SC1534

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC (SR) NO. 7 OF 2014
& SC REFS NO. 1 AND 2 OF 2015

SC Ref No. 7 of 2014	Special Reference by the Attorney-General pursuant to Constitution, Section 19

SC Ref No. 1 of 2015	Reference by Justice Cannings pursuant to Section 18(2) of the Constitution.

References concerning the Powers, Functions, Duties & Responsibilities of the Public Prosecutor & Leadership Tribunals Under Division III.2 of the Constitution & Organic Law on the Duties & Responsibilities of Leadership

SC Ref No. 2 of 2015	Reference by Justice Makail pursuant to Section 18(2) of the Constitution

Waigani: Salika, DCJ; Kandakasi, Mogish, Kassman, Higgins, JJ.
2016:	29th April; 1st September

CONSTITUTIONAL LAW – Power of Ombudsman Commission to issue directions – whether to persons or entities not subject to the Leadership Code – power to direct leaders – whether extends ordering breach of contract by the State – whether leaders have the right to be heard before directions are given

CONSTITUTIONAL LAW – Ombudsman Commission required to give notice of proposed referral to Public Prosecutor – right of leader to be heard on question of referral

CONSTITUTIONAL LAW  – Public Prosecutor to decide to refer allegations to a Leadership Tribunal – Power to amend allegations – Failure to provide copies to leader of reasons for referral – Power to add new allegations – Role of Chief Justice

Cases Cited:

Albert Karo v. Ombudsman Commission of PNG [1995] PNGLR 547.
Application by John Mua Nilkare (1997) SC 536.
CL Toulik v. Andy Kuek (2006) SC876.
Chief Collector of Taxes v. Bougainville Copper Limited; Bougainville Copper Limited v. Chief Collector of Taxes (2007) SC853.
Constitution s19 and In the Matter of a Reference by the Public Prosecutor [1992] PNGLR 336; [1993] 2 Law Reports of the Commonwealth 114.
Chief Sir Michael Thomas Somare v. Chronox Manek, (2011) SC1118
Danny Kakaraya v. The Ombudsman Commission & The State (2003) N2478.
Dr Allan Marat v. Hanjung Power Ltd (2014) SC1357.
Diro v. Ombudsman Commission of Papua New Guinea (1991) N1385.
Electoral Commission of PNG v. Simon J Solo (2015) SC1467.
Eremas Wartoto v. The State (2015) SC1411.
In re Andrew Kumbakor [2003] N2363.
Inakambi Singorom v. Klaut [1985] PNGLR 238.
In re Constitutional (Amendment) Law 2008, Reference by the Ombudsman Commission of Papua New Guinea (2013) SC1302.
Jimmy Mostata Maladina v. Posain Poloh (2004) N2568
John Kua Nilkare v. Ombudsman Commission (1996) SC498.
Mairi v. Tololo [1976] PNGLR 125
Mision Asiki v. Manasupe Zurenuoc (2005) SC797.
Morobe Provincial Executive Council (2002) SC693
Motu Koita Assembly v. National Capital District Commission (2011) N4429.
Mondale Peali Naiya Ass Inc v. William Duma (2013) SC1220;
MRDC v. The Ombudsman Commission [2008] PNGLR 443.
Micah v. Lua [2015] PGSC 40.
National Capital Ltd v. Loi Bakanio (2014) SC1392.
New Britain Palm Oil Limited v. Vitus Sukuramu (2008) SC948.
Ombudsman Commission v. Peter Yama (2004) SC747.
Peter Aigilo v. The Independent State of Papua New Guinea (2001) N2102.
PLAR No. 1 of 1980 [1980] PNGLR 326.
Re The Leadership Code: In the Matter of a Special Reference pursuant to Grand.
Re The Leadership Code: In the Matter of a Special Reference pursuant to Grand.
Rimbink Pato v. Anthony Manjin [1999] PNGLR 6.
Re Raho Hitolo, Member of the Ombudsman Commission (2004) N2745.
Re Tribunal; Re the Hon James Eki Mopio [1981] PNGLR 416
Somare, In re reference by the Public Prosecutor [2011] PGLT 2 and [2011] PGLTI
Re Referral (2008) SC 1011.
Sakawar Kasieng v. Andrew Baigry (2004) N2562.
SCR Nos 12 and 12A of 1984; Joe Parakas v. The State [1985] PNGLR 224.
Severinus Ampaoi v. Bougainville Copper Ltd (2012) SC1166
Sir Michael T Somare & Ors v. Ila Geno & Ors and the Ombudsman Commission (2007) N3139.  
See Reference by the Public Prosecutor pursuant to s27(2)(E) of the Organic Law on Duties and Responsibilities of Leadership - in the matter of Hon Sir Moi Avei (2007) N4633.
SCR No. 1 of 2000; Re Morobe Provincial Government for and on behalf of the.
Re Public Prosecutor’s Power to Request the Chief Justice to Appoint a Leadership Tribunal (2008) SC1011.
The State v. Downer Constructions (PNG) Limited (2009) SC979.
The Mineral Resources Development Company Ltd v. The Ombudsman Commission of PNG [2008] PNGLR 443.
The Independent State of Papua New Guinea v. Barclay Brothers (PNG) Ltd (2001) N2090.
The State v. Achilles James Peni (2013) N5930.
Tkatchenko v. Dessy Magaru (2000) N1956.
Zachary Gelu v. Sir Michael Somare MP (2008) N3526.

Overseas cases cited:
A Solicitor v. Law Society (NSW) [2004] 216CLR 253.
Briginshaw v. Briginshaw (1938) 60 CLR 336
Ex parte Cousens; Re Blacket and Nor (1947) 47 SR (NSW) 145.
Hardcastle v. Commissioner of Australian Federal Police (1984) 53 ALR 595. 
Legal Practitioner v. The Law Society of the ACT [2015] ACTCA 20.
Moran v. Lloyds (1981) 1 Lloyds Reports 423.
NSW Bar Association v. Cummins (2001) 52 NSW LR 279. 
R v. White; ex parte Brynes (1963) 109 CLR 665.
Sankey v. Whitlam [1978] 142 CLR1.

Counsel:
Mr R J  Webb SC with Mr A Manase ,for Attorney General, Hon. Ano Pala, MP
Mr M Varitimos QC with Mr P Tabuchi, for the Prime Minister, Hon. Peter O’Neill, CMG
Ms T Twivey, for Secretary Finance, Dairi Vele
Mr V Narokobi with Mr M Efi, for Ombudsman Commission
Mr N Kubak with G Kubak, for the Public Prosecutor

JUDGMENT

1st September, 2016

1.	SALIKA, DCJ:	I have had the benefit of reading the draft judgments of my brothers Kandakasi and Higgins JJ. and I agree with their respective judgments for the reasons each have given.   I wish however, to make a few comments. 

2.	 My brothers have set out the factual background of the questions referred in detail and I need not repeat them.  They have also set out the referred questions and again I do not wish to restate them.  I will therefore go straight to my comments, starting with the Constitutional Provisions.

3.	The primary source of the powers and functions of the Ombudsman Commission is in Section 27 of the Constitution.  It provides:

“27.	RESPONSIBILITIES OF OFFICE.
(1) 	A person to whom this Division applies has a duty to conduct himself in such a way, both in his public or official life and his private life, and in his associations with other persons, as not–
(a)	 to place himself in a position in which he has or could have a conflict of interests or might be compromised when discharging his public or official duties; or
(b)	to demean his office or position; or
(c)	 to allow his public or official integrity, or his personal integrity, to be called into question; or
(d)	 to endanger or diminish respect for and confidence in the integrity of government in Papua New Guinea.
(2)	 In particular, a person to whom this Division applies shall not use his office for personal gain or enter into any transaction or engage in any enterprise or activity that might be expected to give rise to doubt in the public mind as to whether he is carrying out or has carried out the duty imposed by Subsection (1).
(3) 	It is the further duty of a person to whom this Division applies–
(a)	to ensure, as far as is within his lawful power, that his spouse and children and any other persons for whom he is responsible (whether morally, legally or by usage), including nominees, trustees and agents, do not conduct themselves in a way that might be expected to give rise to doubt in the public mind as to his complying with his duties under this section; and
(b)	 if necessary, to publicly disassociate himself from any activity or enterprise of any of his associates, or of a person referred to in paragraph (a), that might be expected to give rise to such a doubt.
(4)	 The Ombudsman Commission or other authority prescribed for the purpose under Section 28 (further provisions) may, subject to this Division and to any Organic Law made for the purposes of this Division, give directions, either generally or in a particular case, to ensure the attainment of the objects of this section.
(5)	A person to whom this Division applies who–
(a)	 is convicted of an offence in respect of his office or position or in relation to the performance of his functions or duties; o
(b)	 fails to comply with a direction under Subsection (4) or otherwise fails to carry out the obligations imposed by Subsections (1), (2) and (3),
is guilty of misconduct in office.”

4.	The Constitution s.28 then provides for an Organic Law to provide for the following matters.
“28. FURTHER PROVISIONS.
(1)	 For the purposes of this Division, an Organic Law–
(a)	 may give to the Ombudsman Commission or some other authority any powers that are necessary or convenient for attaining the objects of this Division and of the Organic Law; and
(b)	shall make provision for the disclosure to the Ombudsman Commission or some other authority of the personal and business incomes and financial affairs of persons to whom this Division applies, and of their families and associates, and in particular of interests in contracts with governmental bodies and of directorships and similar offices held by them (including powers to nominate directors, trustees or agents, or similar officers); and
(c) 	shall empower the Ombudsman Commission or some other authority to require a person to whom this Division applies to dispose of, or place under the control of the public trustee, any assets or income where this seems to be desirable for attaining the objects of this Division; and
(d)	 may prescribe specific acts that constitute misconduct in office; and
(e)	 may create offences (including offences by persons to whom this Division applies and offences by other persons); and
(f)	 shall provide for the investigation by the Ombudsman Commission or some other authority of cases of alleged or suspected misconduct in office, and confer on the Commission or authority any powers that are necessary or convenient for that purpose; and
(g)	shall establish independent tribunals that–
(i)	 shall investigate and determine any cases of alleged or suspected misconduct in office referred to them in accordance with the Organic Law; and
(ii)	 are required subject to Subsection (1A), to recommend to the appropriate authority that a person found guilty of misconduct in office be dismissed from office or position; and
(h)	 may make any other provision that is necessary or convenient for attaining the objects of this Division.
(1A)	An Organic Law may provide that where the independent tribunal referred to in Subsection (1)(g) finds that–
(a)	 there was no serious culpability on the part of a person found guilty of misconduct in office; and

(b)	public policy and the public good do not require dismissal,
it may recommend to the appropriate authority that some other penalty provided for by law be imposed.
(2)	 Where an independent tribunal referred to in Subsection (1)(g) makes a recommendation to the appropriate authority in accordance with that paragraph or with Subsection (1A), the appropriate authority shall act in accordance with the recommendation.
(3)	 For the purposes of Subsections (1)(g), (1A) and (2), “the appropriate authority”–
(a)	 in relation to–
(i)	 a person holding an office referred to in Section 26(1)(a), (b), (c) or (d) (application of Division 2); or
(ii)	a person holding an elective office that is declared under Section 26(3) to be an office to and in relation to which this Division applies, means the Head of State; and
(b)	 in relation to a person holding any other office to which this Division applies–means the appropriate appointing authority.
(4)	 An Organic Law may provide for the suspension from office of a person to whom this Division applies pending the investigation of any case of alleged or suspected misconduct in office by him.
(5)	 Proceedings under Subsection (1)(g) are not judicial proceedings but are subject to the principles of natural justice, and–
(a)	 no such proceedings are a bar to any other proceedings provided for by law; and 
(b)	 no other proceedings provided for by law are a bar to proceedings under that paragraph.”

5.	Section 29 of the Constitution provides:-

“29. Prosecution of misconduct in office. 
1.	Where the Ombudsman Commission or other authority referred to in Section 28(1)(f) (further provisions) is satisfied that there is a prima facie case that a person has been guilty of misconduct in office, it shall refer the matter to the Public Prosecutor for prosecution before a tribunal established under Section 28(1)(g) (further provisions).

2.	If the Public Prosecutor fails to prosecute the matter within a reasonable period, the Commission may prosecute it in his stead.”

6.	The next source of the powers and functions of the Ombudsman Commission especially its powers of referral for prosecution come from the Organic Law on Duties and Responsibilities of Leadership. Relevantly,   s.27 of the Organic Law on Duties and Responsibilities of Leadership provides:-

“27.	Tribunals.

(1)	If the Ombudsman Commission is satisfied that a person to whom this Law applies is guilty of misconduct in office, it shall refer the matter, together with a statement of its reasons for its opinion—

(a)	to the Public Prosecutor; or

(b)	to the appropriate tribunal referred to in Subsection (7).

(2)	If the Public Prosecutor considers that the matter should be proceeded with, he shall refer the matter, together with the statement of the Ombudsman Commission, to the appropriate tribunal referred to in Subsection (7).

(3)	Where a matter has been referred to the Public Prosecutor under Subsection (1) and the Public Prosecutor has failed to refer it to the appropriate tribunal or the Ombudsman Commission is of the opinion that the matter has not been properly referred to the appropriate tribunal, the Commission may refer the matter, together with a statement of its reasons for its opinion, to the appropriate tribunal referred to in Subsection (7).

(4)	The tribunal shall make due inquiry into the matter referred to it, with legal formalities and in strict compliance with the rules of evidence and the provisions of the Evidence Act, (Chapter 48), and may inform itself in such manner as it thinks proper, subject to compliance with the principles of natural justice.

(5)	 If the tribunal finds that a person to whom this Law applies is guilty of misconduct in office, it shall recommend to the appropriate authority that—

(a)	he be dismissed from office or position; or

(c)	as permitted by Section 28(1A) (further provisions relating to the Leadership Code) of the Constitution and in the circumstances set out in that subsection—some other penalty provided for by an Act of the Parliament be imposed.

(6)	The tribunal shall announce its decision in public, and shall send a copy of the decision to the Speaker, for presentation to the Parliament, and to the National Executive Council and, in the case of a Judge, a Law Officer or the Chief Magistrate, to the Judicial and Legal Services Tribunal.

(7)	For the purposes of this section—
‘the appropriate authority’ means, in relation to a person to whom this Law applies, the authority to whom, in accordance with Section 28(1)(g)(ii) or Section 28(1A) of the Constitution, a recommendation under that provision in relation to him should be made;
‘the appropriate tribunal’ means—
(a)	in the case of alleged misconduct in office by the Chief Justice—the tribunal referred to in Section 179 (removal from office of Chief Justice) of the Constitution; or
(b)	in the case of alleged misconduct in office by a Judge, a Law Officer or the Chief Magistrate—the tribunal referred to in Section 180 (removal from office of other Judges, etc.) of the Constitution; or
(c)	in the case of alleged misconduct in office by any other constitutional office-holder—the tribunal established by Section 3 of the Organic Law on the Guarantee of the Rights and Independence of Constitutional Office-holders; or
(d)	in the case of alleged misconduct in office by the Prime Minister—a tribunal appointed by the Chief Justice, consisting of a Chairman and two other members, all of whom must be—

(i)	Judges or former Judges of the National Court; or
(ii)	former Judges of the pre-Independence Supreme Court of Papua New Guinea; or
(iii)	Judges or former Judges of an equivalent court of a country that has a legal system similar to that of Papua New Guinea;
(e)	in any other case—a tribunal consisting of a Judge (who shall be the Chairman) and two senior magistrates appointed by the Chief Justice.

(8)	The Judicial and Legal Services Commission shall determine the matters referred to in Paragraph (d)(iii) of the definition ‘the appropriate tribunal’.”

7.	The Court needs to carefully look at the above mentioned provisions of the Constitution and the Organic Law on the Duties and Responsibilities of Leadership and interpret them as best as possible that reflects the intention of the drafters of the Constitution and the Organic Law on Duties and Responsibilities of Leadership.  When interpreting the provisions of the Constitution the Court should give proper meaning to the words or the provisions of the Constitution.

8.	At this juncture I will now attempt to answer the question referred by the referrers.
Questions referred by the Attorney General and Cannings, J.
“Is the Public Prosecutor  having formed the opinion that there is certain further evidence required before he can form the opinion that the Prime Minister should be referred to an appropriate tribunal:-
1.a)	entitled to request the OC to collate (or collect)further evidence and submit to  him or her to assist the exercise of power under s.27(2) of the Organic Law on the Duties and Responsibilities of Leadership?”
9.	Answer:	No, at this stage the Public Prosecutor is only required to consider the evidence in the matter, referred to it by Ombudsman Commission whether it is sufficient to proceed to prosecute.  If the evidence is sufficient, he or she must proceed to refer to an appropriate tribunal.  If the evidence is not sufficient he or she must decline to prosecute.  The Public Prosecutor must inform the Ombudsman Commission that he or she declines to prosecute the matter for lack of sufficient credible evidence.   
10.	After going through the provisions of the Constitution and the Organic Law, I am with respect convinced that the scheme for prosecution under the Leadership Code provisions is unique and is a special one, different from the prosecution scheme under the Criminal Code Act.   Prosecution under the Criminal Code starts off with police investigations and laying of charges, then at the District Court sitting as a committal court.  A person is committed to trial at the National Court or the District Court declines to commit.  The committal depositions are referred to the Public Prosecutor to lay the appropriate charges as disclosed by the evidence.  Before the trial commences at the National Court, the Public Prosecutor is at liberty to lay any charge that the evidence appears to warrant or to decline to lay a charge (see s.525 of the Criminal Code Act).

11.	Leadership Code prosecution is unique and different in that the Public Prosecutor is not given any power to reduce into writing a charge or charges or allegations for misconduct in office where the evidence appears to warrant. The Public Prosecutor is only tasked to prosecute the matter referred to him or her by the Ombudsman Commission who investigates the allegations against a leader. The Public Prosecutor must consider only that evidence in the matter. The Public Prosecutor cannot add or subtract anything to and from the matter referred by the Ombudsman Commission. That is why I am of the opinion that the Public Prosecutor is not entitled to request the Ombudsman Commission to furnish him or her with further evidence. The other reason the Public Prosecutor cannot ask the Ombudsman Commission to furnish further evidence is because once the Ombudsman Commission refers the matter to the Public Prosecutor, it (Ombudsman Commission) is functus officio on that matter. The Ombudsman Commission cannot go back to investigate.  That is why the Ombudsman Commission must be very careful in discharging its onerous and important role under the Leadership Code.  The Public Prosecutor‘s decision to proceed to prosecute must be made only from the evidence he or she is furnished with by the Ombudsman Commission. If relevant credible and cogent evidence is not there the Public Prosecutor must decline to prosecute.

12.	Section 27(1) of the Organic Law says if the Ombudsman Commission is satisfied that a leader is guilty of misconduct in office, it shall refer the “matter”, together with the statement of reasons for its opinion to the Public Prosecutor.

13.	The Constitution nor the Organic Law define what “the matter” is.  However bearing in mind the context in which “the matter” is referred to in this provision one would have to conclude that “the matter” referred to under Section 27(1) and (2) of the Organic Law means the allegations or the charges and evidence against the leader.  Together with the allegations,  the charges and the evidence the Ombudsman Commission is required to furnish the matter together with its statements of reasons as to why it is of the opinion that the leader is guilty of misconduct in office.

14.	The Ombudsman Commission is required to state the allegations or the charges and provide the evidence or material relied on to form an opinion that the leader is guilty of misconduct in office.  The Ombudsman Commission must give reasons why it formed the opinion that the leader was guilty of misconduct in office.  That in my respectful opinion is what Section 27(1) of the Organic Law entails.

15.	The next stage of that process under Section 27(2) is that the Public Prosecutor must consider “the matter”, that is the allegations and the charges against the leader and the reasons for the Ombudsman Commission in arriving at the decision that it was of the opinion that the leader was guilty of misconduct in office.  At this stage of the referral if the Public Prosecutor considers that the matter should be prosecuted, he or she must then refer the same “matter” that is the allegations, the charges and the evidence and the statements of reasons to an appropriate tribunal to be prosecuted. However, if the Public Prosecutor is of the opinion that vital evidence is lacking, he must decline to prosecute because s.27(2) of the Organic Law does not give him any authority or power to request further evidence from the Ombudsman Commission and for good reason because the Ombudsman Commission is now functus officio.  

16.	The Public Prosecutor’s role is to satisfy him or herself on the matter referred to him or her by the Ombudsman Commission that there is indeed sufficient reliable credible cogent evidence that the leader is guilty of misconduct in office.  In other words the Public Prosecutor must agree from his own independent assessment and consideration of the relevant evidence with the opinion of the Ombudsman Commission.  If the Public Prosecutor in his or her independent opinion does not agree with the opinion of the Ombudsman Commission, he or she must decline to prosecute the matter.  The matter ends there and the Public Prosecutor is functus officio.  

17.	In my opinion it is not open to the Public Prosecutor to request the Ombudsman Commission to reinvestigate the allegations of misconduct in office and gather more evidence because the Ombudsman Commission is functus officio once it refers the matter to the Public Prosecutor.  That is why the prosecution function of the Public Prosecutor under the Leadership Code is unique and special.

18.	The issue of a publicly announced request for additional material is a new development by the Public Prosecutor.  If Public Prosecutor considers that certain substantial and vital and material evidence is lacking, he or she must inform or advise the Ombudsman Commission of his or her position and decline to proceed to prosecute.  The Public Prosecutor cannot ask for further evidence because the Ombudsman Commission is by then functus officio on the matter.  The Public Prosecutor must decline under those circumstances to prosecute.  

19.	My answer to Question 1(a) is therefore – No – for the reasons given above.  

20.	Question 1.b) “Is the Public Prosecutor entitled to consider such further evidence before exercising his or her powers under s.27 (2) of the Organic Law on the Duties and Responsibilities of Leadership.”

Answer:	In the light of my answer to question 1(a) – it is not necessary 	for me to answer this question.

21.	Question 1(c)“Is the Public Prosecutor obliged to decline to bring proceedings under Part III – Division 2 of the Leadership Code.  Ss.26-31 Constitution for Misconduct in Office in relation to the Prime Minister?”

Answer:	- Yes.  The Public Prosecutor is obliged to decline to prosecute if the material evidence is lacking to proceed further.  The Public Prosecutor must make a firm decision to decline to prosecute and that decision must be made known to the Ombudsman Commission and the Leader concerned.  In this case the Public Prosecutor did not decline to prosecute, he instead asked for more evidence from the Ombudsman Commission relating to an allegation or allegations which he is not entitled to do.  The Public Prosecutor went ahead with the referral of the Prime Minister to the appropriate tribunal.  The referral was not the same matter referred to him by the Ombudsman Commission.  In my view he should have declined to prosecute the matter as it lacked credible and cogent evidence.

22.	Where the Public Prosecutor declines to prosecute for lack of evidence in the matter, he must inform the leader and Ombudsman Commission of his decision so that the Ombudsman Commission can consider whether to invoke s.27 (3) of the Organic Law to refer the matter itself to an appropriate tribunal and prosecute the matter.

23.	Question 2:	“Whether it is unconstitutional for the Public Prosecutor pursuant to s.27 (2) of the Organic Law on the Duties and Responsibilities of Leadership to refer to the appropriate tribunal as “the matter, an allegation which was not referred to the Public Prosecutor by the Ombudsman Commission unders.27 (2) of the Organic Law on the Duties and Responsibilities of Leadership?”

Answer:	Yes, it would be unconstitutional, unless the charge is a mere reformulation and not different in substance from the referred allegations.

24.	Question 3:	“If the answer to question 1 (a) and (b) is yes – is it unconstitutional for the appropriate tribunal referred to in s.27(7) of the Organic Law on the Duties and Responsibilities of Leadership to:-
(a)	Enquire into the ‘matter’ referred to it by the Public Prosecutor in relation to the Prime Minister.”

Answer:	My answer to Question 1 (a) and (b) is no.  It is therefore not necessary to answer this question. 

25.	Question 3 (b):	“Make a finding as to whether a leader is guilty of the allegation of misconduct in office.”

Answer:	My answer to Question 1(a) and (b) was – No.  It is therefore not necessary to answer this question.

26.	Question 3(c): 	“Make recommendation to the appropriate tribunal pursuant to s.27 (5) of the Organic Law on the Duties and Responsibilities of Leadership?”

My answer to Question 1(a) and (b) was No - It is therefore not necessary to answer the question.

27.	Question 4:	“If the answer to Question 1(c) is “Yes”, is it constitutional for the appropriate tribunal to:-

(a)	Enquire into the “matter” referred by the Public Prosecutor in relation to the Prime Minister.”

Answer:	My answer to Question 1(c) was “Yes” meaning the Public Prosecutor was obliged to decline to bring proceedings against the leader because some vital evidence relating to the matter was missing.  The Public Prosecutor’s involvement terminates there and is functus officio. 

28.	Question 4 (b):	“Make a finding as to whether the leader is guilty of the allegation of misconduct in office?”

Answer:	My answer here following on from the answer to question 4(a) above would be that it is not necessary to answer this question because the Public Prosecutor is obliged to decline to prosecute the matter for lack of evidence.

29.	Question 4 (c):	“Make recommendations to an appropriate authority under s.27 (5) of the Organic Law on the Duties and Responsibilities of Leadership?”

Answer:	The question does not arise following answers to 4(a) and (b) above where the Public Prosecutor declines to prosecute the matter before the appropriate tribunal.

30.	Question 5:	“If the answer to Question 2 is “Yes” whether it is unconstitutional for the appropriate tribunal to:-

a)	Enquire into the matter referred to it by the Public Prosecutor in relation to the Prime Minister.”

Answer:	Yes, it would be unconstitutional for the appropriate tribunal to enquire into a matter referred to it by the Public Prosecutor  which was not the same matter referred to the Public Prosecutor by the Ombudsman Commission.  The question of jurisdiction will arise.  

31.	Question 5 (b):	“Make a finding as to whether the leader is guilty of the allegations of misconduct in office?”

Answer:	No - It would be unconstitutional if what the tribunal has before it is a matter not referred by the Ombudsman Commission.

32.	Question 5 (c):	“Make recommendation to the appropriate authority under s.27 (5) of the Organic Law on the Duties and Responsibilities of Leadership?”

Answer:	No - It would be unconstitutional if what the tribunal has before it is a matter not referred by the Ombudsman Commission.

Questions Referred by Makail, J:

33.	Question 1:	“Whether the Ombudsman Commission, in circumstances referred to in the reference has lawful authority, power and jurisdiction to have made a decision to issue the notice or direction dated 14 March 2014 to the Prime Minister and others?”

34.	Answer:	I have read Kandakasi, J’s comprehensive opinion on this question and respectfully agree with his views.

The Ombudsman Commission has lawful authority and power to issue notices and directions to the Prime Minister, other State Ministers. Departmental Heads and heads of government agencies covered under the Leadership Code under s.27 (4) of the Constitution.  However, those directions and notices must be for the purposes of attaining the objectives of the Leadership Code that is to ensure the leader does not place himself in a position in which he could have a conflict of interest or be compromised when discharging his official duties, not to demean his office or position or diminish respect for and confidence in the integrity of government in Papua New Guinea.   It has an obligation to inform all participants involved in the loan and share purchases agreement and copy them the same notices and directions directed to the Prime Minister and others under the Leadership Code.  The purpose is to inform others not covered under the Leadership Code to ensure that all parties, those covered under the Leadership Code and those not covered are acting within the laws and Constitution of Papua New Guinea.  The Constitution and the laws of Papua New Guinea apply to everyone, regardless of whether a person is a leader or not.  Those not covered under the Leadership Code must ensure that their conduct and actions do not offend against any law when in negotiations concerning the loan and share purchase agreements.

35.	The Ombudsman Commission  is  therefore in appropriate cases obliged to inform the Prime Minister and others who come under the Leadership Code including the  participants, not covered under the Leadership Code but involved in the loan and share purchase agreement of the constitutional and legal requirements and ramifications for noncompliance  with the laws of Papua New Guinea.

36.	The Directions issued under s. 27(4) of the Constitution were in relation to negotiations on the loan and share purchases agreement with the aim of bringing to the attention of those involved in the negotiations to comply with the Laws of Papua New Guinea.  In this case, the Direction issued on 14 March 2014 were invalid.

37.	In relation to Questions 2, 3, 4, 5 and 6 of the questions referred by Makail, J I agree with answers given by Kandakasi, J and Higgins, J in their respective drafts.

38.	KANDAKASI J:  I have had the privilege of reading the draft judgment of my brother Higgins J, with which I agree in most respect for the reasons he has given, save for a few aspects. I will thus offer my comments or reasons of my own and answer the questions before us.

39.	Before us a three Constitutional References, one each by the Attorney-General, the Honourable Ano Pala MP (AG) and Justices Cannings and Makail JJ., respectively. They raise a number of Constitutional questions which concern and arise out of the much talked about Union Bank of Switzerland AG (Australian Branch) loan (UBS Loan), related Ombudsman Commission (Ombudsman) directions and Leadership Code proceedings against the Prime Minister, Peter O’Neil.  The questions can be summed up as follows with those raised by the AG and Canning J.’s references treated as one since they raise the same questions:

A.  Reference by the AG and Cannings J

“(1)	Is the Public Prosecutor, having formed the opinion that there is certain further evidence required before he can form an opinion that the Prime Minister should be referred to an appropriate tribunal:

(a)	Entitled to request the Ombudsman Commission to collate (or collect) further evidence and submit same to him or her to assist in the exercise of his powers under s.27(2) of Organic Law On Duties and Responsibilities of Leadership (OLDRL)?

(b)	Is the Public Prosecutor entitled to consider such further evidence before exercising his or her powers under s. 27 (2) OLDRL?

(c)	Is the Public Prosecutor obliged to decline to bring proceedings under Division III.2 of the Leadership Code, ss. 26 -31 of Constitution for misconduct in office in relation to the Prime Minister?
	
(2)	Whether it is unconstitutional for the Public Prosecutor to refer under s.27(2) of the OLDRL to the appropriate Tribunal as ‘the matter’ an allegation which was not referred to the Public Prosecutor by the Ombudsman Commission under s.27(1) of the OLDRL?

(3)	If the answer to questions (1)(a) and (b) is ‘yes’, is it unconstitutional for the appropriate tribunal referred to in s.27(7) of the OLDRL to:

(a)	enquire into the ‘matter’ referred to it by the Public Prosecutor in relation to the Prime Minister;

(b)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(c)	make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL?

(4)	If the answer to question 1(c) is ‘yes’, is it constitutional for the appropriate tribunal to:

(a)	enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister; 

(b)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(c)	make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL?

(5)	If the answer to question (2) is ‘yes’, whether it is unconstitutional for the appropriate tribunal to:

(a)	enquire into the ‘matter’ referred to it by the Public Prosecutor in relation to the Prime Minister;

(b)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(c)	make recommendations to the appropriate authority pursuant to s.27(5) OLDRL?

B. Reference by Makail J

(1)	Whether the Ombudsman Commission, in the circumstances referred to in the reference, has lawful authority, power and jurisdiction to have made a decision to issue the notice or direction dated 14 March 2014 to the Prime Minister and others?

(2)	Whether a failure to comply with the notice or direction dated 14th March 2014 is misconduct in office, on the proper interpretation and application of s.27(5)(b) of the Constitution.

(3)	If the answers to (1) and (sic ‘or’) (2) above is ‘yes’, does the Ombudsman Commission have authority power and jurisdiction to impose penalties under s.28(1)(g)(ii) of the Constitution, s.27(5) of the OLDRL and (sic - ‘or’) s.2 of the Leadership Code (Alternative Penalties) Act.

(4)	Whether the Ombudsman Commission is required to comply with s.59 of the Constitution by providing the minimum requirement of natural justice to act fairly and, in principle, to be seen to act fairly before:

(a)	making any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea citizens.

(b)	issuing a notice or direction under s.27(4) of the Constitution.

(c)	having made the decision and issued the notice of direction dated 14th March 2014.

(d)	issuing a letter dated 23rd May 2014 to Mr. Dairi Vele, the Acting Secretary of the Department of Treasury.

(e)	Referring a leader for misconduct in office pursuant to s.27 OLDRL.

(5)	Whether the Ombudsman Commission has lawful authority, power and jurisdiction to:

(a)	make any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea or its citizens;

(b)	issue a notice or direction under s.27(4) of the Constitution;

(c)	make a decision and issue the notice on (sic – ‘of’) direction dated 14 March 2014;

(d)	issue a letter dated 23 May 2014 to Mr. Dairi Vele, Acting Secretary of the Department of Treasury; or

(e)	refer a leader for misconduct in office pursuant to in office pursuant to s.27 of the OLDRL.

(6)	Whether on the proper interpretation of s.225 of the Constitution, it is not a mandatory requirement in all circumstances, that where a law provides for consultation between persons or bodies, the consultation must be meaningful and allow for a genuine inter-change and consideration of views, particularly given the qualifying works (sic ‘words’) ‘in principle’ in s.225(sic ‘255’) of the Constitution.”

Relevant Facts

40.	The relevant facts giving rise to these questions are not in dispute.  They start in 2009, when the then Somare Government, through the IPBC obtained from a foreign company, International Petroleum Investment Corporation (“IPIC”) a loan to purchase the State’s interest in the PNG LNG project through the issuance of an Exchangeable Bond. The loan was secured by the State’s shares in the Oil Search Limited as well as a mortgage over all the State owned Enterprises’(SOE) assets.  It was a term of the loan that IPIC could take on the maturity date in repayment of the loan either the shares, cash and shares or just cash. IPIC had to make an irrevocable election 2 weeks prior to the maturity date as to what it wanted in repayment. 

41.	The maturity date of the Bond was 5th March 2014.  As that deadline was approaching, the O’Neill Government, searched for a financing institution to re-finance the IPIC loan to enable the State to redeem its shares, the SOE’s assets and its interest in the PNG LNG Project.  After seven months of searching, the Government came up with the USB loan with advice from the Central Bank and Department of Treasury and with State Solicitor’s legal clearance.   On the date of notice however, IPIC advised they would take the shares in Oil Search in repayment of the loan.  That meant the State and hence the people of PNG would have no shareholding interest in the PNG LNG Project.

42.	The Government’s policy has always been to retain shares in Oil Search. So instead of paying IPIC back with cash, a lesser amount was sought to be borrowed to purchase ten point one percent (10.1%) shareholding in Oil Search, as opposed to the original thirteen point one seven percent (13.17%).  A 10.1% share in Oil Search prevents any foreign takeover of Oil Search. Oil Search is the biggest company in PNG and in the top 25 on the Australian Stock Exchange. To lose Oil Search to overseas interests would come with the risk of Oil Search ceasing to be a PNG based company which could have adverse consequences on the country’s economy, in terms of possible income and other taxes and job losses.  Taking up shares in Oil Search was consistent with successive Government’s policies, which is for PNG to not only receive royalties and taxes but, to also become equity participant for the benefit of the people of PNG.

43.	On 23rdFebruary 2014, Oil Search advised the State that it intended to raise capital through a placement of shares and raised the option of selling these shares to the State. The new placements of Oil Search Shares were of the same class, and identical to those shares held under the exchangeable bond.  Three days later, on 26thFebruary 2014, the Prime Minister wrote to the Managing Director of Oil Search and confirmed that the State was willing to participate in the new placement of shares for the amount of $AUD1.225 billion at a price of AUD$8.20 per share but subject to, inter alia, “PNG Government receiving formal approval from PNG’s National Executive Council.” The transaction documents between the State and UBS and the State and Oil Search were then prepared by the legal representatives of the parties. The Department of Treasury coordinated the preparation of the relevant documents. A few days later on 5thMarch 2014 the transaction documents were provided to the State Solicitor Mr. Daniel Rolpagarea. The State Solicitor provided a response to Secretary Vele, indicating inter alia that the Secretary could take the documentation to the NEC bearing in mind legal advice he provided on the matter.  All this happened as the State’s original 13.17 % ownership in Oil Search went over to IPIC in accordance with the Somare Government’s loan agreement with IPIC. 

44.	On 6thMarch 2014, NEC approved the borrowing of USD$1.249 billion to purchase 149.39 million shares in Oil Search, and such a borrowing to be secured solely by the shares themselves.  Initially, the State would be the subscriber but within three months of the transaction, it would pass on the shares to its 100% owned and controlled company Petromin and the debt would be off balance sheet and refinanced. The shares were to be purchased for a price of AUD$8.20 instead of then market value on the day of AUD$8.55. Unlike with the IPIC deal, no SOE’s assets were mortgaged.

45.	Despite the Cabinet’s approval, the then Treasury Minister, Honourable Don Polye refused to sign the requisite documents.   He approved the purchases with the UBS loan but took issue with the State being the original subscriber.  His preference was for Petromin to be the initial subscriber and not the State itself.  At that point the Minister appeared to have failed to understand the relevant trading deadlines on the Australian Stock Exchange (ASX) and the fact that approvals for the State had already been given by UBS. Delay in proceeding with the purchase of the shares came with the risk of PNG missing out on the shares purchases and having a meaningful stake in Oil Search and hence the PNG LNG Project.  On 4th March 2014, Oil Search had announced a halt in trading which according to the ASX trading rules allowed only 48 hours of cessation of trading.  The deadline was 5pm on 6th March 2014 after which Oil Search had to notify the Stock Exchange of a major purchase.  The State’s purchase of the Oil Search shares were going to and indeed assisted Oil Search to buy into the next major LNG Project, the Elk Antelope LNG Project.

46.	Soon after the NEC approval on 6th March 2014 of the UBS loan, Secretary Vele sent a memo to Minister Polye setting out the effects of the NEC decision and the directions that had been given to the Minister regarding the execution of relevant documents. Minister Polye refused to sign the documents and he gave his reasons in a letter he wrote to Secretary Vele on 9thMarch 2014.  He insisted on the loan being processed through Petromin.  The next day, 10th March 2014, the Prime Minister decommissioned Minister Polye and the treasury portfolio reverted to the Prime Minister. The Prime Minister then acted on the NEC decision and executed the relevant documents for the UBS loan and purchase of shares in Oil Search.   That enabled completion of all of the relevant transactions or steps that needed to be taken to conclude the loan agreement and the purchase of shares in Oil Search.  Following that, on 12th March 2014, Oil Search informed the ASX of the completion of share placement of 149,390,244 fully paid ordinary shares to the Independent State of Papua New Guinea which had occurred that day.  This notification, announcement and information is publically available on the ASX Website. 

47.	On 14thMarch, 2014, the Ombudsman issued a Direction pursuant to section 27(4) of the Constitution (14th March 2014 Direction).  That Direction was directed to the Prime Minister, Members of the NEC, Minister for Treasury, Minister for Finance, Secretary of the Department of Finance, Secretary of the Department of Treasury, the Attorney-General, Secretary for Department of Justice & Attorney General, the Governor of the Bank of PNG, Petromin Holdings (PNG) Limited, Independent Public Business Corporation (IPBC), Port Moresby Stock Exchange Limited, Oil Search (PNG) Limited, and UBS Nominees Pty Ltd.

48.	The rest of the Direction in relevant parts read:

“Each of you is hereby directed pursuant to section 27(4) of the Constitution to, immediately upon receipt of this direction:

1.	Stop all further transactions in relation to the loan arrangements with UBS Nominees Pty Ltd ABN 32 0011 450 522 and UBS AG, Australia Branch ABN 47 088 129 613 and freeze the alleged loan arrangement with USB Nominees Pty Ltd ABN 32 0011 450 522 and UBS AG, Australia Branch ABN 088 129 613; and 

2.	Freeze all further loan arrangements with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 088 129 613 and their agents in PNG and abroad;

3.	Freeze all further correspondence on the alleged loan arrangements with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 088 129 613; and

4.	Freeze all further correspondence with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 088 129 613 in PNG and their agents on alleged loan arrangements with UBS Investment Bank; and

5.	Take all necessary steps to ensure that the alleged loan arrangements with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 088 129 613, directly or through their agents in PNG and anywhere abroad and do not progress further in any form, manner or style”.
49.	On 10th April 2014, Hon. Polye filed proceeding numbered OS142 of 2014 seeking declaratory orders in the National Court that the loan was non-compliant with s. 209 of the Constitution and sought to have it declared void, and further that he be re-instated as Minister for Treasury. On 8thMay 2014, the National Court dismissed those proceedings on the basis that they were an abuse of the Court’s process.  At the same time, the National Court made a finding that the loan transaction had been completed and that there was nothing left for the 14thMarch 2014 Direction to stop. 

50.	On 16th May 2014, an interest payment was due on the UBS loan. Secretary Vele wrote to the Ombudsman Commission on 14thMay 2014 and informed it that the State would be making the interest payment.  The Secretary explained that a failure to make such interest payments would place the Government and the people of Papua New Guinea in very bad situation and they would be defaulting on a loan repayment for the first time since Independence.  He also informed the Ombudsman of the National Court’s finding in OS 142 of 2014 that the transaction was completed and that there was nothing left to stop.  Additionally, he informed the Ombudsman that, legal advice provided to him was to the effect that a failure to pay the interests on 16th May 2014, would constitute an act of default by the State and would result in enforcement procedure commenced by UBS. Further, the Secretary informed the Ombudsman that a default under the UBS Loan would most likely have broader adverse ramifications for the State and its people. Loans to the State from multilateral institutions, such as the World Bank and ADB, typically include cross default provisions. A default under the UBS Loan would most likely trigger cross defaults under such other arrangements which could have significant adverse implications for the economic development of the State and its people, and could adversely affect the sovereign credit ratings of the State and have significant adverse implications for the value of the Kina, and the ability and cost of the State and its subsidiaries to borrow from banks and international institutions. To avoid these possible adverse consequences, the Secretary informed the Ombudsman that the State would be making the interest payments in accordance with the loan agreement. 

51.	By letter dated 14th May 2014 which the Secretary received on 15th May 2014, the Ombudsman informed the Secretary it was an independent body which was not subject to any direction by anyone including the Court.  It would thus analyse the situation and then write back to Secretary with its formal response to his letter.  Following no further formal response from the Ombudsman, the Secretary made the interest payment on 16th May 2014. Eventually, on 26thMay 2014 however, the Department of Treasury received a letter from the Ombudsman dated 23rd May 2014. 

52.	The letter stated, inter alia:

“…The Commission is concerned that legal and financial process and procedures may not have been complied with.”

2. Such legal and financial processes includes consultation with the relevant State Agencies, especially for an offshore loan of such magnitude. The Commission is quite concerned that there were no relevant consultation with the Relevant State Agencies, person and bodies as a legal and constitutional requirements under Section 255 (Constitutional) of the Constitution, between persons and bodies. The consultation must be meaningful and allow for genuine interchange and consideration of views.

It is the Ombudsman Commission’s duty to ensure that those who are leaders involved are not in breach of the Leadership Code. Hence the Ombudsman Commission Constitutional Direction was effectively issued within the scope of Section 27(4) of the Constitution.  

3. The Commission also determined that it was necessary for the issuance of the Constitutional Direction under Section 27(4) of the Constitution, particularly in this case to ensure that matters pertaining to the circumstances surrounding the State’s acquisition of 149,390,244 (10.1%) shares of Oil Search Limited and related matters, do not proceed whilst the Ombudsman Commission’s investigations are on foot. 

The thrust of Section 24(7) Constitutional Direction, is that the State freezes all further progress on the UBS AG Loan Transaction including interests payments and the Directions will continue to apply until further notice from the Ombudsman Commission.”
53.	Secretary Vele considered the above letter from the Ombudsman and obtained legal advice.  Then based on his legal advice, the Secretary responded by letter dated 5thJune 2014.  That letter set out in detail why each alleged legal breach was incorrect and why the Ombudsman did not have powers to prevent the State from conducting its business and from complying with binding loan agreements. 

54.	The loan interest payments on the UBS Loan for the purchase of the Oil Search shares are due on or before the 16th of each month. The next interest payment was due on 16thJune 2014 in the sum of AUD$2,490,161.47. The National Court proceedings OS (JR) No. 383 OF 2014 were commenced on 6thJune 2014.The Application for Leave and Stay were argued inter partes on 11 June 2014.Leave for Judicial Review of the decision to issue the 14th March 2014 Directions and a stay was granted of such decision on 16th June 2014. Interest payments have been continuing since.

55.	On 11th August 2014, an instrument titled “Referral of a Leader for Prosecution” was signed by the Chief Ombudsman and an Ombudsman.  By that instrument, “the matter” the Ombudsman sought to refer related to three (3) specific allegations against the Prime Minister without providing any reasons for that decision.  The allegations were:

(1)	The Leader failed to comply with administrative and financial processes including the normal overseas borrowing process in the approval of PGK3 billion loan from Union Bank of Switzerland AG (Australian Branch); and
(2)	The Leader having made media release on the sacking of Mr Don Pomb Polye as the Minister for Treasury by saying that Mr. Polye caused instability in the Government, when the actual reason was to do with Mr Polye’s refusal to sign the UBS Loan Deal which the Prime Minister had unilaterally approved on 6 March 2014; and
(3)	The Leader made a misleading statement on EMTV that he had obtained advice from the State Agencies including Bank of Papua New Guinea on UBS AG (Australian Branch) Loan to purchase Oil Search shares were contrary to the evidence received.
56.	It is part of the agreed facts that, the Ombudsman did not provide any good, proper, sufficient or meaningful reasons to the Prime Minister for his Referral to the PP for alleged misconduct in office. On 13th August 2014, the PP confirmed receipt of the allegations from the Ombudsman.  Nine days later on 22nd August 2014, an application to refer Constitutional questions was filed.  On 27th August 2014, the PP wrote to the Prime Minister saying:

“In response to the matters that you raised, please find a copy of the Letter of Referral by the Ombudsman Commission dated 11 August 2014.  I advise that I am still considering the evidence in the Statement of Reasons.  After considering of the evidence and if I so find that there is cogent and credible evidence supporting the allegations against the leader and request the relevant authority to appoint a tribunal to conduct an enquiry into the allegations, then I will provide you with a copy of the Statement of Reasons.”
57.	In the same letter the PP requested copies of documents in other related proceedings.  The Prime Minister has not been served with the Statement of Reasons despite the PP having agreed to serve the Statement of Reasons on the Prime Minister. 

58.	On 9th October 2014, the PP issued a signed press statement saying:

“I have fully considered the material referred to me by the Ombudsman Commission against Hon. Peter O’Neill, CMG MP Member for Ialibu-Pangia Open and Prime Minister.  I am of the view that there are certain vital evidence that are required for me to make an informed opinion on whether or not to refer the Prime Minister to the appropriate tribunal to conduct enquiries into allegations of misconduct in office.

I have today requested the Ombudsman Commission to collate those relevant evidence and submit them to me to assist me in the exercise of my powers under Section 27(2) of the Organic Law on Duties and Responsibilities of Leadership.” 
(Underlining mine).
59.	Also, it is a part of the agreed facts that, the Ombudsman did not respond to the PP’s request for further evidence and thus did not provided the further evidence requested by the PP.  Despite that, the next step was a request by the Public Prosecutor to the Chief Justice to appoint a Leadership Tribunal to inquire into allegations of misconduct in office by the Prime Minister.  That request identified the allegations to be considered by the tribunal in these terms:

“It is alleged that the Prime Minister failed to comply with administrative and financial processes including the normal overseas borrowing process in the approval of a Three Billion Kina loan from the Union Bank of Switzerland AG (Australian Branch) to purchase shares in Oil Search Limited.  It is further alleged that the purchasing of the shares was in the interest of Oil Search Limited and not in the interest of the Independent State of Papua New Guinea.”
(Underlining mine)

60.	It is clear by this act that, the PP declined to prosecute the allegations concerning false or misleading statements by the Prime Minister.  At the same time, he decided to include the underlined words which were not in the Ombudsman’s referral to the PP.  It is not clear whether the Chief Justice was informed of that discrepancy.

61.	The Prime Minister was informed of the PP’s request to the Chief Justice by letter dated 14thNovember 2014. The next step after that was the Chief Justice acting on the request, who by letter named three eminent Judges or former Judges to constitute the Leadership Tribunal.  The letter also set a time and date for the Tribunal to convene and added:

“It is at that time that the Public Prosecutor will formally present the Statement of allegations and the Statement of Reasons.” 

62.	The Prime Minister took proceedings to challenging his referral and the appointment of the Tribunal.  Those were the proceedings that went before Cannings J., who on 8thJanuary 2015, referred to this Court the questions that are before it now under his referral. 
Relevant Principles on Constitutional law interpretation
	
63.	The questions presented in the three references concern the interpretation and application of a number of Constitutional law provisions. Given that, I consider it important that we should first remind ourselves of the relevant principles governing the interpretation and application of Constitutional law provisions which are well settled. As I noted in a number of my decisions both in the National and the Supreme Court,Wilson J., in PLAR No. 1 of 1980,stated the relevant principles in these terms:

“… there is no place in a developing country where the courts, as well as the Law Reform Commission, are given special responsibilities in the process of development, for the narrow interpretation of statutes without adequate regard to the social purpose of particular legislation. Development is difficult to achieve if courts adopt too conservative an approach to the interpretation of statutes. There has been a tendency in our National Judicial System, less evident in some recent decisions of the courts but still perceptible, to over-emphasize the literal meaning of a provision at the expense of the meaning to be derived from other possible contexts; the latter including the application of the ‘mischief’ rule, the recognition of the general legislative purpose, as well as the obligations laid down under the Constitution such as, for example, the obligation upon the courts in interpreting the law to give ‘paramount consideration to the dispensation of justice’…”

64.	This means the Courts should be taking a more liberal and purposive approach when it comes to interpreting and applying the provisions of the Constitution and other statutory provisions in our country in order to do justice.  A large number of subsequent decisions of the Supreme and National Courts have consistently allowed themselves to be guided by these principles.  As I noted in my decision in Motu Koita Assembly v. NCDC, an example of the Court adopting the liberal and purposive approach to statutory interpretation, is the Supreme Court decision in SCR No. 1 of 2000; Re Morobe Provincial Government for and on behalf of the Morobe Provincial Executive Council. There the Court having regard to the provisions of schedule 1.5 (interpretation) of the Constitution said: 

“Going by this expressed dictation in the Constitution …, it is now an accepted principle of both constitutional and other statutory interpretation, that the provisions of the Constitution and all Acts of Parliament must be given their fair and liberal meaning. This is so as to give effect to the intent of Parliament behind the provisions in question.  There is a long line of case authority on that.”

65.	As I noted in my dissenting decision in the case of The State v. Downer Constructions (PNG) Limited, there are however two well-known exceptions to the above position of the law.  The first of the two exceptions is in cases where the words used in the legislation are so plain and clear that no art of interpretation is required.  The second exception is in the area of tax legislation, where the strict interpretation rule applies. The reason for this exception is simple.  For the imposition of a tax or charge against a subject, clear and unambiguous intention needs to be shown in the statute. A failure to do so would result in an interpretation that is favourable to taxpayers.

66.	With the relevant facts as stated above and the principles governing Constitutional law interpretation and application as just stated, I will now turn to a consideration of the questions presented.  In so doing, I will allow myself to be guided by the chronology of steps taken by the Ombudsman, the PP and the eventual appointment of the Tribunal as against the Prime Minister and others to deal with each of the questions in terms of the order in which each of the questions can be dealt with.   Accordingly, I will deal with the questions that are presented in Makail J.’s referral first because they concern the first in time intervention by the Ombudsman. Thisstarts with the 14th March 2014 Directions.

First question under Makail J. referral  
67.	The first of the questions under the Makail J.’s referral reads:

“Whether the Ombudsman Commission, in the circumstances referred to in the reference, has lawful authority, power and jurisdiction to have made a decision to issue the notice or direction dated 14 March 2014 to the Prime Minister and others?”
68.	Constitutions. 27 (4) is the provision that empowers the Ombudsman to issue such Directions. The provision states:
	
“(4)	The Ombudsman Commission or other authority prescribed for the purpose under Section 28 (further provisions) may, subject to this Division and to any Organic Law made for the purposes of this Division, give directions, either generally or in a particular case, to ensure the attainment of the objects of this section.”							(Underlining added)

69.	Allowing myself to be guided by the principles on Constitutional law interpretation, I note that the provisions of Constitution s. 27 (4) are very clear.  The only part that requires interpretation is the phrase “to ensure the attainment of the objects of this section.”  This requires an identification and understanding of the phrase “object of this section”. To do that, we need to read the whole of the section.  The whole of the section reads:

“27.	Responsibilities of office.
(1)	A person to whom this Division applies has a duty to conduct himself in such a way, both in his public or official life and his private life, and in his associations with other persons, as not—
(a)	to place himself in a position in which he has or could have a conflict of interests or might be compromised when discharging his public or official duties; or
(b)	to demean his office or position; or
(c)	to allow his public or official integrity, or his personal integrity, to be called into question; or
(d)	to endanger or diminish respect for and confidence in the integrity of government in Papua New Guinea.
(2)	In particular, a person to whom this Division applies shall not use his office for personal gain or enter into any transaction or engage in any enterprise or activity that might be expected to give rise to doubt in the public mind as to whether he is carrying out or has carried out the duty imposed by Subsection (1).
(3)	It is the further duty of a person to whom this Division applies—
(a)	to ensure, as far as is within his lawful power, that his spouse and children and any other persons for whom he is responsible (whether morally, legally or by usage), including nominees, trustees and agents, do not conduct themselves in a way that might be expected to give rise to doubt in the public mind as to his complying with his duties under this section; and
(b)	if necessary, to publicly disassociate himself from any activity or enterprise of any of his associates, or of a person referred to in paragraph (a), that might be expected to give rise to such a doubt.
(4)	The Ombudsman Commission or other authority prescribed for the purpose under Section 28 (further provisions) may, subject to this Division and to any Organic Law made for the purposes of this Division, give directions, either generally or in a particular case, to ensure the attainment of the objects of this section.
(5)	A person to whom this Division applies who—
(a)	is convicted of an offence in respect of his office or position or in relation to the performance of his functions or duties; or
(b)	fails to comply with a direction under Subsection (4) or otherwise fails to carry out the obligations imposed by Subsections (1), (2) and (3),
is guilty of misconduct in office.”

70.	The Division under which s. 27 falls is generally referred to as the Leadership Code.  This is because they provide a code of conduct for leaders who are identified and listed in s. 26 at the start of the Code. That provision reads:

“26.	Application of Division 2.
“(1)	The provisions of this Division apply to and in relation to—
(a)	the Prime Minister, the Deputy Prime Minister and the other Ministers; and
(b)	the Leader and Deputy Leader of the Opposition; and
(c)	all other members of the Parliament; and
(d)	members of Provincial Assemblies and Local-level Governments; and
(e)	all constitutional office-holders within the meaning of Section 221 (definitions); and
(f)	all heads of Departments of the National Public Service; and
(g)	all heads of or members of the boards or other controlling bodies of statutory authorities; and
(h)	the Commissioner of Police; and
(i)	the Commander of the Defence Force; and
(j)	all ambassadors and other senior diplomatic and consular officials prescribed by an Organic Law or an Act of the Parliament; and
(k)	the public trustee; and
(l)	the personal staff of the Governor-General, the Ministers and the Leader and Deputy Leader of the Opposition; and
(m)	executive officers of registered political parties as defined by Section 128 ("registered political party"); and
(n)	persons holding such public offices as are declared under Subsection (3) to be offices to and in relation to which this Division applies.
(2)	This Division applies to and in relation to a person referred to in Subsection (1) not only in the office referred to in that subsection but also in any other office or position that he holds under any law by virtue of that office.
(3)	An Organic Law or an Act of the Parliament may declare any public office (including an office in a provincial government or a local-level government body) to be an office to and in relation to which this Division applies.
(4)	In the event of doubt as to whether a person is a person to whom this Division applies, the decision of the Ombudsman Commission is final.”

71.	These provisions have been the subject of a number of Leadership Tribunal, National and Supreme Court decisions.  In Re The Leadership Code:	In the Matter of a Special Reference pursuant to Constitution s19 and In the Matter of a Reference by the Public Prosecutor, the Supreme Court per Kidu CJ, Amet J., Los and Andrew JJ stated:

“We accept also that more specifically, the purpose of the Code is to ensure as far as possible that the leaders specified in Constitution s 26 do not offend in the various ways prescribed by the provisions of Constitution s 27, and that these provisions are geared towards advancing the purpose of protecting the People from the improper and corrupt conduct of their leaders and to ensure, as far as possible, that such breaches are not committed in the first place.
….
Dismissal from office and the prescribed consequential disqualification is quite simply the severest form of sanction prescribed for the purpose of preserving the People of Papua New Guinea from ‘misconduct’ by its leaders. It provides punishment as well as a deterrent purpose for the future. There are of course other penalties, such as reprimand, fines and suspension from duty that can be imposed relative to the culpability of the misconduct, designed to achieve the same primary purpose of preserving the people.”

72.	Later the Supreme Court in theApplication by John Mua Nilkare,per Kapi DCJ commented on what these provisions provide for in these terms:

“…s 27 of the Constitution is concerned with responsibilities and conduct of leaders. Subsec (1) deals with the ‘duty to conduct himself in such a way, both in his public or official life and his private life’. This relates to (1) conduct generally and (2) in his association with other persons. The nature of conduct which may result in misconduct are itemized s 27 (1) (a) – (d). This conduct includes behaviour on the part of the leader where there may be conflict of interest or where the leader’s position may be compromised (s 27 (1) (a)).

The other three types of conduct (s 27 (1) (b) to (d)) are expressed in very wide and general terms. It is incapable of precise definition. In fact any kind of definition is likely to fall short of what this provision was intended to cover. These provisions cast a very wide net to catch all kinds of conduct by leaders. One thing is clear; it is the public perception of the leader which is the dominant theme. Sec 27 (2) speaks about “doubt in the public mind”. When a leader demeans his office or his integrity is called into question this will diminish the respect for and confidence of government.”

73.	Later in Grand Chief Sir Michael Thomas Somare v. Chronox Manek, the Supreme Court in a unanimous decision summed up the Leadership Code and its enforcement regime as follows:

“As has been noted elsewhere already on many occasions …Division – 2 (Leadership Code) of the Constitution, provides for a code of conduct for public leaders for good governance which needs to be adhered to by various identified leaders starting with Sir Michael. The OLDRL provides for the implementation of this part of the Constitution. Section 218 (d) of the Constitution vests the Ombudsman with the powers to supervise and enforce the Leadership Code. Section 27 of the Constitution provides for the process to deal with a leader whom the Ombudsman through its investigations finds guilty of misconduct in office.”

74.	Constitution s. 26 lists the persons who are subject to the Leadership Code and its enforcement regime.  The only doubtful position would be corporations incorporated under the Companies Act or any other legislation which are funded by public funds for a public purpose in accordance with decisions made by the NEC or other relevant public decision making bodies or authorities.  The Supreme Court decision in The Mineral Resources Development Company Ltd v. The Ombudsman Commission of PNG, removed that doubt.   In that decision the Court referred to and endorsed my definition of what is a “statutory authority” for the purposes of s. 26 in the matter of Danny Kakaraya v. The Ombudsman Commission & The State.  The Court said:

“His Honour’s definition of “statutory authority” is, “all corporations whether incorporated under the Companies Act 1997 or any other legislation, in which the State is the sole shareholder and does have the controlling authority in terms of appointing its board and or the managing director, is a statutory authority within the meaning of s.26(1)(g) Constitution”
.…His Honour formulated this definition with the intention and purpose of the provisions of the Leadership Code and s.219 Constitution in mind. At p.28 of his judgment he said:
‘The purpose (of the provisions of the Leadership Code and s219(1) Constitution) is to ensure that all governmental or public bodies are accountable to the people through the investigative and referral powers of the Ombudsman….These provisions are there to protect the people of Papua New Guinea from institutions and people in positions of leadership and influence that are inclined to use their positions for personal gain and in so doing prove themselves untrustworthy.’
….We respectfully agree with His Honour’s comments.”

75.	The Court then went on to observe and said of the definition:

“...Whilst agreeing with His Honour’s definition in principle, we are of the view that it is preferable to look to the Constitution itself to assist in understanding its terms.
...
…We find therefore that an appropriate definition of “statutory authority” is:
‘a body set up by statute or administrative act for governmental or official purposes, and any other body set up by statute –
(A)	 that is wholly or mainly supported out of public moneys of Papua New Guinea; or
(B)	 all of, or the majority of, the members of the controlling authority of which are appointed by the National Executive.’
…Given the above definition we find that MRDC comes within the definition of “statutory authority” in s.26(1)(g) Constitution. Consequently the provisions of the Leadership Code apply to and in relation to the head of and members of the Board of MRDC.”

76.	The Court came to that decision for a number of reasons. Firstly, the MRDC is a company incorporated under the Companies Act with the State being the only beneficial owner of shares in the capital of the Company and all persons or entities holding shares in the Company were so doing only as trustees for the exclusive benefit of the State. Secondly, notwithstanding the provisions of its constitution, “all matters requiring actions of or performance by the shareholder may be performed or undertaken by the Minister responsible for the administration of the Public Finances (Management) Act 1996 …for the best interest of the shareholders and the Company.”  Thirdly, “the persons who hold the positions of Secretary of the Department responsible for the administration of the Public Finances (Management) Act 1996, the Secretary for the Department responsible for Mining matters, the Secretary of the Department responsible for Petroleum matters and a specified senior public servant, or their equivalent departmental heads or officers, shall by virtue of their position be automatically entitled to sit on the Board of Directors”. Fourthly, the company “is similar to the company referred to in The Independent State of Papua New Guinea v. Barclay Brothers (PNG) Ltd.In that case, the company was incorporated by the State under the Companies Act for the purpose of road project construction and financing, following various National Executive Council decisions.  There was only one share on issue initially held by one Minister on behalf of the State. Finally, the MRDC “was set up for governmental or official purposes” as “evident from its shareholding, the provisions of its constitution and the Mineral Resources Development Company Pty Limited (Privatization) Act 1996.”

77.	In In re Constitutional (Amendment) Law 2008, Reference by the Ombudsman Commission of Papua New Guinea,the Supreme Court further elaborated on the purpose of Constitution s. 27 (4).  There, the Ombudsman successfully challenged amongst others, amendments to Constitutions. 27 (4) and other provision of the Constitution and OLDRL granting certain powers to the Ombudsman.  In its submissions, the Ombudsman said:

“…section 27(4) Direction is an exceptional power that has been used to maintain the integrity of leaders and integrity of Government in PNG. It had been used sparingly and with due consideration for the need to prevent the potential misuse of public funds and at the same time not to compromise implementation of government policy. Anyone affected by the Commission’s application of this provision can seek judicial review of the Commission’s decision. Reference was made to Sir Michael T Somare v. Ila Geno [2007] N3139.”

78.	Then speaking of the nature of the power the Ombudsman has under s. 27 (4), the Court said:

“We have expressed in the past that the Constitution is the supreme authority and even the Parliament is subservient to it and neither the Parliament nor the elected representatives in the Parliament have the power to pass or make laws that diminishes that authority given to the Commission to act according to the wishes and aspirations of the Constitution which is the mother law of the land. That is an inalienable right of the people vested in the Commission as the Nation’s watch-dog that is the only authority outside the National Judicial System that has power to exercise quasi-judicial function to protect public finance from uncontrolled use or expenditure outside the clear dictates of the Public Finance Management Act by all persons and this includes members of Parliament.”
								(Underlining added)

79.	It should be abundantly clear that, as Kapi DCJ said in the Nilkare case, Constitution s. 27 ‘is concerned with responsibilities and conduct of leaders.” This concerns a leader’s duty to conduct himself in such a way both in his public and private life generally and his association with others.  The kinds of conduct against which this provision is directed at are itemized in s. 27 (1) (a) – (d). These kinds of conduct include behaviour on the part of a leader that may place himself in a conflict of interest or where the leader’s position may be compromised (s 27 (1) (a)).The kinds of conduct listed from s. 27 (1) (b) to (d)) are expressed in very wide and general terms and are incapable of precise definition. These provisions cast a very wide net to catch all kinds of conduct by leaders. But one thing is very clear, it is the public perception of the leader which is the dominant theme. Section 27 (2) speaks about “doubt in the public mind”. When a leader demeans his office or his integrity is called into question it will diminish the respect for and confidence in government.

80.	Then as this Court said in the case of Re The Leadership Code: In the Matter of a Special Reference pursuant to Constitution s19 and In the Matter of a Reference by the Public Prosecutor,the object of Constitution s. 27 is to ensure as far as is possible that the leaders specified in s. 26 do not offend in the various ways prescribed by the provisions of s. 27.  These provisions are geared towards advancing the purpose of protecting the people of Papua New Guinea from the improper and corrupt conduct of their leaders and to ensure, as far as possible, that such breaches are not committed in the first place.

81.	Given the object or purpose, of Constitution s. 27, subsection (4) vests an important power in the Ombudsman. As the decision in the Reference by the Ombudsman Commission of Papua New Guinea (2013),observed, this is an exceptional power.  That power is quasi-judicial in nature.  This is an inalienable right of the people vested only in the Ombudsman outside the National Judicial System.  This power and function is necessary to protect public finance from uncontrolled use or expenditure outside the clear dictates of the Public Finance Management Act by all persons listed in Constitution s.26.  Undoubtedly this power is to be exercised for the benefit and in the best interest of Papua New Guinea.  Like all other decision makers, the Ombudsman is obliged to act on proper basis for the benefit and interest of Papua New Guinea.  The concept of “in the best interest of Papua New Guinea” has received some judicial consideration.  In my decision in the case of Peter Aigilo v. The Independent State of Papua New Guinea, I tried to give meaning to that concept after considering earlier decisions which I considered relevant, helpful and on point.  I then concluded:

“I am of the view that the concept of ‘in the best interest of Papua New Guinea’ means ‘for the benefit of Papua New Guinea’. Benefits to Papua New Guinea may be immediate or long term and may be tangible or intangible. Ultimately, however the benefits can be translated into Kina (money) terms because everything that is done involves a money factor, which may not necessarily be apparent immediately. Without limiting in any way the factors that may be taken into account to determine whether a proposed action or inaction is ‘in the best interest of Papua New Guinea’ or the State, the following factors are relevant and must be met:
·	it is legal
·	the State will not be exposed to any unnecessary liability
·	the amount of money involved is not substantial
·	there is a real and not a fictitious, imaginary or assumed threat to the security of the nation if that is the reason for the proposed action or inaction
·	it will in fact advance the cause of Papua New Guinea
·	actually save the State from incurring further costs or expenses unnecessarily
·	it is the only action open to the decision maker or the State
·	it is not motivated by politics or sectional and personal interests
·	it is not following and motivated by a change in government.
·	all relevant and clearly independent advice and opinions or recommendations have been sought and obtained and they support or endorse the proposed action or in action.
·	all those who are required by law to be consulted have been consulted
·	all relevant disciplinary process and other remedies available to the State have been exhausted
·	if there is an agreement the decision or action or inaction is strictly in accordance with the terms of the agreement [and]
·	the principles of natural justice have been adhered to.”

82.	I then went on to say:

“Whatever, factors the decision maker or the State takes into account, they must be guided by the general principle. The principle is that the step to be taken is indeed and in fact for the benefit of Papua New Guinea or the State to the exclusion of the personal interest of those who are making the decision or taking the step. The concept of ‘in the best interest of Papua New Guinea’ cannot be applied arbitrarily and as a matter of course but only in very limited and carefully considered cases. … A failure to ensure that the step taken is ‘for the benefit or in the best interest of Papua New Guinea’ renders the person responsible for the action or inaction personally liable for any damages or loss that may arise. The conduct of the decision-maker might amount to an unlawful interference of a legitimate contract between the State and its contracting party. The onus to show that the decision or action or inaction in question is ‘for the benefit or in the best interest of Papua New Guinea’ therefore rests with the person making the decision,[or responsible for the] action or inaction.”

83.	The Ombudsman has in the past exercised its powers under s. 27 (4).  In In Re Constitutional (Amendment) Law 2008, Reference by the Ombudsman Commission of Papua New Guinea(2013), the Ombudsman informed this Court that it uses this power “sparingly with due consideration for the need to prevent the potential misuse of public funds and at the same time not to compromise implementation of government policy. Anyone affected by the Ombudsman’s application of this provision can seek judicial review of its decision.  An example of a case in which s. 27 (4) has been used to issue directions is the case of MRDC v. The Ombudsman Commission.  There the Direction was unsuccessfully challenged on the basis of the MRDC not being covered by the Leadership Code.  As already noted, the Supreme Court found the MRDC and its chief executive officer are covered by the Leadership Code.

84.	An earlier case on point is the decision in Albert Karo v. Ombudsman Commission of PNG.There Mr. Karo was a member of the Parliament and Minister for Works. Hence, he was a leader as defined by s 26(1) of the Constitution, and subject to the Leadership Code and the OLDRL. In September 1993, in the course of an investigation into allegations that the appellant had acted improperly in relation to occupation of a certain house, the Ombudsman issued directions under Constitutions 27(4) to the National Housing Corporation and the Minister for Housing to cease all arrangements pertaining to the tenancy of the property pending completion of its investigation. On 11th February 1994, a tenancy agreement was entered into between Mr. Karo and the Housing Commission for the house in question.  Consequentially, the Ombudsman issued a further direction under s 27(4) to the appellant, which inter alia, required him to leave the house, which he and his family were occupying. At no time prior to 11thFebruary 1994, had the appellant been advised that the Commission was investigating his conduct in relation to the house. The appellant obtained leave to apply for judicial review of the Commission’s decision to issue the direction, but judicial review was refused by Salika J (as he then was).

85.	On appeal the Supreme Court per Amet CJ. Los and Sheehan JJ. held:

(1)	Pursuant to s 217(6) of the Constitution, decisions of the Commission are subject to judicial review on the basis of excess of jurisdiction by failing to give a person a hearing (Ombudsman Commission v Donohoe [1985] PNGLR 348 followed) or otherwise failing to act fairly in the exercise of its investigative powers;

(2)	The Ombudsman’s power to give directions under s 27(4) of the Constitution is made subject to any organic law passed for the purposes of Division 2 of Part III of the Constitution, dealing with the Leadership Code.

(3)	In failing to advise the appellant that he was the subject of investigation, the Commission was in breach of its duty under s 17(1) of the Organic Law on the Ombudsman Commission (OLOC) to inform persons of its intention to investigate their conduct;

(4)	A decision of a preliminary nature which may affect a person’s interests is subject to the principles of natural justice as much as a final decision. Therefore, although the direction to the appellant was preliminary, it affected his proprietary interests. Accordingly, as a person whose conduct was being investigated by the Commission, the appellant had a right to be heard before any decision was made: s 20(3) of the Organic Law on the Duties and Responsibilities of Leadership.

(5)	The remedy sought was not granted because the appellant had made representations to the Commission upon service of the direction upon him, was given the opportunity to make further representations, and in view of the preliminary nature of the decision, other legal remedies were open to him.

86.	However, this Court (differently constituted) in its subsequent decision in John Kua Nilkare v. Ombudsman Commission,held that the decision in Karo’s case was mere obiter dictum on the question of giving a leader a right to be heard before or during investigations. That right comes only after the Ombudsman has concluded its investigations and has come to a decision that there is a prima facie case of breach of the Leadership Code.  This makes sense because if there was too ready an allowance for a leader to be heard at the investigation stage, it allows the risk of the leader interfering in it which could result in either the hiding or destruction of relevant evidence or of preventing witnesses coming forward with evidence concerning the conduct under investigation.  The position in my view is akin to that of the summonses and warrants police obtain from the District Courts to assist them in their investigations and in particular obtaining evidence critical to a criminal investigation and eventual prosecution.  Usually a person under such investigations is never given any opportunity to be heard because a decision to charge or not isyet to be made and which decision would come only after the investigations are fully completed.  Given that,many decisions of the Courts as in the case of the unanimous decision of the Supreme Court in Grand Chief Sir Michael Thomas Somare v. Chronox Manekspeak volumes against any ready interference at the investigatory stage.

87.	The National and this Court have dealt with a number of other cases in which the Ombudsman had issued directions under s. 27 (4) of the Constitution.  An example of that is the case of Sir Michael T Somare & Ors v. Ila Geno & Ors and the Ombudsman Commission.  There, the Ombudsman issued a s.27 (4) direction concerning electoral and discretionary funds and various development funds under the District Services Improvement Program.  The direction was addressed to the Ministers for Treasury and Finance and Planning, Secretaries for the Departments of Finance, Treasury, National Planning, and all Provincial and District Administrators and Treasury Officers. The plaintiffs, who were not included in the direction, sought to review the direction, which application Salika J., (as he then was) dismissed on the basis that the plaintiffs lacked standing.

88.	In the course of dealing with the case, His Honour noted that:
“…the plaintiffs do not handle the various categories of funds that the Direction relate to. The funds are handled by the persons named in the directions.

The plaintiffs’ duty and concern, if anything, should be the same as the Defendants, and that is to ensure that Members of Parliament comply with the Public Finance (Management) Act and the various financial instructions that have been issued. There must be a concerted effort from the leaders with the Defendant. There must, not only be a political will, but political support for not only the financial management but also of good governance.”
89.	More specifically and relevantly, His Honour was faced with an argument that the direction was invalid because it covered persons who were not leaders within the meaning of s. 26 of the Constitution.  His Honour referred to his decision in Karo’s case in the National Court (which was subsequently effectively confirmed correct by the Nilkare decision) and here is how His Honour noted the arguments and dealt with them:

“The plaintiffs argued that the Directions are not to persons covered under the Leadership Code. They argued that the offices and officers under Item 8 in the Directions are not subject to the Leadership Code, and as such how can the Direction be seen to enable the attainment of the objects of the Leadership Code.

It is true that the officer and officers under Item 8 of the Directions are not subject to the Leadership Code but the point is these offices and officers handle the funds. The funds are with them. A person, including the plaintiffs and others, be they subject to the Leadership Code or not, must go to them to access funds for development projects in their electorates…These offices and officers must ensure those who want to access funds must comply with the Public Finance (Management) Act and the financial Instructions….”

90.	In my respectful view, His Honour was correct in his observations. In most cases, leaders or the persons listed under Constitution s.26 do not and will not always use only persons who are also covered by this provision to carry out a criminal or corrupt action or misconduct in office.  Often times they use persons and organisations outside the list of persons given by s. 26 to commit the kind of conduct prohibited by Constitution s.27. Hence, insisting on and or upholding an argument that a direction under s. 27 (4) must only be against persons listed in s. 26 will defeat the purpose of s. 27 (4).  There are few cases in which the Ombudsman has used Constitution s. 27 (4) directions to prevent public funds from being misappropriated by leaders through persons not covered by s. 26 of the Constitution.  One of the recent examples of that is the case of The State v. Achilles James Penicited by the submissions for the Ombudsman.  Section 27 (4) directions were used to prevent misuse of public funds through a private account of a person not covered by the Leadership Code with the recipient successfully prosecuted criminally.  Hence, the argument that the Ombudsman cannot use s. 27 (4) against persons other than leaders is contrary to law, is counterproductive and unacceptable when the level of corruption and misconduct of leaders in the country has escalated to levels beyond those shortly after independence and successful prosecution has become impossible due to too much lawyering and losing focus on the purpose of having the Leadership Code and the OLDRL at the first place.  The sad consequence of this has been a failure to protect the people of Papua New Guinea from corrupt leaders resulting in substantial amounts of public funds intended for public facilities and infrastructure misappropriated for personal gains for leaders and their associates.  This in turn has resulted in poor or no service at all being delivered to the people of the country even to the point of services established during the colonial times now no longer existing due to a complete lack of maintenance and improvement.

91.	The plaintiffs in the Somare & Ors v. Ila Geno& Ombudsmancase also argued that the direction was speculative as there was no factual or legal foundation for it.  Upon considering evidence filed for the Ombudsman, His Honour was satisfied that there was a preliminary investigation and the results of that formed the factual and legal foundation for the direction to be issued.  His Honour then noted that s. 27(4) “gives wide powers to the Ombudsman Commission to give directions, either generally or in a particular case, to ensure that the objective and purpose of responsibilities of office are attained…” He went on to find that the direction was intended to prevent access to the funds.  It was thus proper, save only to point out and hold that, only a small part of the direction was invalid to the extent that the funds were already received.  In arriving at that decision His Honour was satisfied that the directions:

“…were issued for the attainment of the objects of s.27(4) of the Constitution which is that a Leader covered under the Leadership Code has a duty not:
(a)	to demean his office or position.
(b)	to allow his public or official integrity or his personal integrity into question.
(c)	to endanger or diminish respect for and confidence in the integrity of government in Papua New Guinea.”

92.	Finally, His Honour observed:
“Indeed, there would be no need for these directions if we all complied with the Public Finance (Management) Act and the various Financial Instructions and if the office and officers tasked with the responsibility of looking after the funds were as tough and true to them…”

93.	Having due regard to the foregoing discussions, it is clear to me that Constitution s. 27 (4) is an important provision for the protection of the people of Papua New Guinea.  It is also clear to me that the provision itself and its application to date reveal a number of important additional factors about s. 27 (4).  These are; firstly, the power vested in the Ombudsman by Constitution s. 27 (4) is quasi-judicial in nature.  Secondly, this power can be exercised for the purposes of attaining the object of the provisions of Constitution s.27. Thirdly, in practice, the Ombudsman has exercised that power sparingly and only in appropriate cases to attain the object of the provisions of s. 27 of the Constitution.  Fourthly, the object of s. 27 is to ensure as far as is possible that the leaders who are both elected and appointed including those who are appointed to head State owned and controlled corporations as specified in s. 26 of the Constitution do not offend in the various ways prescribed by the provisions of s. 27 of the Constitution.  These provisions are geared towards advancing the purpose of protecting the people of Papua New Guinea from the improper and corrupt conduct of their leaders and to ensure, as far as is possible, that such breaches are not committed in the first place.  This is why the power under s. 27 (4) is described as preventative or pre-emptive in nature. Fifthly, the leaders listed in s. 26 of the Constitution are required by s. 27 of the Constitution to observe and appropriately conduct themselves in the ways prescribed in that provision both in their public and private life generally and in their association with others.  Sixthly, the kinds of conduct against which this provision is directed at are itemized in s. 27 (1) (a) – (d). These kinds of conduct include behaviour on the part of a leader that may place him in a conflict of interest or where the leader’s position may be compromised (s 27 (1) (a)).  Seventhly, the kinds of conduct listed from s. 27 (1) (b) to (d)) are expressed in very wide and general terms and are incapable of precise definition. These provisions cast a very wide net to catch all kinds of conduct by leaders. But one thing is very clear, it is the public perception of the leader which is the dominant theme. Section 27 (2) speaks about “doubt in the public mind”. When a leader demeans his office or his integrity is called into question this will diminish the respect for and confidence in government.

94.	Finally, it is also clear that the Ombudsman cannot simply exercise the power vested in it under s.27 (4) Constitution as and when it wants to.In other words, the Ombudsman cannot exercise its power under s.27 (4) arbitrarily and as a matter of course but only in very limited and carefully considered cases.  This means the Ombudsman as a decision maker, is required to be satisfied that:

(1)	a possibility or likelihood of a breach of  one or more of the duties imposed by the Leadership Code and the OLDRL or any other relevant and applicable law upon a leader listed in s. 26 of the Constitution exists;

(2)	there is sufficient factual and legal foundation to issue a direction under s. 27 (4);

(3)	the direction is directed at persons or leaders listed in s. 26 of the Constitution and other persons or organisations whose facilitation may be required to complete a future transaction that might constitute a corrupt or improper conduct by a leader and not something that has already occurred;

(4)	there is clarity on the kind of steps those covered by the direction are required to take, either specifically or generally;

(5)	there is clarity on the purpose of the direction which must be to prevent an identified possible misconduct or corrupt practice for the protection of the people of Papua New Guinea and is therefore, in their best interest;

(6)	the direction will not result in the State being exposed to any unnecessary risks or liabilities and adverse consequences;

(7)	there is a real and not a fictitious, imaginary or assumed threat to demeaning the office of the leader concerned or his or her integrity is called into question which has the potential or risk of diminishing respect for and confidence in government;

(8)	there is a real possibility of the direction saving the State from incurring further costs or expenses unnecessarily where such is involved;

(9)	there is no other action or option to take but to issue the direction;

(10)	no political or sectional or personal interests is motivating or causing the Ombudsman to exercise its power; and

(11)	there is clearance by its internal processes and procedures, if any, for a direction to issue.

95.	These are key and essential factors in my view, which must all be ticketed off by the Ombudsman before it can issue a direction under s.27 (4) of the Constitution.   A decision arrived at in this way should be able to withstand any challenge as to its validity. 

96.	In the present case, the main text of the Direction is set out in paragraph 48 above. As can be seen from the Direction itself, it is directed at the following persons:

(1)	Prime Minister;
(2)	Members of the NEC;
(3)	Minister for Treasury;
(4)	Minister for Finance;
(5)	Secretary of the Department of Finance;
(6)	Secretary of the Department of Treasury;
(7)	Attorney-General;
(8)	Secretary for Department of Justice & Attorney General;
(9)	Governor of the Bank of PNG;
(10)	Petromin Holdings (PNG) Limited;
(11)	Independent Public Business Corporation (IPBC);
(12)	Port Moresby Stock Exchange Limited;
(13)	Oil Search (PNG) Limited; and
(14)	UBS Nominees Pty Ltd. 

97.	There can be no doubt that the persons listed under (1) to (9) above are leaders covered by Constitution s. 26.  Those listed under (10) and (11) are statutory authorities covered by s. 26 of the Constitution. The rest are private corporations. The private as well as the statutory corporations appear to be persons or organisations whose facilitation is required to complete the UBS Loan arrangement.  Having regard to the foregoing discussions, in my view, they are necessarily and correctly included to ensure that the purpose of the directions is served.  This accords well with the decision in Somare & Ors v. Ila Geno & Ombudsmanand factor (3) in paragraph 94 above. I would thus dismiss the challenge based on this point. 

98.	Turning then to the purpose of the Direction, it is clear from the first to the fifth Direction that its purpose was to “stop all further transactions in relation to the loan arrangements with UBS Nominees”. There is nothing in the Directions that discloses what possible breach or likely breaches marked the Leadership Code or OLDRL or any other relevant and applicable legal requirement’s breach the Direction is intended to prevent or address.  The Ombudsman has not pointed out to any evidence that discloses for example, how the Prime Minister and those involved stand to corruptly gain personally or his associates either directly or indirectly as opposed to the State or the people of PNG, or how their respective conduct is improper or is or are likely to breach a particular legislation such as the Public Finance (Management) Act or any other law. Similarly, the Ombudsman does not point to any evidence that its decision was based on facts and any relevant law which was in turn based on its own preliminary investigations into the UBS loan transaction and was not actuated by any political, sectional or factional interest or influence.  Further, there is no evidence for or by the Ombudsman that the State and hence the country will not be forced to breach the loan agreement because of the Direction and that, there are no serious legal and financial liability flowing against the State or the people of Papua New Guinea.

99.	According to the evidence before the Court and as already noted, at the heart of all of the questions presented, was the Prime Minister and the NEC’s approval of a K3 billion UBS Loan.  The loan was to redeem or secure the State’s shares or interest in the PNG LNG Project and free the SOE’s assets. This had to happen by way of buying shares in one of the most profitable PNG based company, Oil Search Ltd and thus directly participate and benefit from the PNG Liquefied Natural Gas (LNG).  The previous Somare Government created a debt position with a foreign company, IPIC and mortgaged the State’s interest in the PNG LNG Project with all the assets of the SOEs.  Without the UBS Loan, PNG stood to lose its shareholding and interest in the PNG LNG Project.  The approvals to borrow and the eventual borrowing were upon advice from the Treasury Department and with clearance from the State Solicitor.  The Prime Minister executed the loan documents on 12thMarch 2014. Thereafter, Oil Search announced the share placement to the Australian Stock Exchange.  So for all practical purposes, the loan transaction was completed as was found and confirmed by the National Court decision in OS 142 of 2014.There was nothing remaining to be done, except only for the State to service the loan.  Clearly therefore, the Direction has the effect of forcing the State to default on the loan repayment.  Such defaults would add more interests and charges and more financial burden to the State.  It also has the risk of exposing the State in a bad light as an international borrower when it comes to international loans and the honouring of international commitments.  Further, there is the potential of forcing the State into breaching the loan agreement, which would mean several billions of Kina and added financial burden for the people of Papua New Guinea.  Additionally and more importantly, there is no evidence pointing to the Prime Minister or his associates standing to personally gain as opposed to the State and the people.  Hence, the action and Directions of the Ombudsman do not, in my view, accord well with the object of Constitution s.27(4) which is to prevent an identified actual or potential corrupt transaction or misconduct by a leader covered by s. 26 of the Constitution for the protection of the people of PNG as discussed above.

100.	The foregoing discussions should make it clear that the factors that must exist to warrant the issuance of a direction by the Ombudsman under Constitution s. 27(4) as outlined in paragraph 93 and 94 do not exist in this case.  For this reason, I would declare the 14th March 2014 Direction invalid. This should be sufficient for the case at hand.   However, given that arguments where presented along the lines that the Ombudsman does not have any power to issue a direction that has the same effective as an injunctive order issued by a Court, I will address that point. 

101.	The law as I discussed above makes it clear that the Ombudsman has a quasi-judicial power under s. 27 (4) of the Constitution.  That power is pre-emptive and preventative in nature.  Any person aggrieved by such a decision has the right to seek a judicial review of both the decision to issue a direction and the effect of such a direction.  In other words, the power under Constitutions. 27 (4) can be exercised to prevent a possible corrupt transaction or misconduct for the protection of the people of Papua New Guinea. That necessarily means issuing a direction that will effectively prevent a corrupt transaction from occurring or misconduct in office from being committed which is similar in nature to an injunctive order. Any person aggrieved by such a decision has the right to seek judicial review.  If this Court is to declare that the Ombudsman cannot issue directions under Constitutions. 27 (4) that has the effect of an injunctive order, the purpose of having that provision and vesting the Ombudsman with the quasi-judicial power will be defeated.  I would thus dismiss the arguments to the contrary advanced by the Prime Minister and the other interveners.

Answer to the first question in Makail J.’s reference

102.	Based on the foregoing, I would answer the first question under the Makail J., reference with both a “yes” and “no”.  The “yes” part relates to the Ombudsman having as a matter of law the power to issue directions in appropriate cases.  The “no” part relates to the decision the Ombudsman made in the particular circumstances of this case.  Given the lack of all of the factors that must exist to warrant the issuance of such a direction, the Ombudsman did not lawfully and therefore validly issue the 14th March 2016 Direction.   

Second question under Makail J. reference

103.	The second question under the Makail J., reference concerns a failure to comply with the 14th March 2014 Direction. The question reads:

“Whether a failure to comply with the notice or direction dated 14th March 2014 is misconduct in office, on the proper interpretation and application of s. 27 (5) (b) of the Constitution?”

104.	Constitution s. 27 (5) stipulates:

“(5)	A person to whom this Division applies who—
(a)	is convicted of an offence in respect of his office or position or in relation to the performance of his functions or duties; or
(b)	fails to comply with a direction under Subsection (4) or otherwise fails to carry out the obligations imposed by Subsections (1), (2) and (3),
is guilty of misconduct in office”

105.	Again going by the principles of Constitutional Law interpretation and application as earlier discussed, the provisions of Constitution s. 27 (5) (b) and the foregoing discussions, it is clear as to what this provision provides for.  A leader appearing on the list under Constitution s. 26 and or generally the Leadership Code and the OLDRL, who is served with a direction issued by the Ombudsman under Constitution s. 27 (4) fails to comply with the direction, is guilty of misconduct in office.  In my view, in order for such a misconduct to occur three essential elements under Constitution s. 27 (5) (b) must be present.  These are:

(1)	the misconduct must be by a leader covered by the Leadership Code and the OLDRL; and

(2)	the Ombudsman issued a direction directed at the leader; and

(3)	the leader failed to comply with the direction.

106.	Each of these elements has to be established by evidence where there is a serious contest.  By now, who is as a matter of law covered by the Leadership Code and OLDRL, should be clear based on the foregoing discussions.  In short, those who are covered are the persons listed in Constitution s. 26 and heads of statutory authorities like the MRDC which are solely owned, funded and control by the State or a public authority. For the purposes of the second element, I am of the view that, the direction must be one that was lawfully or validly issued at the first place.  A direction under s. 27 (4) of the Constitution would be lawful or validly issued if all of the factors set out in paragraphs 93 and 94 of this judgment are met. The third element is a factual question which will depend very much on the evidence adduced to support or argue against an allegation of none compliance of a direction.  

Answer to question 2 in Makail J.’s referral

107.	Considering the foregoing and the facts in this case, I would answer the question presented both with a “yes” and “no”.  The “yes’ answer is in relation to general position as a matter of law.  The “no” is in relation to the particular circumstances of this case.  Having found that the 14th March 2014 Direction in this case is invalid, the requirement for compliance and any penalty for none compliance does not arise.

Third question under Makail J.,’s referral 

108.	Moving onto the third question under the Makail J., reference, I note the third question is a follow on question from the first two questions under that reference. The question is in these terms:

“If the answers to (1) and (2) above is ‘yes’, does the Ombudsman Commission have authority power and jurisdiction to impose penalties under s.28(1)(g)(ii) of the Constitution, s.27(5) of the OLDRL and s.2 of the Leadership Code (Alternative Penalties) Act?”

109.	This question requires a taking into account of the answers to the first two questions and a consideration of the provisions mentioned in the question itself.   The answers to the first two questions were “yes” in terms of the law generally. However, as to their correct and proper application to the circumstances of this case, both questions have been answered with a “no”. This renders any consideration and answering of the third question unnecessary.  However, for completeness and what appears to me to be an error in the question itself, I will briefly deal with this question.

110.	I start with a consideration of what each of the provisions mentioned in the question provides for in terms of their meaning and application.   These provisions read:

Constitution 

“28.	Further provisions.
(1)	For the purposes of this Division, an Organic Law—
…
(g)  shall establish independent tribunals that—
(i)	shall investigate and determine any cases of alleged or suspected misconduct in office referred to them in accordance with the Organic Law; and
(ii)	are required subject to Subsection (1A), to recommend to the appropriate authority that a person found guilty of misconduct in office be dismissed from office or position…”
OLDRL

“27.	Tribunals.
…
(5)	If the tribunal finds that a person to whom this Law applies is guilty of misconduct in office, it shall recommend to the appropriate authority that—
(a)	he be dismissed from office or position; or
(b)	as permitted by Section 28(1A) (further provisions relating to the Leadership Code) of the Constitution and in the circumstances set out in that subsection—some other penalty provided for by an Act of the Parliament be imposed.”

111.	The Leadership Code (Alternative Penalties) Act (LCAPA) is a short legislation.  This legislation in s. 2 provides for a range of penalties as alternatives to those already provided for in the Constitution and the OLDRL.

112.	A combined reading of these provisions makes it clear that an Organic Law is to provide for the way in which the Leadership Code is to be elaborated upon and enforced.  The relevant Organic Laws are the OLDRL and Organic Law on the Ombudsman Commission. Of the two, the OLDRL is the one that elaborates and provides for the process to investigate into alleged breaches of the Leadership Code and the Organic Law itself.  Both the provisions of s. 27 of the OLDRL and the Constitution s. 28 (1) (g) (ii) make it clear that an independent tribunal has to be established to deal with any breaches of the Leadership Code and its enforcement. Part V of the OLDRL provides for enforcement of the Leadership Code and its own provisions which elaborate and support the Leadership Code.  Subsection (1) of s. 27 of the OLDRL stipulates that, if the Ombudsman is “satisfied that a person to whom this Law applies is guilty of misconduct in office, it shall refer the matter ….to the Public Prosecutor or to the appropriate tribunal referred to in Subsection (7).”  Subsection (7) specifies the various tribunals to deal with certain categories of leaders.  I cannot see any provision in any of the legislation or provisions under consideration that vests any power in the Ombudsman to impose penalties or sanctions except only by an appropriate tribunal or authority.  

Answer to the third question under the Makail J., reference

113.	In the circumstances, regardless of the answers to the first two questions, as a matter of law I would answer the third question with a clear “no”.  There is no specific authority vested in the Ombudsman by any law for it to impose penalties for any breaches of the Leadership Code and the OLDRL. That power is vested in the appropriate tribunal under s. 27 of the OLDRL after a successful prosecution and a guilty verdict. The Ombudsman’s power and function lies with investigations, including the preventive and pre-emptive actions as discussed already and referral to the PP or the appropriate tribunal a prima facie case of a breach of a Leadership Code or the OLDRL by a leader covered by s. 26 of the Constitution. 

Fourth question under Makail J.,’s referral

114.	The fourth question under the Makail J., referral concerns the principles of natural justice under s. 59 of the Constitution, under five subheadings, namely: (1) the right to be heard  generally;  (2) issuing a notice or direction under s. 27 (4) of the Constitution; (3)  after having made the decision and issuing the 14th March 2014 Direction; (4) issuing letter dated 23rd May 2014 to Dairi Vele, the then Acting Secretary of the Department of Treasury; and (5) referring a leader for misconduct in office pursuant to s. 27 of the OLDRL.

115.	A good place to start considering and answering this question is Constitution s. 59.  The provision reads:

“59.	Principles of natural justice.

(1)	Subject to this Constitution and to any statute, the principles of natural justice are the rules of the underlying law known by that name developed for control of judicial and administrative proceedings.
(2)	The minimum requirement of natural justice is the duty to act fairly and, in principle, to be seen to act fairly.”

116.	This provision has been interpreted and applied in a long list of National and Supreme Court decisions. In SCR Nos 12 and 12A of 1984; Joe Parakas v. The State, the Supreme Court said:
“Section 59 does not create any constitutional rights of the nature contained in Div 3 of Pt III of the Constitution, that is, rights such as the right to life (s 35), MRDC v. The Ombudsman Commission (supra)liberty of the person (s 42) etc, .but it does two very important things. In subsection (1) thereof it makes provision as to where to find or look for the principles of natural justice, namely, in the underlying law. Subsection (2) is a direction to authorities such as the courts that it is a minimum requirement of natural justice to be fair and to be seen to be acting fairly. So the courts are required by s 59 to in fact practice fairness in their judicial deliberations. But the section does not lay down the criteria for fairness but leaves such matters to the statutes and the underlying law.”
117.	Other cases have now made it clear that this section grants a right to be heard.  That right is fundamental and one which must be accorded by every public decision maker before making a decision that finally affects the rights and interests of another person.  They also say that, this right includes a duty imposed on all public decision makers to give reasons for their decision. Cases on point include: Ombudsman Commission v. Peter Yama;CL Toulik v. Andy Kuek and New Britain Palm Oil Limited v. Vitus Sukuramu.  These principles are an integral part of the underlying law of Papua New Guinea. This right is available for and applies to judicial and administrative decisions only.

118.	As to the application of this provision to the Ombudsman as a decision maker, my discussion on of the law under the first question under the Makail J referral applies.  I add however, to that discussion this Court’s decision MRDC v. The Ombudsman Commission and in particular the following passage:
“The Supreme Court in John Mua Nilkare v. Ombudsman Commission [1999] PNGLR 333, ruled that there is no obligation pursuant to statute or the principles of natural justice that the Ombudsman Commission has a duty to notify a person subject to the Leadership Code that he is under investigation under that law.
46. After a detailed analysis of the law, Kapi DCJ (as he then was), said:
‘There is clearly an implied intention by the legislature that a person investigated under OLDRL should not have the right to be notified before an investigation is carried out. The right to be notified is given at a later stage after the investigations have been carried out under s.20 (2).
Having come to this conclusion, there is no room for the application of any principle of underlying law with respect to natural justice which may require a right to be notified before investigation commences.  Any such principle (if any) would be inconsistent with the implied intention not to apply this right until at a later stage of investigations under the provisions of OLDRL.’
47. We see no reason to depart from this reasoning.”
119.	In summary, the law is clear that the Ombudsman is obliged to accord a leader his or her right to be heard before making a decision to refer a leader to the Public Prosecutor or an appropriate tribunal under s. 27 (1) of the OLDRL.  It is also settled law that, the right to be heard is not available at the investigation stage, which includes an issuance of directions under s. 27 (4) of the Constitution. 

120.	Having regard to the above, I am of the view that the question under consideration has been unnecessarily raised and included in the referral. The issues raised in this question have already been answered in earlier decisions of this Court, leaving no need for an interpretation of a Constitutional law.   For completeness however, I will briefly answer each of the questions as follows:

….right to be heard before:

(a)	making any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea citizens?
Answer:	This question is too general and is not properly contextualized by reason of which it not properly before this Court.  Hence, no answer is thus required.  Generally, however, the answer is “yes” the Ombudsman Commission has the necessary power and authority to make decisions as are granted to it by Constitution, the ODLRL and the OLOC and any other law.

(b) 	issuing a notice or direction under s.27(4) of the Constitution?
Answer:	No (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra), MRDC v. The Ombudsman Commission and other cases on point).

(c) 	having made the decision and issued the notice of direction dated 14th March 2014.
Answer:	No (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra), MRDC v. The Ombudsman Commission and other cases on point).

(d) 	issuing a letter dated 23rd May 2014 to Mr. Dairi Vele, the Acting Secretary of the Department of Treasury?
Answer:	No (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra), MRDC v. The Ombudsman Commission and other cases on point).

(e) 	referring a leader for misconduct in office pursuant to s.27 OLDRL.
Answer:	Yes (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra) and the many others like Ombudsman Commission v. Peter Yama (supra).

Fifth Question under Makail J., referral 

121.	Turning then to the fifth question in the Makail J., referral, I am of the view that this question is a repeat of question 4 under that referral.  The only difference is in the reference to s. 59 of the Constitution in the earlier question.  Save only to note that this question concerns the Ombudsman’s powers, it is too general which does not require any answer until we get to sub-questions (b) to (e).  Again as was the case with the fourth question, the answer to these questions are in the discussion in the earlier part of this judgment.   The questions and my answers for completeness are as follows:

(5)	Whether the Ombudsman Commission has lawful authority, power and jurisdiction to:

(a)	make any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea or its citizens;

Answer:	This question is too general and is not properly contextualized by reason of which it not properly before this Court.  Hence, no answer is thus required.  Generally, however, the answer is “yes” the Ombudsman Commission has the necessary power and authority to make decisions as are granted to it by Constitution, the ODLRL and the OLOC and any other law.

(b)	issue a notice or direction under s.27(4) of the Constitution;

Answer:	Yes, in accordance with the law as discussed above.

(c)	make a decision and issue the notice on (sic “or”) direction dated 14 March 2014;

Answer:	No. Although the Ombudsman has the power to issue such a notice or direction as a matter of law, it can only do so lawfully.  In this case, as discussed already, the notice or direction was issued invalidly because it failed to meet the requirements of the law for a valid exercise of that power.

(d)	issue a letter dated 23 May 2014 to Mr. Dairi Vele, Acting Secretary of the Department of Treasury;

Answer:	No. Although the Ombudsman has the power to issue such a notice or direction as a matter of law, it can only do so lawfully.  In this case the letter issued to Secretary Vele concerned and was part of UBS Loan and part of the decision and the issuance of the 14th March 2014 Direction which have been found to be invalid.  It follows therefore that the issuance of the letter to the Secretary Vele was also invalid.

(e)	refer a leader for misconduct in office pursuant to in office pursuant to s.27 of the OLDRL.

Answer:	This question is too general and a general answer is required. Generally, therefore the answer is “yes” as long as the exercise of that power is in accordance with the law.

Sixth question under Makail J., referral 

122.	The last and final question under the Makail J., referral concerns the proper meaning and effect of s. 255 incorrectly stated as s. 225 of the Constitution.   The question reads:

“Whether on the proper interpretation of s.225 (sic “255”) of the Constitution, it is not a mandatory requirement in all circumstances, that where a law provides for consultation between persons or bodies, the consultation must be meaningful and allow for a genuine inter-change and consideration of views, particularly given the qualifying works (sic “words”) “in principle” in s.225(sic “255”) of the Constitution.”

123.	Constitution s. 255 reads:

“In principle, where a law provides for consultation between persons or bodies, or persons and bodies, the consultation must be meaningful and allow for a genuine interchange and consideration of views.”

124.	From its own wording, it is clear that this provision is a general provision intended to cover all cases in which there is a requirement “for consultation between persons or bodies or persons and bodies”.   This is apparent from the use of the phrase “In Principle”.   In other words, this provision is saying, generally where there is a requirement for consultation without more, this provision applies.  This in turn means, where a law providing for consultation is specific, that should take priority over s. 255.   Some law for example, s. 115 (1) of the Organic Law on Provincial Governments and Local-level Governments(OLPLG) provides for consultation in specific terms and use the word “shall” instead of the term “may” or the phrase “in principle” as follows:

“(1)	Where there is a proposal to develop a natural resource in a province or provinces, the appropriate National Minister designated by the National Executive Council shall consult with the Provincial Government in the province or provinces where the natural resource is situated.”
									(Emphasised supplied)

125.	The wording in s. 255 uses the words “in principle” while the wording in s. 115 of the OLPLG uses the word “shall”.  They are not one and the same thing.  The consultation provided for in s. 255 is “in principle” while the requirement for consultation is in mandatory terms by the use of the word “shall” in s.115 of the OLPLG.  There is a long line of cases which make it clear that the use of the word “shall” in any legislation signals a mandatory requirement.  A recent decision on point is the decision of this Court in Electoral Commission of PNG v. Simon J Solo.  That case amongst other had to consider and determine if the requirements of s. 149 of Organic Law on National and Local Level Government Electionsis mandatory or not.  The provision in question reads: 

“The scrutiny at a counting centre shall be conducted by the Returning Officer, or, in the absence of the Returning Officer for that counting centre, by an Assistant Returning Officer”…

126.	The Court after quoting the provision said:
“38.	This section prescribes that the proper electoral officers to conduct scrutiny is the Returning Officer and in his absence the Assistant Returning Officer.  This is made abundantly clear by the expression “shall” in the section.  The scrutiny must be conducted by the Returning Officer at the counting centre, but if he is unavailable then the Assistant Returning Officer is to conduct the scrutiny.  It is mandatory that the Returning Officer is to conduct scrutiny.  Section 149 does not authorise any other electoral official to conduct scrutiny.  In our view, in practice this means that the Returning Officer must be physically present at the counting centre during counting or scrutiny.  In the event that it is not possible for whatever reasons, the Assistant Returning Officer is to be physically present and oversee the scrutiny. Failure to do so would amount to errors and omissions.  It would mean that no scrutiny took place during counting.”
127.	There is a long list of other cases taking a similar position in respect of subsidiary legislation, Acts of Parliament and Constitutional law provisions, using the word “shall.”  On the basis of this line of authorities, it can be safely said that this is a settled principle of law in PNG.

128.	Turning to the particular question under consideration, I am of the view that, it does not disclose the context in which the question is raised.  Neither the evidence nor any of the submissions before the Court does that.  The only place where there is a reference to s. 255 and the need for consultation is in the letter from the Ombudsman to the Department of Treasury dated 23rd May 2014, which is reproduced in the main parts at paragraph 52 of this judgment.  The relevant part of that letter reads:

“The Commission is quite concerned that there were no relevant consultation with the Relevant State Agencies, person and bodies as a legal and constitutional requirements under Section 255 (Constitutional) of the Constitution, between persons and bodies. The consultation must be meaningful and allow for genuine interchange and consideration of views.”

129.	As can be seen, no State Agency or person or body is specified and how or where such a consultation is required.  It is too general and does not give the reader an opportunity to know who was require to consult with who and where is the requirement coming from, whether a provision of the Constitution, an Act of Parliament or any rule or regulation or more relevantly how the requirement for consultation has been breached.  In these circumstances, I am of the view that the question is not properly included in the referral and does not warrant any answer.  However, to make the discussion complete and restricting myself to the provisions of s. 255 alone, the answer to the question under consideration is yes.   

First question under the AG and Cannings J.’s referral

130.	This now leaves me to deal with the questions under the AG and Cannings J.’s referrals. I will start with the first question which is centred on s. 27(2) of the OLDRL and ss. 26 – 31 of the Constitution or the Leadership Code. Section 27 (2) and Constitution s. 29 (1) empowers the Ombudsman to refer to PP a leader for prosecution for any breach of the Leadership Code or any provisions of the OLDRL upon being satisfied that there is a prima facie case against a leader.  In Grand Chief Sir Michael Thomas Somare v. Chronox Manek,discussed in detail the process from investigations by the Ombudsman to the appointment of leadership tribunals to deal with allegations of misconduct in office by leaders.  In so doing, the Court noted that:

“…there is no dispute that, where the Ombudsman finds a prima facie case of a leader guilty of misconduct in office and decides to refer the leader to the PP as in this case, the PP independently considers the matter and comes to a decision whether or not to proceed.  The decision of this Court in SC Ref No. 3 of 2005 (supra) re-affirms that position.
								
33. We add that, the phrase “[i]f the Public Prosecutor considers that the matter should be proceeded with...” in s. 27 (2) of the OLDRL, clearly suggests that the PP has to consider the referral from the Ombudsman on its merits and decide whether or not to proceed to prosecute a leader for misconduct in office.  This involves looking at both the alleged misconduct and the strength of the evidence presented by the Ombudsman to successfully prosecute.  The position is akin to police hand-up briefs in committal proceedings under the criminal justice system and the choice the PP has to make under s. 525 (1) of the Criminal Code. 

34.	If the PP is thus independently satisfied that there is a prima facie case of misconduct in office and hence there is merit in the referral, he would then request the Chief Justice to appoint a leadership tribunal to hear allegations of misconduct in office by the leader concerned.  However, as this Court held in SC Ref No. 3 of 2005, if the leader concerned is the Chief Justice, a Judge, the PP, the Public Solicitor (PS) or other law officers and Constitutional Office Holders (COH) like the Auditor General, the referral must be to their respective appointing authorities.  Those authorities will independently consider the matter on its merits including carrying out of their own investigations and if the subject matter gives rise to a question of possible removal from office, it would appoint a tribunal or refer the matter to the Chief Justice to appoint a tribunal.”

131.	Speaking of the system we have under the Leadership Code and the OLDRL, the Court reiterated that:

“Clearly, we have a system of ensuring that only meritorious allegations of misconduct in office go before a leadership tribunal.  That system involves the independent exercise of powers and functions which are different from each other from investigations into an allegation of misconduct in office, to a decision to prosecute, the establishment of a tribunal and the tribunal ultimately coming to a decision on the allegations.  There is also the further process of review of a decision of the tribunal and finally if a leader remains aggrieved, he or she still has a right of appeal against the decision on judicial review.  This process is necessary to ensure that leaders are not subjected to baseless accusations given the importance of the offices they respectively occupy and in the case of all law officers, including the Chief Justice, the Deputy Chief Justice, and the Judges and other COHs, the independence of their respective offices.  Additionally, the system also provides for a way of ensuring that the proper processes and or steps are taken to properly prosecute a leader for any misconduct in office.”

132.	Given this system and its process, the Court most importantly went on to state:

“It is trite law that, a later process or a higher authority such as the National or the Supreme Court cannot easily and readily interfere with the earlier parts of the justice process from being properly completed.”

133.	In support of the above proposition, the Court referred to and cited with approval its earlier decision in the matter of Rimbink Pato v. Anthony Manjin,in which it held that it is inappropriate to issue injunctions restraining the Police Force from carrying out its constitutionally mandated task of conducting criminal investigations and dealing with offenders.   The Court gave two reasons for its decision. These were:

“Firstly, the applicant has protection under the Constitution. His rights, whatsoever they may be, in respect of a criminal prosecution are protected by the Constitution. 
	
If he claims such rights are violated, he has recourse pursuant to s. 57 Constitution. We can't see how he can suppress and prevent, by injunction, a criminal investigation by police, which is a constitutional function. 

Secondly, if the applicant claims that his reputation as a lawyer and a politician have been injured and his character defamed by what he asserted to be a conspiracy by the two Engan Members of Parliament with the three police officers, he has the right to sue and issue proceedings for defamation under the Defamation Act….

It is our view that the restraining order against the police, is not only outrageous and spurious, but an interference with the constitutional function of the police.”

134.	The Court in Somare v. Manek (supra) case noted that a growing line of authorities supported the position taken in Pato’s case with the exception of only three cases. Two of those cases were on the basis of a denial of natural justice prior to a decision to commit the respective plaintiffs.  This was in Tkatchenko v. Dessy Magaru and Jimmy Mostata Maladina v. Posain Poloh.   The third case was in Sakawar Kasieng v. Andrew Baigry. There the defendant conducted a coronial inquest some three years after the death of a person well outside the time period stipulated in the Coroners Act. That in turn required the Attorney General’s approval which was not sought and obtained.  Further, the first defendant did not conduct a proper and complete coroner’s inquest in accordance with the requirements of the Act following the death of a person.  Furthermore, the defendant did not formally have the plaintiff charged in accordance with the findings of the inquest or at all.  In these circumstances, I granted the plaintiff leave for judicial review as I was of the view that there was clearly no proper legal foundation for the actions taken against the plaintiff.

135.	Further, the decision in Somare v. Manek (supra) took a comparative look at the position in jurisdictions similar to ours, especially in Australia and England and in particular the decision in Ex parte Cousins’; Re Blacket and Anor. There, Sir Frederick Jordan speaking for the court in the context of an attempt at intervening in a committal proceeding concluded:

“This is essentially an executive and not a judicial function; and although magistrates have been exercising this authority for nearly 400 years no instance can be found of a superior court having interfered with a magistrate by certiorari or prohibition in his exercise of this function: Cox v Coleridge (1882) 1 B & C 37”.

136.	For the position in England, the decision in Somare v. Manek (supra) referred to the decision of Lord Denning in Moran v. Lloyds, where his Lordship said:

“Today we have to deal with a modern phenomenon. We often find that a man (who fears the worst) turns around and accuses those – who hold the preliminary inquiry – of misconduct or unfairness or bias or want of natural justice. He seeks to stop the impending charge against him. It is easy enough for him to make such an accusation. Once made it has to be answered. So he says there is a triable issue: and that it must go to trial. He knows that it will take months and months. So he gets that which he most wants – time – time to make his dispositions – time to put in his money in a safe place – time to head of the day when he has to meet the charges. And who knows? If he can stop the preliminary inquiry in its tracks, it may never start up again.”

137.	As the Court in Somare v. Manek (supra) noted, Lord Denning’s words found their way into our shores per the judgment of Sheehan J. in Diro v. Ombudsman Commission of Papua New Guineawho cited this passage with approval.  The Court also noted that Canning J.’s decision in Zachary Gelu v. Sir Michael Somare MPsaid the same thing but in other words in these terms: 

“However, it is only in a very clear case that the court should consider ordering a halt to an investigation that is being conducted by a proper authority under the laws of Papua New Guinea. If we do not insist on the rather strict test ... the court will create the environment in which any person who is fearful of exposure by a commission of inquiry or another investigatory agency will come to the court, knowing that they only have to establish an arguable case. The investigation will be stopped in its tracks. Time will be bought. Perhaps time to hide evidence. The courts may unwittingly be protecting those with something to hide rather than protecting the more legitimate interests of those with a right to know: the People of Papua New Guinea.”

138.	Taking into account the foregoing, the Supreme Court in Somare v. Manek (supra) added:

“…all these processes, be it Police investigating into a criminal matter or the Ombudsman carrying out its investigations under the OLDRL; or committal courts and the PP or the various appointing authorities in the case of the law officers and COHs, considering whether there is prima facie case of misconduct in office; or a commission of inquiry inquiring into certain facts, are only preliminary steps.  They do not make final decisions on guilt or innocence and or penalties.  Those are matters that are left to the ultimate decision making authorities like the courts in indictable criminal offences and a leadership tribunal for leadership breaches once appointed.

54.	It is in the court or a final decision making authority like leadership tribunal, where the evidence gathered through the investigations gets tried and tested.  It is there in these forums that an accused has all his constitutional and other rights, protection and appeal or review procedures that the justice system provides which an accused can avail him or herself of.  These rights are not extinguished upon a decision to investigate, charge, commit an accused to stand trial or refer a leader to the PP and a request from him to appoint a leadership tribunal and such a tribunal being appointed.  They remain intact until at the trial or hearing level and a final decision is arrived at.”

139.	The Court then said, there must be a careful weighing of the two competing interests.  On the one hand is the people’s interest in successful prosecution of offenders when the trail and cogency of the evidence is fresh and intact and on the other hand the alleged offenders right to be dealt with fairly and in accordance with the law. The people’s interest would be lost with delaying forced by ready interference of the due process while the offender will benefit from the delay first and secondly from his criminal or misconduct in office.  The Court then concluded:

“Carefully weighing the two sides and all of the cases cited above, we are of the firm view that, the interest of justice and the need to allow for the due process of the law to take its proper course for the greater good of society will be better served by the superior courts, that is the National Court and or the Supreme Court as the case might be, maintaining the age old tradition of not intervening. This should be without any exception because as this Court said in SC Ref No. 3 of 2005, all issues concerning both the process and the substance can be taken up as a preliminary point when the proper court or the tribunal assumes jurisdiction and is seized of the matter. If after that process, the court or the tribunal finds for the accused or the alleged offender that could in appropriate cases, form the foundation for appropriate remedial actions as highlighted by this Court in Pato’s case.  

59.	An intervention by the superior courts allows for instances, stopping the process only to restart it again. By then, the freshness of the evidence, availability of witnesses and interest in seeing justice being done gets lost and ultimately justice is not served.  Justice can only be done without much delay and all steps that need to be taken being taken in a timely and orderly fashion.  Otherwise, the converse of that is true. Justice delayed is justice denied with those who seek out to delay justice end up gaining.  If those who are accused or implicated have nothing to hide they would readily allow the process to take its proper course.   Good leadership requires a ready acceptance of responsibility for one’s actions and try to minimize any harm or damage that can be done to themselves, interest of the institutions they are part of and that of the nation, by allowing the process to take its course.  Most of the harm and damage is caused by people who chose to take all sorts of unnecessary issues with the process without merit most of the time, which results in unnecessary costs and delay. Usually such steps are taken to divert attention from the real issues.”

140.	Subsequently, the five (5) member Supreme Court decision in Eremas Wartoto v. The State,unanimously decided against Mr. Wartoto’s use of civil proceedings to prevent criminal proceedings against him.  Sakora J and I in our joint judgment with which Kirriwom J agreed, referred to and applied the decision in Somare v. Manek (supra) amongst others to arrive at our decision on the Wartoto case.  In my view, this now settles the law beyond any argument that the ready resort to judicial reviews and such other actions which does nothing more than technically defeat prompt investigations, prosecutions and penalising of offenders of the criminal code and other laws and more so the Leadership Code for the protection of the people of PNG is not permissible.  Anyone concerned with the process or the powers, functions and or jurisdictions of the authorities dealing with them, they should first raise such issues with the relevant authority.  This means, any issue concerning the process and arguments over proper assumption of jurisdiction by for instance a leadership tribunal must be raised with a leadership tribunal and not elsewhere.  The relevant authority should be able to deal with any such issues as was done by the Leadership Tribunal in Re Raho Hitolo, Member of the Ombudsman Commission.

141.	In this case, there is no evidence of the Ombudsman carrying out any investigations into the UBS Loan issue and the decommissioning of Hon. Polye.  There is also no evidence that the results of an appropriate investigation formed the foundation for the 14th March 2014 Direction and letters written to Secretary Vele. The generality of the allegations and the letters issued to Secretary Vele clearly renders support to the suggestion that no proper investigations or inquiry was carried out and such forming the foundation for the steps taken by the Ombudsman.  There is also no evidence of the Prime Minister being accorded his right to be heard before the Ombudsman decided to and referred the matter to the PP. The agreed facts confirm all relevant advice and clearance from Department of Treasury and the State Solicitor were given for the UBS Loan.  Also, as noted, the agreed facts point out that the Loan enabled the State to redeem its stake in the PNG LNG Project without mortgaging any of the SOE’s assets unlike the arrangement under the IPIC loan under the then Somare Government.  Further, there is no evidence of the Prime Minister or any of his associates personally benefiting at the expense of the State. A proper investigation would have enabled the Ombudsman to find these undisputed facts.  These agreed facts are at odds with the basis for the 14th March 2014 Direction and the letters to the Secretary Vele and the eventual referral of the Prime Minister to the PP.  

142.	Upon the PP receiving “the matter” referred to him by the Ombudsman, the PP initially formed the view that he needed further evidence.  It is not clear what further evidence he required before he could make his decision. However, it is clear from his press release that, the evidence he required from the Ombudsman was “vital.” Clearly, at that point, he was not satisfied that he could proceed to the next level on the material contained in the referral.  He therefore, made the request for “certain vital evidence”.  As noted, the Ombudsman did not favour the PP with the further “vital” evidence requested.  Yet, for reasons that are unclear, it appears the PP decided to proceed on the basis of the material earlier provided by the Ombudsman and requested the Chief Justice to appoint a leadership tribunal to inquire into allegations of misconduct in office by the Prime Minister.  In his request to the Chief Justice, he tried to improve on what was referred to him by the Ombudsman by coming up with the allegations “the UBS Loan was to buy shares in Oil Search Ltd” and that was for the “interest of Oil Search Limited and not in the interest of the Independent State of Papua New Guinea”.  

143.	The issue of how the proceedings first went before the National Court and are now before us is not an issue before us.  Only for that reason, I will refrain from taking a position in this case.  In so doing, I would like to make it clear for all future purposes that nobody should be permitted to come to this Court or the National Court for the reasons discussed above. Instead, anyone concerned with the process, any condition precedent and other legal requirements, including questions of jurisdiction, any denial of the principles of natural justice and any need for Constitutional law interpretation and application should all be raised at the first instance with the relevant authority.  This means, if there is any need for any interpretation and application of a Constitutional provision or a case to be stated, the relevant authority should be the one to refer the question or state a case for the appropriate Court or authority to consider and determine.   This is necessary to safe guard against any technical defeat of the public’s interest in seeing offenders investigated, prosecuted and where guilt is established, appropriately punished for the protection of the people when the trail of evidence and witnesses’ memories are fresh and intact and when the will to prosecute exists.

Answers to first question under the AG and Canning J., referrals

144.	With the relevant facts and foregoing discussions in mind, I will now answer the sets of questions under the first of the questions presented by the AG and Cannings J., referral by first stating the question to be followed by its answer as follows:

(1)	Is the Public Prosecutor, having formed the opinion that there is certain further evidence required before he can form an opinion that the Prime Minister should be referred to an appropriate tribunal:
		
(a)	Entitled to request the Ombudsman Commission to collate (or collect) further evidence and submit same to him or her to assist in the exercise of his powers under s.27(2) of Organic Law On Duties and Responsibilities of Leadership (OLDRL)?

Answer:	No.

(b)	Is the Public Prosecutor entitled to consider such further evidence before exercising his or her powers under s. 27 (2) OLDRL?

Answer:	No.

(c)	Is the Public Prosecutor obliged to decline to bring proceedings under Division III.2 of the Leadership Code, ss. 26 -31 of Constitution for misconduct in office in relation to the Prime Minister?

Answer:	Yes. There is no provision in the Leadership Code or the OLDRL which compels the PP to bring proceedings under the Leadership Code or the OLDRL. The closest we come to is Constitution s. 29 (2) and s.27 (3) of the OLDRL, which provisions allow for the Ombudsman to refer to the appropriate tribunal where the PP fails to do so. In the circumstances, the PP is not obliged to bring proceedings under the Leadership Code and the OLDRL if in his considered opinion each of the essential elements of the alleged misconduct in office alleged against a leader cannot be sustained.  In this case, the agreed facts and “the matter” referred by the Ombudsman to the PP and the PP’s request to the Chief Justice did not disclose a possible misconduct in office sufficient to warrant referral and prosecution. That is why the PP requested further vital evidence and did not receive them. Given that, the PP was obliged to decline to bring proceedings against the Prime Minister.

Second question under the AG and Canning J., Referral

145.	The second question under the AG and Cannings J., referral concerns s. 27 (1) and (2) of the OLDRL and in particular the PP’s ability to deal with any matter not referred to him by the Ombudsman. The question reads:

“(2)	Whether it is unconstitutional for the Public Prosecutor to refer under s.27(2) of the OLDRL to the appropriate Tribunal as “the matter” an allegation which was not referred to the Public Prosecutor by the Ombudsman Commission under s.27(1) of the OLDRL?”

145.	In short the answer to this question is simply “yes”.  The reasons for this answer are simple.  Again, based on the foregoing discussions, the relevant legal position is clear and leaves no room for any doubt.  The clear position is that, the PP can only act on a referral from the Ombudsman. Section 27 (2) OLDRL and s. 29 of the Constitution speak in terms of the Ombudsman or an appropriate authority referring to PP.  These provisions then speak of the PP acting on “the matter” referred to him.   There is no provision similar to s. 526 of the Criminal Code which authorizes the PP to present an ex officio indictment without a committal.   There being no similar provision made in the case of the Leadership Code and the OLDRL for any of their breaches, I am of the view that the PP has no power to act on his own but only on “the matter” referred to him. 

146.	For certainty and for the avoidance of any doubt, may I point out that this inability to act on his own by the PP is restricted to a substantive allegation of misconduct in office by a leader or the material facts supporting any such allegation. The PP will be entitled to frame any alleged misconduct and the facts supporting it as he considers appropriate on what has been provided to him by the Ombudsman.   Such framing may not be in the same wording or language as those used by the Ombudsman in its referral as long as there is no serious departure in substance from what was in the referral, both in terms of the proffered misconduct and the relevant and supporting facts.  In other words, the PP is restricted to “the matter” that was referred to him by the referring authority. Hence, he cannot, for instance, introduce a totally new charge or allegation of misconduct or facts that had not gone to and has been part of what was investigated by the Ombudsman and the leader was heard upon before the decision to refer “the matter” to the PP.   Obviously the PP would be acting unconstitutionally if he substantially departs from “the matter” referred to him by the Ombudsman.

147.	In the present case, “the matter” referred to the PP is set out in paragraph 55of this judgment.   The matter raises three issues namely; (1) failure to comply with administrative and financial process; (2) the Prime Minister unilaterally approving the UBS Loan and not the NEC; (3) making misleading statements about the truth of decommissioning Hon. Polye and getting advice from State Agencies. As already noted, what administrative or financial process had to be complied with was not specified. Similarly there is no disclosure of what advice was required from what State Agency and why.  Most importantly, and again as already noted, the agreed facts do not support any of these allegations or issues.   Appreciating that position, it seems clear to me in the absence of any explanation to the contrary, that the PP may have sought further evidence to supply the material facts that were missing and or evidence rebutting the uncontested facts.  When the Ombudsman failed to furnish the evidence, which can only be explained by a lack of proper investigation resulting in a lack of proper identification and securing of the relevant evidence, the PP did not have a prima facie case to request the appointment of a leadership tribunal.  The PP had no power to add or supply that which was missing and request the Chief Justice to appoint a tribunal.  In these circumstances it was unconstitutional for the PP to request the appointment of a leadership tribunal. 

Third question in AG and Cannings J.’s referral

148.	The third question under the AG and Cannings J.’s referral is dependent on a “yes” answer to questions (1) (a) and (b).  This question asks if it is unconstitutional for a leadership tribunal to assume jurisdiction and deal with a referral by the PP that is based on further evidence requested and provided by the Ombudsman.  The answer to this question needs to be consistent with the answer to questions 1 (a) and (b).   I answered these questions with a “no”. That being the case, there is no need to answer this question.

149.	For completeness however, I nevertheless not that my observation in paragraphs143, 144 to 147would be relevant.  Then proceeding on that basis, I note again that the PP tried to have a case made against the Prime Minister by introducing the allegations of “the UBS Loan was to buy shares in Oil Search Ltd” and that was for the “interest of Oil Search Limited and not in the interest of the Independent State of Papua New Guinea”.  In my view these additions did not assist the attempt to improve the position because the material facts that were lacking on the face of “the matter” referred as noted above, did not get supplied.   Hence, the referral by the Ombudsman through to the PP’s request to the Chief Justice was unconstitutional.  Hence the answer to the question presented but omitting the opening part of the question is “yes”. It would be unconstitutional for an appropriate tribunal under s. 27 (7) of the OLDRL to:

(a)	enquire into the “matter” referred to it by the PP in relation to the Prime Minister;

(b)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(c)	make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL.

Fourth question in AG and Cannings J.’s referrals

150.	The fourth question in the AG and Cannings J., referrals is dependent on a “yes” answer to question (1) (c) in these references.  That question as noted asked if the PP is obliged to decline to bring proceedings under Division III.2 of the Leadership Code, ss. 26 -31 of Constitution for misconduct in office in relation to the Prime Minister.  The answer was “yes.  The reason for this was that there is no provision in the Leadership Code or the OLDRL which compels the PP to bring proceedings under the Leadership Code or the OLDRL, especially if in his opinion there is no prima facie case.  In this case no prima facie case was presented.

151.	Having answered question (1) (c) with a “yes”, question (4) is asking, is it constitutional for the appropriate tribunal to:

(a)	enquire into the “matter” referred to it by the PP in relation to the Prime Minister; 

(b)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(c)	make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL?

152.	If the PP in the exercise of his powers, considers there is insufficient basis to establish each of the essential elements of misconduct alleged against a leader, he is entitled and or obliged to decline to request the Chief Justice to appoint a tribunal.    If however, the need for further evidence does not go into any of the essential elements of the particular misconduct in office alleged against a leader and the PP is of the view that there is a prima facie case, the PP could still proceed to request the appointment of a leadership tribunal on the material referred to him by the Ombudsman. In the latter case, it would be constitutional for that tribunal to assume jurisdiction and deal with the matter once appointed.  

153.	For the case at hand no prima facie case was referred to the PP by the Ombudsman.  The PP tried to get the Ombudsman to provided further evidence that could supply that which was lacking.  That was not done and the PP was left with what he received originally.  The PP then tried to meet the short fall himself by coming up with certain allegations which were not part of “the matter” referred and in any case, that did not fix the substantial lack in the material allegations and facts.  When that is the case, the answer to question 4 is “yes” it would be unconstitutional and I would answer each of the following questions with a “no”:

(a)	enquire into the “matter” referred to it by the PP in relation to the Prime Minister;

(d)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(e)	make recommendations to the appropriate authority pursuant to s.27(5) OLDRL.

Fifth and final question under AG and Cannings J., referrals

154.	The fifth and final question in the AG and Cannings J., referrals and indeed these referrals is dependent on a “yes” answer to question 2.  As noted question 2 asks if it is unconstitutional for the PP to refer under s. 27 (2) of the OLDRL as “the matter” an allegation not referred to it by the Ombudsman under s.27(1) of the OLDRL.  The answer to question 2 was a “yes”.  Given that, question 5 is asking if it is unconstitutional for the appropriate tribunal to:

(a)	enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister;

(b)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(c)	make recommendations to the appropriate authority pursuant to s.27(5) OLDRL?

155.	The answer to this question is a “yes”.   It should be pointed out that question 5 would arise only if the PP requests the establishment of a leadership tribunal without any referral to him by the Ombudsman a prima facie case of a breach of the Leadership Code or OLDRL under s. 27 (1) of the OLDRL and s. 29 (1) of the Constitution. This is the case in the case at hand because, strictly speaking “the matter” referred by the Ombudsman was not “the matter” referred by the PP to the Chief Justice for the appointment of an appropriate tribunal to deal with the alleged misconduct in office by the Prime Minister.

Answers in summary

156.	In summary my answers to the questions before the Court are as per the following table:

Questions under Makail J., referral
Questions	Answers	
(1)Whether the Ombudsman Commission, in the circumstances referred to in the reference, has lawful authority, power and jurisdiction to have made a decision to issue the notice or direction dated 14 March 2014 to the Prime Minister and others?	Yes” and “no”.  
Yes” in that the Ombudsman has the power to issue such directions in appropriate cases.  “No” because the 14th March 2014 Direction was invalid 	
(2)Whether a failure to comply with the notice or direction dated 14th March 2014 is misconduct in office, on the proper interpretation and application of s.27 (5) (b) of the Constitution?	Yes” and “no”.  
Yes” because generally a failure to comply with a lawful and valid direction amounts to misconduct in office by a leader. “No” because the 14th March 2014 Direction was invalid.  	
(3)If the answers to question (1) and (sic ‘or’) (2) above is ‘yes’, does the Ombudsman Commission have authority, power and jurisdiction to impose penalties under s.28 (1) (g) (ii) of the Constitution, s.27 (5) of the OLDRL and (sic - ‘or’) s.2 of the Leadership Code (Alternative Penalties) Act?	Given the “no” answers to questions (1) and (2) there is no need to answer this question. In any case, regardless of the answers, the Ombudsman has no power to impose any penalty. That power is vested in a leadership tribunal after a successful prosecution.  	
(4)Whether the Ombudsman Commission is required to comply with s.59 of the Constitution by providing the minimum requirement of natural justice to act fairly and, in principle, to be seen to act fairly before:
(a)	making any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea citizens?	This was unnecessarily included and in any case the questions have already been answered. Generally, however, the answer is “yes” the Ombudsman Commission has the necessary power and authority to make decisions in accordance with the law that grants it that power namely under the Constitution, the ODLRL and the OLOC and any other law.	

(b) issuing a notice or direction under s.27(4)of the Constitution?	No (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra), MRDC v. The Ombudsman Commission and other cases on point).	

(d)  issuing the letter dated 23rd May 2014 to Mr. Dairi Vele, the Acting Secretary of the Department of Treasury.	No (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra), MRDC v. The Ombudsman Commission and other cases on point).	

(e)	referring a leader for misconduct in office pursuant to s.27 OLDRL?	Yes (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra) and the many others like Ombudsman Commission v. Peter Yama (supra).	
(5)	Whether the Ombudsman Commission has lawful authority, power and jurisdiction to:
(a)	make any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea or its citizens?	This question is too general and is not properly contextualized by reason of which it not properly before this Court.  No answer is thus required.  Generally, however, the answer is “yes” the Ombudsman Commission has the necessary power and authority to make decisions as are granted to it by Constitution, the ODLRL and the OLOC and any other law.	
(b) issue a notice or direction under s.27(4) of the Constitution?	Yes, in accordance with the law as discussed above.	

(c) make a decision and issue the notice or direction dated 14 March 2014?	No. Although the Ombudsman has the power to issue such a notice or direction as a matter of law, it can only do so lawfully.  In this case, the Direction was issued invalidly because it failed to meet the requirements of the law for a valid exercise of that power.	

(d)issue a letter dated 23 May 2014 to Mr. Dairi Vele, Acting Secretary of the Department of Treasury?	No. Although the Ombudsman has the power to issue such a notice or direction as a matter of law, it can only do so lawfully.  In this case the letter issued to Secretary Vele concerned and was part of UBS Loan and the invalid decision and invalid issue of the 14th March 2014 Direction.  It follows therefore that the issuance of the letter to Secretary Vele was also invalid.	

(e) refer a leader for misconduct in office pursuant to s.27 of the OLDRL?	The question is too general and a general answer will suffice. The answer is generally “yes” as long as the exercise of that power is in accordance with the law.	
(6)	Whether on the proper interpretation of s.225 (sic “255”) of the Constitution, it is not a mandatory requirement in all circumstances, that where a law provides for consultation between persons or bodies, the consultation must be meaningful and allow for a genuine inter-change and consideration of views, particularly given the qualifying works (sic “words”) “in principle” in s.225(sic “255”) of the Constitution?	The context of the question is not clear but the general answer is “yes”.  
But where there is a specific provision providing for consultation such as is the case with s. 115 of the OLPLG, they take priority and apply.

Questions under the AG and Cannings J., referrals
Questions	Answers	
(1)Is the Public Prosecutor, having formed the opinion that there is certain further evidence required before he can form an opinion that the Prime Minister should be referred to an appropriate tribunal:
(a)	Entitled to request the Ombudsman Commission to collate (or collect) further evidence and submit same to him or her to assist in the exercise of his powers under s. 27(2) of Organic Law On Duties and Responsibilities of Leadership (OLDRL)?	

No. 
	
 (b)	Is the Public Prosecutor entitled to consider such further evidence before exercising his or her powers under s. 27 (2) OLDRL?	
No	

(c)	Is the Public Prosecutor obliged to decline to bring proceedings under Division III.2 of the Leadership Code, ss. 26 -31 of Constitution for misconduct in office in relation to the Prime Minister?	Yes.
There was nothing compelling him to bring proceedings. 	

(2)	Whether it is unconstitutional for the Public Prosecutor to refer under s. 27 (2) of the OLDRL to the appropriate Tribunal as “the matter” an allegation which was not referred to the Public Prosecutor by the Ombudsman Commission under s.27(1) of the OLDRL?	
Yes.
The matter referred by him to the Chief Justice was not the matter referred to him by the Ombudsman.	
(3)	If the answer to questions (1)(a) and (b) is “yes”, is it unconstitutional for the appropriate tribunal referred to in s.27(7) of the OLDRL to:
(a)	enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister?	In the light of the “no” answer it is not necessary to answer this question. But if we remove the reference to question (1) (a) and (b) and a “yes” answer to that, the answer is “yes”. 

(b) make a finding as to whether the leader is guilty of the allegations of misconduct in office?	As above	
(c) make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL?	As above
	
(4)If the answer to question (1) (c) is “yes”, is it constitutional for the appropriate tribunal to:
(a)	enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister?	The answer to question (1) (c) is “yes”. In view of that answer, the answer to this question “no”.
	
(b) make a finding as to whether the leader is guilty of the allegations of misconduct in office?	As above
	
(c) make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL?	As above
	
(5)	If the answer to question (2) is “yes”, whether it is unconstitutional for the appropriate tribunal to:
(a)	enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister?	Yes.
The matter referred to the Chief Justice by the PP for the appointment of a tribunal was not the matter that was referred to the PP by the Ombudsman.	
(b) make a finding as to whether the leader is guilty of the allegations of misconduct in office?	
As above	
(c) make recommendations to the appropriate authority pursuant to s.27(5) OLDRL?	As above	
156.	MOGISH, J: 	I have had the benefit of reading the draft judgments of my brothers Deputy Chief Justice Salika, Kandakasi, J and Higgins, J. My brothers have set out in detail the Agreed facts, the questions being referred, the constitutional provisions requiring our interpretation and the answers to the questions.
157.	I agree with the answers given by the Deputy Chief Justice regarding the powers of the Public Prosecutor. I also agree with the answers given by Kandakasi, J and Higgins J regarding the powers of the Ombudsman Commission to persons not covered under the Leadership Code. I agree with the reasoning and the conclusions stated therein.
158.	I wish to add the following in relation to investigatory and prosecution powers of the Ombudsman Commission and the Public Prosecutor after a referral.
159.	During submissions a lot of emphasis was given to the phrase “the matter” or “a matter” as provided for under s. 20(4) and s. 29 of the Constitution and s. 27(1)(2)(3)(4) of the Organic Law on the Duties and Responsibilities of Leadership(OLDRL). Neither of the two constitutional sources provides a definition. I am not aware that this phrase has been subjected to judicial interpretation.
160.	So what constitutes “the matter” or “a matter” in the context of a leadership process? In my view there is nothing technical or legal about the term. Its meaning can be derived from the Constitution and the OLDRL. The starting point to this exercise is s. 20(4) of the OLDRL. That is where the term is first mentioned. It is significant to note that the term the “matter” is referred to after the Ombudsman Commission has (1) completed their investigation and (2) and there is evidence of misconduct. The term the “matter” must therefore include matters arising prior to the completion of the investigation and from the time a complaint is made. Section 20(4) of the OLDRL states:
“If, after an investigation, the Commission is of the opinion that there is evidence of misconduct in office by a person to whom this Law applies, it shall refer the matter to the Public Prosecutor for prosecution by him before the appropriate tribunal.”
161.	So the meaning of the term must begin with the powers and functions of the Ombudsman Commission under the Leadership Code. The leadership process commences when a person makes a complaint to the Ombudsman Commission concerning the alleged or suspected misconduct in office a Leader. (s. 17(1)(c ); (4) and s. 18(1)(3)  OLDRL). 

(1)	The Ombudsman Commission then begins its investigation (s.17(1)(c ), s. 18(3) and 19  OLDRL.
(2)	The investigation is conducted in private (s. 20(1)(3) OLDRL).
(3)	The Commission interviews witnesses and obtain any information, documents, papers or things that, in the opinion of the Commission, relate to any matter being investigated. (s. 21 OLDRL).
(4)	Upon being satisfied that there is a prima facie breach of the Leadership Code, the Ombudsman Commission, then gives the leader a “right to be heard” (s.20(3) OLDRL). Note that the provision does not refer to the term “matter”.
(5)	Based on the leader’s response, (or lack of) the OC then decides whether there is a prima facie breach of the Leadership Code. 
(6)	If the OC is satisfied that there has been a prima facie case of breach of the Leadership Code, the Leader is notified. 
(7)	The Leader is then referred, as in this case, to the Public Prosecutor (s. 29(1) Constitution). The referral to the Public Prosecutor is accompanied by a statement of reasons for its opinion.
162.	The referral of “the matter” must comprise all evidentiary materials collated and shown to the Leader during the investigation. This will include the original complainant, witness statements, documents, exhibits that support the allegations, the right to be heard and the Leaders response (or lack of) statement. All these material, would constitute the matter that the Ombudsman Commission refers to the Public Prosecutor. It is those materials, including the Statement of reasons containing the opinion of the Ombudsman Commission that the Public Prosecutor is asked to determine and nothing else. 
163.	In the reference before us, the Public Prosecutor has released a Press statement regarding the leadership prosecution against the Prime Minister. Mr. Varitimos, Counsel for the Leader and Mr. Web Counsel for the Attorney General submitted the PP has no constitutional powers to seek further evidence from the OC whose investigatory role into the matter in question effectively terminates upon referral and thereafter he becomes functus officio.
164.	Mr. Kubak, Counsel for the PP and submitted the PP has powers to request further evidence from the OC. Mr. Narakobi, Counsel for the OC submitted this Court should not entertain the Reference because it is premised on a Press Release.
165.	There are two features of the Leadership prosecution which makes it distinctive from ordinary criminal prosecution where the PP can direct the investigating officer to collate new evidence not available during the committal proceeding.
166.	The first relates to the function of the OC. Once the investigative process is completed, the functions of the Ombudsman Commission in relation to that matter are functus officio. This contention is supported by the Supreme Court decision in Ombudsman Commission v. Yama (supra) where the Court observed that “The role of the Commission ceased upon the referral to the Public Prosecutor.”  The PP cannot engage him in any more investigatory exercise regarding the matter. And the OC is obliged to comply with the request. I would go further to say the Ombudsman Commission is ceased of the matter.
167.	The second relates to the function of the Public Prosecutor in leadership prosecution. It is significant to note that his function is constrained, limited and restricted to the matter that has been referred to him by the Ombudsman Commission. He cannot go out his way and request for evidence that were not part of investigation as he would in an ordinary criminal prosecution. He does not have power to request from or direct the Ombudsman Commission further new evidence of any suspected misconduct in office, not does he have the power to refer to the Tribunal any matter than one referred to him by the Ombudsman. If the Public Prosecutor was entitled to refer a different matter to what was referred to him by the Ombudsman Commission, it would erode and circumvent the safeguards afforded to the leader as part of the referral process. For instance the investigation would no longer be heard in private; the leader would be denied his right to be heard on those new evidence; the Leader will be denied his entitlement to be informed not only of the Ombudsman Commission decision to refer him or not to refer him, as the case may be, but also the reasons for the decision. As a matter of procedural fairness and observing the rules of natural justice, the Public Prosecutor can only decide whether to refer the Tribunal a matter originally referred to him by the Ombudsman Commission. 
168.	Unlike the Public Prosecutor’s ordinary prosecution power where he can request for further evidence from the police through s. 526 of the Criminal Code, there is no provision empowering the Public Prosecutor to request the Ombudsman Commission to collate further evidence to submit to the PP, nor any provision empowering the OC to provide such further evidence after the Ombudsman Commission has made the referral of the matter and provided the Statement of Reasons under s. 27 of the OLDRL. The Constitution envisaged all these processes to have been finalised before any referral is made.
169.	It is not the function of the Public Prosecutor under the Constitution or the OLDRL to request the Ombudsman Commission to collate evidence for his perusal. The functions of the Ombudsman Commission and the Public Prosecutor under s.27 of the OLDRL are separate and distinct. This contention is supported by the Supreme Court decision of Ombudsman Commission v. Yama (supra) at page 8-9, where the Court observed:
“The investigative functions of the Commission and the prosecution functions of the Public Prosecutor in the Leadership Code matters are separate from each other and they should not be confused. The functions of these two (2) offices must be kept strictly separate and not blurred or clouded by interactions between these two (2) officers in the discharge of their respective functions on Leadership Code matter so that confusion such as the one we have seen in this case is not repeated in the future. The Commission is not an agency or division of the Public Prosecutor or vice versa. As far as the PP is concerned, the appellant is one of many other referral bodies such as Committals Court, which refer police prosecutions on indictable offences, to be prosecuted in the National Court, by that office. The Commission does not enjoy any special privilege with the PP which extend beyond the formal referral.

The Ombudsman Commission is required to thoroughly conduct its investigations as serious consequences flow to the leader and the office he holds including dismissal from office. It cannot have a second opportunity to re investigate a complaint that he has now become functus officio. And the Public Prosecutor has no power to request or direct the Ombudsman Commission to re investigate and collect further new evidence in a matter that the OC has now become functus officio. 

The Public Prosecutor is required to prosecute within the confines of the Constitution and OLDRL. Section 177(1)(b) of the Constitution is relevant. That provision authorises the PP to do one of the following- “to bring or decline to bring proceedings…”
170.	The Constitution envisages that the PP must play an active and meaningful role in the performance of his duties. To assist him make a decision, he is required to independently assess the evidence collated by the Ombudsman Commission. This calls for a higher scrutiny of the evidence presented by the Ombudsman Commission. The Public Prosecutor must be satisfied that the evidence collected by the Ombudsman Commission are “in strict compliance with the rules of evidence and the provisions of the Evidence Act”. (s. 27(4) OLDRL) and there is sufficient cogent and credible evidence of misconduct in office.  
171.	This was acknowledged by the Supreme Court in Re Public Prosecutor’s Powers to Request the Chief Justice to Appoint a Leadership Tribunal(supra). At paragraph 132 the Supreme Court said the PP does not become a “passive observer of the proceedings”. He “must play an active part in seeking to prove allegations, in order to protect the public interest”.
172.	If in his opinion the evidence is lacking then he has no alternative but to decline prosecution. He must not shrink from his duty to decline. He cannot find comfort by requesting further evidence from the Ombudsman Commission. To do so would in my view be inconsistent with his prosecution powers under s.177 (1) (b) of the Constitution.
173.	This is not the end of the matter. The Ombudsman Commission may, if it wishes to do so, pursue this prosecution pursuant to s. 29(2) of the OLDRL. 
174.	Based on the materials, the Public Prosecutor must decide whether “to bring or decline to bring proceedings”. He has no other choice to request further evidence from the OC.
175.	Submissions were raised based on the Press Release that what the Public Prosecutor intends to do is to introduce a new allegation not part of the ‘matter’ that was referred to him by the Ombudsman Commission. The drafting of an appropriate charge emanates from the nature of the evidence adduced. At this stage this court is a not a privy to the Referral by the Ombudsman Commission to the Public Prosecutor. The proper way to deal with this issue is when the matter is referred to the appropriate tribunal and submissions presented to that tribunal. The press release does not constitute the “matter”. It would therefore be unwise for this court to speculate whether the evidence sought by the Public Prosecutor from the Ombudsman Commission constitute new evidence or part of the original evidence.
176.	Having said the above I now return to the questions and answer them as follows:
1.	Is the PP, having formed the opinion that there is certain further evidence required before he can form the opinion that the Prime Minister should be referred to an appropriate tribunal-

a.	Entitled to request the Ombudsman Commission to collate (or collect) further evidence and submit same to him or her to assist in the exercise of power under s. 27(2) of the OLDRL.

Answer: No.

b.	Is the Public Prosecutor entitled to consider such further evidence before exercising his or her powers under s. 27(2) of the OLDRL

Answer: No

c.	Is the PP obliged to decline to bring proceedings under Part III- Division 2 of the Leadership Tribunal, SW. 26-31 Constitution for misconduct in office in relation to the Prime Minister?

Answer: That depends on the evidence presented before him from the OC.

2.	Whether it is unconstitutional for the PP pursuant to s.27(2) OLDRL to refer to the appropriate Tribunal as “the matter” an allegation which was not referred to the PP by the OC under s.27(1)

Answer: Yes

3.	If the answer to questions (1)(a) and (b) is “yes”, is it unconstitutional for the appropriate tribunal referred to in s. 27(7) of the OLDRL to

a.	Enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister;
b.	Make a finding as to whether the leaded is guilty of misconduct in office; and
c.	Make recommendation to the appropriate authority pursuant to s. 27(5) of the OLDRL

Answer: I cannot answer because my answer was No. 

177.	KASSMAN J.	I have read the draft judgments of my brothers Salika DCJ, Kandakasi, Mogish and Higgins JJ. I have nothing to add. I agree with the answers to the questions as stated in the conclusion to this judgment.

178.	HIGGINS J.	This is a 3 fold reference of certain questions to the Supreme Court.  One is made by the Attorney-General, the Honourable Ano Pala MP, the other two by Justices Cannings and Makail respectively.

179.	Each of these references covers much the same factual and legal issues.  So far as the facts are concerned, the interested parties (the Prime Minister, the Hon. Peter O’Neill, the Attorney-General, the Finance Minister, Mr. Dairi Vele, the Ombudsman Commission, the Public Prosecutor and the State) have presented an agreed Statement of Facts.

180.	Central to the factual circumstances was the approval by the Prime Minister and the National Executive Council (NEC) of a proposal to borrow PGK 3b. from Union Bank of Switzerland AG (Australian Branch) (USB), on 6 March 2014.  The loan was for the purpose of purchasing for the State a significant shareholding in Oil Search Limited (Oil Search), the largest resource development company in PNG.

181.	The Minister for the Treasury, the Hon. Don Pomb Polye, allegedly declined to sign off on the deal and was dismissed at the request of the Prime Minister who signed off instead with the approval of the rest of the members of the NEC.

182.	The further background recited that, in 2009, the State had entered into a loan agreement with the International Petroleum Investment Corporation (IPIC) to fund the purchase by the State of Oil Search shares in the PNG LPG (Liquefied Petroleum Gas) Project.  The State’s shares in the company which owned the development, Oil Search, were collateral for the loan.  The maturity date was 5 March 2014.  IPIC then had the option to retain the shares unless the loan was repaid.

183.	The State, on Department of Treasury advice, engaged with UBS, to arrange finance to repay IPIC and, so, retain its interest in the development.

184.	In February 2014, IPIC gave notice that it would take ownership of the shares if not repaid.  In the same month, Oil Search advised the State it was offering further shares totalling AUD 1.225b at AUD$8.20 per share. The Prime Minister wrote to Oil Search advising that the State would take up the share offer subject to NEC approval.

185.	On 5 March 2014, documents and letters of advice were provided by the State Solicitor and Acting Treasury Secretary Vele for the NEC concerning the USB loan.

186.	On 6 March 2014, NEC approved the proposal and authorised the borrowing.  As noted above the Hon. Mr. Polye dissented.

187.	On 12 March 2014, the Prime Minister executed the loan documents.  Oil Search announced the share placement to the Australian Stock Exchange.

188.	Two days later, the Ombudsman Commission (OC) issued a Notice directed to all participants in the loan and share purchase agreements, whether or not they were ‘leaders’ within the meaning of Division 2 of Part III of the Constitution.  Those not leaders included:

(a)	Petromin Holdings (PNG) Limited;
(b)	Public Business Corporation (IPBC);
(c)	Port Moresby Stock Exchange Limited;
(d)	Oil Search (PNG) Ltd; and
(e)	UBS Nominees Pty Ltd.

189.	The Notice was in the following terms, purportedly under s.27(4) of the Constitution:

“Each of you is hereby directed pursuant to section 27(4) of the Constitution to, immediately upon receipt of this direction:

1.	Stop all further transactions in relation to the loan arrangements with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 088 129 613; and freeze the alleged loan arrangement with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 088 129 613; and

2.	Freeze all further loan arrangements with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 088 129 613 and freeze the alleged loan arrangement with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 008 129 613 and their agents in PNG and abroad; and

3.	Freeze all further correspondence on the alleged loan arrangements  with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 088 129 613; and

4.	Freeze all further correspondence with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 088 129 613 in PNG and their agents on the alleged loan arrangements with UBS Investment Bank; and

5.	Take all necessary steps to ensure that the alleged loan arrangements with UBS Nominees Pty Ltd ABN 32 001 450 522 and UBS AG, Australia Branch ABN 47 008 129 613, directly or through their agents in PNG and anywhere abroad and do not progress further in any form, manner or style.”

190.	Section 27(4)Constitution provides:

“The Ombudsman Commission ... subject to this Division and to any Organic Law made for the purposes of this Division, give directions, either generally or in a particular case, to ensure the attainment of the objects of this section.”

191.	The consequence of a failure to comply with a valid direction under s.27 (4) is provided for by s.27 (5)(b):

“A person to whom this Division applies who-

(b) fails to comply with a direction under subsection (4) ... is guilty of misconduct in office.”

192.	Sections 29 to 31 specify the process for prosecution of misconduct in office by a leader.  Dismissal from and disqualification for office may follow. 

193.	It was a provision of the loan agreement with USB that interest be paid on time on the sum borrowed.  Acting Secretary Vele made such payments thus avoiding a sovereign default.

194.	The first such payment was due on 16 May 2014.

195.	On 23 May 2014, the Ombudsman Commission articulated its concerns about the transaction in a letter to Acting Secretary Vele, stating:

“… The Commission is concerned that legal and financial processes and procedures may not have been complied with”.

2.	Such legal and financial processes includes consultation with the relevant State Agencies, especially for an offshore loan of such magnitude. The Commission is quite concerned that there were no relevant consultation with the Relevant Sate Agencies, persons and bodies as a legal and constitutional requirement under Section 255 (Consultation) of the Constitution, between persons and bodies. The consultation must be meaningful and allow for genuine interchange and consideration of views.

It is the Ombudsman Commission’s duty to ensure that those who are leaders involved are not in breach of the Leadership Code.  Hence the Ombudsman Commission’s Constitutional Direction was effectively issued within the scope of Section 27(4) of the Constitution.

3.	The Commission also determined that it was necessary for the issuance of the Constitutional Direction under Section 27(4) of the Constitution, particularly in this case to ensure that matters pertaining to the circumstances surrounding the State’s acquisition of 149,390,244 (10.1%) shares of Oil Search Limited and related matters, do not proceed whilst the Ombudsman Commission’s investigation are on foot.
...
The thrust of Section 24(7) Constitutional Direction, is that the State freezes all further progress on the UBS AG Loan Transaction including interest payments and the Direction will continue to apply until further notice from the Ombudsman Commission”.

196.	On 5 June 2014, Acting Secretary Vele responded.  The terms of that response are not set out in the Reference Book.

197.	Nevertheless, compliance with the Directions has been stayed by Makail J. on and from 3 December 2014, pending the answers to the questions referred to this Court by his Honour. 

198.	Following the stand-off with Acting Secretary Vele, the Ombudsman Commission issued an instrument entitled “Referral of a Leader for Prosecution” dated 11 August 2014 addressed to the Prime Minister.  The Ombudsman Commission declared that “the matter” so referred:

“... relates to allegations that:

(1)	the Leader failed to comply with administrative and financial processes including the normal overseas borrowing process in the approval of PGK 3 billion loan from Union Bank of Switzerland AG (Australian Branch); and

(2)	the Leader having made media release on the sacking of Mr. Don Pomb Polye as the Minister for Treasury by saying that Mr. Polye caused instability in the Government when the actual reason was to do with Mr. Polye’s refusal to sign the USB Loan Deal which the Prime Minister had unilaterally approved on 6 March 2014; and

(3)	the Leader made a misleading statement on EMTV that he had obtained advice from the State Agencies including Bank of Papua New Guinea on UBS AG (Australian Branch) Loan to purchase Oil Search shares was contrary to the evidence (sic – “advice’?) received.”

199.	It is also an agreed fact that:

“19.	The Ombudsman Commission did not provide any reasons to the Prime Minister for his Referral to the Public Prosecutor for alleged misconduct in office; (and)

20.	The Ombudsman Commission did not provide any good, proper, sufficient or meaningful reasons to the Prime Minister for his Referral to the Public Prosecutor for alleged misconduct in office.”

200.	That is an extraordinary admission having regard to the decision of this Court in Micah v. Lua, though the decision itself was not handed down until 15 July 2015.

210.	On 13 August 2014, the Public Prosecutor wrote to the Prime Minister advising that he had received the Reference referred to from the Ombudsman Commission “together with the Statement of Reasons.”

211.	On 27 August 2014, the Public Prosecutor wrote a further letter to the Prime Minister’s lawyers stating:

“In response to the matters that you raised, please find a copy of the Letter of Referral by the Ombudsman Commission dated 11 August 2014. I advise that I am still considering the evidence in the Statement of Reasons.  After considering of the evidence and if I so find that there is cogent and credible evidence supporting the allegations against the leader and request the relevant authority to appoint a tribunal to conduct an enquiry into the allegations, then I will provide you with a copy of the Statement of Reasons.

I also advise that I do not have the documents relating to the two proceedings before the court, namely:

(i)	OS (JR) 383 of 2014 – Hon, Peter O’Neill & Anor –v- The Ombudsman Commissioner and Ors; and

(ii)	SCCOS No.4 of 2014 – Application pursuant to Section 18(1) Constitution, Application by Don Polye MP.

Whilst these matters may be of the same or arising from the same facts and circumstances as the matters referred to me by the Ombudsman Commission I am required to act within a reasonable period to request or not to request the relevant authority to appoint a tribunal to conduct an enquiry.”  (underlining added)”

212.	On 9 October 2014, the Public Prosecutor stated publicly in a signed press release:

“ADDITIONAL EVIDENCE REQUESTED IN THE MATTER OF HON PETER O’NEILL CMG MP MEMBER FOR IALIBU PANGIA OPEN and PRIME MINISTER”

I have fully considered the material referred to me by the Ombudsman Commission against Hon. Peter O’Neill, CMG MP Member for Ialibu-Pangia Open and Prime Minister.  I am of the view that there are certain vital evidence that are required for me to make an informed opinion on whether or not to refer the Prime Minister to the appropriate tribunal to conduct enquiries into allegations of misconduct in office.

I have today requested the Ombudsman Commission to collate those relevant evidence and submit them to me to assist me in the exercise of my powers under Section 27(2) of the Organic Law on Duties and Responsibilities of Leadership.” (underlining added).”

213.	The next step was a request by the Public Prosecutor to the Chief Justice to appoint a Leadership Tribunal to inquire into allegations of misconduct in office by the Prime Minister.  That was advised to the Prime Minister by the Public Prosecutor in a letter dated 14 November 2014.

214.	The Public Prosecutor did not provide an answer to the request by the Prime Minister’s lawyers for a copy of the Statement of Reasons despite his statement agreeing to do so in his letter of 27 August 2014.

215.	It is agreed that there was no response from the Ombudsman Commission to the Public Prosecutor’s request to “collate those relevant evidence (sic)”.

216.	There has been no provision by the Ombudsman Commission or the Public Prosecutor of that “Statement of Reasons” to the Prime Minister or his lawyers.

217.	Nevertheless, on 14 November 2014, the request to the Chief Justice referred to above was made.  That request identified the allegation to be considered by the Tribunal as follows:

	“It is alleged that the Prime Minister failed to comply with administrative and financial processes including the normal overseas borrowing process in the approval of a Three Billion Kina loan from the Union Bank of Switzerland AG (Australian Branch) to purchase shares in Oil Search Limited.  It is further alleged that the purchasing of the shares was in the interest of Oil Search Limited and not in the interest of the Independent State of Papua New Guinea.” (underlining added)”

218.	Clearly the Public Prosecutor was thereby declining to prosecute the allegations concerning false or misleading statements by the Prime Minister.  The allegations referred to the Public Prosecutor by the Ombudsman Commission did not include the underlined portions. It is not clear whether the Chief Justice was informed of that discrepancy.

219.	The letter from the Chief Justice advised the names of three eminent Judges/former Judges to constitute the Leadership Tribunal.  It set a time and date for the Tribunal to convene and added:

“It is at that time that the Public Prosecutor will formally present the Statement of allegations and the Statement of Reasons.” 

220.	In proceedings before Cannings J., the Prime Minister sought to challenge the referral by the Public Prosecutor to the Chief Justice. 

221.	Cannings J., on 8 January 2015, referred to this Court questions as to the power of the Public Prosecutor to:

“(a)	seek further evidence from the Ombudsman Commission before making a decision under Section 177(1)(b) of the Constitution  and Section 27(2) of the Organic Law on the Duties and Responsibilities of Leadership, whether to bring proceedings, proceed with the matter and refer the matter to the appropriate tribunal?

(b)	amend the matter in respect of which he brings proceedings, proceeds with and refers, by, for example, adding to or varying the allegations of misconduct in office relating to the matter referred to him by the Ombudsman Commission.”

222.	The consequential question is whether, if the Public Prosecutor was not empowered to do either or both of those things, it rendered the referral invalid.

223.	The referral by the Attorney General restates in more detail the questions referred by Cannings J.  It does not refer to the questions referred by Makail J.

224.	It is convenient first to consider the question of the scope of the power of the Ombudsman Commission to issue directions and, if so, to what persons.  Then to consider the steps taken by the Ombudsman Commission and the Public Prosecutor to request the Chief Justice to appoint a Leadership Tribunal and the constitutional validity of each of those steps.

DIRECTIONS
225.	There are two issues raised.  First is the scope of the power to issue directions.  The answer to that is relatively straight forward.  The second is as to the process for validly issuing such directions to such persons or entities as may validly be made the subject of directions by the Ombudsman Commission.

226.	The purpose of the Leadership Code is to ensure high standards of behaviour and integrity are adhered to by leaders.  It is not to regulate the standards of behaviour and integrity of private persons and bodies.  That conclusion is confirmed by the terms of the Constitutions.27 (5)(b).  Failure to comply with a valid direction constitutes misconduct in office.  A private individual or body is not an office-holder and is not amenable to the sanctions that may be imposed on a leader.

227.	Thus I conclude that the Ombudsman Commission has no power to issue directions other than to leaders save for the power to direct persons or corporations utilised by leaders.    The purpose of the power is to prevent misconduct in office.  That will include giving general and specific directions to leaders, though it may of course, include their servants and agents, corporations or otherwise.

228.	An analogous regime is to be found in the regulation by the Law Society of the conduct of lawyers.  A recent example is the Legal Practitioner v. The Law Society of the ACT.  The relevance of the reference to that regime is to support the view that the primary purpose of the Leadership Code is to ensure high standards of conduct and integrity in leaders and to promote good practice in all branches of government rather than punishing wrongdoing, though that may be a subsidiary outcome. 

229.	The ACT Supreme Court, at [92], invoked that well settled principle, citing A Solicitor v. Law Society (NSW)and NSW Bar Association v. Cummins.  Honesty and integrity are essential components of fitness for office not only as a lawyer but also as a leader.

230.	As it is not a criminal preceding the standard of proof for misconduct in office is less than beyond reasonable doubt.  Nevertheless, it may, having regard to the seriousness of the allegations, be more than the mere balance of probabilities.  See Briginshaw v. Briginshaw;R v. White; ex parte Brynes;Hardcastle v. Commissioner of Australian Federal Police.

231.	In Re Tribunal; Re the Hon James Eki Mopio, the Court noted that the standard of proof may require a greater satisfaction depending on the gravity of the allegations made.  Indeed Miles J was of the view that in some cases the Tribunal might not be content to act upon a finding unless satisfied of it beyond reasonable doubt.

232.	In Re The Leadership Code (supra),a Full Court Kidu CJ, Kapi DCJ, Amet, Los & Andrew JJ considered an issue concerning the applicability of the Code to a leader who had resigned from office after being referred to a Tribunal.

233.	The thrust of the Code, it was said, is to preserve the people of Papua New Guinea from misconduct by its leaders.  The range of misconduct is not confined to criminal conduct.  As the joint judgment of Kidu CJ, Amet, Los & Andrew JJ stated:

	“342	... these provisions are geared towards advancing the purpose of protecting the people from the improper and corrupt conduct of their leaders and to ensure, as far as possible, that such breaches are not committed in the first place.”

	And, at 343,

“We have extended (sic: “we apprehend”) the entire thrust and primary purpose of the Leadership Code to be the preservation of the people of Papua New Guinea from improper and corrupt conduct of their Leaders.  The ultimate maximum sanction of dismissal from office, with the consequential disqualification in the prescribed categories of public officers under s.31, is the natural extension of this entire thrust to protect the public by the removal from office of leaders found guilty and unworthy of continuing in public office to serve the people”.

234.	It follows, of course, that some instances of misconduct, though worthy of sanction, do not demonstrate unfitness to continue to hold office.  That was the case with the proceedings involving Grand Chief Sir Michael Somare’s failure to provide returns to the Ombudsman Commission.  (Somare, In re reference by the Public Prosecutor– penalty - suspension from office for 14 days).

235.	Of significance, aside from that, is the declaration by the Tribunal at [2.3] of PGLT 2 (supra):

“The allegations in the Reference, and only those allegations constitute the “matter” referred to the Tribunal pursuant to s.27 (2) of the Organic Law on Leadership).”

236.	Further, their Honours cited with approval from In re Andrew Kumbakor,per Injia J (as he then was):
	
“For it would constitute a denial of natural justice for a leader to be called upon or expected to answer an allegation which does not form part of the charges “preferred” against him.”

237.	As has been noted, the Ombudsman Commission quite clearly has no power to direct or control the activities of persons including corporations that are not leaders or government bodies.  It is established for the purposes prescribed by s.219 of the Constitution with the functions and powers conferred upon it by s.219, by the Organic Law on the Duties and Responsibilities of Leadership and by the Organic Law on the Ombudsman Commission.

238.	Further, the power to issue orders to enforce compliance with constitutionally mandated duties or prohibitions is, ultimately, vested in the National Court by s.23 of the Constitution. That does not, of course, preclude the Ombudsman Commission from giving directions but it can enforce those directions only by either referring the offender, if amenable to it, to the Public Prosecutor for misconduct in office or by seeking an appropriate order in the National Court. 

239.	Further, given that the exercise of the power to issue directions may expose a leader to a charge of misconduct in office, it is subject to the right of the person affected to be heard before such a direction is issued.

240.	That is the effect of the decision in Karo v. Ombudsman Commission of PNG (supra).  In that case, the order of the Ombudsman Commission would have required the appellant to vacate his house.

241.	The Ombudsman Commission contended that s.27 (4) did not require it to afford a right to a leader under investigation to be heard before a direction was issued.  Their Honours Amet CJ, Los & Sheehan JJ at 556-559 firmly rejected that contention; concluding at 559:

“... the question of fairness and an opportunity to be heard in relation to any preliminary findings and opinions that will have adverse effect [on the subject thereof] is not confined strictly to investigations where the decisions affecting a person’s rights and duties are final, but apply also to investigations where the Commission is to decide a preliminary point which also impacts and affects the interest of the person being investigated.”

242.	A note to the report of this decision refers to it having been overruled by Nilkare v. Ombudsman Commission (unreported: 3 May 1996).

243.	That latter case was finally reported in [1999] PNGLR 333. It was a decision of Amet CJ, Los & Injia JJ.  Amet CJ at 341, agreed that the earlier decision was obiter dictum insofar as it purported to require a right to be heard before an investigation is commenced by the Ombudsman Commission (see also Kapi DCJ at 361).

244.	It is also noteworthy that, at 385, Kapi DCJ, though accepting that the Ombudsman Commission’s referral to the Public Prosecutor was tainted by error, held that the balance of convenience and substantive fairness did not require the quashing of the entire process.  Los J dissented on the latter point only (P.386).  Injia J (as his Honour then was) agreed that Karo’s case was wrongly decided on the question of the right to be heard before an investigation was commenced but would have set aside the referral process by reason of the referral of new allegations without according the appellant the right to be heard in respect of them.  He also upheld the appeal on the ground of bias.  Nevertheless he also concurred with Kapi DCJ that, in the circumstances, it was preferable to proceed with the Leadership Tribunal hearing rather than to remit the matter back to the Ombudsman Commission for the reasons advanced by Kapi DCJ.

245.	The position with respect to the impugned directions is, therefore, placed in a context whereby the Ombudsman Commission is, pursuant to the Constitution, charged with oversight of the responsiveness of Government bodies and the elimination of “unfairness and discrimination” by them.  As well it has the role of assisting to eliminate defective legislation and practices affecting or administered by government bodies.  Those functions are typical of the office.  Less usual is the power to initiate proceedings, whether criminal or disciplinary or to make remedial orders.  The powers of the Ombudsman Commission under s.219 of the Constitution are of the widest kind but are, nevertheless, subject to limitations.

246.	Subsection 219(3) provides, for example:

	“The Commission shall not inquire into the justifiability of a policy of the National Government or a Minister or a provincial government or a member of a provincial executive, except insofar as the policy may be contrary to law or to the National Goals and Directive Principles, the Basic Rights or the Basic Social Obligations, or of any Act of the Parliament.”

247.	The power to give directions under s.27 (4) Constitution is expressly limited to directions:

“... to ensure the attainment of the objects of this section.”

248.	The section itself is directed towards the duty of the persons identified in s.26 of the Constitution (collectively referred to as “leaders”). I agree that directions may include not only leaders but also those persons or corporation acting for or on behalf of the leader.

249.	The Constitutional Direction, however, seeks ex post facto to freeze the loan taken out for the purpose of the purchase by the State of a significant interest in Oil Search.

250.	The letter containing the directions does not identify any wrongdoing on the part of the leaders referred to save that: “legal and financial process and procedures may not have been complied with.”

251.	This allegation is not said to be warranted by any facts.  It does not purport to identify the relevant processes and procedures.

252.	If it had done so and invited a response, the allegation may have been demonstrated to be without foundation, or, if it had any prima facie validity to have supported a reference to the Public Prosecutor.  An analogous factual situation may be found in Sankey v. Whitlam.

253.	The second is that there “were no relevant consultation (sic) with the Relevant State Agencies, persons and bodies as a legal and constitutional requirement under Section 255 (Constitution) of the Constitution.

252.		Section 255 does not mandate consultation. It states:

	“In principle, where a law provides for consultation between persons or bodies, or persons and bodies, the consultation must be meaningful and allow for a genuine interchange and consideration of views.”

253.	This provision is doubtless directed towards dissuading decision makers, when bound by law to consult, from adopting a process that, for example, seeks the views of the consultee but either gives no sufficient detail of the issue the subject of the consultation or merely politely listens and then totally ignores the view of the consultee.

254.	Regrettably, the Ombudsman Commission failed to identify the persons or bodies who or which were not consulted and the law or laws mandating such consultation.  It did not identify the manner in which the lack of consultation alleged gave rise or might give rise to a breach of the Leadership Code.

255.	That was necessary for it to be clear that the Ombudsman Commission was not merely seeking to prevent the implementation of a policy decision of government with which it disagreed, even if to the extent of fearing that it was not in the public interest.  That is a question for the electorate not the Ombudsman Commission as s.219 (3) makes clear.

256.	A further concern is that the Ombudsman Commission directions mandate that the government default on its obligations under the loan agreement.  It could lawfully do that only if the loan agreement was tainted by invalidity or illegality.

257.	The failure by the Ombudsman Commission to provide reasons for its decision to issue directions as it has done deprives the leaders so directed of any opportunity to judge whether the Ombudsman Commission  is exceeding its powers and, in any event, to answer the implicit allegation that there are grounds to suspect impropriety, invalidity or misconduct.

258.	For these reasons, the Directions should be set aside and declared ultra vires.

REFERRAL TO AND BY THE PUBLIC PROSECUTOR

259.	The next issue relates to the process adopted to refer the Prime Minister to the Public Prosecutor and then for the Public Prosecutor to refer him to the Chief Justice for a Leadership Tribunal to be constituted to enquire into “the matter” so referred.

260.	At the outset, it is an agreed fact that the Prime Minister was not given the opportunity by the Ombudsman Commission to respond to the allegations it referred to the Public Prosecutor.

261.	The allegations so referred undoubtedly constitute the “matter” which may be the subject of referral from the Ombudsman Commission to the Public Prosecutor.  It follows that the Public Prosecutor, though having an independent prosecutorial role, is not entitled to roam at large over the conduct of the Leader to find alternative allegations.

262.	That is plainly the result of in Re Kumbakor (supra).  Fundamental to the integrity of the Leadership Code is adherence to the principles of natural justice towards those subject to it.  That requirement is one of substance not of form alone.  As is clear from the judgment in Nilkare v. Ombudsman Commission (supra) even if there has been non-compliance with the rules of natural justice, the result is that the tainted decision is voidable not void.  If no substantive injustice has occurred relief may be declined notwithstanding that some irregularity has been identified.

263.	In the present case, the referral by the Ombudsman Commission was, in my view, fundamentally flawed by reason of the failure, before referral, to give the Prime Minister notice of the allegations and sufficient particulars thereof to enable the Prime Minister meaningfully to respond. The Statement of Reasons may have provided that material but it was not referred to the Prime Minister for his response.

264.	Those omissions have not been remedied in the course of these references so that it remains a substantive injustice to the Prime Minister that his right to be heard has been denied.

265.	It follows from that omission that the Public Prosecutor has been denied the benefit of a response by the Prime Minister in making an informed decision whether to refer any of the allegations comprising “the matter” to the Chief Justice for the establishment of a Leadership Tribunal.

266.	It is clear from the case of Nilkare v. OC (supra) that whilst the whole Ombudsman Commission file need not be provided to the leader at (343-4) – per Amet CJ:

“By the same token, if there are particulars and documents which are relevant and vital to a fuller and better understanding of the nature of the allegations by the leader, in order that his explanations thereto would be full and complete to enable the Commission to make the determination as to whether or not there is a prima facie case, then it is incumbent on the Commission to ensure that the leader is fully aware of the existence of such materials and documents.  If the leader requests copies of the same then they should be made available to him.”

267.	The compliance by the Ombudsman Commission with this duty is of importance not only to enable the Public Prosecutor to do his or her duty with proper information but also because the consequence of a valid referral by the Public Prosecutor is that the leader is suspended from office upon the matter being referred to “an appropriate tribunal” (s.28 OLDRL).

268.	A further consideration is that, if the Chief Justice is requested to appoint a Tribunal, he or she has no discretion to refuse to do so. Re Referral (2008) SC 1011.

	[104] “In the referral of leaders other than COHS, upon receipt of Public Prosecutor’s request, Chief Justice simply obliges by appointing a tribunal to enable the Public Prosecutor to bring a prosecution. Does the Chief Justice have a discretion to refuse the Public Prosecutor’s request?  This issue is not raised in this reference and it was not argued before us.  However, we would venture to suggest that Chief Justice is given no such power.”

269.	Tellingly, that opinion was given by the Court, including Kapi CJ and Injia DCJ (as he then was) as well as Sakora & Kirriwom JJ.

270.	I agree with that view, in any event.  To hold otherwise would open the decision to appoint a Tribunal to challenge, even to perhaps requiring an opportunity for the leader further to respond to the Public Prosecutor’s request to the Chief Justice, despite the leader having already provided a response to the Ombudsman Commission.

271.	In my view, the leader, if given proper opportunity to respond to the referral from the Ombudsman Commission, has the benefit of the independent assessment by the Public Prosecutor of the strength of the case.

272.	Once the Public Prosecutor has requested that a tribunal be appointed, the leader must face that tribunal where he or she can, of course, challenge the “matter” referred and is entitled to a final determination.  It is analogous to the criminal process terminating with a trial on indictment.

273.	No doubt it would be open to a leader referred to the Public Prosecutor to make a submission that the matter not be prosecuted but there is no right to do so and, unless the prosecution would be plainly inappropriate as a matter of law, for example, if the allegations referred could not constitute misconduct in office, it should not be stopped or unduly delayed.

274.	That view is supported by the consideration that the Public Prosecutor’s role is simply to prosecute or not the allegations referred by the Ombudsman Commission.  The Ombudsman Commission marshals the evidence.  The Public Prosecutor has no investigatory role.

275.	To apply those principles to the present situation, the ‘matter’ starts with the referral by the Ombudsman Commission to the Public Prosecutor.

276.	I have already expressed the view that in this case, that process, as in Nilkare, was flawed and voidable.  But, even if it was decided not to avoid the referral to the Public Prosecutor, there is a further difficulty.

277.	The Ombudsman Commission referred 3 allegations.  Pursuant to a signed Press Release (an odd way to conduct prosecutorial business), the Public Prosecutor announced that he would not prosecute without further material to warrant it from the Ombudsman Commission.

278.	The amendment to s.27 (4) OLDRL to require strict proof and proper process may have influenced that decision but it was clearly within the Public Prosecutor’s discretion to so determine. 

279.	What is then difficult to follow is, how, after no response from the Ombudsman Commission, the Public Prosecutor decided to refer two allegations, only part of the first allegation having been referred by the Ombudsman Commission.

280.	Not only was the Public Prosecutor lacking any further material from the Ombudsman Commission supporting its allegations, he had no response from the Prime Minister. It is an admitted fact that he was not asked to comment.

281.	Does the variation in the allegations make a difference?  Plainly a mere reformulation of the allegations would not disadvantage the relevant leader any further.  He would have had or should have had a chance to respond to the substance of the finally formulated allegations.

282.	To omit allegations likewise does not prejudice the leader in question.

283.	However, the letter from the Public Prosecutor to the Prime Minister’s lawyers of 27 August 2014 is in a different category entirely.  It gives the impression that the Public Prosecutor will only prosecute if “cogent and credible” evidence is provided by the Ombudsman Commission to support the allegations.  That, and the subsequent press release of 9 October 2014, effectively informed the Prime Minister that there were no credibly supported allegations at that time but if it should be otherwise, he would be informed of them and the reasons for them.  That references Nikare’s case (supra).  The Prime Minister and his lawyers might confidently expect that before the Public Prosecutor called upon the Chief Justice to appoint a Leadership Tribunal, the allegations would be reformulated by the Ombudsman Commission and supporting material provided firstly to the Prime Minister and then, together with his response, if any, to the Public Prosecutor.  The Prime Minister would then have been informed as to what he was called upon to respond to and been able to decide whether to respond and, indeed whether judicial review was appropriate.

284.	Alas, the Prime Minister was disappointed.

285.	For those reasons alone the Public Prosecutor was, in my view, acting unlawfully in requesting that a Leadership Tribunal be appointed.  It was the result of a process that bordered upon deceit.

286.	But there is more.  The allegations referred by the Public Prosecutor differed from those made even in the first allegation as originally referred.  The amendment to that allegation by referring to the purchase of Oil Search shares as the purpose of the loan probably adds little to the allegation though it still lacks particularity.  That fatal flaw was not remedied by the provision of any supporting material.

287.	The further allegation is quite different.  First, it cannot be misconduct to approve a loan to purchase shares for the State.  Second, such a transaction will invariably be in the interests of the vendor.  The question then is, what is added by the assertion that it was “not in the interest” of PNG?  That is a matter of opinion on the face of it, not an allegation of fact.  Is it the Public Prosecutor’s opinion or that of the Ombudsman Commission?  What are the facts upon which that opinion is based?

288.	It is not evident that the opinion in question, even if it was one that some parliamentarians, eg Mr. Polye, might agree with, would, if it was endorsed by the relevant Leadership Tribunal, amount to something that was ‘misconduct’ to engage in.  Doubtless, if it were alleged that the purchase was in the interests of the leader and/or cronies of his, that would amount to misconduct. Would it be so even if the transaction was believed by the NEC, whether by majority or unanimously, to be in the interests of the State?  Unless that opinion was not genuinely held or was the result of such incompetence as to amount to a dereliction of duty showing unfitness for office, how could it be “misconduct in office”?

289.	For the above reasons, I would formulate and answer the questions the subject of the references as follows:

A.	(Per Attorney-General & Cannings J)

1.	Is the Public Prosecutor, having formed the opinion that there is certain further evidence required before he can form the opinion that the Prime Minister should be referred to an appropriate tribunal –

(a)	Entitled to request the Ombudsman Commission to collate (or collect) further evidence and submit same to him or her to assist in the exercise of power under s.27(2) of OLDRL?

		Answer:	Yes, but the Ombudsman Commission, if further relevant evidence is collected, must refer the substance of same to the leader for response and forward that response with that evidence to Public Prosecutor.

(b)	Is Public Prosecutor entitled to consider such further evidence before exercising his or her powers under s.27(2)(supra).

		Answer:	Yes, subject to natural justice having been given to the leader.

(c)	Is Public Prosecutor obliged to decline to bring proceedings under DivisionIII.2 of the Leadership Code, SS. 26-31 Constitution for misconduct in office in relation to the Prime Minister.

Answer: 	No. Provided the Prime Minister has been given notice by the Ombudsman Commission of the allegations to be prosecuted and of the facts, circumstances and reasons for the proposed referral.  If the Ombudsman Commission has failed or refused so to do, Public Prosecutor must decline to prosecute.  The Public Prosecutor could choose to attempt to remedy the defect but has no power to carry out an investigation.

2.	Whether it is unconstitutional for the Public Prosecutor pursuant to s.27(2)(supra) to refer to the appropriate Tribunal as “the matter” an allegation which was not referred to the Public Prosecutor by the Ombudsman Commission under s.27(1).

Answer:	Yes, unless the change is a mere reformulation thereof not different in substance from the allegation(s) referred.

3.	If the answer to questions (1)(a) and (b) is “yes”, is it unconstitutional for the appropriate tribunal referred to in s.27(7) of the OLDRL to:

(d)	enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister;

(e)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(f)	make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL.

	Answer:	The decisions of the Ombudsman Commission and of the Public Prosecutor in the circumstances agreed for this reference are voidable for non-compliance with the constitutional provisions referred to.  The defects in compliance are so serious as to warrant the quashing of the entire process.

4.	If the answer to question 1(c) is “yes”, is it constitutional for the appropriate tribunal to:

(d)	enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister; 

(e)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(f)	make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL.

Answer: Questions do not arise as the answer to question 1(c) was ‘no’.

5.	If the answer to question (2) is “yes”, whether it is unconstitutional for the appropriate tribunal to:

(f)	enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister;

(g)	make a finding as to whether the leader is guilty of the allegations of misconduct in office; and

(h)	make recommendations to the appropriate authority pursuant to s.27(5) OLDRL.

Answer:  The circumstances permitting the establishment of such a tribunal have not validly arisen.  It follows that the tribunal purportedly established cannot constitutionally carry out the functions referred to.

B.	Reference by Makail J

1.	Whether the Ombudsman Commission, in the circumstances referred to in the reference, has lawful authority, power and jurisdiction to have made a decision to issue the notice or direction dated 14 March 2014 to the Prime Minister and others:

Answer: The Ombudsman Commission has no power to issue directions to person or entities not subject to the Leadership Code.

The Ombudsman Commission may issue directions such as those directed against the leaders acting for and on behalf of the State if and only if it has given those leaders notice of the proposed directions and of the facts, circumstances and reasons proposed as justifying the said directions and a reasonable opportunity to be heard thereon.

2.	Whether a failure to comply with the notice or direction dated 14th March 2014 is misconduct in office, on the proper interpretation and application of s.27(5)(b) of the Constitution.

Answer:  Only a person to whom the Leadership Code applies can be guilty of misconduct in office.  Insofar as the Notice or Directions was or were directed to persons referred to in s.26 Constitution, those persons can be guilty of misconduct in office if such direction has been validly issued.  The directions contained in the Notice of 14 March 2014 have not been validly issued.

3.	If the answers to (1) and (sic ‘or’) (2) above is ‘yes’, does the Ombudsman Commission have authority power and jurisdiction to impose penalties under s.28(1)(g)(ii) of the Constitution, s.27(5) of the OLDRL and (sic - ‘or’) s.2 of the Leadership Code (Alternative Penalties) Act.

	Answer: 	Under s.28(1)(g)(ii) of the Constitution, the Ombudsman    Commission is not empowered to impose penalties.  It may only refer a leader to the Public Prosecutor to have the question determined by an appropriate tribunal if the Public Prosecutor decides so to refer the matter.

Under s.27(5) of the OLDRL, the Ombudsman Commission may order forfeiture of a prohibited interest and its disposal.

That requires natural justice to be first afforded to the person subject to s.27, but applies only to interests or property acquired by them or on their behalf.  It does not apply to property acquired by the State.

Under s.2 of the Leadership Code (Alternative Penalties) Act 1976, penalties other than dismissal including fines or reprimands may be imposed by a tribunal.  The Ombudsman Commission has no power to impose such penalties.

4.	Whether the Ombudsman Commission is required to comply with s.59 of the Constitution by providing the minimum requirement of natural justice to act fairly and, in principle, to be seen to act fairly before:

(f)	making any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea citizens.

	Answer:  	This question is too general to admit of an answer.  It will depend on the nature of the decision and the rights and interests in question.

(g)	issuing a notice or direction under s.27(4) of the Constitution.

Answer:	Yes, insofar as the direction might adversely affect the legitimate rights or interests of the person so directed.

(h)	having made the decision and issued the notice of direction dated 14th March 2014.

Answer:	Yes.

(i)	issuing a letter dated 23rd May 2014 to Mr. Dairi Vele, the Acting Secretary of the Department of Treasury.

Answer:	Yes, insofar as the letter contained or constituted a direction under s.27(4) of the Constitution.

(j)	Referring a leader for misconduct in office pursuant to s.27 OLDRL.

Answer:	Yes.

Question 5

	Whether the Ombudsman Commission has lawful authority, power and jurisdiction to:

(f)	make any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea or its citizens;

(g)	issue a notice or direction under s.27(4) of the Constitution;

(h)	make a decision and issue the notice on (sic – ‘of’) direction dated 14 March 2014;

(i)	issue a letter dated 23 May 2014 to Mr. Dairi Vele, Acting Secretary of the Department of Treasury; or

(j)	refer a leader for misconduct in office pursuant to in office pursuant to s.27 of the OLDRL.

Answer:	Yes, subject to compliance with the requirements referred to in Question 4.

Question 6

Whether on the proper interpretation of s.225 of the Constitution, it is not a mandatory requirement in all circumstances, that where a law provides for consultation between persons or bodies, the consultation must be meaningful and allow for a genuine inter-change and consideration of views, particularly given the qualifying works (sic “words”) “in principle” in s.225 (sic “255”) of the Constitution.

Answer:	If consultation is a mandatory requirement of a law then s.255 defines the meaning of the term.  Whether or not a lack of proper consultation invalidates a decision or action can only be decided on a case by case basis. It does not arise in the current reference.

The Courts Answers to the Questions

290.	The Courts answer to the questions before it in summary are as follows: 
Questions under Makail J., referral
Questions	Answers	
(1)Whether the Ombudsman Commission, in the circumstances referred to in the reference, has lawful authority, power and jurisdiction to have made a decision to issue the notice or direction dated 14 March 2014 to the Prime Minister and others?	Yes” and “no”.  
Yes” in that the Ombudsman has the power to issue such directions in appropriate cases.  “No” because the 14th March 2014 Direction in this case was invalid 	
(2)Whether a failure to comply with the notice or direction dated 14th March 2014 is misconduct in office, on the proper interpretation and application of s.27 (5) (b) of the Constitution?	Yes” and “no”.  
Yes” because generally a failure to comply with a lawful and valid direction amounts to misconduct in office. “No” because the 14th March 2014 Direction was in this case invalid.  	
(3)If the answers to question (1) and (sic ‘or’) (2) above is ‘yes’, does the Ombudsman Commission have authority, power and jurisdiction to impose penalties under s.28 (1) (g) (ii) of the Constitution, s.27 (5) of the OLDRL and (sic - ‘or’) s.2 of the Leadership Code (Alternative Penalties) Act?	Given the “no” answers to questions (1) and (2) there is no need to answer this question. In any case, regardless of the answers, the Ombudsman has no power to impose any penalty. That power is vested in a leadership tribunal after a successful prosecution.  	
(4)Whether the Ombudsman Commission is required to comply with s.59 of the Constitution by providing the minimum requirement of natural justice to act fairly and, in principle, to be seen to act fairly before:
(a)  making any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea citizens?	This was unnecessarily included and in any cases the questions have already been answered. Generally, however, the answer is “yes” the Ombudsman Commission has the necessary power and authority to make decisions in accordance with the law that grants it that power namely under the Constitution, the ODLRL and the OLOC and any other law.	

(b) issuing a notice or direction under s.27(4)of the Constitution?	No (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra), MRDC v. The Ombudsman Commission and other cases on point).	

(c)  issuing the letter dated 23rd May 2014 to Mr. Dairi Vele, the Acting Secretary of the Department of Treasury.	No (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra), MRDC v. The Ombudsman Commission and other cases on point).	

(d)	referring a leader for misconduct in office pursuant to s.27 OLDRL?	Yes (see the decisions in John Kua Nilkare v. Ombudsman Commission (supra) and the many others like Ombudsman Commission v. Peter Yama (supra).	
(5)	Whether the Ombudsman Commission has lawful authority, power and jurisdiction to:
(a) make any decision affecting the rights or interest of a party, the Independent State of Papua New Guinea or its citizens?	This question is too general and is not properly before this Court. Hence, no answer is thus required. Generally, however, the answer is “yes” the Ombudsman has the necessary power and authority to make decisions as are granted to it by Constitution, the ODLRL and the OLOC and any other law.	
(b) issue a notice or direction under s.27(4) of the Constitution?	Yes, in accordance with the law as discussed above.	

(c) make a decision and issue the notice or direction dated 14 March 2014?	No. Although the Ombudsman has the power to issue such a notice or direction as a matter of law, it can only do so lawfully.  In this case, the Direction was issued invalidly because it failed to meet the requirements of the law for a valid exercise of that power.	

d)	issue a letter dated 23 May 2014 to Mr. Dairi Vele, Acting Secretary of the Department of Treasury?	No. Although the Ombudsman has the power to issue such a notice or direction as a matter of law, it can only do so lawfully.  In this case the letter issued to Secretary Vele concerned and was part of UBS Loan and the invalid decision and invalid issue of the 14th March 2014 Direction.  It follows therefore that the issuance of the letter to  Secretary Vele was also invalid.	

(e) refer a leader for misconduct in office pursuant to s.27 of the OLDRL?	The question is too general and a general answer will suffice. The answer is generally “yes” as long as the exercise of that power is in accordance with the law.	
(6)	Whether on the proper interpretation of s.225 (sic “255”) of the Constitution, it is not a mandatory requirement in all circumstances, that where a law provides for consultation between persons or bodies, the consultation must be meaningful and allow for a genuine inter-change and consideration of views, particularly given the qualifying works (sic “words”) “in principle” in s.225(sic “255”) of the Constitution?	The context of the question is not clear but the general answer is “yes”.  But where there is a specific provision providing for consultation such as is the case with s. 115 of the OLPLG, they take priority and apply.	

Questions under the AG and Cannings J., referrals
Questions	Answers	
(1)Is the Public Prosecutor, having formed the opinion that there is certain further evidence required before he can form an opinion that the Prime Minister should be referred to an appropriate tribunal:
(a)	Entitled to request the Ombudsman Commission to collate (or collect) further evidence and submit same to him or her to assist in the exercise of his powers under s. 27(2) of Organic Law On Duties and Responsibilities of Leadership (OLDRL)?	

No.
	
(b)	Is the Public Prosecutor entitled to consider such further evidence before exercising his or her powers under s. 27 (2) OLDRL?	
No.	
(c)	Is the Public Prosecutor obliged to decline to bring proceedings under Division III.2 of the Leadership Code, ss. 26 -31 of Constitution for misconduct in office in relation to the Prime Minister?	Yes.
There is nothing compelling him to bring proceedings.	
(2)	Whether it is unconstitutional for the Public Prosecutor to refer under s. 27 (2) of the OLDRL to the appropriate Tribunal as “the matter” an allegation which was not referred to the Public Prosecutor by the Ombudsman Commission under s.27(1) of the OLDRL?	Yes.
The matter referred by him to the Chief Justice was not the matter referred to him by the Ombudsman.	
(3)	If the answer to questions (1)(a) and (b) is “yes”, is it unconstitutional for the appropriate tribunal referred to in s.27(7) of the OLDRL to:
(a)  enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister?	In the light of the “no” answer to question (1) (a) and (b) it is not necessary to answer this question. But if we remove the reference to question 1 (a) and (b) and the yes answer to that, the answer is “yes”.	
(b) make a finding as to whether the leader is guilty of the allegations of misconduct in office?	As above
	
(c) make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL?	As above	
(4)If the answer to question (1) (c) is “yes”, is it constitutional for the appropriate tribunal to:
(a)  enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister?	In the light of the “yes” answer to question (1) (c), the answer to this question is “no”
	
(b) make a finding as to whether the leader is guilty of the allegations of misconduct in office?	As above 
	
(c) make recommendations to the appropriate authority pursuant to s.27(5) of the OLDRL?	As above
	
(5)	If the answer to question (2) is “yes”, whether it is unconstitutional for the appropriate tribunal to:
(a)  enquire into the “matter” referred to it by the Public Prosecutor in relation to the Prime Minister?	Yes.
The matter referred to the Chief Justice by the PP for the appointment of a tribunal was not the matter that was referred to the PP by the Ombudsman.	
(b) make a finding as to whether the  is guilty of the allegations of misconduct in office?	As above.	
(c) make recommendations to the appropriate authority pursuant to s.27(5) OLDRL?	As above	

_________________________________________________________________
Manase& Co Lawyers: Lawyers for the Attorney General, Referrer/ Intervenor
Young & Williams: Lawyers for the Prime Minister, Intervenor		
Kubak Lawyers: Lawyers for the Public Prosecutor, Intervenor	
In House Lawyers: Lawyers for the Ombudsman Commission, Intervenor