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Tapungao v Attorney-General [2004] TVHC 1; Case No 03 of 2003 (1 April 2004)

IN THE HIGH COURT OF TUVALU
CIVIL JURISDICTION


CASE NO. 3 of 2003


BETWEEN:


TITO TAPUNGAO
Applicant


AND:


THE ATTORNEY GENERAL
First Respondent


AND:


TUVALU MARITIME TRAINING INSTITUTE
Second Respondent


BEFORE THE HONOURABLE JUSTICE WARD


Counsel: T Malifa for the applicant
Attorney General for both respondents.


Date of Hearing: 9 April and 23 September 2003.
Date of Judgment delivered: 1 April 2004.


JUDGMENT


The applicant in this case was appointed as Captain Superintendent of the Tuvalu Maritime School on 26 February 1999. The appointment was on contract and was for a term of two years. On 22 January 2001, he was informed that his contract had been renewed for three more years from 26 February 2001. Prior to that Parliament had passed the Tuvalu Maritime Training Institute Act 2000 which changed the constitution and name of the School. Although it was referred to as a renewal of his contract, it appears it was to be in a different form because the letter notifying him of the renewal stated:


“The terms and conditions of your employment will be as clearly laid down in the TMTI Act 2000. Your contract is being finalised by the Board for approval by the Hon Minister in due course."


However, it appears the form of the new contract had not been finalised by 16 October 2002 when the applicant was advised in a letter signed by the Chairman of the Board, Seve Paeniu, that his appointment had been revoked effective from the date of the letter.


On 14 February 2003, the applicant filed a claim seeking:


"(1) An order by way of compensation under Part 11 Division 5 Article 38 of the Constitution for enforcement of the Plaintiff's constitutional rights;


(2) An Order that the 1st and 2nd Respondent/Defendants had breached the Plaintiff's contract


(3) An Order granting Leave to apply for Judicial Review


(4) Damages."


That was accompanied on the same day by a notice headed "Application under the Constitution and Motion Ex parte seeking Leave to Apply for Judicial Review".


“1. THAT the 1st and 2nd Respondents/Defendants committed an unlawful act in breach of Articles 12 and 15 of the Constitution in terminating the appointment of the Applicant/Plaintiff as Captain Superintendent, Tuvalu Maritime School, such termination being:-


(a) harsh and oppressive;

(b) not reasonable in all the circumstances, and

(c) is otherwise not reasonably justifiable in a democratic society having a proper respect for human rights and dignity.


  1. THAT the 1st and 2nd Respondents/Defendants in its decision to terminate the appointment of the Applicant/Plaintiff as Captain Superintendent, Tuvalu Maritime School, violated Article 22 (11) of the Constitution in not according to the Applicant/Plaintiff the protection of the law as procured thereunder; the said decision not having been made independently and impartially, and in not granting to the Applicant a fair hearing.

AND OR ALTERNATIVELY


  1. THAT the said decision to terminate the appointment of the Applicant/Plaintiff as Captain Superintendent breached his contract of employment renewed by letter dated 22nd January, 2001.

AND OR ALTERNATIVELY


  1. AN Order EX-PARTE FOR THE GRANT of leave under Order 61 of the Western Pacific H* h Court Rules, to file for Judicial Review the decision of the 1st and 2n Respondents to terminate the appointment of the Applicant/Plaintiff as Captain, Superintendent Tuvalu Maritime School,

UPON THE GROUNDS that the said decision:


(i) is reviewable under authority of [the CCSU case]

(ii) is unreasonable and unlawful under the Wednesbury Principles;

(iii) breached the rules of natural justice and fairness, no opportunity having been given to the Applicant to defend himself or to be heard in respect of Board of Enquiry's investigation.

(iv) was a political decision activated by malice and political pressure not conducive to the development and betterment of the Tuvalu Maritime Institute."


It is clear that the references to the Tuvalu Maritime School and the Tuvalu Maritime Institute in relation to the second contract are all intended to refer to the Tuvalu Maritime Training Institute (the Institute).


The respondents filed a defence on 5 March 2003 and the case came before the court on 9 April 2003.


I considered the pleadings confusing and repetitive. I gave leave to apply for judicial review and directed that the case should proceed on that basis and ordered that the claim and the defence be redrafted accordingly.


A new notice of application for judicial review was filed on 13 May 2003 the particulars of which were:


“1) Decision in respect of which the relief is sought:


The Application for Judicial Review is made against the decision dated 16th October 2002 of the first and second respondent to terminate the appointment of the applicant as Captain Superintendent and Chief Executive Officer of the Tuvalu Maritime Training Institute;


2) Reliefs sought and the grounds upon which they are sought:


(a) An Order for Certiorari to quash the said decision of first and second respondents dated October 16th 2002;

(b) A Declaration that the said decision of the first and second respondents is unlawful and of no effect;

(c) An Order for Damages, the amount of which and particulars thereof to be provided for at trial;

(d) An Order for Special Damages, the amount of which and the particulars thereof to be provided at trial;

(e) A further Declaration and any other reliefs as this Honourable Court seeks fit.


3) Grounds upon which the Relief is sought


That the said decision dated 16th October 2002:


i) is reviewable under the authority of the CCSU case

  1. is not clear as to who made the said decision, whether it was the first respondent or the second respondent or both. Accordingly, the decision of 16 1h October 2002 is ultra vires and is without lawful authority; it is void and of no effect;
  2. is unreasonable and unlawful under the Wednesbury Principles and CCSU case above;
  3. was made in breach of the rules of natural justice and fairness in that no opportunity was afforded to the applicant to defend himself and/or to answer to and respond to the said decision before it was made;
  4. further breached the rules of natural justice and fairness in that no opportunity was given to the applicant to defend himself or to be heard in respect of the Board of Enquiry's investigation and its findings;
  5. the sole purpose of the Board of Enquiry was to investigate certain allegations made against the applicant as CEO of TMTI; yet he was not present or made or required to be present to answer to all the witnesses statements and allegations made against him and/or to cross examine those witnesses;
  6. was a political decision activated by malice and political pressure not conducive to the development and betterment of the Tuvalu Maritime Training Institute."

No amended defence was filed but two affidavits in reply were filed the day before the hearing. It is clear the respondents rely on the same grounds as they raised in their original defence which is effectively a denial of all allegations made.


At the hearing in September 2003, the applicant relied solely on his affidavit and gave further evidence principally in relation to the measure of damages. The respondents relied on the affidavits they had filed from the Secretary of the Ministry of Education and Sport who is the Chairman of the Board of Directors of the Institute and the member/secretary of a three member Board of Enquiry into the applicant's administration of the Institute. An affidavit from the Minister was sworn on 30 October 2003 after the hearing. Whilst the applicant has raised an objection to the late filing of documents, there does not appear to be any objection to the inclusion of this affidavit and, indeed, the applicant relies on some of its contents to support his submissions.


A number of procedural objections were raised with which I can deal briefly.


At the hearing, the Attorney General pointed out that the terms of the TMTI Act created the Institute as a body corporate capable of suing or being sued. He suggested therefore that the second respondent should have been the Institute and not the Board of Directors. I stated I would check the Act and, if I found that to be the case, would substitute the Institute. It is correct and I do so. No application was made for an adjournment in consequence and there has been no claim that extra costs have been incurred as a result of the change. I am satisfied the change does not cause any injustice or even inconvenience to the new second respondent.


At the conclusion of the hearing, the court made orders as to the filing of written submissions by the parties. Counsel for the applicant points out that the submissions of the respondents were filed 9 days out of time. He complains that there was no application for leave to file out of time and suggests that, under O38 r (9)(f) and O29 r 10 of the High Court (Civil Procedure) Rules, the case was therefore closed. He also asks the court to find that the delay has violated the applicants right to fair trial under section 22 (11) of the Constitution.


The timetables set out in the Rules are there to ensure proper disposal of actions and failure by the parties to observe them may result in the action being struck out or the defaulting party being penalised in costs. In this case the respondents should undoubtedly have sought leave of the court to file out of time. However, I do not consider the failure to file within the time ordered by the court means the case is closed.


These submissions were not pleadings and there were no peremptory orders. Neither do I consider there has been any injustice caused nor do I consider the protection of section 22 of the Constitution has been violated.


I note that, apart from registering his complaint at the attitude demonstrated by the respondents' actions, the applicant does not seek any remedy from the court as a consequence of the failures and I make no order.


There is little dispute about the events that led to the applicant's dismissal although the relevance of the events and the motives behind some of the actions are a matter of sharp conflict.


The terms and conditions of the initial two-year appointment were set out in a written contract. The applicant was to be paid a local salary fortnightly and a substantial supplement monthly. After a three month probationary period, the contract allowed termination on three months notice either way or payment of one month's salary in lieu.


Clause 14 dealt with further engagement:


“14. Further Engagement


Three months prior to the completion of this Agreement the Contractor shall give notice in writing to the Government whether he desires to remain in its employment and the Government shall thereupon decide whether it will offer him further employment in which case the re-engagement will be on such terms and for such period as may be mutually agreed."


Before the end of the first contract, the Tuvalu Maritime Training Institute Act 2000 was passed which established the Institute as a body corporate governed by a Board of Directors responsible for the "policy, control and strategic direction of the Institute although, by section 5, the Minister may, after taking into account the views of the Board and Cabinet, issue "policy directions" and the Institute is required to act in accordance with them.


It would appear the applicant indicated his desire to remain because, by a letter dated 22 January 2001, his contract was renewed:


"Dear Tito,


Subject: Renewal of Contract


I am pleased to advise you that the Board of Directors for the Institute with the approval of the Hon Minister of Education, Sports and Culture have approved the renewal of your contract as Captain Superintendent of the Tuvalu Maritime Training Institute for a period of three years from 26 February 2001.


The terms and conditions of your employment will be as clearly laid down in the TMTI Act 2000. Your contract is being finalised by the Board for approval by the Hon Minister in due course."


It was signed by the, then, Chairman of the Board, Lutelu Faavae.


Despite the reference to terms and conditions being clearly laid down in the Act, They are not. On the contrary, the Board is given the power to determine them subject to the approval of the Minister.


The position of Captain Superintendent is established under the Act by section 12, under the marginal heading "Management":


"(1) The Chief Executive of the Institute shall be the Captain Superintendent who shall be responsible to the Board for the effective operation of the day to day activities of the Institute including the supervision and direction of officers and staff of the Institute.


(2) The Captain Superintendent shall be appointed by the Board with approval of the Minister.


(3) In exercising his functions under this Act, the Captain Superintendent shall act in accordance with such policy directions as may, from time to time, be received from the Board.


(4) The Captain Superintendent shall hold office for a period not exceeding 3 years on such terms and conditions as may be determined by the Board, subject to the approval of the Minister.


(5) The Captain Superintendent is eligible for reappointment.


(6) The Captain Superintendent shall devote the whole of his services to the Institute and shall not while holding office, without the approval of the Chairman of the Board:


(a) receive any remuneration from any office or any employment other than with the Institute; or


(b) hold any other office or employment, whether for remuneration or not, except as a nominee of the Institute.


(7) Where the Captain Superintendent is prevented by illness, absence from Tuvalu or any other cause, from exercising his functions as Captain Superintendent, the Board may appoint an Acting Captain Superintendent who shall act as the Captain Superintendent until the Captain Superintendent is able to resume his functions.


(8) The Board may by written resolution authorise the Captain Superintendent, a Director of other officer of the Institute to act, enter into contract and to sign instruments and documents, all on behalf of the Institute.


(9) The Captain Superintendent shall be paid by the Institute such salary and allowances as are determined by the Board and approved by the Minister.


(10) The Minister, on the advice of the Board may, by notice terminate the appointment of the Captain Superintendent for non-performance or any other reasons but shall provide him with a reason or reasons for the termination."


Section 13 (2 - 4) also deals with his duties:


"(2) The Captain Superintendent shall appoint, employ or dismiss such temporary and casual employees of the Institute as may be reasonably necessary for the purposes of or in connection with the business of the Institute on such terms and conditions as the Board may determine and approved by the Minister.


(3) The Captain Superintendent shall provide for the training, career development and discipline of the officers and staff of the Institute.


(4) The officers and staff of the Institute shall be under the administrative control of the Captain Superintendent."


As has been stated, the terms and conditions were never finalised and, in the period from February 2001, it appears the applicant was paid on the same basis as he had been under the previous contract.


In the meantime, a number of allegations were voiced in Parliament by one of the Members for Nukufetau about the manner in which the applicant was running the Institute. The evidence before the court does not give the date of those allegations but it is clear they were made during the April 2001 session. The allegations related to suggested improper management of the Institute, the manner in which some of the staff contracts were Terminated and the suggested unusual manner in which the applicant's son had been employed at the Institute and on the Nivaga II.


On 10 April 2001 Parliament passed a motion that Government should establish a Board of Enquiry into the allegations.


The applicant considered those remarks were untrue and, having been made under the protection of Parliament, unfair because he had no opportunity to respond. On 1 August 2001, he wrote to the Member of Parliament who had made them giving his answers. It is a detailed reply running to 18 pages of typescript with accompanying documents making up 8 appendices. Prior to that the applicant had also delivered an oral response to the allegations on Radio Tuvalu and had written a memorandum dated 25 July 2001 addressed to the, then, Minister of Education setting out information for allegations and Board of Inquiry".


In fact, the Board of Inquiry was only set up by the present Minister on 8 January 2002 and started its work immediately. Although its original terms of reference required a report within three weeks, the extent of the inquiry meant it was not ready until 15 April 2002 and was, on that day, submitted to the Minister.
He submitted it to Cabinet on 27 June 2002 when it was resolved that it should be submitted to the Board of the Institute.


No doubt as a result of the critical tone of some of the findings of the Enquiry, the Board of Directors of the Institute was reconstituted. That delayed the passing of the decision of Cabinet to the Board of the Institute until 29 August 2002. The affidavit of the Chairman of the Board states that the Minister "directed the Board to produce solutions to the problems identified in the Report and to make regulations to enhance efficient and effective administration of the TMTI”.


The Board considered the findings of the Board of Enquiry at four meetings between 6 September and 7 October 2002. During those meetings, the Board did not consider any fresh allegations nor did it hear fresh evidence. The scope of its review was limited entirely to the contents of the Board of Inquiry's report.


The terms of section 10(7) of the Act provide; "The Captain Superintendent shall, unless given leave of absence in writing by the Chairman, be present at all meetings of the Board".


The Chairman of the Board of Directors deposed that the applicant wrote to him on 18 September 2002 asking to be able to take his mid-term break. However, in a reply dated 3 October, the applicant was told he should defer it to a later stage In the light of the outstanding matters to be handled by the TMTI including the Board of Enquiry report and other associated issues". The applicant chose to disregard this and left the country on 7 October 2002. It is not clear whether this was before or after the last of the four meetings which took place on that day but, in any event, the evidence is that the Board's review of the Enquiry report was not completed until 15 October 2002 when it submitted its own report and recommendations to the Minister.


That report is produced by the Minister. It is headed "Decisions of TMTI Board of Directors on Board of Inquiry into TMTI CEO. In accordance, no doubt, with the instructions given to the Board, the report deals with more than just the role of the applicant. Much of it is clearly directed at producing solutions to the problems identified in the report. Of those, some clearly relate to the applicant but others relate to a suggested restructuring of the administration of the Institute. The 'Introduction' states:


“1. This report contains outcomes of TMTI Board of Directors findings and decisions on the Board of Inquiry into TMTI CEO Captain Tito Tapungao. These Board decisions are submitted to the Minister of Education and Sports for further consideration and approval before they are implemented."


It then passes to the 'Background' including the composition of the Board, a challenge by the applicant to the inclusion on the Board of one of the members of the Board of Inquiry, Ms Kofe, which the board accepted was valid, and the fact the applicant took leave contrary to the instructions of the chairman.


Paragraph 3 deals with the applicant's part in the proceedings:


"3. The Board Directors perused the Report of the Inquiry and reviewed in some detail the allegations, findings and recommendations contained therein. The CEO made some verbal remarks to the Board commenting mainly about the Report being bias in attempting to attack one person without considering the larger picture and contribution TMTI makes to the national economy. He stated a number of times that he is ready to accept whatever verdict the Board will deliver on his case."


The section headed 'Findings' starts by stating that, In reviewing the Inquiry findings on the CEO the Board is in support of the findings..." It is not necessary to repeat the contents but it is clear the Board went through the whole of the Inquiry report and decided whether they accepted the findings. All the findings were critical in varying degrees of the applicant with the exception of an allegation relating to his handling of finances upon which they effectively cleared him.


Under 'Decisions', paragraph 11 directly relates to the applicant:


“11. Based on the above findings the Board endorses the Inquiry's recommendation that a suitable and qualified Captain Superintendent be recruited immediately to replace Capt Tito. Given that Capt Tito's current contract expires in February 2004 the Board is of the view that it will be in the best interest of TMTI for his successor to be found immediately, rather than retaining him until expiration of his term."


The remaining paragraphs under this head deal with the consequences of this decision in relation to the administration of the Institute.


The report concludes:


"Recommendation


20. As the decision by the Board (para 11-15) concern the position of Captain Superintendent, these are submitted as recommendation for the Minister's approval which by virtue of TMTI Act, the appointment and termination of Captain Superintendent is subject to the Minister's approval."


The following day, 16 October 2002, the Minister wrote to the Chairman of the Board under the same heading. The relevant part can be set out:


“It appeared that other than the question of Mrs S Kofe's appointment, there was no consensus whatsoever between the CEO and the Board on the issues raised against the CEO. To some extent, however the Board could have shown a token of appreciation of the CEO's record as an active and knowledgeable performer, although such qualities have been severely compromised by his strong arrogant and paternalistic attitudes which eventually caused a great deal of concern amongst employees of TMTI and the Ministry of Education.


I do not have any hope that the Board can change the CEO's leadership attitudes nor his relationship with his superiors. And therefore I appreciate the Board's decision to look for someone else. His complete disregard of the Board's

authority to delay his leave further aggravated the current situation and contributed more to his demise. The three main findings of the Board concerning the CEO is a clear reflection of my earlier statements.


I have a strong feeling and hope that the current membership of the Board will be capable enough to erase sad memories of the previous Board and create a new way forward for TMTI.


Despite a satisfactory report of an enquiry into the CEO's financial management during the Nivaga II slipping, the accounts still require auditing and I urge that this be done as soon as possible.


The recruitment for a new Captain Superintendent should be immediate and the incumbent holder of the post should be informed of the Board's decisions to end his contract."


The Chairman of the Board of Directors wrote to the applicant in Australia by facsimile the same day informing him of the Minister's decision to terminate his appointment:


"Dear Mr Tapugao,


Termination of Appointment as TMTI Captain Superintendent


I wish to advise that the Minister of Education and Sports has, on the advice of the Board of Directors, decided to terminate your appointment as Captain Superintendent and Chief Executive Officer of TMTI.


The advice tendered to the Minister by the Board Directors was largely based on the latter's findings on the Board of Inquiry into the CEO. In reviewing the Inquiry findings on the CEO the Board was in support of such findings, which revolve around the three main concerns: the improper managements of TMTI, unfair dismissal of staff, and employment of CEO's son. Furthermore, the Board Directors has found the CEO's own style of leadership and apparent lack of management and administration experience as a contributing factor to the series of mismanagements that had occurred within the Institute.


Based on those findings the Board Directors endorsed the Inquiry's recommendation to revoke CEO's contract and seek immediate replacement for the CEO position. In supporting the Board's recommendation, the Minister noted that he did not have any hope of the new Board working comfortably with the CEO. Please be advised that the termination of your appointment as Captain Superintendent and CEO of TMTI shall be effective on 16 October 2002, the date on which the Minister decided to revoke your appointment. Incidentally, I wish to note here that you have no formal contract with TMTI and, thus, there is apparently no financial obligation on TMTI or the Government in connection with the termination of your contract."


The applicant replied to the Minister on 21 October 2002 and set out what he describes as some of the problems as he saw them. He concluded:


"Correspondences from the chairman really showed his ruthlessness by the tone of his language. The only avenue open to me to clear my name is through the court and I have been given legal advice on that."


The Minister replied to the applicant in Australia on 31 October 2002:


"Thank you for your letter. This is to confirm that I have endorsed the termination of your appointment by the Board of Directors for TMTI.


My reading of the Report of the Board of Enquiry convinced me that their intervention is timely. The Board needs to re-establish confidence amongst TMTI staff and re-assurance about their security and effective management of TMTI.


It is my hope that the new CEO will work closely with the Board.


I take this opportunity to thank you for the efforts you have made for the institution during your term."


The report of the Board of Enquiry has been exhibited. It includes notes and transcripts of the evidence it heard and some of the documents considered. In summary it finds the allegations of poor management to be made out on a number of grounds. The allegation of unfair dismissal is found to be correct but the blame is placed equally on the Board of Directors for partial and unfair decisions. No responsibility is placed on the applicant for the employment of his son but he is criticised for his manner of dealing with the issue. The report concludes that the ineffectiveness of both the Board of Directors and the Department of Marine allowed the applicant to manipulate the system and places the blame firmly on the Board and the Department of Marine.


The overall conclusion is:


"There is a lot of improvement to be made to the management of TMTI, the Department of Marine and the Ministry concerned. Problems highlighted reflect basically the inefficiency of the management system as currently practiced by the three entities. This report calls for greater efficiency, accountability and transparency in the overall management of TMTI, the Department of Marine and the Ministry concerned."


It then describes the applicant's manner of administering the Institute as "colonial rule" and continues:


“In this regard the Board of Enquiry believes that the Board of Directors, the Ministry of Education and Department of Marine and Port Services are all to blame for their inefficiency, incompetence and for being unproductive since the inception of the TMTI. ... We, as the Board of Enquiry are hopeful that the issues raised would be taken seriously by the Minister concerned."


The method adopted by the Board of Enquiry was to conduct individual interviews with a number of members of staff at the Institute and for the three members of the Board then to collate and analyse the information so gathered.
An affidavit was filed by one of the members, Eselealofa Apinelu, who had also been the secretary. She deposed, in paragraph 4, that the applicant was the last staff member to be interviewed and explained:


"4. ... The reason behind this was to allow the Board to question the applicant on matters arising from previous interviews and for the applicant to respond accordingly and raise any further matters.


  1. When Board of Enquiry interviewed the applicant, the Chairman of the Board of Enquiry explained the reasons behind the formation of the Board of Enquiry which was an established formality to commence the interview. The allegations were then read to the applicant before we invited him to respond.
  2. The applicant's original response to the allegations was to draw the attention of the Board of Enquiry to an oral response delivered in the Tuvaluan language by him over Radio Tuvalu a written translation of which was made accessible to the members of the Board of Enquiry and stated that his response to the allegations are contained in the said written document. This written response was attached to the report of the Board of Enquiry.
  3. The applicant responded to the questions raised by the members of the Board."

The written statement referred to is the memorandum dated 25 July 2001 and is a detailed account running to 14 typescript pages of explanation and supporting documents together with an additional 9 pages of documents.


In his affidavit, the applicant complains that the entire contents of his interview are recorded in 3 ½ pages accompanying the report and the Board of Enquiry did not have his answers written on 1 August 2001. Those answers he suggests are clear, they were not made at the enquiry and therefore, I was deprived of the opportunity not only to be heard but more importantly to defend myself'.


I am most grateful to counsel for the detailed and helpful submissions they have both made. It is no reflection on their scholarship or industry that I do not deal with them all in this judgment.


At the hearing in September 2003, counsel for the applicant advised the court that he intended to pursue all three causes of action pleaded, namely breach of the Constitution, breach of contract and judicial review.


I do not intend to deal with his submissions under the first limb. I have considered the arguments raised and I am satisfied this is not a case that turns on the provisions of sections 12 and 15 of the Constitution. Similarly, the suggestion that the Board of Inquiry breached the applicant's rights under section 22 and the question of whether it is an adjudicating authority under that section are, I am satisfied, not relevant to the determination of whether the applicant's contract was properly terminated. The only relevant issue here is the manner of, and reasons for, the termination of the applicant's contract. Those two grounds themselves are interlocked but I shall attempt to deal with them separately and it is convenient to deal first with the application for judicial review.


Judicial Review


There is no dispute that the manner in which the decision that lead to the termination of this appointment was made is subject to review by the court. The decision on which review is sought is the decision of 16 October 2002 terminating the applicant's appointment but the applicant asks the court to consider the decision of the Board of Inquiry as part of the overall process of decision making in this case.


The grounds are that the decision was made by the wrong authority and is therefore ultra vires the Act, that it was unreasonable, that it was made in breach of the rules of natural justice and, finally, that it was a political decision made mala fides. In his closing submissions, counsel for the applicant has not sought to pursue the claim of mala fides. There was no evidence to support such an allegation and it was not pleaded with any particularity, as an allegation of such a nature should have been.


1. Who made the decision?


As has been stated, by section 12 (10) the Minister, on the advice of the Board may, by notice terminate the Captain Superintendent's appointment. The applicant submits that the section makes it perfectly clear that the decision to terminate lies with the Minister and that it is discretionary.


Counsel points to the difference under the Act between appointment and termination. Subsection (2) provides that appointment to the post is made by the Board with the approval of the Minister. Subsection (10), it is submitted, clearly provides that the decision to terminate is the Minister's but he must, in making the decision, consider the advice of the Board.


I agree with that interpretation of subsection (10). If the Board considers that the appointment should be terminated, it will advise the Minister and the Minister then has a discretion whether to terminate it or not. It means that the Minister does not have the power in his own discretion to terminate the appointment. He can only exercise that discretion if the Board advises him and that advice will only be given if the Board considers termination should be considered.


In the present case, the applicant relies on the respondents' own correspondence to show there has been a failure to follow the proper procedures.


In the letter of 16 October 2002, the matter appears to be correctly stated:


"...the Minister ... has, upon the advice of the Board of Directors decided to terminate your appointment ..." and later, "... the termination ... shall be effective ... on the date on which the Minister decided to revoke your appointment...”


It is suggested that the Board's decision was not its own but simply an endorsement of the decision of the Board of Inquiry. The reference to that in the same letter refers to the advice it gave; "The advice tendered to the Minister ... was largely based on the [Board's] findings on the Board of Inquiry into the CEO." However, it then becomes less clear where the decision was, in fact, made; "Based on those findings the Board Directors endorsed the Inquiry's recommendation to revoke the CEO's contract ... in supporting the Board's recommendation, the Minister noted...".


The confusion is not assisted by referring back to the Minister's letter to the chairman, which lead to those comments. He mentions his appreciation of "the Board's decision to look for someone else" and advises that the "recruitment for a new Captain Superintendent should be immediate and the incumbent holder of the post should be informed of the Board's decision to end his contract."


When the Minister replied to the applicant's letter on 31 October he confirmed, that I have endorsed the termination of your appointment by the Board of Directors ... My reading of the Report of the Board of Inquiry convinced me that their intervention is timely."


Section 12(10) requires the Minister to make the decision. The only decision the Board can make is to advise the Minister to decide whether or not to terminate. The Minister may decide to follow the Board's advice but that decision in itself must be based on a consideration of the relevant matters. The section does not allow the Board to make the decision and pass it to the Minister to approve as happens on appointment. The report of the Board of Directors to the Minister suggests that, despite the terms of the letter of termination of 16 October, the Board failed to note the difference between the two procedures and clearly considered it had made the decision which then simply needed the Minister's approval. Paragraph 1 and 20 of the Board's report to the Minister have been set out above. The passages, "These Board decisions are submitted to the Minister ... for further consideration and approval before they are implemented" (para 1) and the decisions by the board ... are submitted as recommendations for the Minister's approval ... By TMTI Act ... termination is subject to the Minister's approval" both suggest the Board had made the decision and was seeking its approval rather than advising the Minister to make the decision.


I am satisfied that the applicant has demonstrated on a balance of probabilities that the decision here was made by the Board and not the Minister. That he approved is clear but that is not a sufficient exercise of his own deliberative power. Although he states he has considered and accepted the findings of the Board of Inquiry, which would be a proper matter to take into consideration, he has already referred to the termination of the appointment by the Board of Directors.


As I have stated, the letter of termination to the applicant on 16 October stated the position according to the requirements of subsection (10) but the other correspondence shows only too clearly that, by the time the Minister was advised, the decision had been made by the Board and the Minister accepted it had already been made. The termination of the contract in this case was not in accordance with the terms of the Act.


  1. Was the decision unreasonable and/or made in breach of the rules of natural justice?

Both these grounds stem from the Board of Inquiry; the manner in which it conducted its investigation and the effect of its report on the Board of Directors.


Questions have been directed by the applicant at the establishment of the Board of Inquiry. The manner in which it was established by Parliamentary motion is suggested to have been in breach of the doctrine of the separation of powers. It is questioned whether or not it was or should have been established under the Commissions of Inquiry Act.


It is contended by the respondent in response that the establishment of the Board was an executive act by the Minister and was an investigative body for the purpose of fact finding. As such it is suggested that its findings are not subject to judicial review. I reject that argument and am satisfied the power of the court to review executive action extends to any such body.


The applicant suggests that, as this was initiated by a motion in Parliament it, was an interference by the Legislature with the functions of the Executive. Counsel points to the opening paragraph of the Terms of Reference, which states:


"Parliament of Tuvalu Motion 19 as reproduced below was carried at the last Parliament session in April 2001 and which mandated the Government to institute a Board of Inquiry immediately to enquire into the allegations raised by the mover of the said motion ..."


He points to the use of the word 'mandated'. It means he suggests an order to the Government. I am not sure that I accept that is the true purpose of the motion but, as it is the word used by the Minister in setting the Terms of Reference of the Board of Inquiry, I accept he regarded it as such. In those circumstances the applicant suggests the proper course for the Minister was to issue a Commission of Inquiry under the Commissions of Inquiry Act.


It is clear that Act gives the Minister discretion to do so "whenever he deems it advisable". However, I am not persuaded that even an order from Parliament can compel a Minister to exercise his discretion in any particular way neither do I accept it means that he is obliged to act on any direction from Parliament which interferes directly in the manner in which he conducts the affairs of his ministry.


Whether or not this Board was set up by the Minister because he felt he was obliged to, I am satisfied that he always has the power to inquire into the conduct or management of any department for which he is responsible. That he asks for an investigation by independent persons outside his ministry does not mean he has to issue them with a Commission of Inquiry.


However, I do not consider the basis upon which the Board was established is relevant to the question this court has to determine, namely whether the appointment of the
applicant was terminated lawfully. What is clear is that the Board of Inquiry's findings and their effect are central to the applicant's challenge to his dismissal.


The Parliamentary motion is stated to be the "key TOR for the Inquiry":


"Parliament is to allow the Government quickly to select and appoint a "Board of Inquiry" after this session of Parliament to investigate and confirm how the Captain Superintendent managed the Tuvalu Maritime Training Institution at Amatuku, how he forcefully terminated the employment contracts of some of the staff who were in top positions and had been working there a long time; also how he favourably allowed his son to work without a “working visa" being made."


The remaining terms of reference set out the manner in which the Board of Inquiry should conduct its investigations and then directed it to:


"Ensure that a complete and full report disclosing all material facts and evidence, findings and recommendations, should be presented in a Report to the Hon Minister of Education, Sports and Culture within three weeks".


It further directed that it should be submitted directly to the Minister under confidential cover.


I have already set out the manner in which the Inquiry was conducted and the applicant's objections. It is contended by counsel for the applicant that the failure of the Board of Inquiry to allow the applicant to be present and to examine the witnesses denied him a fair hearing and that taints the subsequent effect of the report on the Board of Directors.


I am sure that members of the Board of Inquiry genuinely attempted to investigate the matters assigned to it in a fair and reasoned manner. However, it was clearly directed to investigate specific criticisms of the applicant. Those criticisms bore directly on his position as Captain Superintendent. I have no doubt that the applicant knew that was the intention of the establishment of the Inquiry. He was certainly aware of the nature of the initial criticisms and had already taken steps in public and in private to state his side of the case.


The secretary of the Board has explained that they considered it would be fair to call the applicant last so they would then have all the information and be able to question him on it. At the outset of his interview, the reason for the Inquiry was explained, the allegations were read to him and he was invited to respond. Again I am sure that procedure was adopted in the interests of fairness but it did not give the applicant the chance to know the evidence which had been given against him by the earlier witnesses. He was only able to answer the questions posed by the members of the Board and those were presumably limited to the aspects they considered important. Had he been given the whole of the evidence of the earlier witnesses, he may well have felt a need to explain or point out the significance of other matters from those the members of the Board had chosen to pursue.


Those errors make the value of the report questionable and the applicant asks the court to say that all that followed is impeached by the use of those findings.


There is strength in that submission and I shall return to it. However, the real issue in this case, as I have stated before, is the manner in which and the reasons why his appointment was terminated. That was a process which is covered by the terms of the TMTI Act and involves the Board of Directors and the Minister and that is the point at which I would like to start.


The body which is directed by the terms of the Act to advise when it considers termination may be called for is the Board of Directors. It is only if they give advice to the Minister, that the termination of the applicant's appointment can be considered.


How, then, do the Board consider that question? There can be no doubt that the applicant was entitled to be accorded fair treatment and that the rules of natural justice apply to such a consideration.


The court has heard that Cabinet resolved that the Board of Inquiry report should be submitted to the Board of the Institute with a direction that the latter Board should produce solutions to the problems identified in the report and make regulations to enhance efficient and effective administration of the Institute. Once that was relayed to the chairman, he directed it to be included in the next meeting. The chairman deposes:


“11. In the period between 6 September and 7 October 2002, the TMTI board of Directors met four times to review the findings of the Board of Enquiry.


12. The board reviewed all the allegations raised in the Report ... When the TMTI Board reviewed the Board of Enquiry's report, it did not consider fresh allegations against the Applicant nor did it call and hear fresh evidence. The scope of the review was limited entirely to the contents of the Board of Enquiry's report.


5. On 15 October 2002, the TMTI Board completed its review of the Board of Enquiry's report and submitted its report and recommendations to the Minister on the same."


The report that was submitted confirms this and deals only with the findings of the Board of Inquiry.


Despite some suggestion to the contrary by counsel for the applicant, I do not see any reason why the directors should not have considered the report in this way. It expressed the findings of another independent body into the management of their own Institute. Neither do I consider they were under any obligation to question the manner in which the Inquiry had been conducted although it would certainly have been a wise step if, as happened here, they intended to adopt its report in its entirety.


What the Board of Directors were obliged to do was to observe the rules of natural justice. It was clear that the Inquiry had been set up largely to question the manner in which the applicant was running the Institute. The report they had received was plainly critical of the way he had done so. In those circumstances they should have given him an opportunity to answer the criticisms and to supply further information to counter such allegations if he so wished.


Had they done that, any imperfections in the manner in which the Board of Inquiry had conducted itself would have been remedied as far as the effect on the applicant was concerned. They did not and so those imperfections and inadequacies were necessarily adopted into their own decision.


That they had four meetings before they reached their final stance on these matters suggests a detailed and careful examination of the evidence. At the end of such an examination, it was clear the tone of the report was critical of the applicant's conduct in many ways. The directors clearly thought so because it led them to seeking the Minister's approval of their decision to terminate the CEO's appointment. The right of the applicant to a fair hearing made it essential that he should be heard before the Board reached that decision. He was not and the Board's decision was unfair.


I have already found that the Minister did not make the decision himself but, had I found he did make his own decision, I would have found that it was tainted in the same way. His evidence was that after reading the Board's report he was satisfied the recommendation to recruit a new Chief Executive Officer was well founded and, on the strength of the recommendations, he decided to terminate the appointment. He makes no claim to have considered anything but the Directors' report and the report of the Board of Inquiry and has then accepted the decision of the Directors. If that is flawed as I have found, the Minister's consideration was based on nothing else and must be similarly flawed.


Counsel for the applicant also invites the court to find that the decision is unreasonable on the basis that the decision making body took into consideration matters that were irrelevant to its decision. It is correct that such an action may render the decision unreasonable in the Wednesbury sense. My finding just made does not make such a consideration necessary but I mention that had I not found in that manner, I would not have found that, by considering the Board of Inquiry's report, the Board of the Institute was receiving irrelevant material. Neither do I find that the decision of the directors is, as a result, unreasonable. As I have indicated, the reception of that report was not unreasonable in itself. What makes it fatal to the decision was the failure to allow the applicant an opportunity to answer it.


Breach of Contract


My conclusions that the decision to terminate was made by the wrong body and that the failure to allow the applicant a fair hearing failed to correct the flaws in the manner in which the information upon which the report was based was obtained render the decision unlawful and void. The effect of that decision was that the appointment was terminated and the applicant left his position. What was the contract of employment the applicant had with the Institute and what was the result of his termination on it?


The first question is what was the form of the contract? His previous employment had been under a specific contract. When he was notified that his contract had been renewed for three more years, it was stated that the terms were to be finalised by the Board. Unfortunately that was not done and it is clear from the last sentence in the letter of termination of 16 October that the Institute considered there was no contract.


Although the contract was never finalised, the letter of 22 January 2001 stated the intention of the Board of Directors to be bound by the terms of the new Act. It is clear that, where the Act makes provision for the terms of the appointment, those terms must apply. I shall deal with the matters upon which it is silent later.


The terms of the letter of 22 January 2001 show that the applicant was properly appointed in accordance with the terms of section 12(2). It is equally apparent that the Board intended to follow the requirements of subsection (4). The omission here was in the failure of the Board to determine the terms and conditions and have them approved by the Minister. The determination of the salary and allowances is covered by subsection (9) but, in this again, the Board failed to reach any conclusion.


The effect of subsection (10) has been considered above in relation to the decision to terminate but it includes another provision directly pertinent to the manner in which any such termination is carried out. Besides the power of the Minister to terminate the appointment for non-performance or any other reason, there is a requirement that he shall give written notice and shall provide him with a reason or reasons for the termination.


I accept that the letter of 16 October stated the reasons although they are those found by the Board rather than the Minister. It is suggested that he should have given a period of notice but I accept the respondent's interpretation of the subsection that the requirement is simply that the Minister must give notice of the termination in writing. That notice was from the chairman of the Board but I accept it is notice in the terms of the section. The letter shows that the termination was to be effective on the date the letter was written.


That still leaves open the question of whether there was any contractual requirement for a period of notice on termination of the contract.


The period of notice is not stated in the Act and the court must decide what that period must be. Equally important is the assessment of the remaining terms and conditions that must apply.


I am satisfied that the reference to renewal of contract in the letter of appointment and the fact that the applicant had continued in his office means that, where the provisions of the Act are silent, the terms of the previous contract continued. It would appear that is, in fact, what occurred. In the absence of new terms, conditions, salary and allowances being determined by the Board and approved by the Minister, the applicant appears to have continued to be employed under the terms of the previous contract.


That contract stated the terms of notice required. The employer could terminate the contract by giving three months notice in writing or by paying one month's salary in lieu. There is no suggestion the Institute paid one months salary in lieu and, indeed the last paragraph of the letter of termination made it clear it did not consider it had any further obligations. I rule, in those circumstances, that the applicant was entitled to three months notice in writing. Clearly the Institute did not take the option of paying one month's salary in lieu and the manner in which he was terminated did not allow him to serve out the period of notice but I do not consider that absolves the Institute from its obligation.


The Remedies Sought


The applicant seeks an order for certiorari quashing the decision to terminate his appointment and a declaration that such decision was unlawful.


I see no purpose in ordering certiorari. The appointment has been terminated and a formal order purporting to quash that decision would serve no useful purpose.


I make the declaration sought and I add that the termination of the appointment of the applicant in consequence of that decision was a breach of his contract of employment.


The applicant seeks orders for damages and special damages.


He gave evidence of the loss he had suffered for which he considered he should receive special damages.


The first limb was that he claimed payment for the un-expired period of his contract. I do not accept that is the basis for assessment of damages in a case of this nature. When a contract includes a term as to notice, the period of payment following unlawful termination of the contract is the period of notice he would have received if he had been lawfully terminated. I have already found that the applicant was, pending new terms being determined, bound and protected by the terms of the previous contract. In those circumstances, as I have stated, I award him damages in the amount of three months salary there having been no payment of one month's salary in lieu.


Had this been a case where damages were awardable for the whole of the un-expired period, I should have had to take into account the evidence of the applicant that he had done nothing to mitigate his loss. He gave evidence that he went to Vanuatu to look at the Maritime School there but then returned to Australia and contemplated his future. He explained he was intending to go back to sea but stayed at home pending the result of this case. I shall return to this aspect of the case when I deal with general damages.


On the figures he has given the court, he was receiving a total of $10,116 per month and three months would therefore be $30,348 less the tax, if any, he would have paid in Tuvalu.


He also seeks loss of interest at 7% per annum on the unpaid portion. No interest was claimed but I shall return to the matter of interest later.


He also claimed loss of future superannuation for the years he would have been working until he retired at 65 years old. I see no reason to grant such a claim.


He told the court that he had not received his relocation expenses. Under the previous contract, he and his spouse if any "shall be entitled to an economy class air passage and transit costs from Tuvalu to the place of recruitment." There was no provision for any reduction of this if the contract is part completed or if he is dismissed. The Institute terminated this contract and so he is entitled to those costs. The transit costs are stated in paragraph 5(a)(ii) as "actual and reasonable incidental expenses not otherwise covered, including meals, accommodation and transport expenses incurred by the contractor and his spouse during and at the end of the journey to Tuvalu."


The applicant also claimed his removal expenses. I have been shown no evidence of such an entitlement and it is refused.


Finally he claims damages as compensation for the adverse effect the termination of his contract had on his personal livelihood and reputation. Damages may be awarded for such harm but there is little evidence upon which the court can assess the extent or nature of the harm.


There is no' doubt that applicant is a well-qualified and experienced maritime officer. He has been a maritime officer for 33 years and is the holder of a Foreign-going Master's ticket Class 1. His appointment to the position of Captain Superintendent in 1999 is clear evidence that he was considered to be properly qualified for that position. None of that can be challenged and the respondents do not seek to do so.


However, the question for the court in assessing damages is the adverse effect, if any, on his reputation and future livelihood. That must be based on evidence adduced before the court. The claim states that the amount of general damages and the particulars thereof shall be provided at trial. Search as I have, I can find no such evidence. The applicant's affidavit does not mention the matter. In his evidence to the court he told of his qualifications. He then stated that he claimed damages and went on to specify the heads upon which he based his claim for special damages.


The only claim in his evidence in chief for general damages was that it was for compensation for breach of contract. It was only in cross examination that he told the court how long he had been a maritime officer and, in answer to the court, that he had planned to go back to sea but had decided to await the outcome of this case. The court has no information as to loss of reputation or of the attitude any prospective employer would have had to an application by him for employment as a master mariner or in any executive position similar to the post he had just left. Neither is there evidence that, if he did receive such an appointment, he would be earning any less from the new employment.


In those circumstances the court can make an award only on its assessment of the overall harm and distress such a termination had on the applicant. Some basis for such an assessment can be obtained from the documents in the case.


I note from those the distress shown by the applicant at what he regarded as an unfair attack on him and on his integrity. The same documents demonstrate the attitude of the respondents to the allegations and their effect. The applicant has not pursued the allegation of mala fides and so there is no claim for exemplary or aggravated damages but the general damages can include some element for the distress caused by what was an unlawful termination.


On the other hand, had the Board advised termination and had the Minister decided to do so, the most the applicant could have expected would have been his notice. The Act requires reasons to be stated but there is no restriction to such termination on specific grounds. It may be "for non-performance or any other reasons" and I would suggest that, even accepting the applicant's answers as shown in his memoranda of 25 July and 1 August 2001, the Board would still have been able to suggest sufficient reasons for the Minister to decide to terminate the appointment.


I accept that the applicant did suffer considerable distress from the manner in which this termination was executed although I accept that, despite the faults in the process, the individuals concerned were not demonstrated to have acted maliciously. The distress is increased by the fact that the termination was in fact unlawful. On that basis only I consider an award of $10,000 general damages is justified.


There is a prayer for any other relief the court considers appropriate. No other relief is suggested and, as I have stated, no interest was claimed. However, I order that there shall be interest on the award at the rate of 7% per annum from the date the claim was first filed, 14 February 2003, to the date of payment.


I see no reason to distinguish between the responsibility of the two respondents and order that both respondents shall be jointly and severally liable.


DATED: 1 April 2004.


CHIEF JUSTICE

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