[1987] SILR 75

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 239 of 1987

THE OMBUDSMAN

v

THE ATTORNEY GENERAL
RURAL INDUSTRIES LTD (IN RECEIVERSHIP)
ROBERT VICTOR EMERY
MONARCH LEASING PTE LIMITED
FREDERICK THOMAS CAMPBELL
DAVID WILLIAM HOWELL
HONG KONG AND SHANGHAI BANKING CORPORATION

High Court of Solomon Islands
(Ward C.J.)
Civil Case No. 239 of 1987

Hearing: 26 September 1987
Judgment: 12 October 1987

Civil procedure - locus standi - Ombudsman - whether entitled to bring action as a member of the public, or by virtue of his office in the public interest.

Constitution - Ombudsman - functions in terms of section 97

Ombudsman - powers in terms of the Ombudsman (Further Provisions) Act 1980, section 16.

Facts:

The Ombudsman brought an action seeking certain declarations regarding a scheme for sale of timber rights. The Defendants, other than the Attorney General, objected to the locus standi of the Ombudsman.

Held:

1. The Ombudsman’s interests as a private individual were not peculiarly affected by the Defendants’ conduct and his claim was too indirect and insubstantial to qualify.

2. The Ombudsman has no power to represent the public or the Crown in a legal action; to do so would usurp the function of the Attorney General.

Cases referred to:

Guaranty Trust Co. of New York v. Hannay [1916] 2 KB 536.
Thorne RDC v. Bunting [1972] 2 WLR 577.

Alison Worsnop for the Ombudsman
Reginald Teutao for the Attorney General
J. Sullivan for the remaining Defendants

Ward CJ: This case relates to an application under section 198 of the Companies Act for the Court’s sanction of a scheme of arrangement in Civil Case Number 159 of 1987. The applicant in that case, the Hong Kong and Shanghai Banking Corporation, has proposed a scheme for the operation of Rural Industries Ltd (in receivership) in order that it may continue to utilise its logging licence in Makira.

Having listened to some of the evidence in that case, the Ombudsman has brought this action seeking two declarations and, as they relate to the Rural Industries case, consolidation with that action.

In brief, the declarations sought are:

1. that the proposed scheme involves an agreement for the sale of timber rights, and

2. that the scheme is unlawful and unenforceable because it does not comply with the Forests and Timber (Prescribed Forms) (Amendment) Regulations 1985 and section 5G of the Act.

Objection was taken to the locus standi of the Ombudsman Mr Sullivan, who appears for the Defendants other than the Attorney General.

Having heard argument on that point, it was agreed by the parties that the court should rule on this preliminary point before considering the application itself and, further, the ruling should be left until the conclusion of the application for sanction of the arrangement in case 159 of 1987. Both Miss Worsnop for the Ombudsman and Mr Teutao, the acting Attorney General, were heard in that case as amici curiae and many of the matters referred to in the declarations sought were canvassed there.

Having sanctioned the scheme of arrangement, I ruled that the Ombudsman had no locus standi in this case and said I would give my reasons later. I now do so.

This application is made under O.58 r.2 which reads:

"2. Any person claiming any legal or equitable right in a case where the determination of the question whether he is entitled to the right depends on a question of construction of any provision of a written law, may apply by originating summons for the determination of such question of construction and for a declaration as to the right claimed."

However, that is subject to O.27 r.5:

"No action or proceeding shall be open to objection, on the ground that a merely declaratory judgment or order is sought thereby and the Court may make binding declarations of right whether any consequential relief is or could be claimed, or not."

Thus the power of the Court to entertain such applications is very wide and the jurisdiction to make a declaration under this Rule is not confined to cases in which the plaintiff has a complete and subsisting cause of action apart from the Rule. This was established in Guaranty Trust Co. of New York v. Hannay [1915] 2 KB 536 following an unsuccessful attempt to attack the validity of the, then, O.25 r.5 (now O.15 r.17) of the English Rules of the Supreme Court which is identical to our O.27 r. 5. That case also restated the principle that the power to make declarations is discretionary and, where no specific relief apart from the declaration is sought, the jurisdiction should be exercised with great caution.

Miss Worsnop based her submission on two main arguments. First she urged that the Ombudsman had a right to apply as a normal member of the public who may be affected by the matter being considered and, second, that he has a right by virtue of his office to bring such an action where he feels the public interest is involved.

It is only necessary to look briefly at the facts of the case.

Rural Industries was incorporated in 1982. The principal operations of the company were to be in the timber industry and were centred on Makira Province. The company has a concession from the Amwea and Tawa landowners and a timber licence that runs for twenty years. By 1986 the company was in financial difficulties and, in October 1986, the Hong Kong and Shanghai Bank appointed a Receiver, Mr Emery.

It was clear that the company would need to resume operations if it was to pay its creditors and so the Receiver located a purchaser and the scheme of arrangement was set up.

The Ombudsman’s concern stems from the position of the landowners in Makira who would be affected by the scheme. He noted that the scheme referred to the standard agreement in the Schedule to the Forests and Timber (Prescribed Forms) (Amendment) Regulations but specifically purported to exclude some of the standard provisions. The declarations sought were to ensure the standard form was incorporated in the scheme especially those parts that provided for inspection and control. Whilst this case involved a private right, Miss Worsnop argues that the implications relate to the country as a whole and could affect the general policy in such logging cases.

I deal first with the claim to locus as a private individual. In matters which affect the public at large, the party seeking to sue must show his own interests are peculiarly affected by the Defendants’ conduct. The courts will exercise their discretion widely in such cases but it will not exercise it in favour of a plaintiff whose claim is too indirect or insubstantial and would not give him relief in the sense of something that will relieve him from any liability, disadvantage or difficulty as explained by Megarry J in Thorne RDC v. Bunting [1972] 2 WLR 577. It is clear that the Ombudsman, suing as a member of the public in this case, cannot satisfy the test.

I pass to the main argument of Miss Worsnop and Mr Teutao that the Ombudsman has a right to bring such a case to court as a representative of the public interest. The general principle is that the Attorney General represents the Crown in all matters in which rights of a public character come into question and he is a necessary party to the assertion of public rights even where the moving party is a private individual. Thus, if the Ombudsman claims to be able to take over this function, there must be clear authority.

The Ombudsman’s office is set up under Chapter IX of the Constitution and section 97 sets out the function of the office:

"97(1) The functions of the Ombudsman shall be to:

(a) enquire into the conduct of any person to whom this section applies in the exercise of his office or authority, or abuse thereof;

(b) assist in the improvement of the practices and procedures of public bodies; and 

(c) ensure the elimination of arbitrary and unfair decisions.

(2) Parliament may confer additional functions on the Ombudsman.

(3) This section applies to members of the public service, the Police Force, the Prisons Service, provincial governments, and such other offices, commissions, corporate bodies or public agencies as may be prescribed by Parliament:

Provided that it shall not apply to the Governor-General or his personal staff or to the Director of Public Prosecutions or any person acting in accordance with his instructions.

(4) Nothing in this section or in any Act of Parliament enacted for the purposes of this Chapter shall confer on the Ombudsman any power to question or review any decision of any judge, magistrate or registrar in the exercise of his judicial functions."

In addition, by section 96(4) he shall not perform the functions of any other public or provincial government office.

Parliament is given the power to make provisions for such supplementary and ancillary matters as may appear necessary or expedient to give effect to the provisions of Chapter IX and, in exercise of that power, passed the Ombudsman (Further Provisions) Act, 1980.

Miss Worsnop informed the Court that she relied on section 97(1) (a) and (b) in support of her right to bring this action. In order to fall in either of those categories she must show that the Ombudsman’s interest involves the officers or authorities set out in section 5(2) of the 1980 Act:

"(2) This section applies to the following officers and authorities:-

(a) any department of the Government or officer of such a department;

(b) the police force or any member thereof;

(c) the Prisons service or any other service maintained and controlled by the Government or any officer or authority of any such service;

(d) any Provincial Assembly;

(e) any authority empowered to determine the person with whom any contract or class of contract is to be entered into by or on behalf of the Government or any such officer or authority;

(f) any body incorporated by Act of Parliament;

(g) such other officers or authorities as may be prescribed by resolution of Parliament."

It is suggested that this scheme of arrangement involves the Forestry Department and it is, therefore, on this somewhat tenuous ground that Miss Worsnop claims the Ombudsman is entitled to investigate the case and to bring any necessary action in court.

I do not question the right of the Ombudsman to investigate that department and I accept he may, by section 5(1) (c), do so of his own motion. However, having decided to do so, he is bound by the terms of the Act to follow a set procedure.

From what was stated in court, it would appear the Ombudsman may have failed to comply with the procedural requirements of section 9 and possibly 10 but that is not for me to decide. I proceed on the basis that an investigation was properly conducted.

What then are the Ombudsman’s powers? They are set out in section 16. In any case where, after investigation, the Ombudsman feels the subject matter was contrary to law, based wholly or partly on a mistake of law or fact, unreasonably delayed or otherwise unjust or manifestly unreasonable and requires any further steps to be taken, the Ombudsman must report his opinion and reasons to the officers of the department or authority concerned and may make any recommendations he thinks fit. He must also send a copy of that report and those recommendations if any to the Prime Minister and any Minister concerned. Where the investigation was started by a complaint, he must also inform the complainant of the result of his investigation. If, after a reasonable time, he feels proper action has not been taken, he may make a further report on the matter to Parliament.

Nowhere is the Ombudsman given the power to represent the public or the Crown in a legal action. Indeed, as I have already said, to do so would usurp the function of the Attorney General.

Where the Ombudsman feels during an investigation that some public right has been or is likely to be infringed he should report the matter to the Attorney General. Whether the Attorney General then proceeds at the relation of the Ombudsman or in any other manner is a matter for him. It is entirely in his discretion and the Court will not and cannot enquire into his exercise of that discretion.

In this case, the Ombudsman having joined the Attorney General as a defendant sought to have him joined as a co-plaintiff. As I have ruled that the Ombudsman has no locus standi, I do not need to consider that application but I should add that by making that application, Miss Worsnop was effectively seeking a ruling that would have the effect of forcing the Attorney General to proceed at the relation of the Ombudsman by a Court order. I cannot accept that would have been proper order for the Court to make intruding as it would on the Attorney General’s discretion.