SC1078

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC REF NO 2 0F 2010

SPECIAL REFERENCE
PURSUANT TO CONSTITUTION, SECTION 19

IN THE MATTER OF THE DEED OF SETTLEMENT OF PROCEEDING WS NO 1315 OF 2002,

THE LAND ACT, THE WRONGS (MISCELLANEOUS PROVISIONS) ACT, THE PUBLIC FINANCES (MANAGEMENT) ACT 1995 AND THE ATTORNEY-GENERAL ACT 1989

REFERENCE BY

THE ATTORNEY-GENERAL AND PRINCIPAL LEGAL ADVISER TO THE NATIONAL EXECUTIVE

Waigani: Sakora J, Lenalia J, Mogish J,
Cannings J, Gabi J

2010: 25, 26 October

CONSTITUTIONAL LAW – special references under Constitution, Section 19 – objection to competency – whether reference in a proper form – whether signed by a referring authority – whether questions posed relate to interpretation or application of a Constitutional Law – whether Reference raises issues of already determined in other proceedings – whether res judicata applies to Section 19 references – whether the Supreme Court can and should decline to entertain a Section 19 Reference if it is an abuse of process. 

The Principal Legal Adviser filed a special reference to the Supreme Court under Section 19 of the Constitution seeking the Court's opinion on the constitutionality of a statement of claim in proceedings commenced in the National Court and a deed of settlement of that claim. The reference was comprised of four questions. The plaintiff in the National Court proceedings, who had entered into the deed of settlement with the Solicitor-General, was granted leave to join the reference as an intervener. He objected to competency of the special reference on seven grounds. This is the Court's ruling on the objection to competency. 

Held:

(1)	Ground 1 – that the reference was not in a proper form – was dismissed as the reference substantially complied with the Rules.

(2)	Ground 2 – that the reference was not properly signed – was upheld as the person who signed the reference did not hold the office of Principal Legal Adviser on the date of filing. 

(3)	Ground 3 – that the questions raised do not relate to interpretation of Constitutional Laws – was dismissed as the questions sufficiently related to application of such Laws.

(4)	Ground 4 – that the reference raises issues of fact already determined by the Supreme Court – was dismissed as there has been no prior determination of contested facts.

(5)	Ground 5 – that the reference raises facts that have not been determined by the National Court – was upheld as the reference requires the Supreme Court to act as a tribunal of fact.

(6)	Ground 6 – that the matter is res judicata as there is a previous Supreme Court decision on the issues – is dismissed as the issues have not been previously determined by the Supreme Court.

(7)	Ground 7 – that the filing of the reference is an abuse of process – is upheld as the referrer had adequate opportunity to raise the constitutional issues he now seeks to agitate in previous proceedings, but failed to do so, and instead agreed to settle those proceedings. 

(8)	The reference was not properly before the court, the objection was upheld, and the reference was dismissed as incompetent.

Cases cited

The following cases are cited in the judgment:

SC Ref No 3 of 2006; Reference by Fly River Provincial Executive (2007) SC917
SCR No 4 of 1987; Re Central Provincial Government and NCDIC [1987] PNGLR 249
Supreme Court Reference No 3 of 1999; Special Reference under Section 19 of the Constitution by the Ombudsman Commission re Sitting Days of the National Parliament (1999) SC628
Supreme Court Reference No 3 of 2000; Special Reference under Section 19 of the Constitution by the Governor-General re Sitting Days of the National Parliament (2002) SC722
Yer v Yama (2009) SC996

OBJECTION 

This was an objection to competency of a Constitution, Section 19 reference. 

Counsel

P Donigi, for the referrer
B Lomai, for the intervener

26 October, 2010

1. BY THE COURT: This is a ruling on an objection by the intervener, Peter Yama, to the competency of a special reference filed under Section 19 of the Constitution in the name of the Attorney-General and Principal Legal Adviser.

THE REFERENCE

2. It challenges the constitutional validity of a statement of claim in National Court proceedings Mr Yama instituted against the State in 2002, WS No 1315 of 2002, and a deed of settlement of that claim. 

3. The deed gave effect to an out-of-court settlement of WS No 1315 of 2002. The gist of Mr Yama's claim was that he had been granted a State Lease over land in Madang town in 1988 but traditional landowners had prevented him developing the land. He claimed that an officer of the State, the Secretary for Lands and Physical Planning, was responsible for what happened and that the State was vicariously liable. He sought damages of K38.69 million and settled the matter for K15.5 million by signing a deed of settlement. The then Solicitor-General, Mr Zachary Gelu, signed the deed on behalf of the State.

4. The constitutional challenge to the statement of claim and deed of settlement is made by putting four questions to the Supreme Court. The first three ask whether the statement of claim and deed of settlement are illegal and/or null and void for being contrary to the basic principles of government laid out in Parts II, III and VI of the Constitution and, in particular, for being contrary to specific provisions within those Parts, namely Sections 32, 41, 49, 53, 154-167, 197, 198 and 222(1). The fourth question asks simply 'Does the Solicitor-General have the power under any law to create new rules of law?'

5. Though the reference seeks our opinion on the constitutionality of a claim filed, and a settlement of that claim executed, in 2002, it is necessary, to fully appreciate the circumstances in which the reference has been filed, to record events that occurred in 2008, 2009 and 2010. 

6. By 2008 the State had not paid anything to Mr Yama pursuant to the deed of settlement. On 2 July 2008 he filed fresh proceedings, OS No 371 of 2008, seeking an order that the Secretary for Finance comply with the November 2002 deed of settlement and pay him K15.5 million. On the same day, he filed a notice of motion seeking an order by way of mandamus to compel the Secretary to release and clear a cheque for K7.75 million drawn in his name, forthwith. The matter came before Paliau AJ in the National Court on 3 July 2008 who on that day ordered immediate payment of K7.75 million to Mr Yama. 

7. The Secretary for Finance and the State obtained a stay order against the National Court order of 3 July 2008 and then won an appeal, SCA No 53 of 2008, to the Supreme Court against it (Yer v Yama (2009) SC996). In its decision of 30 October 2009 the Supreme Court quashed the order of 3 July 2008 and remitted OS No 371 of 2008 to the National Court. We are very familiar with the background of this matter as three of the five Judges who presently constitute this court (Sakora J, Mogish J and Cannings J) constituted the Court in that case.

8. After being remitted to the National Court, OS No 371 of 2008 was settled, not out-of court, but by a National Court-sanctioned consent order, made and entered on 15 April 2010, which relevantly states:

1.	The deed of settlement entered into between the Independent State of Papua New Guinea, as represented by Zachary Gelu, in his capacity as then Solicitor-General, and Peter Yama, dated the 28th November 2002 is a valid and legally binding document.

2.	The parties shall forthwith give full effect and meaning to the purpose and intent of the deed of settlement executed between the Independent State of Papua New Guinea and Peter Yama, dated the 28th November 2002, in respect of the National Court proceedings in WS No 1315 of 2002, Peter Yama v The Independent State of Papua New Guinea and Pepi Kimas, Secretary for Lands & Physical Planning.

9. The special reference that is now before us was signed by Dr Lawrence Kalinoe, as Attorney-General and Principal Legal Adviser to the National Executive, on 7 May 2010, just 22 days after the above National Court order was made. Dr Kalinoe filed the reference on 21 May 2010, two weeks after signing it. 

10. Mr Yama filed the notice of objection to competency on 27 May 2010. 

SECTION 19 OF THE CONSTITUTION

11. Section 19 allows a limited number of public authorities, including the Law Officers of Papua New Guinea (they are, under Section 156(1) of the Constitution, the Principal Legal Adviser to the National Executive, the Public Prosecutor and the Public Solicitor), to refer questions relating to the interpretation or application of any provision of a Constitutional Law to the Supreme Court for a binding opinion.

12. Section 19 (special references to the Supreme Court) states:

(1)	Subject to Subsection (4), the Supreme Court shall, on application by an authority referred to in Subsection (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.

(2)	An opinion given under Subsection (1) has the same binding effect as any other decision of the Supreme Court.

(3)	The following authorities only are entitled to make application under Subsection (1):—

(a)	the Parliament; and

(b)	the Head of State, acting with, and in accordance with, the advice of the National Executive Council; and

(c)	the Law Officers of Papua New Guinea; and

(d)	the Law Reform Commission; and

(e)	the Ombudsman Commission; and

(ea)	a Provincial Assembly or a Local-level Government; and

(eb)	a provincial executive; and

(ec)	a body established by a Constitutional Law or an Act of the Parliament specifically for the settlement of disputes between the National Government and Provincial Governments or Local-level Governments, or between Provincial Governments, or between Provincial Governments and Local-level Governments, or Local-level Governments; and

(f)	the Speaker, in accordance with Section 137(3) (Acts of Indemnity).

(4)	Subject to any Act of the Parliament, the Rules of Court of the Supreme Court may make provision in respect of matters relating to the jurisdiction of the Supreme Court under this section, and in particular as to—

(a)	the form and contents of questions to be decided by the Court; and

(b)	the provision of counsel adequate to enable full argument before the Court of any question; and

(c)	cases and circumstances in which the Court may decline to give an opinion.

(5)	In this section, "proposed law" means a law that has been formally placed before the relevant law-making body.

THE GROUNDS OF OBJECTION 

13. The notice of objection to competency sets out seven grounds of objection and we will deal with each one in turn.

GROUND 1: THE REFERENCE IS NOT IN A PROPER FORM 

14. The intervener argues that the form of the reference is defective in that it fails to comply with forms 1, 3 and 17 of the Supreme Court Rules. 

15. This ground of objection has little merit as the reference is substantially compliant with form 3 which, under Order 4, Rule 1(d) of the Supreme Court Rules, is the applicable form for a Section 19 reference. The only part of the form that is deficient is the end of the form, which omits a statement as to applications for directions. Form 3 of the Rules contains a cross-reference to form 1, which means that the following statement should have appeared:

Application for Directions

Application will be made to a Judge of the Supreme Court at Waigani at … am on the ………. day of …………

Registrar

16. We consider that this is a minor omission, which is of no prejudice to any person. It does not make the form defective. Nor does it render the reference incompetent. 

17. There is no merit in the argument that the reference fails to comply with form 1, as that form is only used when a court or tribunal makes a reference to the Supreme Court under Section 18 of the Constitution. 

Ground 1 of the objection is dismissed.

GROUND 2: THE REFERENCE IS NOT PROPERLY SIGNED

18. The intervener argues that the person who signed the reference, Dr Kalinoe, who at all material times held the office of Secretary for Justice, had no authority to make the reference to the Supreme Court as he did not, on the date of signing or on the date of filing of the reference hold the office of Principal Legal Adviser to the National Executive. 

19. Determination of this ground of objection requires us to make some findings of fact. There is sufficient evidence before the Court, to find that under the Attorney-General Act 1989:

•	Dr Allan Marat MP was Attorney-General and Principal Legal Adviser throughout 2009 and until 6 May 2010;

•	Dr Kalinoe was Attorney-General and Principal Legal Adviser from 7 to 14 May 2010;

•	Hon Ano Pala MP was Attorney-General and Principal Legal Adviser from 15 May 2010 to date.

20. This means that on the day the reference was signed – 7 May 2010 – it was properly signed by Dr Kalinoe as Attorney-General and Principal Legal Adviser. However, on the day it was filed – 21 May 2010 – Dr Kalinoe no longer held that office. He was the Secretary for Justice only. 

21. Mr Donigi urged us to consider Schedules 1.9 (provision where no time prescribed) and 1.10 (exercise and performance of powers and duties) of the Constitution but those aids to interpretation do not lead to any conclusion other than the obvious one: a special reference under Section 19(1) – or more precisely an application to the Supreme Court under Section 19(1) of the Constitution – is made when an authority files the reference or application in the Registry of the Supreme Court. On the date of filing, the person making the application must have authority to do so. For the purposes of this case, such authority comes from holding one of the offices in Section 19(3)(c). 

22. Section 19(3) of the Constitution prescribes the authorities entitled "to make application" under Section 19(1). The Secretary for Justice is not one of them. Thus, on the date that the application was made – which can only be the date of filing – Dr Kalinoe lacked authority to do so.

23. The intervener's argument that the reference was not properly signed is therefore upheld. What is the significance of this? Is it a minor matter of form? Or is it something that goes to the competence of the reference? The cases on point strongly suggest the latter. In SC Ref No 3 of 2006; Reference by Fly River Provincial Executive (2007) SC917 the Supreme Court struck out a Section 19 reference, which was filed in the name of a Provincial Executive, as the reference was signed by the referrer's lawyer. The Court followed its decision in SCR No 4 of 1987; Re Central Provincial Government and NCDIC [1987] PNGLR 249 where a reference was struck out for the same reason. The Court held that a rule stipulating who has to sign a reference actually reinforces the power and authority of a referring authority to make a reference. It is a check and balance against the making of bogus or unauthorised references. 

24. The signing requirement is, due to the very special nature of a Section 19 reference, critical. Kidu CJ and Wilson J explained why in SCR No 4 of 1987, in these terms:

A Section 19 reference is a very special proceeding. There are very few countries in the world whose constitutions allow certain authorities to seek the opinion of their highest Courts without there being any substantive legal action as the basis thereof. The Constitutional Planning Committee (CPC) recognized this and in recommending what is now Section 19 it said, inter alia, as follows:

"It is important, however, to regard the advisory opinion as a rather special procedure to be resorted to only in exceptional circumstances." (CPC Report, p 8/16.)

And the procedure is so exceptional that only a few public office-holders and institutions are allowed to use it, a Provincial Executive being one of these authorities. It is because of the special nature of a Section 19 reference that the authority which makes it must consider the matter and sign the reference. In the case of a Provincial Executive the matter should be considered by that body and the reference signed by either the Premier or a member of the Executive. Order 4, Rule 1(e) has added that the reference may be signed also by a "proper officer on behalf of the authority as required by law". We consider that this means two things: (a) that only a person employed by the Authority can sign the reference and (b) that there must be authorisation for such a person to do this on behalf of the Referring Authority.

So Order 4 is a special rule sanctioned by Section 19 of the Constitution. In our opinion, therefore, it cannot be allowed to be overridden by any general rule. It is also inherent in the wording of Order 4, Rule 1(e), that no other person other than those mentioned may sign a special Constitutional Reference.

25. The Court in SC Ref No 3 of 2006 adopted the above dicta as a correct statement of law and we do likewise. This reference has been put before the court and it is incumbent on the referring authority and his lawyers to ensure that the reference meets the requirements of the Rules. The signing requirement is something that goes to the validity of the reference. If the court is to hear and determine a Section 19 reference it must be satisfied that the jurisdiction of the court has been properly invoked and that the referring authority has made a considered decision to make the reference. The court can only be satisfied of those things if the reference is properly signed.

26. We confirm what the Court stated in SC Ref No 3 of 2006: it is necessary to insist on strict compliance with the signing requirement to preserve the integrity of the Section 19 procedure and to ensure that the power to make such a reference is properly controlled. 

27. The present reference, which was framed as a reference by the Attorney-General and Principal Legal Adviser, should have been made in the name of the person who held those offices on the day that it was filed – Hon Ano Pala MP – and signed by that person. The failure to comply with that critical requirement is a fatal defect, which renders the reference incompetent. 

GROUND 3: THE QUESTIONS RAISED DO NOT RELATE TO INTERPRETATION OF CONSTITUTIONAL LAWS 

28. The intervener argues that the four proposed questions are not concerned with interpretation of any Constitutional Laws and therefore the reference does not meet the requirements of Section 19 of the Constitution.

29. We agree that the reference is unusual in that the questions do not obviously require any particular interpretation of any Constitutional Law provision. Since Independence most Section 19 references have been challenges to the validity of Acts of the Parliament or Organic Laws on the ground that they offend against superior laws, especially the Constitution. We suggest that Section 19 has its greatest utility when it is used in that way.

30. Having said that, we see merit in Mr Donigi's submission that, on its terms, Section 19(1) is broad enough to encompass the sorts of questions being raised here. Section 19(1) obliges the Court to "give its opinion on any question relating to the interpretation or application of any provision of a Constitutional Law".

31. The reference seeks our opinion on the application of various provisions of the Constitution to a particular set of facts, so in that sense it complies with Section 19(1).

Ground 3 of the objection is dismissed. 

GROUND 4: THE REFERENCE RAISES ISSUES OF FACT ALREADY DETERMINED BY THE SUPREME COURT

32. The intervener argues that the reference invites the Court to revisit facts or make new findings of fact on issues that have already been determined in previous Supreme Court proceedings involving the State and the intervener: SCA No 53 of 2008, Yer v Yama (2009) SC996.

33. We see no merit in this argument as the previous Supreme Court proceedings were confined to an appeal against a ruling of the National Court requiring immediate payment by the State of money to the intervener. The appeal was determined on questions of law, not fact. There has been no prior determination of contested facts. 

Ground 4 is dismissed. 

GROUND 5: THE REFERENCE RAISES FACTS THAT HAVE NOT BEEN DETERMINED BY THE NATIONAL COURT

34. The intervener argues that the reference is based on a number of facts, which may be contentious and which have not been determined by the National Court.

35. It is another unusual feature of this reference that the proposed questions are based on very specific and detailed facts. Half of the seven-page reference is devoted to averments of fact. Some of these averments will inevitably be contentious, especially as – as emphasised by the intervener – there has been no determination of the facts by the National Court (or by the Supreme Court, explained in ground (4) above). 

36. This means that before the four questions could be authoritatively answered, we would have to make findings of fact. The Supreme Court is ill-equipped to do that and it would be most irregular to undertake the role of a tribunal of fact in the course of hearing a Section 19 reference.

37. We uphold this ground of objection: the reference is defective in that it requires the Supreme Court to make findings of fact not previously determined by the National Court. 

GROUND 6: THE MATTER IS RES JUDICATA 

38. The intervener argues that the issues raised by the reference are res judicata as the Supreme Court has already resolved them in the previous case, SCA No 53 of 2008, Yer v Yama (2009) SC996. Res judicata is a common law principle, adopted as part of our underlying law, which says that if the cause of action that a party wishes to prosecute in a case has already been determined in a previous case involving the same parties the court should decline to hear the matter. 

39. We note that it is open to the Supreme Court to decline to answer a question put to it in a Section 19 reference if the Court has already answered the question in a previous reference. For example, in Supreme Court Reference No 3 of 2000; Special Reference under Section 19 of the Constitution by the Governor-General re Sitting Days of the National Parliament (2002) SC722, it was held by a 5:2 majority that the Court had already authoritatively determined many of the issues involving the same parties, not long before. The previous case was Supreme Court Reference No 3 of 1999; Special Reference under Section 19 of the Constitution by the Ombudsman Commission re Sitting Days of the National Parliament (1999) SC628. The majority therefore declined to answer many of the questions raised on the ground of res judicata. 

40. As for the present case, we find that the doctrine of res judicata does not apply. The previous Supreme Court proceedings, SCA No 53 of 2008, were an appeal against a ruling of the National Court requiring immediate payment by the State of money to the intervener. The Supreme Court found error in the National Court's decision and remitted the matter to the National Court. The Supreme Court expressly declined to make a ruling on the enforceability or legality of the deed of settlement. There was no determination of the issues that the referrer wants settled by this reference.

Ground 6 is dismissed. 

GROUND 7: THE REFERENCE IS AN ABUSE OF PROCESS

41. The intervener argues that the reference is an abuse of process as it is an attempt to review decisions already made by the National Court and the Supreme Court on the enforceability of the deed of settlement.

42. We find merit in this argument as the only reasonable inference that can be drawn from the averment of facts in the reference and the nature of the four questions is that the referrer is challenging the constitutionality of the statement of claim made, and deed of settlement executed, in 2002. The referrer seeks to argue that the deed of settlement, in particular, is illegal and null and void, for various reasons. These are questions of law that could have been raised before the National Court by virtue of the Supreme Court's decision of 30 October 2009 to remit OS No 371 of 2008 to the National Court. The Attorney-General of the day chose not to raise those issues. There is no evidence that the Attorney-General gave any instructions to the Solicitor-General or the lawyers he had engaged for the purposes of those proceedings to raise these issues before the National Court. Quite the contrary. It appears that the then Attorney-General, Dr Marat, made a considered decision to settle the matter by agreeing to a consent order, which was endorsed by the National Court on 15 April 2010.

43. How can it properly be, then, that a little over a month after the National Court resolved the matter – by an order requiring the parties, including the State, to "forthwith give full effect and meaning to the purpose and intent of the deed of settlement … dated 28 November 2002" – the Attorney-General can seek to challenge the constitutionality of that deed of settlement through a Section 19 reference? 

44. The only proper way to 'undo' what happened in the National Court was, perhaps, to go back to the National Court with a slip rule application or perhaps to appeal to the Supreme Court against the order or seek review of it under Section 155(2)(b) of the Constitution, perhaps on the ground that the lawyer acting for the State in the National Court had no instructions to settle the matter (though we note that that appears not to be the case).

45. It is not a proper course of action, however, to commence fresh proceedings under Section 19 and to argue questions of law that the Attorney-General has had the full opportunity of raising before the National Court. This flies in the face of the principle of finality in litigation. It creates the spectre of citizens not being able to believe the word of the State when it agrees to settle a matter. No one could trust the State if this challenge is allowed to continue. The Section 19 reference is an abuse of process.

46. It is no answer to say, as Mr Donigi has asserted, that the Attorney-General and Principal Legal Adviser has a wide power under Section 19 to bring such questions of constitutional interpretation and application as he sees fit to the Supreme Court. It is not an absolute power. With all power comes responsibility. The power must be used with restraint and for proper purposes. If it is not, the Supreme Court will reject the reference. We are bound to do so as it is the duty of every court in the National Judicial System to safeguard its processes against abuse. 

47. It is also no answer to the complaint of abuse of process to say that if the Supreme Court fails to accept this reference and answer the questions in it, we will be countenancing or endorsing the unconstitutional and improper settling out-of-court of litigation involving the State. No. Nothing in this judgment says that the deed of settlement of 2002 was lawful or proper. Likewise, nothing in the judgment says it was unlawful or improper. These questions have not been argued, and we will not allow them to be argued as the Attorney-General has had a full opportunity to do so and has thrown away that opportunity.

48. The present Attorney-General and Principal Legal Adviser is bound by the conduct of his predecessors regarding the matter, which he is by this reference seeking to rejuvenate. No public office-holder, upon assuming office, can take the attitude of 'I don't agree with what my predecessor did, so I will ignore that and we will now do it my way', without consequences. 

49. We reiterate that if the present Attorney-General wants to undo what he thinks has been done improperly in the past, he must seek redress according to law. That means approaching the court in the correct manner and by proper and established processes, not by abusing the privileges that Section 19 of the Constitution confers on a select few public authorities. If the Supreme Court does not insist on its processes being respected and followed the Rule of Law will be bypassed. We will not have justice according to law. We will have justice according to whims and decrees. That would be a recipe for dysfunction and chaos and injustice. 

50. The abuse of process of which the Attorney-General and Principal Legal Adviser is guilty is serious and warrants the reference being dismissed as incompetent.

Ground 7 is upheld. 

CONCLUSION 

51. Three of the seven grounds of objection have been upheld. Two of them (Nos (2) and (7)) by themselves warrant dismissal of the reference. The inevitable consequence is that the reference must be dismissed. 

ORDER

1.	The objection to competency is upheld.

2.	The Special Reference is dismissed for being incompetent.

3.	The Referrer shall pay all the Intervener's costs of the Reference, on a party-party basis, to be taxed if not agreed.

Judgment accordingly.
______________________________________
Warner Shand Lawyers: Lawyers for the Referrer
Lomai & Lomai Attorneys: Lawyers for the Intervener