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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS 538 of 1999
BILL SKATE
AND
PHILIP TAKU
AND
RUMA TAU
AND
REX PAKI
AND
GEORGE PERA
AND
BERNARD KIPIT
AND
MICHEAL GENE
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Waigani : Sevua, J
24th August & 4th October, 2001
ADMINISTRATIVE LAW – Judicial review – Decision of National Executive Council to suspend National Capital District Commission – Whether Organic Law on Provincial Governments and Local-Level Governments or National Capital District Commission Act 1990 apply to suspension.
JUDICIAL REVIEW – Decision of National Executive Council to suspend National Capital District Commission – Natural justice – "audi alteram partem" rule – Right to be heard – Whether plaintiffs accorded natural justice – Whether plaintiffs given opportunity to be heard – Whether error on the face of the record – Whether suspension unreasonable – Constitution, ss.4, 59, 187E; Organic Law on Provincial Governments and Local-Level Governments ss.4, 56, 57 and preamble; Organic Law on Provincial Governments and Local-Level Governments (Amendment No. 4) Law, s.1; Interpretation Act, s3; National Capital District Commission Act 1990, ss.31, 32, 33, 34, 35; National Capital District Commission (Amendment) Act 1995, ss.3,4.
Cases cited:
Cooper v. Wandsworth Board of Works [1863] EngR 424; [1863] 143 ER 414; (1863) 14 CB (NS) 180
Selvarajan v. Race Relations Board [1976] 1 All ER 12
Ridge v. Baldwin [1963] UKHL 2; [1964] AC 40, [1963] 2 WLR 935; [1963] All ER 66
Durayappah v. Fernando [1967] 2 AC 337
Gerald Sidney Fallscheer v. Iambakey Okuk [1980] PNGLR 101
Amadio Pty Ltd v. The State & Ors & Mt Kare Holdings Pty Ltd [1992] PNGLR 218
Kekedo v. Burns Philp (PNG) Ltd & Ors [1988-89] PNGLR 122
The Independent State of Papua New Guinea v. Philip Kapal [1987] PNGLR 417
Counsel:
A. Jerewai with F. Komang for Plaintiffs
A. Manase for 1st, 2nd and 3rd Defendants
J. Nonggorr with D. Kombagle for 4th Defendant
J. Kumura for 5th & 6th Defendants
4th October, 2001
SEVUA, J: Pursuant to leave granted by the Supreme Court on 23rd February 2001, the plaintiffs/applicants seek judicial review by way of certiorari to quash the decision of the Head of State, acting on the advice of the National Executive Council suspending the powers and functions of the National Capital District Commission on 7th September 1999, and also to quash the report of the Committee of Inquiry established on 18th August 1999, to inquire into the affairs of the National Capital District Commission (the Commission).
The first and second plaintiffs are elected Members of Parliament. By virtue of the provisions of the National Capital District Commission Act 1990 (the NCDC Act) they became members of the National Capital District Commission (NCDC). The first plaintiff was and is the Leader of the Opposition whilst the second plaintiff is the Governor (without powers) of the National Capital District.
On 7th September 1999; the Head of State, acting on the advice of the National Executive Council suspended the powers and functions of the National Capital District Commission and consequently appointed Jamie Maxtone Graham as Manager of the National Capital District Commission.
On 15th September 1999, the plaintiffs sought leave to review the decision to suspend the National Capital District Commission. The application for leave was heard by Los, J., who dismissed the application on 20th September 1999.
The plaintiffs having been aggrieved by the refusal of leave, appealed against the decision of Los, J., to the Supreme Court. The Supreme Court (Kapi, DCJ., Salika & Sakora, JJ), on 2nd February 2001, upheld the appeal and granted leave to the plaintiffs/appellants. By order of the Supreme Court, the matter was remitted to the National Court for the substantive review to be heard by another Judge. Through the normal administrative process of the Court Registry, the substantive review was re-allocated to me on 30th July 2001. This judgment therefore relates to the substantive judicial review application.
At the direction of this Court, the parties, except the first, second and third defendants; appeared for directions on 10th August 2001, when directions were issued as to the manner in which the substantive review would be conducted. Based on indications by counsel, the Court allocated 23rd and 24th August for this trial, however, when this matter resumed on 23rd August, the fifth and sixth defendants applied for an adjournment because their counsel, Mr Kumura, was not sufficiently briefed to appear due to the fact that the Attorney General had suspended the Solicitor General, John Kawi, on 22nd August. The trial could not proceed on that date and that is the subject of a contempt of court charge that the Court intends to lay against the Attorney General, Mr Francis Damem.
On 23rd August 2001, the Court further directed that a statement of agreed facts be filed so that the Court did not waste time on ascertaining the facts. All parties complied, and a statement of agreed facts was filed. The hearing then proceeded by affidavits. With the exception of the second plaintiff, Philip Taku, all the deponents were not cross-examined on their affidavits. All counsel then filed written submissions, except Mr Kumura, and spoke on their submissions.
The undisputed facts are therefore these. On 18th August 1999, the then Minister for Provincial and Local Level Government Affairs, Hon. Andrew Kumbakor (the Minister) appointed a Committee of Inquiry (the Committee) by instrument. That committee comprised of Russell Ikosi, Rex Paki and George Pera, however, Russell Ikosi was subsequently replaced by Ruma Tau.
On 26th August 1999, the Committee met with the second plaintiff and the minutes of that meeting are annexed as "A" to the affidavit of the third defendant, sworn on 16th August 2001.
On 6th September 1999; the Committee submitted an "Interim Report" to the Minister. On 7th September 1999, the Head of State, acting on the advice of the National Executive Council, suspended the powers and functions of NCDC and, at the same time, appointed Jamie Maxtone Graham as Manager. On 8th September 1999, the Committee submitted its "Final Report" to the Minister.
The basis for the establishment of the Committee is set out in the Instrument of Appointment of the Committee dated 18th August 1999, and signed by the Minister. The Instrument of Appointment of the Committee is Annexure "A" to the affidavit of Frank Aku, sworn on 7th September 1999, and filed on behalf of the plaintiffs. The Minister purportedly acted pursuant to s.31 of the National Capital District Commission Act 1990, after forming an opinion that:-
(a) there was widespread corruption in the administration of the affairs of the National Capital District Commission; and
(b) there has been gross mismanagement of the financial affairs of the National Capital District Commission; and
(c) there has been a break down in the administration of the National Capital District Commission; and
(d) there has been persistent and deliberate frustration of, and failure to comply with, lawful directions of the National Government; and
(e) the National Capital District Commission has persistently exceeded its powers and disobeyed applicable laws, and
(f) it was in the National interest to do so;
This case raises the following issues, which all parties agreed to, are the issues: -
I propose to address each of the five issues separately. Indeed, I consider that the fourth issue is an extension of the third issue as they relate to the principle of natural justice and I will address them as one issue. I will start with the last issue because the parties agreed that this was the preliminary issue that needed to be determined first before the substantive review is heard. However, at my direction the issues were argued at the same time so as to avoid unnecessary waste of the Court’s time since this case has been outstanding for quite some time, and the Court was of the view that, apart from the plaintiffs, the people of National Capital District have the right to, and are entitled to know, about the finality of this matter.
I will therefore set out each of the issues involved and re-enumerate them.
As I understood, this issue is simply whether the Organic Law or the NCDC Act apply to the government of the National Capital District Commission, and if the Organic Law apply, whether the suspension under the NCDC Act was ultra vires the Constitution
The facts are not in dispute, therefore it is not my intention to canvass them, suffice it to say that, the Minister had formed an opinion on a number of matters in relation to the National Capital District Commission in pursuance of s.31(1) of the National Capital District Commission Act, in establishing the Committee of Inquiry. I consider that this preliminary issue raised issues of law and I will set out in full the relevant provisions of the legislations that are pertinent to this issue, which counsel have referred to. I start with the provisions of the National Capital District Commission Act.
PART VI - SUSPENSION
he may appoint a Committee of Inquiry of three persons to look into and report to him on the matter.
(2) On receipt of a report under Subsection (1), the Minister shall refer the report to the National Executive Council with a statement of his reasons for appointing a Committee of Inquiry.
Executive Council is not bound by the terms or, or recommendations contained in, the report of the Committee of Inquiry.
A suspension under this part shall operate until –
(a) the end of a period stated in the suspension order made under Section 32(1); or
(b) such time as the suspension order made under Section 32 (1) is revoked by the Head of State, acting on advice,
whichever first occurs.
The pertinent provisions of the Constitution are:-
Section 187E of the Constitution has been amended by Constitutional Amendment No. 16 since the original provision was amended by Constitutional Amendment No. 7 – Suspension and Re-establishment of Provincial Governments. I will therefore set out the amended s.187E in Amendment No. 16.
187E SUSPENSION OF PROVINCIAL GOVERNMENT AND LOCAL LEVEL GOVERNMENT.
(1) Where a Provincial Government or a Local Level Government undermines or attempts to undermine the authority of the National Parliament or the national unity, the National Executive Counsel may provisionally suspend the Provincial Government or the Local Level Government concerned subject to confirmation by an absolute majority vote of the Parliament.
(2) An Organic Law may make provision for and in respect of the procedures to be followed in the exercise of the powers under Subsection (1).
(3) An Organic Law may make provision for further defining any matter referred to in Subsection (1).
(4) The National Executive Council may suspend a Provincial Government or Local-Level Government that cannot carry out its functions effectively because or a war or a national emergency declared under Part X (emergency powers) affecting the province, local government area or the whole of the country.
(5) While a Provincial Government or a Local-Level Government is suspended, its powers and functions are vested in and shall be exercised by or on behalf of the National Executive Council, in accordance with an Organic Law.
(6) Where a Provincial Government or a Local-Level Government is suspended –
- (a) in the case of a suspension under Subsection (4), the Minister responsible for provincial government and local-level government matters, shall as soon as practicable and in any event, not later than the first meeting of the Parliament after the suspension, table in the Parliament a report on the suspension, the reasons for it and the circumstances of it; and
- (b) at each meeting of the Parliament during the suspension, the Minister responsible for provincial government and local-level government matters shall report to the parliament on the measures taken to re-establish the Provincial Government or the Local-Level Government, as the case may be.
The preamble to, and relevant provisions of the Organic Law on Provincial Governments and Local-Level Governments are as follows:-
MADE by the National Parliament, to come into operation –
(a) in so far as relating to all provinces other than Bougainville Province and the National Capital District on certification; and
(b) in so far as relating to Bougainville Province on 1st January 1999; and
(Paragraph (b) amended by Amendment No. 4 Law are further amended by Amendment No. 5 Law)
(c) in so far as relating to the National Capital District in accordance with a notice published in the National Gazette by the Head of State, acting with and in accordance with, the advice of the Minister.
(Paragraph (c) added by Amendment No. 4 Law).
Section 3 of the Interpretation Act, Ch. 2 defines the "National Capital District" as the district established by s.4 of the Constitution, the boundaries of which are defined in the Organic Law as the boundaries of the National Capital District. The word "province" is also defined by the same provision to mean "a province declared under s.5 of the Constitution, and includes the National Capital District."
Having cited these legislations, let me now refer to the plaintiffs’ submissions in respect of this issue. Mr Jerewai, counsel for the plaintiffs submitted this issue raises three questions:-
(1) Does the Organic Law on Provincial Governments and Local-Level Governments apply in relation to the National Capital District pursuant to Section 4 thereof notwithstanding that the commencement Clause (c) in the preamble thereto stipulates that the Organic Law is to come into operation..........."in so far as relating to the National Capital District - in accordance with a notice published in the National Gazette by the Head of State, acting with, and in accordance with, the advice of the Minister", but such notice not yet being accordingly given?
(2) If the answer to Question 1 is in the affirmative, are Sections 31 and 32 of the National Capital District Commission Act, inconsistent with the Constitution, Section 187E(1) (as amended), and Division 8, Section 51 and Division 9, Sections 56, 57 and 58 of the Organic Law?
(3) If the answer to Question 2 is in the affirmative, is the suspension of the government of the National Capital District Commission on or about the 7th of September 1999, by the National Executive Council unconstitutional, ultra vires and invalid in so far as that government was suspended pursuant to proceedings undertaken in accordance with and pursuant to Sections 31 and 32 of the National Capital District Commission Act?
In contending that the Organic Law applied to the government of the National Capital District, Mr Jerewai relied on Section 4, Constitution; Section 4, Organic Law and Section 3, Interpretation Act. These provisions have already been cited earlier. I consider that it is not necessary to address all three questions if the answer to Question 1 is in the negative. In my view, if this Court finds that the Organic Law did not apply to the government of the National Capital District Commission, but the National Capital District Commission Act did, that is the end of this argument.
There is no dispute, and I accept that the preamble to the Organic Law clearly stipulates that the coming into force of the Organic Law in respect of National Capital District would be when a notice is published in the National Gazette by the Head of State, acting with, and in accordance with, the advice of the Minister. In relation to all other provinces except National Capital District and Bougainville, the Organic Law would apply when it is certified.
There is also no dispute, and I accept that by virtue of s.4 of the Organic Law, the system of Provincial Governments established by the Organic Law applies to the government of National Capital District and the provisions of the Organic Law dealing with Provincial Governments also apply to the National Capital District. Mr Jerewai concedes this, however, submitted that the problem was with the commencement provision of the Organic Law. He submitted that for all intents and purposes, the Organic Law apply to the government of National Capital District. The Court accepts that as the clear intent and spirit of the Organic Law.
Counsel further submitted that the commencement clause of the Organic Law was not intended by Parliament to be entirely at the Minister’s discretion. He argued that the Minister’s discretion is neither perpetual nor infinite so that, at some point in time, it was mandatory for the Minister to give effect to the application of the Organic Law to the National Capital District by advising the Head of State to give the required notice in the National Gazette.
I accept this submission. It may well be true that the Minister’s discretionary power is not perpetual or infinite. However, there is undisputed evidence that the required notice has, up to the date of suspension of the powers and functions of the National Capital District, and even up to this time, not been published in the National Gazette. I accept the evidence of Joe Kudada, Acting First Legislative Counsel, in his affidavit sworn on 19th June, 2001, wherein he deposed to the fact that the Office of the Legislative Counsel is responsible for drafting of the notice referred to in the commencement clause of the Organic Law and that, as far as the Office of the Legislative Counsel is concerned, no such notice has been drafted, and further that, such notice has not been published in the National Gazette.
It is to be noted that the commencement clause in the preamble to the Organic Law has been amended. Section 1 of the Organic Law on Provincial and Local-Level Governments (Amendment No. 4) Law, certified on 18th June 1997, provides -
1. AMENDMENT OF COMMENCEMENT CLAUSE
The Commencement clause of the Organic Law on Provincial and Local-Level Governments is amended by repealing Paragraph (b) and replacing it with the following:
(c) in so far as relating to National Capital District - in accordance with a notice published in the National Gazette by the Head of State, acting with, and in accordance with, the advice of the Minister.
Whilst it is correct that the system of Provincial Governments established by the Organic Law applies to the government of the National Capital District, and the provisions of the Organic Law relating to Provincial Governments apply to the National Capital District, it is my opinion that the application can only come into effect after a notice to that effect has been published in the National Gazette. In the present case, such a notice has not been published therefore, it follows in my view that, at the present time, the Organic Law does not apply to the government of National Capital District.
I consider that the National Capital District Commission Act is the legislation, which applies to the government of National Capital District. This is consistent with s.4(4) Constitution, which stipulates that either an Organic Law or an Act of Parliament shall make provision for the government of National Capital District. If the Organic Law were to apply to the government of National Capital District, the requisite notice shall have been published as envisaged in the preamble to the Organic Law. I do not consider that s.4 of the Organic Law overrides the preamble as is the impression from Mr Jerewai’s submission.
The National Capital District is a unique form of government unlike a Provincial Government. It has its own legislation (NCDC Act) which covers its operations. The rest of the Provincial Governments do not have their own legislations as they are governed by the Organic Law. While the National Capital District is considered a province by virtue of s.4(5) Constitution, nevertheless, the Organic Law on Provincial Governments and Local-Level Governments does not apply to it until such time a notice is published in the National Gazette. Until that is done, and the National Capital District Commission Act is repealed, the National Capital District Commission operates within the framework of the National Capital District Commission Act 1990.
Mr Jerewai contended that as the Organic Law is supposed to apply to the government of National Capital District, but the Minister had unreasonably withheld advice to the Head of State, he has either breached the commencement clause of the Organic Law or acted ultra vires s. 4 of the Organic Law and ss.4, 187B and 187C of the Constitution. Whilst that may be a valid constitutional argument, I do not consider it relevant in this review.
On the basis of what I have alluded to, it is my opinion that, until such time that the Head of State, acting with, and in accordance with, the advice of the Minister publishes a notice in the National Gazette, in relation to the coming into operation of the Organic Law in respect of the National Capital District, the Organic Law does not apply to the National Capital District.
I would rather accept the defendants’ submissions that the Organic Law does not apply to the National Capital District. In respect of the first issue therefore, I hold that the suspension of the National Capital District Commission was not ultra vires s. 187E(1) of the Constitution and Divisions 8 and 9 of the Organic Law.
In the light of that, it is my opinion that it is not necessary to answer Questions 1 and 2 raised by the plaintiffs in this issue, save that, the establishment of the Committee of Inquiry and the suspension were proper and in accordance with the provisions of the National Capital District Commission Act 1990.
The first ground of review is accordingly dismissed.
This issue as I understood, relates to the report of the Committee of Inquiry, (the
Committee)
The Committee was established by the Minister in pursuance of s.31 of the National Capital District Commission Act. The composition of the Committee has already been revealed. Pursuant to s.31 of the National Capital District Commission Act, the Minister has a discretion to appoint a Committee of Inquiry where he has formed an opinion on any of the matters enumerated under Subsection 1 of that section.
Paragraphs 3 and 5 of the Agreed Facts state:-
"3. On 6th September 1999, the Committee of Inquiry submitted its "Interim Report" to the Minister for Provincial and Local Level Government Affairs.......................
There is no dispute that those facts were agreed to by all the parties and endorsed by their counsel on 24th August, 2001.
In view of that, the plaintiffs cannot turn around now and submit that there was no report to the Minister as required by s.31 of the National Capital District Commission Act. There is undisputed evidence that, there was an Interim Report dated 6th September 1999, which was presented to the Minister. That evidence is contained in the affidavit of Ruma Tau, sworn on 8th September 1999, Annexure "B1", entitled "Interim Report". The affidavit of George Pera sworn on 16th August 2001 also alludes to the Interim Report and the Final Report having been presented to the Minister (para 17).
The Oxford Advance Learner’s Dictionary provide several definitions of the word, "report". The first definition in respect of giving information provides, "to give people information about something that you have heard, seen, done etc."
Counsel for the plaintiffs submitted that the Interim Report was qualified in that there was no serious investigations into the allegations made against officials of the National Capital District Commission. He also submitted that the Interim Report was only to provide an update to the Minister regarding the status of the investigation by the Committee. Mr Jerewai therefore concluded that, on the face of the record it appeared clear there was no report for the purpose of s.31(2) of the National Capital District Commission Act.
It is my view that the plaintiffs’ submissions are misconceived. I find as a fact that there were two reports presented by the Committee, the interim report dated 6th September 1999, and the final report dated 8th September 1999. The affidavit of the Minister, Andrew Kumbakor sworn on 14th September 1999 confirms the evidence of Tau and Pera on this aspect.
On the general meaning and usage of the word ""report", I find therefore that there was a report pursuant to s.31(2) of the National Capital District Commission Act. In my view, whether there were any serious investigation into the allegations against officials of the National Capital District Commission as implied by the plaintiffs’ counsel is of no consequence, as far as this issue is concerned. I am satisfied that there was a report, and that it was presented to the Minister prior to the suspension of the powers and functions of the National Capital District Commission, which became effective at 12:01 am on 7th September 1999.
Whilst it is trite law, and I agree that error on the face of the record is a basis for judicial review which may result in the grant of a certiorari or declaration, in the present case, I consider that this remedy is not available. I find there is no error on the face of the record that warrants the Court granting a certiorari, to quash the decision leading to the suspension of powers and functions of the National Capital District Commission.
The Court would also dismiss the second ground of review.
3.(a) Whether or not the rules of natural justice apply to the decision to suspend the powers and functions of the National Capital District Commission.
(b) If the rules of natural justice apply to the decision to suspend, were the plaintiffs denied the right to be heard?
The whole process of suspension under the National Capital District Commission Act is triggered off by the Minister having formed an opinion under s.31 of the Act. The matters enumerated in Subsection 1 of that provision are very serious in nature – widespread corruption; gross mismanagement; breakdown in administration; persistent and deliberate frustration of or failure to comply with lawful directions; exceeding powers or disobedient to applicable laws, and national interest.
Firstly, I am of the view that one needs to ask what the basis of the Minister’s opinion is. Is it based on written allegations, verbal allegations or some secret reports? Because the nature of these allegations are very serious, I consider that the rule of fair play must apply. The National Capital District Commission is a Commission, thus a body, but first and foremost, it comprises of persons whose integrity, reputation, character and profession may be at stake. It is therefore foremost, in my view, that fairness and the rule of natural justice must apply in any dealing, which may lead to suspension. At this juncture, I should clarify that the rules of natural justice are not specifically provided for in the National Capital District Commission Act, however, in my view, it does not mean that the principles of natural justice cannot be observed as a rule of fair play because its foundation emanates from s.59 of the Constitution, the Supreme law of the land, and the Constitution is superior to the National Capital District Commission Act. I consider therefore that, as the suspension is a very serious matter, which affects public office holders, the rules of natural justice, in particular, the audi alteram partem rule must be observed.
I am reminded by what Byles, J said in Cooper v. Wandsworth Board of Works [1863] EngR 424; [1863] 143 ER 414; (1863) 14 CB (NS) 180 at 194; which was that, where there are no positive words in a statute requiring that a party shall be heard yet the Courts will imply such a right in a proper case. In my view, this present case is one such case which the facts and circumstances warrant this Court to imply that the right to be heard ought to apply to the Governor or second plaintiff. I consider that, that is not only a rule of fairness, but logic and common sense as well.
The first undisputed fact is that the Minister had formed an opinion therefore he established the Committee of Inquiry. The basis for his forming that opinion is not known. The second undisputed fact is that the Committee met with the second plaintiff on 26th August 1999, some eight days after the Committee was formed. It is important to set out some of the matters discussed in that meeting because I consider them to be important in the issue of natural justice. The other reason is that I am of the view that the defendants’ counsel have made submissions that are misconceived even though the facts are quite clear and undisputed.
The minutes of that meeting is marked Annexure "F" in Ruma Tau’s affidavit sworn on 14th September 1999. The minutes are also annexed to the affidavit of George Pera sworn on 16th August 2001, Annexure "M". The minutes revealed that Mr Tau outlined the purpose of the Committee’s visit and clearly said it was visiting as the Committee of Inquiry established by the Minister under s.31 of the National Capital District Commission Act. Mr Pera then took over from Mr Tau to expand on the purpose of the visit by the Committee. He said that it was important for the Committee to present itself formally to the National Capital District Commission so that a thorough understanding of its purpose could be appreciated, and the type of assistance that the National Capital District Commission may render to the Committee could be considered.
It is of utmost significance, and not by chance, that Mr Pera said the following:
"We will be as fair and impartial as possible and be professional in our approach. If any allegation is made or persons named we will pursue a response as far as possible from the city."
Then Mr Pera went on to mention other matters including documents and reports which subsequently led to the second plaintiff interjecting and saying he had not seen a copy of, "The 1998 Assessment Report."
It is noted from Mr Tau’s affidavit sworn on 8th September 1999, that the second plaintiff and Acting Administrator, in meetings, as well as in writing, were fully aware of the nature and extent of the inquiry, however they did not assist the Committee by providing information or evidence. Specific documents requested were not provided. It is to be noted too that there is no evidence of any subsequent meeting after the one convened on 26th August 1999. More importantly, it is to be noted, and there is no dispute that when the Interim Report was compiled, the plaintiffs were not invited or asked to comment on it. In my view, this is crucial for the reasons that I will now embark upon. In my view also, this is where the defendants failed to observe the principles of natural justice, particularly, the audi alteram partem rule.
I will reiterate that the National Capital District Commission is a Commission established by s. 3 of the National Capital District Commission (Amendment) Act 1995, No. 15 of 1995, certified on 19th July 1995. But it is not just an organisation made up of inanimate objects. It comprises of natural persons including the plaintiffs whose integrity, reputation, character and profession may be called into question. They are therefore entitled to the benefit of the rules of natural justice, in my view. My view is fortified by what I consider to be a very sound and logical statement of the law pronounced by Lord Denning in Selvarajan v. Race Relations Board [1976] 1 All ER 12 at p.19: ".........................In all these cases, it has been held that the investigating body is under a duty to act fairly; but that which fairness requires depend on the nature of the investigation and the consequences which it may have on persons affected by it. The fundamental rule is that, if a person may be subjected to pains or penalties, or be exposed to prosecution or proceedings, or deprived of remedies or redress, or in some such way adversely affected by the investigation and report, then he should be told the case made against him and be afforded a fair opportunity of answering it."
I cannot put it any better than what Lord Deaming has, and I am of the opinion that, that is the principle of law that must apply in the present case.
It is trite law that certiorari will lie when there has been a breach of natural justice, and in essence, that is the plaintiffs’ submission. Mr Jerewai referred to the well known English cases of Ridge v. Baldwin [1963] UKHL 2; [1964] AC 40; [1963] 2 WLR 935; [1963] 2 All ER 66, and Durayappah v. Fernando [1967] 2 AC 337, which I do not wish to canvas as the principles discussed therein are quite clear and have been discussed, considered and applied in this jurisdiction in many cases including Gerald Sidney Fallscheer v. Iambakey Okuk [1980] PNGLR 101.
The principles of natural justice have been part of our underlying law in this jurisdiction. The duty to observe emanates from the Constitution, s.59(2), and the minimum requirement is to act fairly and to be seen to act fairly. It is true that the principles of natural justice are subject to this Constitution and any statute, however, it is my view that the inclusion of natural justice in the Constitution is not merely for window dressing. It is there for a purpose so Courts and other tribunals just cannot ignore it’s existence.
It is the plaintiffs submission that there has been a breach of natural justice which warrants the Court to grant certiorari to quash the reports of the Committee, and the decision to suspend the National Capital District Commission. Reliance is placed on Fallscheer v. Iambakey Okuk (supra) where His Honour, Greville Smith, J in adopting the principles enunciated in the two English cases said that where the relevant statute did not expressly and clearly exclude the requirement to observe the rules of natural justice, these rules must be observed.
The defendants have submitted to the contrary. Their counsel submitted that the rules of natural justice do no apply, however, if they did, the plaintiffs were accorded natural justice.
Mr Manase, counsel for the first, second and third defendants submitted that the plaintiffs were given the opportunity to be heard and provided documents however, they failed to appear before the Committee. This submission must be rejected outright as being spurious and mischievous when one considers the undisputed facts. Counsel failed to appreciate that the opinion of the Minister giving rise to appointing the Committee were very general in nature. They made no specific allegations against each of the plaintiffs or any other members of the National Capital District Commission. Whereas, the inquiry by the Committee cited specific allegations against the plaintiffs and other officials, yet these allegations were never put to the plaintiffs, and the plaintiffs were never asked to respond.
I will return to this vital aspect later, but let me mention the other defendants’ submissions. Dr. Nonggorr for the fourth defendant also submitted that the principles of natural justice do not apply in this case, although the principles are applicable in this jurisdiction. He argued that the plaintiffs cannot succeed as they had the opportunity to be heard, but failed to avail themselves of that opportunity. He submitted that there are three matters that a right to a fair hearing require:-
(a) a person’s rights are affected by the exercise of a discretionary power;
(b) the person must be informed of the allegations made against him/her; and
(c) the person must be given an opportunity to respond to the allegations.
The essence of Dr. Nonggorr’s submission was that the plaintiffs’ proprietary rights have not been affected in any way, therefore they were not entitled to be heard. He referred to the fact that the plaintiffs are still Members of Parliament and still receive salaries and other benefits. Mr Manase also alluded to this argument in his submission.
However, I consider that this is a clear misapprehension of the issue. The fact that the plaintiffs are still Members of Parliament, and are still receiving salaries, etc, have never been an issue. This case is not about the plaintiffs’ suspension as Members of Parliament, it is about their suspension together with others as the National Capital District Commission. This submission, in my view, is misconceived.
By law, the plaintiffs have the right to represent their electorates in the National Capital District Commission. Section 3 of the National Capital District Commission (Amendment) Act 1995 provides this. The second plaintiff especially, has the right to serve the National Capital District Commission on a full time basis, and is entitled, in law, to be paid such salaries and allowances, and be employed under such other terms and conditions as are determined by the Salaries and Remuneration Commission. Section 4 of the National Capital District Commission (Amendment) Act 1995 provides for that. It is therefore spurious to say that the second plaintiff has not lost proprietary rights thus not entitled to natural justice.
The fifth and sixth defendants also made similar submissions as the other defendants. As I recall, Mr Kumura adopted the submissions made by both counsel for the first, second, third and fourth defendants.
In respect of the first part of the natural justice issue, I am of the view that the principles of natural justice, being part of our underlying law, and having its source from the Constitution, apply in this case, that is, the rules of natural justice apply to the government of the National Capital District.
Section 3 of the Interpretation Act, Ch. 2, defines, "province", as "a province declared under s.5 of the Constitution, and includes the National Capital District." Section 4(5) of the Constitution stipulates that the National Capital District must be considered a province when calculating the number of provincial electorates under s.125 of the Constitution. Section 4(4) of the Constitution provides for an Organic Law or an Act of Parliament to make provision for the government of the National Capital District. The preamble to the Organic Law clearly provides that the Organic Law on Provincial Governments and Local-Level Governments apply to the National Capital District when a notice to that effect is published in the National Gazette.
Division 9 of the Organic Law on Provincial Governments and Local-Level Governments deal with suspension of Provincial Governments. Sections 56 and 57 require a Provincial Governor to be heard where the Minister is of the opinion that a ground for suspension exists. In my view, that requirement confirms the need to observe the principles of natural justice especially the audi alteram partem rule – the right to be heard. In other words, a Provincial Governor has the right to be heard by the Minister (s.56) and the National Executive Council (s.57), where there is a ground for suspending a Provincial Government. There can be no doubt, in my view, that the rules of natural justice apply to Provincial Governments. I consider therefore that the principles of natural justice apply to the National Capital District, which the Constitution stipulates, must be considered a province.
Given the fact that by virtue of s.4(1) of the Organic Law, the provisions of the Organic Law relating to the Provincial Governments apply to the National Capital District, although, at the present time no notice to that effect has been published, I am of the view that for all intents and purposes, the Parliament had intended that the rules of natural justice apply to the National Capital District as well. That view is fortified by what I have alluded to in s.3 of the Interpretation Act and s.4(5) of the Constitution. I consider that by implication, the principles of natural justice apply to the government of National Capital District.
For these reasons, I hold that the principles of natural justice apply to the government of the National Capital District.
I now turn to the second question raised by this issue.
There is no evidence that the Committee or the Minister or the National Executive Council accorded the right to be heard to the plaintiffs, especially the second plaintiff, Phillip Taku, Governor of National Capital District. The fact that the Committee requested various documents and manuals, etc and it met with the second plaintiff and the City Administrator on 26th August 1999, did not constitute an act of observing the rules of natural justice. That meeting was convened prior to the compilation of the Interim Report. It was an introductory meeting only. It was never a meeting in which the allegations against the plaintiffs were referred to them and a right of reply accorded, because at that time, the allegations in the Interim Report had not yet been compiled.
In my view, the important period when the Committee and the Minister should have accorded the plaintiffs, especially the second plaintiff, the opportunity to be heard was when the Interim Report was completed. Similarly, the National Executive Council should have heard the second plaintiff prior to the decision to suspend. That report contained very serious allegations against both plaintiffs and other officials of the National Capital District Commission. It was therefore fair and just that the allegations in the report be given to the plaintiffs and they be given an opportunity to be heard on those allegations.
The following are examples highlighting the emphasis I wish to place on this issue. In page 4 of the Interim Report:
"6. Allegations and Incidents of Mismanagement since Appointment of Committee.
6.2 .........................................................
(b) Evidence of misappropriation and misuse of public funds by Councillors (including Commissioners) in June, 1998.
(g) The opinion of the 1998 assessment team that "it appears likely that parts of the National Capital District Commission are being systematically stripped of funds by corrupt practices emanating from high office in the NCDC with support from the private sector."
6.3 Some further examples of alleged serious mismanagement by the NCDC or circumstances warranting serious suspicion and urgent investigations (sic) follow:
(a) The fact that a Townsville, Queensland based company called Civil and Marine Engineering has received a massive number of small jobs to a value of K9 million plus, since February 1998 alone, it is alleged without any adequate tender procedures. It has been hinted that this contractor has continued to receive such contracts despite allegations of sub-standard work on its part.
(b) The fact that similar contracts have been awarded to a value exceeding K3.5 million to Waymar Constructions Limited, a company said to be owned by the wife of Michael Carrutthers, a person said to be closely associated with former Lord Mayor Skate.....................
(c) The alleged improper diversion of NCDC Lotto Commissions into an account with Maybank No. 9999 1004 controlled by the Governor of National Capital District........................
(d) An alleged NCDC association with Real Estate Niugini, to which it has paid over K50,000.00, since April, 1998.
(f) There are reported anomalies in the NCDC cash management and control procedures. The Committee sighted documents for July 21, 1999 that the Commission is operating on an overdraft in the order of K3.5 million and paying very high interests on the overdrawn account whilst there is K5,258,000.80 available to the NCDC in IBD accounts, well in excess of the overdraft amount.
(h) It is alleged that landscaping work was planned and executed under the direction of Mr Justin Tkatchenko at the residence of former Governor and Prime Minister Skate at Pari Village at a cost to the National Capital District Commission of more than K200,000.00, without tenders being called.
(i) .............................................. many contracts awarded to relatives of the former Governor.
(n) Very large sums are spent on small contracts allegedly granted to Youth groups. The numbers simply make no sense and there are strong grounds to suspect massive fraud and corruption in this aspect of the NCDC’s financial affairs.
(p) One of the most serious allegations brought to the attention of the Committee was an arrangement made by National Capital District Commission with Mr John Orea, an associate of former Governor and Prime Minister Skate and his political party. It appears that –
- (i) the Gaming Board withheld payment of commissions to the NCDC for sometime; the suspicion is that this was "arranged".
- (ii) the NCDC engaged Mr Orea or his associate to undertake debt collection work, for which it would pay a grossly excessive commission of 20% of monies recovered.
- (iii) recovering money owed by the Gaming Board should of course have required no more than a letter or phone call to the Board, instead, Mr Orea or his associate "recovered" the money and reportedly received K800,000.00 of the NCDC’s money out of this exercise.
(s) Allegations that Governor and Commissioners are paid allowances in advance and for meetings they do not attend in contravention of the SCMC Act.
(aa) Allegations that a house claimed to be worth approximately K50,000.00 was purchased for the Governor’s use for K200,000.00 without being submitted to Finance and Administration Committee, K380,000.00 has further been expended on it, with another K480,000.00 being proved (sic) for in the revised 1999 budget.
(dd) Evidence that the Director – Legal Services attempted to improperly obtain payment of K181,866.66 to Paraka Lawyers. There was also an allegation that these same lawyers were awarded a K50,000.00 job involving the Gas Corporation, without obtaining 3 quotes, or the approval of the Finance and Administration Committee.
(ff) Allegations that substantial amounts have been paid out of NCDC funds to areas outside the city, eg, K200,000.00 to Koiari Development Authority, K100,000.00 to Sogeri Rubber Company, and K100,000.00 to Governor’s village in the Sepik Province.
(ii) A memo from the Finance, Planning and Administration Committee to the Governor was sighted, noting that approval for funding for the trips taken to Fiji, Townsville, and Kuala Lumpur was not referred to or authorised by the Committee."
At page 10 of the Interim Report the Committee of Inquiry stated:
"The Committee advises that its Interim Report is provided to the Minister to update him on progress to date. It must be stated that no serious investigation has been made on any of the allegations listed above (8C) and that the Committee informed the Governor and the Acting City Administrator during a preliminary meeting, that they would allow them to respond to allegations, before the final report is submitted to the Minister." (my own emphasis)
As it were, despite the Committee of Inquiry’s undertaking to permit the Governor to respond to any allegations before the final report was provided to the Minister, the plaintiffs were not given the opportunity to be heard on these allegations. In my view, these allegations were very serious in nature, they reflect imputations of serious forms of corruption and mismanagement on the part of the plaintiffs, especially the second plaintiff as the Governor. However, the plaintiffs were never given the opportunity to respond to these very serious allegations, let alone being informed. The rules of natural justice were not observed. That is, the minimum requirement to act fairly, and to be seen to act fairly, as enshrined in s.59(2) of the Constitution was never observed by the Committee; the Minister, and the National Executive Council.
It is undoubtedly clear that the Committee of Inquiry had cited very serious allegations of corruption and financial mismanagement against the plaintiffs. However, at the time the interim report was submitted to the Minister, these allegations were never brought to the attention of the plaintiffs, and furthermore, the plaintiffs were never given the opportunity to respond to these allegations. There can be no doubt, by any stretch of the imagination, that the plaintiffs were denied the right to be heard – a breach of the audi alteram partem rule.
I conclude therefore that the rules of natural justice apply to the decision to suspend the powers and functions of the National Capital District Commission, and further that, prior to the suspension, the plaintiffs were not accorded natural justice. It therefore follows in my view that, the plaintiffs are entitled to the writ of certiorari they seek.
The Court would uphold these two grounds of review.
4. Whether the suspension was reasonable
When one looks at both reports by the Committee of Inquiry, one glaring and salient feature of the reports which is conspicuous is that many of the allegations relate to the period when the first plaintiff, Bill Skate, was the Governor of National Capital District. In that respect, and in my view, as far as the Governor without power, Philip Taku, is concerned; the suspension is unreasonable to him because it would seem, his government was suspended on the basis of previous bad records of the National Capital District Commission as well.
There is undisputed evidence that the Committee had made references to previous reports such as the, ‘1993 Audit Report", the "1995 and 1996 Audit Reports;" the "Noonan Report into the National Capital District Commission;" the "1995 Committee Report," and other references to a number of very serious allegations of corrupt dealings and financial mismanagement relating to the former Governor, Bill Skate, the first plaintiff. These reports and these allegations did not arise at the time the second plaintiff became the Governor, thus the head of the National Capital District Commission administration. One then must ask, is it fair and reasonable to suspend the National Capital District Commission under the governorship of Philip Taku, on allegations of corruption and financial mismanagement of previous and past administrations of the National Capital District Commission? The answer must be, no, it is not fair and reasonable.
It is my view therefore that the Committee, the Minister and the National Executive Council could not in law, under the Wednesbury principle, take into account the matters that have been alluded to. They cannot blame the second plaintiff for the sins of the past administrations of NCDC. In saying that, I am not saying that the second plaintiff and his administration are free of any wrongdoing. There are allegations made against the second plaintiff and other officials of his administration although, no evidence has been provided by the Minister to substantiate those allegations.
In my view, other alternatives are open to the sixth defendant to pursue in relation to allegations of widespread corruption and financial mismanagement by the previous administration of the National Capital District Commission. If the sixth defendant and the Minister have evidence to substantiate the allegations made, the right to prosecute persons involved exist under the Criminal Code, the Leadership Code, and other legislations. Why didn’t the sixth defendant exercise that right? Is it because the allegations are not supported by credible evidence? Is it because the sixth defendant wants to protect political leaders?
The law in this area of judicial review of administrative action is clear in our jurisdiction. Courts here have adopted as part of our underlying law, the Wednesbury principle enunciated in Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223, especially the majority view in the judgment of the Master of the Rolls, Lord Greene at pp 233 – 234:
"The Court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or, conversely, have refused to take into account, or, neglected to take into account matters which ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it. In such a case, I think the Court can interfere."
The National Court, in Amadio Pty Ltd v. The State & Ors and Mt Kare Holdings Pty Ltd [1992] PNGLR 218, has held that one of the grounds in which the Court can review administrative decisions is the Wednesbury principle of unreasonableness.
The issue here is not whether the National Executive Counsel has the power to suspend. Whether the National Executive Council has the power under the Organic Law or the National Capital District Commission Act, it has power to suspend. The question is, in its decision to suspend, did it consider matters that should not have been taken into account? In my view, it did, that is why its decision to suspend must be held unreasonable, therefore subject to the Court’s jurisdiction to review under the Wednesbury principle. Of course, I am not implying that the wrongs of the previous administration of the National Capital District Commission, if they are proven, should be swept under the carpet and ignored. The ratepayers in National Capital District are entitled to know that their taxes are used for the purpose they are collected and one such purpose is to provide adequate services to them. I do not, for one moment, advocate that wrong doers should go unpunished. However, I consider that in fairness to the Governor of National Capital District, the second plaintiff, the wrong deeds of previous NCDC administrations could not be used to suspend the government of NCD under the second plaintiff. That is the unreasonableness in my view.
One other matter which should be addressed, which I consider to be relevant to the issue of unreasonableness is the manner in which the allegations against the plaintiffs were published. There is undisputed evidence that the Committee, through its Chairman, the Minister, and the sixth defendant had created a huge media hype and adverse publicity about the suspension of the National Capital District Commission. Sure the taxpayers and residents of the National Capital District have the right to know if their representative government in National Capital District Commission is functioning well and within the legal framework and their taxes are not being misused. However, it is my view that the manner in which the allegations against the plaintiffs, and the actual suspension, were published, was quite unfair, unreasonable and most adverse to the plaintiffs. It is tantamount to a trial by the media, although I do not accuse the media of any improper journalism. The dissemination of such information for public consumption is not condemned, however, I consider that the adverse publicity of this matter was quite unreasonable to the plaintiffs.
The print media reports which have been put into evidence by the second plaintiff is uncontested and not in issue. Again, the reports are attributed to the Committee of Inquiry and its Interim Report. For instance, in page 7 of the Post Courier of 7th September 1999, under the heading "Cabinet suspends NCDC", is the following report:
"The Committee was set up under Section 31 of the National Capital District Commission Act and was given the task of inquiring into allegations of corruption and mismanagement in the NCDC. Its interim report found that there was widespread corruption in the administration of the NCDC.
It also highlighted gross mismanagement of the Commission’s financial affairs, a break down in administration of the NCDC and a pattern by the NCDC of persistently exceeding its powers and disobeying applicable laws."
Again, on 8th September 1999, the Post Courier reported a media release by the Provincial Affairs Minister, Andrew Kumbakor under the title, "Millions wasted at City Hall: Minister."
"Millions of kina was squandered by the National Capital District Commission through mismanagement and "chronic" corrupt practice, Provincial Affairs Minister, Andrew Kumbakor alleged yesterday.
He told journalists when explaining the suspension of the National Capital District Commission board that thorough investigations had revealed "widespread corruption and gross mismanagement."
Cabinet was convinced by the mass of evidence that was available to prove the state of affairs at City Hall when it moved for suspension."
There is something drastically wrong here. The committee’s Interim and Final Reports refer to allegations of corruption and financial mismanagement, however, the Minister and the National Executive Council referred to evidence supporting the allegations. No where in all the evidence before this Court can I find any credible evidence to support the decision of the National Executive Council. If the National Executive Council had considered other evidence or materials, there is no evidence of that. The National Executive Council must act reasonably and responsibly, not for political expediency lacking proper and due regard to fairness and natural justice. The Committee’s reports referred to allegations against the plaintiffs, yet the media publicly alluded to evidence to support the allegations, when no evidence was provided by the Committee. This I consider unreasonable.
Whilst I consider that previous reports of the NCDC administration under the former Governor are important for better improvement to the administration and good governance, I do not think it is fair to use those previous reports and attribute the failures of past administration to the second plaintiff and his government. There is evidence that the second plaintiff had attempted to effect some improvements in some areas of operation of the National Capital District Commission. To blame him for the failures and wrong deeds of the previous Commission is grossly unfair in my view. It is unreasonable under the Wednesbury principle. It is my opinion that in doing so, the National Executive Council had taken into account matters it should not have taken into account.
Finally, it is my opinion that the open-ended or indefinite suspension of the government of National Capital District is unfair and unreasonable in itself. It is unfair and unreasonable in that, the ratepayers and residents of the National Capital District have been penalised for the deeds of their elected leaders. The Court does not, for one moment, advocate the maintenance of bad administration in NCDC. However, by the same token, the people of National Capital District deserve a better deal from the National Executive Council. By law, people in National Capital District are entitled to a representative government in the National Capital District Commission, not an administration led by political cronies of the government of the day. If the National Executive Council considers that the system of government in the National Capital District is not working, it has the power to propose new legislations to govern the National Capital District. There is no reason that professional people in NCD cannot be appointed to run an efficient and effective government for the people of NCD.
In my view, the National Executive Council’s power to suspend for an indefinite period, without public scrutiny and debate by the Parliament is open to abuse. The National Executive Council can use its power of suspension to victimise political opponents and marginalise them.
For these reasons, I find that the decision to suspend the powers and functions of the National Capital District Commission was unreasonable in the circumstances under the Wednesbury principle, therefore the plaintiffs are entitled to the relief sought.
In conclusion, the four issues would accordingly be summarized as follows:-
Question 1 : Whether or not the suspension of the National Capital District Commission is ultra vires Section 187E (1) of the Constitution and Divisions 8 and 9 of the Organic Law.
Answer : NO. Until a notice is published in the National Gazette the
provisions in the Organic Law relating to provincial governments do not apply to the National Capital District, therefore the issue of ultra vires does not arise at present.
Question 2 : Whether there was error on the face of the record?
Answer : No, error on the face of the record.
Question 3 (a) : Whether or not the rules of natural justice apply to the decision
to suspend the powers and functions of the National Capital District Commission.
Answer : YES, the rules of natural justice apply.
(b) : If the rules of natural justice apply, were the plaintiffs denied the right to be heard.
Answer : YES
Question 4 : Whether or not the decision to suspend was unreasonable.
Answer : YES, it was unreasonable under the Wednesbury principle.
In Kekedo v. Burns Philp (PNG) Ltd & Ors [1988-90] PNGLR 128, it is said, at p.124,
"The circumstances under which judicial review may be available are where the decision making authority exceeds its powers, commits an error of law, commits a breach of natural justice, reaches a decision which no reasonable tribunal could have reached or abuse its powers."
Two of these considerations exist thereby warranting the success of this review. What the Supreme Court also held in The Independent State of Papua New Guinea v. Philip Kapal [1987] PNGLR 417 has been considered and taken into account by this Court in the present case. This Court is of the opinion that the circumstances of this case warrant the exercise of the Court’s discretion in favour of the plaintiffs.
For all these reasons, the plaintiffs’ application for review is upheld. The Court orders that certiorari be issued to bring up to this Court and quash the Interim Report and the Final Report of the Committee of Inquiry constituted by the first, second and third defendants. The Court also orders, that certiorari be issued to bring up to this Court and quash the decision of the fifth defendant to suspend the powers and functions of the National Capital District Commission.
The Court further makes the following consequential orders:-
In respect of costs, the plaintiffs have succeeded in two of the grounds raised in this review therefore they are entitled to costs
in these proceedings, which costs shall follow the event.
__________________________________________________________________________
Lawyer for Plaintiffs : Jerewai Lawyers
Lawyer for 1st, 2nd & 3rd Defendants : Pato Lawyers
Lawyer for 4th Defendant : Nonggorr & Associates
Lawyer for 5th & 6th Defendants : Acting Solicitor General
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