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Trident Holdings Ltd v Republic of Vanuatu [2015] VUSC 7; CC 01 of 2013 (16 February 2015)

IN THE SUPREME COURT OF THE REPUBLIC OF VANUATU
(CIVIL JURISDICTION)
CIVIL CASE NO. 1 OF 2013

BETWEEN:

TRIDENT HOLDINGS LIMITED
First Claimant

AND:

GUY BENARD
Second Claimant

AND:

REPUBLIC OF VANUATU
Defendant

Coram: Justice Mary Sey
Counsel: Less J. Napuati for the First Claimant
Guy Benard Second Claimant – In person
Kent Ture Tari (SLO) for the Defendant

JUDGMENT

Introduction

1. By its Amended Claim filed on 14 February 2013, Trident Holdings Limited (THL) is claiming for payment of the principal and interests of an invoice for “Search and Rescue” services (SAR) provided to the Defendant sometime in June 2011. This was done at the request of the department of Police Maritime Wing (PMW) in charge of maritime assistance and SAR operations under the supervision of the Ministry of Internal Affairs. The invoice for the work done was for an amount of VT4, 999,500.
   

Background Facts

2. On 24 June 2011 at 01.30 am, Guy Benard was requested by the Maritime Rescue Coordinating Centre (MRCC) in Noumea to provide SAR assistance to a French ship, Clinique Pasteur, and her skipper Doctor Serge Jandaud. They were caught in a storm at over 300 nautical miles out of Port Vila.
   
3. Guy Benard contacted Superindent John Malon Taleo (Supt. Taleo) of the Mala Base and relayed the request to him but he was told that the Defendant’s Patrol Boat RVS Tukoro was under maintenance and not operational.
   
4. Supt. Taleo then requested THL to organize the SAR operations with their tug Nacato. Prior to the departure of Nacato, Supt. Taleo asked THL to provide a quotation for the SAR assistance. Guy Benard obtained the quotation from THL the same day at 7.41am and addressed it to Supt. Taleo who confirmed at 8.52am that “he was on his way to the department of Finance.” Later on, at 12.32 pm, Supt. Taleo confirmed that the quotation was accepted by the department of Finance and that he needed to be provided with the invoice in order to approve it for the department of Finance to process payment.
   
5. THL provided its invoice for VT4, 999,500 and it was approved by Supt. Taleo on 29 June 2011 for payment to be made from the Government Marine SAR budget. The approved invoice was delivered to the department of Finance on 30 June 2011.
   
6. On 4 July 2011, Treasury Analyst John Robert Simelum sent an email to Supt. Taleo informing him that “there is no special rescue fund” but that he had “had conversations with his bosses for alternative funding sources”. Nonetheless, the payment was not processed and the invoice remains unpaid.
   

Claim

7. THL claims the following reliefs:
   
   1. Payment of its invoice in the sum of VT4, 999,500.
   2. Payment of contractual interests at the rate of 5% per annum.
   3. Common law damages.
   4. Aggravated damages.
   5. Exemplary damages.
   6. Legal costs and expenses.
   7. Such other order as this Court may deem fit.
      

Defence

8. By its Amended Defence and Counterclaim filed on 8 August 2013, the Defendant says that although the responsibility of SAR was transferred from the Vanuatu Maritime Authority to the Police, it is not the responsibility of the Police to carry out salvage operations on Clinique Pasteur.
   
9. Further, the Defendant says that because RVS Tukoro was under maintenance, Supt. Taleo, without carefully considering the situation surrounding the request for salvage rescue and other options, requested THL’s tug Nacato to carry out the operation to rescue Clinique Pasteur.
   
10. The Defendant further says that Supt. Taleo unlawfully agreed to the quotation supplied to him by the Claimants.
    
11. Furthermore, the Defendant contends that the operation was not done successfully as anticipated by Supt. Taleo and that Guy Benard had to make a request for assistance to the Defendant’s department of Ports and Harbours for its Tug Boat M/T Roimata II to rescue THL’s vessel from high seas.
    
12. The Defendant says that the department of Ports and Harbours responded that it did not have sufficient fuel for the rescue operation on tug Nakato so an undertaking was made by the Minister of Finance and the department of Ports and Harbours for the department of Finance to pay for the fuel and for Guy Benard to reimburse the Defendant for that fuel.
    
13. In light of the Defendant’s Counterclaim, Guy Benard filed an application to be made a party in the proceeding. The said application was granted by the Court on the 30 August 2013 and Guy Benard in person was made a party to the proceeding as Second Claimant and as Second Defendant to the Counterclaim.
    

The Evidence

14. At trial, both counsel Mr. Less Napuati and Mr. Kent Ture Tari and the Second Claimant agreed that none of the witnesses for the Claimants would be made available for cross examination and that all eleven (11) sworn statements filed by the Claimants be admitted as evidence for the Claimants. It was also agreed that the sworn statement of Kembro Manderson filed in support of the Defence and Counterclaim be withdrawn and that the sworn statements of the other two defence witnesses be admitted in evidence but that the two witnesses be made available for cross examination.
    

The Issues

15. The Defendant submits that the issues before this Court are:
    

15.1 Whether Supt Taleo’s actions in requesting the Claimants to carry out the rescue operation for salvage and agreeing to the Claimants’ quotation are lawful;

15.2 Whether the operation carried out by the Claimants as requested by Supt Taleo was successful;

15.3 Whether THL is entitled to the sum contained in its invoice; and

15.4 Whether the Defendant is required to pay for the damages incurred to THL’s vessel as a result of its operation on the Clinique Pasteur.

Submissions

16. The Claimants contend that, having taken into consideration the course followed by Clinique Pasteur, Guy Benard mobilized Mr. Gibson Liu of Maewo Island for the canoe’s recovery at sea. Further, that Mr. Liu was provided with the location of the canoe at latitude 15°05,6 south and longitude 168°04,7 west and he was assisted by local fishermen who secured the boat on shore and rescued her skipper Doctor Serge Jandaud. Guy Bernard says the local fishermen were paid by THL for the services rendered.
    
17. The Claimants further submit that tug Nacato had to sail immediately because of the great emergency due to the deterioration of the weather. That Roimata II did not rescue tug Nacato at 300 nautic miles out of Port Vila because Roimata II did not even reach this location and that she went only to Tongariki Island where tug Nacato was already located. Further, that the crew of tug Roimata II had never cut off the towing line from the propeller of Nacato. That Roimata II had never rescued tug Nacato in any way but limited her action by sailing in concert with Nacato to Port Vila after Nacato’s Engineer and diver Allan had cleared the propeller which was then fully operational.
    
18. The Claimants further submit that an invoice made by Ports and Harbours was never personally addressed to Guy Benard and that he was only copied with the SSP invoice in the name of Ports and Harbours as agreed and instructed by the then Minister of Finance.
    
19. It is also the Claimants’ contention that Supt. Taleo, being the designated person responsible for SAR, had powers to approve any justified expenses to be paid from the SAR budget.
    
20. Guy Benard says Supt.Taleo advised him at all times that he was doing “everything” with the department of Finance to organize the payment due to THL and that it should be sorted out very soon. He says that he reported his conversations with Supt. Taleo to THL operations officer Sean Griffin through satellite phone. Further, Guy Benard says that on 26 June 2011, he was copied with another email of Supt.Taleo who did confirm to the SAR duty officer of MRCC Noumea that tug Nacato was requisitioned for assistance and operation.
    
21. In the Defendant’s closing submissions defence counsel submits as follows:
    

21.1 That all Government expenditures in relation to the spending of public money is vested on the Director General who is the Head of each Ministry and that the functional responsibility of the Police at that time was under the Ministry of Internal Affairs.

21.2 That Parliament has never appropriated any funds under the Ministry of Internal Affairs for the Police to use towards SAR as such; That public funds would be the available funds to be utilized having its procedures available for compliance under the Financial Regulations Order No. 27 of 2000 (the Regulations).

21.3 That clause 5.1 of Part 5 of the Regulations clearly states that the Director of Finance must then approve the purchase order or payment voucher in its prescribed form. Then the Director of Finance may issue further instructions that must be followed for the purchase of goods and services. The clause then makes it clear by setting out the procedures to be followed depending on the value of goods or services being purchased.

21.4 It is further submitted that, even though at the trial it was revealed that Guy Benard did have discussions with the department of Finance, those discussions did not amount to compliance with the Regulations. Counsel submits that since the Police was under the Ministry of Internal Affairs at that time, Supt. Taleo should have first consulted the Director General who is the Head of the Ministry of Internal Affairs. That the Regulations specifically state that it is for the Head of Ministry to submit such request for approval, be it a quotation or purchase order.

21.5 Furthermore, that it is clear that Supt. Taleo was not the Director General at that time and that he took it into his own hands to agree to the quotation and did not consult with the Director General of the Ministry of Internal Affairs. Thus the Claimants and Supt Taleo have not abided by clauses 3.2, 5.1 and 5.2 of the Regulations. As such, the agreement reached by the Claimants and Supt Taleo on the Claimants’ quotation and the operation was totally outside the scope of the Regulations and must be considered unlawful for that purpose.

21.6 That of course one may argue that the nature of the request needed urgent attention but that is not a requirement under the Regulations. Furthermore, that the provisions of the Regulations are mandatory and one just cannot by-pass them. Supt Taleo should have considered other options, for example he should have conducted the authorities from New Caledonia which was nearby to carry out the salvage rescue since it is not the duty of the Police to provide assistance to salvage operation and that the Police involvement under SAR would be to carry out operations to save lives at sea.

21.7 Therefore the Defendant concludes that the engagement of the Claimants by Supt. Taleo is ultra-vires the powers vested on him for SAR and that the Defendant should not be held responsible for Supt. Taleo’s conduct

Discussion

22. The 1979 International Convention on Maritime Search and Rescue (SAR) was adopted at a Conference in Hamburg. It was aimed at developing an international SAR plan, so that, no matter where an accident occurs, the rescue of persons in distress at sea “will be co-ordinated by a SAR organization and, when necessary, by co-operation between neighbouring SAR organizations”.
    
23. A revised Annex to the SAR Convention was adopted in May 1998 and ed into foro force in January 20t requires Partiearties, either individually or in co-operation with other States, to establish basic elements of a search and rescue service and, where necessary, search and rescue operations those of neighbouring Stat States.
    
24. The Republic of Vanuatu is a signatory to the International Convention on Maritime Search and Rescue and is also a signatory to the International Convention on Salvage of 1989.
    
25. In this present case, it is common ground that Guy Benard was requested by the Maritime Rescue Coordinating Centre (MRCC) in Noumea to provide SAR assistance to a French ship, Clinique Pasteur, and her skipper Doctor Serge Jandaud.
    
26. The Defendant’s position is that the engagement of the Claimants by Supt. Taleo is ultra-vires the powers vested on him for SAR and that the Defendant should not be held responsible for Supt. Taleo’s conduct.
    
27. Interestingly, however, the Defendant has not outlined to the Court the powers vested on Supt. Taleo for SAR. The only evidence before the Court is that he is the officer in charge of Vanuatu Search and Rescue Center and the only person responsible for SAR but the extent of his responsibilities has not been disclosed. Undoubtedly, this would have assisted the Court in determining whether or not Supt. Taleo had acted ultra-vires his powers or whether he was empowered to act in situations requiring urgency like in this present case.
    
28. It is also submitted by defence counsel that it is not the duty of the Police to provide assistance to salvage operation and that the Police involvement under SAR would be to carry out operations to save lives at sea. However, it seems clear to me that the SAR operation carried out by the Claimants from 24 – 27 June was conducted to rescue a French citizen Doctor Serge Jandaud within Vanuatu waters. This is clearly stated in Supt. Taleo’s document dated 16 September 2011 and annexed as “A” to the sworn statement of Guy Benard filed on 15 April 2013.
    
29. The pivotal question is whether Supt Taleo’s actions in requesting the Claimants to carry out the rescue operation and agreeing to the Claimants’ quotation are lawful?
    
30. The crux of the Defendant’s contention is that the agreement reached by the Claimants and Supt. Taleo on the Claimants’ quotation and the operation was totally outside the scope of the Regulations and must be considered unlawful for that purpose.
    
31. The Defendant submits that pursuant to sub clause 3.2(1) of the Regulations, all purchases and expenditure of public funds must be approved and signed off by a person with appropriate financial authority or a financial delegation to authorize the purchase or expenditure. Sub clause 3.2(2) of the Regulations further state that all purchases of or under VT 5,000,000 must follow the regulations set out in Part 5 (Purchasing, approval and payment for goods and services). Clause 3.1 defines a Head of Ministry to mean the person appointed as the Director General of a Ministry under the Public Service Act [CAP. 246].
    
32. Clause 3.2 of the Regulations provides:
    

3.2. Signing and approving purchases and payments

(1) All purchases and expenditure of public funds must be approved and signed off by a person with appropriate financial authority or a financial delegation to authorise the purchase or expenditure. The Head of Ministry automatically has this authority for his or her Ministry only.

33. It is trite law that all legislative provisions must be given their fair and liberal meaning so as to give effect to the legislative intent. There can be no room for any doubt that the intent behind the Regulations is to ensure transparency in all dealings with public authorities and persons or parties who are not an agent of the State, or an arm of the State, approved by the Minister to provide the works, supplies or services.
    
34. In Papua New Guinea, the Supreme Court in two cases considered the Public Finance (Management. The cases are Thee v Keboki Business Gess Group Incorporated & Morobe Provinsel Gavman [ PNGLR 369;and Visv>Visvanathan Subendranathan v The State (Unnumbeudgmentgment SCA 10CA 106 of 1998, 27 October 1999).
    

35. They were both on appeal from the National Court. In Kes case>case, the National Court held that aract for the provision of g of garbage and sanitary services, entered into between Keboki Business Group and the State was not bindinthe State. The National Coul Court reasoned that the contract was not personally "executed" by the designated officer. Somebody else in fact signed the contract for and on behalf of the designated officer, the chairman of the National Government Supply and Tenders Board. That followed a successful tender for the provision of garbage collection service at a price of K90,000.00 for 12 months renewable.