011-SLLR-SLLR-1992-V-1-SRI-LANKA-STATE-PLANTATIONS-CORPORATION-v.-THE-PRESIDENT-LABOUR-TRIBUNA.pdf
CA
SRI LANKA STATE PLANTATIONS CORPORATION
v.*THE PRESIDENT, LABOUR TRIBUNAL, GALlE AND OTHERS
COURT OF APPEALS. N. SILVA, J.
C.A. APPLICATION 1194/906 & 28 JUNE AND 5 JULY.1991
Industrial Law – Certiorari – Right of State.Counsel to appear for a Corporation -Industrial Disputes Act, Section 49.
Held:
The Sri Lanka State Plantations Corporation is established by law and is subjectto extensive control by the Government. It is set up with public funds, it managesgovernment land and its profits go to the public coffers. Although not agovernment department it is not a private institution. It is an agency of thegovernment.
The Attorney-General can appear not only for the State but also for any organor agency of the government.
The government as the employer of the Attorney-General and his officers hasthe right to decide the nature and extent of the work that should be performed bythem. The assignment of work by the employer to an attorney-at-law being anemployee can never amount to a denial of the right to equality.
… . Thet Attorney-General and his officers appear not only in cases having apositive State element but also in private law disputes, i.e., litigation involvingprivate rigffts,.ohijgatians and claims.
If there is a likelihood of a conflict of interest between the Attorney-General’sstatutory "powers and functions and his appearing in a particular case for a publicCorporation or other entity, that conflict should be brought to the notice of theparticular: Court which could rule on the propriety of the Attorney-General
appearing butfhis cannot be done on a hypothetical assumption.
v •. ..'• r
Cases referred to: v
The Land Reform Commission v. Grand Central Ltd. (1981) 1 SLR 250.
The Ceylon Bank Employees Union v. Yatawara, 64 N.L.R. 49.
Dahanayake v. de Si/va (1978-79-80) 1 Sri LR 41.
Rajaratne v. Air Lanka Ltd. (1987) 2 SrjL R 128.
Amaradasa v. The Land Reform Convriission, 79 NLR 505.
Vettivelu v. Wijeratne, 60 NLR 44.
Dharmapala v. Selliah, C A -,L A165/81 – C A minutes of 16.09.1982.
APPLICATION for writ of certiorari to quash decision of the President of theLabour Tribunal.
K. C. Kamaiasabeyson, D.S.G. with K. Sripavan, S.S.C. and A. H. M. D. Navaz,S.C. for petitioner.
R. K. W. Goonesekera with J. C. Weliamuna for 2nd respondent;:
No appearance for other respondents.
Curadvvult.
19th July, 1991.
S.N. SILVA, J.
The Petitioner Corporation has filed this application for a writ ofcertiorari to quash the order dated 08-11-1990 made by thePresident of the Labour Tribunal (the 1st Respondent). A copy of theorder has been produced marked 'Z'. The said order was madepursuant to a preliminary objection raised by counsel who appearedfor the 2nd Respondent, being the Applicant^for relief in caseNo. G/17459, L.T. Galle.
The 2nd Respondent filed the application against the PetitionerCorporation seeking relief in respect of the termination of hisservices. An answer was filed to this application by an attorney-at-lawdescribed as the Legal Officer of the Petitioner Corporation. On 31-07-1990 when the application came up for inqufry a State Counselappeared for the Petitioner Corporation instructed by the LegalOfficer who filed the answer. Counsel for the 2nd Respondent took apreliminary objection to State Counsel appearing for the petitionerCorporation. Learned President heard submissions' OLbottf counselregarding the preliminary objection. A written submission wastendered by counsel for the 2nd Respondent. -No written submissionswere tendered by State Counsel although.two dates were granted forthis purpose. Thereupon the President madfe' the order challenged inthese proceedings upholding.The preliminary objection raised byCounsel for the 2ndlRespondent. Learned President sought to basehis decision on twp j^dgrpents of the Supreme Court. They arejudgment, in the case of:#ie hand Reform Commission v. GrandCentral Ltd.(1) and, in the c&se of TheVeylon Bank Employees Unionv. S. B. Yatawara,(?>. On the basis of the Grand Central case judgmentlearned President has come to a .finding that the Attorney-Generalcannot appear .in a private case and that he could appear only onbehalf of the State. He has relied on the judgment in Yatawara's caseto hold that jn view of the provisions of sectioh:49 of the IndustrialDisputes Act proceedings cannot be instituted in the Labour Tribunalagainst the-Stete. On these two grounds he arrived at the conclusionthat there is no occasion for the Attorney-General to appear before aLabour Tribunal. He has also observed that if one party is permittedto retain the services of the Attorney-General to represent that party,the other party also should be afforded-a similar opportunity. If it .isnot so done there will be a violation of Article 12(1) of the Constitutionwhich enshrines the right to equality. Therefore he held that StateCounsel cannot be permitted to appear in the proceedings.
The Petitioner has stated in this application that “pursuant to aCabinet decision, Heads of Corporations, Government Ownedbusiness Undertakings and Government Owned Public Companieswere required to hand over the legal work of the said institutions tothe Attorney-General's Department". It is further stated that in view ofthis TOquirement the petitioner referred all its legal work including thematter in question to. the Attorney-General. The Petitioner has furtherstated that the: Corporation is. a State Agency and is entitled to berepresented by the Attorney-General and his officers acting in theirofficial, .capacity. ;lt is also pleaded that the order deprives thePetjtione&of a right to be represented at the hearing before theLabour Tribunal,.
'•'V-
, Learned Deputy Solicitor-General (who appeared in support of theapplication without any objection being raised by counsel for the 2ndRespondent) Srtfbmittegjhat the decision of the Divisional Bench ofthe Supreme Court in the Grand Central case is not authority for theproposition that the Attorney-General can appear only in a case towhich the State is a party. it was submitted that the Supreme Courtheld that the Attorney^General cahnot appear in his capacity as anAttorney-at-law so long as he holds the office of Attorney-Generaland that he will be heard by courts only in. hfs capacity as Attorney-General. It was also submitted that the decisfon in Yatawara's case isonly to the effect that the Bank of Ceykm is!, not a GovernmentDepartment. That, the said decision is riot authority for theproposition that the Attorney-General and his. officers cannotrepresent a party before a Labour Tribunal. That, when the Attorney-General or any of his officers appears before a Court or Tribunal heenjoys the same status as that of ah attorney-at-law and an objectioncould be raised to such an appearance only on the same groundsthat an objection could, be raised to any other attorney-at-law. Suchan objection could be raised on the basis that there is a clear conflictof interest between the~atforheyTat-law and the petty whom he seeksto represent or drithe ground of a specific prohibition in law. It wassubmitted that the ground should be clearly established and notfounded on a hypothetical basis. The order of the learned Presidentdoes not contain any such basis on which an objection could befounded and it was submitted that the order is illegal and contrary tothe principles of natural justice.
Learned Senior Counsel for the 2nd Respondent sought to justifythe order on the grounds relied upon by the President. However,
learned Counsel conceded that the Attorney-General could representa Public Corporation, being a State Agency Where “a state element isnecessarily involved” in the litigation. That, in the absence-of "apositive state element" in the litigation the Attorney-General:.cannotappear for a Public Corporation… It was submitted that' such arestriction is necessary to avoid a possible confJict;of Interest: Asregards an application before a'Labour Tribunal; it was submitted thatthe State will not be a party to such an application; in view ^section49 of the Industrial Disputes Act and the decisiori.in Yataw&ate case.The dispute related to a contract of employment be%eeh‘thePetitioner Corporation and the 2nd Respondent. Therefore it wassubmitted that it is a private dispute not involving an^' “State element"and that the Attorney-General and his officers cannot .appear for. thePetitioner in such a dispute. It was also submitted thafthe decision ofthe Cabinet of Ministers pleaded by the Petitioner cannot be reliedupon and the decision does not. have t.heEffect of attributing a “Stateelement” into what is essentially a private dispute.
In reply, learned, deputy.Solicitor-General submitted that thecharacter or nature, of the litigation is irrelevant to the questionwhether the Attorney-General-and his officers should be permitted toappear. It was submitted that the material consideration is the identityof the litigant, and. that there could be np objection whatever to theAttorney-General and his officers appearing in their official capacityfor a Public Corporation set up, and controlled by the Government oran entity in which the Government.-has total financial interest. It wasfurther submitted that, as the recognized agent of the Government incivil actions, the Attorney-Gener-afappears iri cases that areessentially: "private disputes" involving-.no “state element” whatever.Therefore, a question of “positive state element" could not beintroduced to deny a right of repreSeritatiori’tC the Attorney-Generaland his officers appearing for a Public Corporation. Further that ifsuch a precondition is introduced Cpur.ts and Tribunals will have tohold a preliminary inquiry to ascertain the nature and the extent of theState’s interest in the litigation before permitting the Attorney-Generaland his officers, to. appear. That, such a procedure is unprecedented,unworkable and without any legal basis.
The Petitioner Corporation was established by the Ceylon StatePlantation Corporation Act No. 4 of 1958. Its members are appointed
by the appropriate Minister and an officer of the Genera! Treasuryand an officer of the' Department of Agriculture are official membersof the Corporation (section 3(1)). The Minister is empowered toremove any member without assigning reason (section 3(5)). Thepower Of appointing and removing the Chairman of the Corporation isvested, in the Minister (Section 4(1) and (5)). At the time it wasinitially set up the only objects were to develop, maintain and manageplantations approved by the Minister on lands as may be alienated tothe Corporation and to undertake the management of any plantedcrowrri.land (section 3(5))' Even after the amendment of the objectseffected by Act No. 49 of 1979 it is seen that substantially the objectsremain the management and administration of land alienated toovested in the Corporation by the Government. The initial capital of theCorporation is; determined by Parliament and paid out of theConsolidated Fund and may be increased upon resolution ofParliament (section 7). The profits of the Corporation will be paid intoa general or special reserve-.and the balance as may be determinedby the Corporation with the approval of the Minister is paid to theDeputy Secretary to the Treasury to be credited to the ConsolidatedFund (section 8). Thus it is seen that the Corporation is establishedby law and subject to an extensive control by the Government. It isset up with public funds, it manages government land and its profitsgo to the public coffers. The Petitioner Corporation is similar in thisrespect to the large number of Public Corporations that were set upfrom the mid 1950s. The Government Sponsored Corporation Act(Cap. 181) enacted orv 14*04-1955 and the State IndustrialCorporations Act No. 49 of 1957 constitute the early legislation thatprovided for the establishment of these Corporations. Over the years,a large number of Corporations have been set up under variousstatutes. The Constitution of 1972 in section 90(1) required theAuditor-General to audit the accounts of Public Corporations andsubmit annual reports to the National State Assembly. ThisConstitution also provided that officers of the ^Corporations shouldtake the oath of allegiance in schedule ‘B’ to the Constitution (section133(1)). In the Constitution of 1978 there is a definition of the phrase“Public Corporation" in Article 170. This definition, which is based onthe definition contained in section 22 of the Finance Act No. 38 of1971, is as follows:
“ “Public Corporation” means any corporation, board or other body
which was or is established by or under any written law other than
the Companies Ordinance, with funds or capital wholly or partlyprovided by the Government by way of grant, loan or otherwise."
It is to be noted that the two ingredients of'the definition are :
the manner of establishment, that is, by or under any- writtenlaw other than the Companies Ordinance;
the sources of the funds or capital, that it should be. providedwholly or partly by the Government.
Article 154(1) requires the Auditor-General to audit the accounts of allPublic Corporations. He is required to report on such audit toParliament within ten months of the close of each financial year.Article 165(1) requires every officer of a Public Corporation to takethe oath of allegiance provided for in5 ti}e 4th Schedule. The 6thAmendment to the Constitution requires them in addition to take theoath set out in the 7th Schedule-'
In the case of Dahanayake v. de Silva (3), the Supreme Court heldthat the Petroleum Corporation must necessarily be considered anagent of the State and- that a, contract entered into with theCorporation for the distribution of its products should be considereda contract entered into by the Corporation on behalf of the State forthe purpose of construing the provisions Of-section 13(3)(c) of theSoulbury Constitution. Later, in a series of cases the Supreme Courthas considered whether the action of public Corporations and otherState Agencie.s.'Should be considered executive or administrativeaction in relation to Articles 17 and 126 of the Constitution. Differenttests have been adopted that emphasise the functions of theparticular Corporation and/or the controkpf the Corporation, inrelation to and by the Government. It is seen that the interpretationgiven to the phrase "executive or administrative action” has beenconsiderably.expanded over the years. In the case of Rajaratne v. AirLanka Ltd.(4), it was held that the action of Air Lanka Ltd. in relation toa matter of appointment to a post of Flight Engineer is executive oradministrative action. Atukorale, J. stated (at page 134) "the questiontherefore arises as to what is meant by the expression executive oradministrative action. Our Constitution contains no definition of this
expression. The trend of our decisions, however, has been toconstrue this expression as being equivalent to actions of thegovernment or of an-organ or instrument of the Government". After anexhaustive analysis- of the provisions with regard to capital of thecompipy, the appointment of its Directors, the functions and themanner-in which these functions were previously performed,Atukorale, J. stated as follows: ••
"AU the above circumstances enumerated by me show that AirLanka is=no ordinary company. It has been brought intoexistence by the government, financed almost wholly by thegovernmentvand managed and controlled by the governmentthrough its oWti nominee Directors. It has been so created forthe purpose of tarrying out a. function of great publicimportance which was, once carried out by the governmentthrough the agency of' a statutory Corporation. In reality AirLanka is a company formed by the government, owned by thegovernment and controlled by the government.
The juristic veil of corporate personality donned by thecompany for certain purposes cannot, for the purposes of theapplication and enforcement of fundamental rights enshrined inPart III of the Constitution, be permitted to conceal the realitybehind it which is the government. The brooding presence ofthe government behind the operations of the company is quitemanifest. The cumulative effect of all the above factors andfeatures would, in my view, render Air Lanka an agent or organof the government. Its action can therefore properly bedesignated as executive,or administrative action within themeaning of Articles and 126 of the, Constitution. Thepetitioner has thus established that he is entitled to relief underArticle 126(4)”,
The learned President Of the Labour Tribunal in his order raised thequestion whether the Petitioner Corporation is a “private institution" ora "government institution". He sought to answer this question solelywith reference to section 49 of the Industrial Disputes Act and itsinterpretation as given by the Supreme Court in Yatawara's case(supra). Section 49 of the Industrial Disputes Act states that theprovisions of the Act shall not apply "to.or in relation to the Crown orGovernment, in its capacity as employer or to-or in relation to aworkman in the employment of the' Crown or the Government”. ..Ineffect this provision excludes-^he application of the IndustrialDisputes Act in relation to situations where a contract of employmentexists between the Government and one of its officers andemployees. There is a general jute of interpretation contained insection 3 of the Interpretation Ordinance, that "no enactment shat! inany manner affect the right of the Crown unless it is therein expresslystated or unless'it appears by necessary implication that the Crown isbound thereby”. The provisions of section 49 of the IndustrialDisputes Act are no more than a restatement of this general rule ofinterpretation, in relation to the Act. In Yatawara's case (supra), areference to arbitration was challenged on the basis that the Bank ofCeylon is a party to an arbitration and that the reference is bad in lawin view of section 49 of the Industrial Disputes Act. In relation to thisobjection Sansoni, J. came to a finding that the Bank of Ceylon is nota Government Department and that the reference is not defective.
The provisions of section 49 of the decision in Yatawara’s case,relied upon by learned President are not helpful to. identify the truecharacter of the Petitioner Corporation. The learned President hasfailed to take into;account:the reality of there being a large number ofstatutory Corporations dnd entities set up by the Government,performing functions that would.:otherwise; be performed by theGovernment, and controlled by the Government. He had also failedto take into account the fact that in view of the financial investmentsmade by the Government in these Corporations and entities, underthe Constitution, Parliament exercises, control over them through theAuditor-General. The ^employees of these Corporations and entitiesdo not have any contracts of employment with-the Government and,certainly the Industrial Disputes Act appJiesi.il relation to them.However, the character of the Corporations and entities cannot bedetermined solely by this fact. In the decisions Of the Supreme Courtreferred to above these Corporations have been described asagencies of the Government and in certain instances their action hasbeen considered as executive or administrative action. Thereforealthough they are not Government Departments they cannot beconsidered as private institutions. In relation to the Petitioner
Corporation, the provisions of the Incorporating Statute referred toabove clearly show that it is an institution in respect of which theGovernment has control and a complete financial interest. It managesgovernment land. Therefore adopting the test of the extent of controlor that of the nature of functions or the extent of financial interest, thePetitioner Corporation should be considered an agency of theGovernment, and not a private institution, as assumed by the learnedPresident.
The ne«.t basis of the learned President’s decision is that theAttorney-General could appear only on behalf of the State. He hassought to draw this inference from the decision in the Grant Centralcase (supra). In the Grand Central case, an objection was taken tothe Attorney-General appearing for the Land Reform Commission inhis private capacity as an Attorney-at-Law and not in his capacity asAttorney-General. The objection was upheld by this Court andaffirmed by the Supreme Court. There was no determination by thisCourt or by the Supreme Court as to the type of cases in which theAttorney-General or any of his officers could appear in his officialcapacity. With reference to this matter the Chief Justice observed (atpage 255) that the Attorney-General’s “right to practise his professionas the Chief Law Officer of the State in all Courts in the Island has notbeen denied. Indeed, it has been conceded in no uncertain terms".Therefore the decision in the Grand Central case is certainly notauthority for the proposition that the Attorney-General can appearonly for the State. The observation made by the Chief Justice (atpage 261) that the “image of impartiality will be tarnished if theAttorney-General takes part in private litigation arising out of privatedisputes” has to be understood in relation to the finding in the casethat the Attorney-General can appear only in his official capacity. Thefact that the Chief Justice did not contemplate an impropriety in theAttorney-General appearing in his official capacity for any organ oragency of the Government is clearly borne out by the observation (atpage 254), “If it .(.The Land Reform Commission) was an organ oragency of Government the Attorney-General could have, and wouldhave marked his appearance in his official capacity”. Thus it is seenthat both grounds relied upon by learned President to uphold theobjection are without basis.
I have to now consider the ground urged by (earned Counsel forthe 2nd Respondent that the Attorney-General and his officers couldappear for a public Corporation only in litigation having a "positivestate element” and the observation made by the learned Presidentwith regard to a possible infringement of Article 12(1) of theConstitution.
The Attorney-General is the chief law officer of the State. He holdsa paid office under the Republic. He is appointed by the Presidentand is a public officer in terms of the Constitution. He could not becategorised a judicial officer and in relation to his functions he comeswithin the Executive of the country; Similarly the legal officers of theAttorney-General's Department are Attorneys-at-Law who hold paidoffices under the Republic. The power of appointment, dismissal anddisciplinary control in relation to them finally reft with the Cabinet ofMinisters. Therefore, primarily, the government decides as to theparticular work that will be handled by the Attorney-General and hisofficers. From about 1974 to 1978 upon’ a decision of the Cabinet ofMinisters the Attorney-General and his officers handled all the legalwork of the Public Corporations and other entities referred to above,without any objection being raised in any Court as to their right torepresent these entities. In the case of Amaradasa v. The LandReform Commission(6), the Additional Solicitor-General with severalother officers of the Attorney-General’s Department appeared for theLand Reform Commission and the Hon’ble Minister who wererespondents to the application. This case was heard before aDivisional Bench of the Supreme Court without any objection orobservation being made, with regard to the right of the AdditionalSolicitor-General to represent the Land Reform Commission.
Subsequently, the Cabinet of Ministers decided that the Attorney-General and his officers should not appear for Public Corporations.This decision is referred to in the judgment in the Grand Centralcase. It appears that now the Cabinet of Ministers has reversed thatdecision and directed that the legal work of the Public Corporationsand other entities referred in the petition should be handled onceagain by the Attorney-General and his officers. Certainly, no onecould deny the Government’s right as the employer to decide thenature and the extent of the work that should be performed by itsemployees. The right of any person to engage the services of anAttorney-at-Law is well recognised. This engagement may be to
appear in a particular case or to handle the legal work as anemployee. The assignment of work by the employer to an Attorney-at-Law being an employee could never amount to a denial of the right toequality. In any event, it is seen that the 2nd Respondent has retainedan Attorney-at-Law of his choice to appear for him. He has notcomplained of an infringement of the right to equality, by theGovernment. In those circumstances the observation ^ the Presidentin this respect is misconceived.
The submission of learned Counsel for the 2nd Respondent thatthe Attorney-General and his officers could appear for a PublicCorporation or otjjer entity only in litigation having a “positive stateelement” assumes that the Attorney-General and his officers do notappear in litigation involving only private rights, obligations andclaims when they represent, in their official capacity, the Government,Ministers and public officer.® In relation to civil actions section 25(a)of the Civil Procedure Code’provides that the. Attorney-General is therecognised agent of the Government. Section 463 of the CivilProcedure Code empowers the Attorney-General to get himselfsubstituted as a party defendant in any.abtibn filed against a Minister,Parliamentary Secretary or a public officer.. In the case of Vettivelu v.Wijeratne(6), and of Dharmapala v. Selliah(7), (decided after the GrandCentral case) it was held that an officer of the Attorney-General’sDepartment can appear for a public officer-In a civil action withoutrecourse to the procedure in section 463. The majority of these civilactions filed against the Government, Ministers and public officersare based on causes of actions involving private rights, obligationsand claims and could be aptly described as private law disputes.These causes of actions do notrelate to matters involving public law.Hence there is no basis whatever to insist that the Attorney-Genera!and his officers .could appear for public Corporations and otherentities only in litigatioh involving a “positive state element”. LearnedCounsel did not elaborate as to what is meant by this requirement ofa “positive state element”. The submission was that it excludesdisputes such as the one in issue which relates to a contract ofemployment between the Petitioner Corporation and the 2ndRespondent. This contract, of employment is no different from thecontract of employment between the Government and one of itsofficers. There is no public law element in either situation. In the
circumstances I am of the view that the distinction drawn between thetwo, upon what is termed a “positive state element” is without anybasis whatever, l am also inclined to agree with the submissiorv-oflearned Deputy Solicitor-General that if such a precondition isintroduced, in every case where the Attorney-General or his officersappear for a Public Corporation in their official capacity, a separateinquiry will have', to be held to ascertain whether there is a “positivestate element” , in the matter. Such a precondition and procedure istotally inconsistent with the provisions of section 41 of the JudicatureAct which gives a right to a party to be represented by an Attorney-at-Law of his choice.
Learned Counsel submitted that a “positive State element” shouldbe present for the Attorney-General and his officers to appear inorder to avoid a conflict of interest. t is indeed correct that theAttorney-General has several Statutory powers and functionsspecially in the public law area of Constitutional and Criminal Law.The powers and functions in Criminal Law matters are such that inthese matters the Attorney-General and his officers could appearonly for the prosecution' If there is a likelihood of a conflict of interestbetween the Attorney-Geoerars statutory powers and functions andhis appearing in a particular case for a public Corporation or otherentity, that conflict should be.drought to the notice of the particularCourt. The Court will then go into the question whether there is alikelihood of a conflict of interest and if so satisfied make order, in theexercise of the inherent power;-that the Attorney-General cannotappear for such Public Corporation or entity in the particular case.Such a decision should be madeLin relation to the facts andcircumstances of the particular caseV t am inclined to agree with thesubmission of learned Deputy Solicitor-General that, such a decisioncannot be based on a hypothetical assumption, In this instance thereis no material whatever from which an inference .could be drawn thatthe statutory powers and duties of the Attorney-General would resultin a conflict of interest if a State Counsel appears for the PetitionerCorporation in the Labour Tribunal. The order of the learned Presidentof the Labour Tribunal that State Counsel cannot represent thePetitioner Corporation is without any legal basis and is contrary to theprovisions of section 41 of the Judicature Act. It is also contrary to theprinciples of natural justice being an ingrained requirement in our
judicial proceedings since it effectively denies a right of hearing tothe Petitioner Corporation. Hence, I am of the view that the order hasan error of law which goes to jurisdiction. I accordingly issue a Writ ofCertiorari as prayed for in prayer ‘B’ to the prayer of the petition. Inthe particular circumstances of this case I would make no order forcosts.
Certiorari issued.