McLaughlin v Governor of the Cayman Islands

JurisdictionUK Non-devolved
CourtPrivy Council
JudgeLord Bingham of Cornhill
Judgment Date23 Jul 2007
Neutral Citation[2007] UKPC 50
Docket NumberAppeal No 83 of 2006

[2007] UKPC 50

Privy Council

Present at the hearing:-

Lord Bingham of Cornhill

Lord Walker of Gestingthorpe

Baroness Hale of Richmond

Lord Carswell

Lord Neuberger of Abbotsbury

Appeal No 83 of 2006
Dr Astley McLaughlin
Appellant
and
His Excellency the Governor of the Cayman Islands
Respondent

Delivered by Lord Bingham of Cornhill

1

The real issue in this appeal concerns the compensation payable to Dr McLaughlin, the appellant, following his dismissal or purported dismissal from the Government service of the Cayman Islands on 31 December 1998. The Governor contended below, and the Court of Appeal held in its decision now subject to appeal, that the dismissal of Dr McLaughlin, although unlawful, was effective in law to determine his engagement, and his only entitlement was to damages, which were to be re-assessed. Dr McLaughlin contends that in law his engagement was never determined, with the result that he remains in the Government service, entitled to be remunerated as a Government officer despite the lapse of time since his purported dismissal.

2

Dr McLaughlin, a citizen of the Cayman Islands, is a well-qualified scientist. From 1989 onwards he was employed in various scientific posts in the Cayman Government service. From 1996 onwards he held the position and office of Administrative Officer 1 in the Ministry of Agriculture, Environment, Communication and Works. He was remunerated by salary and Government contributions to a public service pension fund.

3

By letter dated 21 December 1998 Dr McLaughlin was officially informed that the Governor, acting on the advice of the Public Service Commission, had approved his retirement on the ground of the abolition of his office. This was to take effect from 1 April 1999. However, he was to be paid three months' salary in lieu of notice and was to cease work on 31 December 1998.

4

By section 55 of the Constitution of the Cayman Islands the Governor was empowered to dismiss a person holding a public office for cause or to require such a person to retire. But the conditions of service of Government officers were regulated by General Orders promulgated in 1987 and revised in 1994. These provided that if an office in a series of offices was to be abolished regulation 28 of the Public Service Commission Regulations was to be followed, and regulation 29 governed the procedure to be followed if a public officer holding a pensionable office was to be called upon to retire in order to facilitate an improvement or economy in his department. The procedure required the officer to be given an opportunity to make representations, which were to be passed to the Public Service Commission. It is unnecessary to consider these provisions in detail, since it is common ground between the parties to this appeal that Dr McLaughlin held a public office and that his dismissal (or purported dismissal) was effected in breach of the rules of natural justice and in breach of regulation 29 and was accordingly unlawful.

5

Dr McLaughlin applied for and on 1 June 2000 obtained leave to move for judicial review of the decision to dismiss him. In grounds annexed to his originating motion issued on 26 June he claimed "(1) a declaration that the decision to dismiss him and the dismissal were void; (2) reinstatement of [Dr McLaughlin] to the office which he held prior to the dismissal, or an alternative suitable office, with full back pay and benefits, including seniority for pension and other purposes; (3) in the alternative, damages for the [Governor's] illegal conduct and breach of duty, consisting of full pay and benefits, including all entitlements based on seniority, from 21 st December 1998 to the date of the order granting the same and beyond; …". Dr McLaughlin's substantive application was heard by Graham J in the Grand Court on 7 March 2001, and on 9 March the judge dismissed the application. He held that the Governor had been entitled to bring about Dr McLaughlin's retirement and there had been no procedural unfairness: [2001] CILR 249. The order was filed on 25 June 2001, and on 27 June Dr McLaughlin gave notice of appeal, seeking to set aside the judge's order and reinstatement to the office which he held or damages.

6

Dr McLaughlin's appeal was heard by the Court of Appeal (Zacca P, Rowe and Taylor JJA) on 29 and 30 July 2002 and the judgment of the Court was given by Rowe JA on 29 November 2002: [2002] CILR 576. The Court of Appeal was uncertain whether Dr McLaughlin's office had been abolished, or whether there had been an intention to abolish it, but did not need to reach a conclusion since it found that the public service had unfortunately overlooked the protections given to officers by regulation 29 and had effected the compulsory retirement of Dr McLaughlin in breach of the rules of natural justice. In paragraph 37 of the judgment the Court ruled that the judgment of Graham J should be set aside and it made the declaration sought by Dr McLaughlin "that the decision to dismiss him and his dismissal were void."

7

The Court went on to address the second head of relief claimed by Dr McLaughlin in his pleading, for reinstatement to the office which he held prior to the dismissal or an alternative suitable office. In paragraph 38 of the judgment, on which the Governor very strongly relies, the Court continued:

"38. The appellant has sought relief that he be reinstated in the office which he held at the time of his retirement. Mr Hall-Jones submitted that courts in judicial review proceedings are loath to order the reinstatement of employees, as such an order borders on the usurpation of the powers of the decision maker, and because of the practical problems which such an order would present. For this proposition he relied on Lewis, Judicial Remedies in Public Law, 2 nd ed., para 11-021, (2000). The appellant has not been in the public service for approximately four years. We have no knowledge of the state of the requirements of the public service for personnel and in what capacities, and, for no other reason, we do not consider reinstatement as an appropriate remedy."

The Court held that Dr McLaughlin's remedy lay in damages, and it therefore remitted the case to the Grand Court for the damages to be assessed. The Court of Appeal's order was that the appeal be allowed and the judgment below set aside, that there be a declaration that the decision to dismiss Dr McLaughlin and his dismissal were void and that the case be remitted to the Grand Court for assessment of damages.

8

On remission of the case to the Grand Court there were two hearings (26-28 July 2005 and 5-7 September 2005) and two rulings (22 August and 14 September 2005). In the first ruling the Hon Anthony Smellie CJ examined the applicable principles, "explaining the meaning and effect of the Court of Appeal's decision of 29 November 2002". In the second he applied these principles to assess the quantum of damages.

9

In his first ruling the Chief Justice summarised (para 1) the parties' respective cases, on the one side that Dr McLaughlin remained a public officer entitled to remuneration as such, on the other that his employment had been effectively terminated, entitling him only to a limited amount of damages. He found (para 8) an apparent tension between the Court of Appeal's declaration that the decision to dismiss Dr McLaughlin, and the dismissal of him, were void, and its refusal of reinstatement to his particular post and statement that the appropriate remedy was damages. But this apparent tension (para 9) was the result of the operation of settled principles. It was settled law that a decision declared by a court to be void is a nullity and of no effect: Ridge v Baldwin [1964] AC 40, 80. Thus it seemed that no question of reinstatement arose, since Dr McLaughlin's status could not have been affected by the decision notified to him by the letter of 21 December 1998. Similarly, the notion of Dr McLaughlin's remedy sounding only in damages while the status of employment continued to subsist was seemingly at odds with the declaration of nullity. The Chief Justice's task, he said (para 10), was to decide what was intended by the Court of Appeal's order, since (para 11) very different consequences could follow depending on how it was understood.

10

The Chief Justice rehearsed the parties' competing submissions at some length, considering academic and judicial authority on which reliance was placed, including Wade and Forsyth, Administrative Law (9 th ed, 2004), Chief Constable of the North Wales Police v Evans [1982] 1 WLR 1155, Jhagroo v Teaching Service Commission [2002] UKPC 63, (2002) 61 W1R 510, Ridge v Baldwin, above, Vine v National Dock Labour Board [1957] AC 488, Malloch v Aberdeen Corporation [1971] 1 WLR 1578 and Zainal bin Hashim v Government of Malaysia [1980] AC 734. The Chief Justice expressed his understanding of the effect of this authority in paragraph 56:

"56. By virtue of the foregoing analysis, I conclude as follows as to the effect of the Court of Appeal's decision in this case:

(i) the decision to dismiss [Dr McLaughlin] and his dismissal were null and void and of no effect;

(ii) accordingly, while he was not to be ordered to be reinstated to his former particular post, he remained a public and pensionable officer subject in all respects to the statutory regulatory scheme governing his employment;

(iii) this meant that he continued to be entitled to salary so long as he continued to be available for service and for so long as no other steps were taken to determine his service;

(iv) the extraordinary and perhaps censurable result, is that this state of affairs has been allowed to persist for nearly seven years now and nearly three years after the Court of Appeal's decision. That state of affairs, however, is nothing to detract from the principle and, subject to...

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