IN THE HIGH COURT OF KIRIBATI
CIVIL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

High Court Civil Case 29 of 2000

BETWEEN:

TEATAO TEANNAKI
APPLICANT

AND:

THE ATTORNEY-GENERAL
ON BEHALF OF CABINET
RESPONDENT

FOR THE APPLICANT: MR BANUERA BERINA
FOR THE RESPONDENT: MR DAVID JAMES

JUDGMENT

On the 18th February I gave judgment in High Court Civil Appeal 11/98, Teatao Teannaki v the Attorney General on behalf of the Cabinet of the Republic of Kiribati. I quashed the surcharge which the Cabinet had imposed on the appellant's parliamentary salary, pursuant to section 47C of the Public Finance (Control and Audit) Ordinance.

In my reasons I explained I made the order quashing the surcharge because the Cabinet had not used the proper procedure in imposing it:-

.....the Cabinet has not given any reason at all as to why "it appears to" it that the appellant was not entitled either to all or to some or to none of the particular amounts.

It is not to the point, as the Solicitor General, for the Respondent, argued that if the appellant could have found authority for drawing the expenses he would have. The point is that the Cabinet had an obligation as a matter of fairness to disclose the reasons why the appellant was not entitled, then give him the opportunity to justify.

In all fairness the appellant was, is, entitled to know the case he has to meet. Otherwise how can he defend having claimed and received the amounts? How can he give "an exculpatory explanation"? He cannot. He was entitled to the reasons, in the case of each amount, why the payments are considered to be unlawful.

Pursuant to section 47D(2) as it then stood - it was amended in May - all I could do was to "confirm, alter or quash the surcharge ...." I said:-

The Court has power to "confirm, alter or quash the surcharge" but not power to refer the matter back to the Cabinet to give its reasons for regarding the payments as unlawful. If I had the power to refer it back, I would. As it is I am not prepared either to confirm or alter the surcharge. All I can do is to quash it.

In April Cabinet issued a fresh notice to the applicant in this form:-

Cabinet has reason to believe that in relation to travel in the period January 1991 to March 1994 you claimed and received payments and allowances from Public Funds to which you are not lawfully entitled, particulars of which are as follows:

There followed the particulars. The form of the notice overcomes the objection to the previous notice. Mr Banuera Berina, for the applicant, does not now complain about it. However in July Mr Berina took out an originating summons on behalf of his client for the determination of three questions:-

1. Whether or not the effect of section 47A of the Public Finance (Control and Audit) Ordinance, Cap 79 is discriminatory against the Applicant and former members of his Cabinet.

2. Whether or not Cabinet having had its order relating to the surcharge of the Applicant's salary on the ground that it is of the view that payments made to the Applicant when he was a Cabinet Minister and Beretitenti were improper and/or unlawful quashed by the High Court, can have the matter reopened under the Public Finance and (Audit Control) Ordinance, Cap. 79 as amended, by issuing a fresh notice curing the defects in its first notice which caused such first notice to be quashed.

3. Whether or not Cabinet can claim recovery for monies paid to the Applicant over six years ago having regard to the operation of the Statute of Limitation 1935 (UK).

At the hearing Mr Berina abandoned the third question. Section 47B of the Public Finance (Control and Audit) (Amendment) Act 1996 has been amended to extend the period of limitation to 12 years rather than 6. The amendment is retrospective to the 1st January 1990 quite cutting the ground from under the applicant's feet.

The questions argued were discrimination and res judicata.

Mr Berina in his admirably clear and concise written submissions, based his argument regarding discrimination on section 15 of the Constitution, the marginal note to which is:-

Protection from discrimination on the grounds of race, etc.

Mr Berina supported his argument by setting out a number of reasons, matters of fact, which, he argued, go to shew that this legislation has been aimed specifically against his client who was Beretitenti from 1991 to 1994 and the members of his Cabinet. I am prepared to accept that the legislation probably is aimed in the first place at these gentlemen.

The Solicitor General, Mr David James, for the respondent, had two arguments contra.

The first is that an issue of estoppel arises. Discrimination was a point, Mr James argued, which should have been, but was not, taken in the earlier proceedings: it is not open to the applicant to raise it now.

In fact, a point very close to discrimination - bias - was taken but I did not accept it. That bias was argued in the earlier proceedings rather strengthens Mr James' argument: point close to the present one taken but not accepted: applicant cannot argue again a point which has already failed.

Mr James referred to several authorities, the earliest of which sets out the principle. It is Henderson v Henderson (67 ER 313). I use the All England Reprint ((1843 - 1860) All ER Rep 378 @ 381-382 per Wigram V.-C.):-

In trying this question, I believe I state the rule of the court correctly, when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special case, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation and which the parties, exercising reasonable diligence, might have brought forward at the time.

As the High Court summed up the principle in the Port of Melbourne Authority v Anshun Propriety Limited (1981) 147 CLR 589 @ 603):-

It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment.

There is an issue estoppel but I prefer also to answer the question on the merits. I reject Mr Berina's argument for the simple reason that the legislation is general in its application: in terms it is not aimed at an individual or at a particular group or groups. It may have been aimed at the applicant and his colleagues but it does not discriminate against them compared to anyone else. The legislation will continue to speak, unless amended or repealed, into the future and may be used in relation to others. For example, a future government may attempt to use it against the members of its predecessor.

The answer to the first question asked in the originating summons is that section 47A of the Public Finance (Control and Audit) Ordinance, Cap 79 is not discriminatory against the applicant and former members of his Cabinet.

The second question I have found more difficult. Section 47D(1) and (2):-

(1) Any member against whom action is taken by the Cabinet under subsection (3) may appeal against the action of the Cabinet to the High Court at any time within 30 days after the Cabinet commences such action.

(2) The High Court may confirm, alter, or quash the surcharge and any such decision of the High Court shall be final.

Subsection (2) looks absolute - "shall be final". Mr Berina set out his argument in this way:-

The High Court, in exercise of the power given to it under the Act, had quashed the surcharge on 18 February 2000. The High Court noted it did not have the power to have the matter remitted to Cabinet for the defects in the first notice to be cured.

Submit it is clear from the Act the decision of the High Court quashing the surcharge is final. By issuing a fresh notice, concerning matters which were the subject matter of the notice that had been quashed, Cabinet is in fact reopening a matter a final decision over which had been made. What Cabinet is doing contravenes the finality of the decision set out in section 47D(2) of the 1996 Act.

The Act does not make any distinction between decisions made on the merit of the case or otherwise. If it had been the intention of Parliament to make such distinction it would have done so.....

Submit a final decision has been made in the applicant's case. Cabinet and Parliament know a final decision has been made. Cabinet ought not be allowed to have the matter reopened by means of a fresh notice curing the defect in the first notice.

The Concise Oxford gives several meanings for "final". The one, apt relating to this matter, is:-

2. conclusive, decisive, unalterable, putting an end to doubt.

Mr James' answer is that "final" in this context should be construed as meaning "not subject to appeal": there is no appeal to the Court of Appeal.

Pursuant to sections 90 to 95 of the Constitution the Court of Appeal is a court separate from the High Court: the High Court and the Court of Appeal are not just divisions of the same court. They are separate. If they were divisions of the same court I would be against Mr James without more but as they are not, the proper construction - I say this not without some hesitation - the construction of the subsection is open to doubt, the drafting is not clear - is that the litigation finishes with the High Court - there is no appeal to the Court of Appeal. It should not be construed, as Mr Berina argued, to give the result that the matter may not be considered again, that my earlier decision was final and may not be questioned. I have come to this conclusion notwithstanding my considering in my earlier reasons (at page 3) that "the sections are penal in nature and ought to be strictly construed."

Apart from the construction of the statute, is the matter nevertheless res judicata? Did I decide it once and for all so that it may not now be reopened?

In my reasons I said:-

I am not concerned with substance, only to enquire whether there has been fairness in procedure.

I did not consider the substance of the matter at all. Mr James referred me to 16 Halsbury (4th edition) paras 1527 et seq. He argued that one must look at the nature of the process to decide if the matter is res judicata: look at the pleadings: look at the judgment: the question is, "what is being finalised?" Mr James submitted that I did not, in the earlier judgment, get into the heart of the merits of the matter.

Mr James referred particularly to 16 Halsbury para 1529:-

In all cases where the cause of action is really the same and has been determined on the merits, and not on some ground (such as the non-expiration of the term of credit) which has ceased to operate when the second action is brought, the plea of res judicata should succeed. The doctrine applies to all matters which existed at the time of the giving of the judgment and which the party had an opportunity of bringing before the court. If, however, there is matter subsequent which could not be brought before the court at the time, the party is not estopped from raising it.

Mr James went to one of the cases cited in support of the proposition, Tak Ming Co. Ltd v Yee Sang Metal Supplies Co. ((1973) 1 All ER 569). That was an appeal from Hong Kong. When giving judgment the trial judge, Pickering J, through inadvertence did not allow interest: he was not invited to do so. The plaintiffs, the successful parties, applied to another judge, Briggs J, for interest: Briggs J. refused saying merely that he had no jurisdiction to make an award of interest after the delivery of judgment. Some time later the plaintiffs went back to the trial judge, inviting him to use the slip rule and fix interest: Pickering J did so. The Privy Council found for the plaintiffs (by then the respondents):-

......Briggs J's reason for rejecting the application was that he had no jurisdiction to entertain it. He did not decide whether on some different application - e.g. an application for correction of the judgment - he would have had jurisdiction to decide whether interest should be awarded. There was no adjudication on the merits of the claim for interest ........ In the present case there was no res judicata. The claim for interest had not been adjudicated by Briggs J. (@ 573-574).

It seems to me that the same principle applies here. I did not "adjudicate on the merits of the claim". I was concerned only with form, not substance. That being so there is no res judicata.

Accordingly my answer to the second question is, "Cabinet may reopen the matter under the Public Finance (Control and Audit) Ordinance by issuing a fresh notice giving the defects in its first notice which caused such first notice to be quashed."

The matter may be left to take its course.

THE HON ROBIN MILLHOUSE QC
CHIEF JUSTICE
(12/12/00)