N3721

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 200 OF 2008

ELIAS R WOHENGU, ROBERT BAIYAGE & SAMSON JOKE
Plaintiffs

V

THE HONOURABLE JOHN HICKEY CBE MP, MINISTER FOR AGRICULTURE & LIVESTOCK
First Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

WARREN DUTTON, KOLIN DAMAI & JULIUS YEOH
Third Defendants

Waigani: Cannings J
2009: 19 June, 20 August

JUDICIAL REVIEW – natural justice – whether members of statutory board must be given right to be heard prior to revocation of appointments – whether reasons must be given for revocation of appointment.

The Minister responsible for appointment of members of a statutory board revoked the appointment of three members (the plaintiffs) and made new appointments without giving notice to the plaintiffs of his intention to revoke their appointments and without giving them a right to be heard on whether their appointments should be revoked. The Minister notified the plaintiffs of his decision after the gazettal of his decision and the only reason he gave was that their appointments had not been "in line with" the Act under which they were appointed. The plaintiffs challenged by judicial review the Minister’s decision, arguing that the principles of natural justice required that they be given a right to be heard prior to the revocation of their appointments and that they be furnished with proper reasons for the decision and that the Minister’s failure to comply with those requirements rendered his decision void.

Held:

(1) Members of a statutory board hold public office and a decision to revoke their appointments inevitably affects their reputation and standing in the community. The principles of natural justice require that they be given notice of an intention to revoke their appointment and an opportunity to be heard on whether their appointment should be revoked (Gegeyo, Misso, Bell & Henao v Minister for Lands and Physical Planning [1987] PNGLR 336).

(2) An integral part of the right to natural justice is the right to be given good, proper and sufficient reasons for the decision (Ombudsman Commission v Peter Yama (2004) SC747).

(3) Here, the Minister failed to comply with his duty to accord natural justice to the plaintiffs by not giving them notice, not giving them a right to be heard and not furnishing good, proper and sufficient reasons for his decision.

(4) As a matter of discretion and in light of the principles of natural justice, good leadership, good governance and the Rule of Law espoused in the Constitution it is not appropriate or just that the Minister’s decision remains in force. Accordingly the Court declared that the Minister’s decision was void and of no effect and ordered that it be quashed, the consequences being that the plaintiffs are reinstated and the appointment of the new members is void.

Cases cited

The following cases are cited in the judgment:

Aegaiya v Baki and The State (2009) N3693
Dale Christopher Smith v Minister for Lands (2009) SC973
Gegeyo, Misso, Bell & Henao v Minister for Lands and Physical Planning [1987] PNGLR 336
Isaac Lupari v Sir Michael Somare (2008) N3476
Kerua v Council Appeals Committee of the University of Papua New Guinea (2004) N2534
Leo Nuia v The State (2000) N1986
Martha Kokiva-Age v Lawyers Statutory Committee (2005) N2835
Mision Asiki v Manasupe Zurenuoc (2005) SC797
Nilkare v Ombudsman Commission (1995) N1344
Ombudsman Commission v Peter Yama (2004) SC747
Philip Aeava v The State (2001) N2136
Sinamoi, Loko, Iewago & Kidu v The State and Minister for Finance and Planning (1995) N1298

Counsel

W Hagahuno, for the plaintiff
J Alu, for the first defendant
G Emang, for the second defendant
B Frizzell, for the third defendant

20 August, 2009 

1. CANNINGS J: The plaintiffs, Elias Wohengu, Robert Baiyage and Samson Joke, were appointed in October 2006 as members of the Rubber Board, a body established under the Rubber Act. They were appointed for a period of three years under Section 7 of the Rubber Act by the then Minister for Agriculture, Hon Sasa Zibe MP. Thirteen months later, in January 2008, their appointments were revoked and three new members were appointed in their place: the third defendants, Warren Dutton, Kolon Damai and Julius Yeoh. The decision to revoke their appointments and appoint the new members was made by the current Minister for Agriculture & Livestock, the first defendant, Hon John Hickey CBE MP.

2. In April 2008 the plaintiffs applied for leave to seek judicial review of Minister Hickey’s decision. Leave was granted and this is a trial of the substantive application for judicial review.

THE GROUNDS OF REVIEW AND THE RELIEF SOUGHT

3. The plaintiffs say that the Minister breached the principles of natural justice in two respects:

- He did not give notice of his intention to revoke their appointments and did not give them a right to be heard on whether their appointments should be revoked.

- He did not give proper reasons for his decisions.

4. They are the two grounds of review. If either or both are upheld the plaintiffs want the Court to declare that they have been denied natural justice and that Minister Hickey’s decision is null and void and to order that they be reinstated.

5. The defendants do not dispute that the Minister did not give the plaintiffs notice and did not give them a right to be heard. The defendants argue that he did not have to. As for giving reasons the defendants point out that the Minister did write to each of the plaintiffs on 14 March 2008. He stated to both Mr Wohengu and Mr Baiyage:

I have decided to revoke your appointment as a member … of the Rubber Board, since your appointment was not in line with Section 7 of the Rubber Act (Chapter 222). The revocation of your appointment came into effect as per gazettal notice of 17 January 2008.

I take this opportunity to thank you for the services you rendered to the Rubber Board since its inception.

6. In his letter to Mr Joke, who is an officer of the Department of Agriculture and Livestock, the Minister stated that he was revoking his appointment as a member (government official) on the recommendation of the Departmental Head. The defendants say that those are sufficient reasons.

ISSUES

7. There are three issues before the Court:

1. Did the Minister have to give notice of his intention to revoke the appointments and/or give the plaintiffs a right to be heard before revoking their appointments?

2. Did the Minister give sufficient reasons for revoking the appointments?

3. What declarations or orders should the Court make?

1 DID THE MINISTER HAVE TO GIVE NOTICE AND/OR A RIGHT TO BE HEARD?

Plaintiffs’ submissions

8. Mr Hagahuno, for the plaintiffs, submitted that as holders of public office the plaintiffs were entitled to protection of the principles of natural justice. It was not open to the Minister to summarily terminate their appointments. He was obliged to give them notice of the proposal to revoke their appointments and afford them an opportunity to be heard on any allegations against them. Mr Hagahuno relied on the following passage from the judgment of Amet J, as he then was, in Gegeyo, Misso, Bell & Henao v Minister for Lands and Physical Planning [1987] PNGLR 336 to underpin his submission:

… if any administrative decision will or may affect the reputation, integrity or standing in the community of persons holding public office then the minimum requirement of fairness must be afforded that person or persons. I consider that that minimum requirement should be to give advice or notice in writing of the reasons for a decision proposed to be taken which will affect the status of such a person. And if that reason is likely to cause negative aspersions on the character, integrity or reputation of that person, then I consider that an opportunity should be given to that person to be heard before such a reason or reasons are relied upon as the basis for that decision.

9. In Gegeyo the plaintiffs were appointed as members of the Land Board for a period of one year. Eleven weeks into their terms the Minister revoked their appointments and appointed new members to replace them. They challenged the decisions and succeeded. The Court held that they each held a public office, that the decision to revoke their appointments affected their integrity and reputation so they each had a right to be heard on whether their appointments should be revoked, which was denied them by the summary revocation of their appointments.

Defendants’ submissions

10. Mr Alu, for the first defendant, Minister Hickey, submitted that the facts of the present case should be distinguished from those in Gegeyo and that there are good reasons for saying that the plaintiffs were not entitled to be heard. He submitted that the Rubber Board was a different sort of entity to the Land Board as it has a narrow statutory function. The Minister had the power under the Rubber Act to revoke the appointments at any time. There was no set procedure he had to follow. He did not have to be satisfied that the plaintiffs were guilty of any misconduct or misbehaviour.

11. The fact is that the plaintiffs were not qualified to hold the positions to which they had been appointed; they should not have been appointed in the first place. Minister Hickey was just correcting an irregularity created by his predecessor, Minister Zibe. There was no damage to the integrity or reputation of the plaintiffs as they were not alleged to have done anything wrong. The positions they held were honorary – they were not being remunerated, so the decision to revoke their appointments had no effect on their livelihoods. They lost nothing, Mr Alu submitted.

Statutory functions of Rubber Board

12. Mr Alu is correct when he points out that the Rubber Board has limited statutory functions. Unlike other commodity boards such as the Cocoa Board (established by the Cocoa Act Chapter 388), the Oil Palm Industry Corporation (established by the Oil Palm Industry Corporation Act 1992) and the Kokonas Indastri Koporesen (established by the Kokonas Indastri Koporesen Act 2002), the Rubber Board has no regulatory powers and lacks corporate status. It is just an appeal body. Its function is to hear appeals under Section 9 of the Rubber Act by owners or exporters of rubber against the classification of rubber by inspectors appointed under the Rubber Act.

13. However, I consider that the narrowness of its statutory functions actually puts the Rubber Board in a similar position to the Land Board, which is also an appeal body with no regulatory powers. This common feature of the Rubber Board and the Land Board makes the facts of the present case and those in Gegeyo look quite similar, as does the fact that in Gegeyo, like the present case, the Board members received no remuneration for their work.

Rubber Act silent on grounds and procedures for revocation

14. Another similarity is that under both the Rubber Act and the Land Act the grounds on which the appointment of a board member can be revoked are not spelt out. Nor is the procedure that has to be followed before an appointment is revoked.

15. Mr Emang, for the second defendant, the State, submitted that Section 36 (implied power to remove or suspend) of the Interpretation Act provides support for Minister Hickey’s actions. It states:

(1) Where a statutory provision confers a power to make an appointment, the power includes power, subject to Subsection (2), to remove or suspend a person so appointed.

(2) The power provided for by Subsection (1) is exercisable only subject to any conditions to which the exercise of the original power of appointment was subject.

16. Mr Emang asserted that Minister Hickey clearly had the power to revoke the plaintiffs’ appointments. This is a valid point but there is an important difference between having a power to do something and exercising it properly. It was never disputed in Gegeyo – just as in the present case – that the Minister lacked power to revoke the appointments. It was the procedure that he had to follow in exercising that power that was in issue.

Reputation, integrity, standing in the community

17. I have thus struggled to appreciate Mr Alu’s submission that the facts in Gegeyo can be distinguished from those in the present case in a material way. Perhaps it can be said that the Land Board members in Gegeyo were of a higher standing in the community than the plaintiffs and therefore they had a more tangible or valuable reputation to protect. But this is not a relevant point of distinction. Every person holding public office has a reputation capable of protection and I do not think the principle in Gegeyo should be read down to say that only high ranking, well known or famous people have a right to be heard.

18. The key principle emerging from Gegeyo is that if an administrative decision is likely to adversely affect a public office-holder’s reputation, integrity or standing in the community, they are entitled to the protection of the principles of natural justice: they should be given prior notice of the decision and should be given a right to be heard on why the decision should or should not be made. This is especially the case where the decision necessarily involves a finding of wrongdoing, misbehaviour, inefficiency or incompetence or some other adverse finding concerning the individual concerned. But the requirement for fairness, which is embodied by the principles of natural justice, is not restricted to those scenarios. If the person’s reputation is likely to suffer as a result of the decision there is a presumption that natural justice applies irrespective of whether the decision entails an adverse finding against that person.

Allegations against plaintiffs

19. As to Mr Alu’s submission that the revocation of the plaintiffs’ appointments did not implicate them in any wrongdoing and that their reputations were unaffected by the revocation of their appointments, this is very hard to accept in light of serious allegations made against them in the affidavits tendered in evidence by the defendants. In particular it was alleged that:

- Mr Wohengu, who was appointed as Chairman of the Rubber Board, is a senior officer in the Department of Foreign Affairs, so he is not qualified to be a member of the Rubber Board, let alone Chairman;

- Mr Wohengu acted illegally in May 2007 by issuing a licence authorising illegal buying and exporting of rubber cup-lumps, which is a raw material, unclassified and in violation of the Rubber Act, thereby destroying the reputation of PNG rubber on international markets;

- Mr Wohengu collaborated with Mr Joke in August 2007 to corruptly obtain K10,000.00 cash from a private investor involved in buying and processing rubber for export;

- Mr Baiyage stood as a candidate in the 2007 general election while holding the position of Deputy Chairman of the Rubber Board;

- Mr Baiyage is not involved in producing, processing or export of rubber and he does not represent any group of rubber processors or producers on the Board;

- Mr Joke has failed over a number of years to perform effectively as Head of the Rubber Section of the Department of Agriculture and Livestock;

- Mr Joke in his capacity as a member of the Rubber Board acted against ministerial directives on the ban on export of cup-lumps by encouraging and mobilising so-called investors to continue buying and exporting cup-lumps;

- Mr Joke, an officer of the Department of Agriculture and Livestock, is facing disciplinary charges.

- the plaintiffs had not in their time on the Rubber Board planned effectively for the rubber industry and had exercised powers in the name of the Rubber Board that they did not have. 

20. The above allegations are made in the affidavits of Philip Pondikou, Team Leader, Rubber Industry, Department of Agriculture and Livestock; Twain Pambula, Director, Personnel and Administration, Department of Agriculture and Livestock; and Warren Dutton, Chairman of the Rubber Board, one of the third defendants. There is no affidavit by Minister Hickey before the Court, which is strange as he is the first defendant and it is to be expected that he would have wanted to explain to the court the reasons for his decision. The allegations are repeated in Mr Alu’s extract of argument.

21. The only reasonable inference to draw is that the above allegations were the real reasons that Minister Hickey decided to revoke the plaintiffs’ appointments. Each allegation – including that Mr Wohengu and Mr Baiyage did not have the necessary qualifications – was serious and involved a challenge to the reputation and integrity of the plaintiffs. I reject the submission that the revocation of their appointments left their reputation and integrity unimpaired and that they lost nothing by revocation of their appointments.

Application of the principle in Gegeyo’s case

22. I can see no good reason for distinguishing the present case from Gegeyo’s case. The principle in Gegeyo has been applied in many decisions of the National Court, eg Sinamoi, Loko, Iewago & Kidu v The State and Minister for Finance and Planning (1995) N1298; Leo Nuia v The State (2000) N1986; Philip Aeava v The State (2001) N2136; and Martha Kokiva-Age v Lawyers Statutory Committee (2005) N2835. It has not been overruled by the Supreme Court and it seems that no decision of the National Court has questioned its validity. The principle is a sound one and gives effect to Section 59 of the Constitution which provides that the minimum requirement of natural justice is the duty to act fairly and in principle to be seen to act fairly.

23. It seems that the defendants have not understood the nature of the plaintiffs’ grievance that it is being prosecuted in this case. The purpose of the proceedings has not been to establish whether there was good reason for terminating the plaintiffs’ appointments. The court is not making a decision on whether the allegations against the plaintiffs are true. This is not an appeal against the Minister’s decision. The court is not deciding whether the plaintiffs are qualified to be members of the Rubber Board. The grievance of the plaintiffs is that they were not given prior notice of the Minister’s decision and were not given an opportunity to be heard – that they were not dealt with fairly. The purpose of the proceedings has been to determine whether the Minister had a duty to give them notice and give them a right to be heard – ie whether the Minister acted fairly.

Conclusion re ground 1

24. I conclude that the Minister had a duty to give the plaintiffs notice of his proposed decision and a duty to give the plaintiffs a right to be heard on whether their appointments should be revoked. He was obliged to set out the allegations against them and allow them a reasonable time to respond. He failed to do any of those things. He did not act fairly. Therefore the first ground of review is upheld.

2 DID THE MINISTER GIVE SUFFICIENT REASONS FOR REVOKING THE APPOINTMENTS?

25. It is part of the principles of natural justice and the duty to act fairly that once a decision is made the decision-maker must give good, proper and sufficient reasons for the decision. Two recent Supreme Court decisions have entrenched this principle: Ombudsman Commission v Peter Yama (2004) SC747 and Mision Asiki v Manasupe Zurenuoc (2005) SC797. It has been applied in numerous National Court decisions and has its genesis in Gegeyo’s case.

26. Applied to the present case the principle means that Minister Hickey had a duty, having made the decision to revoke the plaintiffs’ appointments, to notify them of the reasons for his decision.

27. I reject Mr Alu’s submission that the Minister’s letters of 14 March 2008 are evidence of compliance with this duty, for two reasons.

28. First, the Minister’s statement to Messrs Wohengu and Baiyage that their appointments were "not in line with" Section 7 of the Act (which provides that the Board consists of five members, two of whom must be "officers" and three of whom shall be "representatives of the rubber producers") is far too vague. It is a virtually meaningless statement.

29. Secondly, the Minister did not state the real reasons for his decision. The statement that the appointments were not in line with the Act was not the only reason for the decision. Likewise the statement to Mr Joke that his appointment was being revoked on the recommendation of the Departmental Head was only half true. The decision was, as a matter of fact, based on the various allegations against the plaintiffs summarised earlier, only some of which could be encompassed by the phrases "not in line with" the Act or "on the recommendation of" the Departmental Head. The duty to give proper reasons means there is a duty to provide the real reasons for a decision – a duty to candidly and transparently state the reasons. That duty was not complied with here.

30. The second ground of review is upheld.

3 WHAT DECLARATIONS OR ORDERS SHOULD THE COURT MAKE?

31. It is now time to consider the consequences of upholding the two grounds of review. It does not necessarily follow that the court will make the declarations sought by the plaintiffs (Aegaiya v Baki and The State (2009) N3693). This is a judicial review, which is a two-stage decision making process. First the plaintiff must establish one or more grounds of judicial review. If he succeeds, the second stage of the process is persuading the court that he should be granted a remedy (Dale Christopher Smith v Minister for Lands (2009) SC973).

32. Deciding on what remedies should be granted is a matter of discretion (Isaac Lupari v Sir Michael Somare (2008) N3476). One of the things the court must take into account is whether granting the remedies sought by the plaintiffs would achieve any practical purpose (Mision Asiki v Manasupe Zurenuoc (2005) SC797; Nilkare v Ombudsman Commission (1995) N1344; Kerua v Council Appeals Committee of the University of Papua New Guinea (2004) N2534). This is an important consideration as the plaintiffs’ three-year appointments will expire in less than two months time, on 17 October 2009. They have been out of office for 19 months, since January 2008. In the meantime the third defendants have been on the Board. There is evidence that the new Board has been doing a good job. It would appear to be disruptive to the work of the Board – and it may prove disruptive to the rubber industry – for the plaintiffs to be reinstated. They could only perform their duties as members effectively and with confidence for a short period before their terms of appointment expire.

33. On the other hand, it is not through any fault of the plaintiffs that their case has not been resolved until a short time before the date of expiry of their appointments. They filed their application for leave to seek review within a month after the Minister wrote to them notifying them of the revocation of their appointments. They appear to have acted reasonably diligently in getting their case prepared for hearing. So would it be fair to the plaintiffs to deny them the relief that they are seeking when they have not been shown to have done anything wrong?

34. Another thing to take into account is the extent of the illegality that the plaintiffs have proven. I think it is fair to categorise the extent of Minister Hickey’s violation of the principles of natural justice as very serious, even flagrant. The procedure used to revoke the plaintiffs’ appointments did not come close to compliance with what the law required. As the Minister did not defend his actions by preparing an affidavit the Court can only presume that he was poorly advised or that he did not seek legal advice on what he had to do to lawfully revoke the appointments. In either case this was a very poor administrative decision. There is a danger that if this sort of decision is allowed to remain in force the court will be condoning the disregard of the principles of natural justice.

35. Our Constitution espouses natural justice, good leadership, good governance and maintenance of the Rule of Law. It is those fundamental principles that have driven me to conclude that it is not appropriate or just that the Minister’s decision remains in force. The Minister’s decision was clearly unlawful and it must be quashed. As a consequence the plaintiffs must be reinstated to the Rubber Board and the appointment of the third defendants will be declared void. I will make formal orders in those terms and fix a specific time for the orders to take effect.

ORDER

(1) It is declared that the decision of the first defendant revoking the appointment of the plaintiffs and appointing the third defendants as members of the Rubber Board published in National Gazette No G17 of 31 January 2008 is void and of no effect.

(2) It is ordered for the avoidance of doubt that:

(a) the decision referred to in order (1) is quashed;

(b) the plaintiffs are reinstated as members of the Rubber Board;

(c) the appointment of the third defendants is void and they shall cease to hold office as members of the Rubber Board.

(3) Costs of these proceedings shall be paid by the defendants to the plaintiffs on a party-party basis to be taxed if not agreed.

(4) Other relief sought under the notice of motion filed on 16 April 2008 is refused.

(5) These orders and declarations shall take effect at 3.00 pm on 24 August 2009.

(6) Time for entry of the order is abridged to the date of settlement by the Registrar which shall take place forthwith.

____________________________

Williams Lawyers: Lawyers for the Plaintiffs
Joel Alu: Lawyer for the First Defendant 
Solicitor- General: Lawyer for the Second Defendant 
Warner Shand Lawyers: Lawyers for the Third Defendants