McLaughlin v Governor

• Jurisdiction: Cayman Islands
• Judge: (Smellie, C.J.)
• Judgment Date: 01 January 2004
• Court: Grand Court (Cayman Islands)
• Date: 01 January 2004

Grand Court

(Smellie, C.J.)

McLAUGHLIN

and

GOVERNOR

R.D. Alberga, Q.C. and P.L.S. Simon for the plaintiff;

Miss S.M. Look Loy, Crown Counsel, and Miss V. Ellis, Crown Counsel, for the defendant.

Cases cited:

(1) Chief Constable (N. Wales Police) v. Evans, [1982] 1 W.L.R. 1155; [1982] 3 All E.R. 141, considered.

(2) Jhagroo v. Teaching Serv. Commn.UNK(2002), 61 W.I.R. 510, considered.

(3) Malloch v. Aberdeen Corp., [1971] 1 W.L.R. 1578; [1971] 2 All E.R. 1278, considered.

(4) R. v. Social Servs. Secy., ex p. Assn. of Metropolitan Auths., [1986] 1 W.L.R. 1; [1986] 1 All E.R. 164, referred to.

(5) Ridge v. Baldwin, [1964] A.C. 40; [1963] 2 All E.R. 66, applied.

(6) Vine v. National Dock Labour Bd., [1957] A.C. 488; [1956] 3 All E.R. 939; [1956] 2 Lloyd”s Rep. 567, considered.

(7) Zainal bin Hashim v. Govt. of Malaysia, [1980] A.C. 734; [1979] 3 All E.R. 241, considered.

Administrative Law-public officers-dismissal-if dismissal of public officer void and reinstatement not ordered, remains public and pensionable officer-entitled to salary so long as available for service and no other action taken to determine service-damages assessed by reference to salary and pension lost, subject to duty to mitigate loss after expiry of reasonable time

Administrative Law-public officers-dismissal-no duty on public officer to mitigate losses by seeking or accepting other employment while remains public officer after invalid dismissal-employment and entitlement to damages ends if no indication of reinstatement within reasonable time-reasonable time may be one year, six months for reluctance to pursue reinstatement and six months to resolve position-after this time not entitled to remain inactive

Administrative Law-public officers-dismissal-public officer wrong-fully dismissed entitled to declaration that dismissal in breach of mandatory statutory scheme

The plaintiff brought an action for damages in respect of the purported termination of his employment as a public officer.

The plaintiff was a public officer engaged on permanent and pensionable terms. In December 1998, after nearly 10 years of service, he was informed by letter that his retirement had been approved by the Governor on the ground of abolition of office, effective within 10 days of the date of the letter, with pay in lieu of the three months” notice to which he was entitled.

The plaintiff successfully challenged, on appeal to the Court of Appeal, the lawfulness and validity of his termination. The Court of Appeal found that there was little evidence to show that the appellant”s position in the Ministry had in fact been abolished for the purposes of the Public Service Commission Regulations, reg. 28, but in any event the appellant had been dismissed in a procedurally unfair manner and in disregard of reg. 29 of the Regulations, governing compulsory retirement, which expressly required consultation with the officer concerned. No consultation had been undertaken and the Governor”s decision was declared to be void.

Reinstatement was not ordered, however, since the appellant had been out of service for four years and the court had no knowledge of the government”s current staffing requirements. The case was remitted to the Grand Court for the assessment of damages. The proceedings in the Court of Appeal are reported at 2002 CILR 576.

Before damages could be assessed, issues concerning the meaning of the Court of Appeal”s order had to be resolved. On the one hand it declared that the decision to dismiss and the dismissal were void, but on the other it refused to order reinstatement, awarding damages instead.

The plaintiff submitted that whilst the decision to dismiss and the dismissal were void, a nullity and of no effect, recognizing that the appellant had continued to be employed with the public service, the Court of Appeal”s refusal to order reinstatement meant that his remedy should be in damages in the form of salary and pension as if he had continued throughout in office.

The defendant submitted that (a) the plaintiff”s employment had effectively been terminated-the fact that reinstatement had not been ordered meant that the contractual relationship was at an end and that the plaintiff had not continued in his employment to date; (b) he was not entitled to salary and pension as if his employment had continued, but only to limited damages assessed on the basis of wrongful dismissal, the declaration that the decision to dismiss and the dismissal were void meaning that the plaintiff was wrongfully dismissed, with a concomitant duty on the plaintiff to mitigate his losses; (c) the defendant had been under no obligation to take further steps after the Court of Appeal”s ruling, as the contractual relationship between the parties was at an end; alternatively (d) by serving the letter concerning abolition of office and providing for payment in lieu of notice, the government repudiated the contract of service and the plaintiff, by obtaining other employment, could no longer perform his obligations to the government and accepted the repudiation of his contract of service.

Held, awarding damages by reference to salary and pensionable entitlements lost:

(1) Although a contract for personal services in a master and servant relationship would not be specifically enforced by the courts, one governed by a mandatory statutory scheme would be afforded the appropriate declaratory relief. The Court of Appeal had to be taken to have understood the settled meaning and effect of its declaration of nullity in such a context and in respect of such a contract. The decision to dismiss and the dismissal were therefore null, void and of no effect. Although the plaintiff”s reinstatement to his former post had not been ordered, he remained a public and pensionable officer subject in all respects to the statutory scheme governing his employment, meaning that he was entitled to salary so long as he continued to be available for service and so long as no other steps were taken to determine his service. Damages would therefore be assessed by reference to salary and

pensionable entitlements lost, to be treated as a debt due to the plaintiff (paras. 42–43; para. 47; paras. 49–50).

(2) Although the contract of service was governed strictly by the statutory regime which afforded the plaintiff the protection of public office, certain general common law principles relating to contracts of employment were applicable. While his status as a public officer subsisted, he was not under a duty to mitigate his losses by seeking or accepting other employment. But, not having had any indication of any intention to reinstate him and having taken no steps to invoke the machinery of reinstatement, the plaintiff had to be taken to have accepted, after a reasonable time, a further repudiation of his contract bringing his status as a public officer to an end. His entitlement to damages by way of salary and pensionable entitlements therefore came to an end one year after the Court of Appeal”s decision, allowing six months for him to have been naturally reluctant to invoke the machinery of reinstatement for fear of being dismissed on some other basis, and a further six months as the time necessary to resolve his position, as he was then no longer entitled simply to do nothing (paras. 51–56).

1 SMELLIE, C.J.: This is the plaintiff”s claim for unpaid salary and other loss arising out of the purported termination of his employment as a public officer. His claim is made on the basis that despite an attempt to dismiss him in December 1998, and his continued exclusion from office since then, he remains a public officer and is entitled to be compensated as such. His claim is resisted on behalf of the defendant on the basis that his employment has been effectively terminated, that he is not entitled to salary or pension benefits as if his employment continued, but only to a limited amount of damages.

Background

2 The plaintiff was engaged as a public officer on permanent and pensionable terms on February 13th, 1989. His employment continued on that basis until, by letter of December 21st, 1998, the plaintiff was informed by the Acting Permanent Secretary for Personnel that ‘I am directed by His Excellency the Governor, acting on the advice of the Public Service Commission, to inform you that your retirement has been approved on the grounds of abolition of office.’ The letter went on to explain that retirement would be deemed effective as of December 31st, 1998 and that the plaintiff would be paid in lieu of the three months” notice to which he was deemed entitled, by reference to the provisions of the Public Service General Orders applicable to retirement on grounds of abolition of office.

3 The plaintiff challenged the lawfulness and validity of his termination by way of judicial review proceedings and, having been at first unsuccessful before this court, was eventually successful in his appeal to the Court of Appeal.

4 In allowing his appeal, the Court of Appeal first expressed the relief granted to the plaintiff in its written judgment delivered on November 29th, 2002 (after having reserved its judgment in July 2002) in these terms (2002 CILR 576, at paras. 37–40):

‘37 For the reasons contained herein, we are of the view that the judgment of the court below must be set aside and we make the declaration sought by the appellant that the decision to dismiss him and his dismissal were void.

38 The appellant has sought relief that he be reinstated in the office which he held at the time of his retirement. [Crown Counsel] submitted that courts in judicial review proceedings are loath to order the reinstatement of employees, as such an order borders on the usurpation of the powers of the decision maker, and because of the practical problems which such an order would present. For this proposition he relied on Lewis, Judicial Remedies in Public Law, 2nd ed., para...