N6860
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS No. 303 of 2014

BETWEEN:
THE HON WILLIAM DUMA, LLB, LLM, CMG, MP as Member for Hagen Open and Chairman of Hagen Joint District Planning and Budget Priorities Committee 
Plaintiff

AND:
HON PAIAS WINGTI, CMG, MP as Governor of Western Highlands Province and Chairman of Western Highlands Joint Provincial Planning and Budget Committee 
First Defendant

AND:
HON FRANCIS AWESA, LLB CBD, MP, as Minister for Works
Second Defendant

AND:
DAVID WEREH in his capacity as Secretary for Department of Works
 Third Defendant

AND:
DAIRI VELE in his capacity as Secretary for Department of Treasury 
Fourth Defendant

AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

Waigani: Injia CJ
   2014: 29th August 

CONSTITUTIONAL LAW- Functions of Joint District Planning and Budget Priorities Committee (JDPBPC) under s 33A(3) of the Organic Law on Provincial and Local-Level Governments (OLPLLG) - Whether functions include disbursement of money other than "District Support Grants and other grants", allocated by the National Government directly to the Provincial Government for public works project in the province, comes within the functions of the JDPBPC- Organic Law on Provincial and Local-Level Governments, s 33A (3) (f).

Facts:

The National Government allocated to the Western Highlands Provincial Government the sum of K40 million for developmental projects (road works in Mt Hagen) under the 2014 National Budget. The money was paid directly to the Provincial Works Department in Mt Hagen under the instruction of the Provincial Government. The Plaintiff argued that the money was a form of grant which should have been paid to the JDPBPC for disbursement as it had been the practice in previous years.

Held:

The money was allocated by the National Government directly to the Provincial Government for public works project in Mt Hagen  under the National Budget; it is not a District Support Grant (DSP) or "other grant" that the JDPBPC has control over its disbursement under s 33A(3)(f) of the  Organic Law on Provincial and Local-Level Governments.

Cases Cited in the judgement:

Kiee Toap v The State & others (2004) N2731
Philip Takori v Simon Yagari (2008) SC905
(PNG Forest products Pty Ltd and Another v The State & Genia [1992J PNGLR 85.

Counsel:

Mr Nii, for the Plaintiff
Mr Manase, for the First Defendant 
Mr Koime, for the Second, Third, Fourth & Fifth Defendants 

ruling

29th August, 2014
		
1.	     INJIA CJ: This is an application made by the first defendant to dismiss the plaintiff's action pursuant to Order 12 rule 40 of the National Court Rules. The second, third and fourth defendants support the application. The plaintiff contests the application. Both parties relied on affidavits filed in support of their respective positions. Counsel made extensive submissions, both oral and written, last week I reserved my decision to give myself enough time to deliberate on those material and arguments. 

2.	    Having considered those submissions it is clear to me that the application is principally based on the first of three alternative grounds for dismissal of an action set out in 012 r 40, that is that the action does not disclose a reasonable cause of action. The principles governing this ground of dismissal are settled. There are numerous cases which discuss those principles including the Supreme Court decision in Philip Takori v Simon Yagari (2008) SC90S (Kirriwom, Gavara-Nanu and Kandakasi, JJ)  in which the main principles are canvassed. The Court in that case stressed the importance of a cause of action founded in law in the following terms: 

"It should follow therefore that, the issuance of any court proceeding does not grant any person with a cause of action. Instead, a cause of action forms the foundation for a claim and or a suit or court proceedings. Hence, no person can issue and successfully pursue any suit or proceeding in court unless he has a "claim" that is well founded in law and the law can have it enforced. Technically this is called having a "cause of action.”
 
3.	    I also prefer and quote a succinct statement of principle in Kiee Toap v The State & others (2004) N2731, which appears in the following passage: 

" If it is plain and obvious that the statement of claim, even if proved, will not entitle the plaintiff to what he is asking for, it is appropriate to strike out the proceedings on the ground that no reasonable cause of action is disclosed. But the procedure should be confined to cases where the cause of action is obviously and almost incontestably bad.  The plaintiff should not be driven from the judgment seat unless the case is unarguable (PNG Forest products Pty Ltd and Another v The State & Genia [1992J PNGLR 85.” 

4.	   The cause of action that the plaintiff brought is stated in proceedings commenced by an Originating Summons which, as required by the rules of Court, simply pleads the declaratory and other consequential relief sought without pleading the legal foundation upon which the various relief are claimed. For example, the principal relief claimed appears on paragraph 1 of the Originating Summons in the following terms: 
" A declaration that the sum of K40 million allocated in the 2014 National Budget is for the Hagen City Roads and rural feeder roads identified by the Hagen Joint District Planning and Budget Priorities Committee for the Hagen Open Electorate only ("the intended purpose") and none other.”

5.	   An action in tort or contract may be commenced by Originating Summons in cases where, inter alia, the Plaintiff seeks a declaration of a right or the sole question at issue is the construction of an Act or Instrument". It is obvious from the relief sought in the Originating Summons that the plaintiff is not seeking a declaration of a right conferred by law, he is not seeking the construction of any provisions of an Act or instrument because no such reference is made in the relief claimed set out in the Originating Summons and so on. It became apparent during arguments that there are matters of fact and the applicable law in this particular matter that should have been pleaded and pleaded properly and sufficiently pleaded. Only proceedings commenced by Writ of Summons or pleadings conducted on the Originating Summons would have brought out those matters. Such pleadings would have no doubt included any breach of statutory duties relied upon to bring the claim and seek the relief as required by the rules of Court. The plaintiff bears full responsibility for this failure to state cause of action in law that would form the legal basis or foundation and the facts in support of the relief claimed.
 
6.	   During argument, it became clearer that the action was founded on s 33A of the Organic Law on Provincial and Local Level Governments (OLPLLG) which provides as follows: 

“33A. JOINT DISTRICT PLANNING AND BUDGET PRIORITIES COMMITTEE 

(1)	There shall be established, in each district, a Joint District Planning and Budget Priorities Committee. 

(2)	The Committee shall consist of- 

(a) the Member of the Parliament representing the open electorate who shall be the Chairman of the Committee; and 
(b) {Repealed} 
(c) the heads of Local- Level Governments in the district or their nominees; and 
(d) any other members not exceeding three in number appointed by the Member for the Parliament representing the open electorate in consultation with the heads of the Local-Level Governments in the district. 

(2A) The Member of the Parliament representing the open electorate shall appoint one of the members of the Committee to act as Chairman of the Committee in the event of the absence of the Member representing the open electorate from a meeting of the Committee.
 
(3)	The Joint District Planning and Budget Priorities Committee shall have the following functions:- 

(a) to oversee, co-ordinate and make recommendations as to the overall district planning, including budget priorities for consideration by the Provincial and the National Parliament; and
(b) to determine and control the budget allocation priorities for the Local-Level Government in the district; and 
(c) to approve the Local-Level Government budgets for presentation to the Local-Level Governments and make recommendations concerning them; and 
(d) to draw up a rolling five year (5) development plan and annual estimates for the district; and 
(e) to conduct annual reviews of the rolling five-year development plan; and 
(f) to approve disbursement of District Support Grants and other grants. 

(4) The District Administrator shall be the Chief Executive Officer of the Committee. (emphasis is mine) 
(5) {repealed} 
(6) (repealed) 
(7) An act of Parliament shall make provision for other functions and powers of, and the administrative arrangements for the Committee.”
 
7.	   The functions of the JDPBPC are exhaustively and expressly set out in mandatory terms in s 33A (3). On a plain reading of this provision, by use of the conjunctive expression "and" that connects each of the functions set out in that provision, they are intended to be read as a whole. Paragraphs (a) to (d) inclusive comprise the first part that concerns budget planning and prioritization of projects to be undertaken and funded in the district.  The second part comprising paragraph (e) concerns the approval or disbursements of funds received in the form of specific grants for those prioritised projects. On a plain reading of this provision, the JDBPPC's function is limited to planning, prioritization and approval of" District Support Grants or grants" and no more. Section 95 (B) makes express provision for District Support Grants (DSG) funds of a fixed amount, which initially was K300,000 per annum but now stands at Kl0 million as a result of amendments made to that provision. During the hearing none of the parties were able to point out any other types of Grants provided in the OLPLLG or under any other law.
 
8.	   There is no question that the funds in question in these proceedings (K40 million) is not DSG funds nor is it some form of a grant of some sort. It is funds appropriated by the National Government under the National Government Budget appropriation in 2013 for the 2014 fiscal year designated for developmental projects for road works in the township of Mt Hagen.  The funds to the tune of K40 million were transferred by the Treasury Department to the Department of Works which in turn transferred them to the Engineering Division of the Department of Works in Mt Hagen to carry out the road works following normal procurement processes. The Engineering Division, a division of the Department of Works in the Western Highlands Province, it is said is the implementing arm or agency for provincial works carried out by the Western Highlands Provincial Government. 

9.	    It is not disputed that in the past, the JDPBPC, of which the plaintiff is its Chairman had requested and received funds for similar projects from the National Government under the annual budget appropriations by the Parliament. Those funds were paid by the National Government to the JDPBPC and funds remitted to the District Treasury and drawn upon and expended by the JDPBPC for capital works projects in the Mt Hagen township area. On this occasion, the JDBPC requested the National government for the funds, the Prime Minister responded favourably to the request at a public gathering in Mt Hagen and the funds were in fact budgeted for and released.
 
10.    There is some evidence also that funds were requested by the WHPG in its budget submission to the government for the same road works project and these funds were released.
 
11.	    The dispute is over what the plaintiff says is the release of those funds to the wrong person, body or authority which had not requested those funds and also against established practice. There is no dispute that the funds were paid by the Treasury Department to the Department of Works which paid over the funds to the Engineering Division of the Department of Works, Mt Hagen. The plaintiff says the funds should have been paid into the District Treasury to be disbursed by the JDPBPC in accordance with the existing practice. 

12.	   The first defendant contends the funds were not DSG funds or other grants to be paid into the district treasury. They were funds budgeted for road projects in the township of Mt Hagen which the Provincial Government was responsible for and funds requested for. The National Government transferred the funds to the Department of Works in accordance with the appropriation by the Parliament to be administered by the Western Highlands Provincial Works division through the Works Engineering Division. 

13.	   The case falls to be decided on the application of s 33A (3) of the OLNLLG because it is that provision that defines and vests the powers and functions of the JDPBPC over funds designated for the district. There is no question that both the JDPBP and the Provincial Government exercise concurrent responsibilities over road works carried out in the Mt Hagen Township and both can plan and submit budget estimates for those projects.  Section 33A (3) (a) - (d) inclusive provides for the JDPBPC's functions in terms of budget planning and prioritisation of projects for consideration by the National Government and the Provincial Governments. The only power given to the JDPBPC to approve disbursement of the funds it receives from those governments is limited to DSG and other grants. It has no other power over funds that do not come under the definition "DSG or other grants". I also consider that the past practices with regard to the disbursement of projects funds other than DSG and grants for capital works in the Mt Hagen area is no substitute for the requirements of the law governing functions of JDBPC over grants expressly spelt out in s 33A(3). 

14.	    I have thought long and hard about the nature of the claim pleaded and supported by the material placed before me by both parties. After this exercise, I am clear as to the law and the facts. Section 33A(3) in particular (e) is clear. The facts are clear. The K40 million is not DSG funds or other grants. It is not within the function of JBDPC to access development budget appropriations for capital works, in this case K40 million for developmental capital works project, that clearly do not come within the expression "DSG or other grants" in s 33A (3)(e).  To my mind, the plaintiff's claim for relief as stated in the Originating Summons and the affidavits filed in support clearly lack legal foundation. For this reason, I am satisfied that the claim is plainly and "obviously and almost incontestably bad."   Plainly this is a clear case in which the “claim ... is 'obviously and almost incontestably bad’ and unlikely to succeed even if the claim went to trial”. 

15.	    For the foregoing reasons, the plaintiff's claim is dismissed for disclosing no reasonable cause of action. 

16.	    I also for the same reasons dismiss the action as being an abuse of the Court process. Issues over disbursement of funds by the Government Department in whose responsibility the funds appropriated under appropriation by the National Parliament are placed under, should be more appropriately resolved through other forums and avenues provided by law for those funds to be managed and accounted for, instead of the Courts of law. There are enough avenues provided by law to resolve questions like the current one. Measures such as supervision over strict adherence to procurement processes prescribed by law, close scrutiny of project implementation schedules and progress payments to ensure value for money is received, an audit of works carried out and public funds expended, audit of accounts and financial records by the Government's audit authority, checks on expenditure of public funds by members of Parliament or public authorities through the Parliamentary Public Accounts Committee, reporting abuse of public funds and procurement process to investigating and prosecuting authorities the police and Ombudsman Commission, are some of those avenues provided for by law. Those processes are there to ensure that the funds are appropriated for their designated purposes and value for money is received from the implemented projects. Parties contemplating civil proceedings in Court over the procurement and disbursement of public funds should first exhaust those avenues and the civil court of law should be the last resort when all else have failed. Quick resort to the Courts of law without exhausting these in-built legal avenues, amounts to a abuse of court process.  The Court's speedy grant of relief, without considering these things, may perpetuate that abuse of court process.
 
17.	   For the foregoing reasons, I am satisfied that these proceedings are an abuse of Court process.
 
18.   The formal orders of the Court are these: 

(1) The first defendant's application to dismiss the proceedings is granted. 
(2) The entire proceedings are dismissed. 
(3) The interim restraining orders issued and extended to date are discharged forthwith. 
(4) The plaintiff shall pay all the defendants costs of these proceedings. 

__________________________________________________________
Harvey Nii Lawyers:  Lawyer for the Plaintiff 		
Manase Lawyers:       Lawyer for the First Defendant	 
Solicitor General:    Lawyers for the second, third, fourth and fifth Defendants