REASONS FOR JUDGMENT
WILCOX J:
1 This is an application by the Administration of Norfolk Island ('the Administration') seeking to restrain the Public Service Board of Norfolk Island ('the Board') from proceeding with an application for relief lodged with it by Terence Grube.
The facts
2 On 30 September 2002, Mr Grube entered into a contract with the Administration, whereby he was appointed as Executive Director, Environment & Infrastructure, for a term of three years commencing that day. The contract was signed on behalf of the Administration by the Chief Executive Officer. Clause 1.1 of the contract stated that it was governed by the laws in force in Norfolk Island. The engagement was said to be made under s 47 of the Public Sector Management Act 2000 (NI) ('the Act'). However, it is common ground in this proceeding that this reference was erroneous. The relevant section of the Act must have been s 39. That section, as amended by s 5 of the Public Sector Management Amendment Act 2001 (NI) ('the amending Act'), permits the Chief Executive Officer, 'in accordance with the provisions of the organisational structure, employment standards and the recommendation of the Legislative Assembly' to appoint a person as an Executive Director.
3 It is not necessary to set out all the conditions of the contract. However, it is relevant to note cl 7, which states:
'1 The employee may resign by providing to the CEO three month's notice in writing of intention to terminate the contract.
2 The contract may be terminated by the CEO with one month's notice where in the opinion of the CEO the employee is [sic]:
(a) is absent from duty without authority; or
(b) is guilty of misconduct or fraud or dishonesty or wilful disobedience;
(c) is guilty of a serious and persistent breach of the terms and conditions of this contract
(d) is guilty of wilful breach, wilful non-observance, wilful neglect or wilful failure to discharge duties to the reasonable requirements of the government;
(e) neglects lawful instructions or directions duly authorised;
(f) is convicted for an offence precluding or inhibiting the further performance of duties under this contract.
3 Termination in accordance with this paragraph shall see the employee with no right to the payment of fares and removal assistance from Norfolk Island. Termination of contract on performance or conduct grounds will result in adjustments to any Schedule B agreements.
4 The contract may be terminated with 3 months' written notice at any time by the CEO.'
4 Mr Grube entered upon the duties of his position. However, on 25 February 2003, he sent an email to an employee in the Immigration Section of the Administration which caused concern. I need not refer to its terms.
5 On 4 March 2003, Mr Luke Johnson, the Acting Chief Executive Officer of the Administration, suspended Mr Grube on full pay pending an investigation. An investigator was appointed. She reported ten days later. Following receipt of the investigator's report, and after discussion with Mr Grube, Mr Johnson served on Mr Grube one month's notice of termination of his contract of employment. He was paid salary for one month in lieu of working out his period of notice.
6 On 2 April 2003, the plaintiff applied for review of Mr Johnson's decision. His application was made pursuant to s 60 of the Act, which reads as follows:
[2]
' (1) An employee whose employment has been terminated by the Chief Executive Officer may apply to the Board for relief in respect of that termination on the ground that the termination was harsh, unjust or unreasonable.
(2) An application under subsection 60(1) must be lodged within 21 days after the day on which the termination took effect.
(3) The Board may accept an application that is lodged out of time if the Board considers that it would be unfair not to do so.'
7 Mr Grube retained Mr Wayne Richards, solicitor, to act on his behalf in connection with the application for review.
8 By a letter dated 7 April 2003 addressed to Mr Richards, the presiding member of the Board, Mr John Christian, raised a question about the Board's jurisdiction. Mr Richards responded to the letter on 23 April, arguing the Board had jurisdiction to entertain the application. Mr Christian sought comment on the matter from Mr Johnson. It was provided in a letter, dated 6 May 2003, signed by Mr Graham Rhead, Crown Counsel. Mr Rhead argued the Board did not have jurisdiction to entertain Mr Grube's application. He gave two reasons: first, 'Mr Grube's employment was by contract and he has recourse to the courts if he wishes to bring an action for breach of contract'; second, he was not an 'employee' within the meaning of s 60 of the Act.
9 On 13 May 2003, Mr Christian published an interim decision of the Board in which it held it did have jurisdiction to entertain the application. Reasons were given. They were written by Mr Christian but agreed by the other two members of the Board.
10 The Board made directions as to the future conduct of the application. However, before it conducted any hearing on the merits, an untoward event occurred. It appears that, on 4 June 2003, Mr Christian contacted Mr Grube to inform him the Board intended to meet on the following day 'to continue with its deliberations' in the matter. The nature of the deliberations was not made clear; however, it seems the Board intended to determine whether it would conduct a full hearing, taking evidence, or would determine the application on the basis only of written submissions. Whatever the position, the significant point is that Mr Grube told Mr Christian he held a document which the Board should see and would bring this document to him. Shortly afterwards, Mr Grube delivered it to Mr Christian.
11 What happened next was described in this way by Mr Michael Zande, solicitor for the Board, in a letter to Mr Rhead of 5 June 2003:
'That document was shown by Mr Christian to his co-Board members this morning and after discussion and with the consensus of his co-Board Members, Mr Christian went and located Mr Grube and asked him if he (Mr Grube) intended that the document should be presented formally to the Board and considered by it in this matter and if so, that the Board intended to make it available to Counsel being both of you. I add that the document was also shown to me in my capacity as Counsel assisting the Board.
Mr Christian says that Mr Grube indicated that he wished to withdraw the document which he then did by taking it back from Mr Christian.'
12 Mr Zande informed Mr Rhead that the Board did not feel its role or impartiality had been compromised by what had occurred. Nonetheless, it felt the Administration should be informed.
13 On 8 June 2003, Mr Grube delivered a sealed envelope to the Board. It has not yet been opened.
14 A meeting was held on 11 June to discuss the matter referred to in Mr Zande's letter of 5 June. There was a question whether Mr Grube would release to the Administration the letter he had given to Mr Christian. Mr Richards agreed to obtain instructions about that. On 13 June he told Mr Rhead that Mr Grube did not intend to release the letter. Thereupon, the Administration took the position that the members of the Board should consider their position. On 19 June, Mr Rhead wrote a letter to Mr Christian in which he said:
'Whilst I appreciate the ethical way in which the Board has acted in informing me of these events nevertheless I request that the Board presently dealing with this matter consider whether it is appropriate to continue hearing the matter because of the perceived and/or actual breach of procedural fairness and the principals of natural justice.
The Board has been placed in the invidious position of having seen a document which the Applicant has chosen to deny access by the Respondent. There has been discussion both with the respondent and between the Board members regarding the document.
Mr. Grube has legal representation and has chosen not to use his services in the course of these events.'
Mr Rhead went on to refer to a number of decided cases relating to perceived bias.
15 The Board considered Mr Rhead's letter. On 20 June 2003, Mr Zande wrote a letter to Mr Rhead and Mr Richards in which he said:
'The Board has considered Mr Rhead's submission and instructs me to advise as follows:
The Board does not consider "the sealed envelope" issue, be it the prior contact between the Applicant and the Presiding member or the delivery by the Applicant of the sealed envelope to the Presiding Member, to be such as amounting to actual or ostensible disqualifying bias.
The Board does not consider the prior contact between the Applicant and the Presiding member as to "the document" issue or the delivery by the Applicant of the said document to the Presiding Member, to be such as amounting to actual or ostensible disqualifying bias.
As to the document itself which comprises the "document" issue, the Board concedes that an element of actual or ostensible disqualifying bias may have arisen by the events surrounding that document but considers that if so, then the existence of that element of bias which is regarded by the Board as being if anything, minor and inconsequential, is nevertheless, overridden by application of the doctrine and rule of necessity to the extent that the Board in reliance upon that rule, has ruled that it can and should proceed with the determination of this matter.
Complete and signed reasons for these rulings are in the course of preparation and will be issued to you over the weekend or by early Monday morning.'
16 Reasons were provided on 23 June 2003. They were signed by all three members of the Board. After referring to the facts and Mr Rhead's submissions, the reasons said:
'In short, do the circumstances of the first event or any of them, constitute or amount to apparent or actual disqualifying bias?
What is to be made of the initial telephone contact by the Presiding Member to Mr Grube? At worst, the telephone call amounted to an indication of a meeting by the Board and although unusual by itself, that act and its consequences were so brief and insignificant that there is no apparent or disqualifying ground for the Presiding Member to disqualify himself from continuing with these proceedings. That telephone call could in many ways be described as a spontaneous reaction to the concern of the Presiding member to keep the Applicant informed as to what was happening with his Application and although indiscreet, the consequences of that phone call were so brief that any adverse apprehension of bias could not fairly be drawn - (Note 2). It follows for the same reasoning, that neither should the remaining Board Members or the Board itself withdraw because of that aspect of the first event.
The circumstances that followed and surrounding (i) the document as handed by Mr Grube to Mr Christian, (ii) the contents of that document becoming known to the Board Members, (iii) the subsequent withdrawal of that document by Mr Grube and (iv) that the document has not been produced to the Respondent are all matters which on the face of it could amount to actual or apparent disqualifying grounds for the Board as a whole. However and notwithstanding that the document was withdrawn by Mr Grube from the Board's possession and neither party having sought to have the document formally produced to the Board, the Board considers that if there is an element of disqualifying bias which might be perceived as resulting from the circumstances of the events of the document, the it would be largely related to the Applicant and not to or against the Respondent.
In those circumstances, does the doctrine of necessity permit the Board to continue to hear this matter notwithstanding that an element of bias (such as it might be), exists?'
17 The reasons went on to refer to the decision of the High Court of Australia in Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70, especially the following statement of Mason CJ and Brennan J at 89:
'The rule of necessity gives expression to the principle that the rules of natural justice cannot be invoked to frustrate the intended operation of a statute which sets up a tribunal and requires it to perform the statutory functions entrusted to it.'
18 The Board then said:
'Central to the application of that doctrine then is whether or not there are Deputy Board members available to constitute a new Board. The Presiding Member John Christian and Board Member Shane McCoy, both have Deputies to fill their respective positions but Board Member Gigi Huxley does not have a Deputy to fill her position. The appointment of a Deputy Board Member for Board Member Gig [sic] Huxley can only be effected by the Executive member on the recommendation of the Legislative Assembly (section 10(1)(a) of the Act) which ordinarily and in the absence of any known candidate for that position, is unlikely to occur in the immediate future.
The replacement of the Presiding Member and Board Member McCoy with their deputies, does not overcome the element of possible bias or conflict attaching to those deputies.
The replacement of the Presiding Member and Board Member McCoy with their deputies, does not overcome or remove the element of possible bias remaining with Board Member Gigi Huxley as a continuing Board Member.
The same if not a greater anticipated delay, would or could be expected to follow should it be necessary to appoint a completely new Board to replace the existing Board.
This matter was first instituted on 2nd April 2003 and it is clear to the Board that it is in the interests not only of the Applicant and the respondent but for the Community to have this matter concluded as soon as practicable.
In all those circumstances, the Board considers that this matter fits within the operation of the rule thereby qualifying the effect of what would otherwise be actual or ostensible disqualifying bias so as to enable the Board to continue out of necessity with the discharge of its public function to proceed to conclude this matter and where but for its (the rule's) operation, the discharge of that function would be frustrated with consequent public or private detriment.
Accordingly, the Board as it is currently constituted, declares its intention to continue with the hearing of this matter and so rules accordingly.'
The proceeding
19 On 24 June 2003, the Administration filed in this Court a Notice of Originating Motion. It named the Board as first defendant and Mr Grube as second defendant. The document sought the following relief:
'Declarations that:
1. The first Defendant does not have jurisdiction to hear the Application for Review lodged by the second Defendant.
2. The first Defendant as presently constituted, be disqualified from hearing the Application for Review lodged by the second Defendant.
Orders that:
1. The first Defendant as presently constituted, does not have jurisdiction to hear the Application lodged by the second Defendant.
2. The first Defendant be disqualified from hearing the Application lodged by the second Defendant.
3. The first Defendant be directed to proceed with Application in accordance with the Public Sector Management Act 2000.
[3]
Associate:
Dated: 4 August 2003
Counsel for the Plaintiff: Mr Graham Rhead, Crown Counsel
[4]
Solicitor for the First Defendant: Mr Michael Zande
[5]
Solicitor for the Second Defendant: Mr Wayne Richards
Parties
Applicant/Plaintiff:
The Administration of Norfolk Island
Respondent/Defendant:
The Public Service Board of Norfolk Island and Terence Grube
Cases Cited (3)
(1990) 170 CLR 70
(1985) 159 CLR 550
(1983) 57 ALJR 376
Such other orders as the Court directs.'
20 Pursuant to directions made by me that same day, the matter was fixed for hearing by telephone on 22 July 2003. The Board agreed that, in the meantime, it would not proceed further with the hearing of Mr Grube's application.
21 At the hearing, Mr Rhead appeared for the Administration, Mr Zande for the Board and Mr Richards for Mr Grube. Mr Zande did not put substantive submissions. The Board submitted to such order as the Court might make, except in relation to costs.
22 Two issues were debated between Mr Rhead and Mr Richards, in written submissions filed prior to the hearing and at the hearing itself. The first issue was whether the Board had jurisdiction to entertain Mr Grube's application. The second issue was whether some or all of the members of the Board should be restrained from participating in the determination on account of perceived bias. Although Mr Rhead made no formal application for amendment of the Notice of Originating Motion, he and Mr Richards argued the second point on the basis that any disqualification should apply to all three Board members.
Jurisdiction
23 It is correct, as Mr Rhead observes, that Mr Grube entered into a written contract with the Administration in relation to his employment as an Executive Director. In that regard, he may be in a different position from most of the Administration's employees. However, the question whether the Board has jurisdiction to entertain an application for review of Mr Johnson's decision to terminate his employment must depend upon the terms of the statute that prescribes the Board's area of jurisdiction; that is, the Public Sector Management Act.
24 In para 6 above, I set out the terms of s 60 of the Act. It will be recalled it confers a right of application to the Board on an 'employee whose employment has been terminated' (emphasis added). Therefore, it is necessary to determine whether Mr Grube was an employee within the meaning of that section.
25 Section 4 of the Act contains a definition of 'employee', for the purposes of the Act and subject to the appearance of any contrary intention, viz 'a person appointed to the public service'. The term 'public service' is also defined in s 4, as 'the organisation referred to in section 35'. Section 35 provides:
'The public service consists of -
(a) the Chief Executive Officer; and
(b) the Executive Directors; and
(c) each other person employed by -
(i) the Crown in right of Norfolk Island; or
(ii) the Administration; or
(iii) a territory instrumentality,
(other than a person excluded from the public service by or under Schedule 1).'
26 Schedule 1 lists a number of categories of persons 'excluded from the public service'. The categories do not include persons employed as Executive Directors. They do include (item 1(g)):
'a person when engaged as an officer or employee whose terms and conditions of appointment are to be determined by the Administrator or an executive member.'
27 When the Act was originally enacted in 2000, this exclusion would have applied to an Executive Director. That was because s 39, as originally enacted, required that an Executive Director be appointed by the executive member, on the recommendation of the Legislative Assembly, and s 40(1) required the conditions of appointment to be those specified in a written agreement executed by the executive member acting on the recommendation of the Legislative Assembly. However, the amending Act varied those provisions. As at the date of Mr Grube's appointment, s 39 permitted the Chief Executive Officer to appoint an Executive Director and s 40(1)(b) provided that the conditions of appointment of an Executive Director will be those specified in a written agreement executed by the Chief Executive Officer. The effect of this change is that the exclusion from the Board's s 60 jurisdiction previously effected by item 1(g) of Schedule 1 no longer occurs.
28 It seems to me clear that Mr Grube was an 'employee' within the meaning of s 60(1) of the Act.
29 Section 61 of the Act denies the right of review to some additional categories of employees. Subsection (1) of s 61 depends upon there having been a relevant provision in the human resources policy. It is not contended that such a provision exists. Subsection (2) of s 61 provides:
'The following employees or terminations are excluded from the operation of this Division -
(a) employees whose terms and conditions of employment are governed by special arrangements providing particular protection in respect of termination of employment either generally or in particular circumstances; or
(b) termination of the employment of an employee in accordance with the redundancy provisions of the employment standards.'
30 Paragraph (b) of s 61(2) is conceded to be irrelevant to this case. But Mr Rhead contends that para (a) applies. His argument is that Mr Grube's contract of employment made specific reference to possible termination of his employment and included provision (s 7) for a greater length of notice of termination than is enjoyed by employees generally; therefore, Mr Grube's terms and conditions of employment were 'governed by special arrangements providing particular protection in respect of termination of employment'.
31 Mr Richards disputes the claim that Mr Grube's terms of employment provided 'particular protection' to him in respect of termination of his employment. He points out that s 63 of the Act empowers the Board to reinstate an employee who seeks review by the Board of a termination decision. He says this remedy is a greater protection against harsh, unjust or unreasonable termination than lengthier notice.
32 I think Mr Richards' contention is correct. Mr Christian made the point well in his reasons for decision in respect of jurisdiction. He referred to the Explanatory Memorandum for the Bill for the Act. He thought it provided little specific assistance but he commented:
'However it is useful to note that in the GENERAL OUTLINE section to the Explanatory Memorandum, the summary indicates that the Bill (Act) - "gives individuals the right to - seek remedies for unfair dismissal". That leads me to believe that the Assembly members were at least acquainted with the notion that remedial protection on termination should be available to all members (individuals) within the Public Service irrespective of their job classification.
Thus I have taken it that the Assembly had in mind the desire or need to provide in the Act, a mechanism or procedure whereby an employee could seek a review of termination and that it did by providing Part 5 Division 3. It then went further by contemplating and allowing for the situation where by reason of other provisions of the Act or for whatever other reason or circumstance, there might be a Contract of Employment with a particular individual within the Public Service the provisions of which contained a "special arrangement" affording the employee "particular protection" in respect of termination. In such an instance, that special arrangement and the particular protection it provided would be the remedy open to the employee on termination of employment, to seek redress as an alternative to the statutory protection afforded by Part 5 Division 3.
Put another way, it seems to me that for a Contract of Employment to fall within the exclusion provisions of Section 61(2)(a), it has to clearly provide remedial provisions for termination. Whether or not those remedial provisions are "special" would depend on the nature and extent thereof as expressed in the Contract. For example, I would think that to be special, the remedial provisions would have to be at least, equal to or better than the statutory remedial provisions of Part 5 Division 3.'
In Mr Grube's contract there were no remedial provisions in relation to termination.
33 In my view, the Board has jurisdiction to entertain Mr Grube's application for review of Mr Johnson's decision to terminate his employment.
Perceived bias
34 The objection taken by the Administration to the determination of Mr Grube's application by the current panel of the Board was argued by reference to the concept of perceived bias. However, Mr Rhead referred in his submission to Eaton v Overlands [2001] FCA 1834; 67 ALD 671, a decision of Allsop J, of the Federal Court of Australia, in relation to procedural fairness. The decision-maker in that case had been aware of statements expressed by senior officers concerning the applicant's conduct, statements that he did not convey to the applicant. At para 159, Allsop J said the situation epitomised a comment of Brennan J in Kioa v West (1985) 159 CLR 550 at 629:
'Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made. It is not sufficient for the repository of the power to endeavour to shut information of that kind out of his mind and to reach a decision without reference to it. Information of that kind creates a real risk of prejudice, albeit subconscious, and it is unfair to deny a person whose interests are likely to be affected by the decision an opportunity to deal with the information. He will be neither consoled nor assured to be told that the prejudicial information was left out of account …'
35 Allsop J went on to say:
'No suggestion was made that Mr Palmer's views could not be passed on because of confidentiality. The respondents submitted that Mr Palmer's views were not credible, relevant and damaging. This was so, it was submitted, because Mr Overland said he was not referring to them. Leaving aside such exclusion by Mr Overland, the views could only be described as potent and weighty. But that proposition, that the decision-maker denudes credible, relevant and damaging material of those characteristics by his or her decision to exclude it from consideration, is the very thing Brennan J warned against.'
36 It would clearly be a gross breach of the rules of natural justice for the Board, in determining Mr Grube's application for review, to take into account the contents of the document he handed to Mr Christian on 4 June; and which Mr Christian ill-advisedly read and showed to the other members of the Board. Mr Grube has declined to provide this document to the Administration or to submit it as evidence in his application for review. Consequently, the Administration has no means of ascertaining the contents of the document, or of evaluating its authenticity, relevance or accuracy.
37 In fairness, it should immediately be said the Board recognised that the document must not be taken into account. Moreover, in its reasons for decision of 20 June 2003, the Board conceded 'that an element of actual or ostensible disqualifying bias may have arisen by the events surrounding that document', but it thought it should apply the doctrine of necessity.
38 Mr Richards does not share the Board's concession that the circumstances surrounding the document give rise to an element of actual or ostensible bias; he says the Board members can, and should, put the document out of their minds. However, the answer to that proposition is to be found in the words of Brennan J, quoted above.
39 The more substantial issue concerns the doctrine of necessity. It will be recalled the Board said the conceded element of bias is 'overridden by application of [that] doctrine'. The doctrine of necessity was explained by Mason CJ and Brennan J, in Laws at 88, in this way:
'The rule of necessity permits a member of a court who has some interest in the subject-matter of the litigation to sit in a case when no judge without such an interest is available to sit …'
40 At 89 their Honours said:
'The rule of necessity gives expression to the principle that the rules of natural justice cannot be invoked to frustrate the intended operation of a statute which sets up a tribunal and requires it to perform the statutory functions entrusted to it. Or, to put the matter another way, the statutory requirement that the tribunal perform the functions assigned to it must prevail over and displace the application of the rules of natural justice.'
41 The doctrine of necessity has been applied to a statutory tribunal: see Builders' Registration Board v Rauber (1983) 57 ALJR 376. It is applicable to a body such as the Board. However, it seems the present circumstances fall well short of 'necessity'. Section 11(1) of the Act requires the executive member, upon the recommendation of the Legislative Assembly, to appoint deputies for the Board's presiding member and the other member appointed under s 10(1)(a). A deputy presiding member already holds office. The Legislative Assembly meets monthly. There would seem to be no difficulty in obtaining an early recommendation from the Legislative Assembly in respect of the other deputy required to be appointed under s 11(1).
42 Section 11(2) requires the election of a deputy to the employee-elected Board member. A deputy has already been elected.
43 Having regard to the above facts, the most that can be said is that there may be a delay of a month or two before a reconstituted Board can take up Mr Grube's case. I do not think such a delay invokes the doctrine of necessity.
Disposition
44 The Administration is entitled to succeed, but on a more limited basis than that argued by Mr Rhead. The appropriate course is for me to make a declaration that the persons presently constituting the Board are disqualified from determining Mr Grube's application and an order that the Board be reconstituted for that purpose.
45 The Administration does not seek costs. Mr Richards informed me his instructions were to seek an order that the Administration pay his client's costs. Such an order would not be appropriate. Although the Administration fails in relation to jurisdiction, it succeeds in obtaining relief. There will be no order as to costs.
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.