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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE AT WAIGANI]
OS 189 OF 2005
BETWEEN:
CERTIFIED PRACTISING ACCOUNTANTS PAPUA NEW GUINEA (formerly known as Papua New Guinea Institute of Accountants)
First Plaintiff
AND:
ACCOUNTANTS REGISTRATION BOARD
Second Plaintiff
AND:
REX PAKI (LIQUIDATOR)
Third Plaintiff
AND:
THOMAS LAKA (AUDITOR)
Fourth Plaintiff
AND:
INSTITUTE OF CHARTERED MANAGEMENT ACCOUNTANTS ("ICMA")
First Defendant
AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant
| Waigani | : | Davani, J |
| 2005 | : | 25 May |
| | | 8 August |
CONSTITUTIONAL LAW – Constitution of the Independent State of Papua New Guinea – Interpretation and application of – legislation to be declared unlawful – when National Court may determine – Constitution s. 18 (1) (2); s. 19 (1)
Constitutional Law – Enacted legislation – Interpretation and application of – not a prohibited or restricted act – National Court – no jurisdiction – Constitution ss. 23 (2); 41 (1) (a) (b) (c).
Counsel:
R. Pato for the plaintiffs
L.Makap for the defendants
8th August 2005
DAVANI, J: There are two applications by Notice of Motion brought by the plaintiffs and the defendants. They arise out of proceedings commenced by the plaintiff seeking relief relying on s. 41 of the Constitution.
The parties interested in this application and who are named in the proceedings are parties who are affected by the gazettal and certification of the Act. The role they play in the accounting profession and their interests in the proceedings is set out below;
1(a) The first plaintiff is or otherwise consists of the whole of the membership of the certified Practising Accountants of Papua New Guinea and represented in this proceedings by its Acting President, Mr Pokawin who has filed an affidavit.
1(b) The second plaintiff is the Controlling Board of the first plaintiff which inter alia is empowered to review the activities of the members of the first plaintiff, set appropriate professional and ethical standards, discipline its members where appropriate, determine qualifications acceptable for admission to membership of the Certified Practising Accountants PNG, etc.
1(c) The third and fourth plaintiffs are individual Accountants currently in private practice and are registered members of the Certified Practising Accountants of Papua New Guinea (formerly) the Papua New Guinea Institute of Accountants.
1(d) The first defendant is the body whose functions are the same as or equivalent to the second plaintiff under the Management Accountants Act 2004.
1(e) The second defendant is the Independent State of Papua New Guinea and was responsible through its Minister, the Treasurer, for introducing the Management Accountants Act 2004 which was passed by Parliament on 24th November, 2004.
Applications
The motion filed by Paraka Lawyers on 10th May, 2005, seeks the following orders:
"1. The entire proceedings be dismissed for being incompetent in that the proceedings involves the issue of the Constitutional validity of an Act of Parliament, which is the sole function of the Supreme Court pursuant to section 18 and 19 of the Constitution, and therefore the National Court lacks jurisdiction.
3. Costs of the proceedings."
The plaintiffs Notice of Motion filed by Steeles Lawyers on 14th April, 2005, seeks the following orders;
"1. That pursuant to the Courts inherent jurisdiction under section 155 (4) of the Constitution, the Management Accountants Registration Board be restrained from causing to register and/or requiring any person to register, under the Management Accountants Act 2004, (‘the Act’) pending the determination of this Constitution section 41 action.
4. Costs be costs in the cause.
..."
It is necessary that I set out the substantive relief sought by the plaintiffs. This is contained in Originating Summons filed by Steeles Lawyers on 13th April, 2005, and which states;
"The plaintiff claims;
The respective motions filed by the parties are supported by the following affidavits;
Issues
The main issue raised by the court proceedings filed, now before me and which is the subject of contention by the Notices of Motions filed by plaintiffs and defendants, is;
- whether or not the National Court has jurisdiction to determine these proceedings because the proceedings may raise constitutional issues in relation to the validity of an act of Parliament and which will involve the interpretation or application of the Management Accountants Act 2004, when such issues regarding the interpretation or application of any constitutional law falls within the original jurisdiction of the Supreme Court by virtue of ss. 18 and 19 of the Constitution.
The defendants raise another issue in relation to the application under O. 12 R. 40 of the National Court Rules, being that the proceedings do not disclose a cause of action and should be dismissed because it seeks to nullify or declare as unconstitutional, what is otherwise a lawful action of the National Parliament or Legislature in passing, certifying and gazetting an act of Parliament through a lawful process.
I deal with these issues in my reasons.
I set out below ss. 18 and 19 of the Constitution.
S. 18 reads;
"(1) Subject to this Constitution, the Supreme Court has original jurisdiction, to the exclusion of other courts, as to any question relating to the interpretation or application of any provision of a Constitutional Law.
(2) Subject to this Constitution, where any question relating to the interpretation or application of any provision of a Constitutional Law arises in any court or tribunal, other than the Supreme Court, the court or tribunal shall, unless the question is trivial, vexatious or irrelevant, refer the matter to the Supreme Court and take whatever other action (including the adjournment of proceedings) is appropriate."
S. 19 (1) of the Constitution reads;
"(1) Subject to subsection (4), the Supreme Court shall, on application by an authority referred to in section (3), give its opinion on any question relating to the interpretation or application of any provision of a Constitutional Law, including (but without limiting the generality of that expression) any question as to the validity of a law or proposed law."
For this court to decide on whether these proceedings fall within the ambit of ss. 18 and 19 of the Constitution, the court must have recourse to the affidavit material filed by the parties and the relief sought in the originating summons. However, I deal firstly with submissions by counsel.
Mr Pato for the plaintiffs submit that s. 18 of the Constitution applies only where it involves issues of Constitutional application and interpretation and which issues may arise in the course of proceedings before the court. He submits that in the present case, the issues before the court or the matter for determination does not require interpretation of a constitutional law, in this case the Management Accountants Act 2004. Mr Pato submits that the act of certification, gazettal and the effect of the Management Accountants Act 2004 fall within the ambit of s. 41 (a) (b) or (c) of the Constitution. He submits that the Management Accountants Act 2004 not only duplicates the role of accountants under the Accountants Act 1996 but further creates inconsistencies which make both laws conflict. He pointed out a few of these inconsistencies to the court. Firstly, that there is no definition of a Management Accountant as against other types of accountants, that it goes beyond passing a law that is to work alongside or to complement the Accountants Act 1996. He submits that the Management Accountants Act 2004 goes beyond what was intended to be passed by Parliament. He referred the court, amongst others, to Peter Pokawin’s affidavit at part. 11 where he deposed that according to the "explanatory notes to the Member of the National Parliament", document which was circulated to all Members of Parliament prior to debating and enactment of the Bill, that the purpose and intent of the body to be created by the new Act was to complement the first plaintiffs functions. However, that is now not the case. He deposes at par. 13 of his affidavit that the Act fails to properly define the term "Management Accountant" and the fact that the new Act seeks to take coverage over so called Strategic Auditors Liquidators, means that the act goes well beyond a body which is established to cater for a specialized area within the practice of accounting (i.e Management Accounting) and extends to cover all persons practising in the area of accounting which includes all those persons who are now required to be registered under the Accountants Act with CPAPNG and the ARB.
Mr Pokawin deposes at par. 34 of his affidavit, the consequences of the certification and gazettal of the Act, its enforcement and coming into effect, which Mr Pato covered in his submissions but which I set out below in point form. There are;.
(1) there is a duplication of the professional roles and functions which are currently being carried out by the first plaintiff.
(2) the creation of a second professional body duplicating the functions and role of CPA PNG will result in the fragmentation of the accounting profession and confusion in the minds of employers, accountants and the general public as to which accounting body is the operative body in Papua New Guinea.
(3) such duplication and confusion will erode the confidence of the general public including employers, tertiary institutions, clients of accounting firms and international accounting bodies with whom the first plaintiff has worked in developing strong relationships over many years.
(4) threatens to undermine and destabilize the effective and efficient conduct and regulation of the accountancy profession in PNG. All this is in circumstances where there is no need for change since the CPA PNG and the ARB have been and remain bodies which have contributed significantly to the high standard of the practice of accounting in Papua New Guinea and were created by far seeing senior and prominent citizen members through the Accountants Act.
Mr Pokawin deposes further that the actions of the State and its responsible instrumentalities and authorities must be declared unlawful to prevent an unnecessary and unwarranted decline in the standard of accounting in Papua New Guinea.
I should state here that Paraka Lawyers for the defendants, upon being served with the proceedings, sent a letter dated 3rd May, 2005, to Steeles Lawyers, asking them to reconsider the entire proceedings and to file fresh proceedings by way of a constitutional reference. However the plaintiffs did not do so. This is deposed to in the affidavit of Guguna Garo.
Application of law to facts
Defendants counsel cited several authorities which I shall refer to. In Re; Jim Kas, Governor of Madang (2001) SC 670. Mr Kas filed proceedings by way of a reference under s. 18 (1) of the Constitution. The Supreme Court held in that case;
"...an authority prescribed under s. 19 of the Constitution may make special reference on any question relating to the interpretation or application of any provision of a constitutional law, including any question as to the validity of a law or a proposed law". (my emphasis)
Again, in Patterson Lowa and others v Wapule Akipe, Woods .J said;
"An action cannot be founded on s. 18 (2) of the Constitution. It provides for a situation apart from enforcement of Human Rights which a question of the interpretation or application of a constitutional law arises in an ordinary litigation in a court or proceedings of a tribunal (such as a Leadership Tribunal or a Commission of Enquiry). When that occurs the court or tribunal has no power to entertain the matter. It must refer the matter to this court."
Again, In the matter of a Petition by R.T. Hon. Michael Somare under s. 18 (1) of the Constitution [1982] PNGLR 65 His Honour Miles .J said;
"The second basic principle is that where the National Parliament has exceeded its powers, then the Supreme Court is entitled to say so. Subject to the Constitution itself, the Supreme Court has original and exclusive jurisdiction as to any question relating to the interpretation or application of a constitutional law; Constitution s. 18(1). This jurisdiction has been accepted as including the power to rule that a particular piece of legislation is invalid as seen outside the power of the National Parliament." (my emphasis)
However, Mr Pato for the plaintiffs submits that a right of action under s. 41 is enforceable and can be protected in either the Supreme Court and/or the National Court under s. 155 (4) and 23 (2) of the Constitution. He referred the court to Raz v Matane [1985] PNGLR 329 where the Supreme Court held at pgs. 338 and 339;
"There is no question that the Supreme Court has jurisdiction to apply or enforce s. 41 under s. 18 of the Constitution... My answer to the second question is that s. 41 confers a right of action which may be enforced or protected by the National Court under s. 23 (2) or s. 155 (4) of the Constitution."
In Raz v Matane (supra), a deportation order was made in respect of the plaintiff by the Minister for Foreign Affairs and Trade under the provisions of the Migration Act (Ch No. 16). This order was reviewed by a committee of three ministers which approved the ministers order. The plaintiff sought a judicial review of this decision in the National Court relying on s. 41 of the Constitution. This section was been held by the Supreme Court to be applicable to deportation orders under the Migration Act (see Premdas v Independent State of Papua New Guinea [1979] PNGLR 329).
The National Court on hearing this then referred the matter to the Supreme Court as a reference, the questions being;
It is necessary that I set out in full ss. 23 (2), 41 (a) (b) (c) and 155 (4) of the Constitution.
S. 41 (a) (b) (c) reads;
"41. Proscribed acts
(1) Notwithstanding anything to the contrary in any other provision of any law, any act that is done under a valid law but in the particular case –
(a) is harsh or oppressive; or
(b) is not warranted by, or is disproportionate to, the requirements of the particular circumstances or of the particular case; or
(c) is otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind,
is an unlawful act."
S. 23 (2) reads:
"23. Sanctions
...
(2) Where a provision of a Constitutional Law prohibits or restricts an act or imposes a duty, the National court may, if it thinks it proper to do so, make any order that it thinks proper for preventing or remedying a breach of the prohibition, restriction or duty, and subsection (1) applies to a failure to comply with the order as if it were a breach of a provision of this Constitution."
S. 155 (4) reads:
"155. The National Judicial System
...
(4) Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case."
Mr Pato submits that s. 18 applies where the issue of constitutional application and interpretation arises in the course of proceedings before the court. He submits that in the present case, interpretation of the Constitution is not required. He submits that it simply turns on the application of s. 41 to the facts in terms of whether the act alleged, if proved, fall within s. 41 (a) (b) or (c) and are therefore invalid or illegal in terms of that provision. He submits that the power of enforcement clearly lies in the National Court where the proceedings have been brought.
However in relation to this, Mr Makap for the defendants, submits otherwise. Relying also on Raz v Matane (supra), Mr Makap quoted Kapi DCJ who said;
"S. 18 (1) of the Constitution gives the Supreme Court the original jurisdiction to the exclusion of other courts to resolve any question relating to the interpretation and application of a constitutional law... However under s. 18 (1) of our constitution where a question of interpretation or application of a constitutional law arises, only the Supreme Court has jurisdiction to resolve it. It is therefore significant to determine what is a question relating to interpretation or application of a constitutional law under s. 18.
A question of interpretation or application can only arise where there is an issue as to the interpretation or application of a constitutional law. Where there is no such issue or question, there can be no question relating to the interpretation or application of a constitutional law." (my emphasis).
Mr Makap submits that the decision and reasoning in Raz v Matane (supra) should not be applied to the present case because in the Raz case, the issue before the court did not involve an issue pertaining to the validity of an act of Parliament and therefore the court did not have to decide the important question of whether or not to refer to the Supreme Court. He submits that in the present case, the proceedings challenge the validity of an act of Parliament and that therefore it falls within the exclusive jurisdiction of the Supreme Court pursuant to ss. 18 (1) and 19 (1) of the Constitution.
After consideration of all submissions, I find that significant constitutional issues arise as a result of the plaintiffs proceedings, which are:
In relation to question 1 of the reference in Raz v Matane (supra), the majority decided in the negative but held in relation to question 2 of the reference, that s. 41 could be enforced under other provisions of the Constitution, by ss. 23 (2) and 155 (4). But in this case, even if this Court finds the Management Accountants Act to be harsh and oppressive within the meaning of s. 41 of the Constitution, that immediately the Court does that, it is then dealing with an issue as to the interpretation or application of the Management Accountants Act and the Accountant Act, which are constitutional laws. Then, this court cannot deal with this application.
Kapi DCJ held in Raz v Matane (supra), that where the Constitution or any Constitutional Law gives jurisdiction to the National Court to interpret or apply a constitutional law, and where a question relating to the interpretation or application of a constitutional law arises, the National Court is not bound to refer the question to the Supreme Court. But he held further that "under s. 18 of the Constitution, a question relating to the interpretation or application of a constitution law arises where there is an issue as to the interpretation or application of a constitutional law". (My emphasis) (pg. 330). Then the matter must be referred to the Supreme Court.
In Raz v Matane (supra), which Mr Pato relied on in submitting that the National court has jurisdiction to apply the terms of s. 41 of the Constitution under s. 23 (2) or s. 155 (4) of the Constitution, it should be borne in mind that the referral to the Supreme Court was in relation to the enforcement of s. 57 of the Constitution. S. 57 reads;
"57 Enforcement of Guaranteed Rights and Freedoms
(1) A right or freedom referred to in this division shall be protected by, and is enforceable in, the Supreme Court or the National Court or any other court prescribed for the purpose by an act of the Parliament...". (My emphasis).
Kidu CJ in Raz v Matane (supra) on the application of s. 57 of the Constitution;
"S. 57 was quite clearly meant to be used by the Supreme Court, the National Court and any other court designated by an Act of the Parliament to remedy breaches of human rights..." (pg. 331).
In this case, s. 41 (a) (b) (c) does not give the National Court the option to choose the court at which the dispute can be reached.
Furthermore, I find there is indeed an additional challenge to s. 134 of the Constitution and that in my view, is within the Supreme Courts domain. It is the Supreme Court that should decide whether the speakers certificate issued after the passing of the Management Accountants Act is valid or not because that involves an issue as to the interpretation or application of a constitutional law.
I find that because the issue is as to the validity of the Management Accountants Act, that certification and gazettal are all components of the process in relation to the passing of the legislation and that the process will involve the courts invoking its powers to consider the various procedures in relation to parliaments law making powers which would then determine the validity of that legislation.
The process will involve a thorough review of procedures under the Accountants Act and the Management Accountants Act. The Court will in that process, consider the affidavit materials deposing to the irregularities and abuse of procedure apparent in the new legislation. Inevitably, the issue of interpretation and application of these laws will arise and only the Supreme Court has exclusive jurisdiction to interpret and apply these laws to determine any questions or issues as to their validity. (see s. 19 (1) of the Constitution; In the Matter of a Petition by Rt. Hon. Michael Somare under s. 18 (1) of the Constitution [1982] PNGLR 65; SCR 1 of 1986; Re Vagrancy Act chapter no. 268) [1988] PNGLR 222).
Therefore, in response to the issues I raised earlier;
- The National Court does not have the jurisdiction and power relying on s. 41 (a) (b) (c) of the Constitution to apply ss. 23 (2) and 155 (4) of the Constitution, to declare an act of parliament, unlawful and illegal.
- That the National Courts jurisdiction to enforce s. 41 (1) (a) (b) (c) of the Constitution, does not extend to the National Courts power to declare on Act of Parliament as being unlawful and illegal.
- That undoubtedly, the affidavit material deposed to by the defendants representatives show or demonstrate that there is indeed a challenge to parliaments law-making powers and procedures.
I find that the National Court is not the court where such issues can be decided.
Therefore, I will not accept Mr Pato’s submissions that this court can make orders as to the validity or not of a constitutional law by invoking ss. 155 (4), 41 (a)(b)(c) and 23 (2) of the Constitution. The facts in this case are not the same as in Raz v Matane (supra). The court must, as I said earlier, subject this legislation to a thorough analysis as to why it should not remain and why it should be declared invalid and unconstitutional. Only the Supreme Court can do that under ss. 18 and 19 (1).
Having reviewed submissions by both counsel, I find that I must accede to the defendants motion because the issues raised by the plaintiffs in relation to the challenge as to the illegality or not of the Management Accountants Act, are issues that will require the interpretation and or application of provisions of the Management Accountants Act and the Accountants Act including provisions of the Constitution itself.
On that basis I will dismiss the plaintiffs Notice of Motion.
I find that I need not consider defendants counsels submissions in relation to par. 2 of the Notice of Motion. As to the plaintiffs motion, I have now ordered the dismissal of its action, so that motion also stands dismissed.
As to costs, the defendants did not ask for costs and that is reflected in clause 3 of Paraka Lawyers Notice of Motion, that costs be in the cause. Counsel may have his reasons for doing that and I accept it.
The court’s formal orders are:
2. That costs of the proceedings be in the cause;
____________________________________________________
Lawyer for the plaintiffs : Steeles Lawyers
Lawyer for the defendants : Paraka Lawyers
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