SC1944
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SC REF NO 2 OF 2018

REFERENCE BY THE OMBUDSMAN COMMISSION
PURSUANT TO CONSTITUTION, SECTION 19(1)

RE THE PUBLIC MONEY MANAGEMENT
REGULARISATION ACT 2017

Waigani: Salika CJ, Kandakasi DCJ,
Gavara-Nanu J, Cannings J, Yagi J

2019: 30th April
2020: 27th May

CONSTITUTIONAL LAW – national legal system – supremacy of Constitution – construction of written laws – constitutional alteration – Constitution, ss 9, 10, 11, 12, 13.

CONSTITUTIONAL LAW – Basic Rights – general qualifications on qualified rights – protection of the law – proscribed acts – freedom from arbitrary search and entry – freedom of expression – right to privacy – protection from unjust deprivation of property – Constitution, ss 37, 41, 44, 46, 49, 53.

CONSTITUTIONAL LAW – national judicial system – independence of judiciary – exercise of judicial power – structure of government – separation of powers – Constitution, ss 37(11), 99, 155, 157, 166, 209, 225.

CONSTITUTIONAL LAW – supervision and control – parliamentary responsibility for raising and expenditure of finance by National Government – Constitution, ss 209, 210, 211.

CRIMINAL LAW – offences defined by written law – whether penalties for offences can be proscribed acts – Constitution, ss 37(2), 41. 

STATUTES – validity – Public Money Management Regularisation Act 2017 – whether regulates or restricts Basic Rights – whether compliant with Constitution, ss 38, 39 – whether made contrary to constitutional principles: supremacy of Constitution; parliamentary responsibility for raising and expenditure of public finance; separation of powers; judicial independence. 

Various questions of constitutional interpretation and application were referred by the Ombudsman Commission to the Supreme Court under s19(1) of the Constitution, seeking the Court’s opinion on the constitutionality of the Public Money Management Regularisation Act 2017 (“the PMMR Act”). 

The purpose of the Act is“to regularise the handling and management of public money received by public and statutory bodies”. It provides that public money held or received by a public or statutory body must be deposited in “revenue bank accounts” specified by the Secretary for Finance and that public and statutory bodies must have only one operating bank account, subject to ultimate control by the Secretary for Finance. It establishes the Strategic Budget Committee, which makes determinations as to amounts of public money to be transferred back to public or statutory bodies to meet their reasonable operating budget requirements. It has an extensive operation by broad definitions of “public money”, “public body” and “statutory body”, by making constitutional institutions subject to the Act and by providing that the Act overrides other legislation. It imposes restrictions on judicial review of determinations of the Strategic Budget Committee, legal representation for public and statutory bodies and claims against the State and statutory bodies. It creates the offence of failing to comply with a duty, obligation or requirement of the Act, “of strict liability”, punishable for an individual person by a maximum 15 years imprisonment and fine of K2 million, and for a body corporate, by a fine of K50 million. It confers power on the Secretary for Finance to supervise and control all bank accounts of public and statutory bodies. 

The referrer asked the Court to declare that the Act is unconstitutional in whole or in part in that it: (1) provides for compulsory acquisition of property in a way not permitted by s 53 of the Constitution; (2) alters the Constitutional Laws (by purporting to bind constitutional institutions), other than by ss 12 and 13 of the Constitution; (3) ousts the jurisdiction of the courts by restricting exercise of judicial power to an extent not permitted by ss 37, 155, 166 and 157 of the Constitution; (4) offends against the principle of parliamentary control over raising and expending of public money, under ss 209, 210 and 211 of the Constitution; (5) provides for such harsh and oppressive penalties for offences that it offends s 41 of the Constitution; (6) creates an offence, the elements of which are so broad and ill-defined that it offends against the requirement of s 37(2) (protection of the law) of the Constitution that offences be defined by written law; (7) purports to elevate itself to a status above the Constitutional Laws, contrary to ss 12, 13 and 14 of the Constitution; (8) restricts exercise of rights of freedom of expression and freedom from arbitrary search and entry without complying with s 38 of the Constitution; (9) by its application to the judiciary, is offensive to the principle of judicial independence entrenched by ss 99 and 157 of the Constitution; (10) restricts exercise of the right to privacy without complying with s 38 of the Constitution.

Held: 

(1)	By the Court: The Act provides for compulsory acquisition of property other than on just terms, contrary to s 53 of the Constitution, and for that reason alone, being inconsistent with the Constitution, is invalid and ineffective in its entirety. 

(2)	Per Salika CJ & Cannings J (Kandakasi DCJ deciding otherwise; Gavara-Nanu J & Yagi J declining to give opinion): Though the Act binds constitutional institutions, it does not purport to alter any Constitutional Laws, and there was no need to comply with ss 12 or 13 of the Constitution.

(3)	Per Salika CJ, Kandakasi DCJ & Cannings J (Gavara-Nanu J & Yagi J declining to give opinion): Sections 5(5), 9(1), 9(5) and 11 of the Act restrict the jurisdiction of the National Court to an extent not permitted by ss 37, 155, 166 and 157 of the Constitution, so those provisions of the Act are, for that reason, invalid and ineffective. 

(4)	Per Salika CJ, Kandakasi DCJ & Cannings J (Gavara-Nanu J & Yagi J declining to give opinion): To the extent that the Act applies to public bodies and statutory bodies other than the courts and administrative agencies within the National Judicial System, it does not offend against the principle of parliamentary control over raising and expending of public money, under ss 209, 210 and 211 of the Constitution. However, the principle of separation of powers under s99 of the Constitution is strengthened and enforced by ss 209(2), (2A), (2B) and (3) of the Constitution with the effect that the Constitution did not intend that the Executive should control the finances of the other arms, the Parliament and the Judiciary.

(5)	Per Salika CJ, Kandakasi DCJ & Cannings J (Gavara-Nanu J & Yagi J declining to give opinion): The Act does not provide such harsh and oppressive penalties for offences against the Act that it offends against s 41 of the Constitution. 

(6)	Per Salika CJ, Kandakasi DCJ & Cannings J (Gavara-Nanu J & Yagi J declining to give opinion): The Act creates an offence, the elements of which are so broad and ill-defined that it offends against the requirement of s 37(2) of the Constitution that every offence be defined by a written law. 

(7)	Per Salika CJ, Kandakasi DCJ & Cannings J (Gavara-Nanu J & Yagi J declining to give opinion): The Act does not successfully confer on itself a constitutional status, contrary to ss 12, 13 and 14 of the Constitution. However, (per Salika CJ) it may be viewed as an attempt to do so, to enable the Executive arm of government to exercise even more control over the other two arms of government, the Parliament and the Judiciary, which is dangerous to democracy and an opening to erosion of the principle of separation of power. 

(8)	By the Court: The questions about the Act’s alleged restriction of the rights of freedom from arbitrary search and entry and freedom of expression are hypothetical, and do not warrant an opinion.

(9)	Per Salika CJ, Kandakasi DCJ & Cannings J (Gavara-Nanu J & Yagi J declining to give opinion): The Act, by its application to the Judiciary, is offensive to the principle of judicial independence guaranteed by ss 99, 155, 157, 209, 223 and 225 of the Constitution and is, for that reason alone, to the extent it applies to the Judiciary, invalid and ineffective. 

(10)	By the Court: The questions about the Act’s alleged restriction of the right to privacy are hypothetical, and do not warrant an opinion.

(11)	By the Court: In summary, the Public Money Management Regularisation Act 2017 is unconstitutional, invalid and ineffective in its entirety. 
Cases Cited

The following cases are cited in the judgment:

Acting Public Prosecutor v Uname Aumane [1980] PNGLR 510
Application by Geno (2016) SC1581
Application by Nilkare [1998] PNGLR 472
Avia Aihi v The State (No 1) [1981] PNGLR 81
Daniel v Air Niugini Ltd (2017) SC1886
Donald Valu v Dr Ken Ngangan, Secretary for Finance and The State (2019) N7733
Dr Allan Marat v Hanjung Power Ltd (2014) SC1357
Dumal Dibiaso ILG v Kola Kuma (2005) SC805
Enforcement of Rights Pursuant to Constitution Section 57, Application by Karingu [1988-89] PNGLR 276
Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705
Goli Golu v The State [1979] PNGLR 653
Grand Chief Sir Michael Thomas Somare v Chronox Manek [2011] 1 PNGLR 220
Hui Teck Lau v Leo Maniwa (2016) SC1528
In the Matter of Re-Election of the Governor-General, Reference by the Morobe Provincial Executive (2010) SC1089
John Kasaipwalowa v The State [1977] PNGLR 257
Kaseng v Namaliu [1995] PNGLR 481
Lambu v Ipatas [1999] PNGLR 207
Leahy v Kaluwin (2014) N5813
Leo Maniwa v Aron Malijiwi (2013) N5687
Mairi v Tololo [1976] PNGLR 125
Mekere Morauta v Ano Pala (2016) SC1529
Mendepo v National Housing Corporation (2011) SC1169
Minister for Lands v Frame [1980] PNGLR 433
Morobe Provincial Government v John Kameku (2012) SC1164
Namah v Pato (2016) SC1497
Paias Wingti v Kala Rawali (2010) N3959
Papua New Guinea v Ume More [1985] PNGLR 48
Patterson Lowa & Ors v Wapula Akipe & Ors [1991] PNGLR 265
Peter Dickson Donigi v Base Resources Ltd [1992] PNGLR 110
Peter Ipu Peipul v Sheehan [2002] PNGLR 596
Petrus and Gawi v Telikom PNG Ltd (2008) N3373
Philo Aufa v Richard Pii (2018) N7501
PNG Aviation Services Pty Ltd v Geob Karri (2009) SC1002
PNG Forest Industries Association Inc v Tomuriesa (2017) SC1601
PNG National Stevedoring Pty Ltd v Andrew Baing (2001) N2069
PNG Power Ltd v Augerea [2013] 1 PNGLR 280
PNG Ready Mixed Concrete Pty Ltd v The State [1981] PNGLR 396
Premdas v The State [1979] PNGLR 329
Public Prosecutor v Nahau Rooney (No 2) [1979] PNGLR 448
Putput Logging Pty Ltd v Ambalis [1992] PNGLR 159
Re Alleged Brutal Treatment of Suspects (2014) N5512
Re Criminal Circuits in Eastern Highlands and Simbu Provinces [1990] PNGLR 82
Re Human Rights of prisoners sentenced to death (2017) N6939
Re National Court Circuit, Southern Highlands Province [1988-89] PNGLR 435
Re Release of Prisoners on Licence (2008) N3421
Reference by the Attorney-General and Principal Legal Adviser to the National Executive Council [2010] 1 PNGLR 1
Rimbao v Pandan (2011) SC1098
Rimbunan Hijau (PNG) Ltd v Ina Enei (2017) SC1605
SC Ref No 1 of 1976 (P), Rakatani Peter v South Pacific Brewery Ltd [1976] PNGLR 537
SC Ref No 1 of 1981, Re Inter-Group Fighting Act [1981] PNGLR 151
SC Ref No 1 of 1984, Re Minimum Penalties Legislation [1984] PNGLR 314
SC Ref No 1 of 1986, Re Vagrancy Act [1988] PNGLR 1
SC Ref No 1 of 1990, Reference by the Enga Provincial Executive Council [1990] PNGLR 532
SC Ref No 1 of 1993, Re Income Tax Act, Section 365 (1995) SC482
SC Ref No 1 of 2000, Re Valued Added Tax Act 1998 [2002] PNGLR 333
SC Ref No 1 of 2010, Re Organic Law on the Integrity of Political Parties & Candidates [2010] 2 PNGLR 319
SC Ref No 1 of 2012, Re Prime Minister and NEC Act [2012] 1 PNGLR 74
SC Ref No 1A of 1981, Re Motor Traffic Act [1982] PNGLR 122
SC Ref No 2 of 1982, Re Organic Law on National Elections (Amendment) Act [1982] PNGLR 214
SC Ref No 2 of 2004, Re Enhanced Co-operation Between Papua New Guinea and Australia Act (2005) SC785
SC Ref No 3 of 1989, Re Forestry (Private Dealings) Act [1990] PNGLR 222
SC Ref No 3 of 1993, Re Internal Security Act [1994] PNGLR 341
SC Ref No 4 of 1980, Re Petition of Michael Thomas Somare [1981] PNGLR 265
SC Ref No 4 of 2001, Re NCDC Amendment Acts (2001) SC678
SC Ref Nos 2, 3 & 5 of 2014, Re Powers, Functions, Duties & Responsibilities of the Commissioner of Police (2014) SC1388
SC Review No 1 of 1990; Re Recount of Votes [1990] PNGLR 441
Steven Turik v Mathew Gubag (2013) N5132
Tamali Angoya v Tugupa Association Inc (2009) SC978
Teine v University of Goroka (2019) SC1881
The State v Francis Kumo Gene [1991] PNGLR 33
The State v NTN Pty Ltd [1992] PNGLR 1
Tzen Plantations Ltd v Open Bay Timber Ltd (2014) SC1380
Wilson v Kuburam (2016) SC1489
Yal v Mission of the Holy Ghost (New Guinea) Property Trust (2017) N6530
Yarlett v New Guinea Motors Ltd [1984] PNGLR 155

REFERENCE

This was the determination of a Special Reference under s 19 of the Constitution.

Counsel:

V L Narokobi, P Koralyo, M Kik & R Harry, for the Referrer, the Ombudsman Commission
L B Mamu & R Pariwa, for the First Intervener, the Public Solicitor
D Wood & T Griffiths, for the Second, Third & Fourth Interveners, the Secretary of the National Judicial Staff Service, the Registrar of the National Court and the Supreme Court & the Sheriff
P N Mawa, for the Fifth Intervener, the Attorney-General
R Lains, for the Sixth Intervener, the Speaker of the National Parliament 
H Maliso, for the Seventh Intervener, the Secretary, Department of Treasury  
R Saulep, for the Ninth Intervener, the Konebada Petroleum Park Authority

27th May, 2020 

1.      SALIKA CJ: I have read the draft opinion of Justice Cannings on the 25 questions that are the subject of this Special Reference. I agree with each of his Honour’s proposed answers and the reasons provided for answering each of the questions in the manner proposed. I agree with and endorse the opinion that the Public Money Management Regularisation Act 2017 (“PMMR Act”) is unconstitutional, invalid and ineffective in its entirety.I have something to say relating to the independence of the judiciary only in relation to question 22 of the reference. 

2.     This reference was filed by the Ombudsman Commission (referrer) of Papua New Guinea under s 19(1) of the Constitution for reasons highlighted by my brothers Kandakasi DCJ and Cannings J.

3.     The concerns raised by the referrer are in relation to the enactment, application and enforcement of the PMMR Act.

4.      The PMMR Act enacted in 2017 purports to regulate the handling and management of public monies in the following manner:

•	giving the Act an extensive operation with broad definitions in s2 of terms “constitutional institutions” public money, “public body” and “statutory body” subject to the Act (s 4) and allowing the Act to override other legislation (s 5);

•	requiring all monies held or received by constitutional and public bodies to be deposited in “revenue bank accounts” specified by Secretary of the Department of Finance (s 6);

•	restricting constitutional and public bodies to have only one operating bank account, which is subject to ultimate control by the Secretary for Finance (s 7);

•	establishing and empowering a centralized body, the “Strategic Budget Committee”, consisting of the Treasury Secretary, who is Chairman, and the Secretary for Finance and other appointed Departmental Heads, to make determinations as to amounts of public money to be transferred back to constitutional and public bodies to meet their reasonable operating budget requirements (s 8); 

•	imposing restrictions on judicial review of determinations of the SBC (s 9), legal representation for Constitutional and public bodies (s 10) and claims against the State and statutory bodies (s 11);

•	making it a strict liability offence for a person to omit or fail to comply with a duty, obligation or requirement of the Act, punishable with a maximum of 15 years imprisonment and a fine of K2 million for individual offenders, and for a body corporate, by a fine of K50 million (s 12); 

•	granting immediate and increasing power conferred on the Secretary for Finance to supervise and control all bank accounts of constitutional and public bodies (ss 13 and 14).

5.     My additional comments are in relation to the yearly budgetary appropriations for the judiciary. By virtue of the Constitution, s 99 the structure of the National Government consists of: (i) the National Parliament (ii) the National Executive and (iii) the National Judicial System consisting of the Supreme Court, the National Court and other Courts.

6.      The three arms of Government each have separate and distinct roles to play in the workings of a government. They are separated in their roles and functionalities:

•	the Parliament has unlimited powers of lawmaking, subject to and in accordance with the Constitution;

•	the National Executive is the principal policy-making arm of the government;

•	the National Judicial System’s function is to interpret and apply the laws passed by Parliament.

7.      Section 99(3) says in clear and unambiguous terms:

In principle, the respective powers and functions of the three arms shall be kept separate from each other.

8.      Papua New Guinea is a parliamentary democracy with a constitutional monarchy, where citizens elect representatives to the Parliament to make laws and make decisions for the country. The Parliament represents the People.  When Parliament makes laws or decisions, it is deemed that the People through their elected representatives make the laws and the decisions.

9.      The doctrine of separation of powers is fundamental to the maintenance of the rule of law and to democracy. It is at the very root of every country that subscribes to a democratic system of government, like ours. Section 99(3) in no uncertain terms separates the three arms of government, the Legislature, the Executive and the Judiciary. Section 99(3) divides the powers, functions, duties and responsibilities of each arm. This is critically important for three reasons. Firstly, it prevents concentration of power in any one arm of government. Secondly, it ensures checks and balances: each arm checks on the other, so that the corrupting nature of power is prevented and limited.  Thirdly separation of power is a fundamental element of the maintenance of the Rule of Law in a democracy to ensure human rights and freedoms of the people are protected

10.      Having said that I go back to the PMMR Act which seeks to elevate itself to a status over and above the Constitutional laws.  It is now or should now be in the minds and lips of the People of this free and democratic country that the Constitution of the Independent State of Papua New Guinea is the First and Supreme Law of this land apart from the Divine Law of God. Any other law enacted by Parliament which seeks to elevate itself to the Constitutionor even to be superior to the Constitution is unconstitutional and must be struck down. 

11.      Question 22 of the reference challenges the application of the PMMR Act to the Judiciary, the third arm of government.  I reiterate again that I agree with my brothers Kandakasi DCJ and Cannings J in relation to the answers each of them provides in relation to this question. Cannings J explains the special budgetary treatment that the Parliament and the Judiciary must enjoy. I agree with his observations, with respect. Section 209(2) of the Constitution provides:

For each fiscal year, there shall be a National Budget comprising—

(a)	estimates of finance proposed to be raised and estimates of proposed expenditure by the National Government in respect of the fiscal year; and

(b)	separate appropriations for the service of that year in respect of—

(i)	the services of the Parliament; and
(ii)	general public services; and
(iii)	the services of the Judiciary; and

(c)	such other supplementary Budgets and appropriations as are necessary.

12.     What are these provisions saying? They are saying in very plain language that the National Budget must comprise amongst other things a separate appropriation for: 

•	Parliamentary services (including salaries and emoluments for MPs and officers); 

•	Public Service salaries etc for public servants and heads of departments; 

•	Judiciary Services.

13.      With respect, Parliament does make separate budgetary appropriations for the three arms of government. The Judiciary Services appropriation covers salaries and emoluments for Judges and staff of the Judiciary including those employed under the National Judicial Staff Service Act. The appropriation for the judiciary must also cover maintenance of the Courts and for infrastructure development for the Courts to operate and for operational costs like funding for duty travel, court circuits, court hearings and the like. 

14.      When the Constitution says the National Budget must have separate appropriations it means each of the three arms must have its own separate appropriation. That much is usually and already being done.  However, all of the appropriations for each of the three arms go into one arm of the Government which is the Executive arm. From the Executive arm, monthly allocations are remitted to the other two arms of Government for their respective operations. In effect the Executive arm has financial control of the appropriations of the other two arms of Government. This is not and never was the intent of the Constitution. For clarity, this country has a Parliamentary Executive made up of members of Parliament who are appointed by the Prime Minister to be State Ministers; which forms the National Executive Council, with the Prime Minister as the Chairman of the Council. All the Ministers of Government are members of the National Executive Council, often referred to as the Cabinet. It is in this regard that the Executive arm of the Government has effective control of the finances of the country. This arrangement can cause grave concern sometimes. 

15.      The intention of the Constitution was and is in my respectful opinion that each of the three arms of Government is separately catered for in terms of financial appropriations. In this regard I am very mindful that all the three arms of government must have equal and adequate financial powers to perform their respective roles. 

16.      In theory no arm of government should be more powerful than the other but in practice the Executive arm of the Government controls the financial powers of the institutions of the Constitution and the other two arms of the Government, that is Parliamentary Services and Judiciary Services. The Parliament and the Judiciary in practice have to go begging to the Executive Government to request their respective allocation on a monthly basis. This was and is not the intention of the Constitution. Often, the Executive arm does not release the finances in a timely manner and the judicial arm is made to beg for the money.  One could argue that the Executive arm is only doing this to ensure that a check and balance is maintained and that the process of governing the country is equally resourced and shared between all three arms of government. On the other hand the Executive arm, with its firm grip on financial power, should not be viewed as stifling or frustrating the work of the other arms of government. 

17.     Parliamentary Services and Judiciary Services are confined to their specific areas of responsibility entrusted by the Constitution while the Executive arm’s responsibility is larger, broader and more diverse. The Public Service must have its own separate budget, and it certainly has its own budget with all government departments and agencies allocated appropriations for each of them to function. However, the Budget appropriation for the Public Service is not given the same high profile under s 209(2A) as they are for the Parliament and the Judiciary Services.

18.      One could also argue that all the finances for the purposes of governance are parked in one central basket at the Department of Finance for the purpose of accounting under ss 211 and 212 of the Constitution. It may be argued that it is easier to have the monies of the State parked in one place and that is with the Department of Finance.  That is indeed one model of fiscal governance.  But there are other models which can also be adopted; a model that should be corrupt-free and efficient, a model that will ensure proper, corrupt-free procurement processes. 

19.     Section 209(2) specifically allows for separate appropriations.  For the Parliament, the Parliamentary Service Act 1997 provides for the operations of the Parliamentary Service’s bank accounts. For the Judiciary, its separate appropriation can be deposited into the National Judicial Staff Service’s bank accounts. These two arms of the National Government already have their own fiscal management controls in place if the monies were parked in their own accounts.  This option is open to be trialled and adopted in my respectful opinion and may be better suited as it is consistent with the principle of separation of power.

20.      Section 211 (accounting etc for public monies) of the Constitution says: 
(1)	All moneys of or under the control of the National Government for public expenditure and the Parliament and the Judiciary for their respective services, shall be dealt with and properly accounted for in accordance with law.

(2)	No moneys of or under the control of the National Government for public expenditure or the Parliament and the Judiciary for their respective services, shall be expended except as provided by this Constitution or by or under an Act of the Parliament.

21.      Section 211 safeguards the monies from abuse, even if they were parked at the Parliamentary Service’s or Judicial Service’s Accounts.  

22.      Section 212 (revenue and expenditure without prior approval) of the Constitution says: 

(1)	If at the beginning of a fiscal year the Parliament has not made provision for public expenditure by the National Executive or expenditure by the Parliament or the Judiciary for their respective services for that year, the National Executive, the Parliament or the Judiciary, as the case maybe, may, without authorization other than this section but in accordance with an Act of the Parliament, expend amounts appropriated out of the Consolidated Revenue Fund for the purpose not exceeding in total one-third of its respective budgeted expenditure during the immediately preceding fiscal year.

(2)	The authority conferred by Subsection (1) lapses when the Parliament has made provision for the public expenditure for the fiscal year in question, and any amounts expended by virtue of that subsection are a charge against the expenditure so provided for and shall be properly brought to account accordingly.

23.     Section 212 is a further check and balance provision regarding State Finances.  The Public Finances (Management) Act 1995 provides for the management and administration of the finances of all the State and Constitutional Institutions. This includes Parliament and the Judiciary.

24.     In my respectful opinion the constitutional provisions of ss 99, 209, 211 and 213 should be given full and proper effect and not partial only. This attempt by the Parliament and the Executive to have even more power and control over State finances by enactment of this law, the PMMR Act, is an attempt to give even more financial muscle to the Executive arm, to control the two other arms of the government, in my respectful opinion. With respect, this is dangerous to democracy and is an opening of the erosion of the principle of separation of power. The principle of separation of power, must be maintainedand preserved at all cost and under all circumstances in the democracy we have. Guard it. I appeal and urge Parliament to ensure this is achieved.

25.     KANDAKASI DCJ: I have had the privilege of reading the draft judgment of my learned brother Cannings J.  Except for questions 5 and 6, I agree with his Honour’s approach and his proposed answers to the questions raised in this reference.  I also accept his Honour’s rephrasing of some of the questions for simplicity, better understanding and proper answers. I will therefore, adopt them as I address each of the questions. I will now proceed to give my reasons and answers to each of the questions. 

QUESTION 1:	WHETHER CONSTITUTIONAL AND PUBLIC BODIES WHO ARE AUTHORISED BY THEIR ENABLING LEGISLATION TO OWN PROPERTY, MAINTAIN ACCOUNTS, RAISE MONEY AND DISPOSE OF PROPERTY “HAVE AN INTEREST IN PROPERTY” FOR THE PURPOSES OF SECTION 53 OF THE CONSTITUTION?

26.        The most critical of all the questions presented is the first question. This concerns the property rights of constitutional, public and statutory bodies (“constitutional and public bodies”) for the purposes of s 53 of the Constitution. The question is, whether constitutional institutions, public and statutory bodies, whose enabling laws, allow them to own property, maintain accounts, raise money and dispose of property “have an interest in property” for the purposes of s 53 of the Constitution?

27.      This question arises from the fact that, the Public Money Management Regularisation Act 2017 (“the PMMR Act”) seeks to do the following:

(1)	giving the Act an extensive operation with broad definitions in s. 2 of terms “constitutional institutions”, “public money, “public body” and “statutory body” subject to the Act (s 4) and allowing the Act to override other legislation (s 5);

(2)	requiring all monies held or received by constitutional and public bodies to be deposited in “revenue bank accounts” specified by Secretary of the Department of Finance (s 6);

(3)	restricting constitutional and public bodies to have only one operating bank account, which is subject to ultimate control by the Secretary for Finance (s 7);

(4)	establishing and empowering a centralized body, the “Strategic Budget Committee” (“SBC”), consisting of the Treasury Secretary, who is Chairman, and the Secretary for Finance and other appointed Departmental Heads, to make determinations as to amounts of public money to be transferred back to Constitutional and public bodies to meet their reasonable operating budget requirements (s. 8);

(5)	imposing restrictions on judicial review of determinations of the SBC (s 9), legal representation for constitutional and public bodies (s 10) and claims against the State and statutory bodies (s 11);

(6)	making it a strict liability offence for a person to omit or fail to comply with a duty, obligation or requirement of the Act, punishable with a maximum of 15 years imprisonment and a fine of K2 million for individual offenders, and for a body corporate, by a fine of K50 million (s 12);

(7)	granting immediate and increasing power conferred on the Secretary for Finance to supervise and control all bank accounts of constitutional and public bodies (ss 13 and 14). 

28.      No establishment, strength, effectiveness and the survival of any organisation, public or private, is complete without providing amongst others, for the question of their finances.  That in turn includes their ability to make decisions on generating their income, expenditure, savings and managing of their respective funds. Logically therefore, legislation which establishes public institutions or bodies necessarily and invariably provide for the necessary powers and functions over their finances, assets and the management of the same.  They would either be expressly provided for or by implication after providing for their primary aim or objective of establishing them. The enabling legislation of one of the public bodies before us, namely, the Konebada Petroleum Park under its enabling legislation the Konebada Petroleum Park Authority Act 2008 illustrates this point in ss 6 – 7 (powers and functions) and ss 28 – 30. Sections 6 – 7 state:

6.	Functions of the Authority.

Without limiting the generality of functions of the Authority under Section 6, prescribed by this Act or any other law, the functions of the Authority are to—

(a)	as prescribed, determine the scope of activities permitted in the Park and eligibility to downstream processing of petroleum; and
(b)	to acquire Government and private land in the Park; and
(c)	hold and manage land for the use by the Authority and enterprises at the Park, and to collect rent for the use of land; and
(d)	manage relations with customary landowners, including business development, social, health and environment programs; and
(e)	to carry out such other functions as are given to the Authority by this Act or by any other law; and
(f)	generally to do such supplementary, incidental, or consequential acts and things as are necessary or convenient for the Authority to carry out its function.

7.	Powers of the Authority.

The Authority has, in addition to the powers otherwise conferred on it by this Act and any other law, power to do all things necessary or convenient to be done for or in connection with the performance of its functions.

29.    It is a well-known position at law and is so common that, it easily qualifies for any Court to take judicial notice of the fact that, most public and statutory bodies are often authorised by their enabling laws, expressly or impliedly, to own property, maintain accounts, raise money and or dispose of property. The ability or the power of the public and statutory bodies to own properties, maintain accounts, raise money and dispose of property necessarily includes having more than an interest in them, namely, ownership or rights over the properties they acquire, accounts they maintain and the funds they raise or are allocated to them as a necessary part of their establishment and existence. Hence, the ability to acquire and have such ownership rights and interests in their properties is critical and goes into the core of their survival and or existence.  

30.      Additionally, as this Court noted in the context of public bodies in the case of PNG Power Ltd v Ian Augerea [2013] 1 PNGLR 280, some public and statutory bodies have been established with the aim of making them efficient and effective to provide to the people in the country better goods and services, such as water and sanitation, electricity, telecommunications and air services, to name a few. The task of satisfactorily delivering on these objectives, necessarily in turn requires amongst others, ownership of their respective finances and the ability to make decisions concerning their respective properties or assets.  Efficiency in a delivery of each of the constitutional and public bodies’ purposes and functions, require the ability to make decisions in the areas of property acquisition and disposal, raising funds, accessing them and the opening, maintaining and closing of bank accounts and sound investments in a timely manner. To make informed and well considered decisions, each of the constitutional and public bodies have boards or decision-making authorities made up in most cases, by well qualified and experienced members.

31.      Given the importance and functions of the public bodies, their properties, be it real estate, funds or other items of value need to be protected against theft, misappropriation, corruption and third parties.The law in that respect is not void.  At the highest, s 53 of the Constitution, provides for the protection of properties in these terms:

(1)	Subject to Section 54 (special provision in relation to certain lands) and except as permitted by this section, possession may not be compulsorily taken of any property, and no interest in or right over property may be compulsorily acquired, except in accordance with an Organic Law or an Act of the Parliament, and unless—

(a)	the property is required for—

(i)	a public purpose; or
(ii)	a reason that is reasonably justified in a democratic society that has a proper regard for the rights and dignity of mankind,

that is so declared and so described, for the purposes of this section, in an Organic Law or an Act of the Parliament; and
(b)	the necessity for the taking of possession or acquisition for the attainment of that purpose or for that reason is such as to afford reasonable justification for the causing of any resultant hardship to any person affected.

(2)	Subject to this section, just compensation must be made on just terms by the expropriating authority, giving full weight to the National Goals and Directive Principles and having due regard to the national interest and to the expression of that interest by the Parliament, as well as to the person affected.

(3)	For the purposes of Subsection (2), compensation shall not be deemed not to be just and on just terms solely by reason of a fair provision for deferred payment, payment by instalments or compensation otherwise than in cash.

(4)	In this section, a reference to the taking of possession of property, or the acquisition of an interest in or right over property, includes a reference to—

(a)	the forfeiture; or
(b)	the extinction or determination (otherwise than by way of a reasonable provision for the limitation of actions or a reasonable law in the nature of prescription or adverse possession),

of any right or interest in property.

(5)	Nothing in the preceding provisions of this section prevents—

(a)	the taking of possession of property, or the acquisition of an interest in or right over property, that is authorized by any other provision of this Constitution; or
(b)	any taking of possession or acquisition—

(i)	in consequence of an offence or attempted offence against, or a breach or attempted breach of, or other failure to comply with a law; or
(ii)	in satisfaction of a debt or civil obligation; or
(iii)	subject to Subsection (6), where the property is or may be required as evidence in proceedings or possible proceedings before a court or tribunal,

in accordance with a law that is reasonably justifiable in a democratic society that has a proper regard for the rights and dignity of mankind; or
(c)	any taking of possession or acquisition that was an incident of the grant or acceptance of, or of any interest in or right over, that property or any other property by the holder or any of his predecessors in title; or
(d)	any taking of possession or acquisition that is in accordance with custom; or
(e)	any taking of possession or acquisition of ownerless or abandoned property (other than customary land); or
(f)	any restriction on the use of or on dealing with property or any interest in or right over any property that is reasonably necessary for the preservation of the environment or of the national cultural inheritance.

(6)	Subsection (5)(b)(iii) does not authorize the retention of any property after the end of the period for which its retention is reasonably required for the purpose referred to in that paragraph.

(7)	Nothing in the preceding provisions of this section applies to or in relation to the property of any person who is not a citizen and the power to compulsorily take possession of, or to acquire an interest in, or right over, the property of any such person shall be as provided for by an Act of the Parliament.

32.      The background leading to the inclusion of this provision in the Constitution is as stated in the Final Report of the Constitutional Planning Committee (CPC). The relevant parts are paragraphs 85 – 86 at page 5/1/14 which read as follows:

85. 	In the days of the French and American Revolutions and throughout the nineteenth and much of the twentieth century, great stress was laid on property rights as being among the most fundamental of human rights. This was part of the political philosophy of laissez-faire which was dominant in the thinking of Western societies until quite recently.  

86.	With the emergency of many new states in which the vast majority of the people have relatively few property rights to protect, whilst a small number of privileged people, both non-citizens and citizens, own the bulk of rural and industrial property, nationalist governments in many countries have regarded it as essential that positive action be taken to redistribute wealth more equitably. To do so, however, has been a daunting task, and some of these countries, particularly new Commonwealth states, have found that constitutional provisions have limited their ability to acquire foreign owned property and have also been instrumental in obligating them to pay very substantial sums, on strict conditions, as compensation for the property they have acquired. This in turn has restricted the ability of the governments of these states to carry out programmes designed to achieve a fairer distribution of their resources and of the benefits obtained from their use.

33.     Clearly therefore, s 53 was included deliberately to protect against the government or the State and others from taking away from other persons their property rights.  At common law, a person, be it a natural person or an incorporated entity’s property rights were protected and enforced by amongst others, the tort of trespass and conversion.  According to PNG’s customary law and practice, property including land rights were and still are in some parts of the country enforced through tribal war fares at the highest. Upon colonisation and Independence, these rights especially, those over customary land were recognised with the enactment of the Land Disputes Settlement Act, whilst at the same time the protection provided at common law by principles such as trespass and conversion were adopted and became part of our underlying law pursuant to Sch 2.2 of the Constitution. 

34.      Section 53 of the Constitution has been the subject of proceedings in the Supreme Court on a number of occasions. The first case was in the matter of PNG Ready Mixed Concrete Pty Ltd v The State [1981] PNGLR 396. There, the National Court at p 409 said:

The Constitution, s 53, carries the heading: ‘Protection from the unjust deprivation of property’. The detailed provisions of the section itself vary markedly from the recommendations of the Constitution Planning Committee. However, Ch 5, paras 85-91 of the Committee’s Final Report (Part I) make it clear that what the Committee was concerned with was the limitation on the power of government to distribute wealth by means of the compulsory acquisition of property from citizens. In its final form in the legislation the provision as to acquisition of property was widened to include forfeiture, extinction or determination of any right or interest in property. The key word is ‘compulsorily’ which I think implies the exercises of some power conferred by statute on the State or an instrumentality of State. In my view the section is not directed at the decision of the court which adjudicates, declares or determines pre-existing rights. The word ‘deprivation’ in the heading sheds further light to the subject. A person is not deprived of property unless he is stripped of something to which he is entitled. The judgment of a court which determines that a person’s claim to be entitled to possession is not recognised at law or is recognised only to a limited extent (for instance until the happening of some supervening event such as a contrary claim by someone with a better right) does not deprive a person of that interest. On the other hand, the powers exercisable under legislation such as the Land Acquisition Act 1974 (to which the Constitutional Planning Committee referred) do have the effect of stripping the landowner of the land to which he is entitled, and of substituting that right to land with a right to compensation. Thus, it is that s 53(2) provides for just compensation to be made by the appropriating authority. It is quite inapposite to consider the applicant company as being in any way an ‘authority’.  It’s action in seeking to enforce its right to possession may not be characterised as an act of expropriation. For these reasons, I conclude that s 53 of the Constitution is inapplicable to the present case.

35.      That was a case in which PNG Ready Mix Concrete sought to evict squatters on its land.  

36.      Later, the Supreme Court had the occasion to consider the provisions of s 53 in SC Ref No 3 of 1989 Re Forestry (Private Dealings) Act [1990] PNGLR 222. There, as the Court noted, it was a case in which certain provisions of the Forestry (Private Dealings) Act Ch 217 were considered. Speaking of the applicability of s 53 the Court said:

It follows from our reasoning that provisions of the Forestry (Private Dealings) Act does [sic] not deal with compulsory acquisition or possession of any property. Section 53 of the Constitution has no relevance and application to this Act. There are three main components to s 53:

(1) 	It deals with compulsory acquisition of property in accordance with an Organic Law or an Act of Parliament.
 (2) 	Such acquisition must comply with s 53 (a) and (b).
 (3) 	Just compensation must be made on just terms by the expropriating authority.

37.      The Court approved and applied the decision in PNG Ready Mixed Concrete Pty Ltd v The State (supra) and held that, s 53 did not apply because, it was a private matter for the customary landowners which did not include, compulsory acquisition of their land or their property.

38.      The next time s 53 came into consideration was in the matter of Peter Dickson Donigi v Base Resources Ltd [1992] PNGLR 110. There, Mr Donigi applied to the Supreme Court under s 155(2)(b) of the Constitution for a review of a decision of the National Court that went against him. In the National Court proceeding, he claimed Base Resources Ltd was contractually bound to transfer 10% of its petroleum licence interest to a company in which Mr Donigi had substantial interest in the share capital. In support of his claim, he claimed that, Base Resources Ltd had unjustly deprived him of property contrary to s 53 of the Constitution. He was therefore, seeking to enforce his right under s 57 also of the Constitution. The action was struck out on the ground, inter alia, that it disclosed “no cause of action.  After having lost his right of appeal, Mr Donigi applied for a review of the decision. The Supreme Court dismissed the review application as having no merit. In so doing, the Court followed the earlier cases on s 53.

39.      In some recent cases, the National and Supreme Courts have not been slow in enforcing this right under s 53 of the Constitution. In Tzen Plantations Ltd v Open Bay Timber Ltd (2014) SC1380, the National Court struck down a State Lease granted by the State over a land that was at the relevant time already vested in the National Forest Authority. The Supreme Court on appeal upheld that decision. Other cases on point, include Rimbunan Hijau (PNG) Ltd v Ina Enei (2017) SC1605.  There, the appellant entered the respondent’s customary land, without first ascertaining and obtaining the respondent and his clan, Moga’s consent as the owner of the land.  In its own words, the Supreme Court dealt with the issue in the following terms:

…since RH entered into the Land without the expressed or tacit consent and approval of Moga, RH’s first entry and remaining on the Land until the end of its operations was clearly trespass and continuous trespass. In other words, RH’s entering the Land, remaining and carrying out its operations on it without the approval of Moga was clearly illegal and the illegality continued until RH vacated the Land at the end of its operations. We endorse the learned trial Judge’s findings that, RH’s conduct was disrespectful and in total disregard of Moga’s ownership rights and interests in the Land and in any case the ownership issue was in Court.  We add, this was a serious breach of Moga’s rights as owners of the Land which is guaranteed by s. 53 of the Constitution in the context of providing against compulsory acquisition of land except as permitted by law.

40.     The Basic Rights which are often referred to as human rights, are not vested only in natural human persons.  They are also vested in incorporated entities.  Unless a statutory provision such as the definition of the word “individual” in s 1 of the Business Names Act (Chp 145), specifically excludes incorporated entities such as companies or associations and others, the use of the word “individual” also includes incorporated entities.

41.     For clarity s 34 of the Constitution stipulates:

Subject to this Constitution, each provision of this Division applies, as far as may be—

(a)	as between individuals as well as between governmental bodies and individuals; and
(b)	to and in relation to corporations and associations (other than governmental bodies) in the same way as it applies to and in relation to individuals,

except where, or to the extent that, the contrary intention appears in this Constitution.

42.      Arguably, the words in the brackets in paragraph (b) would appear to suggest an exclusion of “governmental bodies”.  If that is the intent, that is understandable. Paragraph (a) already provides for the application of the human rights provisions to governmental bodies. Paragraph (b) is thus intended to make it clear that the human rights provisions also apply to legal persons or incorporated entities such as corporations (companies) and associations which are not governmental bodies.

43.      A closer look at the provisions made for the fundamental or basic human rights and the rights of citizens only, makes it clear that, the founding fathers of our nation and Constitution provided for the right to life and all that which contributes to and support the life of both natural human beings and incorporated beings at the same time. Included in that, is the protection against the taking away of another’s land or other property through the adoption of the common law principles in Sch 2.2 of the Constitution, knowing that it is the property or assets of a person that supports his or her life.  I am sure, our founding fathers were well aware of the fact that, once a person’s property, which includes, one’s finances or other assets are taken away, it invariably results in the person concerned being left with nothing to stand on. Incorporated entities and some natural human beings go into bankruptcy and eventually cease to exist.  Hence, the important provisions, the crowing act of which was s 53, were made in the Constitution to protect against once’s properties or assets being taken away. That was with only one exception. The exception is for the State to acquire properties compulsorily in accordance with s 53.  It follows therefore that, unless the State utilises the process provided for in the Constitution, it cannot simply take away or deprive a person (natural or incorporate) of his or her property.  

Answer to question 1

44.      Having regard to the foregoing, my answer to the question under consideration is a clear and unequivocal yes. Constitutional institutions and public and statutory bodies have an “interest in property” for the purposes of s 53 of the Constitution.

QUESTION 2: IF THE ANSWER TO THE FIRST QUESTION IS “YES”, DOES THE PMMR ACT, PARTICULARLY SECTIONS 6, 7, 13 AND 14, HAVE THE EFFECT OF THE STATE TAKING COMPULSORY POSSESSION OF THEIR PROPERTY WITHIN THE MEANING OF SECTION 53 OF THE CONSTITUTION?

45.      This question follows on from the yes answer to the first question. The referrer and the first to the fourth and ninth interveners argue for a yes answer to this question as well. The fifth and seventh interveners argue to the contrary.

46.      This calls for a careful consideration of the various provisions in question. I set out below the relevant provisions of ss 6, 7, 13 and 14 of the PMMR Act.

6.	Payment of public money to Consolidated Revenue Fund

(1)	Subject to this Act, from the date of the commencement of this Act, all public money —

(a)	held by or on behalf of any person or a public or statutory body; or
(b)	received or in the custody, care or control of any person or a public or statutory body, whether or not it has been banked,

shall, at the close of the business day on which the public money was first held or received, be transferred or deposited, without deduction of any type, to the revenue bank accounts specified for that person or public or statutory body by the Departmental Head.

(2)	From the date of commencement of this Act, a person or public or statutory body shall not hold or receive into their custody, care or control, either directly or indirectly, any public money, other than in accordance with this Act.

(3)	A specification of bank accounts by the Departmental Head pursuant to Subsection (l ) shall be by written notice.

(4)	On receipt of public money into a specified bank account pursuant to Subsection (1), the Departmental Head shall cause to be transferred back to a public or statutory body an amount equal to ten percent of the public money transferred by the public or statutory body to their operating bank account.

7.	Bank accounts of public and statutory bodies

(1)	Every public and statutory body shall maintain, in addition to any trust accounts, a single operating bank account.

(2)	The operating bank account of a public or statutory body shall contain only public money —

(a)	appropriated by the National Budget; and
(b)	transferred to a public or statutory body pursuant to Section 8.

(3)	A trust account of a public or statutory body shall contain only —

(a)	the money appropriated to a public or statutory body by or under the National Budget and which the National Budget specifically authorises to be transferred to a trust account; and
(b)	the donor funds authorised by the trust instrument of that trust account.

(4)	Subject to this Act, any public money —

(a)	in an operating account or trust account other than the public money authorised by this Act shall be transferred to the Consolidated Revenue Fund by the Departmental Head; or
(b)	in a trust account, other than the public money authorised by the Public Finances (Management) Act 1995 and the trust instrument of the trust account, shall be transferred to the Consolidated Revenue Fund by the Departmental Head.

(5)	The Departmental Head shall open and operate such revenue bank accounts as are necessary to provide for the receipt of all public funds collected by any person, public or statutory body.

(6)	A person or public or statutory body that receives public money shall bank that money, without deduction or withholding, into the relevant revenue bank account operated by the Departmental Head.

(7)	The Departmental Head has the power, by virtue of this Act, to operate and execute transactions in his own name on all bank accounts of all public and statutory bodies, including trust and operating accounts, irrespective of any provisions in any other law relating to the signatories of bank accounts, to —

(a)	access the transactional details of any bank account held by or on behalf of a public or statutory body; and
(b)	transfer or cause to be transferred to the Consolidated Revenue Fund or a revenue account, public money that, pursuant to this Act or the Public Finances (Management) Act 1995, is required to be so transferred; and
(c)	effect any transaction permitted or required by this Act.

(8)	Subject to this Act, at the date of commencement of this Act, if a person or public or statutory body holds public money in a bank account other than in accordance with this section so that public money is mixed with money other than public money, the Departmental Head has the power by virtue of this Act to transfer, without deduction of any type, to the revenue bank accounts of that person or public or statutory body, all such money including the public money held in that bank account.

(9)	Subject to this Act, the Departmental Head, on receipt of information that satisfies him that money other than public money has been transferred pursuant to Subsection (8), shall transfer —

(a)	money appropriated by the National Budget to the operating bank account, if it is not a drawing account of a public or statutory body; or
(b)	money appropriated by the National Budget to a trust account of a public or statutory body, provided that the National Budget specifically authorised that money to be transferred to a trust account; or
(c)	in respect of money other than public money, to the public or statutory body from which it was transferred pursuant to Subsection (8). …

13.	Transitional implementation

(1)	After the date of the commencement of this Act, the Departmental Head shall transfer all moneys in all bank accounts held by or on behalf of public and statutory bodies to bank accounts specified for that public or statutory body by the Departmental Head.

(2)	Subject to this section, the Departmental Head shall —

(a)	return to a trust account, without deduction, the money that was authorised by the trust instrument to be contained in the trust account, including amounts appropriated by the National Budget and authorised by that National Budget to be paid into a trust account, provided that no public money shall be returned to a trust account; and
(b)	return to an operating account amounts appropriated by the National Budget and the amount specified in Sections 8(5) or 10(1); and
(c)	pay all other funds to the Consolidated Revenue Fund.

(3)	The Departmental Head shall make no payments pursuant to Subsection (2) unless —

(a)	the public or statutory body has an operating account or trust account, as the case may be, that is in full compliance with all of the requirements of the Public Finances (Management) Act 1995; and
(b)	the Departmental Head is in receipt of information produced by the public or statutory body that satisfies him that the payments are due pursuant to Subsection (2).

(4)	After the Departmental Head has acted pursuant to Subsection (1), he may, from time to time as he thinks fit, repeat the actions authorised by that subsection, to ensure that operating and trust accounts are being operated in accordance with the provisions of this Act and the Public Finances (Management) Act 1995.

47.      These provisions do the following:

(1)	compel at the commencement of the Act a transfer or deposit of all public money held or received by a Constitutional or public body (whether banked or not) without any deduction to a revenue bank account specified by Secretary for Finance;

(2)	restrict from the commencement of the Act all persons or public bodies from holding or receiving into their custody, care or control, either directly or indirectly, any public money, except only in accordance with the Act;

(3)	on receipt of public money into a specified bank account the Secretary for Finance is then obliged to cause to be transferred back to a public or statutory body’s operating account an amount equal to ten percent of what was transferred by that public or statutory body;

(4)	the Secretary for Finance is empowered to transfer to Consolidate Revenue any public money other than those authorised by the Act or the Public Finances (Management) Act 1995 (PFMA) that are in an operating or trust account;

(5)	the Secretary for Finance is empowered to open and operate such revenue bank accounts as are necessary to provide for the receipt of all public funds collected by any person, public or statutory body;

(6)	requires and compels all persons or public or statutory bodies that receives public money to bank that money into the relevant revenue bank account operated by the Secretary for Finance, without any withholding or deduction;

(7)	the Secretary for Finance is then also empowered to operate and execute transactions in his own name on all bank accounts of all public and statutory bodies, including trust and operating accounts, irrespective of any provisions in any other law relating to the signatories of bank accounts, to:

(a)	access the transactional details of any bank account held by or on behalf of a public or statutory body; and
(b)	transfer or cause to be transferred to Consolidated Revenue or a revenue account, public money that, that is required by the Act or the PFMA to be so transferred; and
(c)	effect any transaction permitted or required by the Act.

(8)	if at the commence of the Act a person or public or statutory body holds public money in a bank account other than in accordance with s. 7 of the Act and is mixed with money other than public money, the Secretary for Finance is given the power to transfer, without deduction of any type, to the revenue bank accounts of the relevant person or public or statutory body; 

(9)	fixes 1st January 2020 as the date for ss 8(4) and 10 of the Act to cease and compels all public money to be paid to the nominated bank accounts of the Consolidated Revenue fund. At the same time, it precludes remittance of any moneys to any public or statutory body; and

(10)	after 1st January 2020 all Constitutional and public bodies are restricted to receiving public money solely by appropriations made by or under the National Budget.

48.      It is obvious that, the operation of the provisions under consideration either on their own or in combination with the other provisions of the Act, causes all constitutional and public bodies to lose possession of their public money, which otherwise would be under their custody and control.  Making matters worse, the Act gives a much more broader meaning to the phrase “public money” in s 2(1) of the Act in these terms:

‘public money’ includes all money raised, refunded, received, held or controlled by a public body, statutory body or a person acting on behalf of the State, including all money received as a result of —

(a)	fees, levies, royalties or any other charges of any type, other than taxes; or
(b)	bonds, debentures, shares, securities, term-deposits, dividends or any other investments, including the return on those investments; or
(c)	the sale or lease of public property; or
(d)	donations or gifts,

but excludes money appropriated to a public or statutory body by or under the National Budget.

49.      Also, a combined effect and operation of these and other provisions of the Act compels each constitutional or public body to have only two types of bank accounts:

(a)	a single operating bank account (s 7(1)); and

(b)	trust accounts compliant with s 7(3).

50.      Further, by virtue of other provisions of the Act, any money in those accounts that should not be in them or in any accounts not authorised by the Act, are transferrable by the Secretary for Finance to the body’s revenue bank account.  The revenue account as already noted, is one that is opened and operated by the Secretary for Finance.  Alternatively, such funds are transferrable to the Consolidated Revenue Fund. In all of these, the constitutional and public bodies whose funds are taken away have no say or control. Only the Secretary for Finance as the ultimate supervision, control and say.

51.     Almost all public and statutory bodies are authorised by their own enabling legislation to open and operate such bank accounts as a necessary to carry out their function.   Some of them, such as Kumul Consolidated Holdings, are required by the very nature and purpose of their establishment at the first place to acquire and deal with shares, stock, units, debentures, options, warrants or other securities or financial instruments or interests and received and disburse moneys.   Others are authorised to open and operate trust accounts as are necessary and part of their functioning. The Sheriff Regulation (Chp 55) is an example on point. This regulation authorises the Sheriff who is also the Registrar of the National Court to open and maintain trust accounts.  It follows therefore that, an application of the Act to trust accounts operated for example, by the Registrar of the National Court or the Sheriff, would potentially interfere with the discharge by the Registrar or the Sheriff of fiduciary obligations that are owed for whose benefit the funds are held in trust.

52.        A consideration of the particular provisions discussed above and the other provisions in the Act clearly leads to an inevitable conclusion. The conclusion is, the whole intend and purpose of the Act is to impose a scheme for compulsory acquisition or, if not, taking possession by the State, through its functionary the Secretary for Finance, of all property in the form of money that would otherwise be under the custody and control of public and statutory bodies.  In so doing, Parliament through the initiation of the Executive arm of Government has decided by legislation namely, the PMMR Act to remove and place under the control of the Secretary for Finance through the SBC, funds belonging to the constitutional and public bodies. This executive and legislative act has made all constitutional and public bodies subject to the powers of the Secretary for Finance and the SBC. Effectively, this Act undermines the existence of each of the constitutional and public bodies by getting into and removing the most critical and core part of their existence namely, their finances. It also undermines the purpose for which these bodies were created and or established at the first place.  Not only that, it opens the door for control by the Executive arm of Government through the control of each of the bodies’ finances. For as it is well known, power is in he who controls one’s finances.  Expressed another way, money is power, therefore he who controls another’s money, controls the other. Herein lies also, the risk of removing the independence of each of the bodies and place them under the Secretary for Finance and the SBC’s control and ultimately, the Executive arm of Government.

Answer to question 2

53.      The answer to question 2 is therefore a clear yes.  The PMMR Act has the effect of the State taking compulsory possession of property in the form of monies of public and statutory bodies including constitutional institutions, within the meaning of s 53 of the Constitution.

QUESTION 3:	IF THE ANSWER TO THE SECOND QUESTION IS “YES” DOES THE PMMR ACT COMPLY WITH SECTION 53 OF THE CONSTITUTION, ESPECIALLY SECTIONS 53(1) AND (2)?”

54.     The third question follows on from the yes answer to the second question.  In their submissions, the referrer and the first to the fourth and ninth interveners argue for a yes answer.  On the other hand, the fifth and seventh interveners argue for a negative answer. The answer to the question lies in a careful consideration of what is provided for in ss 53(1) and (2) of the Constitution. 

55.      As I noted earlier, s 53 protects citizens including, public and statutory bodies against unjust deprivation of property in which they have an interest. It does so by providing against possession being compulsorily taken of any property and any interest in property.  At the same time, the provision provides for compulsory possession or acquisition of property provided, that act meets certain requirements stipulated in the provision itself. The requirements are that the:

(1)	compulsory acquisition must be in accordance with an Organic Law or an Act of the Parliament;

(2)	property must be required for a public purpose or a reason that is reasonably justified in a democratic society that has a proper regard for the rights and dignity of mankind;

(3)	purpose or reason must be so declared and so described, for the purposes of s. 53, in an Organic Law or an Act of the Parliament;

(4)	necessity for the taking of possession or acquisition for the attainment of that purpose or for that reason is such as to afford reasonable justification for the causing of any resultant hardship to any person affected;

(5)	compulsory acquisition must be with just compensation paid on just terms by the expropriating authority, giving full weight to the National Goals and Directive Principles and having due regard to the national interest and to the expression of that interest by the Parliament, as well as to the person affected. 

56.      A number of Supreme Court and National Court decisions bring these requirements out clearly.  In addition to the cases I discussed under the first question, I refer to the decisions of the Supreme Court in Hui Teck Lau v Leo Maniwa (2016) SC1528; Patterson Lowa & Ors v Wapula Akipe & Ors [1991] PNGLR 265; [1992] PNGLR 399; SC Ref No 3 of 1989 Re Forestry (Private Dealings) Act [1990] PNGLR 222 as cases on point. 

57.      A careful consideration of what the Executive through the Parliament per the PMMR Act has done reveals requirements (1) and (2) for the compulsory acquisition of property pursuant to s 53 of the Constitution have been met.  This is because the acquisition is under an Act of the Parliament for a public purpose.  The public purpose of acquisition as the PMMR Act’s title suggests, is to “regularising the handling and management of public money received by public and statutory bodies”.

58.      I am not however, satisfied that the remaining requirements (3), (4) and (5) have been met. There is no express declaration and description in the long title or anywhere else in the Act that complies with requirement (3). Similarly, there is no expressed, implied or tacit case set out in any provisions of the Act the necessity for the acquisition, so as to afford reasonable justification for the causing of any resultant hardship to any person that may be affected. All we have is the following statement in s 1(3) of the Act:

For the purposes of Section 53(2) of the Constitution, this Act is expressed to be made in the national interest.

59.      This is insufficient for what is a very critical factor or requirement for a proper, legal and constitutional compulsory acquisition of property by the State.  In the present case, the State took away that which enables each of the constitutional and public bodies to exist and deliver on their purpose and functions. I repeat the observations I made in the context of the discussions under the first two questions. This legislative act has the effect of making each of the constitutional and public bodies dependent and come under the clear control of the Executive arm of Government through its functionary the Secretary for Finance. Herein lies an avenue and a risk of compromising the independence and hence, the purpose and function of some of these bodies specifically through the SBC under s 8 of the Act.

60.     Finally, not a single provision or mention is made for just compensation to meet the fifth and final requirement that must be met for a proper, legal, constitutional and valid compulsory acquisition. As with the first four requirements, this is also a very important and critical requirement.   In the present case, the Act empowers the Executive arm of Government through its functionary, the Secretary for Finance, to take away funds held in trust for example, by the Registrar of the National Court or that of the Sherriff or the Public Solicitor who as part of their duty, receive and hold non-public funds belonging private persons, be it natural or corporations.  It is odd that, no provision is made for just and adequate compensation for this acquisition.  

Answer to question 3

61.     Based on the foregoing reasons, I answer the third question with a no.  The PMMR Actdoes not comply with s 53 of the Constitution, in that, it has failed to meet 3 of the 5 critical requirements for a proper, legal, constitutional and valid acquisition of the properties in the form of funds of the constitutional and public bodies.

QUESTION 4: IF THE ANSWER TO THE THIRD QUESTION IS “NO” DOES THAT MEAN THAT THE PMMR ACT IS UNCONSTITUTIONAL AND INVALID IN ITS ENTIRETY AS THE THRUST OF THE LEGISLATION DEPENDS ON SECTIONS 6, 7, 13 AND 14 OF THE PMMR ACT?

62.     The no answer to the third question leads to the fourth question. Section 11 of the Constitution requires all Acts of Parliament to be consist with the Constitution. An Act of Parliament that is inconsistent with the Constitution are already rendered invalid and ineffective by the provisions of s 11 (1) to the extent of the inconsistency.  The main thrust of the PMMR Act depends on ss. 6, 7, 13 and 14 of the Act.For reasons already given, these provisions are inconsistent with s 53 of the Constitution. Accordingly, I find the PMMR Act is unconstitutional and invalid in its entirety.

Answer to question 4

63.     Based on the reasons given for questions 1 to 3 above, I answer this question with a yes. That is to say the PMMR Act is unconstitutional and invalid in its entirety as the core of the legislation is dependent on sections 6, 7, 13 and 14 of the PMMR Act?

QUESTIONS 4A – 4C

64.     Turning then to the next lot of questions namely questions 4A, 4B and 4C I note they are related to question 4. As summarised by my brother Cannings J, these questions ask:

4A: 	DO PERSONS WITH A CLAIM FOR PAYMENT AGAINST A STATUTORY BODY ETC HAVE AN “INTEREST IN PROPERTY”?

4B:	DOES SECTION 11 OF THE ACT PROVIDE FOR COMPULSORY ACQUISITION OF PROPERTY?

4C: 	DOES SECTION 11 OF THE ACT COMPLY WITH CONSTITUTION, SECTIONS 53(1) AND (2)?

65.      The referrer and the first to the fourth interveners as well as the ninth interveners argue for a yes answer to questions 4A and 4B and a no answer to question 4C. On the other hand, the fifth and seventh interveners argue for a negative answer to questions 4A and 4B and a yes answer to the question 4C.

QUESTION 4A

66.      Question 4A is based on s 11 of the PMMR Act.  That provision reads:

11.	Claim against the state and statutory bodies not enforceable in certain circumstances

(1)	A claim for payment, compensation, restitution, damages or any other form of relief, including injunctive or declaratory relief, against the State or a statutory body based on equity or equitable principles in respect of the value of works, goods or services rendered to the State or a statutory body shall not be enforceable, through the Courts or otherwise, unless the seller of the property or stores or the supplier of the works, goods or services produces —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure,

relating to the property or stores or works, goods or services, the subject of the claim, to the full amount of the claim.

(2)	A claim for payment, compensation, restitution, damages or any other form of relief, including injunctive or declaratory relief, against the State or a statutory body based on the undertaking or promise of any person, whether or not that person had the actual, implied or ostensible authority of the State or statutory body to give or make that undertaking or promise, shall not be enforceable, through the courts or otherwise, unless the person making the claim produces —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure,

relating to the undertaking or promise, the subject of the claim, to the full amount of the claim.

(3)	The Courts shall, on application by the State, stay a claim specified in Subsections (1) and (2), if the person making the claim cannot produce, on demand by the State —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure, 

relating to the subject of the claim, to the full amount of the claim.

67.      This provision does the following:

(1)	provides for claims for payments based on:

(a) 	equity or equitable principles for value of works, goods or services; or
(b)	an undertaking or promise of a person on behalf of the State or statutory authority; and

(2)	restricts enforceability of such claims unless they are supported by a properly authorised ILPOC or an Authority to Pre-commit Expenditure (APE).

68.      Unless a claim is for say a specific performance or the like, most claims based on equity or equitable principles for value of works, goods or services; or based on an undertaking or promise of a person on behalf of the State or statutory authority, would be for a payment of money that is owned by the State or public bodies or statutory authorities.  Consequently, the persons making the kinds of claims covered by s 11 would have an interest in the properties of such authorities for enforcement of their claims.

Answer to question 4A

69.      It should follow from the foregoing that, the answer to question 4A should be a yes.  That is to say, persons having the sorts of claims covered by s 11 of the PMMR Act, have an “interest in … property” for the purposes of s 53 of the Constitution. 

QUESTION 4B

70.      I turn to question 4B next. The question asks, for the purpose of s 53 of the Constitution, whether s 11 of the PMMR Act provides for compulsory possession of the property of persons making the sorts of claims referred to in s 11. 

71.      Subsection (4) of s 53 provides as to what acts might constitute “taking of possession of property” for the purposes of s 53(1). Subsection (4) reads: 

In this section, a reference to the taking of possession of property, or the acquisition of an interest in or right over property, includes a reference to—

(a)	the forfeiture; or
(b)	the extinction or determination (otherwise than by way of a reasonable provision for the limitation of actions or a reasonable law in the nature of prescription or adverse possession),

of any right or interest in property.

72.      Section 11 of the PMMR Act, effectively takes away from persons who are entitled to make a claim, their right to bring their claims unless, they are able to produce an ILPOC or an APE. Without this provision, persons who enter into contracts with the State or statutory authorities for the supply of goods or services in return for the payment of the agreed contractual price, already have the right to make their claims and get them enforced through the courts.  In Papua New Guinea, the State is best known for not meeting its contractual obligations to pay for goods and services in a timely manner. In some cases, suppliers of goods and services issue proceedings to enforce their claims.  That in turn, forces the suppliers to incur further losses and costs. In other cases, suppliers or providers go bankrupt because of a failure of the State or a public authorities in making timely payments which seriously affects their cashflow.

73.      The State or public authorities already have a range of unfair protection.  An example that quickly comes to mind is the requirement for notice under s 5 of the Claims By and Against the State Act 1996 (CBASA Act) as amended. Except only for the Motor Vehicles Insurance Limited, other defendants are not required to be notified before a claim is made against them. Another example of an unfair protection is where the State is given more time to file its defence under s 9 of the CBASA.  A further example of unfair protection of the State is where it is obligated to pay interest at no more than 2%. That is under the Judicial Proceedings (Interest on Debts and Damages) Act 2015 compared to 8% as determined and added by the courts following judgments on debts and damages against other defendants.   Finally, I note, a provision similar to s 11 of the PMMR Act already exists in the form of s 2A of the CBASA as amended 

74.      It is open for one to argue that s 11 does not take away any property in the way discussed above. Instead, this provision only requires either of the two requirements, an ILPOC or an APE.  As long as either of these requirements are met, there can be no taking away of property. That could work in a system that works well in a timely manner and free of corruption. It is a well-known fact in PNG that, most of the State departments or agencies are usually too slow in discharging their duties and responsibilities and the countries systems and process are corrupted. When that is the case, and for good reasons, some suppliers may not be able to secure an ILPOC or an APE promptly.  Meanwhile, the need to deliver any goods or services to the State as in an urgent or emergency case or even in normal circumstances may necessarily require an immediate delivery of the relevant goods and or services without first securing an ILPOC or APE. In other cases, those vested with the necessary authority to issue an ILPOC or an APE’s could either inadvertently or deliberately refuse or delay the giving of the required approval or endorsement for their own reasons.  Under the principles of equity, adopted under Sch 2.2 of the Constitution as part of PNG’s underlying law, the Courts can and have in appropriate cases awarded damages and granted other remedies based on the principles such as quantum meruit. This approach has the backing of a lot of case precedents such as Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705 and Teine v University of Goroka (2019) SC1881. In the circumstances, I am of the view that s 11 is an encroachment of a supplier or provider’s right to recover damages in appropriate cases.

Answer to question 4B

75.      The short answer to question 4B is a yes. For the purposes of s 53 of the Constitution, s 11 of the PMMR Act provides for compulsory possession of the property of claimants making the kinds of claims provided for under s 11.
	
QUESTION 4C

76.      Question 4C is the final question centred around s 11 of the PMMR Act and s 53 of the Constitution. This question asks whether, s 11 of the Act complies with s 53 of the Constitution.  The question calls for the Court to consider s 11 on its own as against s 53 of the Constitution. 

77.      Under question 4B, I expressed the view that s 11 allows for compulsory possession of the property of claimants within the meaning of s. 53 of the Constitution. It should follow therefore that, in order for s 11 of the Act to do that constitutionally, it must meet the requirements of s 53 of the Constitution. In the earlier part of my judgment, I already summarised and set out the requirements under s 53.  Examining s 11 against the requirements under s 53 clearly show that, only requirement (1) has been met and not requirements (2) to (5).

Answer to question 4C

78.      Hence, the answer to question 4C is no.  Section 11 of the PMMR Act does not comply with s 53 of the Constitution and is therefore unconstitutional. Since, I have come to the conclusion that the entire PMMR Act is unconstitutional, s 11’s unconstitutionality adds to the decision to declare the whole Act unconstitutional and invalid. 

QUESTION 5: WHETHER SECTION 4 OF THE PMMR ACT IS EFFECTIVELY ALTERING THE CONSTITUTION BY MAKING THE ACT BIND CONSTITUTIONAL INSTITUTIONS CONTRARY TO THE PRESCRIBED PROCESS UNDER SECTIONS 12 AND 13 OF THE CONSTITUTION?

79.      The referrer and the second to the fourth and the ninth interveners argue for a yes answer. On the other hand, the first, fifth and the seventh interveners argue for a no answer. 

80.      Section 4 of the Act reads:

4.	Integrity of constitutional institutions.

(1)	Nothing in this Act shall be interpreted so as to restrict or in any way diminish the functional mandates and integrity of constitutional institutions but shall be interpreted so as to limit the operation of the Act to public financial management of public money.

(2)	This Act binds constitutional institutions and constitutional institutions shall be deemed to be statutory bodies for the purposes of this Act.

81.      What constitutes “constitutional institutions” is defined by s 2 of the Act. It simply says “constitutional institutions” are those “established by the Constitution”. A much clearer definition is provided by the Constitution itself in s 221 in the following terms: 

“‘constitutional institution’ means any office or institution established or provided for by this Constitution, other than an office of Head of State or of a Minister, or the National Executive Council.

82.      It is beyond argument that “constitutional institutions” include the:

(1)	Supreme Court and the National Court of Justice (established by Constitution, ss 160 and 163);
(2)	Offices of Public Prosecutor and Public Solicitor (Constitution, s 176(1));
(3)	Magisterial Service (Constitution, s 173(1));
(4)	Ombudsman Commission (Constitution, s 217(1));
(5)	Electoral Commission (Constitution, s 126);
(6)	Parliamentary Service (Constitution, s 132);
(7)	Public Services Commission (Constitution, s 190(1)); and 
(8)	Office of Auditor-General (Constitution, s 213(1)). 

83.      These offices are not complete without those who are authorised by the Constitution to occupy or hold or occupy each of the offices or the various “constitutional institutions”. They are the constitutional office-holders. Section 221 identifies these officers as follows:

(a)	a Judge; or
(b)	the Public Prosecutor or the Public Solicitor; or
(c)	the Chief Magistrate; or
(d)	a member of the Ombudsman Commission; or
(e)	a member of the Electoral Commission; or
(f)	the Clerk of the Parliament; or
(g)	a member of the Public Services Commission; or
(h)	the Auditor-General; or
(i)	the holder of any other office declared by an Organic Law or an Act of the Parliament to be a constitutional office for the purposes of this Part.

84.      As can be seen, this is a small but a special group of leaders who hold or occupy higher offices in the country. When we consider each of their respective corresponding “constitutional institutions” offices, or positions, roles, purposes and or functions in the country, their importance and value in society becomes clearer. They enjoy an enhanced level of independence, security of tenure and guarantee of resources under Part IX of the Constitution. Section 225 of the Constitution strengthens this position in the following terms:

225.	Provision of facilities, etc.

Without limiting the generality of any other provision of this Constitution, it is the duty of the National Government and of all other governmental bodies, and of all public office-holders and institutions, to ensure, as far as is within their respective legal powers, that all arrangements are made, staff and facilities provided and steps taken to enable and facilitate, as far as may reasonably be, the proper and convenient performance of the functions of all constitutional institutions and of the offices of all constitutional office-holders.

85.      This provision has been the subject of a number of proceedings in the National and Supreme Courts.  The decision of this Court in PNG Power Ltd v Ian Augerea (supra) went through the relevant cases from paragraph 42 – 45 of the judgment from the decision in Re National Court Circuit, Southern Highlands Province [1988-89] PNGLR 435 to Paias Wingti v Kala Rawali (2010) N3959 and In the Matter of Re-Election of the Governor-General, Reference by the Morobe Provincial Executive (2010) SC1089.

86.      These cases highlight the fact that, the State has on a number of occasions failed to duly discharge its duties under s 225.  The failure has mainly been in the area of providing adequate funding in a timely manner to enable the relevant constitutional institutions and the constitutional office-holders to duly discharge their duties and responsibilities. That failure has in some cases, resulted in the relevant constitutional institutions and or “constitutional office-holders” being inhibited from discharging their duties and responsibilities in a timely and cost-effective manner. The clear dictate of s 225 is for:

… the National Government and of all other governmental bodies, and of all public office-holders and institutions, to ensure, as far as is within their respective legal powers, that all arrangements are made, staff and facilities provided and steps taken to enable and facilitate, as far as may reasonably be, the proper and convenient performance of the functions of all constitutional institutions and of the offices of all constitutional office-holders.

87.      As already noted, s 8 of the PMMR Act establishes the SBC which is made up of the Secretaries for Finance and Treasury and such other members appointed by them.  The SBC is vested with power to “determine … the reasonable operating budget requirements of a public or statutory body” while the public or statutory bodies have the option of making submissions to the SBC regarding their “operating budget requirements”. However, that option has expired under s 14 (1) of the Act on 1st January 2020.  Hence, in my view, by making the Act with provisions such as s 8 applying to constitutional institutions, the Act has effectively encroached into the independence of each of the constitutional institutions, by allowing for the Executive arm of Government through its functionary, the Secretary for Finance and the SBC, to determine their operating budgetary requirements. 

88.      It is well settled law by convention and specific expressed provisions like s 99(3) of the Constitution that, there is a clear separation of powers between the three arms of government namely, Parliament, the Executive and the Judiciary (s 99(2)). One of the arms of government cannot interfere with the powers and functions of the other and their respective operations.  This is carried through in the matter of finances and budgets by s 209(2) of the Constitution which provides:

For each fiscal year, there shall be a National Budget comprising—

(a)	estimates of finance proposed to be raised and estimates of proposed expenditure by the National Government in respect of the fiscal year; and

(b)	separate appropriations for the service of that year in respect of—

(i)	the services of the Parliament; and
(ii)	general public services; and
(iii)	the services of the Judiciary; and

(c)	such other supplementary Budgets and appropriations as are necessary.
			
89.      This is strengthened by ss 209(2A), (2B) and (3). The first of these provisions outlines what is to be covered in the appropriations. Then, subsection 2B authorises the Speaker of Parliament and the Chief Justice to submit to the Prime Minister before 30th September each year, their respective estimates. The Prime Minister or the Executive arm is not authorised in any way to reduce the Speaker or the Chief Justice’s estimates on behalf of Parliament and the Judiciary respectively. Instead, there is an imperative to ensure that the Speaker and the Chief Justice’s estimates in full constitute part of the National Budget each year. Failing that, or a breach of this requirement, the Speaker and the Chief Justice can go to Parliament for any difference in the actual allocation and their estimates.  It is then up to Parliament to increase or decrease the actual appropriation. This is apparent from ss 210(3) and (4) of the Constitution which stipulate:

(3)	Where, in the opinion of the Parliament, the proposed expenditure for the services of the Parliament or the services of the Judiciary is below the estimate submitted by the Speaker or Chief Justice respectively and is insufficient adequately to meet the requirements of that service, the Parliament may increase the expenditure to an amount not exceeding the original estimates submitted by the Speaker or the Chief Justice, as the case may be, under Section 209(2B).

(4)	For the purposes of subsection (3), the Parliament may re-allocate, or reduce and re-allocate, the amount of expenditure appropriated for any purpose.

90.      Once the budget is passed through the enactment into law of an appropriate Appropriation Bill each year, the funds appropriated to the Parliament and the Judiciary would have to be made available to them either in a lump sum payment at the beginning of the relevant financial year or in equal instalments each month, subject to the availability of public funds to meet the National Budget. In keeping with the important principle of separation of powers enshrined in s 99(3) of the Constitution, it was never intended nor should it ever be the case that, the Executive Government through the Department of Finance should control any aspect or part of the Judiciary and the Parliaments Finances. For to do so, would undermine the separation of powers principle and vest ultimate control in the Executive Government and thereby enable it to interfere with the duties, powers and functions of the Parliament and the Judiciary. The Executive Government can only control the finances of the various departments of the Executive Government, the national bureaucracy and other arms and or instrumentalities of the government.   

91.      Consistent with the important principle of the separation of powers and to ensure the separate and independent management of its finances amongst other duties, the National Judicial Staff Service (NJSS) was established by s 2(1) of its enabling legislation, the National Judicial Staff Service Act 1987.  The NJSS is certainly not a constitutional institution but a statutory or public authority established to support a constitutional institution, namely the Judiciary in its administration.  As such, it is caught by the definition of the phrases “public body” or “statutory body” under s2(1) of the PMMR Act.  That being the case, the PMMR Act applies to the NJSS.  Indeed, the taking compulsorily of the possession of the funds under the Act would directly affect the NJSS and the National Court Registrar’s Trust Account as well as that of the Sheriff’s Trust Account.

92.      As already noted, s 4(2) makes the PMMR Act apply to all constitutional institutions. Then, for the purpose of the Act, it places all constitutional institutions in the same category as statutory bodies by the use of the phrase “constitutional institutions shall be deemed to be statutory bodies for the purposes of this Act.”  Section 4(1) of the Act tries to keep the importance of constitutional institutions by the use of the phrase:

Nothing in this Act shall be interpreted so as to restrict or in any way diminish the functional mandates and integrity of constitutional institutions …

93.      However, this is not where it ends.  Instead, it goes on to say:

… but shall be interpreted so as to limit the operation of the Act to public financial management of public money.

94.       In other words, this provision is saying, the Act must be interpreted in such a way that it does not restrict or diminish the functional mandate and integrity of constitutional institutions. Yet, it goes on to provide by the same breath, the power to take away the constitutional institution’s power and function over “management of public money”.  As already noted, “public money” is widely defined to include matters that would not traditionally include as public money.   

95.      This means, the need to interpret and apply the Act “so as to restrict or in any way diminish the functional mandates and integrity of constitutional institutions” does not include all questions of management of public funds which by deliberate constitutional provisions namely ss 209(2), (2A), (2B) and (3) and s 210(3) and (4) as well as s 225 are to be separately appropriated and managed.  In these circumstances, I am of the view that s 4 of the PMMR Act has effectively amended these important provisions to make the constitutional institutions and constitutional office-holders subject to the Executive Government through its functionary the Secretary for Finance and the SBC. In so doing, it has encroached upon the most important principle of the independence of constitutional institutions without following the process provided for by the Constitution itself in ss 12 to 17.

Answer to question 5

96.      In short my answer to question for is yes, s 4 of the PMMR Act is effectively altering the Constitution by making the Act bind constitutional institutions contrary to the prescribed process under ss 12 to 17 of the Constitution to properly amend any of its provisions of the Constitution.

QUESTION 6: IF THE ANSWER TO THE ABOVE QUESTION IS “YES,” IS SECTION 4 OF THE PMMR ACT UNCONSTITUTIONAL AND INVALID?  

97.      I answered question 5 with a yes. For the reasons given in the foregoing, I accept the referrer and the second to the fourth and the ninth interveners’ arguments that, this question must be answered with a yes answer. 

Answer to question 6

98.     Thus, the answer to question 6 is, yes, s 4 of the PMMR Act is inconsistent with the Constitution and is therefore unconstitutional. 

QUESTION 7: WHETHER SECTIONS 5(5), 9, 10 AND 11(3) OF THE PMMR ACT ARE INCONSISTENT WITH 155(2) AND (4) OF THE CONSTITUTION AND THEREFORE UNCONSTITUTIONAL AND INVALID?

99.      Judicial review is a necessary part of any democracy and the rule of law. For it is this process that holds public decision-makers accountable for  their decisions, or actions or inactions, against acceptable levels of fairness, due process and procedure and arriving at decisions that are reasonable in all of the circumstances for sound and good public administration. The main objective or purpose of this is to ensure that a person who is coming for judicial review “is given fair treatment by the authority to which he has been subjected. However, it is no part of that purpose to substitute the opinion of the judiciary or of individual judges for that of the authority constituted by law to decide the matters in question” (Peter Ipu Peipul v Sheehan [2002] PNGLR 596 and SC Review No 1 of 1990; Re Recount of Votes [1990] PNGLR 441).  

100.      Hence, only a State or an executive government that does not wish to be so scrutinised, would go to the extent of legislating against such accounting for its actions. In PNG, this is not to happen because of the provisions of ss 155(2) and (4) of the Constitution which vests the Supreme and National Courts with the necessary power to review all judicial and other administrative decisions. Unless these provisions are removed by a proper constitutional amendment, any attempt at ousting the judicial review powers of the National and Supreme Courts would stand unconstitutional, invalid and unenforceable. 

Answer to question 7

101.      Accordingly, I would answer question 7 with a yes.  That is to say, yes, ss 5(5), 9, 10 and 11(3) of the PMMR Act are inconsistent with s 155, in particular, ss 155(2) and (4) of the Constitution and are therefore, unconstitutional and invalid.  

QUESTION 8: WHETHER SECTIONS 5(5), 9, 10 AND 11(3) OF THE PMMR ACT ARE INCONSISTENT WITH SECTION 157 OF THE CONSTITUTION AND THEREFORE UNCONSTITUTIONAL AND INVALID?

102.      I have already considered and discussed the relevant provisions of the Act in the context of the last preceding question.  What I now need to do is to consider the question of whether, the provisions in question are inconsistent with the provisions of s 157 of the Constitution.  Section 157 reads:

Except to the extent that this Constitution specifically provides otherwise, neither the Minister responsible for the National Justice Administration nor any other person or authority (other than the Parliament through legislation) outside the National Judicial System has any power to give directions to any court, or to a member of any court, within that System in respect of the exercise of judicial powers or functions.

103.      A judiciary that is independent from the executive and the parliamentary arms of government is necessary and critical for the rule of law and more so a democratic system of government like ours. As the CPC in its final reported noted at Chp 8 p 1, the judiciary performs a necessary and important function that is different from the other two arms of government. The judiciary has the function of:

… peacefully determining conflicts that arise between individuals and individuals; between different levels of government; and between individuals and government; in accordance with law and justice. They may also have an important advisory function, through which the they can assist in the avoidance of potential disputes. In countries which have written Constitution the highest courts have the important task of deciding matters relating to the interpretation and enforcement of the Constitution.

104.      Given that important function and the role the judiciary plays in our society, the CPC went on to say:

It is a fundamental principle of any free country that the men and women who sit to hear and determine disputes that come before them as members of the judiciary should not be improperly influenced to make decisions for or against any particular person or groups.

105.      The CPC then noted that, it has made a number of important recommendations in its report to “ensure that the people of Papua New Guinea are governed by law, not according to whims of powerful individuals or groups.” Accordingly, it concluded:

We believe that the cardinal principle that the courts [judiciary] should be independent of the legislature and the executive must be firmly established under our Constitution.  Those who legislate and those who exercise executive power should not also be responsible for dispensing justice in our nation. The people who have that responsibility, namely judges and magistrates, should be sufficiently secure in their position so that they are able to make their decisions without fear of personal repercussions.

106.      In addition to s 157, s 99(3) of the Constitution as I earlier noted under question 5, expressly provides for the principle of separation of powers between the three arms of government and their independence from each other. 

107.       Wilson J, first considered the principle of independence of the judiciary in the matter of Public Prosecutor v Nahau Rooney (No 2) [1979] PNGLR 448. Thereafter at page 492, his Honour expressed the view that:

Section 157 of the Constitution imposes a duty on the Minister for Justice as the Minister responsible for the national justice administration and  on all other persons or authorities (other than Parliament through legislation) not to give directions to any court, or to a member of any court, with the national judicial system in respect of the exercise of judicial powers or functions.  The independence of the national judicial system, of which the judiciary form as part, is further recognised in s 176(3)(a) and (5), s 183(4) and s 223.  The Judicial declaration that each member of the judiciary is required, by s 249 of the Constitution, to make before entering upon the duties of, or exercising any of the powers of, his office is inconsistent with there being any erosion of the concept of independence of the judiciary … By virtue of the making of such a declaration independence becomes a vital part of a judge’s judicial integrity.”

108.      Having regard to the foregoing and my discussions under question 5, I am of the humble view that, the guarantee of judicial independence under s 157 is not absolute and without any exception. The words in brackets “(other than Parliament through legislation)” in the provision itself creates in my view, an exception. That exception is for Parliament through legislation to provide directions. However, this is not an open licence for Parliament to legislate as it pleases.  Parliament needs to bear in mind that, the people’s judicial power is vested in the judiciary by and through s 158 of the Constitution as reiterated and provided for elsewhere in the Constitution by provisions such as s 37(3) and (11). The judicial power vested in the courts cannot be restricted or taken away by Parliament without going through the proper and prescribed process of constitutional changes or amendments under ss 13 to 17. Then given the possibility of taking away or restricting the right to the full protection of the law under s 37, any legislation Parliament considers and passes under the exception under s 157 must also meet the requirements under ss 38 and 39.

109.      I therefore, agree with the submissions that the provisions of ss5(5), (1) and (5) and 11(1), (2) and (3) of the PMMR Act effectively are an attempt by the Parliament, through the workings of the Executive Government, to shield decisions made under the Act by the Executive from judicial review. This is sought to be achieved by deeming such decisions to be non-justiciable and immune from judicial review. Clearly, these provisions effectively seek to remove, restrict or significantly curtail the exercise of the people’s judicial power that is vested in the judiciary or the courts by s 158. Not only that, these provisions also interfere with and constrain the independence of the judiciary, a constitutional principle well entrenched by s 157 of the Constitution. This is dangerous and risky. Under such a legislative and administrative regime, respect for the rule of law is easily diminished, and the country is at risk of being governed by decrees and “according to whims of powerful individuals or groups” (to use the words of the CPC) and not by law that is free from the necessary checks and accountability through the due judicial process. The Parliament has with respect, allowed for this dangerous and risky possibility without going through the proper process under ss 13 to 17 and without properly meeting the requirements of ss 38 and 39 of the Constitution. 

Answer to question 8

110.      Accordingly, I answer question 8 with a yes, ss 5(5), 9, 10 and 11(3) of the PMMR Act are inconsistent with s 157 of the Constitution and are for that reason, unconstitutional and invalid.

QUESTION 9: ARE SECTIONS 5(5), 9, 10 AND 11(3) OF THE PMMR ACT INCONSISTENT WITH SECTIONS 37(11), 155(2) AND 166(1) OF THE CONSTITUTION AND THEREFORE UNCONSTITUTIONAL AND INVALID?

111.      I have already considered the meaning and possible effect of the provisions of the PMMR Act that are the focus of this question. With that in mind, I turn to a consideration of the provisions of ss 37(11), 155(2) and 166(1) of the Constitution. These provisions confer powers, functions, duties and responsibilities of the National Judicial System in the following terms:

112.      Section 37(11) reads:

A determination of the existence or extent of a civil right or obligation shall not be made except by an independent and impartial court or other authority prescribed by law or agreed upon by the parties, and proceedings for such a determination shall be fairly heard within a reasonable time.

113.      This provision reiterates the principle of an independent judiciary along with any other authority that is prescribed by law or as agreed to by the parties that is authorised to determine the existence and the extend of a civil right. Then s 155 (2) provides for one’s right of appeal or review of a decision by such independent or impartial judiciary or other others. In its own words, s 155(2) states:

The Supreme Court—

(a)	is the final court of appeal; and
(b)	has an inherent power to review all judicial acts of the National Court; and
(c)	has such other jurisdiction and powers as are conferred on it by this Constitution or any other law.

114.      Section 166(1) provides as to the nature of judicial power the National Court has. The provision states: 

Subject to this Constitution, the National Court is a court of unlimited jurisdiction.

115.      These provisions coupled with the provisions of ss 157, 158 and 37(3) and (11) clearly do what my brother Cannings J, says they are doing namely: 

(1)	entrench the roles of the Supreme and the National Court as the superior courts of record in the National Judicial System both at Courts of first instance as well as Courts of appeal or review; and

(2)	ensure that all persons, including individual and corporate persons and public and statutory authorities, are provided with access to the courts at the first instance, with rights of appeals and or reviews;

(3)	allow for an independent and impartial determination of the civil rights and obligations; 

(4)	enforce the right of all persons under s 37(1) of the Constitution to the full protection of the law; and thus 

(5)	maintain the rule of law. 

116.       I uphold the submissions of the referrer and the second to the fourth and ninth interveners that ss 5(5), 9(1), 9(5), 11(1), 11(2) and 11(3) of the PMMR Act have the effect of:

(1)	devaluing if not, undermining and/or limiting the independent and impartial roles of the Courts which are inherent and unlimited;

(2)	curtailing the right of all public and statutory authorities to access the courts at the first instance;

(3)	militating against an independent and impartial determination of civil rights and obligations; 

(4)	undermining and/or preventing or restricting the right of all persons under s 37(1) of the Constitution to the full protection of the law; and

(5)	subverting the rule of law. 

117.      All this is being done without using the due process provided for under ss 13 to 17 and without meeting the requirements under ss 38 and 39 of the Constitution.

Answer to question 9

118.      Accordingly, I answer question 9 with a yes, ss 5(5), 9, 10 and 11(3) of the PMMR Act are inconsistent with ss 37(11), 155(2) and 166(1) of the Constitution and are therefore, unconstitutional and invalid.

QUESTION 10:	ARE SECTIONS 6, 7 AND 8 OF THE ACT INCONSISTENT WITH CONSTITUTION, SECTIONS  209, 210 AND 211?

119.      This question and the next two questions, namely, 11 and 12 are centred on ss 6, 7 and 8 of the PMMR Act. The critical parts of ss 6 and 7 are set out earlier this judgment. I referred to and considered the relevant parts of s 8 in the context of questions 5 and 8.

120.      In brief, s 6 requires each constitutional and public bodies at the close of every business day to transfer all public money they are holding, to their respective revenue accounts, as specified by the Secretary for Finance. As already noted, s 7 requires all these bodies to have only two types of bank accounts, namely (1) a single operating bank account and (2) trust accounts that are compliant with the Act.  Again, as already noted, this provision also creates a power in the Secretary for Finance under ss 7 (4) and 13(1) to transfer any money in either of the two accounts that should not be in them, by operation of other provisions of the Act, or in any accounts not authorised by the Act, to the:

(a)	relevant body’s revenue bank account, which is opened and operated by the Secretary for Finance; or

(b)	Consolidated Revenue Fund, exercising powers under ss 7(4) or 13(1).

121.      Further as already noted, a revenue bank account in the name of the body, is opened and operated by the Secretary for Finance under s 7(5). The relevant constitutional or public body has no control over such accounts. Every operating bank account and every trust account is subject to the ultimate, supervision and control of the Secretary for Finance under s 7(7). 

122.      Finally, as already noted, s 8 establishes the SBC, consisting of the Treasury Secretary, who is Chairman, and the Secretary for Finance and other Departmental Heads appointed by them. The SBC makes determinations as to amounts of public money to be transferred back to constitutional or public bodies from their specified revenue accounts, to meet their reasonable operating budget requirements.   The public bodies under s 8(4) had until 1st January 2020 (s 14(1)) the option to make submissions on their budgetary requirements. 

123.      The referrer and the second and fourth and ninth interveners argue that ss 6, 7, and 8 provide for the raising and expenditure of public finance contrary to authorisation of the Parliament through an Act of the Parliament. Consequently, they further argue that, these provisions are therefore, not permissible under ss 209, 210 and 211 of the Constitution.

124.      Under question 5, I discussed the provisions of s 209(2) and (2A) and (2B) and ss 210(2), (3) and (4) of the Constitution. For the purposes of answering the question under consideration here, I reproduce ss. 209 to 212 of the Constitution in full below: 

209.	Parliamentary responsibility

(1)	Notwithstanding anything in this Constitution, the raising and expenditure of finance by the National Government, including the imposition of taxation and the raising of loans, is subject to authorization and control by the Parliament, and shall be regulated by an Act of the Parliament.

(2)	For each fiscal year, there shall be a National Budget comprising—

(a)	estimates of finance proposed to be raised and estimates of proposed expenditure by the National Government in respect of the fiscal year; and
(b)	separate appropriations for the service of that year in respect of—

(i)	the services of the Parliament; and
(ii)	general public services; and
(iii)	the services of the Judiciary; and
(c)	such other supplementary Budgets and appropriations as are necessary.

(2A)	For the purposes of this Subdivision—

(a)	"the services of the Parliament" include the salaries and allowances (financial and otherwise) of the Members of Parliament, the maintenance of the precincts of the Parliament, and the Parliamentary Service established under the Parliamentary Service Act (Chapter 26); and
(b)	"the services of the Judiciary" include—

(i)	the salaries and allowances (financial and otherwise) of Judges of the Supreme and National Courts; and
(ii)	the maintenance of the Supreme and National courts; and
(iii)	the National Judicial Staff Service established under the National Judicial Staff Service Act 1987; and
(iv)	the salaries and allowances (financial and otherwise) of all persons appointed under the Supreme Court Act (Chapter 37), the National Court Act (Chapter 38) and the Sheriff Act (Chapter 55).

(2B)	For the purposes of subsection (2)(b)(i) and (iii), the Speaker of the Parliament and the Chief Justice respectively shall, before 30 September each year, submit to the Prime Minister estimates of expenditure for the services of the Parliament and the services of the Judiciary respectively in the following fiscal year.

(3)	Before any Budget or appropriation is prepared for submission to the Parliament, the National Executive Council shall consult with any appropriate Permanent Parliamentary Committee, but this subsection does not confer any right or impose any duty of consultation after the initial stages of the preparation of the Budget or appropriation.

210.	Executive initiative

(1)	The Parliament shall not provide for the imposition of taxation, the raising of loans or the expenditure of public moneys of Papua New Guinea except on the recommendation of the Head of State, acting with, and in accordance with, the advice of the National Executive Council.

(2)	Subject to subsections (3) and (4), Parliament may reduce, but shall not increase or re-allocate, the amount or incidence of, or change the purpose of, any proposed taxation, loan or expenditure.

(3)	Where, in the opinion of the Parliament, the proposed expenditure for the services of the Parliament or the services of the Judiciary is below the estimate submitted by the Speaker or Chief Justice respectively and is insufficient adequately to meet the requirements of that service, the Parliament may increase the expenditure to an amount not exceeding the original estimates submitted by the Speaker or the Chief Justice, as the case may be, under Section 209(2B).

(4)	For the purposes of subsection (3), the Parliament may re-allocate, or reduce and re-allocate, the amount of expenditure appropriated for any purpose.

211.	Accounting, etc, for public moneys

(1)	All moneys of or under the control of the National Government for public expenditure and the Parliament and the Judiciary for their respective services, shall be dealt with and properly accounted for in accordance with law.

(2)	No moneys of or under the control of the National Government for public expenditure or the Parliament and the Judiciary for their respective services, shall be expended except as provided by this Constitution or by or under an Act of the Parliament.

212.	Revenue and expenditure without prior approval

(1)	If at the beginning of a fiscal year the Parliament has not made provision for public expenditure by the National Executive or expenditure by the Parliament or the Judiciary for their respective services for that year, the National Executive, the Parliament or the Judiciary, as the case maybe, may, without authorization other than this section but in accordance with an Act of the Parliament, expend amounts appropriated out of the Consolidated Revenue Fund for the purpose not exceeding in total one-third of its respective budgeted expenditure during the immediately preceding fiscal year.

(2)	The authority conferred by Subsection (1) lapses when the Parliament has made provision for the public expenditure for the fiscal year in question, and any amounts expended by virtue of that subsection are a charge against the expenditure so provided for and shall be properly brought to account accordingly.

125.      From these provisions the following fundamental principles come out very clear:

(1)	Parliament has control over the raising and expenditure of finances by the National Government. That includes the imposition of taxation and the raising of loans.  This is to be regulated by an Act of the Parliament (s 209(1)). A number of cases like the decisions in Mairi v Tololo [1976] PNGLR 125; SC Ref No 1 of 1990, Reference by the Enga Provincial Executive Council [1990] PNGLR 532 and PNG Forest Industries Association Inc v Tomuriesa (2017) SC1601 confirm that position;

(2)	Parliament’s control over the raising and expenditure of finances is through a National Budget each year. The budget comprises of:

(a)	estimates of finance proposed to be raised and estimates of proposed expenditure by the National Government in each fiscal year; and
(b)	separate appropriations for each fiscal year for the service of the:

(i)	Parliament; and
(ii)	general public services; and
(iii)	Judiciary; and

(c)	such other supplementary Budgets and appropriations as are necessary (s 209(2));

(3)	Parliament can provide for the imposition of taxes and raise loans or expenditure of public funds only in accordance with the recommendations of the Head of State acting with, and in accordance with, the advice of the National Executive Council (s 210);

(4)	Accounting for moneys of or under the control of the National Government for public expenditure and the Parliament and the Judiciary for their respective services, should be in accordance with law and only as provided for by the Constitution or by or under an Act of the Parliament (s 211); and

(5)	Where Parliament has not made provision for public expenditure in the foregoing manner, the National Executive, the Parliament or the Judiciary, as the case maybe, may, without authorization, expand up to one-third of the previous year’s expenditure (s 212). 

126.      In support of their arguments that ss 6, 7, and 8 are inconsistent with ss 209(2), (2A) and (2B) and 210(2)-(4) of the Constitution, the referrer and the second to the fourth and ninth interveners argue that ss 6, 7 and 8 of the Act go against the first fundamental principle. This they argue is the case because, these provisions of the Act provide for the raising and expenditure of public finances without authorisation of Parliament through an Act of Parliament.

127.      In my view, a closer examination of the wording in ss 6, 7, and 8 of the PMMR Act appear not to concern the “raising and expenditure of finances”. The definition of the phrase “public money” in s 2 of the Act confirms this in the following terms:

‘public money’ includes all money raised, refunded, received, held or controlled by a public body, statutory body or a person acting on behalf of the State, including all money received as a result of —

(a)	fees, levies, royalties or any other charges of any type, other than taxes; or
(b)	bonds, debentures, shares, securities, term-deposits, dividends or any other investments, including the return on those investments; or
(c)	the sale or lease of public property; or
(d)	donations or gifts,

but excludes money appropriated to a public or statutory body by or under the National Budget.

128.      I note at the same time however that, there is a risk in s 8(2) of the Act. A broad interpretation and application of the provision by the Executive Government through its functionary, the SBC, might unduly dictate or interfere with the constitutional institutions and public bodies’ operational budgetary requirements. Nevertheless, a proper consideration, interpretation and application of s 8 does not authorise any such actions of the SBC.  Its power is limited to “public money” as defined by s 2 of the Act that have been transferred to accounts operated by the Secretary for Finance under the Act or Consolidated Revenue and a return of a portion of those to the relevant constitutional institution or public body.

129.      In the end, I consider ss 6, 7, and 8 of the PMMR Act are doing what the Act seeks to do, which is to provide a scheme of regularising the handling and management of public finance. Hence, I am not persuaded that these provisions of the Act are imposing a system or coming close to ‘raising and expenditure of public finance’.  Accordingly, I do not find these provisions inconsistent with ss 209-212 of the Constitution. 

Answer to question 10

130.      Thus my answer to question 10 is, no, ss 6, 7 and 8 of the PMMR Act are not inconsistent with Constitution, ss 209 to 212 as they do not provide for raising and expenditure of public finance without authorisation of Parliament through an Act of Parliament. 

QUESTION 11:	IS SECTION 8 OF THE ACT, INCONSISTENT WITH CONSTITUTION, SECTIONS 209, 210 AND 211?

131.      I have already answered this question in the negative in my answer to question 10. 

QUESTION 12:	DO THE ANSWERS TO QUESTIONS 10 AND 11 RENDER THE ENTIRE ACT UNCONSTITUTIONAL?

132.      This question is based on the assumption that ss 6, 7 and 8 of the Act are inconsistent with ss 209 to 212 of the Constitution. Since I have answered questions 10 and 11 in the negative, it is not necessary to answer this question. Accordingly, I decline to give any opinion here.
	
QUESTION 13: ARE PENALTIES PRESCRIBED BY SECTION 12(4) OF THE ACT SO HARSH AND OPPRESSIVE THAT THEY ARE PROSCRIBED BY CONSTITUTION, SECTION 41? 

133.      All except the fifth and seventh interveners argue for a yes answer. The referrer and the first to the fourth and ninth interveners argue that the legislative “act” of imposing such heavy penalties for committing an offence under the Act is harsh, oppressive or otherwise proscribed by s 41 of the Constitution.  

134.      The question before us calls for a careful consideration of what s 12 of the PMMR Act says as against the provisions of s 41 of the Constitution. Starting with s 12 of the Act, that provision reads:

(1)	All offences under this Act are offences of strict liability.

(2)	A person who, in whole or part, omits or fails to comply with a duty, obligation or requirement of this Act is guilty of an offence.

(3)	In sentencing a person after conviction of an offence under this Act, the rank, title or designation of the person within the public or statutory body at the time of the commission of the offence shall be considered by the sentencing court so that the higher the rank, title or designation of the person, the more serious the offence when imposing penalty.

(4)	The penalties for conviction for an offence under this Act are: 

(a)	in the case of an offence by a person, imprisonment for a term not exceeding 15 years and a fine not exceeding K2,000,000.00; and
(b)	in the case of an offence by a body corporate, a fine not exceeding K50,000,000.00.

135.      Clearly, this provision provides for the kinds of penalty that could be imposed for any of the offences created under the PMMR Act. Section 100 of the Constitution vests the legislative powers of the people in the Parliament. Section 109 then vests the Parliament with general law-making powers. Thereafter, other provisions such as s 37(2) provide the Parliament with specific legislative powers in certain specific areas. Sections 100, 109 and 37(2) of the Constitution respectively stipulate:

100.	Exercise of the legislative power.

(1)	Subject to this Constitution, the legislative power of the People is vested in the National Parliament.

(2)	Subsection (1) does not prevent a law from conferring on an authority other than the Parliament legislative powers or functions (including, if the law so provides, a further power or further powers of delegation and subdelegation).

(3)	Nothing in any Constitutional Law enables or may enable the Parliament to transfer permanently, or divest itself of, legislative power.

109.	General power of law-making.

(1)	Subject to this Constitution, the Parliament may make laws, having effect within and outside the country, for the peace, order and good government of Papua New Guinea and the welfare of the People.

(2)	In particular, Acts of the Parliament, not inconsistent with the Constitutional Laws, may provide for all matters that are necessary or convenient to be prescribed for carrying out and giving effect to this Constitution.

(3)	No law made by the Parliament is open to challenge in any court on the ground that—

(a)	it is not for the peace, order or good government of Papua New Guinea or the welfare of the People; or
(b)	it purports to have extra-territorial effect.

(4)	Each law made by the Parliament shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the law according to its true intent, meaning and spirit, and there is no presumption against extra-territoriality.

37.	Protection of the law.

(2)	Except, subject to any Act of the Parliament to the contrary, in the case of the offence commonly known as contempt of court, nobody may be convicted of an offence that is not defined by, and the penalty for which is not prescribed by, a written law.

136.      These provisions are consistent with the well accepted principle that, the Parliament under our system of government, is the supreme law maker. Meanwhile, the judiciary is tasked with the power, duty and or responsibility to apply the law by interpreting and give meaning and effect to laws passed by Parliament.  As I noted earlier under questions 5 and 8, the legislative and judicial arms of government are separate and independent from and of each other. In Dr Allan Marat v Hanjung Power Ltd (2014) SC1357, Gavara-Nanu J with whom David J agreed, re-emphasised the principle by reference to this Court’s earlier decision in Minister for Lands v Frame [1980] PNGLR 433.

137.      The Frame case concerned the promulgation and application of a regulation. Although the final outcome in that case was by a majority of 2 to 1, all the members of the Court, Greville-Smith and Pratt JJ, with Kapi J (as he then was) dissenting were unanimous on one point. Gavara-Nanu J noted that as follows:

It is important to note that all three judges expressed a common view that ordinarily a regulation, or a provision of a regulation, made by the Governor-General under an Act or legislation was a valid legislative enactment and the courts have no power to interfere with such regulation.

138.      Pratt J, also expressed the view that, if the regulation was inconsistent with the enabling Act or legislation then, the regulation can be challenged as being ultra vires the Act. At page 459 this same view was expressed by Kapi J, where his Honour said:

When the prescribed factor is fixed by the Governor-General in a statutory instrument and is not inconsistent with the Act, that is the end of the matter. It is the law. It seems to me that the court has no right to question the adequacy of the factor fixed by the statutory instrument made under the Act.

139.      His Honour then concluded:

In reflecting this doctrine, the passages re-emphasise that the courts cannot interfere with a valid legislative enactment made by an authority with delegated legislative power given to it by the Parliament which has unlimited powers of law making. In this case, the power exercised by the appellants to make the Regulation was a delegated legislative power given by the Parliament under the Customs Act; the Regulation as I said therefore has the same force and effect as the Act itself.  

140.      His Honour also noted that, a similar decision was arrived at in the case of PNG National Stevedoring Pty Ltd v Andrew Baing (2001) N2069. That concerned By-Laws made by the Harbours Board pursuant to the powers conferred on it by s 30 of the Harbours Board Act (Chp 240). The By-Laws were found to be not inconsistent with the Act and made for the control, regulation and management of declared ports and the affairs of the Board as well as providing for or in relation to regulation and licensing of stevedoring. They were legislative enactments made under a delegated legislative power which the Court could not interfere with.

141.      Applying the law as he went through to the case before him, his Honour said:

Here, the Court is not concerned with the result or the effect of the legislation, nor is it the concern of the Court to make pronouncements on the wisdom or reasonableness of the legislation. The court’s function is to give meaning to the legislation and to apply and give effect to it. In discharging this function the court should construe the words of the legislation according to their ordinary and natural meaning. 

142.        David J, in his concurring judgment added by pointing out that, the “validity of regulations made under statutory authority may be inquired into by the courts.” His Honour also noted that in exercising that power:

The courts have always taken the view that a subordinate legislation will be invalid if it contradicts or is repugnant to the enabling legislation under which it is made: 

The concept of repugnancy is usually viewed as running parallel with the notion of simple ultra vires, but there is a slight difference.  A regulation will be deemed ultra vires where there is no power whatsoever to make it: ...  On the other hand, a regulation will be deemed repugnant to the enabling legislation where the making of it on a subject matter is authorised, but the form which it takes is inconsistent with the provisions of the enabling legislation. 

143.      In SC Ref No 1 of 1984, Re Minimum Penalties Legislation [1984] PNGLR 314, a similar view was expressed by our first national Chief Justice, Sir Buri Kidu, in these terms:

The power to make criminal laws for this country is vested in the National Parliament and not the Judiciary. Also, the power to prescribe penalties for breaches of these laws is vested in the National Parliament. Certain provisions in the Constitution put this beyond any doubt.

144.      The Chief Justice then cited ss 109 and 37(2) of the Constitution as the kinds of provisions that put the point beyond any doubt. Ultimately, the Chief Justice found Parliament was within its power to enact the minimum penalties laws. That was in a case where, Parliament had enacted Acts of Parliament which prescribed minimum penalties for certain offences.
	
145.      Kapi DCJ (as he then was), re-emphasised the principle of separation of powers in the course of providing one of the reasons for his rejection of a submission to follow the US Supreme Court in this way:

Third, with respect to the United States Supreme Court, by introducing the notion of proportionality or excessiveness into the Eighth Amendment, the court has overstepped its judicial function and ventured into the legislative function of prescribing penalties for crimes. This interpretation allows the judiciary to address itself to legislative motives and policies in prescribing penalties for crimes. This is a violation of the principle of separation of powers between the judiciary and the legislature.

146.      Applying the principle his Honour discussed to the case before the Court then, his Honour stated:

To read the principle of proportionality into s 36 is to allow the courts to exercise a power which is given to the Parliament to determine in relation to punishment of criminal offences. Such an interpretation, in my view, violates the principle of separation of powers of the legislature and the judiciary: s 99(3) of the Constitution.

147.      The supremacy of Parliament to make laws is in no doubt and so is the authority and duty in the Judiciary to interpret and apply the laws once passed by Parliament. But this is not absolute. The laws made by Parliament must be consistent with the relevant and applicable provisions of the Constitution and the enactment must follow the correct and due process or the requirements that govern a proper exercise of that legislative power such as ss 13 to 16 of the Constitution for alterations of the Constitution itself and ss 38 and 39 for enactment of laws that affect the civil and human rights provisions enshrined in the Constitution (Minister for Lands v Frame (per Kapi J at pp 470, 471). 

148.      In the present case, Parliament in the exercise of its legislative powers enacted the provisions of s 12 within the PMMR Act.  Unlike in the case of Re Minimum Penalties Legislation, Parliament by s 12 of the PMMR Act prescribed the maximum penalties. This means, the Court’s sentencing discretion is not taken away. That in turn means a court may impose a sentence well below what is prescribed as the maximum. The question of whether a sentence imposed is harsh, oppressive or not warranted and disproportionate in the particular circumstances of a case, could arise once the Court has decided on a penalty, which is a further “act” from the act of legislating. 

149.      This takes me to the provisions of s 41 of the Constitution which reads:

41. Proscribed acts 

(1)	Notwithstanding anything to the contrary in any other provision of any law, any act that is done under a valid law but in the particular case—

(a)	is harsh or oppressive; or
(b)	is not warranted by, or is disproportionate to, the requirements of the particular circumstances or of the particular case; or
(c)	is otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind,

is an unlawful act.

(2)	The burden of showing that Subsection (1)(a), (b) or (c) applies in respect of an act is on the party alleging it, and may be discharged on the balance of probabilities.

(3)	Nothing in this section affects the operation of any other law under which an act may be held to be unlawful or invalid.

150.      A careful consideration of this provision reveals the following essential components for a proper invoking of this provision:

(1)	notwithstanding any other law;

(2) 	an act that is done under a valid law;

(3) 	but in the particular case it is:

(a)	harsh; or
(b)	oppressive; or
(c)	not warranted in the particular circumstances of the case because:

(i)	it is disproportionate; or
(ii)	is otherwise not reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind.

151.       This Court considered and interpreted this provision in the Re Minimum Penalties Legislation case.  There, the Court held that it was within Parliament’s power to enact the minimum penalties legislation. It also held that, the question of whether the enactment and the existence of those laws were harsh, or oppressive, or not warranted, or disproportionate, or otherwise not reasonably justified in a democratic society, could only arise after a judicial act of imposing the penalties had taken place. In so holding, the Court gave a broader definition to the phrase “any act that is done under a valid law” to include judicial acts. 

152.       The decisions in the Hanjung Power Ltd (supra) and Frame (supra) cases considered the provisions of s 41 in the context of a delegated legislation. In both cases, this Court has effectively held that Parliament has the power to enact any law it wants and it is for the Judiciary to interpret and apply the law unless the law is otherwise found invalid applying the usual tests of any inconsistency with a provision of the Constitution and in the case of a subordinate legislation, its enabling Act. These decisions as well as the decision in the Re Minimum Penalties Legislation case, make it clear that s 41 concerns an “act” done under a valid law and not the “act” of the enactment of a law. 

153.      In this case, questions 3 – 12 and 14 – 25 concern the validity of the PMMR Act.  My answers to the questions 3, 4, 4C to 9 already find either certain provisions or the whole of the PMMR Act is inconsistent with a number of constitutional provisions and is unconstitutional and invalid.  That being the case, I find this case does not meet two of the essential elements, I listed above. These are elements (2) and (3). That is to say firstly, the requirement for an “act” under consideration to be under a valid law is not met.  Secondly, the test of whether a penalty under s 12 of the PMMR Act is harsh, or oppressive, or not warranted in the particular circumstances of the case because it is disproportionate; or is otherwise not reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind will only arise after a judicial act of a penalty being imposed under s 12. If the Act was not found to be unconstitutional, the third element would come into operation only after a judicial “act” of imposing a penalty under the Act.  Consistent with the decisions in Hanjung Power Ltd (supra) and Frame (supra) cases, I am of the view that, the mere existence of s 12 under the PMMR Act does not give rise to the question under consideration.  

154.      The decision of Kapi DCJ in the Re Minimum Penalties Legislation case is on point.  Relevantly, his Honour said:

Section 41, as interpreted, would be applicable to a minimum penalty imposed under the minimum penalty provisions. The act would be the imposition of the minimum penalty. The act must be done before the rest of the provision is applied. In practical terms a sentencing court, faced with a minimum penalty, is bound to impose the sentence. Where a sentence is considered to be in breach of s 41 of the Constitution, separate proceedings may be taken before the appropriate court. I do not think that it is right to allow the same court which imposes the sentence to consider invalidating the same.

155.      The above discussion leads to the conclusion that, Parliament in the exercise of its supreme law-making power has enacted s 12 of the PMMR Act. This Court when exercising its judicial powers of considering whether the Act in part or whole is valid or not, must duly recognise the principles of separation of powers and independence of one from the other and be careful not to step into the realm of law making which belongs only to Parliament.  In a due exercise of the powers vested in the Court, I have arrived at the conclusion in answers to the questions 3, 4, 4C to 9 that either certain provisions or the whole of the PMMR Act is inconsistent with a number of constitutional provisions and is therefore unconstitutional and invalid. This removes any consideration of s 12 against the provisions of s 41. Additionally, the question asked in question 13 in this reference does not arise until a judicial “act” sees an imposition of a penalty under s 12 of the Act. Bearing this in mind, I will proceed to answer.

Answer to question 13

156.      My answer to question 13 is, no, the penalties provided by s 12(4) of the PMMR Act are not harsh, oppressive or otherwise proscribed under s 41 of the Constitution by the provision’s enactment and the fact of its existence alone.  

QUESTION 14: DOES THE OFFENCE PROVISION, SECTION 12(2) OF THE ACT, MEET THE REQUIREMENTS OF CONSTITUTION, SECTION 37(2)?

157.      The referrer and the first, to the fourth and ninth interveners argue for a negative answer.  They argue that the elements of the offence are so vague and too general that, it fails to meet the requirements of s 37(2) of the Constitution. 

158.      Section 37(2) of the Constitution reads:

Except, subject to any Act of the Parliament to the contrary, in the case of the offence commonly known as contempt of court, nobody may be convicted of an offence that is not defined by, and the penalty for which is not prescribed by, a written law.

159.      This Court had a similar question to the one presented here in the case of SCRef No 1 of 1981; Re Inter–Group Fighting Act [1981] PNGLR 151. The majority comprising of Kidu CJ, Greville-Smith J, Andrew J and Pratt J, with Miles J dissenting, held that the combined effect of ss 16, 17 and 20 of the Inter-Group Fighting Act 1977 offended ss 37(2) and (4)(b) of the Constitution. This was because these provisions provided for a conviction of a person for an offence that was not defined by a written law within the meaning of s 37(2) of the Constitution and without complying with the requirements of s 37 (4)(b).  On that basis, the provisions in question were held invalid and unconstitutional. In arriving at that decision, the Court reasoned:

In our opinion an ‘offence’ in the context of these provisions is any act or omission, whether by himself or someone else (we have in mind offences of vicarious liability) or any condition (we have in mind ‘status’ offences) in consequence of which a person may be, after proceedings and a finding against him, imprisoned, either immediately or upon non-payment of a fine or penalty. In our view such an adverse finding is a ‘conviction’, an adjudication that the ‘offence’ has been committed, and the body that makes that adjudication is a ‘court’, that is, a tribunal that exercises jurisdiction over persons by reason of the sanction of the law…

In our view the combined effect of the provisions contained in ss 16, 17 and 20 of the Act is to provide for the conviction of a person for an offence that is not defined by a written law within the meaning of s 37(2) of the Constitution, without compliance with s 37(4)(b) of the Constitution, for an ‘act’ that did not at the time when it took place constitute an offence (being formulated in the magistrate's mind, during the hearing, whether expressed by him in some form or not, as the criterion upon which he should decide under ss. 16 and 17 whether a penalty should be imposed) and for the imprisonment of the person concerned, in the execution of a sentence of a court which is invalid by reason of the foregoing.

160.      In SC Ref No 3 of 1993, Re Internal Security Act [1994] PNGLR 341, this Court had before it a number of constitutional questions. One of the questions concerned Part IV of the Internal Security Act 1993. It asked if that part of the Act was inconsistent with ss 37(2), 37(3), 37(7), 37(11) and 37(15) of the Constitution and the constitutional separation of the three arms of government, legislative, executive and judicial? The majority comprising of Amet CJ, Woods J, Los J and Hinchliffe J, noted for the purposes of s 37(2):

Section 2 of the Act gives the definition of the offence of terrorism and throughout the Act there are consequential offences. Section 3 lists what activities constitute offences. Section 6 provides for associating and assisting the groups involved in terrorism. Section 7 makes it an offence to promote terrorist groups. When therefore Part IV talks about offences and conviction for offences, it talks about the offences created and described in the provisions referred to.

161.      Consequently, the Court found the relevant part of the Act was not inconsistent with s 37(2) of the Constitution. Earlier Andrew J, in Acting Public Prosecutor v Uname Aumane [1980] PNGLR 510, considered the provisions of s 37(2) and commented:

For a person to be found guilty of an offence a written law must:

(a) 	define it,
(b) 	and prescribe the penalty.

A written law under this provision, in my view, refers to an Act of Parliament (including any law made under the Act), Organic Laws and the Constitution. This term has been used to distinguish it from what may be called the unwritten laws, custom as adopted under Sch 2.1 of the Constitution, common law as adopted under Sch 2.2 of the Constitution and the underlying law as developed under Sch 2.3 and Sch 2.4 of the Constitution.

162.      In my view, the requirement under s 37(2) of the Constitution would be met, if a written law creating an offence clearly describes the particular act or activity or the omission it is seeking to prohibit and also, state in clear terms, its penalty. This can be better illustrated by looking quickly at the way the Criminal Code defines offences. Picking s 307 of the Criminal Code for example, which defines the offence of conspiracy to kill, defines it in the following way:

A person who conspires with any other person to kill any person, whether that other person is in Papua New Guinea or elsewhere, is guilty of a crime.

Penalty: Imprisonment for a term not exceeding 14 years.

163.      In the case before us, s 12(2) of the PMMR Act states:

A person who, in whole or part, omits or fails to comply with a duty, obligation or requirement of this Act is guilty of an offence.

164.      This is quite a strange way of creating or defining an offence. Unlike s 307 of the Criminal Code in the example cited above, s 12(2) is far too general. Usually a properly defined offence would include in the same provision defining the offence, its essential elements. In some cases, definition of terms used in the definition of the offence may be elsewhere but not the essential elements. Here, s 12(2) is devoid of any precision on what omissions or failures constitutes a breach of a duty or obligation which are themselves not specified in the defining of the offence. Accordingly, I accept the referrer and the first, to the fourth and ninth interveners’ argument that s 12(2) is in broad and vague terms and it therefore fails to meet the requirements of s 37(2) of the Constitution.

Answer to question 14

165.      Hence, my answer to question 14 is, no, the offence created by s 12(2) of the PMMR Act does not meet the requirements of s 37(2) of the Constitution. 

QUESTION 15: IF THE ANSWER TO QUESTION 14 IS NO, IS SECTION 12(2) OF THE ACT UNCONSTITUTIONAL AND INVALID?

166.      Given my answer to question 14, the answer to question 15 is an obvious yes. Consequentially, I find s 12(2) of the PMMR Act is inconsistent with s 37(2) of the Constitution and is therefore unconstitutional and is invalid.

QUESTION 16: IS THE WHOLE OF S 12 UNCONSTITUTIONAL AND INVALID??

167.      The referrer and the first to fourth and ninth interveners argue for an affirmative answer. They submit that, s 12(2) is central to the whole of s 12. Hence, it cannot operate without subsection (2). I agree. It is subsection (2) that creates the offence.  Subsection (1) makes the offence a strict liability offence and does not play any part in defining or creating the offence. Subsection (3) is the penalty provision and it does not also have any part to play in creating or defining the offence. Clearly therefore, subsections (1) and (2) are rendered useless without subsection (2). 

Answer to question 16

168.      Accordingly, my answer to question 16 is, yes, the whole of s 12 of the PMMR Act is unconstitutional based on the answer to question 15. 

QUESTION 17:	DOES SECTION 5 CONFER A CONSTITUTIONAL STATUS ON THE ACT OUTSIDE CONSTITUTION, SECTIONS 12, 13 AND 14?

169.      I have already come to the decision under question 9 that, s 5(5) is of the PMMR Act is inconsistent with ss 37(11), 155(2) and 166(1) of the Constitution. Under this question, the referrer and the second to the fourth and ninth interveners argue that that the Parliament has, through s 5(1), attempted to make the PMMR Act override all other laws including, Constitutional Laws. In so doing, they argue that, the Act gives unto itself a constitutional status and amended the Constitutional Laws other than by the exclusive procedure prescribed by ss. 12 – 14 of the Constitution itself.

170.     Section 5 in its entirety states:

(1)	Notwithstanding anything to the contrary in any other provision of any law, any act that is done under a valid law but in the particular case—

(a)	is harsh or oppressive; or
(b)	is not warranted by, or is disproportionate to, the requirements of the particular circumstances or of the particular case; or
(c)	is otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind,

is an unlawful act.

(2)	The burden of showing that Subsection (1)(a), (b) or (c) applies in respect of an act is on the party alleging it, and may be discharged on the balance of probabilities.

(3)	Nothing in this section affects the operation of any other law under which an act may be held to be unlawful or invalid.

(4)	This Act expressly renders wholly void and of no effect any agreement or undertaking in respect of the sharing of public money raised as revenue by a public or statutory body other than by an Appropriation Act, as and from the date of the agreement or undertaking, that is wholly or partly inconsistent with this Act, other than the Public Finances (Management) Act 1995.

(5)	No compensation, damages or any other relief, including injunctive or declaratory relief, may be awarded by any court or tribunal in respect of any agreement or undertaking rendered void by this section.

171.     The question and arguments before the Court need to be viewed against what the Constitution, being the supreme law of the land says about the relationship between Acts of Parliament and itself.  In that regard, the most relevant provisions are ss 10 and 11(1) of the Constitution. These provisions provide for the hierarchy of laws in PNG and the supremacy of the Constitution in the following terms:

10.	Construction of written laws

All written laws (other than this Constitution) shall be read and construed subject to—

(a)	in any case—this Constitution; and
(b)	in the case of Acts of the Parliament—any relevant Organic Laws; and
(c)	in the case of adopted laws or subordinate legislative enactments—the Organic Laws and the laws by or under which they were enacted or made,

and so as not to exceed the authority to make them properly given, to the intent that where any such law would, but for this section, have been in excess of the authority so given it shall nevertheless be a valid law to the extent to which it is not in excess of that authority.

11.	Constitution, etc, as Supreme Law

(1)	This Constitution and the Organic Laws are the Supreme Law of Papua New Guinea, and, subject to Section 10 (construction of written laws) all acts (whether legislative, executive or judicial) that are inconsistent with them are, to the extent of the inconsistency, invalid and ineffective.

(2)	The provisions of this Constitution and of the Organic Laws are self-executing to the fullest extent that their respective natures and subject-matters permit.

172.      These two provisions have been the subject of many decisions of this Court. One of the decisions that best clearly states the principles enshrined in these two provisions is the decision in the SC RefNo 4 of 1980, Re Petition of Michael Thomas Somare [1981] PNGLR 265.  There, Miles J, when discussing the role of the Supreme Court in determining the validity of laws made by the National Parliament, stated, there are two principles basic to the constitutional laws of Papua New Guinea:

The first principle is that the powers of the National Parliament are limited by the Constitution itself. The Constitution s 11(1) provides that the Constitution and the Organic Laws are the Supreme Law of Papua New Guinea and, subject to the Constitution, s 10, (construction of written laws), all acts (whether legislative executive or judicial) that are inconsistent with them are, to the extent of the inconsistency, invalid and ineffective. …

The second basic principle is that where the National Parliament has exceeded its powers, then the Supreme Court is entitled to say so.

173.      In a large number of cases, the Supreme Court has not been slow to striking down laws that were inconsistent with the provisions of the Constitution: See  for examples of cases on point, SCRef No 1 of 1976 (P), Rakatani Peter v South Pacific Brewery Ltd [1976] PNGLR 537, per Frost CJ, Prentice DCJ, Kearney J; Enforcement of Rights Pursuant to Constitution Section 57, Application by Karingu [1988-89] PNGLR 276, per Kapi DCJ, Bredmeyer J, Amet J, Los J, Hinchliffe J; and SC Ref No 1 of 2000, Re Valued Added Tax Act 1998 [2002] PNGLR 333, per Amet CJ, Salika J, Kandakasi J.

174.      Turning to the case at hand, there can be no doubt that the PMMR Act has to be read subject to the Constitution as dictated by the provisions of ss 10 and 11(1) of the Constitution. The whole of s 5 is talking about inconsistencies between itself and any other Act of Parliament or a subordinate legislation. Obviously, the draftsman was aware of the provisions of s 10 and 11(1) of the Constitution and has ensured that no mention is made of any inconsistency between the Act and any provisions of the Constitution. If, however, the Act did that, that would immediately make it inconsistent with ss 10 and 11(1) of the Constitution and make it open for a strike down for being unconstitutional.

Answer to question 17

175.      For the reasons given, my answer to question 17 is simply this. No, s 5(1) of the PMMR Act does not confer a constitutional status on the Act outside the Constitution, ss 12, 13 and 14 and is therefore not inconsistent with the Constitution. 

QUESTION 18:	DO SERVANTS AND AGENTS OF CONSTITUTIONAL AND PUBLIC BODIES HAVE RIGHTS UNDER CONSTITUTION, SECTIONS 44 AND 46?

176.      It is well settled law that a party coming to the Supreme Court seeking to invoke the Court’s original jurisdiction in the area of constitutional interpretation and or application must do so on questions that warrant the Court’s consideration. In Grand Chief Sir Michael Thomas Somare v Chronox Manek [2011] 1 PNGLR 220 (per Salika DCJ (as he then was)), Kirriwom J and Kandakasi J (as he then was)), this Court stated the relevant principles in the following terms:

98. The general rules of proper pleading as they apply in the National Court with the endorsement of the Supreme Court in the context of appeals from the National Court say that, the relevant facts disclosing a reasonable cause of action must be pleaded with the relevant and necessary particulars without necessarily pleading the evidence. A failure to do so may result in a denial of the remedy that may be sought. What this means in the case of someone filing an originating process in the Supreme Court seeking to invoke the original jurisdiction of the Supreme Court must, properly plead the basis for his claim that a question of interpretation and application of a constitutional law arises or has arisen. If it arises out of a factual setting, the relevant facts must be succinctly pleaded with the relevant question sufficiently and clearly identified and set out in such a way that a quick perusal of the pleadings will immediately and clearly reveal the relevant question of constitutional law interpretation and application and the basis on which that arises.  The plaintiff has the onus to ensure that is done.

177.      These principles were reiterated by this Court in Mekere Morauta v Ano Pala (2016) SC1529 per Kandakasi J, (as he then was), Yagi J and Sawong J, at paragraph 30 of the judgment.  

178.      In the present case, the question as posed, fails to meet the need to properly plead the basis for seeking this Court’s interpretation of a constitutional question. Indeed, the question is not calling for any interpretation or an application of a constitutional provision.  If the latter was the case, that would be out of context because, what we have before us is a constitutional reference under s 19(1) and not an application under s 18 (1) of the Constitution. As my brother Cannings J says, this is a hypothetical question that is “posed in a factual vacuum, and unconnected to any provisions of the PMMR Act.”  If this question arises out of a factual situation that ought to have been properly pleaded but even that, has not happened here.  For these reasons, I would also decline to answer this question, pursuant to Order 4, Rule 18 of the Supreme Court Rules. 

Answer to question 18

179.      I decline to give any opinion in respect of question 18 as the question is not a proper question requiring an answer.

QUESTION 19: IF THE ANSWER TO QUESTION 18 IS “YES”, CAN THE COURT CONSIDER WHETHER THE ACT IS REASONABLY JUSTIFIABLE FOR PURPOSES OF CONSTITUTION, SECTIONS 38 AND 39?

180.      As can be seen, this question is premised on the basis that the answer to question 18 is yes. I declined to answer that question because amongst others, the question is not a proper constitutional reference question. This effectively means, there is no proper foundation for question 19. I would therefore decline to also answer this question.

QUESTION 20: IF THE ANSWER TO QUESTION 19 IS “YES”, IS THE PMMR ACT A LAW REASONABLY JUSTIFIABLE FOR PURPOSES OF CONSTITUTION, SECTIONS 38 AND 39?

181.      This question is dependent on a yes answer to question 19. That in turn is also dependent on a yes answer to question 18. For the reasons given under question 18, I declined to answer question 19 also. This leaves question 20 without any foundation.  Accordingly, I decline to answer this question as well.

Answer to question 20

182.      I decline to give an opinion in respect of question 20 because it is not properly before the Court.

QUESTION 21: IF THE ANSWER TO QUESTION 20 IS “NO”, IS THE PMMR ACT UNCONSTITUTIONAL AND INVALID IN ITS ENTIRETY?

183.     This question is built upon an assumption that there would be a no answer to question 20. Unfortunately, for the referrer and the parties supporting the referrer, I have declined to answer question 20 which was in turn, based on my declining to answer questions, 18 and 19 for the reasons I gave under question 18.  Proceeding on that basis, I also decline to answer this question.	

Answer to question 21

184.      I decline to give an opinion in response to question 21 as the question is not properly before the Court.

QUESTION 22:	IS THE ACT, BY ITS APPLICATION TO THE JUDICIARY, OFFENSIVE TO THE CONSTITUTIONAL INDEPENDENCE OF THE JUDICIARY?

185.      The referrer and the first to the fourth and the ninth interveners argue that the key provisions (ss 6-14) of the PMMR Act apply to the Registrar of the Supreme Court, the Registrar of the National Court, the Sheriff of Papua New Guinea and the whole of the NJSS. They further argue that, the Act’s application to the judiciary will undermine its independence, contrary to the principle of judicial independence enshrined in ss 99, 157 and other provisions of the Constitution. 

186.      I effectively discussed this question and the relevant principles that are applicable in my consideration and answers to questions 5-8. For the purpose of this question, I can only reiterate the discussions under those questions whilst agreeing with the views expressed by my brother Cannings J.

Answer to question 22

187.      Accordingly, the answer to question 22 is this. Yes, the provisions of the PMMR Act, to the extent that they apply to the NJSS, the Registrar of the Supreme Court, the Registrar of the National Court and the Sheriff, are inconsistent with ss 99 and 157 of the Constitution, and is therefore unconstitutional and invalid. 

QUESTION 23:	DO PUBLIC AND STATUTORY BODIES AND THEIR SERVANTS AND AGENTS HAVE THE RIGHT TO PRIVACY UNDER CONSTITUTION, SECTION 49?  

188.      This question is not properly before this court both in its form and content. The question has been drafted in the same way as question 18 and questions 19 to 21. For the reasons I gave under question 18 and the few comments added under the other questions, I declined to answer each of those questions. Those reasons and comments equally apply here. In short, this question is hypothetical, without any factual foundation and not in any way connected to any provisions of the PMMR Act. This brings into application the provisions of Order 4, Rule 18 of the Supreme Court Rules. 

Answer to question 23

189.      For these reasons, I decline to give any opinion in response to question 23 because this question is hypothetical, without any factual foundation and not connected in any way to the PMMR Act which is the subject of challenge in this reference.

QUESTION 24:	IF THE ANSWER TO QUESTION 23 IS “YES”, CAN THE COURT CONSIDER WHETHER THE ACT IS REASONABLY JUSTIFIABLE FOR PURPOSES OF CONSTITUTION, SECTIONS 38 AND 39?

190.      This question is similar to question 19, which was dependent on a yes answer to question 18. I declined to answer that question for the reasons I gave under question 18. Proceeding on that basis, I declined to answer question 19. I adopt and apply the same reasoning and decision in respect of this question. 

Answer to question 24

191.      I decline to give an opinion in respect of question 24 as the question is not properly before the Court. 

QUESTION 25: IF THE ANSWER TO QUESTION 24 IS “YES”, IS THE ACT, PARTICULARLY SECTIONS 6, 7 AND 8, A LAW REASONABLY JUSTIFIABLE FOR PURPOSES OF CONSTITUTION, SECTIONS 38 AND 39?

192.      This question is dependent on a yes answer to question 24. Additionally, I am also of the view that, this is a hypothetical question and without any factual foundation. Additionally, I declined to answer question 24.  That being the case, question 25 is not a proper question before this Court requiring an opinion. In the circumstances, Order 4, Rule 18 of the Supreme Court Rules applies. 

Answer to question 25

193.      I decline to give an opinion in respect of question 25 because the question is hypothetical, without any factual foundation and is not properly before the Court.

CONCLUSION

194.      I have come to the following conclusions based on the discussions and answers to the questions presented:

(1)	the Public Money Management Regularisation Act 2017 is unconstitutional, invalid and ineffective in its entirety because:

(a)	ss 6, 7, 13, 14 which are the main thrust of the Act are inconsistent with s 53 of the Constitution (see questions 1-4); 

(b)	the Act does not meet all of the requirements under s 53 of the Constitution (questions 2–4C); and

(c)	s 4(1) renders all constitutional institutions and office-holders subject to the Act without complying with ss 12–17 of the Constitution (question 5 and 6).

(2)	the following other provisions of the Act are also inconsistent with certain provisions of the Constitution as indicated by reason of which these provisions are unconstitutional, invalid and ineffective to the extent of their respective inconsistencies:

(a)	ss 5(5), 9, 10 and 11(1)-(3) of the Act are inconsistent with s 155(4) and (5) of the Constitution (question 7); 

(b)	ss 5(5), 9, 10 and 11(1)-(3) of the Act are inconsistent with ss 37(11), 155(2), 157 and 166(2) of the Constitution (questions 8 and 9); 

(c)	s 12(2) of the Act is inconsistent with s 37(2) of Constitution and renders the whole of s 12 unconstitutional, invalid and ineffective (questions 14-16); 

(d)	ss 6-14 of the Act in their application are inconsistent with the provisions of ss 99 and 157 of the Constitution (question 22); 

(3)	at the same time, I have not found the following provisions inconsistent with the various provisions of the Constitution as indicated:

(a)	s 5(1) of the Act is not inconsistent with ss 12–14 of the Constitution (question 17); 

(b)	ss 6, 7 and 8 of the Act are not inconsistent with ss 209 – 212 of the Constitution (questions 10 – 12); 

(c)	s 12(4) of the Act is not a proscribed act under s 41 of the Constitution (question 13);

(4)	finally, I declined to answer or give an opinion for questions 18-21 and 23-25 as they are improper questions and not properly pleaded to invoke the Supreme Court’s jurisdiction under s 19(1) of the Constitution.

195.      GAVARA-NANU J: I have had the benefit of reading the judgments of my learned brothers and I respectfully agree with the conclusions their Honours have reached. I would nonetheless like to add some observations of my own.
196.      I am indebted to their Honours as they have made my task somewhat easier. I am particularly grateful to the Deputy Chief Justice and Justice Cannings who have given comprehensive narratives of the background facts and the questions posed by the Reference. I am also grateful to all my learned brothers for their helpful and very comprehensive discussion of the relevant laws, including the Public Money Management Regulation Act 2017, (PMMR Act), the validity of which is the subject of this reference. All the questions posed by the reference have also been reproduced by the Deputy Chief Justice and Cannings J in their respective judgments, as such, except for a few questions, it will not be necessary for me to repeat the other questions. 

197.      A reference under s 19 of the Constitution is brought by any one of the authorities listed under s 19(3) (as the referrer) to the Supreme Court for its opinion on any questions relating to the interpretation or application of any Constitutional Law provision and any questions relating to the validity of a law or a proposed law. The s 19 reference is a special procedure which invokes the jurisdiction of the Supreme Court directly to give its opinion on the questions referred to it. See Reference by the Attorney-General and Principal Legal Adviser to the National Executive Council [2010] 1 PNGLR 1. However, to invoke the jurisdiction of the Court, it is of paramount importance that the questions are clearly and concisely pleaded. The questions should not be longwinded, convoluted, confusing and ambiguous. They should not be duplicitous, speculative, hypothetical and conjectural. This is fundamental to the competency of a reference and for the Court’s jurisdiction to be properly invoked. The Court has inherent power to decline to answer or even to strike out any question that may suffer from any of these fatal defects. See, SC Ref No 1 of 2010, Re Organic Law on the Integrity of Political Parties & Candidates [2010] 2 PNGLR 319. There is a very good reason for this approach, viz any question that is deemed incompetent will affect the jurisdiction of the Court and such questions will only waste the Court’s scarce judicial time if the Court was to answer them. In SC Ref No 1 of 2010, when emphasizing these principles, the Court said: 

Constitutional questions should not be framed in a general, ambiguous, convoluted, and duplicitous manner. Statement of reference questions in this manner makes the Court’s task difficult in identifying the precise question to be answered and leads counsel into “an ambitious goose chase in a jungle of provisions”, so to speak, that results in the waste of Court’s time. It is in the Court’s discretion to strike out such questions or decline to answer the questions as offending Order 4 r 16 of the Supreme Court Rules, 1987. 

198.     The Court went on to say:

The Court must give or decline to give its opinion on the question. The Court may decline to give an opinion if in its opinion the question is trivial, vexatious, hypothetical, or unlikely to have any immediate relevance to the  circumstances of Papua New Guinea: Constitution, s 19(4); Supreme Court Rules O 4 r 16. 

199.      This reference poses 25 questions which are essentially seeking this Court’s opinion on one overarching issue, vizwhether the PMMR Act, which the Parliament enacted on or about 5 December 2017, is constitutional. Pursuant to its preamble, the Act is aimed at regularising the handling and management of public money received by public and statutory bodies as well as constitutional bodies.

200.      The questions are pleaded in paragraph 5 of the reference, they are numbered 5.1 to 5.25, which I will now answer. 

QUESTION 1: WHETHER CONSTITUTIONAL INSTITUTIONS, PUBLIC BODIES AND STATUTORY BODIES, WHO HAVE IN THEIR ENABLING LAWS, PROVISIONS TO ALLOW THEM TO OWN PROPERTY, MAINTAIN ACCOUNTS, RAISE MONEY AND DISPOSE OF PROPERTY “HAVE AN INTEREST IN PROPERTY” FOR PURPOSES OF SECTION 53 OF THE CONSTITUTION?

201.      Section 53 of the Constitution is headed “Protection from unjust deprivation of property”. The key word in question 1 is“interest”. In my opinion s 53 gives a broad definition to the word “property”. Thus the word not only connotes ownership of a property, it also connotes rights and interests in a property. The broad definition accorded to the word “property” in s 53 is apparent from the terms of subsection (4) which reads: 

In this section, a reference to the taking of possession of property, or the acquisition of an interest in or right over property, includes a reference to—
(a)	the forfeiture; or
(b)	the extinction or determination (otherwise than by way of a reasonable provision for the limitation of actions or a reasonable law in the nature of prescription or adverse possession),
of any right or interest in property.

202.      This subsection has to be given a fair and liberal meaning to appreciate the meaning of the word “property”in s 53.  See Schedule 1.5(2) of the Constitution.

203.      It is an established principle that governing legislations and subordinate legislations to the governing legislations that establish and regulate public bodies and authorities (public bodies), give such public bodies capacity to own and acquire properties or acquire rights and interests in properties. See Tzen Plantations Ltd v Open Bay Timbers Ltd (2014) SC1380. In that case the Supreme Court said s 53 provides protection to ownership rights and interests in properties and safeguards unlawful taking possession of or acquisition of properties or rights and interests in properties. See also PNG Aviation Services Pty Ltd v Geob Karri (2009) SC1002. In that case, the Court said even disregarding a person’s right to protection against unjust deprivation of the ownership of a property or rights and interests in a property would breach s 53. In Leo Maniwa v Aron Malijiwi (2013) N5687 the Court, after discussing the National Goals and Directive Principles held that a Special Agricultural and Business Lease (SABL) issued by the State to a logging company for 99 years over a customary land breached s 53 of the Constitution because the SABLnot only deprived the customary landowners of their ownership of the land but it also deprived them of their other rights and interests in the land that went with their ownership rights. For example, right to fish, hunt and other traditional rights relating to the usage of their land. In Philo Aufa v Richard Pii (2018) N7501 the Court held that it is against the clear dictates of s 53 of the Constitution for the State or State institutions such as the National Housing Corporation to unjustifiably repossess, forfeit and extinguish or determine a person’s right or interest in a property. 

204.      My answer to question 1 therefore is Yes.

QUESTION 2: IF THE ANSWER TO THE FIRST QUESTION IS “YES”, DOES THE PMMR ACT, PARTICULARLY SECTIONS 6, 7, 13 AND 14, HAVE THE EFFECT OF THE STATE TAKING COMPULSORY POSSESSION OF THEIR PROPERTY WITHIN THE MEANING OF SECTION 53 OF THE CONSTITUTION?

205.      Section 6 provides among others that all public money held by or on behalf of any person or public or statutory body or where public money is received or is in custody, care or control of any person or public or statutory body whether banked or not, be transferred or deposited without deduction of any type, to the revenue bank accounts specified for that person, public or statutory body by the Departmental Head (responsible for finance). The Departmental Head will then transfer back to the public or statutory body to its operating bank account an amount equal to ten percent of the public money initially transferred to that public or statutory body.

206.      Section 7 provides among others that, in addition to any trust accounts every public or statutory body must have a single operating account. The single operating accounts and trust accounts must have certain types of funds and the Departmental Head has the power to have access to those funds and have direct control over them. The Departmental Head can withdraw and transfer those funds in his own name. He can transfer the funds from those accounts to the Consolidated Revenue Fund or a revenue account. 

207.      Section 13 provides among others that, after the date of the commencement of thePMMR Act, the Departmental Head shall transfer all the funds held by public bodies or held on their behalf to bank accounts specified for them by the Departmental Head. Section 13 therefore essentially empowers the Departmental Head to assume control of all the funds held by the public bodies when the PMMR Act, came into operation. 

208.      Section 14 provides that as of 1 January 2020, the public bodies will no longer have control over public funds as those funds will be paid into nominated bank accounts of the Consolidated Revenue Fund.  

209.      It is clear to me that the scheme of the above provisions is to deprive the public bodies of their properties as well as rights and interests in properties through compulsory taking possession of or compulsory acquisition of their properties and or rights and interests in properties. The PMMR Act, in this respect undermines the authority and capacity of the public bodies to own, control and manage their properties, and their rights and interests in properties. The scheme of these provisions also erodes the financial independence of the public bodies. In my opinion the provisions provide opportunities for possible abuse of power and manipulation. The above provisions therefore are clearly in breach of s 53 of the Constitution.
	
210.      My answer to question 2 therefore is yes. 

QUESTION 3: IF THE ANSWER TO THE SECOND QUESTION IS “YES” DOES THE PMMR ACT COMPLY WITH SECTION 53 OF THE CONSTITUTION, ESPECIALLY SECTIONS 53(1) AND (2)?

211.      Sections 53(1) and (2) prohibit compulsory acquisition or taking possession of a person’s property or rights and interests in property except under those circumstances listed under Subsection (1)(a) and (b). There are no provisions in thePMMR Act, providing for the public bodies whose properties or rights and interests in properties have been compulsorily acquired or taken possession of to be compensated; nor are there provisions providing for restitution of what the public bodies may lose as a result of such compulsory deprivation of their properties or rights and interests in properties. 

212.      My answer to question 3 therefore is No. 

QUESTION 4: IF THE ANSWER TO THE THIRD QUESTION IS “NO” DOES THAT MEAN THAT THE PMMR ACT IS UNCONSTITUTIONAL AND INVALID IN ITS ENTIRETY AS THE THRUST OF THE LEGISLATION DEPENDS ON SECTIONS 6, 7, 13 AND 14 OF THE PMRR ACT?

213.      Three more questions are posed under question 4 which I say is the main and overarching question. The three questions are 4A, 4B and 4C. The main question is directly related to question 2 which I have answered Yes. The effect of my answer to question 2 is that the PMMR Act, by its through ss 6, 7, 13 and 14, which permit compulsory acquisition of properties either owned by the public bodies or in which they have rights and interests, leaves such public bodies without any form of compensation or restitution. Thus, ss 6,7,13 and 14 are, in their applications, whether individually or collectively, in flagrant breach of s 53 of the Constitution, thus rendering the PMMR Act, unconstitutional in its entirety. 

214.      My answer to question 4 therefore is Yes.

QUESTIONS 4A TO 25

215.       The succeeding questions, from 4A to 25, ask whether specific provisions of the PMMR Act,to which the questions relate are constitutional. The questions are couched differently but they all ask the same question of whether the particular provisions of the PMMR Actare constitutional. It is my firm opinion that the rest of these questions are superfluous and unnecessary because they have already been answered by the answer to question 4. To my mind, the whole reference raises the single all-embracing and overarching question of whether the PMMR Act is constitutional, in so far as its application to s 53 of the Constitution is concerned. In my opinion the principal constitutional provision that has to be considered by the Court for the purposes of this reference is s 53 because the PMMR Actessentiallychallenges the rights conferred by s 53 of the Constitution. The whole Reference turns on the answer to question 4, viz the PMMR Actis unconstitutional in its entirety.  

216.      Consequently, based on my answer to question 4, I decline to answer the rest of the questions from 4A to 25. I find that these questions are duplicitous of question 4, the answer to which has already declared the PMMR Act, unconstitutional in its entirety.  It would therefore be a waste of Court’s time if I was to answer the rest of the questions, because those questions have no proper basis as the PMMR Act, upon which they are purportedly based has been declared unconstitutional. 

217.      Let me in conclusion make some general remarks regarding the PMMR Act. In my opinion the aims and objectives of the PMMR Act are sufficiently accounted for by the Public Finances (Management) Act 1995 (PFM Act). To my mind, the State through the Department of Finance has all the powers it needed under the PFM Act, to properly and legally ensure that public bodies, statutory authorities and even constitutional bodies manage their funds properly and lawfully. The powers conferred by the PFM Act do not in any way derogate and or undermine the authority and capacity of the public bodies regarding their rights and capacities to own properties and to have rights and interests in properties.  The PFM Act in my opinion gives effect to and harnesses the rights conferred by s 53 of the Constitution.

218.      The powers conferred by the PFM Act on the Head of the Department of Finance and other relevant officers to oversee the management of public funds held by public bodies, (including constitutional bodies or authorities) either directly or through delegation are in my opinion adequately spelt out in ss 4, 5, 6, 7, 8, 9, 10, 11 and 12 of the Act. These provisions prescribe responsibilities for good management and control of public funds by public bodies. The responsibilities are specific, they include among others, those for the Head of the Department of Finance, other Heads of Departments, accountable officers who account public funds, public office-holders who hold, control and manage public funds, finance inspectors who ensure that all public funds are properly accounted for. All public bodies are also mandated to keep accurate records of monies received, and any investments made from the public funds. 

219.      It may be that in this instance, the Parliament in enacting the PMMR Act, was reacting to certain public bodies mismanaging their finances. That appears to me to be the case from my reading of ss 5 (3) and (4) and 13(3)(a) and (4) of the PMMR Act. But even if that was the case, the Department of Finance through its Departmental Head is already equipped with sufficient powers under the PFM Act, to take appropriate actions against such public bodies, including enforcing compliance with the requirements of the PFM Act. In Donald Valu v Dr Ken Ngangan, Secretary for Finance and The State (2019) N7733 the first defendant informed the plaintiff that he intended to take certain actions against him (plaintiff)  including surcharging him and prosecution for alleged misuse of funds allocated to Konebada Petroleum Park Authority (KPPA), which employed the plaintiff. The KPPA management was also accused of serious mismanagement of public funds. The plaintiff argued that the first defendant had no power to issue directions to him and KPPA and its management regarding surcharging and possible prosecution. The first defendant had simply issued directions to the plaintiff and KPPA by way of warnings to account for their actions.  In regard to the powers of the first defendant in such situations, I said:

	There is no dispute that the first defendant has power to issue directions to KPPA and its officers including the plaintiff regarding the management of KPPA and its expenditure. There is no dispute that KPPA as a public body is accountable to the first defendant regarding its financial management as it is bound by the PFM Act. The first defendant also has power to enforce the PFM, Act, and demand KPPA to comply with its requirements.

220.      Thus, apart from the PMMR Act being unconstitutional, in my opinion its enactment by the Parliament was also unnecessary as its aims and objectives can be achieved by enforcing the PFM Act.  

221.     CANNINGS J: Twenty-five questions of constitutional interpretation and application have been referred to the Supreme Court by the Ombudsman Commission under s 19(1) (special references to the Supreme Court) of the Constitution. The questions concern the constitutionality of the Public Money Management Regularisation Act 2017 (“the PMMR Act”).

THE PUBLIC MONEY MANAGEMENT REGULARISATION ACT

222.      The long title of the Act describes its purpose as being “to regularise the handling and management of public money received by public and statutory bodies and for related purposes”. The features of the Act are:

•	public money held or received by a public or statutory body must be deposited in “revenue bank accounts” specified by the Departmental Head responsible for financial matters (the Secretary for Finance): s 6;

•	public and statutory bodies must have only one operating bank account, which is subject to ultimate control by the Secretary for Finance: s 7;

•	establishment of the Strategic Budget Committee, consisting of the Departmental Head responsible for treasury matters (the Treasury Secretary), who is Chairman, and the Secretary for Finance and other appointed Departmental Heads, which makes determinations as to amounts of public money to be transferred back to public or statutory bodies to meet their reasonable operating budget requirements: s 8;

•	giving the Act an extensive operation by broad definitions in Section 2 of “public money”, “public body” and “statutory body”, making “constitutional institutions” subject to the Act (s 4) and by providing that the Act overrides other legislation (s 5);

•	restrictions on judicial review of determinations of the Strategic Budget Committee (s 9), legal representation for public and statutory bodies (s 10) and claims against the State and statutory bodies (s 11);

•	enforcement of the Act by making it an offence for a person to omit or fail to comply with a duty, obligation or requirement of the Act, and making all offences “of strict liability”, punishable for an individual person by a maximum 15 years imprisonment and a fine of K2 million, and for a body corporate, by a fine of K50 million (s 12);

•	immediate and increasing power conferred on the Secretary for Finance to supervise and control all bank accounts of public and statutory bodies (ss 13 and 14). 

PARTIES 

223.      Nine parties were granted leave to intervene:

•	first intervener, the Public Solicitor, Mr Leslie Mamu;

•	second intervener, the Secretary of the National Judicial Staff Service, Mr Jack Kariko; 

•	third intervener, the Registrar of the National Court and the Supreme Court, Mr Ian Augerea; 

•	fourth intervener, the Sheriff, Mr Ian Augerea; 

•	fifth intervener, the Attorney-General, the Honourable Davis Steven MP;

•	sixth intervener, the Speaker of the National Parliament, the Honourable Job Pomat MP;

•	seventh intervener, the Secretary, Department of Treasury, Mr Dairi Vele;

•	eighth intervener, the Minister for Finance, the Honourable James Marape MP;

•	ninth intervener, Konebada Petroleum Park Authority. 

224.      The arguments of the referrer and the first, second, third, fourth and ninth interveners are generally but not entirely supportive of each other. The arguments of the fifth and seventh interveners are supportive of each other. No arguments were made by the sixth intervener who adopted a neutral position. Nor were arguments made by the eighth intervener who withdrew from the proceedings on the day of the hearing. 

CATEGORIES OF QUESTIONS

225.      The 25 questions can be put into ten categories: 

A – Right to ownership of property: questions 1 to 4 concern the right to protection against unjust deprivation of property conferred by s 53 of the Constitution.

B – Status of constitutional institutions: questions 5 and 6 ask whether s 4 of the Act is unconstitutional to the extent that it makes constitutional institutions subject to the Act. 

C – Ouster of jurisdiction of the courts: questions 7, 8 and 9 relate to sections of the Act that restrict the exercise of judicial power by the National Court and the Supreme Court and ask whether this is contrary to ss 37, 155, 166 and 157 of the Constitution.

D – Parliamentary control of public finance: questions 10, 11 and 12 raise the issue of whether the Act offends against the principle of parliamentary control over raising and expending of public money, under ss 209, 210 and 211 of the Constitution. 

E – Harsh and oppressive penalties: question 13 raises the issue of whether the penalty provision of the Act (s 12(4)) offends against s 41 (proscribed acts) of the Constitution. 

F – Protection of the law: questions 14, 15 and 16 ask whether the offence provision of the Act (s 12(2)) offends against s 37 (protection of the law) of the Constitution. 

G – Constitution as supreme law: question 17 is whether the Act elevates itself to a status above the Constitutional Laws, contrary to ss 12, 13 and 14 of the Constitution.

H – Freedom of expression and freedom from arbitrary search and entry: questions 18 to 21 ask whether the Act is unconstitutional on the ground that it restricts the rights to freedom of expression and freedom from arbitrary search and entry without complying with the requirements of s 38 of the Constitution. 

I – Independence of the judiciary: question 22 challenges the application of the Act to the judiciary, on the ground that it is offensive to the principle of judicial independence guaranteed by ss 99 and 157 of the Constitution.

J – Right to privacy: questions 23, 24 and 25 ask whether the Act is unconstitutional on the ground that it restricts the right to privacy without complying with the requirements of s 38 of the Constitution.

I address each of the 25 questions in turn. After stating each question, I summarise it, and then set out the positions of the parties before providing my opinion on the question.

A – RIGHT TO OWNERSHIP OF PROPERTY: QUESTIONS 1 TO 4

QUESTION 1: WHETHER CONSTITUTIONAL INSTITUTIONS, PUBLIC BODIES AND STATUTORY BODIES, WHO HAVE IN THEIR ENABLING LAWS, PROVISIONS TO ALLOW THEM TO OWN PROPERTY, MAINTAIN ACCOUNTS, RAISE MONEY AND DISPOSE OF PROPERTY “HAVE AN INTEREST IN PROPERTY” FOR PURPOSES OF SECTION 53 OF THE CONSTITUTION?

That is: Do public and statutory bodies have an interest in property for purposes of Constitution, s 53?

226.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
1	Yes	Yes 	Yes	Yes 	No	Yes 	

227.      I agree with the position of all parties other than the seventh intervener that this question should be answered in the affirmative. I take judicial notice of the fact that most public bodies and statutory bodies are authorised by their enabling laws, expressly or impliedly, to own property, maintain accounts, raise money or dispose of property. The bodies subject to the Act are defined by s 2 (interpretation) in the following terms:

"public body" means an agency which is part of the State Services established under Part VII of the Constitution and excludes a Provincial Government or Local-level Government established under the Organic Law on Provincial Governments and Local-level Governments; …

"statutory body" means a body, authority or instrumentality (incorporated or unincorporated) established under an Act of the Parliament or howsoever otherwise for governmental or official purposes, including a subsidiary statutory body that is not a public body, but excludes a body, authority or instrumentality (incorporated or unincorporated) established by a Provincial Government or Local-level Government or their subsidiary statutory bodies that are not public bodies.

228.      Such bodies cannot operate without money and other property. They have an interest in such money and property. It is an interest capable of protection under s 53 (protection from unjust deprivation of property) of the Constitution, which states:

(1)	Subject to Section 54 (special provision in relation to certain lands) and except as permitted by this section, possession may not be compulsorily taken of any property, and no interest in or right over property may be compulsorily acquired, except in accordance with an Organic Law or an Act of the Parliament, and unless—

(a)	the property is required for—

(i)	a public purpose; or
(ii)	a reason that is reasonably justified in a democratic society that has a proper regard for the rights and dignity of mankind,

that is so declared and so described, for the purposes of this section, in an Organic Law or an Act of the Parliament; and
(b)	the necessity for the taking of possession or acquisition for the attainment of that purpose or for that reason is such as to afford reasonable justification for the causing of any resultant hardship to any person affected.

(2)	Subject to this section, just compensation must be made on just terms by the expropriating authority, giving full weight to the National Goals and Directive Principles and having due regard to the national interest and to the expression of that interest by the Parliament, as well as to the person affected.

(3)	For the purposes of Subsection (2), compensation shall not be deemed not to be just and on just terms solely by reason of a fair provision for deferred payment, payment by instalments or compensation otherwise than in cash.

(4)	In this section, a reference to the taking of possession of property, or the acquisition of an interest in or right over property, includes a reference to—

(a)	the forfeiture; or
(b)	the extinction or determination (otherwise than by way of a reasonable provision for the limitation of actions or a reasonable law in the nature of prescription or adverse possession),

of any right or interest in property.

(5)	Nothing in the preceding provisions of this section prevents—

(a)	the taking of possession of property, or the acquisition of an interest in or right over property, that is authorized by any other provision of this Constitution; or
(b)	any taking of possession or acquisition—

(i)	in consequence of an offence or attempted offence against, or a breach or attempted breach of, or other failure to comply with a law; or
(ii)	in satisfaction of a debt or civil obligation; or
(iii)	subject to Subsection (6), where the property is or may be required as evidence in proceedings or possible proceedings before a court or tribunal,

in accordance with a law that is reasonably justifiable in a democratic society that has a proper regard for the rights and dignity of mankind; or
(c)	any taking of possession or acquisition that was an incident of the grant or acceptance of, or of any interest in or right over, that property or any other property by the holder or any of his predecessors in title; or
(d)	any taking of possession or acquisition that is in accordance with custom; or
(e)	any taking of possession or acquisition of ownerless or abandoned property (other than customary land); or
(f)	any restriction on the use of or on dealing with property or any interest in or right over any property that is reasonably necessary for the preservation of the environment or of the national cultural inheritance.

(6)	Subsection (5)(b)(iii) does not authorize the retention of any property after the end of the period for which its retention is reasonably required for the purpose referred to in that paragraph.

(7)	Nothing in the preceding provisions of this section applies to or in relation to the property of any person who is not a citizen and the power to compulsorily take possession of, or to acquire an interest in, or right over, the property of any such person shall be as provided for by an Act of the Parliament.

229.      The right of protection against unjust deprivation of property in s53 is one of the bundle of Basic Rights conferred and enforceable through Division III.3 of the Constitution, consisting of:

1.	right to freedom (s 32);

2.	right to life (s 35);

3.	protection from inhuman treatment (s 36);

4.	protection of the law (s 37);

5.	proscribed acts (s 41);

6.	liberty of the person (s 42);

7.	freedom from forced labour (s 43);

8.	freedom from arbitrary search and entry (s 44);

9.	freedom of conscience, thought and religion (s 45);

10.	freedom of expression (s 46);

11.	freedom of assembly and association (s 47);

12.	freedom of employment (s 48);

13.	right to privacy (s 49);

14.	right to vote and stand for public office (s 50);

15.	right to freedom of information (s 51);

16.	right to freedom of movement (s 52);

17.	protection from unjust deprivation of property (s 53);

18.	equality of citizens (s 55).

(See Re Release of Prisoners on Licence (2008) N3421; Re Alleged Brutal Treatment of Suspects (2014) N5512; Re Human Rights of Prisoners Sentenced to Death (2017) N6939.)

230.      Though the Basic Rights are also referred to as human rights, they are rights that vest not only in human persons but also in non-human entities including corporations. The broad application and availability of the Basic Rights is ensured by s 34 (application of division 3) of the Constitution, which states:

Subject to this Constitution, each provision of this Division applies, as far as may be—

(a)	as between individuals as well as between governmental bodies and individuals; and

(b)	to and in relation to corporations and associations (other than governmental bodies) in the same way as it applies to and in relation to individuals,

except where, or to the extent that, the contrary intention appears in this Constitution.

231.     There is some indication in s 34 that all of the Basic Rights provisions might not apply to “governmental bodies”. However, the wording of s 53 is very broad. I find nothing in its wording (apart perhaps from the limitation provided by s 53(7) that it applies only to citizens) to show that s 53 does not protect constitutional institutions and public and statutory bodies.

Answer to question 1

232.      Yes, constitutional institutions and public and statutory bodies have an “interest in property” for the purposes of s 53 of the Constitution.

QUESTION 2: IF THE ANSWER TO THE FIRST QUESTION IS “YES”, DOES THE PMMR ACT, PARTICULARLY SECTIONS 6, 7, 13 AND 14, HAVE THE EFFECT OF THE STATE TAKING COMPULSORY POSSESSION OF THEIR PROPERTY WITHIN THE MEANING OF SECTION 53 OF THE CONSTITUTION?

That is: Does the Act provide for compulsory acquisition of property of public and statutory bodies?

233.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
2	Yes	Yes 	Yes	No	No	Yes 	

234.      I agree with the position of the parties other than the fifth and seventh interveners that this question should be answered in the affirmative. 

235.      There are three provisions of the Act under which public bodies and statutory bodies (including constitutional institutions) lose possession of property, including public money, which otherwise would be under their custody and control: ss 6(1), 7(4) and 13(1).

236.     “Public money” is defined broadly by s 1(1) of the Act:

"public money" includes all money raised, refunded, received, held or controlled by a public body, statutory body or a person acting on behalf of the State, including all money received as a result of —

(a)	fees, levies, royalties or any other charges of any type, other than taxes; or
(b)	bonds, debentures, shares, securities, term-deposits, dividends or any other investments, including the return on those investments; or
(c)	the sale or lease of public property; or
(d)	donations or gifts,

but excludes money appropriated to a public or statutory body by or under the National Budget.

237.      Section 6(1) states:

Subject to this Act, from the date of the commencement of this Act, all public money —

(a)	held by or on behalf of any person or a public or statutory body; or
(b)	received or in the custody, care or control of any person or a public or statutory body, whether or not it has been banked,

shall, at the close of the business day on which the public money was first held or received, be transferred or deposited, without deduction of any type, to the revenue bank accounts specified for that person or public or statutory body by the Departmental Head.

238.      Section 7(4) states:

Subject to this Act, any public money —

(a)	in an operating account or trust account other than the public money authorised by this Act shall be transferred to the Consolidated Revenue Fund by the Departmental Head; or
(b)	in a trust account, other than the public money authorised by the Public Finances (Management) Act 1995 and the trust instrument of the trust account, shall be transferred to the Consolidated Revenue Fund by the Departmental Head.

239.      Section 13(1) states:

After the date of the commencement of this Act, the Departmental Head shall transfer all moneys in all bank accounts held by or on behalf of public and statutory bodies to bank accounts specified for that public or statutory body by the Departmental Head.

240.      The combined effect of those and other provisions (especially ss 7(1), 7(3) and 7(5)) is that each public body or statutory body may have only two types of bank accounts:

•	a single operating bank account (s 7(1));

•	trust accounts compliant with s 7(3).

241.      Any money in those accounts that should not be in them (by virtue of the application of other provisions of the Act) or in any accounts not authorised by the Act, is liable to be transferred by the Secretary for Finance to the body’s revenue bank account (which is opened and operated by the Secretary for Finance) or to the Consolidated Revenue Fund, exercising powers under ss 7(4) or 13(1). 

242.      Any revenue bank account in the name of the body, is opened and operated by the Secretary for Finance under s 7(5). The public or statutory body has no control over such accounts. 

243.      Every operating bank account and every trust account is subject to ultimate supervision and control by the Secretary for Finance under s 7(7), which provides:

The Departmental Head has the power, by virtue of this Act, to operate and execute transactions in his own name on all bank accounts of all public and statutory bodies, including trust and operating accounts, irrespective of any provisions in any other law relating to the signatories of bank accounts, to —

(a)	access the transactional details of any bank account held by or on behalf of a public or statutory body; and
(b)	transfer or cause to be transferred to the Consolidated Revenue Fund or a revenue account, public money that, pursuant to this Act or the Public Finances (Management) Act 1995, is required to be so transferred; and
(c)	effect any transaction permitted or required by this Act.

244.      Application of the Act to trust accounts operated by, for example, the Registrar of the National Court or the Sheriff, would potentially interfere with the discharge by the Registrar or the Sheriff of fiduciary obligations (Dumal Dibiaso ILG v Kola Kuma (2005) SC805).  

245.      The scheme of the Act can properly be described in accordance with its long title, as one that ‘regularises the handling and management of public money received by public and statutory bodies’. It can also be accurately described as imposing a scheme for compulsory possession by the State, through its functionary the Secretary for Finance, of property that would otherwise be under the custody and control of public and statutory bodies.

Answer to question 2

246.      Yes, the PMMR Act has the effect of the State taking compulsory possession of property of public and statutory bodies including constitutional institutions, within the meaning of Section 53 of the Constitution.

QUESTION 3: IF THE ANSWER TO THE SECOND QUESTION IS “YES” DOES THE PMMR ACT COMPLY WITH SECTION 53 OF THE CONSTITUTION, ESPECIALLY SECTIONS 53(1) AND (2)?

That is: Does the Act comply withConstitution, ss 53(1) and (2)?

247.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
Intervener	9th intervener	
3	No 	No 	No	Yes 	Yes	No	

248.      I agree with the position of the parties other than the fifth and seventh interveners that this question should be answered in the negative. 

249.      Section 53 of the Constitution protects citizens including public and statutory bodies against unjust deprivation of property in which they have an interest by requiring that:

•	possession may not be compulsorily taken of the property; and 

•	no interest in it may be compulsorily acquired; 

unless the act of compulsory possession or compulsory acquisition meets the requirements of Section 53, which are:

1.	must be in accordance with an Organic Law or an Act of the Parliament (s 53(1));

2.	the property must be required for a public purpose or a reason that is reasonably justified in a democratic society that has a proper regard for the rights and dignity of mankind (s 53(1)(a));

3.	that purpose or reason must be so declared and so described, for the purposes of Section 53, in an Organic Law or an Act of the Parliament (s 53(1)(a));

4.	the necessity for the taking of possession or acquisition for the attainment of that purpose or for that reason is such as to afford reasonable justification for the causing of any resultant hardship to any person affected (s 53(1)(b));

5.	just compensation must be made on just terms by the expropriating authority, giving full weight to the National Goals and Directive Principles and having due regard to the national interest and to the expression of that interest by the Parliament, as well as to the person affected (s 53(2)).

(See Minister for Lands v Frame [1980] PNGLR 433; SC Ref No 3 of 1989 Re Forestry (Private Dealings) Act [1990] PNGLR 222; Patrick Yal v Mission of the Holy Ghost (New Guinea) Property Trust (2017) N6530).

250.      Requirements (1) and (2) are satisfied as the compulsory acquisition of property is effected under an Act of the Parliament for the purpose of, according to the long title, ‘regularising the handling and management of public money received by public and statutory bodies’, which can properly be regarded as a public purpose. However, requirements (3), (4) and (5) are not satisfied. There is no declaration and description in the long title or anywhere else in the Act that complies with requirement (3). 

251.      There is no express, implied or tacit case set out in any provisions of the Act for the necessity for the acquisition of property, such as to afford reasonable justification for the causing of any resultant hardship to any person affected. There is only a general statement in Section 1(3) of the Act:

For the purposes of Section 53(2) of the Constitution, this Act is expressed to be made in the national interest.

252.      Section 1(3) does not comply with requirement (4). Nor does it comply with requirement (5) as the Act makes no provision for just compensation on just terms. 

Answer to question 3

253.      No, the PMMR Act does not comply with Section 53 of the Constitution.

QUESTION 4: IF THE ANSWER TO THE THIRD QUESTION IS “NO” DOES THAT MEAN THAT THE PMMR ACT IS UNCONSTITUTIONAL AND INVALID IN ITS ENTIRETY AS THE THRUST OF THE LEGISLATION DEPENDS ON SECTIONS 6, 7, 13 AND 14 OF THE PMMR ACT?

4A	WHETHER PERSONS WHO HAVE A CLAIM FOR PAYMENT, COMPENSATION, RESTITUTION, DAMAGES OR ANY OTHER FORM OF RELIEF FOR THE PURPOSES OF SECTION 11 OF THE PMMR ACT “HAVE AN INTEREST IN PROPERTY” FOR THE PURPOSES OF SECTION 53 OF THE CONSTITUTION?

4B 	IF THE ANSWER TO THE ABOVE QUESTION IS “YES” DOES THE PMMR ACT, PARTICULARLY SECTION 11, HAVE THE EFFECT OF THE STATE TAKING COMPULSORY POSSESSION OF THEIR PROPERTY WITHIN THE MEANING OF SECTION 53 OF THE CONSTITUTION?

4C	IF THE ANSWER TO THE ABOVE QUESTION IS “YES” DOES SECTION 11 OF THE PMMR ACT COMPLY WITH SECTION 53 OF THE CONSTITUTION, ESPECIALLY SECTIONS 53(1) AND (2)?

That is: 

4: Is the Act invalid in its entirety for failing to comply with Constitution, ss 53(1) and (2)?

4A: Do persons with a claim for payment against a statutory body etc have an “interest in property”?

4B: Does s 11 of the Act provide for compulsory acquisition of property?

4C: Does s 11 of the Act comply with Constitution, ss 53(1) and (2)?

254.     The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
Intervener	9th intervener	
4	Yes	Yes	Yes	No	No	Yes	
4A	Yes 	Yes 	Yes 	No	No	Yes 	
4B	Yes	Yes	Yes	No 	No	Yes	
4C	No	No	No	Yes 	Yes	No	

255.      I agree with the position of the parties other than the fifth and seventh interveners that questions 4, 4A and 4B should be answered in the affirmative and question 4C should be answered in the negative. 

QUESTION 4

256.     The PMMR Act enacts a scheme for compulsory acquisition of property, which fails to meet the requirements of s 53 of the Constitution. The process of compulsory acquisition is, as explained above, provided for in three provisions of the Act under which public bodies and statutory bodies (including constitutional institutions) lose possession of property, including public money, which otherwise would be under their custody and control: ss 6(1), 7(4) and 13(1).

257.      As those provisions fail to meet the requirements of s 53, they are “inconsistent” with the Constitution. This means that the Act is, at least insofar as those provisions is concerned, invalid and ineffective by force of s 11 (Constitution etc as supreme law) of the Constitution, which states:

(1)	This Constitution and the Organic Laws are the Supreme Law of Papua New Guinea, and, subject to Section 10 (construction of written laws) all acts (whether legislative, executive or judicial) that are inconsistent with them are, to the extent of the inconsistency, invalid and ineffective.

(2)	The provisions of this Constitution and of the Organic Laws are self-executing to the fullest extent that their respective natures and subject-matters permit.

258.      I agree with the referrer that once those provisions are struck down, the rest of the Act cannot operate. It follows that the entire Act is unconstitutional.

Answer to question 4

259.      Yes, the PMMR Act is invalid in its entirety. 

QUESTION 4A

260.      This question is based on s 11 (claim against the state and statutory bodies not enforceable in certain circumstances) of the Act, which states:

(1)	A claim for payment, compensation, restitution, damages or any other form of relief, including injunctive or declaratory relief, against the State or a statutory body based on equity or equitable principles in respect of the value of works, goods or services rendered to the State or a statutory body shall not be enforceable, through the Courts or otherwise, unless the seller of the property or stores or the supplier of the works, goods or services produces —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure,

relating to the property or stores or works, goods or services, the subject of the claim, to the full amount of the claim.

(2)	A claim for payment, compensation, restitution, damages or any other form of relief, including injunctive or declaratory relief, against the State or a statutory body based on the undertaking or promise of any person, whether or not that person had the actual, implied or ostensible authority of the State or statutory body to give or make that undertaking or promise, shall not be enforceable, through the courts or otherwise, unless the person making the claim produces —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure,

relating to the undertaking or promise, the subject of the claim, to the full amount of the claim.

(3)	The Courts shall, on application by the State, stay a claim specified in Subsections (1) and (2), if the person making the claim cannot produce, on demand by the State —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure, 

relating to the subject of the claim, to the full amount of the claim.

261.      Section 11 is directed at two types of claims (for payment, compensation, damages etc) against the State or a statutory body (curiously, there is no mention of public bodies, as distinct from statutory bodies, in the section):

•	claims based on equity or equitable principles in respect of the value of works, goods or services (s 11(1)); 

•	claims based on the undertaking or promise of a person on behalf of the State or statutory authority (s 11(2)).

262.      Section 11 restricts the enforceability of such claims in two ways:

•	first, by declaring that such claims are not enforceable, through the courts or otherwise, unless the seller or supplier of the property, works, goods or services or the person making the claim produces a properly authorised ILPOC or an authority to pre-commit expenditure (ss 11(1) and 11(2)); and

•	secondly, by obliging all Courts, upon application by the State, TO stay any such claim if the person making the claim cannot produce a properly authorised ILPOC or an authority to pre-commit expenditure (s 11(3)). 

263.      Question 4A asks whether claimants (persons making the sorts of claims referred to in Section 11) have an “interest in property” for the purposes of s 53 of the Constitution. They do, as an entitlement to sue is properly regarded as a chose in action (John Kasaipwalowa v The State [1977] PNGLR 257; The State v Francis Kumo Gene [1991] PNGLR 33). 

Answer to question 4A

264.      Yes, persons having the sorts of claims (for payment, compensation, damages etc) against the State or a statutory body referred to in s 11 of the PMMR Act, have an “interest in … property” for the purposes of Section 53 of the Constitution. 

QUESTION 4B

265.     This asks whether s 11 provides for compulsory possession of the property of claimants (persons making the sorts of claims referred to in Section 11), for the purposes of s 53 of the Constitution. 

266.     To answer this question it is necessary to refer to s 53(4), which elaborates on what is to be regarded as compulsory ‘taking possession of property’ and compulsory ‘acquisition of an interest in or right over property’, for the purposes of triggering the right to just compensation on just terms conferred by s 53(1). 

267.     Section 53(4) states:

In this section, a reference to the taking of possession of property, or the acquisition of an interest in or right over property, includes a reference to—

(a)	the forfeiture; or
(b)	the extinction or determination (otherwise than by way of a reasonable provision for the limitation of actions or a reasonable law in the nature of prescription or adverse possession),

of any right or interest in property.

268.      I uphold the submission of the second, third and fourth interveners that the effect of s 11 of the Act is, by rendering certain sorts of claims unenforceable, to remove from claimants the entitlement (which exists were it not for the operation of the Act) to sue, unless they meet the requirements of a properly authorised ILPOC or an authority to pre-commit expenditure. This amounts to a forfeiture, an extinction and a determination of their entitlement to sue.

269.      This represents a very significant change in the law of transactions in Papua New Guinea, especially in regard to contracts and other arrangements for the supply of goods and services to the State and public and statutory bodies. For all sorts of reasons – sometimes satisfactory, sometimes not – a supplier will not be able to meet the requirements of a properly authorised ILPOC or an authority to pre-commit expenditure or a contract entered into in full compliance with the Public Finances (Management) Act. The contract might be illegal. However, under the principles of equity, which have been adopted as part of the underlying law of Papua New Guinea, the National Court can, in an appropriate case and in accordance with precedent, recognise an equitable cause of action such as a quantum meruit and grant an equitable remedy such as equitable damages or restitution (see, eg, Fly River Provincial Government v Pioneer Health Services Ltd (2003) SC705; Teine v University of Goroka (2019) SC1881; Putput Logging Pty Ltd v Ambalis [1992] PNGLR 159; Steven Turik v Mathew Gubag (2013) N5132). 

Answer to question 4B

270.      Yes, s 11 of the PMMR Act provides for compulsory possession of the property of claimants (persons making the sorts of claims referred to in Section 11), for the purposes of s 53 of the Constitution. 

QUESTION 4C

271.      This asks whether s 11 of the Act complies with s 53 of the Constitution. It invites the Court to consider s 11 in isolation, separately from other provisions of the Act. This is a useful exercise as s 11 does not seem to directly advance the purpose of the Act, which according to its long title is “to regularise the handling and management of public money received by public and statutory bodies and for related purposes”. 

272.      Given that s 11 provides for compulsory possession of the property of claimants it must meet the requirements of s 53 of the Constitution, which in summary are (as set out in the answer to question 3): 

(1)	must be in accordance with an Organic Law or an Act of the Parliament (s 53(1)); 

(2)	the property must be required for a public purpose or a reason that is reasonably justified in a democratic society that has a proper regard for the rights and dignity of mankind (s 53(1)(a)); 

(3)	that purpose or reason must be so declared and so described, for the purposes of Section 53, in an Organic Law or an Act of the Parliament (s 53(1)(a)); 

(4)	the necessity for the taking of possession or acquisition for the attainment of that purpose or for that reason is such as to afford reasonable justification for the causing of any resultant hardship to any person affected (s 53(1)(b)); and 

(5) just compensation must be made on just terms by the expropriating authority, giving full weight to the National Goals and Directive Principles and having due regard to the national interest and to the expression of that interest by the Parliament, as well as to the person affected (s 53(2)).

273.      Only requirement (1) has been complied with. The others have not been complied with. Section 11 does not comply with s 53. 

Answer to question 4C

274.      No, s 11 of the PMMR Act does not comply with s 53 of the Constitution. If I had not formed the view that the entire Act were unconstitutional I would declare that at least s 11 is unconstitutional. 

B – STATUS OF CONSTITUTIONAL INSTITUTIONS: QUESTIONS 5 AND 6

QUESTION 5: WHETHER SECTION 4 OF THE PMMR ACT INSOFAR AS IT PURPORTS TO BIND CONSTITUTIONAL INSTITUTIONS, WHICH ARE CREATURES OF CONSTITUTIONAL LAWS, CAN ONLY BE DONE THROUGH CONSTITUTIONAL AMENDMENT IN COMPLIANCE WITH SECTIONS 12 AND 13 OF THE CONSTITUTION?

That is: Does s 4 of the Act purport to bind constitutional institutions, thereby altering the Constitutional Laws?

275.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
5	Yes	No	Yes	No	No	Yes 	

276.      This question addresses s 4 (integrity of constitutional institutions), which brings constitutional institutions within the scope of the Act. It states:

(1)	Nothing in this Act shall be interpreted so as to restrict or in any way diminish the functional mandates and integrity of constitutional institutions but shall be interpreted so as to limit the operation of the Act to public financial management of public money.

(2)	This Act binds constitutional institutions and constitutional institutions shall be deemed to be statutory bodies for the purposes of this Act.

277.      The term “constitutional institutions” is defined by s 2 of the Act to mean “the institutions established by the Constitution”.  It is necessary and appropriate in these circumstances to adopt the definition in s 221 of the Constitution:

"constitutional institution" means any office or institution established or provided for by this Constitution, other than an office of Head of State or of a Minister, or the National Executive Council. 

278.      Constitutional institutions include the offices and institutions occupied by “constitutional office-holders”, an elite group of public office-holders who enjoy an enhanced level of independence, security of tenure and guarantee of resources under Part IX (constitutional office-holders and constitutional institutions) of the Constitution. The term “constitutional office-holders” is defined exhaustively by s 221 of the Constitution, to mean:

(a)	a Judge; or
(b)	the Public Prosecutor or the Public Solicitor; or
(c)	the Chief Magistrate; or
(d)	a member of the Ombudsman Commission; or
(e)	a member of the Electoral Commission; or
(f)	the Clerk of the Parliament; or
(g)	a member of the Public Services Commission; or
(h)	the Auditor-General; or
(i)	the holder of any other office declared by an Organic Law or an Act of the Parliament to be a constitutional office for the purposes of this Part.

279.      Constitutional institutions therefore include:

•	the Supreme Court of Justice and the National Court of Justice (established by Constitution, ss 160 and 163);

•	the Offices of Public Prosecutor and Public Solicitor (Constitution, s 176(1));

•	the Magisterial Service (Constitution, s 173(1));

•	the Ombudsman Commission (Constitution, s 217(1));

•	the Electoral Commission (Constitution, s 126);

•	the Parliamentary Service (Constitution, s 132);

•	the Public Services Commission (Constitution, s 190(1)); and 

•	the Office of Auditor-General (Constitution, s 213(1)). 

280.      The referrer and the second, third, fourth and ninth interveners argue that the Act cannot lawfully apply to constitutional institutions as their powers, functions, duties and responsibilities are conferred by Constitutional Laws (the Constitution and the Organic Laws) – not by Acts of the Parliament. Only where a Constitutional Law expressly allows for the regulation, through Act of Parliament, of a constitutional institution’s activities should the provisions of an Act of Parliament be permitted to extend to constitutional institutions. Section 4 of the PMMR Act compromises the status of constitutional institutions.

281.      I am not persuaded by those arguments. While it is correct that many of the powers, functions, duties and responsibilities of constitutional institutions are conferred by Constitutional Laws, this is not universally the case. For example, the Public Prosecutor, the Public Solicitor, the Magisterial Service, the Parliamentary Service, the Public Services Commission and the Auditor-General operate without any specific Organic Law. They are required to discharge their powers, functions, duties in accordance with Acts of the Parliament, eg the Public Prosecutor (Office and Functions) Act, Magisterial Service Act, Parliamentary Service Act, Public Services (Management) Act, Auditor-General Act. 

282.      The fact that an Act of Parliament is the source of laws that affect how a constitutional institution discharges its roles does not by itself compromise the institution’s status as a constitutional institution.

283.      I think that s 4(1) of the Act (“nothing in this Act shall be interpreted so as to restrict or in any way diminish the functional mandates and integrity of constitutional institutions …”) is a sufficient bulwark against any perceived compromise of the independence of constitutional institutions that arises from bringing such institutions within the scope of the Act.

284.      The Act is constitutionally problematic in a number of other respects. However, as to the Act bringing all constitutional institutions within its scope, I see no constitutional problem.  

Answer to question 5

285.      No, it was not necessary to amend Constitutional Laws in order for constitutional institutions to be brought within the scope of the PMMR Act. 

QUESTION 6: IF THE ANSWER TO THE ABOVE QUESTION IS “YES,” IS SECTION 4 OF THE PMMR ACT UNCONSTITUTIONAL AND INVALID?  

That is: Is s 4 of the Act unconstitutional?

286.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
6	Yes	No 	Yes 	No	No	Yes 	

287.      I would answer question 5 in the negative, so this question is strictly speaking irrelevant. However as the question of constitutionality of s 4 of the Act is directly raised, I will answer it. 

Answer to question 6

288.      No, s 4 of the PMMR Act is not, in itself, unconstitutional. 

C – OUSTER OF JURISDICTION OF THE COURTS: QUESTIONS 7, 8 AND 9

QUESTION 7: WHETHER SECTIONS 5(5), 9, 10 AND 11(3) OF THE PMMR ACT ARE INCONSISTENT WITH SECTION 155 OF THE CONSTITUTION, ESPECIALLY SECTIONS 155(2) AND 155(4) AND THEREFORE UNCONSTITUTIONAL AND INVALID?

That is: Do ss 5(5), 9, 10 or 11(3) of the Act restrict the exercise of judicial power contrary to Constitution, s 155?

289.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
7	Yes	No	Yes 	No	No	Yes 	

290.      Six sorts of provisions of the PMMR Act, which to some extent restrict the functions, powers and discretion of courts, are at the centre of questions 7, 8 and 9: ss 5(5); 9(1); 9(2) and 10(1); 9(5); 11(1) and 11(2); and 11(3). 

291.      Section 5(5) states:

No compensation, damages or any other relief, including injunctive or declaratory relief, may be awarded by any court or tribunal in respect of any agreement or undertaking rendered void by this section.

292.      Section 9(1) states:

A determination pursuant to Section 8 shall not be the subject of any judicial or administrative review by a public or statutory body, including by way of injunctive relief or prerogative writ.

293.      Sections 9(2) and 10(1) state:

S 9(2): For the purpose of Subsection (1), a public or statutory body shall not engage legal representation, commence any action or other proceeding in any court or tribunal or procure or contract for legal representation other than in compliance with the Attorney-General Act 1989.

S 10(1): For the purposes of this Act, a public or statutory body shall not engage legal representation, commence any action or other proceeding in any court or tribunal or procure or contract for legal representation for any purpose other than in compliance with the Attorney-General Act 1989.

294.      Section 9(5) states:

If any public or statutory body, or any other person, obtains injunctive or declaratory relief in respect of any provision of this Act, including a determination pursuant to Section 8, the Court or administrative body making the order shall also order that —

(a)	the public or statutory body, or any other person seeking the order shall within, one working day, pay into court the amount that the State demands to be paid to secure payment of the State's legal costs, or the order in respect of the injunctive or declaratory relief shall be immediately vacated by reason of the non-payment within the required time; and
(b)	the public or statutory body, or any other person seeking the order shall pay into Court all public funds in their possession or control at the time of the order and all public funds that subsequently come into their possession within one working day of receiving those funds; and
(c)	that the substantive hearing of the matter, application or injunction be set for full hearing within ten working days of the granting of the injunctive or declaratory relief.

295.	    Sections 11(1) and 11(2) state:

	S 11(1): A claim for payment, compensation, restitution, damages or any other form of relief, including injunctive or declaratory relief, against the State or a statutory body based on equity or equitable principles in respect of the value of works, goods or services rendered to the State or a statutory body shall not be enforceable, through the Courts or otherwise, unless the seller of the property or stores or the supplier of the works, goods or services produces —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure,

relating to the property or stores or works, goods or services, the subject of the claim, to the full amount of the claim.

S 11(2): A claim for payment, compensation, restitution, damages or any other form of relief, including injunctive or declaratory relief, against the State or a statutory body based on the undertaking or promise of any person, whether or not that person had the actual, implied or ostensible authority of the State or statutory body to give or make that undertaking or promise, shall not be enforceable, through the courts or otherwise, unless the person making the claim produces —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure,

relating to the undertaking or promise, the subject of the claim, to the full amount of the claim.

296.      Section 11(3) states:

The Courts shall, on application by the State, stay a claim specified in Subsections (1) and (2), if the person making the claim cannot produce, on demand by the State —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure, 

relating to the subject of the claim, to the full amount of the claim.

297.      I will deal with each sort of provision separately.

298.      Section 5(5) of the Act is directed at agreements and undertakings in respect of the sharing of public money raised as revenue that are rendered void by s 5(4) of the Act. Section 5(5) purports to remove from the courts, including the National Court and the Supreme Court, the power to grant any relief to any person commencing legal proceedings in respect of such an agreement or undertaking.

299.      I agree with the submissions of the referrer that the removal from those courts of the power to grant relief (including in cases where a plaintiff has established a cause of action) is in direct contravention of s 155 (the national judicial system) of the Constitution, which states:

(1)	The National Judicial System consists of—

(a)	the Supreme Court; and
(b)	the National Court; and
(c)	such other courts as are established under Section 172 (establishment of other courts).

(2)	The Supreme Court—

(a)	is the final court of appeal; and
(b)	has an inherent power to review all judicial acts of the National Court; and
(c)	has such other jurisdiction and powers as are conferred on it by this Constitution or any other law.

(3)	The National Court—

(a)	has an inherent power to review any exercise of judicial authority; and
(b)	has such other jurisdiction and powers as are conferred on it by this Constitution or any law,

except where—

(c)	jurisdiction is conferred upon the Supreme Court to the exclusion of the National Court; or
(d)	the Supreme Court assumes jurisdiction under Subsection (4); or
(e)	the power of review is removed or restricted by a Constitutional Law or an Act of the Parliament.

(4)	Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.

(5)	In a case referred to in Subsection (3)(e), the National Court has nevertheless an inherent power of review where, in its opinion, there are over-riding considerations of public policy in the special circumstances of a particular case.

(6)	Subject to any right of appeal or power of review of a decision, it is the duty of all persons (including the Law Officers of Papua New Guinea and other public officers in their respective official capacities), and of all bodies and institutions, to comply with and, so far as is within their respective lawful powers, to put into effect all decisions of the National Judicial System.

300.      Section 155 is a source of inherent jurisdiction of the National Court to judicially review decisions of public authorities in accordance with a system of administrative law specifically designed for Papua New Guinea under s 60 (development of principles) of the Constitution (Daniel v Air Niugini Ltd (2017) SC1886). Section 5(5) of the Act purports to remove that power. An Act of the Parliament cannot remove powers conferred on the Court by the Constitution. 

301.     Section 155(4) is a direct grant of inherent constitutional power and authority conferred on the Supreme Court and the National Court to “make such … orders as are necessary to do justice in the circumstances of a particular case” (Avia Aihi v The State (No 1) [1981] PNGLR 81; Application by Nilkare [1998] PNGLR 472). Section 5(5) is an attempt to abolish that power and authority in particular cases, which is not constitutionally permissible.

302.     Section 9(1) of the Act makes determinations of the Strategic Budget Committee under s 8 of the Act immune from “any judicial or administrative review by a public or statutory body, including by way of injunctive relief or prerogative writ”. It is an attempt to make decisions of that Committee immune from judicial review. It is one thing for the legislature to say that there is no right of appeal against an administrative decision. There is nothing wrong with that. It is quite another to say that there shall be no judicial review of such decisions. That is anathema to the exercise of the inherent constitutional power under s 155(4) of the Constitution. 

303.     Sections 9(2) and 10(1) of the Act prohibit public and statutory bodies from doing certain things other than in compliance with the Attorney-General Act 1989, viz:

•	engaging legal representation;
•	commencing any action or other proceedings in any court or tribunal;
•	procuring or contracting legal representation 

304.      The question arises whether these provisions might amount to an unwarranted brake on the exercise by such bodies of their right to the full protection of law under s 37 of the Constitution. However, that issue is addressed later. For present purposes, I see no inconsistency between ss 9(2) and 10(1) of the Act and s 155 of the Constitution. 

305.      Section 9(5) of the Act requires a Court that grants to a public or statutory authority any injunctive or declaratory relief in respect of any provision of the Act, to order:

•	that the public or statutory body pay into court any amount of costs demanded by the State (s 9(5)(a)) plus all public funds in their possession or control (s 9(5)(b)); and

•	that the substantive hearing of the matter be set for full hearing within ten working days of the granting of the injunctive or declaratory relief (s 9(5)(c)). 

306.     Section 9(5) is an attempt by the legislature to tell the courts, including the Supreme Court and the National Court, how proceedings before them should be conducted. It attempts to remove the inherent constitutional power and discretion of the Courts to make such orders as are necessary to do justice. 

307.      Section 9(5)(a) is repugnant to the significant power and discretion of the courts to make orders for security for costs, which are exercised in accordance with established principles and precedent (Yarlett v New Guinea Motors Ltd [1984] PNGLR 155; Lambu v Ipatas [1999] PNGLR 207; Wilson v Kuburam (2016) SC1489). The Courts need not and cannot be told by the legislature how to exercise such powers, which are an integral part of the administration of justice. 

308.     Likewise, with Section 9(5)(b): the courts cannot be ordered by the legislature that they must order a party in every case, irrespective of the circumstances of the case, to pay certain sums of public money into court. 

309.      Section 9(5)(c) is an attempt by the legislature to tell the courts how to conduct proceedings before them. It is a key component of the exercise of the judicial function that courts, in particular the Supreme Court and the National Court, control their own proceedings and are empowered and obliged to protect their processes against abuse (Tamali Angoya v Tugupa Association Inc (2009) SC978; Rimbao v Pandan (2011) SC1098; Mendepo v National Housing Corporation (2011) SC1169). The Court before which proceedings are instituted has inherent power and discretion to decide when a matter is to be set down for hearing. It should not and cannot be told by the legislature when a matter is to be set down. 

310.      Sections 11(1) and 11(2) were considered earlier in my opinion on question 4B. They are directed at two types of claims (for payment, compensation, damages etc) against the State or a statutory body:

•	claims based on equity or equitable principles in respect of the value of works, goods or services (s 11(1)); 

•	claims based on the undertaking or promise of a person on behalf of the State or statutory authority (s 11(2)).

311.      Sections 11(1) and 11(2) restrict the enforceability of such claims by declaring that they are not enforceable, through the courts or otherwise, unless the seller or supplier of the property, works, goods or services or the person making the claim produces a properly authorised ILPOC or an authority to pre-commit expenditure. 

312.      This is an unwarranted and impermissible curtailment of the exercise by the Supreme Court and the National Court of the inherent, constitutional power under s 155(4) of the Constitution to make such orders as are necessary to do justice. 

313.      Section 11(3) obliges the Courts, whenever hearing claims of the type covered by s 11, upon application by the State, to stay any such a claim if the claimant cannot produce a properly authorised ILPOC or an authority to pre-commit expenditure. 

314.      This is another attempt by the legislature to tell the courts what orders it should and shall make in the circumstances described. It is another unwarranted and impermissible curtailment of the exercise by the Supreme Court and the National Court of judicial power under s 155(4) of the Constitution. 

Answer to question 7

315.      Yes, ss 5(5), 9(1), 9(5), 11(1), 11(2) and 11(3) of the PMMR Act are inconsistent with s 155, in particular, s 155(4), of the Constitution and are for that reason unconstitutional and invalid.  

QUESTION 8: FURTHER, AND IN THE ALTERNATIVE, WHETHER SECTIONS 5(5), 9, 10 AND 11(3) OF THE PMMR ACT ARE INCONSISTENT WITH SECTION 157 OF THE CONSTITUTION AND THEREFORE UNCONSTITUTIONAL AND INVALID?

That is: Are ss 5(5), 9, 10 or 11 of the Act inconsistent with Constitution, s 157?

316.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
8	Yes	No	Yes 	No	No	Yes 	

317.      This question asks whether the same provisions of the Act at the centre of question 7 – ss 5(5); 9(1); 9(2) and 10(1); 9(5); 11(1) and 11(2); and 11(3) – are inconsistent with another provision of the Constitution, s 157 (independence of the national judicial system), which states:

Except to the extent that this Constitution specifically provides otherwise, neither the Minister responsible for the National Justice Administration nor any other person or authority (other than the Parliament through legislation) outside the National Judicial System has any power to give directions to any court, or to a member of any court, within that System in respect of the exercise of judicial powers or functions.

318.     I see no reason to answer question 8 differently to the answer to question 7. The highlighted provisions of the Act (apart from ss 9(2) and 10(1)) are an attempt to significantly curtailthe exercise of judicial power. Those provisions not only restrain the exercise of constitutionally guaranteed powers and discretion, they interfere with and constrain the independence of the judiciary, entrenched by s 157 of the Constitution.

319.      Judicial independence is central to maintenance of the Rule of Law and the constitutional principle of separation of powers, under s 99 (structure of government) of the Constitution, which states:

(1)	Subject to and in accordance with this Constitution, the power, authority and jurisdiction of the People shall be exercised by the National Government.

(2)	The National Government consists of three principal arms, namely:—

(a)	the National Parliament, which is an elective legislature with, subject to the Constitutional Laws, unlimited powers of law-making; and
(b)	the National Executive; and
(c)	the National Judicial System, consisting of a Supreme Court of Justice and a National Court of Justice, of unlimited jurisdiction, and other courts.

(3)	In principle, the respective powers and functions of the three arms shall be kept separate from each other.

(4)	Subsection (2) is descriptive only and is non-justiciable.

320.      I agree with the submissions of the referrer and the second, third and fourth interveners that the highlighted provisions of the Act appear to be an attempt by the Parliament, aided and assisted by the Executive, to shield decisions made under the Act by the Executive from judicial review by deeming them to be non-justiciable and immune from review. Under such a legislative and administrative regime, respect for the rule of law is easily diminished, and the country is at risk of being governed not by law but by decree. 

Answer to question 8

321.      Yes, ss 5(5), 9(1), 9(5), 11(1), 11(2) and 11(3) of the PMMR Act are inconsistent with s 157 of the Constitution and are for that reason unconstitutional and invalid.

QUESTION 9: FURTHER, AND IN THE ALTERNATIVE, WHETHER SECTIONS 5(5), 9, 10 AND 11(3) OF THE PMMR ACT ARE INCONSISTENT WITH SECTIONS 37(11), 155(2) AND 166(1) OF THE CONSTITUTION AND THEREFORE UNCONSTITUTIONAL AND INVALID?

That is:Are ss 5(5), 9, 10 or 11 of the Act inconsistent with Constitution, ss 37(11) and 166(1), and unconstitutional?

322.     The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
9	Yes	No	Yes 	No	No	Yes 	

323.      This question is based on three provisions of the Constitution, which confer powers, functions, duties and responsibilities of the National Judicial System: ss 37(11), 155(2) and 166(1).

324.      Section 37(11) states:

A determination of the existence or extent of a civil right or obligation shall not be made except by an independent and impartial court or other authority prescribed by law or agreed upon by the parties, and proceedings for such a determination shall be fairly heard within a reasonable time.

325.      Section 155(2) states:

The Supreme Court—

(a)	is the final court of appeal; and
(b)	has an inherent power to review all judicial acts of the National Court; and
(c)	has such other jurisdiction and powers as are conferred on it by this Constitution or any other law.

326.      Section 166(1) states: 

Subject to this Constitution, the National Court is a court of unlimited jurisdiction.

327.      The purpose and effect of these provisions is:

•	to entrench the roles of the Supreme Court and the National Court as the superior courts of record in the National Judicial System; and 

•	to ensure that all persons, including individual and corporate persons and public and statutory authorities, are provided with access to the courts;

•	to allow an independent and impartial determination of civil rights and obligations; 

to enforce the right of all persons, including individual and corporate persons and public and statutory authorities, under s 37(1) of the Constitution to the full protection of the law (Papua New Guinea v Ume More [1985] PNGLR 48, SC Ref No 1 of 1993, SC Ref No 1 of 1993, Re Income Tax Act, Section 365 (1995) SC482); and therefore 

•	to maintain the rule of law. 

328.      I agree with the submissions of the referrer and other parties who support the referrer’s position, that ss 5(5), 9(1), 9(5), 11(1), 11(2) and 11(3) of the PMMR Act have the effect of:

•	devaluing the roles of the Supreme Court and the National Court; 

•	curtailing access to those Courts; 

•	militating against independent and impartial judicial determination of disputes as to the nature and extent of rights and obligations arising under the PMMR Act; 

•	undermining the right of all persons under s 37(1) of the Constitution to the full protection of the law; and therefore 

•	subverting the rule of law. 

Answer to question 9

329.     Yes, ss 5(5), 9(1), 9(5), 11(1), 11(2) and 11(3) of the PMMR Act are inconsistent with ss 37(11), 155(2) and 166(1) of the Constitution and are for that reason unconstitutional and invalid.

D – PARLIAMENTARY CONTROL OF PUBLIC FINANCE: QUESTIONS 10, 11 AND 12
QUESTION 10: WHETHER SECTIONS 6, 7 AND 8 OF THE PMMR ACT, WHICH REQUIRE REMITTANCE OF PUBLIC MONEY TO THE CONSOLIDATED REVENUE FUND (SECTION 6), BANKING OF PUBLIC MONEY TO A REVENUE ACCOUNT (SECTION 7), AND ALLOCATION OF FUNDS BY THE BUDGET STRATEGIC COMMITTEE (SECTION 8) ARE RAISING AND EXPENDING PUBLIC FINANCE CONTRARY TO AUTHORISATION OF THE PARLIAMENT THROUGH AN ACT OF PARLIAMENT AS REQUIRED BY SECTIONS 209, 210 AND 211 OF THE CONSTITUTION AND THEREFORE UNCONSTITUTIONAL AND INVALID? 

That is:Are ss 6, 7 and 8 of the Act inconsistent with Constitution, ss 209, 210 and 211?

330.       The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
10	Yes	No	Yes 	No	No	Yes 	

331.      Questions 10, 11 and 12 are focussed on ss 6, 7 and 8 of the Act. 

332.      Section 6 requires each public and statutory body at the close of every business day to transfer all public money it holds, to its revenue account, specified by the Secretary for Finance. 

333.      Section 7 requires each public and statutory body to have only two types of bank accounts: a single operating bank account and trust accounts compliant with the Act. Any money in those accounts that should not be in them (by virtue of the application of other provisions of the Act) or in any accounts not authorised by the Act, is liable to be transferred by the Secretary for Finance to the body’s revenue bank account (which is opened and operated by the Secretary for Finance) or to the Consolidated Revenue Fund, exercising powers under ss 7(4) or 13(1). Any revenue bank account in the name of the body, is opened and operated by the Secretary for Finance under s 7(5). The public or statutory body has no control over it. Every operating bank account and every trust account is subject to ultimate supervision and control by the Secretary for Finance under s 7(7). 

334.      Section 8 establishes the Strategic Budget Committee, consisting of the Treasury Secretary, who is Chairman, and the Secretary for Finance and other appointed Departmental Heads, which makes determinations as to amounts of public money to be transferred back to public or statutory bodies from their specified revenue accounts, to meet their reasonable operating budget requirements. 

335.      The referrer and the second, third, fourth and ninth interveners argue that those three provisions provide for the raising and expenditure of public finance contrary to authorisation of the Parliament through an Act of the Parliament, which is not permissible under ss 209, 210 and 211 of the Constitution.

336.      Those constitutional provisions are found in Subdivision VIII.1.A (the parliament and finance) of the Constitution, which contains just one other provision, s 212. Subdivision VIII.1.A states:

209.	Parliamentary responsibility.

(1)	Notwithstanding anything in this Constitution, the raising and expenditure of finance by the National Government, including the imposition of taxation and the raising of loans, is subject to authorization and control by the Parliament, and shall be regulated by an Act of the Parliament.

(2)	For each fiscal year, there shall be a National Budget comprising—

(a)	estimates of finance proposed to be raised and estimates of proposed expenditure by the National Government in respect of the fiscal year; and
(b)	separate appropriations for the service of that year in respect of—

(i)	the services of the Parliament; and
(ii)	general public services; and
(iii)	the services of the Judiciary; and
(c)	such other supplementary Budgets and appropriations as are necessary.

(2A)	For the purposes of this Subdivision—

(a)	"the services of the Parliament" include the salaries and allowances (financial and otherwise) of the Members of Parliament, the maintenance of the precincts of the Parliament, and the Parliamentary Service established under the Parliamentary Service Act (Chapter 26); and
(b)	"the services of the Judiciary" include—

(i)	the salaries and allowances (financial and otherwise) of Judges of the Supreme and National Courts; and
(ii)	the maintenance of the Supreme and National courts; and
(iii)	the National Judicial Staff Service established under the National Judicial Staff Service Act 1987; and
(iv)	the salaries and allowances (financial and otherwise) of all persons appointed under the Supreme Court Act (Chapter 37), the National Court Act (Chapter 38) and the Sheriff Act (Chapter 55).

(2B)	For the purposes of subsection (2)(b)(i) and (iii), the Speaker of the Parliament and the Chief Justice respectively shall, before 30 September each year, submit to the Prime Minister estimates of expenditure for the services of the Parliament and the services of the Judiciary respectively in the following fiscal year.

(3)	Before any Budget or appropriation is prepared for submission to the Parliament, the National Executive Council shall consult with any appropriate Permanent Parliamentary Committee, but this subsection does not confer any right or impose any duty of consultation after the initial stages of the preparation of the Budget or appropriation.

210.	Executive initiative.

(1)	The Parliament shall not provide for the imposition of taxation, the raising of loans or the expenditure of public moneys of Papua New Guinea except on the recommendation of the Head of State, acting with, and in accordance with, the advice of the National Executive Council.

(2)	Subject to subsections (3) and (4), Parliament may reduce, but shall not increase or re-allocate, the amount or incidence of, or change the purpose of, any proposed taxation, loan or expenditure.

(3)	Where, in the opinion of the Parliament, the proposed expenditure for the services of the Parliament or the services of the Judiciary is below the estimate submitted by the Speaker or Chief Justice respectively and is insufficient adequately to meet the requirements of that service, the Parliament may increase the expenditure to an amount not exceeding the original estimates submitted by the Speaker or the Chief Justice, as the case may be, under Section 209(2B).

(4)	For the purposes of subsection (3), the Parliament may re-allocate, or reduce and re-allocate, the amount of expenditure appropriated for any purpose.

211.	Accounting, etc., for public moneys.

(1)	All moneys of or under the control of the National Government for public expenditure and the Parliament and the Judiciary for their respective services, shall be dealt with and properly accounted for in accordance with law.

(2)	No moneys of or under the control of the National Government for public expenditure or the Parliament and the Judiciary for their respective services, shall be expended except as provided by this Constitution or by or under an Act of the Parliament.

212.	Revenue and expenditure without prior approval.

(1)	If at the beginning of a fiscal year the Parliament has not made provision for public expenditure by the National Executive or expenditure by the Parliament or the Judiciary for their respective services for that year, the National Executive, the Parliament or the Judiciary, as the case maybe, may, without authorization other than this section but in accordance with an Act of the Parliament, expend amounts appropriated out of the Consolidated Revenue Fund for the purpose not exceeding in total one-third of its respective budgeted expenditure during the immediately preceding fiscal year.

(2)	The authority conferred by Subsection (1) lapses when the Parliament has made provision for the public expenditure for the fiscal year in question, and any amounts expended by virtue of that subsection are a charge against the expenditure so provided for and shall be properly brought to account accordingly.

337.      Five fundamental principles for supervision and control of public finances underpin Subdivision VIII.1.A:

338.      1 Parliamentary responsibility: The raising and expenditure of finance by the National Government, including the imposition of taxation and the raising of loans, is subject to authorization and control by the Parliament, and shall be regulated by an Act of the Parliament (s 209(1), Mairi v Tololo [1976] PNGLR 125; SC Ref No 1 of 1990, Reference by the Enga Provincial Executive Council [1990] PNGLR 532; PNG Forest Industries Association Inc v Tomuriesa (2017) SC1601). 

339.      2 Budget requirement: For each fiscal year, there shall be a National Budget comprising—

(a)	estimates of finance proposed to be raised and estimates of proposed expenditure by the National Government in respect of the fiscal year; and

(b)	separate appropriations for the service of that year in respect of

(i)	the services of the Parliament; and
(ii)	general public services; and
(iii)	the services of the Judiciary; and

(c)	such other supplementary Budgets and appropriations as are necessary (s 209(2)).

340.      3 Executive initiative: The Parliament shall not provide for the imposition of taxation, the raising of loans or the expenditure of public moneys of Papua New Guinea except on the recommendation of the Head of State, acting with, and in accordance with, the advice of the National Executive Council (s 210). 

341.      4 Accountability: All moneys of or under the control of the National Government for public expenditure and the Parliament and the Judiciary for their respective services, shall be dealt with and properly accounted for and expended in accordance with law and only as provided by the Constitution or by or under an Act of the Parliament (s 211).

342.      5 Revenue and expenditure without prior approval: If the Parliament has not made provision for public expenditure by the National Executive or expenditure by the Parliament or the Judiciary for their respective services for that year, the National Executive, the Parliament or the Judiciary, as the case maybe, may, without authorization, expend amounts appropriated out of the Consolidated Revenue Fund for the purpose not exceeding in total one-third of its respective budgeted expenditure (s 212). 

343.      The referrer and the second, third, fourth and ninth interveners argue that ss 6, 7 and 8 of the Act flout the first of those fundamental principles as those provisions:

•	provide for the raising of public finance;

•	provide for the expenditure of public finance;

•	without authorisation of the Parliament; and 

•	without being done by an Act of the Parliament.

345.      I am not persuaded by those arguments. It is correct that ss 6, 7 and 8 are directed at control of “public money” that comes into possession of public and statutory bodies other than what is formally appropriated to them through the National Budget. This is apparent from the definition of “public money” in s 2 (interpretation) of the Act:

"public money" includes all money raised, refunded, received, held or controlled by a public body, statutory body or a person acting on behalf of the State, including all money received as a result of —

(a)	fees, levies, royalties or any other charges of any type, other than taxes; or
(b)	bonds, debentures, shares, securities, term-deposits, dividends or any other investments, including the return on those investments; or
(c)	the sale or lease of public property; or
(d)	donations or gifts,

but excludes money appropriated to a public or statutory body by or under the National Budget. 

346.      However, imposing a system of supervision and control of existing public money through the measures enacted under ss 6, 7 and 8, does not, in my view, amount to ‘raising of public finance’. Nor can it be properly regarded as ‘expenditure of public finance’. The measures enacted under ss 6, 7 and 8 are better regarded as imposing a scheme for ‘regularising the handling and management of public finance’, which is in line with the purpose of the Act as set out in its long title. 

347.      In my view the Act does not offend against Subdivision VIII.1.A of the Constitution. 

Answer to question 10

348.      No, ss 6, 7 and 8 of the PMMR Act do not provide for raising and expenditure of public finance without authorisation of the Parliament through an Act of the Parliament. 

QUESTION 11: FURTHER AND IN THE ALTERNATIVE, WHETHER SECTION 8 OF THE PMMR ACT, WHICH PROVIDES FOR THE STRATEGIC BUDGET COMMITTEE TO ALLOCATE FUNDS TO PUBLIC BODIES AND STATUTORY AUTHORITIES HELD IN CONSOLIDATED REVENUE FUND WITHOUT APPROVAL FROM THE HEAD OF STATE ON ADVICE FROM THE NATIONAL EXECUTIVE COUNCIL, IS CONTRARY TO SECTIONS 209, 210 AND 211 OF THE CONSTITUTION AND THEREFORE UNCONSTITUTIONAL AND INVALID?

That is:Is s 8 of the Act, inconsistent with Constitution, ss 209, 210 and 211?

349.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
11	Yes	No	Yes 	No	No	Yes 	

350.      I have considered the issues arising from s 8 of the Act in my opinion on question 10. The answer is in the negative. 

Answer to question 11

351.      No, s 8 of the PMMR Act is not inconsistent with ss 209, 210 or 211 of the Constitution. 

QUESTION 12: IF ONE OR ALL OF SECTIONS 6, 7 AND 8 OF THE PMMR ACT IS/ARE INCONSISTENT WITH ONE OR ALL OF SECTIONS 209, 210 AND 211 OF THE CONSTITUTION, DOES THAT RENDER THE ENTIRE PMMR ACT UNCONSTITUTIONAL AND INVALID AS THE SAID PROVISIONS ARE INDISPENSABLE TO THE EFFECTIVE FUNCTIONING OF THE PMMR ACT?

That is:Do the answers to Qs 10 and 11 render the entire Act unconstitutional?

352.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
12	Yes	No	Yes 	No	No	Yes 	

353.      This question is based on the presumption that ss 6, 7 and 8 of the Act are inconsistent with one or more of the provisions of Subdivision VIII.1.A of the Constitution. However, in my view there is no such inconsistency, so it is not appropriate to answer the question. I would invoke Order 4, Rule 18 of the Supreme Court Rules 2012 (a rule made under s 19(4)(c) of the Constitution, in respect of cases and circumstances in which the Court may decline to give an opinion) which states:

The court may decline to give an opinion on the question the subject of the reference or special reference if in [its] opinion the question is trivial, vexatious, hypothetical or unlikely to have any immediate relevance to the circumstances of Papua New Guinea.

354.      I decline to answer the question as it is hypothetical. 

Answer to question 12

355.      Decline to give opinion.

E – HARSH AND OPPRESSIVE PENALTIES: QUESTION 13

QUESTION 13: ARE THE PENALTIES FOR BREACH OF THE PMMR ACT AS PRESCRIBED BY SECTION 12(4) OF THE PMMR ACT HARSH AND OPPRESSIVE OR OTHERWISE A PROSCRIBED ACT PURSUANT TO SECTION 41 OF THE CONSTITUTION, AND/OR NOT REASONABLY JUSTIFIABLE IN A DEMOCRATIC SOCIETY HAVING PROPER REGARD FOR THE RIGHTS AND DIGNITY OF MANKIND PURSUANT TO SECTIONS 38 AND 39 OF THE CONSTITUTION CONSIDERING THAT SECTION 12(1) OF THE PMMR ACT DEEMS ALL BREACHES AS STRICT LIABILITY OFFENCES?

That is: Are penalties allowed by s 12(4) of the Act so harsh and oppressive they are proscribed by Constitution, s 41? 

356.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
13	Yes	Yes	Yes 	No	No	Yes 	

357.      This question addresses the offence provision of the Act, s 12, in particular the penalty provision, s 12(4). Section 12 states:

(1)	All offences under this Act are offences of strict liability.

(2)	A person who, in whole or part, omits or fails to comply with a duty, obligation or requirement of this Act is guilty of an offence.

(3)	In sentencing a person after conviction of an offence under this Act, the rank, title or designation of the person within the public or statutory body at the time of the commission of the offence shall be considered by the sentencing court so that the higher the rank, title or designation of the person, the more serious the offence when imposing penalty.

(4)	The penalties for conviction for an offence under this Act are: 

(a)	in the case of an offence by a person, imprisonment for a term not exceeding 15 years and a fine not exceeding K2,000,000.00; and
(b)	in the case of an offence by a body corporate, a fine not exceeding K50,000,000.00.

358.      The referrer and the first, second, third, fourth and ninth interveners argue that the legislative “act” of imposing such heavy penalties for committing an offence under the Act is harsh, oppressive or otherwise proscribed under s 41 (proscribed acts) of the Constitution, which states:

(1)	Notwithstanding anything to the contrary in any other provision of any law, any act that is done under a valid law but in the particular case—

(a)	is harsh or oppressive; or
(b)	is not warranted by, or is disproportionate to, the requirements of the particular circumstances or of the particular case; or
(c)	is otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind,

is an unlawful act.

(2)	The burden of showing that Subsection (1)(a), (b) or (c) applies in respect of an act is on the party alleging it, and may be discharged on the balance of probabilities.

(3)	Nothing in this section affects the operation of any other law under which an act may be held to be unlawful or invalid.

359.      It is argued that s 41 proscribes (ie prohibits) and gives protection against seven sorts of acts (Morobe Provincial Government v John Kameku (2012) SC1164; Petrus and Gawi v Telikom PNG Ltd (2008) N3373). Even if done under a valid law and notwithstanding anything to the contrary in any law, an act is unlawful if it is, in the particular case:

•	harsh; or

•	oppressive; or

•	not warranted by the requirements of the particular circumstances; or

•	disproportionate to the requirements of the particular circumstances; or

•	not warranted by the requirements of the particular case; or

•	disproportionate to the requirements of the particular case; or

•	otherwise not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind.

360.      It is further argued that there being no qualification provided by s 41 as to the nature of “acts” covered by it, s 41 extends to all acts, including private acts and public acts, whether executive, judicial or legislative in character. And the penalties available under 12(4) of the PMMR Act are of such magnitude that the act of creating such penalties, when viewed in the context of other draconian features of s 12 (the offences created are vague and general and expressed to be of strict liability) should be regarded as harsh and oppressive and not, in the particular circumstances, reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind.

361.      I am not persuaded by those arguments. First and foremost, I have difficulty with the notion that a legislative act, such as imposition of a penalty for committing an offence, can be determined by the Court to be harsh or oppressive etc, with the consequence that the legislative provision in question is rendered “unlawful”. I doubt that the ‘acts’ referred to in s 41 extend to legislative acts. 

362.      There is no case in which s 41 has been held to have such a broad application. Indeed this seems to be the first occasion on which the point has been argued. In SC Ref No 1 of 1984, Re Minimum Penalties Legislation [1984] PNGLR 314, which concerned the constitutionality of a suite of laws that imposed minimum, mandatory penalties for certain offences, it was argued that sentences imposed by the courts could be challenged under s 41. However, it was not argued that the laws that imposed minimum penalties were unconstitutional on the ground that the legislative act of making those laws offended s 41. 

363.      Making an argument for the first time in not such a bad thing. Making a decision without precedent can be a good thing. But the absence of precedent means caution must be exercised and the need for persuasive arguments is intensified. I remain unpersuaded in this case that the scope of s 41 should be extended to capture legislative acts such as imposing penalties for criminal offences. 

364.      In any event I do not think that the severity of a penalty necessarily makes it (or the legislative act of creating it ) harsh or oppressive etc. These are not minimum or mandatory penalties. The Act providing for them would need to expressly state that the penalties are minimum or mandatory before a court would be obliged to impose them. Without an express statement to that effect the normal rule of statutory interpretation, codified by ss 14 and 15 of the Interpretation Act, would apply: the penalties are the maximum that can be imposed, and the sentencing court has discretion to impose any penalty within the available range (Goli Golu v The State [1979] PNGLR 653). 

Answer to question 13

365.      No, the penalties provided by s 12(4) of the PMMR Act are not harsh, oppressive or otherwise proscribed under s 41 of the Constitution. 

F – PROTECTION OF THE LAW: QUESTIONS 14, 15 AND 16
QUESTION 14: WHETHER SECTION 12(2) OF THE PMMR ACT DEFINES AN OFFENCE CAPABLE OF MEETING THE REQUIREMENTS OF SECTION 37(2) OF THE CONSTITUTION?

That is:Does the offence provision, s 12(2) of the Act, meet the requirements of Constitution, s 37(2)?

366.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
14	No	No	No 	Yes	Yes	No	

367.      This question addresses the offence created by s 12(2) of the Act, which states:

A person who, in whole or part, omits or fails to comply with a duty, obligation or requirement of this Act is guilty of an offence.

368.      The referrer and the first, second, third, fourth and ninth interveners argue that the elements of the offence are so vague that the offence fails to meet the requirements of s 37(2) (protection of the law) of the Constitution, which states: 

	Except, subject to any Act of the Parliament to the contrary, in the case of the offence commonly known as contempt of court, nobody may be convicted of an offence that is not defined by, and the penalty for which is not prescribed by, a written law.

369.      It is argued that, though s 12(2) is a written law and it creates an offence, it has not defined in sufficiently clear terms what the offence actually is.

370.      I uphold this argument. It is not enough for a written law to simply define an offence. Section 37(2) requires that the offence be defined in clear and unequivocal terms so that all persons subject to the law are able to conduct themselves in accordance with it (SC Ref No 1 of 1981, Re Inter-Group Fighting Act [1981] PNGLR 151). 

371.      Section 37(2) is an integral part of Section 37 (protection of the law), which falls within Division III.3 (basic rights) of the Constitution. It is a human rights provision. It is one of the sub-sections of Section 37 which is intended to ensure that the right to the full protection of the law, conferred by Section 37(1), “is fully available, especially to persons in custody or charged with offences” (SC Ref No 2 of 2004, Re Enhanced Co-operation Between Papua New Guinea and Australia Act (2005) SC785; SC Ref Nos 2, 3 & 5 of 2014; Re Powers, Functions, Duties & Responsibilities of the Commissioner of Police (2014) SC1388; Leahy v Kaluwin (2014) N5813). 

372.      An offence is defined by its elements, the propositions of fact or law that need to be proven by the prosecution beyond reasonable doubt to prove commission of the offence. The elements of an offence under s 12(2) of the Act are that a person:

•	omits or fails to comply with;

•	a duty, obligation or requirement of the Act

•	in whole or in part. 

373.      Each set of elements contains alternatives, so s 12(2) is actually creating 12 (2 x 3 x 2) different offences, comprising the following elements:

1.	Omit duty in whole

2.	Omit duty in part

3.	Omit obligation in whole

4.	Omit obligation in part

5.	Omit requirement in whole

6.	Omit requirement in part

7.	Fail to comply with duty in whole

8.	Fail to comply with duty in part

9.	Fail to comply with obligation in whole

10.	Fail to comply with obligation in part

11.	Fail to comply with requirement in whole

12.	Fail to comply with requirement in part

374.      Practical application of such broadly and alternatively defined elements is difficult. Consider for example the requirements of s 6 of the Act, which include:

•	all public money, held by or on behalf of any person or a public or statutory body or received or in the custody, care or control of any person or a public or statutory body, whether or not it has been banked, shall, at the close of the business day on which the public money was first held or received, be transferred or deposited, without deduction of any type, to the revenue bank accounts specified for that person or public or statutory body by the Departmental Head;

•	a person or public or statutory body shall not hold or receive into their custody, care or control, either directly or indirectly, any public money, other than in accordance with this Act;

•	a specification of bank accounts by the Departmental Head pursuant to Subsection (1) shall be by written notice;

•	on receipt of public money into a specified bank account pursuant to Subsection (1), the Departmental Head shall cause to be transferred back to a public or statutory body an amount equal to ten percent of the public money transferred by the public or statutory body to their operating bank account.

375.      On a literal interpretation of s 12(2) it becomes an offence, apparently, for any person (including the Departmental Head) to, amongst other things, “omit” any of those requirements “in part” or “in whole”. When it is considered that all offences under s 12(2) are perforce of s 12(1), of strict liability (in which case an offence can be committed inadvertently without proof of any knowledge of the requirements of the Act or any intention to avoid the requirements) the vagueness and unfairness of s 12(2) is heightened. 

376.      Section 12(2)is,in my view, cast in such vague and broad terms it fails to meet the requirements of s 37(2) of the Constitution. 

Answer to question 14

377.      No, the offence created by s 12(2) of the PMMR Act does not meet the requirements of s 37(2) of the Constitution. 

QUESTION 15: IF THE ANSWER TO THE ABOVE QUESTION IS “NO,” DOES THAT MEAN THAT SECTION 12(2) OF THE PMMR ACT IS INCONSISTENT WITH SECTION 37(2) AND THEREFORE UNCONSTITUTIONAL AND INVALID?

That is:Is s 12(2) of the Act unconstitutional and invalid?

378.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
15	Yes	Yes	Yes 	No	No	Yes 	

379.      The answer to this question is obvious, given my determination of question 14. Section 12(2) of the Act is inconsistent with s 37(2) of the Constitution and it becomes a simple matter of applying s 11(1) of the Constitution: s 12(2) is a legislative act which is inconsistent with the Constitution and is therefore invalid and ineffective. 

Answer to question 15

380.      Yes, s 12(2) of the PMMR Act is unconstitutional and invalid. 

QUESTION 16: IF SECTION 12(2) OF THE PMMR ACT IS UNCONSTITUTIONAL, DOES THAT MEAN THAT ALL OF SECTION 12 OF THE ACT IS UNCONSTITUTIONAL?

That is:Is the whole of s 12 unconstitutional and invalid?

381.     The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
16	Yes	Yes	Yes 	No	No	Yes 	

382.      I agree with the position of the referrer and the first, second, third, fourth and ninth interveners that the other parts of s 12 cannot operate without s 12(2). Subsection (2) creates the offence. Subsection (1) states “all offences” under the Act are of strict liability, but all offences are created by s 12(2); there are none created by any other provision, so subsection (1) is rendered useless. Subsection (3) contains sentencing guidelines. It is also rendered useless if there no offence of which any person can be convicted. Likewise with subsection (4): a penalty cannot be imposed without commission of an offence. 

Answer to question 16

383.      Yes, all of s 12 of the PMMR Act is unconstitutional. 

G – CONSTITUTION AS SUPREME LAW: QUESTION 17
QUESTION 17: WHETHER SECTION 5 OF THE PMMR ACT, ESPECIALLY SECTION 5(1) WHICH BY ITS TERMS, CONFERS ON THE PMMR ACT A CONSTITUTIONAL STATUS OUTSIDE OF THE REQUIREMENTS OF SECTIONS 12, 13 AND 14 OF THE CONSTITUTION, [IS] THEREFORE UNCONSTITUTIONAL AND INVALID?

That is:Does s 5 confer a status on the Act outside Constitution, ss 12, 13 and 14?

384.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
17	Yes	No	Yes	No	No	Yes 	

385.      This question addresses s 5 (interpretation of inconsistent legislation) of the Act, which provides that the Act overrides other laws except the Public Finances (Management) Act. Section 5 states:

(1)	This Act shall be interpreted as being subject only to the terms of the Public Finances (Management) Act 1995.

(2)	An Act, a regulation or other subordinate legislation that is inconsistent with the purposes of this Act shall be repealed accordingly.

(3)	This Act shall be interpreted to override and expressly or impliedly repeal, to the extent of inconsistency, any direction, appointment, notice or similar, including any agreement or undertaking, that is wholly or partly inconsistent with this Act, other than the Public Finances (Management) Act 1995.

(4)	This Act expressly renders wholly void and of no effect any agreement or undertaking in respect of the sharing of public money raised as revenue by a public or statutory body other than by an Appropriation Act, as and from the date of the agreement or undertaking, that is wholly or partly inconsistent with this Act, other than the Public Finances (Management) Act 1995.

(5)	No compensation, damages or any other relief, including injunctive or declaratory relief, may be awarded by any court or tribunal in respect of any agreement or undertaking rendered void by this section.

386.      The referrer and ninth intervener argue that the Parliament has, through s 5(1), attempted to make this Act override all other laws including the Constitutional Laws; and that the Act gives unto itself a constitutional status and amended the Constitutional Laws other than by the exclusive procedure prescribed by Subdivision II.2.B (constitutional alteration and organic laws) of the Constitution (Kaseng v Namaliu [1995] PNGLR 481). 

387.      I agree that some parts of s 5 are problematic. I have already given my opinion in question 9 that s 5(5), which has the effect of removing the power of courts to make orders at the discretion of the court, is invalid. However, I do not that that s 5(1) or any other parts of s 5 purport to override Constitutional Laws or attempt to elevate the Act to a constitutional status. If that were the intention, it has been poorly expressed. If it is an attempt, it is unsuccessful. Section 5(1) could have more clearly expressed, so as to state that it did not seek to override any Constitutional Laws. But that would have been stating the obvious. 

388.      Resolving the issue of interpretation raised by this question is a simple matter of applying s 10 (construction of written laws) of the Constitution, which states:

All written laws (other than this Constitution) shall be read and construed subject to—

(a)	in any case—this Constitution; and
(b)	in the case of Acts of the Parliament—any relevant Organic Laws; and
(c)	in the case of adopted laws or subordinate legislative enactments—the Organic Laws and the laws by or under which they were enacted or made,

and so as not to exceed the authority to make them properly given, to the intent that where any such law would, but for this section, have been in excess of the authority so given it shall nevertheless be a valid law to the extent to which it is not in excess of that authority.

389.      The Act is to be read and construed subject to the Constitution and the Organic Laws. It cannot be interpreted or applied any other way. 

Answer to question 17

390.      No, s 5(1) of the PMMR Act is not unconstitutional. 

H – FREEDOM OF EXPRESSION AND FREEDOM FROM ARBITRARY SEARCH AND ENTRY: QUESTIONS 18 TO 21

QUESTION 18: ARE SERVANTS OR AGENTS OF PUBLIC BODIES OR STATUTORY AUTHORITIES ENTITLED TO FREEDOM FROM ARBITRARY SEARCH AND ENTRY AND FREEDOM OF EXPRESSION GUARANTEED BY SECTIONS 44 AND 46 OF THE CONSTITUTION RESPECTIVELY, TO FULFIL THEIR STATUTORY OBJECTIVES AND FUNCTIONS?

That is:Do servants and agents of public and statutory bodies have rights under Constitution, ss 44 and 46?

391.     The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
18	Yes	Yes	Yes 	Yes	Yes	Yes 	

392.      This is a curious question. It is not a question of constitutional interpretation or application. It is hypothetical, posed in a factual vacuum, and unconnected to any provisions of the PMMR Act. I note that the fifth and seventh interveners, who oppose most propositions advanced by the referrer and other parties in other questions, are content to see it answered in the affirmative. That indicates the worth of the question. It is so vagueit has no utility. I invoke Order 4, Rule 18 of the Supreme Court Rules. I decline to answer it as it is hypothetical. 

Answer to question 18

393.      Decline to give opinion.

QUESTION 19: IF THE ANSWER TO THE ABOVE QUESTION IS “YES,” CAN THE SUPREME COURT CONSIDER THE QUESTION OF WHETHER THE PMMR ACT IS A LAW THAT IS REASONABLY JUSTIFIABLE IN A DEMOCRATIC SOCIETY HAVING PROPER REGARD FOR THE RIGHTS AND DIGNITY OF MANKIND AS DEFINED BY SECTIONS 38 AND 39 OF THE CONSTITUTION, NOTWITHSTANDING SECTION 1 OF THE PMMR ACT?

That is:Can the Court consider whether the Act is reasonably justifiable for purposes of Constitution, ss 38 and 39?

394.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
19	Yes	Yes 	Yes 	No	Yes	Yes 	

395.      Put in its simplest terms, this question asks: ‘Can the Supreme Court consider whether the PMMR Act is a law that is reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind?’ The referrer and most other parties argue that the answer is ‘Yes, the Court should determine that issue’; and then they want the Court to determine, in question 20, that the PMMR is not a law that is reasonably justifiable etc; and then they will argue, in question 21, that therefore the PMMR Act is unconstitutional.

396.      Underpinning those responses, as well as the drafting of each of questions 18-21 of the reference, are two misconceptions. First, that it is the role of the Supreme Court to hear argument and make a determination on the question of whether an Act of the Parliament is reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind, whenever it is asked to do so. Secondly, that the constitutional validity of an Act of the Parliament can be challenged on the ground, alone, that the Act is not reasonably justifiable in a democratic society etc.

397.      The proper view, explained by the Supreme Court in Premdas v The State [1979] PNGLR 329, is that the Court only has jurisdiction to determine the question of whether a law is reasonably justifiable in a democratic society etc, when the law regulates or restricts one of the qualified rights conferred by the Constitution that allows for regulation or restriction of such rights subject to compliance with s 38 of the Constitution, and when a challenge to the validity of the law is made on the ground that it fails to comply with s 38. 

398.      For the question of whether the PMMR Act is a law that is reasonably justifiable etc, to properly arise, it would need to be first determined that the Act does in fact regulate or restrict one or more of the qualified rights that requires compliance with s 38 of the Constitution. Two such rights have been referred to in question 18: the right to freedom from arbitrary search and entry under s 44 of the Constitution and the right to freedom of expression under s 46 of the Constitution. 

399.      Section 44 (freedom from arbitrary search and entry) states:

No person shall be subjected to the search of his person or property or to entry of his premises, except to the extent that the exercise of that right is regulated or restricted by a law—

(a)	that makes reasonable provision for a search or entry—

(i)	under an order made by a court; or
(ii)	under a warrant for a search issued by a court or judicial officer on reasonable grounds, supported by oath or affirmation, particularly describing the purpose of the search; or
(iii)	that authorizes a public officer or government agent of Papua New Guinea or an officer of a body corporate established by law for a public purpose to enter, where necessary, on the premises of a person in order to inspect those premises or anything in or on them in relation to any rate or tax or in order to carry out work connected with any property that is lawfully in or on those premises and belongs to the Government or any such body corporate; or
(iv)	that authorizes the inspection of goods, premises, vehicles, ships or aircraft to ensure compliance with lawful requirements as to the entry of persons or importation of goods into Papua New Guinea or departure of persons or exportation of goods from Papua New Guinea or as to standards of safe construction, public safety, public health, permitted use or similar matters, or to secure compliance with the terms of a licence to engage in manufacture or trade; or
(v)	for the purpose of inspecting or taking copies of documents relating to—

(A)	the conduct of a business, trade, profession or industry in accordance with a law regulating the conduct of that business, trade, profession or industry; or
(B)	the affairs of a company in accordance with a law relating to companies; or
(vi)	for the purpose of inspecting goods or inspecting or taking copies of documents, in connexion with the collection, or the enforcement of payment of taxes or under a law prohibiting or restricting the importation of goods into Papua New Guinea or the exportation of goods from Papua New Guinea; or

(b)	that complies with Section 38 (general qualifications on qualified rights). [Emphasis added.]

400.      Section 46 (freedom of expression) states:

(1)	Every person has the right to freedom of expression and publication, except to the extent that the exercise of that right is regulated or restricted by a law—

(a)	that imposes reasonable restrictions on public office-holders; or
(b)	that imposes restrictions on non-citizens; or
(c)	that complies with Section 38 (general qualifications on qualified rights). 

(2)	In Subsection (1), "freedom of expression and publication" includes—

(a)	freedom to hold opinions, to receive ideas and information and to communicate ideas and information, whether to the public generally or to a person or class of persons; and
(b)	freedom of the press and other mass communications media

(3)	Notwithstanding anything in this section, an Act of the Parliament may make reasonable provision for securing reasonable access to mass communications media for interested persons and associations—

(a)	for the communication of ideas and information; and
(b)	to allow rebuttal of false or misleading statements concerning their acts, ideas or beliefs,

and generally for enabling and encouraging freedom of expression. [Emphasis added.]

401.      If it were proven that the PMMR Act does in fact regulate or restrict the exercise of the right to freedom from arbitrary search and entry or the right to freedom of expression, then, but only then, could the question of whether the Act is reasonably justifiable in a democratic society etc, arise. It could arise under s 44(b) and under s 46(1)(c) of the Constitution as both of those provisions say that a law regulating or restricting the rights that those provisions confer can be regulated or restricted by a law “that complies with Section 38”.

402.      A law, such as the PMMR Act, will comply with s 38 if it is amongst other things a law that is reasonably justifiable in a democratic society etc. That is the combined effect of ss 38 and 39 of the Constitution. 

403.      Section 38 (general qualifications on qualified rights) states:

(1)	For the purposes of this Subdivision, a law that complies with the requirements of this section is a law that is made and certified in accordance with Subsection (2), and that—

(a)	regulates or restricts the exercise of a right or freedom referred to in this Subdivision to the extent that the regulation or restriction is necessary—

(i)	taking account of the National Goals and Directive Principles and the Basic Social Obligations, for the purpose of giving effect to the public interest in—

(A)	defence; or
(B)	public safety; or
(C)	public order; or
(D)	public welfare; or
(E)	public health (including animal and plant health); or
(F)	the protection of children and persons under disability (whether legal or practical); or
(G)	the development of under-privileged or less advanced groups or areas; or

(ii)	in order to protect the exercise of the rights and freedoms of others; or

(b)	makes reasonable provision for cases where the exercise of one such right may conflict with the exercise of another,

to the extent that the law is reasonably justifiable in a democratic society having a proper respect for the rights and dignity of mankind.

(2)	For the purposes of Subsection (1), a law must—

(a)	be expressed to be a law that is made for that purpose; and
(b)	specify the right or freedom that it regulates or restricts; and
(c)	be made, and certified by the Speaker in his certificate under Section 110 (certification as to making of laws) to have been made, by an absolute majority.

(3)	The burden of showing that a law is a law that complies with the requirements of Subsection (1) is on the party relying on its validity.

404.      Section 39 (“reasonably justifiable in a democratic society” etc) states:

(1)	The question, whether a law or act is reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind, is to be determined in the light of the circumstances obtaining at the time when the decision on the question is made.

(2)	A law shall not be declared not to be reasonably justifiable in a society having a proper regard for the rights and dignity of mankind except by the Supreme Court or the National Court, or any other court prescribed for the purpose by or under an Act of the Parliament, and unless the court is satisfied that the law was never so justifiable such a declaration operates as a repeal of the law as at the date of the declaration.

(3)	For the purposes of determining whether or not any law, matter or thing is reasonably justified in a democratic society that has a proper regard for the rights and dignity of mankind, a court may have regard to—

(a)	the provisions of this Constitution generally, and especially the National Goals and Directive Principles and the Basic Social Obligations; and
(b)	the Charter of the United Nations; and
(c)	the Universal Declaration of Human Rights and any other declaration, recommendation or decision of the General Assembly of the United Nations concerning human rights and fundamental freedoms; and
(d)	the European Convention for the Protection of Human Rights and Fundamental Freedoms and the Protocols thereto, and any other international conventions, agreements or declarations concerning human rights and fundamental freedoms; and
(e)	judgements, reports and opinions of the International Court of Justice, the European Commission of Human Rights, the European Court of Human Rights and other international courts and tribunals dealing with human rights and fundamental freedoms; and
(f)	previous laws, practices and judicial decisions and opinions in the country; and
(g)	laws, practices and judicial decisions and opinions in other countries; and
(h)	the Final Report of the pre-Independence Constitutional Planning Committee dated 13 August 1974 and presented to the pre-Independence House of Assembly on 16 August 1974, as affected by decisions of that House on the report and by decisions of the Constituent Assembly on the draft of this Constitution; and
(i)	declarations by the International Commission of Jurists and other similar organizations; and
(j)	any other material that the court considers relevant.

405.      There are a number of cases in which the issue has arisen, in the context of a question whether a law is constitutionally valid, whether the law is reasonably justifiable in a democratic society etc. See in particular:

•	SC Ref No 2 of 1982, Re Organic Law on National Elections (Amendment) Act [1982] PNGLR 214; 
•	SC Ref No 1 of 1986, Re Vagrancy Act[1988] PNGLR 1; 
•	The State v NTN Pty Ltd [1992] PNGLR 1; 
•	SC Ref No 4 of 2001, Re NCDC Amendment Acts (2001) SC678; 
•	SC Ref No 1 of 2010, Re Organic Law on Integrity of Political Parties & Candidates [2010] 2 PNGLR 319; 
•	SC Ref No 1 of 2012, Re Prime Minister and NEC Act [2012] 1 PNGLR 74; 
•	Namah v Pato (2016) SC1497.

406.      However, I reiterate, that issue will only arise if and when there is a real question of whether the law complies with the requirements of s 38. And the question of compliance with s 38 will only arise if the law actually purports to regulate or restrict one of the Basic Rights that cross-refer to s 38 of the Constitution.

407.      A law will comply with s 38 when three requirements are met:

(1)	The law is made and certified in accordance with s 38(2), these being the manner and form requirements: the law must (a) be expressed to be a law that is made for that purpose; (b) specify the right or freedom that it regulates or restricts; and (c) be made, and certified by the Speaker in his certificate under Section 110 (certification as to making of laws) to have been made, by an absolute majority.

(2)	The law: 

(a)	regulates or restricts the exercise of the right or freedom identified only to the extent necessary (i) for the purpose of giving effect to the public interest in various alternative matters or (ii) in order to protect the exercise of the rights and freedoms of others; or 

(b)	makes reasonable provision for cases where the exercise of one such right may conflict with the exercise of another; and 

(3)	The law is reasonably justifiable in a democratic society having a proper respect for the rights and dignity of mankind.

408.      The question that should have been raised in this reference, before asking the Court to determine whether the PMMR Act is reasonably justifiable in a democratic society etc, is whether the Act regulates or restricts the right to freedom from arbitrary search and entry under s 44 of the Constitution or the right to freedom of expression under s 46 of the Constitution. The referrer should have argued the affirmative proposition, pointing the Court to the provisions that regulate or restrict those rights and freedoms. Then, on the presumption that the affirmative proposition was upheld, it could have asked whether the Act is a law that complies with s 38 of the Constitution, which would then raise the question of whether the law is reasonably justifiable in a democratic society etc.

409.      I have, despite the Court not being asked to do so, given consideration to the question whether the PMMR Act regulates or restricts s 44 or s 46 rights. Section 1 (compliance with constitutional requirements) of the Act suggests that it might. It states:

(1)	This Act, to the extent that it regulates or restricts the exercise of a right or freedom referred to in Subdivision III.3.C. (qualified rights) of the Constitution, namely —

(a)	the right to liberty conferred by Section 42; and   
(b)	the right to freedom from arbitrary search and entry conferred by Section 44; and
(c)	the right to freedom of expression and publication conferred by Section 46; and
(d)	the right to peacefully assemble and associate and to form or belong to, or not to belong to, political parties, industrial organisations or other associations conferred by Section 47; and
(e)	the right to freedom of choice of employment in any calling for which a person has the qualifications (if any) lawfully required conferred by Section 48; and
(f)	the right to reasonable privacy conferred by Section 49; and
(g)	the right of reasonable access to official documents conferred by Section 51; and
(h)	the right of freedom of movement conferred by Section 52,

is a law that is made under Section 38 of the Constitution, taking account of the National Goals and Directive Principles and the Basic Social Obligations, for the purpose of giving effect to the public interest in public order and public welfare.

(2)	For the purposes of Section 53(2) of the Constitution, this Act is expressed to be made in the national interest.

(3)	For the purposes of Section 41 of the Organic Law on Provincial Governments and Local-level Governments, it is declared that this Act relates to a matter of national interest.

410.      The fact that the Act asserts that it is a law that complies with s 38 of the Constitution does not mean it had to comply with s 38. It only need comply with s 38 if it actually regulates or restricts any of the qualified rights such as freedom from arbitrary search and entry and freedom of expression. Section 1 does not assist in determining whether the PMMR Act regulates or restricts the rights to freedom from arbitrary search and entry and freedom of expression. None of the parties has referred the Court to any specific provision. I cannot find any. It seems that there are none. 

411.      I am not satisfied that it was necessary, by reason of its regulation or restriction of the rights to freedom from arbitrary search and entry or freedom of expression, for the PMMR Act to comply with s 38 of the Constitution. It is therefore neither necessary nor appropriate for the Court to consider whether the Act is a law that is reasonably justifiable in a democratic society etc. 

Answer to question 19

412.      No, the Court cannot consider the question whether the PMMR Act is a law that is reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind. 

QUESTION 20: IF THE ANSWER TO THE ABOVE QUESTION IS “YES,” IS THE PMMR ACT A LAW THAT IS REASONABLY JUSTIFIABLE IN A DEMOCRATIC SOCIETY HAVING PROPER REGARD FOR THE RIGHTS AND DIGNITY OF MANKIND AS DEFINED BY SECTIONS 38 AND 39 OF THE CONSTITUTION IN SO FAR AS IT RESTRICTS THE FREEDOM OF EXPRESSION AND PUBLICATION AND FREEDOM FROM ARBITRARY SEARCH AND ENTRY GUARANTEED BY SECTIONS 46 AND 44 OF THE CONSTITUTION RESPECTIVELY?

That is:Is the Act a law reasonably justifiable for purposes of Constitution, ss 38 and 39?

413.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
Intervener	9th intervener	
20	No	No	No	Yes	Yes	No	

414.      This question is based on the presumption that question 19 is answered in the affirmative, but it has been answered in the negative. I invoke Order 4, Rule 18 of the Supreme Court Rules. I decline to answer question 20 as it is hypothetical. 

Answer to question 20

415.      Decline to give opinion.

QUESTION 21: IF THE ANSWER TO THE ABOVE QUESTION IS “NO,” IS THE PMMR ACT UNCONSTITUTIONAL AND INVALID IN ITS ENTIRETY?

That is:Is the Act unconstitutional for not complying withConstitution, ss 38 and 39?

The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
Intervener	9th intervener	
21	Yes	Yes	Yes 	No	No	Yes 	

416.      This question is based on the presumption that question 20 is answered in the negative, I we have declined to answer it. I invoke Order 4, Rule 18 of the Supreme Court Rules. I decline to answer question 21 as it is hypothetical. 

Answer to question 21

417.      Decline to give opinion.

I – INDEPENDENCE OF THE JUDICIARY: QUESTION 22

QUESTION 22: NOTING THAT SECTION 4(2) OF THE PMMR ACT PURPORTS TO BIND CONSTITUTIONAL INSTITUTIONS AND DEEMS THEM TO BE STATUTORY BODIES FOR THE PURPOSES OF THAT ACT,

AND BEARING IN MIND THE SEPARATE POWERS AND FUNCTIONS OF THE THREE ARMS OF GOVERNMENT (SECTION 99 OF THE CONSTITUTION), THAT THE SUPREME AND NATIONAL COURTS COMPRISE THE NATIONAL JUDICIAL SYSTEM (SECTION 155) AND ARE CONSTITUTIONAL INSTITUTIONS WITHIN SECTION 225 OF THE CONSTITUTION, AND THAT FOR THE PURPOSES OF SECTION 209(2A)(b) OF THE CONSTITUTION THE “SERVICES OF THE JUDICIARY” INCLUDES THE NATIONAL JUDICIAL STAFF SERVICE AND PERSONS APPOINTED UNDER THE SUPREME COURT ACT, NATIONAL COURT ACT AND THE SHERIFF ACT,

ARE SECTIONS 6, 7, 8, 9, 10, 11, 12, 13 AND 14 OF THE PMMR ACT, IN SO FAR AS THEY APPLY TO THE NATIONAL JUDICIAL STAFF SERVICE, THE OFFICE OF THE REGISTRAR OF THE NATIONAL COURT AND SUPREME COURT AND THE SHERIFF, INCONSISTENT WITH SECTIONS 99 AND 157 OF THE CONSTITUTION AND THEREFORE UNCONSTITUTIONAL AND INVALID?    

That is:Is the Act, by its application to the judiciary, offensive to the constitutional independence of the judiciary?

418.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
Intervener	9th intervener	
22	Yes	Yes	Yes 	No	No	Yes 	

419.      The referrer and the first, second, third, fourth and ninth interveners argue that the key provisions of the PMMR Act will apply to the Registrar of the Supreme Court, the Registrar of the National Court, the Sheriff of Papua New Guinea and the whole of the National Judicial Staff Service, ie the administrative apparatus of the Supreme Court and the National Court, and the application of the Act to the judiciary will undermine its independence, contrary to the principle of judicial independence entrenched in the Constitution by s 99 and s 157 and other provisions. 

420.      The referrer has thus advanced three propositions. First, that the Act will apply to the Judiciary. Secondly, that there is a principle of judicial independence in the Constitution. Thirdly that application of the Act to the Judiciary will undermine judicial independence. Each proposition must be tested. 

1	The Act will apply to the Judiciary

421.      The offices of the Registrar of the Supreme Court, the Registrar of the National Court, the Sheriff of Papua New Guinea and the whole of the National Judicial Staff Service all fall within the definition of “statutory body” in s 1 of the Act. Any doubt about the intention being to bring the Judiciary and its administrative apparatus within the scope of the Act is removed by s 4(2): constitutional institutions shall be deemed to be statutory bodies for the purposes of the Act.

2	The principle of judicial independence.

422.      It is entrenched in the Constitution in four different ways:

(a)	Establishment as a principal arm of government

423.      Under s 99 (structure of government) of the Constitution the National Judicial System, consisting of the Supreme Court, the National Court and other courts established under s 172 (establishment of other courts) of the Constitution, is one of the three principal arms of the National Government, the other two being the National Parliament and the National Executive. Section 99(3) provides that, in principle, the respective powers and functions of the three arms shall be kept separate from each other. 

(b)	Freedom from direction and control

424.      The independence of the judiciary is expressly guaranteed by s 157 of the Constitution, which provides that except to the extent that the Constitution provides otherwise, no person or authority (other than the Parliament through legislation) has any power to give directions in respect of the exercise of judicial powers and functions to any court or member of any court within the National Judicial System. 

425.      The freedom from direction and control conferred on the judiciary is qualified by Schedule 1.19 (independence) of the Constitution, which provides:

Where a Constitutional Law provides that a person or institution is not subject to control or direction, or otherwise refers to the independence of a person or institution, that provision does not affect—

(a)	control or direction by a court; or
(b)	the regulation, by or under a Constitutional Law or an Act of the Parliament, of the exercise or performance of the powers, functions, duties or responsibilities of the person or institution; or
(c)	the exercise of jurisdiction under Division III.2 (leadership code), Subdivision VIII.1.B (the Auditor-General), or Subdivision VIII.1.C (the Public Accounts Committee),

and does not constitute an appropriation of, or authority to expend, funds.

(c)	Special budgetary treatment 

426.      Subdivision VIII.1.A (the Parliament and finance) of the Constitution requires that the Judiciary, like the Parliament, be given special treatment in the National Budget. This is achieved in three ways. 

427.      First, the Chief Justice shall, before 30 September each year, submit to the Prime Minister estimates of expenditure for the services of the Judiciary in the following fiscal year (s 209(2B)). 

428.      Secondly, after the Head of State, acting with and in accordance with the advice of the National Executive Council, recommends to the Parliament an appropriation for the Judiciary, the Parliament is empowered (unlike in the case of estimates of expenditure for the Executive, and only as it can do for its own estimates), if of the opinion that the proposed expenditure for the services of the Judiciary is below the estimate submitted by the Chief Justice and insufficient to meet the requirements of the Judiciary, increase the expenditure to an amount not exceeding the original estimates submitted by the Chief Justice (s 210(3)).

429.      Thirdly, the Parliament is obliged in each year’s National Budget to make an appropriation specifically in respect of the services of the Judiciary, separately and apart from other appropriations for the Parliament and for the Executive (s 209(2)(b)). 

(d)	Security of tenure and guarantee of resources

430.      Under Part IX (constitutional office-holders and constitutional institutions) of the Constitution, the Chief Justice and Deputy Chief Justice and all other Judges are constitutional office-holders and have security of tenure and guaranteed emoluments, including retirement benefits (Application by Geno (2016) SC1581). Section 223 (general provision for constitutional office-holders) provides:

(1)	Subject to this Constitution, Organic Laws shall make provision for and in respect of the qualifications, appointment and terms and conditions of employment of constitutional office-holders.

(2)	In particular, Organic Laws shall make provision guaranteeing the rights and independence of constitutional office-holders by, amongst other things—

(a)	specifying the grounds on which, and the procedures by which, they may be dismissed or removed from office, but only by, or in accordance with the recommendation of, an independent and impartial tribunal; and
(b)	providing that at the end of their periods of office they are entitled, unless they have been dismissed from office, to suitable further employment by a governmental body, or to adequate and suitable pensions or other retirement benefits, or both, subject to such reasonable requirements and conditions (if any) as are laid down by an Organic Law.

(3)	A constitutional office-holder may not be suspended, dismissed or removed from office during his term of office except in accordance with a Constitutional Law.

(4)	The total emoluments of a constitutional office-holder shall not be reduced while he is in office, except—

(a)	as part of a general reduction applicable equally or proportionately to all constitutional office-holders or, if he is a member of a State Service, to members of that service; or
(b)	as a result of taxation that does not discriminate against him as a constitutional office-holder, or against constitutional office-holders generally.

(5)	The office of a constitutional office-holder may not be abolished while there is a substantive holder of the office but this subsection does not apply to the abolition of any additional constitutional office created by an Act of the Parliament.

(6)	Nothing in this section prevents the making by or under an Organic Law or an Act of the Parliament of reasonable provision for the appointment of a person to act temporarily in the office of a constitutional office-holder.

431.      The independence of the Judiciary is enhanced further by the duty imposed on the National Government by s 225 (provision of facilities etc) of the Constitution to provide the Judiciary and all Judges with adequate staff and facilities (PNG Power Ltd v Augerea [2013] 1 PNGLR 280,Re National Court Circuit, Southern Highlands Province [1988-89] PNGLR 435). Section 225 states:

Without limiting the generality of any other provision of this Constitution, it is the duty of the National Government and of all other governmental bodies, and of all public office-holders and institutions, to ensure, as far as is within their respective legal powers, that all arrangements are made, staff and facilities provided and steps taken to enable and facilitate, as far as may reasonably be, the proper and convenient performance of the functions of all constitutional institutions and of the offices of all constitutional office-holders.

3 Will applying the Act to the Judiciary undermine judicial independence? 

432.      The independence of the Judiciary is an integral component of the constitutional framework of Papua New Guinea. Judicial independence is pivotal to the exercise of the judicial authority of the People under s 158 (exercise of the judicial power) of the Constitution, which states:

(1)	Subject to this Constitution, the judicial authority of the People is vested in the National Judicial System.

(2)	In interpreting the law the courts shall give paramount consideration to the dispensation of justice.

433.      The principle of judicial independence incorporates both decisional independence for individual judicial officers and institutional independence. To be genuinely independent an institution such as the Judiciary needs operational and financial independence. Can this occur if the PMMR applies to the Judiciary?

434.      The three central provisions of the Act allow considerable day-to-day control to be exercised over the finances of bodies subject to the Act.

435.     Section 6 would require the Registrar of the Supreme Court, the Registrar of the National Court, the Sheriff and the Secretary of the National Judicial Staff Service at the close of every business day to transfer all public money held by the Judiciary, to its nominated revenue account, specified by the Secretary for Finance. 

436.      Section 7 would require the Judiciary to have only two types of bank accounts: a single operating bank account and trust accounts compliant with the Act. Any unauthorised money in those accounts would be liable to be transferred by the Secretary for Finance to the Judiciary’s revenue bank account (which is opened and operated by the Secretary for Finance) or to the Consolidated Revenue Fund, exercising powers under ss 7(4) or 13(1). The Judiciary would have no control over its own revenue account. Its single operating bank account and every trust account (holding millions of Kina of costs and other money paid into court under orders of the Supreme Court and the National Court) would be subject to ultimate supervision and control by the Secretary for Finance under s 7(7). 

437.      Under s 8 the Strategic Budget Committee, consisting of the Treasury Secretary, who is Chairman, and the Secretary for Finance and other appointed Departmental Heads, would make determinations from time to time as to amounts of public money to be transferred back to Judiciary from its specified revenue account, to meet what the Committee regards as its reasonable operating budget requirements. 

438.      The nature and extent of operational and financial control that could be exercised over the Judiciary is, in my view, inconsistent with the principle of judicial independence (Re Criminal Circuits in Eastern Highlands and Simbu Provinces [1990] PNGLR 82). The Judiciary would lose its status as one of the three principal arms of government. The doctrine of separation of powers, entrenched by s 99 of the Constitution, would be imperilled. 

439.      The PMMR Act would pose an intolerable and unacceptable threat to judicial independence. It would disturb irretrievably the state of dynamic equilibrium that the Constitution demands be maintained between the three principal arms of government (SC Ref No 1A of 1981, Re Motor Traffic Act [1982] PNGLR 122, SC Ref No 3 of 1993, Re Internal Security Act [1994] PNGLR 341). 

Answer to question 22

440.      Yes, the provisions of the PMMR Act, to the extent that they apply to the National Judicial Staff Service, the Registrar of the Supreme Court, the Registrar of the National Court and the Sheriff, are inconsistent with ss 99 and 157 of the Constitution, and therefore unconstitutional and invalid. 

J – RIGHT TO PRIVACY: QUESTIONS 23, 24 AND 25
QUESTION 23: ARE PUBLIC BODIES, STATUTORY AUTHORITIES AND THEIR SERVANTS AND OR AGENTS AND THE INFORMATION AND ACCOUNTS THEY MAINTAIN ON BEHALF OF THIRD PARTIES, ENTITLED TO THE RIGHT OF PRIVACY GUARANTEED BY SECTION 49 OF THE CONSTITUTION, TO FULFIL THEIR STATUTORY OBJECTIVES AND FUNCTIONS? 

That is: Do public and statutory bodies and their servants and agents have the right to privacy under Constitution, s 49?  

441.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
23	Yes	Yes	Yes 	No	No	Yes 	

442.      The form and content of this question are similar to question 18 and must suffer the same fate. The question is hypothetical, posed in a factual vacuum and unconnected to any provisions of the PMMR Act. I invoke Order 4, Rule 18 of the Supreme Court Rules. The question is hypothetical. 

Answer to question 23

443.      Decline to give opinion.

QUESTION 24: IF THE ANSWER TO THE ABOVE QUESTION IS “YES,” CAN THE SUPREME COURT CONSIDER THE QUESTION OF WHETHER THE PMMR ACT IS A LAW THAT IS REASONABLY JUSTIFIABLE IN A DEMOCRATIC SOCIETY HAVING PROPER REGARD FOR THE RIGHTS AND DIGNITY OF MANKIND AS DEFINED BY SECTIONS 38 AND 39 OF THE CONSTITUTION, NOTWITHSTANDING SECTION 1 OF THE PMMR ACT? 

That is: Can the Court consider whether the Act is reasonably justifiable for purposes of Constitution, ss 38 and 39?

444.      The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
Intervener	9th intervener	
24	Yes	Yes	Yes 	Yes	No	Yes 	

445.      I answer this question in the negative for the same reasons for answering no to question 19. It has not been established that the PMMR Act needed to comply with s 38 of the Constitution; and it is only when there is a need to comply with s 38 that the question will arise whether the Act is a law that is reasonably justifiable in a democratic society etc.  

Answer to question 24

446.      No, the Court cannot consider the question whether the PMMR Act is a law that is reasonably justifiable in a democratic society having a proper regard for the rights and dignity of mankind. 

QUESTION 25: IF THE ANSWER TO THE ABOVE QUESTION IS “YES,” IS THE PMMR ACT, ESPECIALLY IN SECTIONS 6, 7 AND 8, A LAW THAT IS REASONABLY JUSTIFIABLE IN A DEMOCRATIC SOCIETY HAVING PROPER REGARD FOR THE RIGHTS AND DIGNITY OF MANKIND AS DEFINED BY SECTIONS 38 AND 39 OF THE CONSTITUTION, IN SO FAR AS IT RESTRICTS THE RIGHT TO PRIVACY GUARANTEED BY SECTION 49 OF THE CONSTITUTION? 

That is: Is the Act, particularly ss 6, 7 and 8, a law reasonably justifiable for purposes of Constitution, ss 38 and 39?

447.     The positions of the parties are:

Q
	Referrer	1st
intervener 	2nd, 3rd& 4th interveners 	5th intervener 	7th
intervener	9th intervener	
25	No	No	No	Yes	Yes	No	

448.      This question is based on the presumption that question 24 is answered in the negative, but I have declined to answer it. I invoke Order 4, Rule 18 of the Supreme Court Rules. The question is hypothetical. 

Answer to question 25

449.      Decline to give opinion.

CONCLUSION

450.      In my opinion the Public Money Management Regularisation Act 2017 is unconstitutional and invalid and ineffective in its entirety due to the failure to comply with ss 53(1) and (2) of the Constitution (see question 4). 

451.      If I did not think that the entire Act is unconstitutional, I would declare that certain provisions of the Act are in themselves invalid and ineffective, viz:

•	Sections 5(5), 9(1), 9(5) and 11, for their inconsistency with ss 37(11), 155 and 166 of the Constitution (see questions 7, 8 and 9) and further, in the case of s 11, for not complying with ss 53(1) and (2) of the Constitution (see question 4C); and 

•	Section 12, for not complying with s 37(2) of the Constitution.

452.      Furthermore, if the entire Act were not unconstitutional, I would declare that the Act has no application to the Judiciary, as key parts of it are offensive to the constitutional principle of judicial independence (see question 22). 

I answer the questions as follows:

No 	Question	Answer	
1	Do public and statutory bodies have an interest in property for purposes of Constitution, s 53? 	Yes	
2	Does the Act provide for compulsory acquisition of property of public and statutory bodies?	Yes	
3	Does the Act comply with Constitution, ss 53(1) and (2)?	No
	
4	Is the Act invalid in its entirety for failing to comply with Constitution, ss 53(1) and (2)?	Yes	
4A	Do persons with a claim for payment against a statutory body etc have an “interest in property”?	Yes	
4B	Does s 11 of the Act provide for compulsory acquisition of property? 	Yes
	
4C	Does s 11 of the Act comply with Constitution, ss 53(1) and (2)?  	No	
5	Does s 4 of the Act purport to bind constitutional institutions, thereby altering the Constitutional Laws? 	No	
6	Is s 4 of the Act unconstitutional?
	No	
7	Do ss 5(5), 9, 10 or 11 of the Act restrict exercise of judicial power contrary to Constitution, s 155?	Yes	
8	Are ss 5(5), 9, 10 or 11 of the Act inconsistent with Constitution, s 157? 	Yes	
9	Are ss 5(5), 9, 10 or 11 of the Act inconsistent with Constitution, ss 37(11) and 166(1), and unconstitutional? 	Yes	
10	Are ss 6, 7 and 8 of the Act inconsistent with Constitution, ss 209, 210 and 211? 	No	
11	Is s 8 (strategic budget committee) of the Act, inconsistent with Constitution, ss 209, 210 and 211?	No	
12	Do the answers to Qs 10 and 11 render the entire Act unconstitutional? 	DTGO	
13	Are penalties allowed by s 12(4) of the Act so harsh and oppressive they are proscribed by Constitution, s 41? 	No 	
14	Does the offence provision, s 12(2) of the Act, meet the requirements of Constitution, s 37(2)? 	No
	
15	Is s 12(2) of the Act unconstitutional and invalid?
	Yes	
16	Is the whole of s 12 unconstitutional and invalid?
	Yes	
17	Does s 5 confer a status on the Act outside Constitution, ss 12, 13 and 14?	No	
18	Do servants and agents of public and statutory bodies have rights under Constitution, ss 46 and 44?  	DTGO
	
19	Can the Court consider whether the Act is reasonably justifiable for purposes of Constitution, ss 38 and 39?	No
	
20	Is the Act a law reasonably justifiable for purposes of Constitution, ss 38 and 39?	DTGO
	
21	Is the Act unconstitutional for not complying with Constitution, ss 38 and 39? 	DTGO
	
22	Is the Act, by its application to the judiciary, offensive to the constitutional independence of the judiciary?	Yes
	
23	Do public and statutory bodies and their servants and agents have the right to privacy under Constitution, s 49?  	DTGO
	
24	Can the Court consider whether the Act is reasonably justifiable for purposes of Constitution, ss 38 and 39?	No
	
25	Is the Act, particularly ss 6, 7 and 8, a law reasonably justifiable for purposes of Constitution, ss 38 and 39?	DTGO
	
DTGO: decline to give opinion. 

453.      YAGI J: This is a reference pursuant to Constitution, s 19(1) by the Ombudsman Commission of Papua New Guinea (the referrer) seeking the opinion of the Court as regards a number of important constitutional questions. The questions relate to the constitutional validity of a recently enacted legislation called Public Money Management Regularisation Act 2017 (the Act). 

454.      I do not propose to restate the questions suffice to say these are adequately canvassed in the judgments before me.

455.      I had the privilege of reading the judgments in draft by Chief Justice Salika, Deputy Chief Justice Kandakasi, Justice Gavara-Nanu and Justice Cannings. I agree with their Honours’ reasons for conclusion. Deputy Chief Justice Kandakasi, Justice Gavara-Nanu and Justice Cannings have discussed in detail the central or fundamental question in this reference; that is, whether the Act is constitutionally valid. Their Honours have ably discussed the issues with references to the law extensively. I am in debt to their Honours in that regard. 

456.      In my humble opinion, the fundamental issue at the heart of this reference is question number 4. I say this because if the answer to the question is answered in the manner framed, the effect and consequence is that the whole Act is deemed constitutionally invalid and unenforceable, and in which case, all other questions requiring answers are rendered redundant. In my view, any attempt to answer these questions would be purely academic and hence unnecessary. It is thus my opinion that the thrust or the essence of the Act sits on the pillars of ss 6, 7, 13 and 14 of the Act. These provisions are, without doubt, inconsistent with s 53 of the Constitution as discussed by my learned brothers. 

457.      I concur with the reasons and the answer given by my learned brothers in particular Deputy Chief Justice Kandakasi, Justice Gavara-Nanu and Justice Cannings in their respective opinions regarding question 4. At the risk of being repetitious I see no utility in adding any further to what they have already expressed. I would answer the question in the same manner as their Honours have stated. For clarity only, I reiterate my opinion that the Act is unconstitutional in its entirety and therefore invalid and unenforceable.I would decline to answer all other questions for the reasons given.

458.       BY THE COURT: We summarise the answers to the questions and determine the proceedings by making the following order of the Supreme Court.

459.      The questions referred to the Supreme Court are answered as follows:

No 	Question	Salika 
CJ	Kandakasi
DCJ	Gavara-Nanu J	Cannings 
J	Yagi 
J	Majority opinion	
1	Do public and statutory bodies have an interest in property for purposes of Constitution, s 53? 	Yes	Yes	Yes	Yes	DTGO
	Yes	
2	Does the Act provide for compulsory acquisition of property of public and statutory bodies?	Yes	Yes	Yes	Yes	DTGO 	Yes	
3	Does the Act comply with Constitution, ss 53(1) and (2)?	No
	No
	No	No
	DTGO
	No	
4	Is the Act invalid in its entirety for failing to comply with Constitution, ss 53(1) and (2)?	Yes	Yes	Yes	Yes	Yes	Yes	
4A	Do persons with a claim for payment against a statutory body etc have an “interest in property”?	Yes	Yes	DTGO
	Yes	DTGO
	Yes	
4B	Does s 11 of the Act provide for compulsory acquisition of property? 	Yes
	Yes
	DTGO 	Yes
	DTGO 	Yes	
4C	Does s 11 of the Act comply with Constitution, ss 53(1) and (2)?  	No	No	DTGO
	No	DTGO
	No	
5	Does s 4 of the Act purport to bind constitutional institutions, thereby altering the Constitutional Laws? 	No	Yes	DTGO
	No	DTGO
	No	
6	Is s 4 of the Act unconstitutional?
	No	Yes	DTGO 	No	DTGO 	No	
7	Do ss 5(5), 9, 10 or 11 of the Act restrict exercise of judicial power contrary to Constitution, s 155?	Yes	Yes	DTGO
	Yes	DTGO
	Yes	
8	Are ss 5(5), 9, 10 or 11 of the Act inconsistent with Constitution, s 157? 	Yes	Yes	DTGO
	Yes	DTGO
	Yes	
9	Are ss 5(5), 9, 10 or 11 of the Act inconsistent with Constitution, ss 37(11) and 166(1), and unconstitutional? 	Yes	Yes	DTGO 	Yes	DTGO 	Yes	
10	Are ss 6, 7 and 8 of the Act inconsistent with Constitution, ss 209, 210 and 211? 	No	No	DTGO
	No	DTGO
	No	
11	Is s 8 (strategic budget committee) of the Act, inconsistent with Constitution, ss 209, 210 and 211?	No	No	DTGO
	No	DTGO
	No	
12	Do the answers to Qs 10 and 11 render the entire Act unconstitutional? 	DTGO	DTGO	DTGO 	DTGO	DTGO 	DTGO	
13	Are penalties allowed by s 12(4) of the Act so harsh and oppressive they are proscribed by Constitution, s 41? 	No 	No 	DTGO
	No 	DTGO
	No	
14	Does the offence provision, s 12(2) of the Act, meet the requirements of Constitution, s 37(2)? 	No
	No
	DTGO
	No
	DTGO
	No	
15	Is s 12(2) of the Act unconstitutional and invalid?
	Yes	Yes	DTGO 	Yes	DTGO 	Yes	
16	Is the whole of s 12 unconstitutional and invalid?
	Yes	Yes	DTGO
	Yes	DTGO
	Yes	
17	Does s 5 confer a status on the Act outside Constitution, ss 12, 13 and 14?	No	No	DTGO
	No	DTGO
	No	
18	Do servants and agents of public and statutory bodies have rights under Constitution, ss 46 and 44?  	DTGO
	DTGO
	DTGO 	DTGO
	DTGO 	DTGO	
19	Can the Court consider whether the Act is reasonably justifiable for purposes of Constitution, ss 38 and 39?	No
	DTGO 	DTGO
	No
	DTGO
	DTGO	
20	Is the Act a law reasonably justifiable for purposes of Constitution, ss 38 and 39?	DTGO
	DTGO
	DTGO
	DTGO
	DTGO
	DTGO	
21	Is the Act unconstitutional for not complying with Constitution, ss 38 and 39? 	DTGO
	DTGO
	DTGO 	DTGO
	DTGO 	DTGO	
22	Is the Act, by its application to the judiciary, offensive to the constitutional independence of the judiciary?	Yes
	Yes
	DTGO
	Yes
	DTGO
	Yes	
23	Do public and statutory bodies and their servants and agents have the right to privacy under Constitution, s 49?  	DTGO
	DTGO
	DTGO
	DTGO
	DTGO
	DTGO	
24	Can the Court consider whether the Act is reasonably justifiable for purposes of Constitution, ss 38 and 39?	No
	DTGO 	DTGO 	No
	DTGO 	DTGO	
25	Is the Act, particularly ss 6, 7 and 8, a law reasonably justifiable for purposes of Constitution, ss 38 and 39?	DTGO
	DTGO
	DTGO
	DTGO
	DTGO
	DTGO	
DTGO: decline to give opinion. 

1.	It is declared that the Public Money Management Regularisation Act 2017 is unconstitutional, invalid and ineffective in its entirety. 

2.	The parties shall bear their own costs of the proceedings.  
____________________________________________________________
Counsel to the Commission:  Lawyer for the Referrer		
Public Solicitor:  Lawyer for the First Intervener	
Ashurst Lawyers:  Lawyers for the Second, Third & Fourth Interveners
Mawa Lawyers:  Lawyers for the Fifth Intervener		
Hardy & Stocks Lawyers:  Lawyers for the Sixth Intervener		
Twivey Lawyers:  Lawyers for the Seventh Intervener	
Leo Lawyers:  Lawyers for Eight Intervener			
Jema Lawyers:  Lawyers for Ninth Intervener		

APPENDIX

PUBLIC MONEY MANAGEMENT REGULARISATION ACT
NO 17 OF 2017

Being an Act to regularise the handling and management of public money received by public and statutory bodies and for related purposes,

MADE by the National Parliament.

PART I. — PRELIMINARY

1.	Compliance with Constitutional requirements

(1)	This Act, to the extent that it regulates or restricts the exercise of a right or freedom referred to in Subdivision III.3.C (qualified rights) of the Constitution, namely —

(a)	the right to liberty conferred by Section 42; and   
(b)	the right to freedom from arbitrary search and entry conferred by Section 44; and
(c)	the right to freedom of expression and publication conferred by Section 46; and
(d)	the right to peacefully assemble and associate and to form or belong to, or not to belong to, political parties, industrial organisations or other associations conferred by Section 47; and
(e)	the right to freedom of choice of employment in any calling for which a person has the qualifications (if any) lawfully required conferred by Section 48; and
(f)	the right to reasonable privacy conferred by Section 49; and
(g)	the right of reasonable access to official documents conferred by Section 51; and
(h)	the right of freedom of movement conferred by Section 52,

is a law that is made under Section 38 of the Constitution, taking account of the National Goals and Directive Principles and the Basic Social Obligations, for the purpose of giving effect to the public interest in public order and public welfare.

(2)	For the purposes of Section 53(2) of the Constitution, this Act is expressed to be made in the national interest.

(3)	For the purposes of Section 41 of the Organic Law on Provincial Governments and Local-level Governments, it is declared that this Act relates to a matter of national interest.

2.	Interpretation

(1)	In this Act, unless the contrary intention appears —

"Constitutional institutions" means the institutions established by the Constitution; 

"Departmental Head" means the Departmental Head responsible for financial matters;

"ILPOC" means the Integrated Local Purchase Order or Claim;

"public body" means an agency which is part of the State Services established under Part VII of the Constitution and excludes a Provincial Government or Local-level Government established under the Organic Law on Provincial Governments and Local-level Governments;

"public money" includes all money raised, refunded, received, held or controlled by a public body, statutory body or a person acting on behalf of the State, including all money received as a result of —

(a)	fees, levies, royalties or any other charges of any type, other than taxes; or
(b)	bonds, debentures, shares, securities, term-deposits, dividends or any other investments, including the return on those investments; or
(c)	the sale or lease of public property; or
(d)	donations or gifts,

but excludes money appropriated to a public or statutory body by or under the National Budget;

"statutory body" means a body, authority or instrumentality (incorporated or unincorporated) established under an Act of the Parliament or howsoever otherwise for governmental or official purposes, including a subsidiary statutory body that is not a public body, but excludes a body, authority or instrumentality (incorporated or unincorporated) established by a Provincial Government or Local-level Government or their subsidiary statutory bodies that are not public bodies;

"this Act" includes the regulations.

(2)	In this Act, "Trust Fund" shall not include Trust Account.

3.	Application of Act

(1)	This Act binds —

(a)	the State; and
(b)	all public and statutory bodies.

(2)	This Act shall not apply to —

(a)	the Bougainville Government established under Part XIV of the Constitution or any public or statutory body created or established by the Bougainville Government or any public. or statutory body operating exclusively within the Autonomous Region of Bougainville; and
(b)	any statutory body which is established or serves primarily religious purposes; and
(c)	the Kumul Consolidated Holdings established under the Kumul Consolidated Holdings Authorisation Act 2002; and
(d)	the Kumul Petroleum Company established under the Kumul Petroleum Holdings Limited Authorisation Act 2015; and
(e)	the Kumul Minerals Company established under the Kumul Minerals Holdings Limited Authorisation Act 2015.

PART II. — REGULARISATION OF PUBLIC MONEY

4.	Integrity of constitutional institutions

(1)	Nothing in this Act shall be interpreted so as to restrict or in any way diminish the functional mandates and integrity of constitutional institutions but shall be interpreted so as to limit the operation of the Act to public financial management of public money.

(2)	This Act binds constitutional institutions and constitutional institutions shall be deemed to be statutory bodies for the purposes of this Act.

5.	Interpretation of inconsistent legislation

(1)	This Act shall be interpreted as being subject only to the terms of the Public Finances (Management) Act 1995.

(2)	An Act, a regulation or other subordinate legislation that is inconsistent with the purposes of this Act shall be repealed accordingly.

(3)	This Act shall be interpreted to override and expressly or impliedly repeal, to the extent of inconsistency, any direction, appointment, notice or similar, including any agreement or undertaking, that is wholly or partly inconsistent with this Act, other than the Public Finances (Management) Act 1995.

(4)	This Act expressly renders wholly void and of no effect any agreement or undertaking in respect of the sharing of public money raised as revenue by a public or statutory body other than by an Appropriation Act, as and from the date of the agreement or undertaking, that is wholly or partly inconsistent with this Act, other than the Public Finances (Management) Act 1995.

(5)	No compensation, damages or any other relief, including injunctive or declaratory relief, may be awarded by any court or tribunal in respect of any agreement or undertaking rendered void by this section.

6.	Payment of public money to Consolidated Revenue Fund

(1)	Subject to this Act, from the date of the commencement of this Act, all public money —

(a)	held by or on behalf of any person or a public or statutory body; or
(b)	received or in the custody, care or control of any person or a public or statutory body, whether or not it has been banked,

shall, at the close of the business day on which the public money was first held or received, be transferred or deposited, without deduction of any type, to the revenue bank accounts specified for that person or public or statutory body by the Departmental Head.

(2)	From the date of commencement of this Act, a person or public or statutory body shall not hold or receive into their custody, care or control, either directly or indirectly, any public money, other than in accordance with this Act.

(3)	A specification of bank accounts by the Departmental Head pursuant to Subsection (l ) shall be by written notice.

(4)	On receipt of public money into a specified bank account pursuant to Subsection (1), the Departmental Head shall cause to be transferred back to a public or statutory body an amount equal to ten percent of the public money transferred by the public or statutory body to their operating bank account.

7.	Bank accounts of public and statutory bodies

(1)	Every public and statutory body shall maintain, in addition to any trust accounts, a single operating bank account.

(2)	The operating bank account of a public or statutory body shall contain only public money —

(a)	appropriated by the National Budget; and
(b)	transferred to a public or statutory body pursuant to Section 8.

(3)	A trust account of a public or statutory body shall contain only —

(a)	the money appropriated to a public or statutory body by or under the National Budget and which the National Budget specifically authorises to be transferred to a trust account; and
(b)	the donor funds authorised by the trust instrument of that trust account.

(4)	Subject to this Act, any public money —

(a)	in an operating account or trust account other than the public money authorised by this Act shall be transferred to the Consolidated Revenue Fund by the Departmental Head; or
(b)	in a trust account, other than the public money authorised by the Public Finances (Management) Act 1995 and the trust instrument of the trust account, shall be transferred to the Consolidated Revenue Fund by the Departmental Head.

(5)	The Departmental Head shall open and operate such revenue bank accounts as are necessary to provide for the receipt of all public funds collected by any person, public or statutory body.

(6)	A person or public or statutory body that receives public money shall bank that money, without deduction or withholding, into the relevant revenue bank account operated by the Departmental Head.

(7)	The Departmental Head has the power, by virtue of this Act, to operate and execute transactions in his own name on all bank accounts of all public and statutory bodies, including trust and operating accounts, irrespective of any provisions in any other law relating to the signatories of bank accounts, to —

(a)	access the transactional details of any bank account held by or on behalf of a public or statutory body; and
(b)	transfer or cause to be transferred to the Consolidated Revenue Fund or a revenue account, public money that, pursuant to this Act or the Public Finances (Management) Act 1995, is required to be so transferred; and
(c)	effect any transaction permitted or required by this Act.

(8)	Subject to this Act, at the date of commencement of this Act, if a person or public or statutory body holds public money in a bank account other than in accordance with this section so that public money is mixed with money other than public money, the Departmental Head has the power by virtue of this Act to transfer, without deduction of any type, to the revenue bank accounts of that person or public or statutory body, all such money including the public money held in that bank account.

(9)	Subject to this Act, the Departmental Head, on receipt of information that satisfies him that money other than public money has been transferred pursuant to Subsection (8), shall transfer —

(a)	money appropriated by the National Budget to the operating bank account, if it is not a drawing account of a public or statutory body; or
(b)	money appropriated by the National Budget to a trust account of a public or statutory body, provided that the National Budget specifically authorised that money to be transferred to a trust account; or
(c)	in respect of money other than public money, to the public or statutory body from which it was transferred pursuant to Subsection (8).

8.	Strategic Budget Committee

(1)	The Departmental Head —

(a)	of the Department responsible for finance matters; and
(b)	of the Department responsible for treasury matters,

and such other Departmental Heads as the Departmental Heads in Paragraphs (a) and (b) may appoint from time to time to consider sectoral specific matters, may form the Strategic Budget Committee, of which the Departmental Head of the department responsible for treasury matters shall be the chairman.

(2)	The Strategic Budget Committee may determine that, to meet the reasonable operating budget requirements of a public or statutory body, that an amount other than the amount specified in Section 9(5) be remitted to a public or statutory body.

(3)	A determination pursuant to Subsection (2) shall be by notice in writing by the chairman and shall have no force or effect until ratified by the Treasurer.

(4)	A public or statutory body to which Subsection (1) applies, may make a submission, approved by resolution of the managing committee, board or other controlling entity in the case of a statutory body, in writing to the Strategic Budget Committee in respect of its operating budget requirements that shall —

(a)	specify its full complement of staff, including consultants for any and all projects of the public or statutory body, and the total of all salary, benefits, fees and any other emoluments payable to each such person on an annual basis; and
(b)	specify all recurrent outgoings and costs of the public or statutory body; and
(c)	specify the activities to be undertaken by the public or statutory body in that financial year, including an itemised costing of those activities,

and such other matters as may be required by Treasury Instructions issued pursuant to this Act.

(5)	A determination under this section shall be expressed by the Strategic Budget Committee as a percentage of the public money received into the revenue bank account of that public or statutory body, as the case may be.

(6)	Subject to this section, the Departmental Head shall implement a determination under this section by transferring to a public or statutory body an amount equal to the percentage determined by the Strategic Budget Committee under this Act.

(7)	Transfers pursuant to Subsection (6) shall be made to the operating account of a public or statutory body, unless that operating account is a drawing account, in which case the funds shall be transferred to a trust account specifically opened and maintained solely for the purpose of the receipt of those funds.

(8)	The Treasurer shall cause to be laid before Parliament at the next sitting of Parliament the details of all determinations ratified by him pursuant to this Act.

(9)	The Departmental Head responsible for treasury matters may issue Treasury Instructions, by notice published in the National Gazette, not inconsistent with this Act or the Public Finances (Management) Act 1995, as to any matter relating to the conduct and control of the operations of the Strategic Budget Committee.

(10)	All persons shall comply with the terms, conditions, requirements and instructions of Treasury Instructions issued under this section.

9.	Judicial review of Strategic Budget Committee

(1)	A determination pursuant to Section 8 shall not be the subject of any judicial or administrative review by a public or statutory body, including by way of injunctive relief or prerogative writ.

(2)	For the purpose of Subsection (1), a public or statutory body shall not engage legal representation, commence any action or other proceeding in any court or tribunal or procure or contract for legal representation other than in compliance with the Attorney-General Act 1989.

(3)	For the purposes of Subsection (2), prior to the Attorney-General exercising his powers pursuant to Section 7 of the Attorney-General Act 1989 —

(a)	the State Solicitor shall certify to the Attorney-General whether the lawyers to be appointed are, in the opinion of the State Solicitor, experienced and with sufficient professional competence in the area of law to represent a public or statutory body; and
(b)	the Attorney-General shall satisfy himself that all procurement laws in Papua New Guinea have been complied with to the extent necessary for him to exercise his powers.

(4)	Legal representatives of public and statutory bodies shall not receive or charge for any fees or disbursements other than taxed party-party or solicitor-client costs on the scale of fees of the appropriate Court.

(5)	If any public or statutory body, or any other person, obtains injunctive or declaratory relief in respect of any provision of this Act, including a determination pursuant to Section 8, the Court or administrative body making the order shall also order that —

(a)	the public or statutory body, or any other person seeking the order shall within, one working day, pay into court the amount that the State demands to be paid to secure payment of the State's legal costs, or the order in respect of the injunctive or declaratory relief shall be immediately vacated by reason of the non-payment within the required time; and
(b)	the public or statutory body, or any other person seeking the order shall pay into Court all public funds in their possession or control at the time of the order and all public funds that subsequently come into their possession within one working day of receiving those funds; and
(c)	that the substantive hearing of the matter, application or injunction be set for full hearing within ten working days of the granting of the injunctive or declaratory relief.

10.	Legal representation of public and statutory bodies

(1)	For the purposes of this Act, a public or statutory body shall not engage legal representation, commence any action or other proceeding in any court or tribunal or procure or contract for legal representation for any purpose other than in compliance with the Attorney-General Act 1989.

(2)	Prior to the Attorney-General exercising his powers pursuant to Section 7 of the Attorney-General Act 1989 —

(a)	the State Solicitor shall certify to the Attorney-General whether the lawyers to be appointed are, in the opinion of the State Solicitor, experienced and with sufficient professional competence in the area of law to represent a public or statutory body; and
(b)	the Attorney-General shall satisfy himself that all procurement laws in Papua New Guinea have been complied with to the extent necessary for him to exercise his powers.

(3)	Legal representatives of public and statutory bodies shall not receive or charge for any fees or disbursements other than taxed party-party or solicitor-client costs on the scale of fees of the appropriate Court.

(4)	For the purposes of this section and Section 11 —

"public body" means an agency which is part of the State Services established under Part VII of the Constitution and includes a Provincial Government or Local-level Government established under the Organic Law on Provincial Governments and Local-level Government; and

"statutory body" means a body, authority or instrumentality (incorporated or unincorporated) established under an Act of the Parliament or howsoever otherwise for governmental or official purposes, including a subsidiary statutory body that is not a public body, and includes a body, authority or instrumentality (incorporated or unincorporated) established by a Provincial Government or Local-level Government or their subsidiary statutory bodies that are not public bodies.

11.	Claim against the state and statutory bodies not enforceable in certain circumstances

(1)	A claim for payment, compensation, restitution, damages or any other form of relief, including injunctive or declaratory relief, against the State or a statutory body based on equity or equitable principles in respect of the value of works, goods or services rendered to the State or a statutory body shall not be enforceable, through the Courts or otherwise, unless the seller of the property or stores or the supplier of the works, goods or services produces —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure,

relating to the property or stores or works, goods or services, the subject of the claim, to the full amount of the claim.

(2)	A claim for payment, compensation, restitution, damages or any other form of relief, including injunctive or declaratory relief, against the State or a statutory body based on the undertaking or promise of any person, whether or not that person had the actual, implied or ostensible authority of the State or statutory body to give or make that undertaking or promise, shall not be enforceable, through the courts or otherwise, unless the person making the claim produces —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure,

relating to the undertaking or promise, the subject of the claim, to the full amount of the claim.

(3)	The Courts shall, on application by the State, stay a claim specified in Subsections (1) and (2), if the person making the claim cannot produce, on demand by the State —

(a)	a properly authorised ILPOC; or
(b)	an Authority to Pre-commit Expenditure, 

relating to the subject of the claim, to the full amount of the claim.

PART III. — MISCELLANEOUS

12.	Offences

(1)	All offences under this Act are offences of strict liability.

(2)	A person who, in whole or part, omits or fails to comply with a duty, obligation or requirement of this Act is guilty of an offence.

(3)	In sentencing a person after conviction of an offence under this Act, the rank, title or designation of the person within the public or statutory body at the time of the commission of the offence shall be considered by the sentencing court so that the higher the rank, title or designation of the person, the more serious the offence when imposing penalty.

(4)	The penalties for conviction for an offence under this Act are —

(a)	in the case of an offence by a person, imprisonment for a term not exceeding 15 years and a fine not exceeding K2,000,000.00; and
(b)	in the case of an offence by a body corporate, a fine not exceeding K50,000,000.00.

13.	Transitional implementation

(1)	After the date of the commencement of this Act, the Departmental Head shall transfer all moneys in all bank accounts held by or on behalf of public and statutory bodies to bank accounts specified for that public or statutory body by the Departmental Head.

(2)	Subject to this section, the Departmental Head shall —

(a)	return to a trust account, without deduction, the money that was authorised by the trust instrument to be contained in the trust account, including amounts appropriated by the National Budget and authorised by that National Budget to be paid into a trust account, provided that no public money shall be returned to a trust account; and
(b)	return to an operating account amounts appropriated by the National Budget and the amount specified in Sections 8(5) or 10(1); and
(c)	pay all other funds to the Consolidated Revenue Fund.

(3)	The Departmental Head shall make no payments pursuant to Subsection (2) unless —

(a)	the public or statutory body has an operating account or trust account, as the case may be, that is in full compliance with all of the requirements of the Public Finances (Management) Act 1995; and
(b)	the Departmental Head is in receipt of information produced by the public or statutory body that satisfies him that the payments are due pursuant to Subsection (2).

(4)	After the Departmental Head has acted pursuant to Subsection (1), he may, from time to time as he thinks fit, repeat the actions authorised by that subsection, to ensure that operating and trust accounts are being operated in accordance with the provisions of this Act and the Public Finances (Management) Act 1995.

14.	Termination of operation

(1)	From 1 January 2020, Sections 8(4) and 10 of this Act shall cease to operate and as and from that date all public money shall be paid to the nominated bank accounts of the Consolidated Revenue fund and no money shall be remitted or returned to any public or statutory body.

(2)	For the avoidance of doubt, as and from 1 January 2020, public and statutory bodies shall receive public money solely by appropriations made by or under the National Budget.