Foong v The Norfolk Island Hospital Enterprise

Federal Court of Australia|2002-08-15|Before: Beaumont CJ

INTRODUCTION 1 By his further amended originating application, the plaintiff, Dr Damien Foong, has sued the defendant, The Norfolk Island Hospital Enterprise ("the Hospital"), a statutory body corporate, and made capable, by statute, of being sued. Dr Foong sought declaratory and other relief. 2 First, Dr Foong seeks the following declaratory orders: "1. The resolution of the Board of Management of the defendant on 10 May 2002, suspending the plaintiff's employment with the defendant, is void and of no effect. 2. The purported suspension of the plaintiff's employment by the defendant on 10 May 2002 is void and of no effect. 3. The purported suspension of the plaintiff's employment by the Director of the defendant on 2 July 2002 is void and of no effect. 4. The purported suspension of the plaintiff's employment by the defendant on 2 July 2002 is void and of no effect. 5. The plaintiff's entitlements under the Contract of Employment continued to accrue during the period of purported suspension of the plaintiff's employment." 3 Secondly, Dr Foong seeks these orders: "1. The defendant forthwith do all things reasonably necessary to reinstate the plaintiff's employment by the defendant. 2. Damages. 3. Interest under section 39 of the Supreme Court Act 1960 (N.I.)."

THE BASIS OF the CLAIMS BY DR FOONG FOR RELIEF AND THE HOSPITAL'S RESPONSE 4 By his further amended statement of claim, Dr Foong alleges the following: · On or about 17 October 2001, Dr Foong and the Hospital entered into a written Contract of Employment ("the Contract"). (By its defence, the Hospital admits that a contract of employment was entered into on or about 17 October 2001.) · Under the Contract, Dr Foong is entitled to certain benefits (then specified) which accrue during completed years of employment. (The Hospital says that Dr Foong is entitled to specific accrued benefits.) · On 13 February 2002, the Chairman of the Hospital's Board of Management ("the Board"), Lianne Stevens, resigned. (The Hospital admits this fact.) · In March 2002, it became apparent that the copy of the Contract held by Dr Foong was different from that held by the Hospital. · On 3 April 2002, the Hospital accused Dr Foong of fraudulently altering his copy of the Contract, but Dr Foong denied this. · On 10 May 2002, the Board purported to meet in accordance with s 18 of the Norfolk Island Hospital Act 1985 (N.I.) ("the Act"). The meeting was purportedly convened by a person other than the Board's Chairperson. (Section 18(1)(a) provides that the Board's Chairperson shall convene such Board meetings as are necessary for the efficient conduct of its functions.) · At its meeting on 10 May 2002, the Board purported to resolve to suspend Dr Foong's employment with the Hospital, in breach of the Contract. (The Hospital says that its Board met, and resolved, in the exercise of its prerogative, to suspend Dr Foong on full pay. The Hospital denies that the suspension breached the Contract.) · Since the purported suspension, Dr Foong has been excluded from his place of work by the Hospital, in breach of the Contract. (The Hospital admits that Dr Foong has been excluded, but denies any breach.) · The purported Board meeting on 10 May 2002 was not convened in accordance with s 18(1)(a) of the Act because Larry Quintal was not appointed Chairman until 27 May 2002, the previous Chairperson having resigned in February 2002; so that, as at 10 May 2002, no Chairperson had been appointed pursuant to s 16 of the Act. (The Hospital denies any departure from the provisions of s 18(1)(a).) (Section 16 of the Act provides that the executive member shall appoint a member, other than the Director, to be the Chairperson of the Board.) · The Hospital was not entitled, under the Contract, to suspend Dr Foong, so that the purported suspension is invalid. (The Hospital says that it was entitled to suspend, in the exercise of its prerogative power.) · In any event, the Board had no power under the Act to suspend Dr Foong, so that the purported suspension is invalid for this reason also. (The Hospital says that it suspended in the exercise of its prerogative power.) · Further, the purported suspension is invalid because the Hospital failed to comply with the requirements of natural justice in that - (a) Dr Foong was not given prior notice of the 10 May 2002 meeting. (b) Dr Fong was not given an opportunity to be heard in respect of the proposal to suspend him. (The Hospital disputes the claim that Dr Foong was denied natural justice, and says that Dr Foong was aware of the nature and import of the allegations with respect to the alterations to the Contract; and that Dr Foong was given ample opportunity to proffer an explanation.) · On 2 July 2002, each of the Hospital, its Director, and its Board purported to suspend Dr Foong's employment without pay, in breach of the Contract. (The Hospital denies any breach of the Contract, and says that it suspended in the exercise of its prerogative.) · The Hospital was not entitled, under the Contract, to suspend Dr Foong, so that the purported suspension was invalid. (The Hospital disputes this.) · In any event, the Board had no power under the Act to suspend, so that its purported suspension was invalid. (The Hospital disputes this.) · Further, this purported suspension is also invalid because the Hospital failed to comply with the requirements of natural justice in that - (a) Dr Foong was not given prior notice of the 2 July 2002 meeting. (b) Dr Foong was not given the opportunity to be heard in respect of the proposal to suspend him. (The Hospital disputes any denial of natural justice, and says that Dr Foong was aware of the nature and import of the allegations with respect to the alterations to the Contract; and was given ample opportunity to proffer an explanation.) · As a result of the breach of the Contract, Dr Foong suffered damage, including loss of wages, allowances etc. (The Hospital disputes any entitlement to the relief claimed.)

THE BACKGROUND FACTS 5 The parties sensibly co-operated in the preparation of both a Statement of Agreed Facts and an Agreed Bundle of Documents. As will be seen, the Agreed Statement refers to a particular copy of the Contract in the Agreed Bundle. It will be convenient to set out first the Agreed Statement, and then to refer to this copy of the Contract.

The Agreed Statement of Facts 6 The Agreed Statement is as follows: "1. On 24 September 2001, [the Board] of [the Hospital] instructed the Director of the Hospital to prepare a contract of employment for Dr Foong. 2. Several drafts of the proposed contract were prepared and circulated among [the Board], the Director and Dr Foong. 3. On 17 October 2001, the Hospital entered into a contract of employment with Dr Foong. 4. On 13 February 2002, the Chairman of [the Board], Lianne Stevens, resigned. 5. In March 2002, in the course of discussions between Dr Foong and the Director about the provision of medical malpractice insurance by the Hospital for its employed doctors, it emerged that the copy of the contract held by Dr Foong was different to the copy of the contract held by the Hospital. 6. On 20 March 2002, Dr Foong gave the Director a copy of the contract which he held. This document is in the Agreed Bundle at Tab 3. 7. On 20 March 2002, Dr Foong agreed that the Contracts were not the same. 8. On 3 April 2002, the Director met with Dr Foong to discuss the different versions of the contract. Legal representatives for both parties attended the meeting. At the meeting, the legal representative for the Hospital alleged that Dr Foong has fraudulently altered the contract. 9. On 4 April 2002, Dr Foong invited the Director to inspect his laptop computer. 10. On 6 April 2002, Stephen Matthews of the Hospital inspected Dr Foong's laptop computer and advised that the laptop could not connect to the Hospital's computer network as it was not equipped with a network card or software. 11. On 6 April 2002, Dr Foong left Norfolk Island on leave, travelling to Australia and the United States. 12. On 8 April 2002, the Hospital's legal representative met with the Hospital's doctors and then with the Hospital's staff, informing them that, in his opinion and following investigation and speaking with a number of witnesses, there appeared to be irreconcilable differences between the two contracts that could not be explained. 13. On 12 April 2002, the Hospital's legal representative set out the Hospital's position with respect of the allegations about the contract in a letter to the plaintiff's solicitor. 14. On 16 April 2002, the plaintiff's solicitor responded to the allegations in relation to the contract put by the Hospital's legal representative. 15. On 24 April 2002, the Director requested that Dr Foong respond to his letter in writing of 12 April 2002. 16. On 26 April 2002, Dr Foong's solicitor advised the Director that all future correspondence to Dr Foong from the Hospital on the matter be directed to him. 17. On 2 May 2002, the Director referred the matter to the police for investigation. 18. On 10 May 2002, [the Board] resolved to suspend Dr Foong's employment with the Hospital on full pay whilst the investigation by the Norfolk Island Police into the different versions of the contract was undertaken. 19. Dr Foong was not given the opportunity to address [the Board] in respect of his proposed suspension before the resolution of 10 May 2002 or before the suspensions referred to in pars 23, 24 below. 20. Dr Foong returned to Norfolk Island on 11 May 2002. 21. Since the resolution of [the Board] on 10 May 2002, Dr Foong has been excluded from his workplace. 22. On 27 May 2002, Larry Quintal was appointed as the Chairman of [the Board]. 23. On 2 July 2002, the Director suspended Dr Foong without pay. 24. On 2 July 2002, [the Board] of the Hospital suspended Dr Foong without pay. 25. Dr Foong's position at the Hospital has not been filled."

Dr Foong's copy of the Contract 7 This photocopy document, entitled "Schedule - Terms and Conditions of Employment - Medical Officer", dated 17 October 2001, is signed on its last page (p 6) by Dr Foong and by the Hospital by its then Chairperson and by its Director. 8 This document provides that the engagement shall be made under ss 21 and 23A of the Act, and that Dr Foong "shall be subject to the Act so far as applicable except as otherwise herein provided". Dr Foong "is employed as a General Medical Practitioner with surgical skills" (cl 1). 9 (Section 20(1) of the Act provides that the Director shall, subject to s 20(2), manage the day-to-day administration of the Hospital. Section 20(2) provides that the Director shall act in accordance with any policies determined, and any directions given, by the Board in writing. Section 21 provides for the powers of the Director relevantly as follows: "21. (1) Subject to this Act, the Director has power to do anything that is necessary or convenient to be done for or in connection with, or incidental to, the performance of the Enterprise's functions or the exercise of its powers. (2) Without limiting subsection 21(1), the Director may - (a) exercise any of the powers of the Enterprise specified in paragraph 6(2)(c) [which includes the power to make contracts, see below]; and (b) employ persons for the purposes of the Enterprise on such terms and conditions as the Director determines. (3) Subject to subsection 21(4), the duties of an employee are to be as determined by the Director, and each employee is to be responsible for the performance of his or her duties to - (a) the Director; or (b) another employee determined by the Director. (4) If an employee is employed by the Director to perform duties of a professional nature, the employee is not subject to the directions of the Director in respect of the exercise by the employee of the employee's professional or clinical judgement. (5) For the purposes of subsection 21(4), 'duties of a professional nature' include (but are not limited to) the duties of - (a) a medical practitioner, in the practitioner's capacity as such; …".) 10 The document further provides that the term of employment shall be for two years from the date of commencement of employment specified in the Instrument of Appointment (see below), and that the option of an extension of one year "may be available subject to written consent from the Board" ( cl 2). 11 Provision is made in the document for salary, gratuities, allowances, and other benefits (cll 3 - 10). 12 Hours of employment are dealt with as follows: "11. Hours of Employment: (a) The employee will be required to work a rotational roster, developed in consultation with other employee medical offices and as approved by the Director. (b) The employee will be required to work on-call hours in accordance with the rotational roster. (c) No overtime allowance will be paid for hours worked on-call or for hours worked beyond the employee's rostered shift." 13 Termination of employment is provided for as follows: "12. Termination of Employment: (a) In the opinion of the Director, if the employee is absent from duty without authority or guilty of professional misconduct, or undertakes behaviour that is detrimental to the reputation and operation of the Enterprise, the Director may dismiss the employee by giving to the employee three month's written notice in writing of the Director's intention to terminate the employment, or, a payment of three month's current salary in lieu of such notice where upon the employee shall have no right to the payment of fares and removal expenses for him/herself or his family, if any, from Norfolk Island. (b) Subject to the above in paragraph (a), six months written notice of the intention to terminate the employment may be given by either the Director or the employee." 14 (In the copy of the Contract held by the Hospital cl 12(a) provides for a period of one month's notice or salary, as the case may be, rather than three months.) 15 (No provision is made by the Contract for suspension.) 16 It is further provided that the employee shall not have the right to conduct any private medical practice on Norfolk Island without the prior approval of the Director (cl 13). 17 The Instrument of Appointment is made by the Acting Minister for Health pursuant to s 23A of the Act. 18 (Section 23A(1) provides that the executive member may appoint an employee who is a medical practitioner to be the Medical Superintendent of the Hospital.)

The instrument of appointment 19 Under the Instrument of Appointment, dated 17 October 2001, the Minister appointed Dr Foong "in temporary employment of Medical Officer - GP/Surgeon (under the … Act - Medical Superintendent)" with effect on and from 24 November 2001, for a term "not to exceed two years (option of a one year extension) (subject to the terms of item 2) … ." 20 The Minister determined the terms and conditions to be as set out in the schedule to the Instrument (see above).

The events leading up to the 10 May 2002 suspension resolution 21 By letters dated 14 and 15 March 2002, Dr Foong wrote to David Connell, the Hospital's Director, on the subject of "public indemnity" or "hospital malpractice" insurance. On those dates, Dr Foong and Mr Connell also exchanged e-mails on the topic. By Mr Connell's e-mail dated 14 March 2002, Dr Foong was asked: "Did you have a variation to your contract that we don't have a copy???." Dr Foong replied: "It would appear that my contract has a variation to it. Rather, totally revamped. There were about 4 contracts which were signed by myself floating out there. The one in effect was the last and shall attempt to get you a copy." 22 Dr Foong sent a further e-mail to Mr Connell on 20 March 2002 stating, inter alia: "Contract that is in my possession and in your possession are not the same. Helen and I reviewed the contract(s). The details within the contract were ironed out with Christine Sullivan. Your contract is the older one: with points of discontent". ("Helen" is presumably a reference to Ms Helen Dowling, Deputy Director, Accounting Officer and Office Manager of the Hospital, who gave evidence before the Court on 2 July 2002.) 23 As mentioned in the Agreed Statement, at a meeting held on 3 April 2002 between the Hospital's representative, Mr Connell and Dr Foong, attended by their respective lawyers, the Deputy Crown Counsel alleged that Dr Foong had altered his copy of the Contract, an allegation that was disputed, then and in the subsequent correspondence between lawyers in April referred to in the Agreed Statement.

The Board Meeting held on 10 May 2002 24 The minutes of this meeting state that: "The Meeting agreed to appoint Mrs Janine Brown as Chairperson for the meeting". 25 The minutes record that the Director had "advised that the material had been handed to the N.I. Police, who also queried whether Dr Foong should be suspended during the investigation"; and that the meeting resolved, by a majority, in accordance with the Director's recommendation, that Dr Foong be suspended "on full pay effective immediately, with notice to be given to his legal counsel immediately, until the investigation is concluded". 26 By letter dated 10 May 2002, the Director informed Dr Foong's lawyers of the resolution "to suspend Dr Foong on full pay whilst the investigation by the Norfolk Island Police is undertaken and a conclusion of the matter is reached". 27 By notice dated 10 May 2002, the Director informed the Hospital's staff that - "Dr Foong will not be returning to the workplace as originally planned. We are unsure of the return date at this time. Appropriate rosters have been drawn up to accommodate his period of absence."

The initiation of criminal proceedings 28 On 1 July 2002, pursuant to information laid under s 178A and s 252 respectively of the Crimes Act 1900 (NSW) in its application to Norfolk Island, Dr Foong was summonsed to appear before the Court of Petty Sessions on 9 July 2002 on three charges: (1) that between 3 November 2001 and 8 January 2002 he attempted to fraudulently misappropriate $941.98 from the Hospital; (2) that between 16 October 2001 and 12 March 2002, he forged a document (the Contract) with intent to defraud the Hospital; and (3) that on 20 March 2002 he uttered a document (the Contract) knowing the document to be forged, with intent to defraud the Hospital ("the criminal proceedings").

The purported suspension on 2 July 2002 29 By letter dated 2 July 2002 the Director informed Dr Foong that the commencement of the criminal proceedings had come to his attention, and said - "I view this as a serious breach of your contract of employment with the Norfolk Island Hospital Enterprise. In view of these proceedings I hereby suspend your employment without pay under Section 21 of the Norfolk Island Hospital's Act until such time as the criminal proceedings have been dealt with by the courts and legal system." 30 Also on 2 July 2002, the Hospital Board resolved, by a majority, that - "The motion of the 10th May was that the director recommends to suspend Dr. Foong on full pay effective immediately with notice to be given to his legal counsel immediately until the investigation is concluded."

CONCLUSIONS ON THE CLAIMS MADE BY DR FOONG 31 As has been noted, the case for Dr Foong, that the suspensions on 10 May 2002 and 2 July 2002 were invalid, is put in several ways. It will be convenient to consider them in their order.

(a) Is there a common law right to suspend? 32 First, what is involved in the notion of "suspension"? In Boston Deep Sea Fishing & Ice Company v Ansell (1888) 39 Ch D 339, Cotton LJ said (at 352): "… suspension is very different from dismissal. When [an employee] is suspended from … office … it is merely a direction, that … until … legally dismissed [the employee] must not do anything in the discharge of the duties of the office …." 33 On behalf of Dr Foong, it is submitted that a right, if any, to suspend, must be conferred, if at all, by contract, statute or award. That is, the argument runs, as Macken, Law of Employment, 5th ed. (2002) has noted (at 157) - "The common law rejects any notion that there can be a suspension of contractual rights and duties save by express or implied agreement. The employer is in an all or nothing situation. Faced with serious misconduct an employer must either dismiss the employee or retain the employee without loss of contractual rights." 34 Moreover (citing Macken at 159) it is submitted that exclusion of an employee from the workplace as a disciplinary measure in the absence of authorisation by contract, statute or award, constitutes an unlawful suspension.

(b) Is there a contractual right to suspend? 35 As has been seen, cl 12 of the Contract provides for the termination, but not the suspension, of the employment relationship.

(c) Is there a statutory right to suspend? 36 The Act (unlike some other statutes - see e.g. Dixon v Commonwealth of Australia (1981) 61 ALR 173) does not confer any such specific right.

(d) Is there a prerogative right to suspend? 37 This emerged as the major area of contention on the challenge to the validity of the purported suspensions. 38 On behalf of the Hospital it is submitted, and Dr Foong accepts, that the Hospital is an instrumentality of the Crown, since s 6(4) of the Act provides: "(4) The Enterprise is an instrumentality of the Crown in right of Norfolk Island." 39 The Hospital then argues that, as a Crown instrumentality, it "possessed the power to suspend its … employees from office, a common law right that 'is of great antiquity'." In this connection, the Hospital refers to Bennett v Commonwealth of Australia (1980) 30 ALR 423. Rogers J there said (at 428): "Mr McHugh referred me to the decision of the High Court in Hunkin v Siebert (1934) 51 CLR 538. The appellant was an officer in the South Australian Public Service who was charged with larceny. The head of his department gave him a notice purporting to suspend him. The respondent was tried and acquitted, whereupon he presented himself for duty, but he was further suspended and after inquiry, dismissed as from the date of the original suspension. During the period of suspension he received no salary. The question at issue was whether or not he was entitled to be paid his salary during the period of suspension. In the joint judgment, the court pointed to detailed provisions of the Public Service Act of South Australia for dealing with charges against officers, and for the suspension of officers so charged. The joint judgment pointed out that the provisions of the Act were not employed and held that in the result it was impossible for the Crown to withhold the salary for the period of suspension. Their Honours went on to say: 'The Crown's power of suspending its servants from office existed at common law and is of great antiquity. The manner of its exercise depended upon the nature of the office. Its exercise did not have the effect of provisionally or temporarily vacating the office, and did not necessarily deprive the officer of the right to salary'." 40 However, Rogers J proceeded (at 428 - 429): "[T]heir Honours went on to say: 'But whatever might be its effect at common law, the Public Service Act 1916 operates, in our opinion, to define exclusively the occasions and mode of the exercise of the power to suspend. Sections 53 and 54 lay down a method of dealing with delinquent officers, which includes suspension, and, according to Gould v Stuart [1896] AC 575, such provisions must be interpreted as restricting the common law right of the Crown to exercise a similar power by other means and in other circumstances' (my emphasis). For present purposes it is sufficient to refer to the headnote in Gould v Stuart [1896] AC 575. It states that the Crown has by law, whether in England or in New South Wales, power to dismiss at pleasure either its civil or military officers, a condition to that effect being an implied term of contract of service, except where it is otherwise expressly provided, and certain provisions of the New South Wales Civil Service Act 1884, being manifestly intended for the protection and benefit of officers, were inconsistent with such a condition and consequently restricted the power of the Crown in that respect. The significance of the advice of the Privy Council in the present context is that it supports the view that the Commonwealth cannot, by resort to its right at common law, abrogate the right of appeal provided for both by the Act and the Regulations and without giving the officer affected an opportunity of challenging both the reasonableness of the order given to him, and the effect of disobedience." 41 The Hospital submits that the Crown's prerogative to suspend "is imported into the Contract and becomes an implied term of the Contract by law, except where it is otherwise expressly provided." 42 It is then contended for the Hospital that this was a Crown appointment (that is, one made by the Minister, rather than the Hospital or its Director). That is, because Dr Foong was appointed directly by the Minister pursuant to s 23A(1) of the Act, and since the Hospital did no more than ratify the terms and conditions of employment when, by its Chair and Director, it executed the Schedule to the Instrument of Appointment, Dr Foong was "a servant of the Crown". 43 For Dr Foong, on the other hand, it is submitted that the prerogative has no relevant application here. 44 I agree, for these reasons:- 45 First, although members of the armed or police forces might be suspended under the prerogative (see e.g. Coutts v Commonwealth of Australia (1985) 157 CLR 91; Menner v Commissioner of Police (1997) 74 IR 472), Dr Foong was not a Crown servant, holding office at "Crown pleasure", but, rather, a medical practitioner employed by the director of a statutory corporation under a fixed term contract of employment. 46 Secondly, the dismissal prerogative may be surrendered by agreement or abrogated by statute (see Suttling v Director-General of Education (1985) 3 NSWLR 427; affirmed (1987) 162 CLR 427; Welbourn v Australian Postal Commission (1984) VR 257). 47 Thirdly, the fact that a body is described by statute as an "instrumentality of the Crown" does not necessarily entitle the body to all the privileges of the Crown for all purposes (see Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282 at 288; DCT v State Bank (NSW) (1992) 174 CLR 219 at 230; Superannuation Fund Investment Trust v Commissioner of Stamps (SA) (1979 - 1980) 145 CLR 330; Jellyn Pty Ltd v State Bank of South Australia (1996) 1 Qd R 271 at 288). 48 In my opinion, the general principles in this area are accurately explained by Finkelstein J in Australian Workers' Union v Stegbar Australia Pty Ltd [2001] FCA 367 (at [24] - [25]): "[U]nder the common law, in the case of threatened misconduct, an employer has no right to suspend an employee without pay. The employer may dismiss the employee, or it must permit the employee to carry out his duties, albeit otherwise than in performance of his obligations. In Hanley v Pease & Partners Ltd [1915] 1 KB 698 at 705 Lush J said: '[a]fter declining to dismiss the workman - after electing to treat the contract as a continuing one - the employers took upon themselves to suspend him for one day; in other words to deprive the workman of his wages for one day, thereby assessing their own damages for the servant's misconduct at the sum which would be represented by one day's wages. They have no possible right to do that. Having elected to treat the contract as continuing it was continuing. They might have had a right to claim damages against their servant, but they could not justify their act in suspending the workman for one day and refusing to let him work and earn wages.' A right to suspend or stand down an employee without pay may be granted by contract (Warburton v Taff Vale Railway (1902) 18 TLR 420), including by a term implied by custom or usage (Marshall v English Electric Co Ltd [1945] 1 All ER 653) or by statute (Browne v Commissioner for Railways (1935) 36 (SR)NSW 21)." 49 Has this general common law rule been displaced here? In my opinion, it has not. 50 The scope of the exercise of the prerogative in a similar context was considered by the High Court in the Townsville Hospitals Case, where Gibbs CJ (Murphy, Wilson and Brennan JJ agreeing) said (at 288 - 289): "It has been said that in deciding the question whether a person or body is entitled to the privileges and immunities of the Crown it is necessary to consider all the circumstances of the case and that '[t]he fact that function has been a traditional function of government and that no intention of "alienating" it appears is sufficient to answer the question in many cases': …. There have been cases in which the fact that the objects which the statutory body was set up to achieve were peculiarly within the province of the Government was regarded as decisive: …. However, many functions formerly regarded as matters of private concern are now carried out by instrumentalities of government and the question whether the functions in question are traditionally or peculiarly governmental is likely to be increasingly unhelpful in deciding whether the body formed to carry out those functions enjoys the privileges and immunities of the Crown. However, if it matters, the provision of hospital services is not a traditional function of government, and is still regarded as a matter in which private enterprise as well as governments will play a part. The answer to the question must in the end depend upon the intention to be derived from the statute under which the body in question is constituted." (References omitted) 51 Gibbs CJ added (at 291): "It has more than once been said in this Court that 'there is evidence of a strong tendency to regard a statutory corporation formed to carry on public functions as distinct from the Crown unless parliament has by express provision given it the character of a servant of the Crown': …. All persons should prima facie be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to confer them. It is not difficult for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not readily be concluded that it had that intention. The Hospitals Act does not expressly provide that a board shall have the privileges and immunities of the Crown when engaging in building operations, and in my opinion it does not impliedly so provide. …" (References omitted) (Emphasis added) 52 In my opinion, the present case is, in principle, similar to the Townsville Hospitals Case in all relevant respects. 53 The material provisions of the scheme of the Act are as follows: · The Hospital known at the commencement of the Act as the Norfolk Island Public Hospital shall continue to be a public hospital under the name of the Norfolk Island Hospital, but shall be maintained and carried on in accordance with the Act (s 5). · The Hospital is established as a body corporate with perpetual succession. Subject to the Act, the Hospital is capable, in its corporate name, of (inter alia) making contracts, and doing and suffering all other matters and things a body corporate may do or suffer (s 6(1), (2)). · (As noted), the Hospital is "an instrumentality of the Crown in right of Norfolk Island" (s 6(4)). · The Hospital's functions, and the principles it is to adhere to, are specified (ss 7, 8, 11(3)). · The executive member may notify the Hospital of general policies of the Government that are to apply; and the executive member may give the Hospital a written direction (to be laid before the Legislative Assembly) in relation to the performance of its functions and the exercise of its powers (s 9(1), (2), (3)). · The Board's functions are, inter alia, to control, administer and manage the Hospital; and to give directions to the Director in relation to the day-to-day administration of the Hospital (s 11(1)). The Board has power to do all things necessary or convenient to be done in connection with the performance of its functions (s 11(2)). Except as otherwise provided by, or under, the Act or any other Act, the Board is not subject to direction by, or on behalf of, the Administration (s 11(4)). · The executive member, on the recommendation of the Board, may appoint a person to be the Director (s 19(1)). The Director holds office on such terms and conditions (if any) in respect of matters not provided for by the Act as are determined by the executive member on the advice of the Board (s 19(2)). · (As noted), subject to the Act, the Director has power to do anything that is necessary or convenient to be done for or in connection with, or incidental to, the performance of the Hospital's functions or the exercise of its powers (s 21(1)), including the exercise of the Hospital's powers specified in s 6(2)(c) (see above); and may employ persons for the purposes of the Hospital on such terms and conditions as the Director determines (s 21(2)). If an employee is employed by the Director to perform duties of a professional nature (which include the duties of a medical practitioner, in that capacity (s 21(5)(a))), the employee is not subject to the Director's directions in respect of the exercise by the employee of the employee's professional or clinical judgement (s 21(4)). · (As noted), the executive member may appoint an employee who is a medical practitioner to be the Hospital's Medical Superintendent (s 23A(1)). · The Medical Superintendent is responsible for all matters concerning the medical administration of the Hospital (s 23B(1)). · In performing the duties specified in s 23B, the Medical Superintendent shall act in accordance with any policies determined, and any direction given, by the Board in writing (s 23C(1)). The Board shall not direct the Medical Superintendent to take action that is in conflict with standards of professional conduct (s 23C(2)). · The Director may, after such consultations with the Hospitals' employees as are appropriate and practicable, make, in writing, a code governing the manner in which the employees are to perform their duties ("a Code") (s 44(1)). A Code has no effect until approved by the Board (s 44(1A)). A Code must not be inconsistent with the Act (s 44(3)). If the Board thinks that an employee has breached a provision of a Code, the Board may, subject to s 45, terminate the employee's employment (s 45(1)). Before doing so, the Board must (a) provide to the employee written particulars of the conduct said to constitute a breach of the Code; and (b) give the employee a reasonable opportunity to make representations (s 45(2)). A decision under s 45(1) to terminate employment (a) applies in spite of any provision of the Act, or another enactment, or anything included in the terms and conditions of employment; but (b) may be appealed against by the employee to the Public Sector Remuneration Tribunal (s 45(3)). · Nothing in s 44 or s 45 is to be taken to imply that the employment of an employee may only be terminated for breach of a Code (s 46). (Suspension is not mentioned in the Act.) 54 Whilst the Act is explicit that the Hospital is a Crown instrumentality, the above analysis of an elaborate legislative scheme directed at employment relationships indicates, in my opinion, that the Act intended to remove any Crown privilege to suspend in the employment context. 55 It is equally clear, on the face of the Act, that no statutory power to suspend was, in my view, conferred upon the Board or the Director. 56 The question remains whether there is any relevant contractual provision bearing upon the present issue. However, this question should be approached upon the basis explained by Brennan J (with the agreement of Mason ACJ and Deane J) in Suttling, above (at 437 - 438) that the statute is the controlling instrument: "Members of the Service are appointed pursuant to the Act and their rights must be ascertained by reference to its provisions. The relationship between a civil servant of the Crown and the Crown has often been described as contractual, though the civil servant has been appointed pursuant to statute: …. However, the contractual nature of the relationship has not been universally accepted: …. And sometimes an espousal of one view rather than the other has been avoided: …. If the relationship is contractual, the contract must be consistent with any statutory provision which affects the relationship. No agent of the Crown has authority to engage a servant on terms at variance with the statute. To the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions. The statute itself controls the terms of service:…" (References omitted) (Emphasis added) 57 But, as has been seen, the Act confers no power of suspension. In any event, there is no provision in the Contract conferring a power to suspend. 58 It follows that, subject to any question of discretion arising, I would hold that both purported suspensions (on 10 May 2002 and 2 July 2002) were beyond power. 59 It is not necessary then that I consider the other grounds of challenge propounded by Dr Foong. 60 Subject to the question of discretion, I would make a declaratory order of the kind explained by Lord Reid in Ridge v Baldwin [1964] AC 40 (at 81) that the purported suspension was null and void. Although Dr Foong has also sought an order for reinstatement, I do not propose to order such a mandatory injunction, as it is not necessary in the case of the Crown, once the Court declares that the purported suspensions had no effect. A declaration is sufficient (see, e.g. FAI Insurances Ltd v Winneke (1981 - 1982) 151 CLR 342 per Gibbs CJ at 351 and Mason J at 372; Ainsworth v Criminal Justice Commission (1991 - 1992) 175 CLR 564 per Mason CJ, Dawson, Toohey and Gaudron JJ at 581 - 582; Chief Constable of the North Wales Police v Evans [1982] 3 All ER 141 per Lord Brightman at 155 - 156; Spry, Equitable Remedies, 6th ed. (2001) at 395). 61 Turning then to the discretion to make a declaratory order, the Hospital called, subject to Dr Foong's objection, the three other medical practitioners employed by the Hospital, two of whom said that they would find it very difficult to work with Dr Foong. The third said that he would be very reluctant to work with Dr Foong. 62 In my opinion, such evidence does not provide, in principle, a valid reason for refusing to declare the legal rights of Dr Foong in the present context. In other words, if in law, the purported "suspensions" should be treated as if they had never occurred, the nature of the day-to-day professional working relationships cannot be used as a reason, in effect, for negating the rule of law. 63 On behalf of the Hospital, it is further submitted that the "public interest" in the efficient conduct of its operations also constitutes a discretionary reason for the Court's declining to make the declaration sought. Again, in my view, general considerations of this kind ought not be allowed to deprive Dr Foong of his entitlement to a judicial statement of his common law rights in the context of his purported "suspension". 64 Accordingly, I propose to make the declaration, with costs.

Monetary claims 65 Since it is not feasible to deal with this aspect at this stage, liberty to restore will be reserved.

ORDERS 66 I make these orders: 1. Declare that each of the purported suspensions of the plaintiff on 10 May 2002 and 2 July 2002 was null and void. 2. Order the defendant to pay the plaintiff's costs. 3. Reserve liberty to either party to restore the plaintiff's monetary claims to the list upon fourteen days' notice.

I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the reasons for Judgment of his Honour Chief Justice Beaumont.

Associate: Date: 15 August 2002 Appearing for the plaintiff: Ms K Rees Solicitor for the plaintiff: McIntyres Solicitors Appearing for the defendant: Mr D Greenwell Solicitor for the defendant: Crown Counsel, The Administration of Norfolk Island Date of Hearing: 2 - 3 July 2002 Date of Judgment: 15 August 2002

Foong v The Norfolk Island Hospital Enterprise [2002] NFSC 4

At a glance

Court

Decision date

Before

Source

Judgment (19 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (11)