IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
Civil Jurisdiction

Civil Case No. 101 of 2004.

BETWEEN:

LAURENT PARENTÉ
Claimant

AND:

VANUATU MARITIME AUTHORITY
Defendant

Coram: Mr. Justice H. Bulu

Mr. Sugden for the Claimant
Mr. James Tari for the Defendant

Hearing Date: 16th July, 2004.
Judgment Date: 30th September, 2004.

JUDGMENT

INTRODUCTION

1.	The Vanuatu Maritime Authority Act No. 29 of 1998 (the Act) established the Authority and conferred on the Authority certain responsibilities, including the following:-

a) to ensure compliance with the law in respect of the registration, licensing, operation and crewing of vessels;

b) to promote compliance with safety standards in the maritime industry;

c) to act internationally as the national authority, or representative, of Vanuatu in respect of matters relating to the supervision and regulation of the maritime transport industry.

2.	When John Less Napuati became the Commissioner of Maritime Affairs (the Commissioner) he discovered that the Authority was not in a position to meet its obligations to organize the Annual Meeting on the Tokyo MOU to be held in Vanuatu from the 20th – 26th February 2004 and the Implementation of the International Ship and Port Security Code.

3.	Due to that situation Mr. Napuati immediately set out to recruit a person with suitable qualifications and experience to be responsible for those areas. No one in the Secretariat of the VMA had the qualifications and experience for the job. Contact was established with Mr. Parenté in Paris and an assessment was made regarding his suitability for the role. Mr. Napuati was happy with Mr. Parenté’s credentials and recruited him directly from Paris. 

4.	An Agreement headed “Consulting Agreement” (the Agreement) was entered into between the Vanuatu Maritime Authority (VMA) and Mr. Parenté on 22nd day of December 2003 for a period of 4 months. It became effective on the 2nd day of January 2004. The Agreement was extended for another period to expire at the end of June.

5.	In preparation for his arrival and employment the VMA organized with the Departments of Labour and Immigration for relevant permits for Mr. Parenté to enable him to reside and work in Vanuatu.

6.	On 31st day of March 2004 the Agreement was extended for a further period of 2 months to expire on 30th June 2004. The reason for the extension was that Mr. Parenté has been “endorsed by the Hon. Minister of Transport and Public Utilities as the ISPS Code implementation coordinator.”

7.	On the 2nd day of April 2004 an extension to the Agreement was signed between the VMA and Mr. Parenté for Parenté to “carry out the implementation of the STCW 95 regulation.”

8.	Following this further arrangements VMA requested the Department of Labour to extend the temporary work permit granted to Mr. Parenté to 31st July 2004. This was granted. A similar request was made to the Immigration Department, but the request was refused.

9.	On 15th of April 2004, the Vanuatu Maritime Authority Board terminated the Agreement. Mr. Parenté disputed the termination and lodged a claim in the Supreme Court on 14 May 2004 challenging his termination. He claimed that the Authority had acted unlawfully as it had no power to terminate his appointment under the Vanuatu Maritime Authority Act.

10.	Hearing of the claim took place on 16th July 2004. At the conclusion of the hearing the Court directed Mr. Parenté to lodge his written submissions by 21st July 2004.

11.	Mr. Parenté made further written submission after that date line. The rationale for that was that being a non-legal person he did not know that in written submissions parties can attach other documents as authorities on submissions they made. He asked the Court to take the late submissions into account. In the circumstances of the case I do not see how I can reject the submissions and do justice to his case.

12.	On receipt of submissions from the parties the Court was not satisfied that the parties had properly assisted it to determine the issues before it. On 24 July 2004 the Court issued further directions to the parties for further submissions on certain issues before the Court. Mr. Parenté informed the Court that he would have already returned to France and requested the Court’s permission for a lawyer to represent him on the final submissions. The request was granted.

13.	This is a matter that was difficult to manage in that the Claimant, a non-lawyer, appeared in person and the VMA was represented by legal counsel. This placed enormous burden on the Court to ensure that justice is done to the case. 

ISSUES FOR DETERMINATION

14.	The following issues arise for determination:- 

(a)	Whether the Commissioner has powers to appoint Mr. Parenté?

(b)	Whether the “Consulting Agreement” binds the VMA. 

(c)	Whether the employment of Mr. Parenté is in line with employment laws?

(d)	Whether the VMA has powers to terminate employees appointed to perform the functions of the VMA by the Commissioner.

(e)	Whether the VMA gave Parenté notice of termination of his employment?

First Issue: 	Does the Commissioner have authority to employ Mr. Parenté?

PARENTÉ’S POSITION

15.	Mr. Parenté told the Court that the Commissioner is authorized by the Act to appoint employees of the Authority. He referred the Court to the preamble of the Agreement which states, among other things, that “the parties are duly authorized and have the capacity to enter into and perform this agreement”. The Authority is a company and such language is evidence of the fact that those entering into the Agreement on behalf of the company must have the Authority to do so.

16.	Mr. Parenté also drew the attention of the Court to section 38 (1) of the Act which states that the “Commissioner may appoint … employees … as he thinks necessary for the efficient performance of the Authority’s functions.” He submitted that his engagement was made under that provision and not otherwise. The Commissioner at paragraph 6 of his sworn statement said “I engaged Mr. Laurent Parenté under section 38 (1) of the VMA Act for the efficient performance of the VMA in regard with the international conventions …”

17.	The then Chairman of the VMA Board, Christophe Emelee at paragraph 9 of his sworn statement stated that the “VMA Board was not and is not the employer of Mr. Parenté”. That sworn statement was accepted fully by the VMA.

18.	Parenté further submitted that section 13 (3) of the Act does not apply. The control imposed by the amendment to that section in 2002 only applies to the class of matters as specified in subsection (3) (a), (b) and (c). That the “enforcement of provisions” of Acts and other subordinate instruments referred to in that paragraph mean just that. It has nothing to do with the exercise of powers under section 38 (1) by the Commissioner. 

VMA’S POSITION.

19.	VMA submitted that the Commissioner does not have the power to employ Mr. Parenté. The power conferred on the Commissioner under section 38 (1) is not unfettered. It is exercisable subject to the “direct control of the Authority”. That the Authority, through the Board, must approve any appointment made under section 38 (1). In this case the Board did not approve the appointment of Mr. Parenté.

20.	VMA relied on section 13 (3) (c) of the Act. It submitted that paragraph (c) extends to and includes the power of appointing and terminating staff of the Authority vested in the Commissioner under section 38 (1). Prior to the amendment in 2002 the performance of functions or exercise of powers under section 13 (3) was not restricted.

THE LAW—Vanuatu Maritime Authority Act

21.	Section 3 of the Act established the Authority as “a body corporate with perpetual succession… an official seal and may sue and be sued in its corporate name”.

22.	Section 7 of the Act says that the Authority “has power to do all things necessary or convenient to be done for or in connection with the performance of its functions.” The powers include authority “to enter into contracts”.

23.	Section 13 (1) of the Act provides:-

“The Commissioner must perform the following functions and exercise the following powers:- 

(a)	such functions and powers as may be conferred on the Commissioner by this Act or any other Act; 

(b)	such functions and powers as may be delegated to the Commissioner by the Authority under this Act.” 

24.	Section 38 (1) of the Act provides:- 

“(1) The Commissioner may appoint such employees, including employees on secondment from other organizations, as he or she thinks necessary for the efficient performance of the Authority’s functions; 

(2) The Commissioner may terminate or suspend the employment of any of the Authority’s employees.” 

25.	Section 13 (3) of the Act states:- 

“The Commissioner, in performing any functions or exercising any powers under this Act or any other Act is subject to the direct control of the Authority and the decisions of the Tribunal in relation to:- 

(a)	the issuing, granting, suspension, revocation, recognition or acceptance of maritime documents;

(b)	the granting of exemptions in relation to maritime documents;

(c)	the enforcement of the provisions of this Act, the Acts specified in Schedule I, and any other Act, and the regulations and rules made under any of those Acts.”

DISCUSSIONS

26.	 The “direct control” exercised by the VMA and the Tribunal under section 13 (3), in my view, relates only to the powers specified in paragraphs (a) and (b) under the Act. Paragraph (c) extends that control to the other legislations specified in Schedule I to the Act. In other words the “direct control” relates to the issuing, granting, suspension, revocation, recognition or acceptance of the maritime documents, and the granting of exemptions in relation to maritime documents. The subject matter subsection (3) is concerned with is “maritime documents” and the “direct control” conferred on the Authority is in relation to the doing of any acts specified in subsection (3) (a) and (b) regarding that. 

27.	The opening words of paragraph (3) (c) is an aid in itself to the proper construction of that paragraph. It begins with the “enforcement of the provisions” of this Act, the Acts specified in Schedule I …” To enforce a provision of an Act is to ensure that the person required to comply with the provision obeys the command contained in that provision. Failure to do so can lead to penal sanctions or some other disadvantage being imposed on the person. Firstly there must be a command or requirement not to engage in any specified act or activity; or to do so in accordance with specified conditions or requirements. 

28.	The Vanuatu Maritime Authority is established with three principal objectives. These are:-

(a)	to regulate, administer and promote the Vanuatu maritime transport industry;

(b)	to promote the provision of an effective marine pollution prevention programme;

(c)	to promote the provision of an effective marine pollution response system. 

29.	The first objective sets the direction clear. The Authority is concerned with the regulation of the maritime transport industry. It follows that to do so properly, it must enforce the relevant provisions of the maritime legislations so that stake holders in the maritime transport industry:-

(a)	comply with the relevant maritime laws;

(b)	comply with the marine pollution programmes promoted by the Authority; and

(c)	have in place an effective marine pollution response system.

30.	One effective way to ensure compliance with the maritime transport laws is through the enforcement of the licensing regime under the maritime laws.

31.	An important rule in the construction of a statute is to adhere to the ordinary meaning of the words used, and to the grammatical variation unless that is not consistent with the intention of Parliament. The first question that must be asked is what is the natural or ordinary meaning of the word or phrase in its context in the statute. Looking at paragraph (c) in the context of subsection (3) it is, in my view, clear what the intention of Parliament is. That is, the “direct control” the Authority has is over the powers exercisable by the Commissioner regarding the enforcement of the provisions of the relevant maritime laws concerning the powers relating to issuing, granting, suspension, revocation, recognition or acceptance of maritime documents, and the granting of exemptions in relation to maritime documents. It does not extend to powers exercisable by the Commissioner under section 38 (1) of the Act.

FINDINGS

32.	For reasons I have set out above I find that:- 

(a)	The Commissioner has the power to appoint Parenté under the Act. That power is found in section 38 (1);

(b)	The exercise of section 38 (1) powers by the Commissioner is not subject to the “direct control” of the Authority and the Tribunal. 

Second Issue:	Is the Vanuatu Maritime Authority bound by the Agreement? 

PARENTÉ’S POSITION 

33.	The Agreement is signed by the Commissioner and the Chairman of the Board of the Authority and bears the Authority’s seal.

34.	Parenté submitted that he was employed by the Commissioner of Maritime Affairs and not the Authority. The Commissioner has the power to appoint him and he did so exercising that power. He referred the Court to section 38 (1) of the Act that says the “Commissioner may appoint such employees … as he thinks necessary for the efficient performance of the Authority’s functions.”

35.	Mr. Parenté’s submission in this regard is twofold. These are:-

(a)	There was no evidence before the Court that a quorum of the Board did not approve the Agreement.

(b)	The Agreement is a contract of employment within section 38 (1) of the Act and so it is binding as the Commissioner has power under that Act to enter into a contract of employment.

36.	When a person deals with an organization that has its own rules as to how it must operate internally, that person will not know and is not entitled to know what is happening within the organization. If the organization, by those rules, is required to take certain steps before it engages in some course of action with this person, this person cannot know whether it has taken the required steps or not.

37.	It would seem grossly unfair then, it is submitted, that if the organization has, through its own failing not carried out some of the necessary internal steps to allow that organization to benefit and the person to be harmed by virtue of that failure in relation to their dealings. This, would be unjust – allowing the organization to benefit by its own wrong.

38.	Parenté submitted that the indoor management rule applies to the Agreement. This rule is sometimes called the Rule in Turquand’s Case because of the decision in Royal British Bank –v- Turquand (1855) E & B 248: 119 ER 474 that gave rise to the rule.

39.	The House of Lords in Morris –v- Kanssen [1946] AC 459 confirmed the rule in the following form –

“But persons contracting with a company and dealing in good faith may assume that acts within its constitution and powers have been properly and duly performed, and are not bound to inquire whether acts of internal management have been regular.”

40.	In Turquand’s Case itself, a company that gave a bond as security for a loan to the company tried to escape the bond by arguing that although two directors had signed the bond as was required by the company’s articles, no general meeting had been held to resolve to enter the bond as the articles also required.

41.	The Court would not listen to this argument ruling that the Bank’s position could not be affected by the company failing to make sure all of its internal workings had been properly carried out and the company was therefore bound by the contract.

42.	Parenté submitted that VMA is trying to argue almost exactly the same position in this case.

VMA’S POSITION

43.	VMA submitted that it is not bound by the Agreement. It argued that section 38 (1) powers exercisable by the Commissioner are subject to the “direct control” of the Authority. The authority for the proposition is section 13 (3), as amended in 2002 by Act No. 29.

44.	I have made a finding under the first issue regarding the proper construction of section 13 (3) (c) of the Act. I need not repeat it. 

45.	VMA further submitted that the Agreement is a consulting agreement. The title clearly states that it is a “Consulting Agreement”. There is no where in the agreement can one find the term employment agreement.

46.	VMA submitted that the Court should not rely on the definition of consultant, which Collins Compact Australian Dictionary defines as “an expert who gives professional advice”, because it will be contrary to the contractual principles of construction and interpretation of contracts. 

47.	VMA submitted that the courts have taken the view in relation to implying the terms into a contract that the courts are not established to imply terms of a contract. It is the duty of the parties to make sure that all the terms of a contract are included in the contract.

48.	VMA referred the Court to the dicta by Lord Esher in Hamlyn v Wood [1891] 2 QBD 488 at 491:-

“I have for a long time understood that rule to be that the Court has no right to imply in a written contract any such stipulation, unless on considering the terms of the contract in a reasonable and business manner, an implication necessarily arises that the parties must have intended that the suggested stipulation should exist. It is not enough to say that it would be a reasonable thing to make such implication. It must be necessary in a sense that I have mentioned.” 

49.	A term cannot be implied if this is inconsistent with the express terms of a written contract. One of the main reason for implication of terms into a contract as stated in The Moorcock [1889] 14 PD 64 is that without such provision of the contract being implied, the contract would have effectively been unworkable.

50.	VMA submitted that based on these principles of common law, the Court cannot imply the term “employment contract” to replace “Consulting Agreement” because the terms of the Agreement are expressed in writing in a very clear and unambiguous term.

51.	Generally the intention of the parties is the dominant consideration in deciding whether a term is implied at common law. VMA submitted that the intention of the parties can only be found in the Agreement itself, and not anywhere else.

THE LAW 	— Vanuatu Maritime Authority Act No.29 of 1998 

•	Section 3 (2) (a) of the Act states:-

“The Chairperson or the Deputy Chairperson – 

(a)	may convene a meeting at any time; …”

•	Section 7 (2) (a) of the Act states:-

“Without limiting subsection (1), the powers include the following –

(a)	to enter into contracts; …”

•	Section 13 (1), (2) and (3) of the Act state:-

“(1)	The Commissioner must perform the following functions and exercise the following powers:-

(a)	such functions and powers as may be conferred on the Commissioner by this Act or any other Act;

(b)	such functions and powers as may be delegated to the Commissioner by the Authority under this Act; 

(c)	such functions and powers as may be delegated to the Commissioner by the Authority under this Act; 

(2)	Without limiting subsection (1), the Commissioner must – 

(a)	ensure the proper operation of the maritime transport system by issuing, granting, recognizing or accepting maritime documents; and

(b)	take such action as may be appropriate in the public interest, including the carrying out or requiring of inspections and audits, to enforce the provisions of this Act, the Acts specified in Schedule 1 and any other Act, and the regulations and rules made under any of those Acts;

(3)	The Commissioner in performing any functions, or exercising any powers under this Act or any other Act is subject to the direct control of the Authority and the decisions of the Tribunal, in relation to – 

(a)	the issuing, granting, suspension, revocation, recognition or acceptance of maritime documents; or 

(b)	the granting of exemptions in relation to maritime documents; or

(c)	the enforcement of the provisions of this Act, the Acts specified in Schedule 1 and any other Act, and the regulations and rules made under any of those Act.”

•	Section 17 (1) of the Act states:-

“The Authority may delegate to the Commissioner or any employee of the Authority all or any of its functions or powers under this Act.”

•	Section 20 (f) of the Act states:-

“Where a section of this Act confers on a person or the Authority (in this section called the “delegator”) to delegate a function or power – 

(a) … 
(b) …
…

(f) in the absence of proof to the contrary, the delegate is presumed to be acting in accordance with the terms of the delegation when the delegate purportedly acts pursuant to the delegation; and 
…”

•	Section 41 (1) and (2) of the Act state:-

(1)	The Authority may, in writing, authorize any one or more members, or employees, of the Authority to execute any deeds, instruments, contracts or other documents on behalf of the Authority, and may in the same manner revoke such authority.

(2)	Without limiting subsection (1), an authority may be given to:- 

(a) the Commissioner; or … 

DISCUSSIONS

52.	The rules for the internal management of the VMA are contained in the Act and Regulations as amended. Section 7 (2) (a) of the Act gives the VMA the power to: “enter into contracts”. The centre of this case is a contract and section 7 (2) (a) makes it clear that the VMA had the power to enter the contract with Mr. Parenté.

53.	Section 13 (i) (b) and 17 (1) of the Act provides for the Commissioner to perform such functions and exercise such powers as are delegated to him by the Authority. Thus the VMA has the power to delegate its power to enter contracts, including the one with Mr. Parenté, to the Commissioner. 

54.	Section 41 of the Act, as amended, provides that the Authority may, in writing, authorize any member or employee of the Authority, including the Commissioner, to execute any deeds, instruments, contracts or other documents on behalf of the Authority.

55.	These provisions are sufficient to show that, by taking the formal internal steps required by the Act, the VMA could either, by delegation or alternatively by authorization to sign the contract, have placed the Commissioner or the Commissioner and Chairman in a position to enter the contract with the Claimant. 

56.	It is noted that there is no evidence that those internal steps were not taken. 

57.	Section 20 (f) of the Act is there for the protection of third parties who deal with people who occupy senior positions in the Authority. They are justified, unless they have been given proof to the contrary, in presuming that the person is duly authorized to enter legal relations with them when that person purports to do so. 

58.	In other words, if that person purports to enter a contract with him the third party can, unless when he signs the contracts he had proof that the third party is not authorized, safely enter the contract and fulfil his obligations under it, knowing the contract will bind the Authority. 

59.	Then, if the person did not, in fact, have the authorization that is purely a matter between that person and the Authority and will not affect the third party. 

60.	To an effect similar to section 20 (f) of the Act is section 41 (2) of the Act which states:-

“A person purporting to execute any document on behalf of the Authority under an authority is taken to be acting in accordance with the authority in the absence of proof to the contrary.” 

61.	Thus, in this case Mr. Parenté was entitled to assume that the Agreement bound the VMA unless he had evidence, at the time he signed it, that the Commissioner and the Chairman did not, in fact, have authority to sign the Agreement when they did.

62.	In relation to both sections (20 (f) and 41 (2)) there is no evidence that, at the time the Agreement was entered there was evidence that the delegation or authorization had not been given.

63.	It is clear from the evidence before the Court that the VMA paid Mr. Parenté VT500,000 in January, February and March and the Chairman was very much aware of Parenté’s existence at the VMA in early February.

64.	If the Agreement was void the VMA should, at that stage have ended matters and so prevented Mr. Parenté, who had come from France and refused other employment, from being further disadvantaged.

65.	The failure of the VMA to do so, but to continue paying him in February and March creates an estoppel by representation. In Franklin –v- Manufacturers Mutual Insurance Ltd. (1995) 36 SR (NSW) 86 at 82, Jordan CJ said:-

“The type of estoppel which became definitely established in the common law by the case of Pickard –v- Sears (1837) 6 Ad & E 469 – estoppel by representation – depends upon different principles. In order that this type of estoppel may arise, it is necessary that (1) by word of conduct, (2) reasonably likely to be understood as a representation of fact, (3) a representation of fact, as contrasted with a mere expression of intention, should be made to another person either innocently or fraudulently, (4) in such circumstances that a reasonable man would regard himself as invited to act upon it in a particular way, (5) and that the representation should have been material in inducing the person to whom it was made to act on it in that way (6) so that his position would be altered to this detriment if the fact were otherwise than as represented.” 

66.	The VMA acts through its employees and representatives and its acts and omissions were, by paying Mr. Parenté and otherwise treating him as if there was a contractual relationship requiring Mr. Parenté to perform work for the VMA (whether as employee or consultant does not matter for this purpose), a clear representation that such a contractual relationship did exists. Mr. Parenté acted on the basis of that representation to continue to provide his work to the VMA and this will be to his detriment if the VMA is allowed to claim that no such contract existed.

67.	The VMA is therefore estopped from denying that it entered the Agreement with Mr. Parenté.

FINDINGS

68.	When one looks at the terms of the “Agreement” in this case it was clearly an employment contract. Article 2 of the Agreement stated that the “VMA agrees that Mr. Parenté shall have ready access to VMA’s staff and resources as necessary to perform the services provided for by this Agreement.” Exhibit A to the Agreement provides for Mr. Parenté:-

•	To be responsible for managing the 12 Database Managers Meeting and the 13 Port State Control Committee Meeting of the Memorandum on Port State Control in the Asia Pacific Region in Port Vila from 19 to 27 February 2004. 

•	To monitor the implementation of the new SOLAS Chapter X1-2 On Special Measures to Enhance Maritime Security; and the International Ship and Port Facility Security (ISPS) Code. 

69.	This clearly is not a function that falls under section 39 (1). The dicta by Lord Esher in Hamlyn v Wood, in my view, cannot apply in this case. The Court, in my view, do not need to imply any term into the Agreement as the nature of the task agreed to be performed by Parenté clearly falls within an employment contract.

70.	The intention of the parties is a dominant consideration in a contract and clearly the parties have intended that Mr. Parenté performed the functions specified in Exhibit A to the Agreement. There is no ambiguity at all, in my view, as to what Parenté was required to do under the Agreement. The nature of the functions clearly falls within section 38 (1) of the Act. The Agreement, in my view, is an employment agreement and not a consultancy agreement. 

71.	I have considered the case of The Moorcock and, in my view, does not assist in this case. I have considered Shirlaw v Southern Foundries and reject it as a case on point in this case also. It is my view that the Agreement was made in line with section 38 (1) of the Act.

72.	The VMA is a body corporate and therefore the indoor management rule applies to it. In my view, that rule has been incorporated into the Act.

73.	For reasons I have outlined above my view is that the Agreement binds the VMA.

Third Issue:	Whether the employment of Mr. Parenté is in accordance with employment laws. 

74.	I have already made a finding in relation to the first issue that Parenté’s engagement was in line with the Act.

VMA’S POSITION 

75.	VMA further submitted that the employment of Mr. Parenté did not comply with the Government Contracts and Tenders Act No. 10 of 1998. That the contract did not go through a tender process. 

PARENTÈ’S POSITION

76.	Parenté argued that the Contract and Tenders Act do not apply to him. That he was an employee of the VMA. Under common law rules, a worker is an employee if the employer has the right to control him in the way they work both as a final result and as to the details of when, where and how their work is done. Mr. Parenté was working as an employee as he was performing his duty under the authority and control of the Commissioner. He –

•was reporting to the Commissioner on a daily basis;

•was receiving directions from the Commissioner concerning the performance of his functions;

•was working in the VMA office; 

•had access to VMA computers and keys to the VMA office;

•had attended VMA staff meetings.

76.	Under examination in chief John Less Napuati, the Commissioner was asked:-

“Q. Did you consider me as an employee or consultant?

Ans. I considered you as an employee because you were under my direct control. I delegated responsibilities daily to you for implementation. You reported back to me daily.”

THE LAW—Government Contract and Tenders Act N0. 10 of 1998

77.	Section 1 of the Government Contract and Tenders Act defines government contracts as follows:- 

“Government contract” means a contract arrangement, or obligation for the supply of goods or services or the execution of public works in consideration of payment out of public moneys (and includes any subcontract made in relation to any such contract or public work), where the consideration of the Government contract as the case may be is over VT5,000,000, but does not include contracts for raising loans.”

78.	Section 11 (3) of the Vanuatu Maritime Authority (Amendment) Act No. 29 of 2002 provides:-

“The Authority must pay all fees, charges and any other amounts received by the authority under this Act or any other Act administered by the Authority into the Public Fund within the meaning of the Public Finance and Economic Management Act No. 6 of 1998 within 7 days after receiving such fees, charges or other amounts.”

DISCUSSION

79.	VMA argued that the essential elements in this definition of Government contract is “… works in consideration of payment out of public moneys …” That a “government contract” is concerned with the –

(a)	supply of goods; or

(b)	supply of services; or

(c)	the execution of public works.

in consideration of payment out of public moneys over VT5 million.

80.	The duties agreed to be performed by Mr. Parenté may fall under public works. No submissions at all were made on this to assist the Court. 

81.	The VMA did not challenge submissions by Parenté that while he was with VMA he was under the authority and control of the Commissioner in the performances of his functions.

82.	Is the arrangement entered into between VMA and Mr. Parenté fall within the definition of “Government contract”? The phrase “… and includes any subcontract made in relation to any such contract or public work …” in my view, envisage an arrangement that is independent of the Government. The contractor is under no obligation to report regularly, everyday to Government and to receive instructions regularly on when, where and how he will perform the assigned task. The definition envisages in my view an arrangement that is taken out of Government and performed by the contractor independently on behalf of the Government. It is that type of arrangement which must comply with the Government Contract and Tenders Act. The fact that this particular employee Mr. Parenté was receiving a higher salary under the contract of employment does not necessarily make it a contract for the supply of goods, services and execution of public works as envisaged by the Government contracts and Tenders Act. The presumption must be that arrangements must have been made internally in line with budget allocations.

FINDINGS

83.	My view is this. The Agreement entered into between VMA and Mr. Parenté does not fall within “Government contract” as envisaged under the Government Contract and Tenders Act No 10 of 1998. 

Fourth Issue:	Whether the VMA has powers to employ and terminate employees of the VMA.

84.	My findings under the first issue, takes care of this issue. It follows that the Authority can and has the power to appoint and terminate those it appoints under section 39 (1) only. Its powers of appointment and termination applies to consultants, specialists and committees under section 39, whose sole function upon appointment is “to advise on the exercise of functions or powers of the Authority.”

Fifth Issue:	Was Mr. Parenté served a notice of termination?

PARENTE’S POSITION

85.	Mr. Parenté submitted that he was never served notice for the cessation of his employment.

VMA’s POSITION

86.	VMA submitted that the Board gave notice to Mr. Parenté to attend a Board meeting to respond to allegations made against him but Mr. Parenté failed to attend the meeting. That this was notice being given for the termination of his employment with the VMA. That such notice was given in accordance with section 49 (2) of the Employment Act.

DISCUSSIONS

87.	Article 10 of the “Consulting Agreement” provides for the manner in which the contract can be terminated earlier. It does not provide for any notice to be given. If the contract can be characterized as an employment contract for the purposes of the Employment Act [Cap. 160], it makes no difference, because section 48 of that Act provides that “… a contract of employment shall terminate on the last day of the period agreed in the contract.” 

88.	Section 49 of the Employment Act contains notice provisions but they only apply to “… a contract of employment for an unspecified period of time …” The contract in question is for a specified time, that is 4 months originally, then extended for a further 2 months bringing to a total of 6 months. Clearly section 49 cannot apply to the Agreement in question.

89.	Whether notice was given or not seems to me to be immaterial. The Agreement does not provide for it to be determined on notice being served by either party.

FINDINGS

90.	My view is this:-

(1)	The Agreement is for a specific term. It does not provide for termination by notice. It only provides for termination by “either party if the other party fails to fulfil its obligations … and does not cure such failure.” VMA did not contend that Parenté had failed to fulfill his obligations under the Agreement.

(2)	The Employment Act does not apply to the Agreement.

(3)	VMA terminated the employment of Mr. Parenté in breach of the Agreement.

FORMAL ORDERS 

91.	As a result of the Court’s findings judgment is entered for Parenté against the VMA as follows:-

(a) Arrears of remuneration 	VT4,012,000

(b) Remaining contract period 	VT2,760,000

(c) Common Law Damages 	VT150,000

(d) Exemplary Damages 	VT200,000

(e) Airfares		VT200,000

(f) Disbursements 		VT120,000

Total	VT7,442,000

(g) Costs in favour of Parenté and to be taxed if not agreed.

(h) Interests at 10%.

DATED at Port Vila, this 30th day of September 2004.

H. BULU
Judge.