, is not automatically entitled to the relief sought. It is a matter for the discretion of the court, and the overarching consideration is the interests of justice (Mision Asiki v Manasupe Zurenuoc (2005) SC797, Tzen Pacific Ltd v Kanawi Pouru and Ors (2016) SC1550).


100. The evidence here showed that even if JT had been a contract officer, she was subject to the same contractual obligation not to wilfully disregard lawful directions and orders, and subject to the same disciplinary procedures requiring suspension, written charges, and an opportunity to respond, as in the Act. JT was not denied any procedural fairness, and there was no breach of natural justice.


101. Further, it is well established law in PNG that an employee who is unlawfully terminated is generally only entitled to receive what he would have received if he had been lawfully terminated. The usual remedy is damages, and the measure of damages is the period of notice unless the contract provides otherwise (Jimmy Malai v PNG Teachers Association (1992) SC431, Porgera Joint Venture v Robin Kami (2010) SC1060).


102. The standard form of contract under which JT said that she was employed, provided for termination to be effected by 3 months’ notice or pay in lieu, and that on termination, under no circumstances would payment be made for the unexpired balance of the contract. There would therefore have been no basis for ordering backpay for the full period of the contract.


103. In relation to reinstatement, the Courts have always accepted that they should be loath to order reinstatement where the relationship between the employer and employee has broken down (Ayleen Bure v Robert Kapo (2005) N2902). Here, the relationship between JT and her employer had clearly broken down, and become noxious to both of them. It would have been unreasonable to order reinstatement. As a matter of public policy the Court will not order an unwilling private employer who has lost faith in its employee, to re-employ her. In the public sector, where persons are now employed under contracts, the same principle should be applicable.


104. For these reasons, even if JT had been found to have been terminated under the wrong procedure, the Court had the discretion to refuse to grant the relief sought.


105. Finally, reference must be made to the decision of the PSC to purport to order the destruction of the records relating to JT’s disciplinary proceedings.


106. Section 18 of the Act gives the PSC the discretion to uphold, vary or annul the decision the subject of the complaint. The decision the subject of JT’s complaint did not include any reference to the destruction of records, so there was no such decision to uphold, vary or annul. It would be fanciful to say that s 18 gave the PSC the power to add a completely new and different decision. Further, the first respondent, and indeed all government departments, are obliged to create and maintain contemporaneous records of their business. It would be antithetical to the notion of good governance if records could be destroyed at will.


CONCLUSION


107. If JT was employed under a 3 year contract in February 2011, that contract expired in February 2014, subject to renewal.


108. In February 2014 JT did not have a performance review rating of not less than 4, so her contract did not automatically renew pursuant to Para 9.64 of the General Orders.


109. No decision was made to renew the contract on or before February 2014. JT was not appointed to another office under the Act, in February 2014 or at any other time.


JT’s employment in the Public Service thereupon terminated, pursuant to s 41(4) of the Act. Notwithstanding this, she continued on the payroll, without occupying any office, and was treated as an unattached officer.


110. At the date when disciplinary proceedings were brought against JT in June 2015, she was not employed under a contract.


111. JT was therefore correctly charged under the Act, and there was no error in the decision of the learned primary judge.


112. For these reasons, I would order that the appeal be dismissed, that the decision of the National Court be affirmed and that the parties bear their own costs.


ORDER


113. The order of the Court, by majority, is:


  1. The appeal is dismissed.
  2. The order of the National Court of 17 July 2018 in OS (JR) No 434 of 2016 is affirmed.
  3. The parties shall bear their own costs of the proceedings.

_______________________________________________________________
Counsel to the Public Services Commission: Lawyer for the Appellant
Kamutas Legal Services: Lawyers for the First Respondent


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