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Fonua v Tonga Communications Corporation Ltd [2006] TOLawRp 27; [2006] Tonga LR 278 (16 August 2006)

IN THE COURT OF APPEAL OF TONGA

Fonua

v

Tonga Communications Corporation Ltd

Court of Appeal, Nuku'alofa
Webster CJ, Burchett, Salmon, and Moore JJ
AC 11A/2004

7 August 2006; 16 August 2006

Practice and procedure – appeal out of time – special circumstances – time extended

Employment law – question of whether resignation was voluntary – not voluntary – unjustified dismissal

The facts of the judgment are set out at Fonua v Tonga Communications Corporation Ltd [2003] Tonga LR 351. The Court effectively dismissed the claim by the applicant that alleged that he had been wrongfully dismissed in July 1999 by his employer The Tonga Telecommunications Commission ("the Commission"), now the Tonga Communications Corporation Ltd ("the Corporation"). However, the Chief Justice ruled that notwithstanding the adverse finding in relation to the wrongful dismissal claim, the applicant was entitled to the pension. On 21 July 2005, the Court of Appeal upheld the Corporation's appeal and concluded that the construction of the pension scheme provisions adopted by the Chief Justice was erroneous. The effect of the Court of Appeal's judgment was to deprive the applicant of the benefit of a favourable ruling by the trial judge concerning his pension even though his Honour had effectively dismissed his application for wrongful dismissal. On or about 14 September 2005, the applicant filed a notice of appeal purporting to appeal against the judgment of the Chief Justice of 11 December 2003 putting in issue the conclusion of the Chief Justice that the applicant had not been wrongfully dismissed but had voluntarily resigned. That appeal was plainly out of time. It was necessary for the applicant to obtain an extension of time to prosecute an appeal. However the hearing was conducted on the basis that the parties would address both the question of whether time should be extended and also the merits of the appeal so the appeal could be determined in the event that time was extended.

Held:

1. The application to extend time was filed almost two and a half years after the Chief Justice's judgment. The power to extend time was a discretionary power. In exercising the discretion, time should be extended only if it was necessary to do justice between the parties. It was necessary to have regard to the history of the matter, the conduct of both parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the extension. A relevant consideration was the prospect of the applicant succeeding in the appeal. Also, the failure of a legal adviser to take proper steps could be regarded as establishing sufficient cause to extend time. The candid and proper concession of counsel as to why there was the delay, was a factor supporting the extension of time.

2. It was in the interests of justice to extend time.

3. The court found that the Commission dismissed the applicant by requiring him to resign in circumstances in which he knew that if he did not, he would be dismissed. That occurred in circumstances where the Commission could only dismiss the applicant if it was established, by proper process, that he was guilty of gross misconduct. That was never established and the applicant's dismissal was not lawful. The Chief Justice erred in reaching the contrary conclusion.

4. Time should be extended and the appeal should be allowed.

5. The court made the following orders: time was extended until 14 September 2005 to file the notice of appeal; the appeal should be allowed. The court declared that on or about 29 July 1999 the applicant was wrongly dismissed. The matter was remitted to the Supreme Court to assess damages for the wrongful dismissal. Costs should be ordered as discussed.

Cases considered:

Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66

Brown, Kali & Minister of Lands v Tali 'Ofa [1990] Tonga LR 136

Cabal v United Mexican States [2001] FCA 427; (2001) 108 FCR 311

Commodities Board v Christine 'Uta'atu [1990] Tonga LR 92 (PC)

Commonwealth, Re; ex parte Marks [2000] HCA 67; (2000) 177 ALR 491

Scott v Jess [1986] FCA 365; (1986) 12 FCR 187

Statutes considered:

Pensions Act (Cap 8)

Tonga Communications Corporation Act 2000

Rules considered:

Court of Appeal Rules 1990

Counsel for appellant: Mr Niu
Counsel for respondent: Mr Tu'utafaiva

Judgment

Introduction

[1] This is an application for an extension of time to appeal against a judgment given by Chief Justice Ward on 11 December 2003 (see [2003] Tonga LR 351). His Honour effectively dismissed a claim by the applicant, Siosaia H Fonua, alleging that he had been wrongfully dismissed in July 1999 by his employer The Tonga Telecommunications Commission ("the Commission"), now the Tonga Communications Corporation Ltd ("the Corporation"). It is necessary for the applicant to obtain an extension of time to prosecute an appeal. However the hearing was conducted, as such matters often are, on the basis that the parties would address both the question of whether time should be extended and also the merits of the appeal so the appeal could be determined in the event that time was extended.

[2] In the proceedings resulting in the judgment of 11 December 2003, an issue arose about whether the applicant was entitled to a pension under a pension scheme modelled on the scheme embodied in the Pensions Act (Cap 8). The learned Chief Justice indicated in his judgment that he would hear further submissions from the parties on that issue. In the result, on 28 June 2004, his Honour made a ruling that the applicant was entitled to be paid a pension when he reached his 50th birthday. That occurred on 8 August 2000. The ruling of 28 June 2004 was the subject of an appeal by the Corporation.

[3] On 21 July 2005, the Court of Appeal upheld the Corporation's appeal and concluded that the construction of the pension scheme provisions adopted by the Chief Justice that had led him to conclude that the applicant was entitled to a pension, was erroneous. The effect of the Court of Appeal's judgment was to deprive the applicant of the benefit of a favourable ruling by the trial judge concerning his pension even though his Honour had effectively dismissed his application for wrongful dismissal.

[4] On or about 14 September 2005, the applicant filed a notice of appeal purporting to appeal against the judgment of the Chief Justice of 11 December 2003 putting in issue the conclusion of the Chief Justice that the applicant had not been wrongfully dismissed but had voluntarily resigned. That appeal was plainly out of time: see Order 5 Rule 2 of the Court of Appeal Rules 1990. On or about 26 May 2006, the applicant filed an application for leave to appeal out of time. That application was accompanied by an affidavit of his counsel in which he candidly and properly deposed to having given his client inappropriate advice about when and on what basis an appeal should be brought.

The judgment below

[5] Before considering the application for extension of time, it is convenient to summarise the reasoning of the Chief Justice in concluding that the applicant had not been wrongfully dismissed. There was no real issue before his Honour about the primary facts. The applicant led evidence and gave evidence himself. The Corporation led no evidence. In July 1999, the applicant was the Chief Engineer of the predecessor of the Corporation, the Commission. The Commission became the Corporation by operation of the Tonga Communications Corporation Act 2000. Both the Commission and later the Corporation had their origins in the Telegraph and Telephone Department of the Government. The applicant commenced working in the Department in 1971. He worked continuously for the Department and the Commission until July 1999. As the trial judge noted, at that time the applicant was a very highly qualified and experienced telecommunications engineer and he fully expected to continue working for the Commission until he reached retirement. His Honour also noted that following a number of incidents, the applicant was told to resign and did so.

[6] In summary, his Honour's findings concerning the events leading to the applicant tendering a letter of resignation were that in 1996 issues arose about the standard of telephone services provided by the Commission and, in particular, what was revealed by the ASR (Answer Seizure Ratio) which was a means of measuring the number and types of unanswered calls both incoming to and outgoing from Tonga. The applicant, who headed the Engineering division of the Commission, believed the cause of the problem lay elsewhere in the organisation. In the result, the relationship between the applicant and the General Manager had, by 1999, deteriorated. In June 1999, the applicant sent a memorandum to the General Manager, in which he expressed an opinion about the losses the Commission had suffered and advocated the dismissal of the Chief Commercial Officer. That memorandum was later produced in the Legislative Assembly. His Honour noted that it was clear from the evidence that the General Manager and some of the applicant's senior colleagues suspected it had been passed on by the applicant. His Honour also noted that this was denied by the applicant and there was no evidence to support the allegation.

[7] On 6 July 1999, the General Manager submitted a report to the Commission's Monitoring Committee answering the applicant's memorandum concluding that "the ASR conclusions of [the applicant] is therefore unacceptable and wrong". That committee heard from the applicant about his memorandum, but it did not accept his assertions. The Monitoring Committee adjourned to allow it to see if there was any "further and accurate information" available. It met again on 8 July 1999 and again concluded that the applicant's conclusions concerning the ASR were incorrect and erroneous. The Monitoring Committee met again on 12 July 1999. As his Honour recorded, the committee noted seven matters which it considered constituted serious misconduct on the part of the applicant. Having regard to his Honour's findings, it appeared not to be in issue that at that meeting the applicant was told to resign. In any event, that became apparent in a letter to him from the General Manager dated 13 July 1999 which noted the meetings of the Monitoring Committee on 6, 8 and 12 July 1999 and then said:

......It is now up to a point that someone has to move out in order for the services of [the Commission] to be executed smoothly and effectively.

You well recount all the issues considered at the above meetings and that the blames fall at your side. It was therefore advised to you that for the good of the Tonga Telecommunications Commission and your own good, it is advisable for you to attend your resignation from the services of [the Commission] and to submit your letter by Tuesday 20th July 1999.

[8] Later, the General Manager prepared a briefing paper for a meeting of the Monitoring Committee scheduled for 20 July 1999. In that paper, the General Manger discussed procedures for charging the applicant.

[9] The applicant, after receiving the General Manager's letter of 13 July 1999, wrote a resignation letter and as the trial judge noted, "he knew the consequences if he did not resign". The applicant tendered the letter on 20 July 1999 giving three months notice. In his letter he expressed sincere regret for the "damages and inconvenience" caused to the Chairman of the Board, members of the Board, the Commission and its staff. The applicant continued to attend his workplace. However he received a letter from the General Manager dated 29 July 1999 informing him that the Board had, that day, accepted his resignation, that the resignation was effective immediately and that the requirement for three months notice had been waived. He was also told that he would be paid a gratuity equivalent to three months salary. Receipt of that payment was acknowledged by the applicant in a letter dated 9 August 1999 though it was expressed to be received under protest.

[10] After recounting these primary facts, the Chief Justice noted that the main thrust of the applicant's case was that he was effectively dismissed. His resignation had been forced on him. He had offered to resign because he was told to and was sure that if he did not he would be dismissed because the decision had already been made. There were proper procedures for dismissal which had not been followed.

[11] The Chief Justice dealt with this contention in the following passage:

..... The [applicant] has not persuaded me on the balance of probabilities that he was forced to resign. It is all too clear that the point had been reached where the General Manager was going to recommend disciplinary action against the [applicant]. The Monitoring Committee had accepted there were grounds for such action and, in order no doubt to offer the [applicant] an alternative, suggested he should resign.

There is no doubt that, in deciding whether to accept that advice, the plaintiff considered the alternative and the risk of dismissal. Resignation, as he agreed with Counsel for the defence, will allow him to seek further employment in that field. Dismissal would be a serious bar to any hope of future employment in a position of responsibility in the communications industry.

I am satisfied he considered it the better option and made a free decision. The note prepared by the General Manager for the meeting of 20 July 1999 when he thought the plaintiff had not decided to accept that course, shows that the intention was to charge the plaintiff and to put the matter through the proper channels. If successful, he would have retained his position but he decided not to take that more risky option.

He has devoted considerable time in the witness box to maintaining that he was correct in all he did. He was a man of considerable experience with [the Commission]. I have no doubt that, had he thought he could have succeeded, he would have taken the option of fighting it through the Commission procedures. He complains that the proper procedures were not followed but I am satisfied that no decision had been made to dismiss him by the time he was offered the option to resign. The decision was to charge him and he accepted that he would be better to offer his resignation.

[12] It was for these reasons that the Chief Justice concluded that the applicant had not been wrongfully dismissed. He had resigned voluntarily.

Application for extension of time

[13] The purported notice of appeal was filed a little less than two years after the judgment in which the Chief Justice concluded that there had been no wrongful dismissal though it was only less than two months after the Court of Appeal determined that the applicant was not entitled to a pension. The application to extend time was filed almost two and a half years after the Chief Justice's judgment. The power to extend time is a discretionary power. In exercising the discretion, time should be extended only if it is necessary to do justice between the parties. It is necessary to have regard to the history of the matter, the conduct of both parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the extension. A relevant consideration is the prospect of the applicant succeeding in the appeal: see generally the observations of McHugh J in Re Commonwealth; ex parte Marks [2000] HCA 67; (2000) 177 ALR 491 at 495. The following are some particular matters relevant to the exercise of the discretionary power.

[14] The explanation given by counsel for the applicant for the delay was, as noted earlier, erroneous advice given to the applicant about when and on what basis an appeal should be brought. It appears that the applicant and his counsel took comfort from the ruling of the Chief Justice that notwithstanding the adverse finding in relation to the wrongful dismissal claim, the applicant was entitled to the pension. However the applicant's counsel now accepts that the prudent and appropriate course was for the applicant to have cross-appealed (or perhaps filed a notice of contention) from what in effect were the combined rulings and judgment of the Chief Justice that the applicant had not been wrongfully dismissed but was entitled to the pension. Had that course been followed, the Court of Appeal would have been able to consider in the one appeal proceeding, both of the Chief Justice's conclusions. However the failure of a legal adviser to take proper steps can be regarded as establishing sufficient cause to extend time: see Scott v Jess [1986] FCA 365; (1986) 12 FCR 187 at 190. In the present case the candid and proper concession of counsel as to why there was the delay, is a factor supporting the extension of time.

[15] There is an obvious theoretical prejudice to the Corporation if time is extended. Legal issues which it thought had been settled in its favour, are reopened. But counsel for the Corporation did not submit there was any actual prejudice. However, against that can be balanced the prejudice to the applicant, if he is entitled to a remedy and is unable to obtain it because of the combined effect of error on the part of the trial Judge (if this is established) and misjudgement on the part of his legal adviser.

[16] It will shortly be apparent from our discussion of the merits of the appeal, that the applicant has a strong case. Indeed, he should succeed in the appeal.

[17] In all the circumstances, we are satisfied that it is in the interests of justice to extend time. The case is an unusual one. The judgment against which the applicant wishes to appeal (involving the determination that he had not been wrongfully dismissed) was an innocuous one from his perspective at least from the time the ruling in his favour was made by the Chief Justice concerning the pension until, many months later, that ruling was reversed on appeal by the Court of Appeal. We should emphasise that our ruling in this matter should not be taken as a licence for aggrieved litigants to delay bringing appeals. It is generally in the interests of the administration of justice, for judgments of the Supreme Court and other courts to be treated as final after the period for bringing an appeal has expired. Any other approach introduces unacceptable uncertainty into the Tongan legal system.

The appeal

[18] The gist of the applicant's case in the appeal was that the Chief Justice erred in concluding that the applicant had resigned voluntarily and had not been dismissed. The Corporation's case was that the conclusion that the applicant had resigned voluntarily was a conclusion of fact which should not be interfered with by an appeal court: see Brown, Kali & Minister of Lands v Tali 'Ofa [1990] Tonga LR 136 at 137 and 138.

[19] A convenient starting point is considering the role of an appeal court in relation to findings of fact. It cannot be doubted that a trial judge is in a special position when hearing evidence and any invitation to review findings of fact should be approached with caution for the reasons explained in Brown, Kali & Minister of Lands v Tali 'Ofa. Particular caution is necessary if findings of fact may depend on the assessment by the trial judge of witnesses who have given evidence. However this is not such a case. First, the evidence of the applicant was not challenged by evidence from the Corporation. Indeed, somewhat curiously, the Corporation called no evidence in the proceedings before the Chief Justice. Secondly, the primary facts appear not to have been disputed.

[20] What was in issue before the Chief Justice, and is in issue in this appeal, is what inferences can be drawn from those primary facts. The critical inference is whether the applicant resigned voluntarily or whether the applicant effectively had no choice but to resign. In circumstances where there is an appeal by way of rehearing from a judge sitting without a jury, the appellate court is in just as good a position as the trial judge to decide on the proper inference to be drawn from facts which are not disputed. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge. However once having reached its own conclusion it will not shrink from giving effect to it: see Cabal v United Mexican States [2001] FCA 427; (2001) 108 FCR 311 at 362.

[21] In the present case, the Chief Justice inferred that the applicant resigned voluntarily. From one perspective, this is true. The applicant was asked to resign and some days later, wrote a letter of resignation and tendered it to the Commission. The writing and tendering of the letter were voluntary acts in the sense that they were conscious acts of the applicant. He was not, in relation to the physical steps of preparing and providing the letter, acting involuntarily. They were his acts. However those voluntary physical acts occurred in a context where he had no effective choice but to resign.

[22] It may be accepted, as the Chief Justice noted in the passage quoted earlier, no decision had been made to dismiss the applicant. However, with respect, that conclusion focuses on form rather than substance. The Monitoring Committee was comprised of most of the Board of the Commission, its ultimate decision making body. The committee had expressed the firm view on 12 July 1999, that the applicant had been guilty of serious misconduct in seven ways particularised in a summary of its conclusions. The misconduct included wrongly alleging loss by the Commission, providing erroneous and misleading information, wrongly blaming other staff, insubordination and incompetence. The later conduct of the General Manager directed to formulating charges appears to us to have been an attempt to regularise, as a matter of process only, what were clearly predetermined views about the guilt of the applicant.

[23] The unambiguous request that the applicant resign was effectively made on behalf of those within the Commission with power to make decisions after they had made clear their view that the applicant was guilty of gross misconduct. The high probability, if not certainty, was that if the applicant had not resigned, their predetermined views would have been confirmed in any process designed to consider charges and the applicant would have been dismissed for gross misconduct. Our conclusion in this regard is fortified by the forensic decision made by the Corporation to defend the applicant's claim in the Supreme Court only on the basis that he had resigned voluntarily. It did not raise a defence that the applicant had been guilty of gross misconduct. That forensic decision relieved the Corporation of the burden of proving the misconduct: see Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66.

[24] Counsel for the Corporation conceded in the appeal, that having regard to the Commission's staff regulations promulgated in January 1998, the applicant could only be dismissed for gross misconduct and then, it appears, only after the procedures of charging the applicant had been followed: see generally reg 4.1 of section 12.5 of those regulations. The position appears to be analogous to that considered by the Privy Council in Commodities Board v Christine 'Uta'atu [1990] Tonga LR 92.

[25] In our opinion, the Commission dismissed the applicant by requiring him to resign in circumstances in which he knew that if he did not, he would be dismissed. That occurred in circumstances where the Commission could only dismiss the applicant if it was established, by proper process, that he was guilty of gross misconduct. That was never established and the applicant's dismissal was not lawful. The Chief Justice erred, with respect, in reaching the contrary conclusion. Time should be extended and the appeal should be allowed. Counsel for both the applicant and the Corporation ultimately accepted that if we reached this conclusion it would be appropriate that the matter be remitted to a judge of the Supreme Court to assess the damages payable to the applicant. However we would urge the parties to investigate, in the meantime, whether the matter could be settled and, in particular, whether a pension (or compensation for loss of the pension) might be paid to the applicant.

Originally, the applicant received half his costs of the trial before the Chief Justice. That order was set aside by the Court of Appeal in its judgment of 21 July 2005 though no order was made as to the costs of the appeal. The applicant should have his costs of the trial and two-thirds of his costs in this appeal. While the applicant has succeeded in the appeal, the hearing was unnecessary in the sense that the issue decided in the applicant's favour could have been raised in the hearing which resulted in the Court of Appeal's judgment of 21 July 2005. For this reason, the applicant should not have all his costs of this appeal.

[26] The appropriate orders are as follows. Time should be extended until 14 September 2005 to file the notice of appeal. The appeal should be allowed. We would declare that on or about 29 July 1999 the applicant was wrongly dismissed. The matter should be remitted to a judge of the Supreme Court to assess damages for the wrongful dismissal. Costs should be ordered as discussed in the preceding paragraph.