002-SLLR-SLLR-2001-V-2-MERIL-v.-DAYANANDA-DE-SILVA-OTHERS.pdf
MBRIL
v.DATANANDA DE SILVA & OTHERS
COURT OF APPEAL.GUNAWARDANAJ.
CA 789/97
1st,7™, 17th FEBRUARY, 200013th, 2 7th MARCH, 20005™, 3 1st MAY, 2000
Writ of Certiorari/Mandamus – Compensation package adopted byCabinet of Ministers – Payment of lesser sum – Commissioner of Labourrefuses to act – Public Law remedies – Liquidator of a public company -Character of public duties – Locus standi – Rational grounds – Legitimateexpectation.
The Petitioner was an employee of C. C. C (Teas) Ltd. and his services wereterminated with effect from 31.10.96. The Cabinet of Ministers howeverhad on 9.8.1995 decided to liquidate the aforesaid Company, andformulated a scheme of compensation, to the employees on 25.9.1996.
The Petitioner was entitled to Rs. 355,000/- but was paid onlyRs. 246,120/-. The Commissioner of Labour refused to intervene. Theposition of the Respondent was that a notice dated 30.4.97 was submit-ted to the Cabinet on 11.6.97, where the Minister of Public Administra-tion had apprised the Cabinet that the employees nearing the age ofretirement will be compensated according to the package or on the basisof a salary lost to the employee in consequence of the liquidation of theCompany, whichever is less.
Held:
Payment of Compensation on the basis of nearness to the usualage of retirement (60 years) is the very antithesis or converse of the
12
Sri Lanka Law Reports
12001] 2 Sri L.R.
basis of payment of compensation on the length of service which wasthe governing criterion on which the earlier scheme had beenformulated.
It is irrational to seek to award compensation on the basis of twoconflicting schemes, that is on the basis of the length of the serviceand also on the basis of the nearness to the age of retirement.
Per Gunawardana J.,
It is well known that if a decision is not based on rational groundsthen review by the Court is sustainable. The decision of the DeputyCommissioner of Labour is liable to be quashed as it falls far belowthe standard that administrative or public officers are expected todisplay."
Petitioner may have had a legitimate expectation that he would beawarded compensation in pursuance of that special scheme as thisvery legitimate expectation had not been realised, it had to beprotected by judicial review.
Legitimate expectations are capable of including expectationwhich go beyond enforceable legal rights provided they have some
reasonable basis The expectation may be based upon some
statement or undertaking by or on behalf of the Public Authoritywhich has the duty of making the decision, if the authority throughits officers, acted in a way that would make it unfair or inconsistentwith good administration for the applicant to be denied such aninquiiy.
A public law issue might be defined by reference to the authoritymaking the decision. If the authority making the decision is a publicauthority or body as C.C.C (Teas) Ltd., for it has been convertedinto a public company then it should be subject to law regardless ofthe actual power being exercised.
As C.C.C fTeas) Ltd., is under liquidation, the liquidator who hadbeen appointed to liquidate the assets of the company, steps into theshoes or the position of the Company. As such the liquidator will beimpressed with the public character of C.C.C (Teas) Ltd., for thepurpose for which the liquidator had been appointed, that is toliquidate the assets.
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
13
Aplication for writs of Certiorari/Mandamus.
Cases referred to :
In Re Wednesbuiy Corporation – (1947) 2 A11 E.R. 680
Schmidt vs Secretary of State for Home Affairs – (1969) 2 Ch. 149
Oloniluyi vs Home Secretary – (1989) – Imm AR 135
Attorney General for Hongkong vs Ng Yuen Shiu – (1983) 2 AC 629
H. LavenderandSonLtd., vsMinisterofHousing&Local Government
1970 1 WLRijypi
Rv East Berkshire Health Authority, exparte Walsh – (1985) QB 152
R v Insurance Ombudsman Bureau 1994 – The Times, 7th January
Me Claren vs Home Office (1990) – 1C.R. 824
R vs Civil Service Appeal Board exparte Bruce (1988) – 3 All ER 686
R v Panel on Take – Overs and Mergers, Exparte Datafln – (1987) 1All ER 770
Council of Civil Service Union vs Minister for the Civli Service (1985)
AC 374
Stead, Hazel Co., vs Cooper – (1933) AER, 770
Fleet Street Casuals case – (1982) AC 617
R vs Richmond Confirming Authority – (1921) KB 248
Forbes & Walker Case – (1998) – 2 SLR 378
N.RM. Daluwatte P.C., with P.B.Herath for Petitioner.Adrian Pereria SSC for l-7th Respondents
Cur. adv. vult.
December 14, 2000.
U. DE Z. GUNAWARDANA, J.This is an application by the petitioner for a writ ofcertiorari and mandamus. Against whom such relief is soughtunder the judicial review procedure and as to why suchremedies are sought would be clear from the sequel. Thepetitioner had been an employee of the Colombo CommercialCompany (Teas) Limited and his service was terminated witheffect from 31.10.1996. The Cabinet of Ministers had on
decided to liquidate the aforesaid Company anda Committee, that had been appointed to devise a suitablescheme of compensation to the erstwhile employees who
14
Sri Lanka Law Reports
120011 2 Sri L.R.
numbered 59, had suggested a formula which had beenadopted by the Cabinet on 25.09.1996 and was reflected inthe Cabinet memorandum dated 05.09.1996 (P3(a)). And therecommendation relevant to the petitioner would be that whichcontemplates or directs the payment of 53 months' salary forthose employees who had served for more than 16 years – thefact that the petitioner had been in the employment of theColombo Commercial Company Limited being an undisputedfact. In terms of this compensation package (P3A) the petitionerwas entitled to be paid Rs. 355,000/=, that being the upperlimit to which payment of compensation was subject. TheSecretary to the Cabinet, as evidenced by letter 3(b) dated
had, in fact, issued instructions to the SecretaryMinistry of Public Administration, Home Affairs and PlantationIndustries to direct the relevant officers to implement therecommended compensation package which had been, asstated earlier, adopted by the Cabinet of Ministers.
But, by letter dated 30.09.1996 (PI) whereby the petitionerwas informed that his service was terminated, he was alsotold that compensation that he would be entitled to would beRs. 246,120/= whereas, in terms of the compensation packageexplicitly spelt out in P3a and approved by the cabinet on
that is, five days before the date of the letter oftermination of service (PI), the petitioner should getRs. 355,000/=. It is significant to note there was no otherscheme for the payment of compensation to the employees ofthe Company in question, as at the date i.e. 30.09.1996 onwhich date the petitioner was informed by the said PI that hewould be awarded compensation in a sum of Rs. 246,120/=.It is worth noting that it is stated in PI that the said sum ofRs. 246,120/= is offered as compensation, to use the verywords in the letter P1, "in terms of the approved compensationpackage". But that statement in letter PI that Rs. 246,120/=is awarded as compensation "in terms of the approvedcompensation package" is not free from deceit because it islacking in candour although in the letter PI any specificreference to the scheme in P3a approved by Cabinet is artfully
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
15
avoided. The petitioner had complained to the Commissionerof Labour (7th Respondent) against the decision to pay himthe lesser amount i.e. Rs. 246,120/=. But the DeputyCommissioner of Labour (6th respondent) deputising for theCommissioner, after an inquiry of sorts, had by letter dated
(P6) informed the petitioner that no relief could begranted as the petitioner was not shown to have suffered anydetriment.
The petitioner through this application to this Court,under the judicial review procedure, had sought:
a writ of certiorari to quash the aforesaid decision made
by the 6th respondent refusing to grant the relief thathe sought from the Commissioner of Labour;
an order of mandamus directing the 1st respondent,who had been appointed liquidator of the ColomboCommercial Company CTeas) Limited which is now inliquidation, to pay the petitioner the balance amountof the compensation; or in the alternative for anidentical order directing the Commissioner of Labourto recover from the 4th respondent i.e. the ColomboCommercial Company (Teas) Limited for the benefitof the petitioner, the balance of the compensation due
,to the petitioner.
Subsequently, a note or memorandum dated 30.04.1997(P12) had been submitted to the Cabinet on 11.06.1997 bythe Minister of Public Administration etc. whereby he apprisedthe Cabinet of Ministers that the employees nearing the ageof retirement will be compensated according to thecompensation package or on the basis of salary lost to theemployee, in consequence of the liquidation of the Company,in respect of the period from the date of retirement, to the(date of) 60th birthday, whichever is less as, that mode ofpayment – according to what is stated in P12-had been theaccepted or inveterate policy that had been followed in the
16
Sri Lanka Law Reports
12001] 2 Sri L.R.
matter of the payment of compensation to employees nearingor close to the age of retirement. The document P13 dated
which is a communication under the hand of theCabinet Secretary addressed to the Secretary of the Ministryof Public Administration etc. shows that the aforesaidmemorandum (PI2) was considered by the Cabinet on
although it is obvious that consideration had beenas cursory as cursory could be, and even adopted – althoughit is not said so, in so many words. In fact P13, which is ascryptic as it is vague, conveys a Cabinet decision to theSecretary of the Public Administration to be implemented bythe latter. P13 also states that minister's intimation by Cabinetmemorandum (P12), if it can be called so, had been noted bythe Cabinet. From the tenor and purport of the saidcommunication (P13) it is reasonably clear that the Minister'smemorandum (PI2) submitted to the Cabinet to the effectthat compensation would be paid to the employees nearingretirement as stated there in i.e. in that memorandum (P12)had been accepted by the Cabinet to be acted upon. And thatexplains the necessity for the Secretary to the Cabinet to inform'the Secretary of the relevant Ministry (i.e. PublicAdministration and Plantation Industries) by letter P13 dated
that the (although it looks as if the Secretary hadtried excessively in P13 not to express himself clearly)memorandum (P12) dated 30.04.1997 was taken intoconsideration or was considered by the Cabinet at the Cabinetmeeting held on 11.06.1997. In any event, there is nothing toeven remotely suggest that the intimation embodied in theCabinet memorandum (PI2) – pith and substance of theintimation being that employees on the verge of retirementwould be paid as compensation the aggregate of the monthlysalary from the date of retirement (in consequence of theliquidation of the Company) to the 60th birthday- was notaccepted by the Cabinet or was even received or regardedwith disfavour or that the Cabinet had dissented. Althoughthe learned President's Counsel for the Petitioner had soughtto impress upon the Court that there was no acceptance bythe Cabinet of Ministers of the intimation to the Cabinet which
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
17
intimation or suggestion had been embodied in thememorandum (PI2) – yet it is sensible to conclude that theacceptance by the Cabinet of Ministers of the intimation orsuggestion is, to say the least, implies or understood or tacitwithout being put into express words – if I may say so.
But, I am inclined to think that the statement in theMinister's subsequent memorandum dated 30.04.1997 (P12),to the effect tha^the Minister's earlier memorandum P3(a)dated 05.09.1996 (which was approved by the Cabinet on
did not explain or mention how compensationwas to be awarded to those employees who were "very close"to the age of retirement, stems from a misconception (mostprobably, induced by the Minister’s own advisers or therelevant officials) on the part of the Minister of his own previousmemorandum or rather the compensation formula spelt outtherein i.e. in P3a in which the basis of awarding compensationwas the length of service of the employee. It cannot logicallybe said as, in fact, it had been said in the subsequentmemorandum (PI2), that the formula for compensationenunciated in the earlier memorandum P3(a) dated 05.09.1996makes no provision for payment of compensation to thoseemployees on the "verge of retirement", because the yardstickor standard or the criterion adopted in P3a for the payment ofcompensation was an altogether different test, i.e. the lengthof service and not the fact of nearness to retirement. In termsof the scheme outlined or foreshadowed in the first Cabinetmemorandum (P3a) with regard the matter of payment ofcompensation, what mattered was the length of service, andnothing else and the amount of compensation was madeproportionate to the number of years of service. If an employeehad served for more than 16 years – such an employee wasrecommended to be paid 53 months' salary whichrecommendation or scheme of compensation, be it noted, asstated above, had been accepted by the Cabinet on 25.09.1996without any qualification. If it is possible or there is scope forsaying, as, in fact, it had been stated in the subsequent CabinetMemorandum (PI2), that the scheme of compensation
18
Sri Lanka Law Reports
f20011 2 Sri L.R.
embodied in Cabinet memorandum P3 (a) does not makeprovision for payment of compensation to the employees whoare "close to the age of retirement" – then, one might as wellsay that the said compensation package (P3a) makes noprovision for payment of compensation to employees who areun-married or for the payment of compensation to employeeson the basis of either of the two main groups i.e. male andfemale into which living beings are placed according to theirreproductive functions. Even according to the compensationpackage in P3(a), which was based solely on the criterion oflength of service, an employee nearing the age retirement can,in fact, be paid and there was no prospect of such an employeegoing un-paid or not receiving any compensation. For, thereis no difficulty at all in paying an employee nearing the age ofretirement or on the "verge" thereof according to the length ofhis service which is the rationale on which the scheme ofcompensation set out in P3a had been shaped. This illustratesthat the statement in the later Cabinet Memorandum (PI2),viz: that the scheme of compensation in P3a had no provisionfor the payment of compensation to employees who were onthe verge of retirement, was illusory and unreal. Whether ornot a person is "on the verge of' or "very close" to retirement isa subjective question, and the answer to such a question would-necessarily be coloured by one’s personal opinions andidiosyncrasies or the views peculiar to a person which mightvary from individual to individual. The awarding ofcompensation with reference to the question as to whether ornot a person is "very close” to the age of retirement cannot bereconciled or integrated with awarding compensation on thebasis of the length of service unless it is indicated, with clarityan<4 precision, the age group that falls into the category ofemployees falling into that group i.e. the age group on the"verge of retirement". One has to adopt one or the other of thetwo schemes. The action, rather the statement of the ministerin P12 is prompted by the false or mistaken assumption thatthe former scheme in P3a had made no provision for thepayment of compensation to the employees on the "verge ofretirement" – since there is ho difficulty in paying employees
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
19
on the "verge of retirement" on the basis of the length of service.It is irrational to have specially devised a scheme ofcompensation on the basis of the length of service as the solecriterion, as the scheme embodied in P3a was, and thencomplain of the lack of, or seek to find therein, a provision forthe payment of compensation on the basis of nearness toretirement. Payment of compensation on the basis of nearnessto the usual age of retirement i.e. 60 years is the very antithesisor converse of the basis of payment of compensation on thelength of service which was the governing criterion on whichthe scheme inhad been formulated. The relevant minister
had acted on a false impression or belief, in apprising orbringing it to the notice of the Cabinet by means of thememorandum dated 30.04.1997 (P12) that – in as much asthe scheme in P3a makes no provision for the payment ofcompensation to employees on the "verge of retirement" -compensation would be paid to such employees on the basisof the amount of the aggregate of the monthly salary thatsuch employees would have lost (which aggregate was to becalculated from the date on which the services werediscontinued to the date on which they would have retiredupon reaching the age of 60 had their services not beendiscontinued or had the employees not been compulsorilyretired). As the recommendation or intimation in the CabinetMemorandum (PI2) was not based on rational grounds, then,review by the courts of any decision by whom so ever made,to pay on the basis or on the same basis as that on which theCabinet decision was made on 11.06.1997 (on the basis ofPI 2) – as is the decision of the Deputy Commissioner of labour,becomes a possibility. Firstly, the decision to pay as suggestedin P12 is based, as stated above, on a wrong assumption bythe Minister that no provision has been made in P3(a) for thepayment of compensation to employees on the verge ofretirement. It has been pointed out that those nearingretirement too, could be paid in terms of the schemeadumbrated in P3a.
Secondly, it is irrational to seek to award compensationon the basis of two conflicting schemes, that is on the basis of
20
Sri Lanka Law Reports
[2001] 2 Sri LR.
the length of the service and also on the basis of the nearnessto the age of retirement, more so, when the decision to paythose on the "verge of retirement" is made on a palpably wrongor false assumption that they cannot be paid or that there isno provision for the payment of compensation to that group
e. employees on .the "verge of retirement" in the scheme setout in P3a which was a scheme specially devised after studyfor compensating the employees of this particular Companyin question. In a way, it is so unreasonable as to verge on theirrational or absurd. It is important to appreciate that theobject of the scheme of compensation (P3a) was clearly toreward the length of the service. When one examines (P3a) itwould be clear that scheme envisages the payment of highercompensation to those employees with a longer period ofservice. And the Chairman/Managing Director of the ColomboCommercial Company (Teas) Limited, who chose to offer byPI only Rs. 246,120/= which represented the aggregate ofthe salary in respect of the period from the date ofdiscontinuance of service or retirement, to the 60th birthday,as compensation to the petitioner had flouted or acted indefiance of the veiy rationale or the logical basis of P3a whichwas to make the compensation proportional to the length ofthe service of the employees. What was sought to be achievedby the scheme in (P3a) was to make the compensationproportional to the length of the service. That object isfrustrated, at least, in relation to some employees, whencompensation is made to depend on the length of service leftover or outstanding as would be the case if the employeesnearing or on the verge of retirement are paid, taking intoconsideration only the period of service that remainsoutstanding. The latter mode of payment wouldn't achievethe predominant, if not, the sole object desired to be attainedby the earlier scheme in P3a which was to award-in recognitionof their service deserving commendation upon termination ofservice, higher compensation to those employees with a longerperiod of service. For instance, an employee may have served35 years and have only one more month before reaching theage of 60, at which he retires, in which case, he will get one
CA
Merit v. Dayananda de Silva & Others
(Gunawardana, J.j
21
month’s salary as compensation, although the schemeindicated in Cabinet Memorandum (P3a) and approved by theCabinet contemplates the payment of 53 months' salary toemployees who had served more that 16 years – into whichlatter category the petitioner falls – he having served for 36years. In any event the decision reflected in the letter dated
(PI) to pay the petitioner. Rs. 246,120/= is notlawful because that decision had been materially affected andin fact had been brought about as a result of the compensationpackage (P3a), be it noted, approved by the Cabinet, beingwholly disregarded. In fact, as on that date i.e. 30.09.1996,that being the date of the letter (PI) informing the petitionerthat his service will be discontinued as from 31.10.1996, therewas no other scheme, in any event, no other scheme approvedby the Cabinaf^ than the one embodied in P3(a), for thepayment of compensation to the employees of the ColomboCommercial Company (Teas) Limited that was being liquidated.And if compensation had been paid in pursuance of thatscheme (P3a), as the petitioner should have been that beingthe one and only germane scheme, as at the date of the letter(PI) whereby the service of the petitioner was terminated,the petitioner would have been entitled to Rs. 355,000/=being the 53 months' salary subject to the upper limit ofRs. 355,000/= that the petitioner was entitled to, inaccordance with P3a, which represents the earlier schemeapproved by the Cabinet on 25.09.1996. The decision conveyedto the petitioner by PI, to pay the petitioner Rs. 246,120/=had been reached flagrantly overlooking the one overridingfactor which was also the sole relevant circumstance, thatshould have been taken into reckoning viz: the compensationpackage set out in P3a. And as such, the conduct of the personor authority who took the decision to pay the petitioner alesser amount of Rs. 246,120/= as is evident from PI is agood example of a case illustrating behaviour that must bedeemed to warrant the designation of irrationality. (Some ofthe documents produced by the petitioner, such as P7, areillegible and cannot be read at all and the submissions, onthe whole are un-profitable) The rules of natural justice are a
22
Sri Lanka Law Reports
[2001} 2 Sri L.R.
set of uncodified common law rules offering proceduralsafeguards that have been developed over time by the judiciaryto ensure that decision makers act according to basicstandards of fairness. The importance of the rules of naturaljustice can be observed when one considers the crucial roleperformed by procedural rules in helping to ensure thatdecisions are taken in any matter according to all relevantfacts and not in defiance of them. It is well known, (althoughno such argument had been put forward in this case) that if adecision is not based on rational grounds, then review by theCourts is sustainable. It is worth repeating for the sake ofemphasis, that as at the date on which the petitioner wasinformed by PI i.e. 30.09.1996, that his service would beterminated as from 31.10.1996, the only scheme ofcompensation in operation or in force was that embodied inP3(a) dated 05.09.1996 and approved by the Cabinet on
And it is to be remembered that it was by thesame letter (PI) that the petitioner was offered compensationin a sum of Rs. 246,120/= not in conformity, but in defianceof the only scheme of compensation (P3a) that had beenapproved by the Cabinet as at 30.09.1996. It is admitted thatsum i.e. Rs. 246,120/= had been awarded on the basis of theaggregate of monthly salary in respect of the period from thedate of retirement, that is, the date on which service wasterminated by PI, to the date of reaching the age of 60. Thepetitioner had to retire 21 months before the age of 60 inconsequence of the liquidation of the Company of whichCompany he had been an employee. It is irrational to awardcompensation by a rigid adherence to a supposed policy, ashad been done by PI dated 30.09.1996, on the basis of theperiod of service left over or outstanding before the petitionerreaching the age of 60. It is irrational because, whoeveradopted that scheme of awarding compensation to thepetitioner on the basis of the remaining period of service,calculated from the date of termination of service, to the dateof the employee reaching 60 years of age, had wholly failed toapply his mind to the only criterion for payment ofcompensation spelt out in the relevant scheme of
CA
Merit v. Dayanarvda de Silva & Others
(Gunawardana, J.)
23
compensation (P3a) which was, as repeatedly stated in thisorder, the one and only operative scheme of compensationrelating to the matter in hand recognised by the Cabinet, asat the date that compensation was, in fact awarded by letterPI dated 30.09.1996, (signed by the Chairman/ManagingDirector of the Colombo Commercial Company (Teas) Limitedwhich is the 4th respondent). It is to be noted that the Ministersought the Cabinet approval by P12 (Cabinet Memo), on aveiy much later date, i.e. 30.4.1997, for the basis on whichthe petitioner had been awarded compensation by PI. Andthe Cabinet had made a note of it or had considered P12 on astill later date i.e. 11.06.1997.1 have highlighted these factsin order to bring into prominence one salient fact, that is,that, as at the date of PI which was 30.6.1996 – there was noscheme of payment authorized or contemplated by the Cabinetother than the one spelt out in P3a referred to above. It isworth reminding oneself at this juncture that according toLord Green in Wednesbury Corporationw a situation that canlead to a decision being set aside concerns taking irrelevantconsiderations into account or failing to take relevantconsiderations into account. This, as I said before, is arecognised ground for review. In the common run of cases, inconsidering whether a decision maker has gone aboutexercising his discretion correctly there is, very often, acomplex interplay of considerations that would operate onthe mind of the decision maker. In such a case or situation acourt exercising powers or functions of review under thejudicial review procedure has to decide if proper emphasishas been given by the decision maker to the right aspect orconsiderations. But in this case in hand, no such exercise iscalled for since the mode of payment, if not the only scale ofpayment itself, was sternly prescribed by the Cabinet as wasindicated in P3a and no one had any choice or option as at
(that being the date of PI whereby the lesseramount of Rs. 246,120/= was offered to the petitioner ascompensation) except to pay in pursuance of the scheme laiddown therein i.e. in P3a. And as such balancing of relevantand irrelevant considerations had been obviated. By deciding
24
Sri Lanka Law Reports
[2001] 2 Sri L.R.
to pay compensation on the basis of the length of the periodbetween the date termination of service and the date of thepetitioner reaching the age of 60, the authority concernedhad taken into account as a relevant factor something whichthat authority should not properly take into account and hadalso excluded from taking into account the one and onlyrelevant consideration viz: the scheme embodied in P3a whichit was the bounden duty of the authority awardingcompensation not merely to consider but also was its(authority's) bounden duty (dictated by the Cabinet decisionmade on the basis of the recommendation in P3a) to haveadopted with punctilious attention. Taking into account anirrelevant consideration, that is a supposed policy referred toin the Cabinet Memorandum P12 dated 30.04.1997 ofawarding compensation to those on the "verge of retirement”
e. on the basis of the aggregate salary for the period from thedate of discontinuance of service to the date of reaching theage of 60 – the purpose for which the scheme outlined in P3awas specially devised had been wholly disregarded – thepurpose of the scheme in P3a being to make compensationproportional to the length of the service in appreciation of thelonger period of service.
What the petitioner has sought is a review of the decisionof the Deputy Commissioner of Labour whose decision dated26.8.1997 (P6), in truth, and one may almost divine, so tospeak, is rested on the Cabinet decision adopting the schemeof compensation setout in the memorandum P12 if, infact,the cabinet can be said to have adopted it. In any event boththe scheme of compensation in P12 which was accepted orrather of which the Cabinet had made a note on 11.06.1997,and the order (P6) of the Deputy Commissioner whereby heupheld the decision to pay only Rs. 246,120/= have a commonbasis i.e. the policy, which is, (going by what is stated in P12)said to be a long – standing one: to pay employees, on the"verge" of retirement and whose services are terminated, onthe basis of the aggregate salary in respect of the period fromthe date that the services are terminated to the date on which
CA
Merit v. Dayananda due Silva & Others
(Gunawardana, J.) ■
25
the 60th birthday falls. As such, the irrationality of the schemein PI2 is infused into decision of the Deputy Commissioneror his decision is imbued with the irrationality of the schemeof compensation suggested in P12, which was, at best, notedby the Cabinet, and presumably if not, most probablyapproved. Even if the Deputy Commissioner’s decision is notbased on the Cabinet decision to adopt the intimation orrecommendation in P12, yet both the Cabinet decision andthe order of the Deputy Commissioner (P6) are obviously based,on a policy, said to be of old standing, described in P12 andwhich was said to be followed (according to what is stated inPI2) in the matter of payment of compensation to thoseemployees "on the verge" of retirement. The decision of theDeputy Commissioner of Labour (P6) is liable to be quashedas it falls far below the standard that administrative or publicofficers are expected to display. The decision of the DeputyCommissioner is not based on rational grounds because theone overriding factor viz: the Cabinet decision dated
adopting the scheme of compensationrecommended in P3a (in which scheme compensation wasproportional to the length of service) was wholly left out ofconsideration. It is irrational to take into consideration onlysuch a fusty policy said to be of general application as thatdescribed in P12 dated 11.06.1997, when the Cabinet haddecided at an earlier date i.e. is 25.09.1996 to awardcompensation in pursuance of a special scheme reflected inP3a which had been formulated by a committee, after study,for the specific purpose of compensating the employees of theColombo Commercial Co. (Teas) Limited. As a general rule, adecision can still be held to be unreasonable, notwithstandingthe existence of certain relevant considerations in supportof it.
In any event, the petitioner must be held to have had alegitimate expectation that he would be awarded compensationin accordance with the scheme in P3(a) which was distinctlyformulated by the Cabinet, with particular reference to thecircumstances of the employees of the Colombo CommercialCo. (Teas) Ltd., for the specific purpose of awardingcompensation to the employees of the said Company which
26
Sri Lanka Law Reports
[2001] 2 Sri L.R.
was being liquidated. It is irrational also to awardcompensation in terms of a supposed general policy, such asthat referred to in the later Cabinet memorandum PI2, when,in fact, a special scheme, reflected in P3a had been devised tocater to the employees of the Company in question. The onlyscheme of compensation, as had been repeatedly emphasizedin this order, that was in force, as at the date that thepetitioner's service was terminated, i.e. 31.10.1996, devisedfor the purpose of awarding compensation to the employees,who were forced to relinquish their employment as a result ofthe winding up of the Company, was the scheme in P3(a)approved by the Cabinet on 25.09.1996, that is, about 5 or 6days before the petitioner was informed by letter (PI) dated
that his service would be terminated as from
Essentially, the petitioner may have had alegitimate expectation that he would be awarded compensationin pursuance of that special scheme applicable to theemployees of the Colombo Commercial Company (Teas)Limited. As this very legitimate expectation had not beenrealised, it had to be now protected by judicial review. Wherethere is such an undertaking or policy guideline as that speltout in P3a which more than justifies or prompts the petitionerto expect that he will be awarded compensation in the mannerindicated therein, the petitioner can truly be said to have alegitimate expectation. The term "legitimate expectation wasprobably first employed by Lord Denning in Schmidt vs.Secretary of State for Home Affairs"121 and it has since beenwidely accepted in a number of different contexts. And I myselfhad to consider, albeit cursorily, the scope and applicabilityof this concept in case No: C.A. 213/2000.
I think, the first situation where a legitimate expectationmight be recognised is where there has been an expressundertaking or something equivalent to that. When theCabinet approved the recommendation, made through theCabinet memorandum (P3a) by the relevant Minister, that theemployees of the Colombo Commercial Company (Teas)Limited be paid compensation in terms of a scheme suggested-be it noted by a committee that had been specially appointedto study and recommend a suitable compensation package –
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.) ■
27
the petitioner wasjustified in expecting that he will be awardedcompensation as contemplated by that package deal speltout in P3a. As the authority awarding compensation was,in the circumstances under a duty to pay compensation asrecommended in the relevant package, more so as the packagehad been approved by the Cabinet, the petitioner, as well asthe other employees whose services were discontinued, had aright to expect that the authority or body awardingcompensation will act in accordance with that veritableundertaking. "Inconsistency of policy may also amount to anabuse of discretion particularly when undertakings orstatements of intent are disregarded unfairly or contrary tocitizen's legitimate expectation" – Wade and Forsyth.
There is no gainsaying that when the Cabinet of Ministersmade a decision on 25.09.1996, to adopt the scheme ofcompensation embodied in the Cabinet memorandum (P3a)dated 5.9.1996 submitted by the Minister, that Cabinetdecision based on the Minister’s memorandum wastantamount to a statement or declaration of intent on thepart of the Cabinet to pay compensation depending on orproportional to the length of service, subject to an upper limitof Rs. 355,000/=.
There are revealing decisions on this ground of judicialreview – one such being Oloniluyi vs. Home Secretan/31 (whichis referred to in my judgment in an earlier case referred toabove) where a student from Nigeria was given oral assurancesthat she would have no difficulty in returning to the U.K.after going home for Christmas. The student was refused leaveto enter on returning. The refusal was quashed by the Courtof Appeal (England) on the ground of legitimate expectationand unfairness. As had been observed in Wade, such decisionsshow that Courts now expect the government departments tohonour their statements of policy or intention.
It is to be observed that the conduct of the 4th respondent
e. The Colombo Commercial Company (Teas) limited – asmanifested through the action of its Chairman/ManagingDirector and the Finance Manager in setting out and exhibitingnotices both in English (P. 4A dated 09.10.1996) and Sinhala
28
Sri Lanka Law Reports
12001] 2 Sri L.R.
(undated) that the employees will be paid according to thescheme exhibited in those notices – also must be held to havegiven rise to a legitimate expectation in the employeesthat the Company (4th respondent) will act in accordancewith the said compensation package. After such an expressundertaking has been given by a public Company whichundertaking was also published – the employees have certainlya right to expect that the 4th respondent Company will actin accordance with the undertaking. These noticeshad published and announced to the employees the veryscheme of compensation adumbrated in P3a in whichcompensation was proportional to the length of service.As the Colombo Commercial Company (Teas) Limited(4th respondent) had now failed to do what it said, thereare grounds for judicial review. It must not be permitted toshrink back from that commitment. In this context, it is worthpointing out that in this application, an order of mandamusis sought directing the liquidator (4th respondent) who, asexplained in the sequel, is now the agent or representative ofthe company which is now in liquidation. Attorney Generalfor Hong kong vs. Ng Yuen Shiul4) is a good example of wherethe operation of the principle of legitimate expectation arisingon an express undertaking was subjected to close analysis byLord Fraser. He stated that: "legitimate expectations arecapable of including expectations which go beyond enforceablelegal rights provided they have some reasonable basis…. Theexpectation may be based upon some statement orundertaking by or on behalf of the public authority which hasthe duty of making the decision if the authority through itsofficers, acted in a way that would make it unfair orinconsistent with good administration for the applicant to bedenied such an inquiry". The judgment from which I havequoted above concerned an illegal immigrant who had cometo Hong kong from Macau and had established a business inHong Kong. In order to clear up a problem that existed relatingto illegal immigration, it was officially announced that anypersons presenting themselves to the authorities would havetheir individual cases dealt with on their merits. However,when the applicant came forward he was detained while adeportation order was applied for. Following this his appeal.
CAMeril v. Dayananda de Silva & Others29
(Gunawardana, J.)
against deportation was dismissed without a hearing.Certiorari was sought on the ground that the applicant hadnot been allowed to present his case against deportation tothe authorities. It was held that the public undertaking hadcreated a right that would otherwise not have existed. Althoughan alien as a rule does not have a right to a hearing in thissituation after the announcement had been made. The PrivyCouncil considered this to apply when there have been expressassurancesvSf this kind.
In the Colombo Commercial Company (Teas) Limited casetoo a right to a legitimate expectation that the employees -willbe paid compensation pursuant to the formula spelt ort inP3a, (in which scheme, compensation was proportional to’i lelength of service) must be held to have ciystallized as thecompany through the Chairman/Managing Director and theFinance Manager had made a formal declaration or promiseby publishing notices, as explained above, that the employeeswhose services were terminated would be paid compensationin accordance with the scheme in P3a.
In the case in hand, that is in the case with which I amdealing, the authority or the Officer who awarded, by the saidPI dated 30.09.1996, compensation in terms of a supposedpolicy to pay compensation to employees on the?bas^^Ttheremaining length of service and not on the basis of length ofservice already accomplished or concluded, which latter basis,as explained above, was the main principle upon which P3awas based or formulated, had plainly acted contrary tolegitimate expectation which had been created by the decisionmade by the Cabinet on 25.09.1996 to adopt the schemerecommended in P3a – that is, to award compensation on thelength of service. It is irferesting to notice that it is by theCabinet memo dated 30^04.1997 (P12) (which memo was putup for consideration by the vCabinet, as stated above on
that the relevant Minister, if I am so, soughtto give some semblance of legitimacy, if that were possible,to the basis on which compensation had been offered, if
30
Sri Lanka Law Reports
12001] 2 Sri L.R.
not awarded, to the petitioner by PI dated 30.09,1996 – adate which was nearly nine months anterior to the date onwhich Cabinet Memo (PI2) was considered by the Cabinet. Itis to be recalled that it is by means of Memo (P12) that therelevant Minister apprised the Cabinet that there was noprovision in P3a dated 5.9.1996 for payment of compensationto employees on the "verge of retirement" and as suchemployees would be paid as compensation, a surn equivalentto their aggregate monthly salary calculated fropithe date ofdiscontinuance of service to the date of 60th birthday.
Of course, neither in his submissions nor in his petitionhad the petitioner sought relief on the grounds of irrationalityor legitimate expectation. In fact, nowhere in the submissions(either written or oral) made on behalf of the petitioner hadany known ground of judicial review been invoked or evenmentioned, at least, for the sake of keeping up appearances.The submissions were at best, a mere recapitulation of facts.
As will now be apparent the decision to award thepetitioner can be assailed or attacked, under the judicial reviewprocedure, at least, on the two grounds enunciated above: (a)irrationality and (b) legitimate expectation provided thepetitioner j^as the locus standi or sufficient interest toch^ljepge the decision and the issue involved is a public lawissue/To say the least, it is also of some passing interest tonote that the subsequent decision to pay the petitioner, onthe basis of the principle of nearness to retirement, if, in factit can be called a decision by the Cabinet, is bad or unlawfulin that the exercise of discretion or judgment on the part ofthe Cabinet is not genuine because rigid adherence to a policy,or a supposed policy, had acted as a fetter. It is to be recalledthat the relevant Minister had by Cabinet Memorandum (PI2)dated 30.04.1997 brought it to the notice of the Cabinet on
– that it had been the "policy from a long timepast" to pay compensation to employees on the "verge ofretirement" on the basis of the compensation formula oraggregate of the salary for the period from the date ofretirement to the date of the 60th birthday, whichever is less.
CA
Mertl v. Dayananda de Silva & Others
(Gunawaiplana, J.)
31
The Cabinet had merely made a note of it which is, in thecircumstances, tantamount to an approval of the Minister'srecommendation made in P12 whereby the Minister hadsought Cabinet approval to pay the employees of the relevantCompany also on the same basis inveterate and outlined inthe Cabinet memorandum (PI2). But, in the circumstancesone experiences some kind of malaise or strong uneasy feeling,that in appvNving, if, in fact, the Cabinet can said to haveapproved it, r.e. the Minister's recommendation in P12, inrelation to the employees of the Colombo Commercial Company(Teas) Limited, the Cabinet had allowed an official or someoneelse to have the dominant influence, so that the other personor official, in effect, had dictated the outcome. It would be aptto cite a case which, I think, would be somewhat germane orrelevant to the context. In H. Lavender and Son Ltd., vs.Minister of Housing and Local Govemmen1!5, an application forplanning permission was refused and the appeal wasdisallowed by the Minister. From the Minister’s letter whichconveyed the decision it was clear that the reason for therejection was that the site in respect of which the applicationhad been made was in an area of good quality agriculturalland. In these circumstances the Ministry of Agriculture hadbeen consulted by the Ministry of Housingeand^L"S£?alGovernment and because the Ministry of Agriculture objectedto the grant of planning permission the appeal was disallowed.In other words, the Minister who was supposed to decide theappeal did not really make tHfe decision but left it to the officialsin another Ministry. Of course, it has to be remembered thatthe petitioner had not sought a review of any Cabinet decision.But it would be unrealistic to assume that the Cabinet"decision" dated 11×06.1997, which adopted therecommendation of thecrelevant Minister embodied in P12,
e. to pay compensation on t^je basis of nearness to the ageof 60, did not have an overwhelming influence on the DeputyCommfssioner whose order (P6) is sought to be quashed bycertiorari. Sometimes, in exceptional situations one has to
32
Sri Lanka Law Reports
2
[2001] 2 Sri L.R.
divine what, in fact, did happen or one has to trust one'sinstinct more than even the evidence.
Remedies viz: Certiorari and Mandamus sought by thepetitioner in this application are public law remedies whichare only available in respect of public law issues. (Theinjunction and the declaration are private law remedies incontradiction to the public law remedies). As tte Certiorariand Mandamus (two of the remedies available under thejudicial review procedure) are public law remedies, it isimportant to know whether the relevant issue or decisionunder consideration in this matter involves public law.
I feel this is a suitable context in which to consider whetherthe issue arising on this application concerns a public lawissue. The answer to the question on the issue is a public lawissue depends on either of the two matters or on both viz: (i^source of power of the authority making the decision; (ii) thenature of the function that the authority exercises, or,sometimes, on both the above considerations. For mostadministrative authorities the source of their power will belegislation. But legislation can confer even upon a private bodya public law element in respect of which judicial review canbC'fgfright.^On the other hand, the fact that the source ofpowei is statutory does not automatically mean that judicialreview is available.
It is clear that the Colombo Cpmmercial Co. (Teas) Limitedis a statutory creation. The Colombo Commercial Company(Teas) Limited was incorporated under the CompaniesOrdinance and had been vested in the state and convertedinto a public Company in terms of the Act No: 23 of 1987. TheColombo Commercial Company (Teas) Limited is a public bodyand had been given tasks to do by'the statute. It has publicresponsibilities to perform, e
The remedies sought by the petitioner under the Judicialreview procedure are in the main as follows:
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
33
Writ of Certiorari quashing the decision (P6) dated
made by the 6th respondent who is theDeputy Commissioner of Labour;
Writ of Mandamus directing the 1st respondent, i.e.the liquidator, to pay the balance compensation; or inthe alternative for a Writ of Mandamus compellingthe^7th respondent (the Commissioner of Labour) torecds^r from the 4th respondent i.e. ColomboCommercial Company (Teas) Limited, the said balanceto be paid to the petitioner.
I shall consider in order whether each of the remediesenunciated above can be granted (on the assumption that thepetitioner has the locus standi – which latter aspect will beconsidered last in the scheme of this order).
In deciding whether a Writ of Certiorari can be issuedquashing the decision made by the Deputy Commissioner ofLabour (6th respondent) which decision, if it can be so called,was conveyed to the petitioner by letter P6 dated 26.8.1997,one has to consider the source of the power of the 6threspondent (Deputy Commissioner of Labour) and the natureof his function. It is by the said letter P6 that the Deputycommissioner had refused relief to the petitioner wl^l^thePetitioner complained to the Commissioner of Labour thatthe petitioner had been awarded relief in pursuance of or inaccordance with the scheme spelt out in P3a, by means ofwhich scheme the Cabinet ‘sought to make the question ofcompensation proportional to the length of service of theemployee. There cannot be any controversy as regards, thefact that the 6th respondent derived the power to make theimpugned order, if it can be called so, for it is more akin to anapology for an order – £i£>m a statute viz: Termination ofEmployment of Workmen Act ,No: 45 of 1971, or supposedlythereunder. Faintest clue cannot be gleaned either from thesubmissions of the learned President's Counsel for thepetitioner or from the petition or application made to this court
34
Sri Lanka Law Reports
[2001] 2 Sri L.R.
as to the statute or the law under which the DeputyCommissioner of Labour (6th respondent) had made thedecision sought to be quashed. The decision of the 6threspondent (Deputy Commissioner of Labour) is equallyenigmatic with regard to the law under which he had madethe decision in question. But it is well known that the factthat the source of the power is statutory does not automaticallymean that judicial review will be available as a *niblic sectoremployment case cited below would serve to show: in JR. vs.East Berkshire Health Authority, exparte Walsh!61 the court heldthat judicial review of the dismissal of a nurse was not a publiclaw issue or matter as despite the statutory origin of theauthority that dismissed the nurse, its relationship with itsemployees (nurse being one of the employees) was based oncontract. Accordingly the matter or dispute was held to fallwithin the domain of private law in which public law remediescould not be invoked. Rose L. J. made two relevant points inthe case of R. vs. Insurance Ombudsman Bureau171. Firstly thata body would not be exercising governmental functions if thesource of its power was consensual; secondly, Rose L.J. madeit clear that even if it could be shown that its powers hadbeen woven into the governmental system, amenability toreview wouSd excluded if the source of power was contractual,as^ftaSJas irj the case of Insurance Ombudsman Bureau. Butthere are exceptions to the non-availability of judicial reviewin public sector dismissal cases. And some general guidanceabout such exceptions has been provided by inter dicta ofWoolf L. J. in Me Claren vs. Homi? Office!81. In the case of R. vs.Civil Service Appeal Board, Ex parte Bruce191 it was held that ifa disciplinary or other body has been created by statute orprerogative to which body the employer or employee is entitledor is required to refer employment disputes then, that createsa public law element. In such a case the order made by thatauthority is an order made in the sphere of publicadministration. The termination of Employment of WorkmenAct No. 45 of 1971 is a statute which, inter alia, provides forthe reference of disputes arising out of the termination of
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
35
c
employment to the Commissioner of Labour. TheCommissioner of labour, being a statutory creation, whodecides many disputes involving employers and employees,his errors are subject to judicial review. The DeputyCommissioner's order refusing relief, which is sought to bequashed, in these proceedings, is susceptible to judicial review,because the Deputy Commissioner of Labour (6th respondent)had presumably and most probably acted under theTerminatiotyof Employment of Workmen Act No: 45 of 1971in making that order although the Deputy Commissioner hadbeen careful to avoid any mention of a statute in his decision.The source of Deputy Commissioner’s power is legislation i.e.The Termination of Employment of Workmen Act No: 45 of1971 and Certiorari is mainly applied to quash invaliddecisions of bodies and authorities acting under statutoryauthority except in situations where, as explained above, theauthority's power is derived from contract.
Furthermore the question of payment of compensationor what was promised to be paid as compensation to thepetitioner, which is the subject matter of the dispute betweenthe petitioner and the Colombo Commercial Company (Teas)Limited (4th respondent), did not arise pursuant to any contractof service. The undertaking to pay compensation. As explainedearlier, was a unilateral act on the part of the CtgrgboCommercial Company (Teas) Limited. There was nothingconsensual or contractual about it. In the case of R. vs. CivilService Board, referred to above, May L. J. observed thus: "Inthe instant case, however, %i the absence of a contract ofservice between him and the crown, I think one is bound tohold that there was a sufficient public law element behindthe applicant's dismissal."
o
The claim of the petitioner too, that he be paidcompensation in termsmf P3a, is not grounded in contractbut, as explained above, is oW arising out of an unilateralundertaking given by the Colombo Commercial Co. (Teas)Limited to its employees.
36
Sri Lanka Law Reports
[20011 2 Sri L.R.
Next, to consider whether it is permissible in law to compelby mandamus, the liquidator (1st Respondent), who had beenappointed to settle the accounts and liquidate the assetsfor the purpose of making distribution and dissolving theconcern in question i.e. Colombo Commercial Company (Teas)Limited:- The Colombo Commercial Company (Teas) Limitedwhich is a public company, is veritably a government authority.It was formed and owned by the State in public interest,supported in whole or part out of public funds, Jnd governedby managers deriving their authority from the State. PublicLaw remedies are available only in respect of public law issues.
A public law issue might be defined by reference to theauthority making the decision. If the authority making thedecision is a public authority or body, as Colombo Commercial(Teas) Limited is, for it has been converted into a publiccompany in terms of Act No. 23 of 1987, then it should besubject to public law regardless of the actual power beingexercised. The Colombo Commercial Company (Teas) Limitedbeing a Public Company, it certainly exercised powers whichwere akin to the essentially governmental nature of truly"Public" activity. Even a private organisation might well beconsidered Jio be exercising powers which affect the publicandtj^us be subject to public law. Much of the discussionabow>thele issues has resulted from the somewhatcontroversial decision in R. vs. Panel on Take-overs andMergers, Ex-parte Datajmm. In that case the Court of Appeal(England) was faced with the dilemma of deciding whether itwas the source of the powers of the organisation which wasthe crucial factor, or the nature of the body itself and thepublic consequences of its decisions. The Panel on Take oversand Mergers was, be it noted, an entirely non-statutoiyself-regulating association which had devised and operatedcode of conduct, to be observed in take-overs and mergers ofpublic companies. The Court>bf Appeal (England) felt that,bearing in mind that the panel did have government lackingand was exercising its duties in the public interest, it should
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
37
c
be subject to the control of public law. In Sri Lanka too, themajor reason behind bringing various Companies into publicownership, as had been done by Act No: 23 of the 1987 in thecase of the Colombo Commercial Company (Teas) Limited,was to ensure that public interest was protected and promoted.In this context, it would be relevant to note that there is anideological view held, rightly or wrongly, that the cause ofworkers would be furthered if industries were in publicownerships^): is fairly obvious that it was to protect andpromote thepterest of employees that the compensation wasmade proportional to the length of service of the employee.It is to be recalled that the Cabinet Memo dated 5.9.1996(P3a) which spelt out a compensation formula on therecommendation that compensation be made proportional tothe length of service had been approved by the Cabinet on
A private company must make profits or it willnot survive. A private company might reduce the frequency ofor stop operating uneconomic services, even though thoseservices might be vital to the community. Some companieswere placed into Public ownership, sometimes, in order tomaintain jobs or promote a particular industry. The rescue ofBritish Leyland in 1975 by the British Government was doneboth to save jobs and to sustain a British Volume carmanufacturer. The 1st respondent had been appointed as theliquidator of the Colombo Commercial Company (T%as) Limitedon 10.03.1997 at an extraordinary general meeting ^trthecreditors meeting of the Colombo Commercial Company (Teas)Limited. It has been held in Council of Civil Service Unionsvs. Minister for the Civil Service(11) that if an employee isaffected by a decision of general application made by theemployer, then judicial review may be available to challengethe flaws in that decision. The impugned decision to pay theemployees of the Colombo Commercial Company (Teas)Limited is also of general^pplication and will apply uniformlyto all employees who will be categorised as being on the "vergeof retirement".
Tlje question, if not, the moot-point, that arises in thiscase is whether or not the liquidator of a public company,
38
Sri Lanka Law Reports
[20011 2 Sri L.R.
i
such as the Colombo Commercial Company (Teas) Limited,which is under liquidation, could be compelled by mandamusto pay the balance of the compensation due to the petitioner.It is to be remembered that this balance of the compensationis due from the Colombo Commercial Company (Teas) Limitedwhich, as explained above, is a public company or body. Andmandamus is an order which commands a public body toperform a public duty. As I have stated above, if the authoritymaking the decision is a public authority then pt should besubject to public law regardless of the actuaTpower beingexercised. But as the Colombo Commercial Company (Teas)Limited is now under liquidation, the liquidator, who had beenappointed to liquidate the assets of the Company, so to speak,steps into the shoes or the position of the Company. As suchthe liquidator will be impressed with the public character ofthe Colombo Commercial Co. (Teas) Limited for the purposefor which the liquidator had been appointed, that is, toliquidate the assets which means to pay and settle anddischarge the indebtedness of the Public Company concerned.It is to be observed that this balance of the compensation is adebt owed by the Company (4th respondent) to the Petitioner.In, fact, it has been held in Stead, Hazel Co. vs. Cooper,12> thata liquidator is an agent of the company in liquidation and isnot in the same position as a receiver. One knows that areod&or is p. ministerial officer who represents the courtappoiming him and is caretaker of the property for the courtpending litigation. In the District Court actions, the receiveris commonly and frequently appointed. Because the liquidatoris the agent of the company – the (the liquidator) representsthe Company which means that the liquidator stands in theplace of the company. Being the agent, the liquidator partakesof the complexion or character of the public company whichhas been absorbed into public ownership in the public interest.So that duties of the liquidator of a public company assumethe character of public duties – since ‘die liquidator is its agentwho is clothed with the authority to speak and act on behalfof the Colombo Commercial Company (Teas) Limited wjiich isin liquidation. I have stated above, that if the authority making
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
39
c
the decision is a public authoriry then it should be subjectto public law.
The petitioner has also prayed that in the alternative thatthe Commissioner of Labour (7th respondent) be directed byan order of mandamus to recover from the 4th respondent thebalance of the compensation for the benefit of the petitioner.It used to be said: altemtive petition non est audienda(an altern&^ye petition is not to be heard). But those archaicrules or dogmas, as a general rule, are not to be taken seriouslyin the present times and there is absolutely no impediment,according to ideas in current fashion, which inflict leastpossible hardship on parties, to a party seeking relief in thealternative giving the court the option or choice of doing oneor the other of two things. Since disobeying an order ofmandamus places the official or the body concerned incontempt of Court, the order of mandamus acquires a greatercoercive force which diminishes, if not altogether eliminates,the prospect of the order of mandamus being not obeyed bythe liquidator (1st respondent). If both the liquidator(1st respondent) and the Commissioner of Labour are directed,even if that were possible, at the same time, to ensure paymentto the petitioner, that will lead to uncertainty as it would thenbe difficult to foist responsibility, for the implementation ofthe order of mandamus, squarely on either of t&eimj^ftiisstate of things I decide to issue mandamus only against theliquidator (1st respondent) requiring him, i.e. the liquidator topay the balance of the compensation due to the petitioner interms of the compensation formula set out in P3a andapproved by the Cabinet of Ministers on 25.09.1996.
Besides, the prayer in the petition that the Commissionerof Labour (7th respondent) be directed to recover the balanceof the compensation from the 4th respondent, that is, theColombo Commercial Company (Teas) Limited for the benefitof petitioner is one made witStout any sense of responsibilityand w^s apt to have misled the Court. In law, I cannot directthe Commissioner of Labour (7th respondent) to do that for
40
Sri Lanka Law Reports
[2001) 2 Sri L.R.
which the petitioner has prayed, under the relevant Act, orstatute viz: Termination of Employment of Workmen ActNo: 45 of 1971 since under the said statute the workmenwhose employment is wrongfully terminated can recover thesum awarded as compensation by the Commissioner of Labourupon application made to the Magistrate having jurisdictionin the area. But in this case there is no such determination oran award made by the Commissioner in favour of the petitioner.For the Magistrate to enforce an award, there r|mst, in thefirst instance, be an award made, be it nmed, by theCommissioner of Labour. It is not to be forgotten that theDeputy Commissioner of Labour by his order dated 26.08.1997(P6) had turned down or refused the petitioner's claim for,payment in pursuance of the scheme in P3a and is to quashthat order (P6) made by the Deputy Commissioner that a Writof Certiorari has been sought by the petitioner in thisapplication.
Lastly, the question of petitioner's locus standi that is,whether or not the petitioner has sufficient interest in thematter to entitle him to institute judicial review proceedingsremains to be considered. The general belief, commonly held,is that question of the petitioner's sufficient interest or locusstandi is a a threshold question which is somewhat of apreBSainaiy p)int, arising before and independent of the meritsof the action, and as such the question of locus standi has tobe considered in limine i.e. at the veiy beginning. This may,in fact, be true in straightforward cases, where the issue ofthe petitioner's standing or locusf>standi is clear cut. In thiscase, which is somewhat of an intricate one, I decided toconsider the question of status of the petitioner, to instituteproceedings under the judicial review procedure, after themerits of the case had been considered for the simple reasonthat more meritorious the claim of the petitioner is, the moredeserving he would be to be granted locus standi. In the FleetStreet Casuals case(13> Lord Wilberborce said of the lessstraightforward cases that: "it will be necessary to considerthe power or duties in law of those against whom the relief is
CAMerit v. Dayananda de Silva & Others41
(Gunawardana, J.)
C
asked, the position of the applicant in relation to those powersand duties and to the breach of those said to have beencommitted. In other words, the question of sufficient interestcannot, in such cases, be considered in the abstract or as anisolated point: it must be taken together with the legal andfactual context". Thus, it is clear that in that judgment LordWilberborce was suggesting that no applicant has standingunless he Jias a case good on its merits. In other words,determining locus standi necessarily involves having regardto the substance of the claim. However the courts now seemto operate a less restrictive standing test for the prerogativeorders.
The earlier view seemed to be summed up or reflected inthe cases of an old vintage, for instance, R. vs. RichmondConfirming Authority1141 According to that view the applicantwould be ineligible to obtain relief under the judicial reviewprocedure, if his grievance is one which is complained of "incommon with the rest of the public". As I myself had occasionto remark in Forbes & Walker Case1151 such a restrictiveapproach is irrational for as Craig (Tutor – Worcester College- Oxford) had said: "To deny access in such a case isindefensible. If the subject mater is otherwise appropriate for
judicial resolutionto erect a barrier of no staSiding would
be to render many important areas of government ^Ktfvityimmune from censure for no better reason than that they doaffect a large number of people. One might be forgiven forthinking that common sense of the reasonable man wouldindicate the opposite condition: that the wide range of peopleaffected is positive reason for allowing a challenge by someone."
It would be worth reproducing in this context an excerptof my own judgment in £he Forbes and Walker case referredto above. "I strongly feel that the test or rather the concept ofdenying locus standi to an applicant for judicial review for noother or better reason than teat his interest or grievance isshared by many others in common with the applicant is asillogical and irrational as refusing to treat anyone member of
42
Sri Lanka Law Reports
120011 2 Sri L.R.
the public for a disease which has assumed epidemicproportions and has afflicted virtually the entire community."
But, even if the rules relating locus standi are construednarrowly, the petitioner in this application must be held tohave sufficient interest and more, for the petitioner is affectedpersonally and is genuinely aggrieved. What is stated withregard to the decision (which is sought to be quashed) to paythe petitioner in defiance of and contrary to tbjf scheme inP3a, would, I hope, serve to show that the petitioner is directlyconcerned if for no other reason than that his pecuniaryinterest is adversely affected. The petitioner has clearlyestablished the infringement of his right to receive Rs.355,000/- in terms of the compensation package P3a.
Although I have considered the question of the petitioner’sstanding to be entitled to relied under the judicial reviewprocedure, in a way, it was wholly un-necessary for me tohave done that because, at the hearing before me, thepetitioner's standing was taken for granted provided thepetitioner had satisfied the other requirements to be entitledto relief.
It is of interest to note that it had been pointed out in thewrii^gn subqiissions filed on behalf of the petitioner that the1st respondent (liquidator) had paid himself compensation interms of the scheme in P3a in which scheme compensationwas made proportional to the length of service. The 1strespondent had been the Finance Manager of the Companyand it will be recalled that it was under his hand, and that ofthe Chairman/Managing Director that undertaking had beengiven, as explained above, through notices which werepublished that compensation would-be paid in pursuance ofthe scheme in P3a. It is worth noting that the liquidator hadpaid himself Rs. 355,000/= which is tifie exact amount claimedby the petitioner. Perhaps, th#3st respondent (liquidator) feltthat one must be free only in giving to oneself and thatgenerosity is due first to oneself and to oneself only.
CA
Meril v. Dayananda de Silva & Others
(Gunawardana, J.)
43
c
For the aforesaid reasons all the reliefs prayed for in thepetition are hereby granted except the order of mandamusdirecting the Commissioner of Labour to recover the balanceof the compensation from the Colombo Commercial Company(Teas) Limited (4th respondent) for the benefit of the petitioner.
Certiorari is hereby issued quashing the decision (P6)made by the Deputy Commissioner of Labour, as the saidorder, as detained above, is not only tainted with irrationalitybut is also «^>ntraiy to legitimate expectation created by theacts and circulars or notices published by the relevantauthorities. The order of the Deputy Commissioner of Labour(P6) does not satisfy the expectations that were legitimatelyheld by the petitioner which expectations arose, as explainedabove, out of, or as a consequence of, the conduct of theauthorities.
The 1st respondent (liquidator) is also hereby directed byan order of mandamus to pay the petitioner the balance ofcompensation due to the petitioner as prayed for by thepetitioner in his application to this court.
In addition, I also direct the 1st respondent to pay thepetitioner costs fixed at Rs. 10,500/=. I wish tlje officials ingeneral had a more benevolent outlook in the discharge oftheir duties without making a fetish of excessive^urewcracyand officialism.
application allowed.