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United Kingdom Privy Council Decisions for Cook Islands |
Michaelmas Term
[2016] UK #160;32
Privy Council Appeal No 0033 of 2015
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JUDGMENT Arorangorangi Timberland Limited and others (Appe(Appellants) v
Frob>From the Court of Appeal of the Cook Islands
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Lord Neuberger
Lord Mance
Lord Clarke
Lord Sumption
Lord To
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JUDG>JUDGMENT GIVEN ON
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| Appellants Dr Gerard QC (Instructed by Tim Arim Arnold nold PC) | | | Respondent Michael Ruffin David James (Instructed bwn Law Office (Cook Islands)) |
 
Introductory
1. &##160;; < < &;&&60600; ـ This is a is an apan appeal peal brougbrought by seven appellants against a decision of the Cook Islands’ of A (Wil P, Barker and son Jreverthe first instance ance decisdecision oion of Wesf Weston CJ, who held that the superannuatnnuation sion scheme set up by the Cook Islands’ National Superannuation Act 2000 (“the 2000 Act”) was unconstitutional and therefore invalid. The respondent to the appeal is the Minister of Cook Islands’ National Superannuation Fund (“the Minister”).
2. ـ &##60;&< n&##10;& ҈Prior to r to 2000, 000, the only forms of financial support for retired people provided by the Cook Islands’ Government were (i) a universal old age pensionall tover ars of age (which the the CourtCourt of A of Appeal described as “very modest”), and (ii) a pension under a defined benefit scheme which was limited to public servants, and which had been closed to new entrants since 1995. During the 1999 general election, the New Alliance Party’s manifesto included a policy for establishing a national superannuation scheme for all employed Cook Islanders.
3. ҈ ҈ n&##160;After the gene general election, this policy was then implemented through the presentation to Parliament by th Govet of l (“the Bill”) which in due e beche 2000 Act. The 20he 2000 Ac00 Act sett set up a up a Nati National Superannuation Fund (“the Fund”) to which contributions were to be made by employees and employers, and from which superannuation payments were to be made.
4. ҈ ҈ n&##160;The appellantslants raise two principal arguments to challenge the validity of the 2000 Act. The first is that the 2000 Act, or the Scheme established pursuant to that Act, is id as volveaking or deprivatrivation cion contraontrary to article 40(1) and/or 64(1)(c) of the Cook Islands Constitution (“the Constitution”). The second principal argument is that section 53 of the 2000 Act is unjustifiably discriminatory contrary to article 64(1) of the Constitution. At first instance, in a judgment given on 31 January 2014, the Chief Justice accepted both these arguments, but on appeal, in a judgment of the court given on 17 November 2014, the Court of Appeal rejected them - [2014] CKCA 4.
The factual, statutory and constitutional background
The 2000 Act
5. ҈& < < &##10;& &##160; The0;The Court of Appeal ullpfullyout a14] CKCA 4, para 14 the main features of the 2000 Act. With a couple of omissionssions (whi (which are more comments than descriptions) and with a few small additions and alions, summary is as foas followsllows:
(a) & The compulsoru nature of c of contributions to the Fund. The membership of the Scheme set up by the 2000 Act (“the Scheme”) and, thus, an obligation to contribute to the Funcompu for person who is inis in empl employmenoyment in the Cook Islands or whose employment is outside the Cook Islands while the employer is resident in the Cook Islands and for every employer in respect of an employee who is so employed - sction 36 of the 2000 Act0 Act.
(b) ـ҈ T60; The quae quacation of contributions to the Fund. The Scheme was phased ased in and, once it applied to an employee’s class of employment, tntribs were calculated as a percentage of the employeeloyee̵’s earnings. For one year following the date on which the Scheme becomes applicable to a class of employees, the employer and employee are both required to pay 3% of the employee’s earnings. That percentage rises to 4% in the second year and thereafter 5% per annum. These rates may be amended by Order-in-Council in accordance with a recommendation of the Board and the Trustee - see section 39 of the 2000 Act.
(c) National Superannuation B(ard (“the Board”). Thrd comprises five members. One is the Financial Secretary oary of the Cook Islands who is to be a permanent member while the other foe nom of pular interest groups. ups. ThoseThose grou groups are the Cook Islands’ Workers Association Inc, the Cook Islands’ Chamber of Commerce Inc, the private sector employers who are not members of the Chamber of Commerce, and one member nominated by contributors to represent them. Only one member of the five member Board has any association with the Cook Islands’ Government - see section 4(2) of the 2000 Act.
(d) &##160;; T60; The Boae Board’s functions. The initial function of the Board was to prepare a Trust Deed (“the Trust Deed”) to establish thd. Otunctinclude the appointment and removal of t of the Trhe Trustee administering the Scheme under nder the Act (“the Trustee”), enforcing collection and payment of contributions to the Fund, monitoring the performance of the Trustee under the Trust Deed, advising the Trustee and reporting to and advising the Minister as the Minister requires. The usual obligations of members of the Board to act in good faith, with reasonable care, diligence and skill and with honesty and integrity are stated in the Act - see sections 11 and 12 of the 2000 Act.
(e) ـ T6e obligation to p to prepare the Trust Deed rested with the Board and not the Government. The Board was required to appoint the initial Trustee and to submit the Trust Deed to the Minister and provide him with a certificate from the Chairman of the Board certifying that the Trust Deed was not inconsistent with the 2000 Act. Under section 16 of the 2000 Act certain provisions were mandatorily to be included in the Trust Deed. They included obligations:
(i) ҈& < < &##10;& Toblish the Fund Fund;
(ii) &##60;&<;To60p tha al T al Tr;
(iii)&ـ҈ <&&160; #160rTo prTo provideovide fide for the conditions of entry of members to the Fund;
(iv) ـ < & rove tions as to term termination of meof membersmbership ohip of thef the Fund;
(v) ـ &##60;&<ټ&##160;;160;;To provid the tionsr which bich benefienefits bets become come payabpayable anle and the way in which the benefits are to be determined;
(vi)ټ&##160;;       To providethe circumstancesances in which the Fund may be wound up, and the way in whie assf the are to be distributed in the event of a winding up;
(vii) #160; t   contain no restrictionstions on the Trustee’s powers of investment other than which is provided in section 19 of the 2000 Act;
(viii)ټ&##160;; To ct thstee l equitabuitabuitable dule duties ties and rand responesponsibilities that a trustee has at law;
(ix) &##160;; & To provide for for separatparate accounts for each contributributor;
(x) ټ0;;ټ&##160;;To0;;To ghe Trustee power to borrow mone money fory for the the purpopurposes oses of makf making aing any investment or paying any benefit oting iabilr for the purpose of management of the the Fund;Fund;
(xi) ;ɘʔ  ive the True Trustee ptee power to enter into any insurance or reinsurance contract relating to the payment pursuant to the Fund o pensr othnefittinge the or survival oval of humf human lian life; afe; and
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(xii) &##60;&<;To60rovipe fore for the remuneration and reimbursement of expenses of the Trustee, investment manager and agents.
(f) ;&Thstee.Trus.Trustst best be a company undy under ther the True Trustee stee CompaCompanies Act 1967 (New Zealand) or the Public Trust Office Act 1957 (New nd), indent professional corporate trustee of siof similarmilar stan standing and experience in the trusteeship of superannuation schemes or plans. The Trustee must be appointed by the Board which has the power to replace a Trustee. Another provision requires the Trustee to be appointed “following a transparent and contestable process” - see sections 2 and 11 of the 2000 Act.
(g) The investment of the Fune. The Trustee is responsible for investing the Fund on a prudent commercial basis consistent with besttice olio ementis red eacr to provide to the Board its investment ment stratstrategy fegy for thor the yeae year whir which is to include the Trustee’s expectation as to risk and return and anticipated specific investments and class of investments. Under section 19 of the 2000 Act, the Board does have a power to direct the Trustee to invest the Fund:
(i) ҈ ҈ To meet tve Goent’s e7;s expectation as to the Fund’s performance, including the Government’s expectation as to risk and return;
(ii) &##160;&##160;;ټ 
No60;Not to invest in a spea specified investment or class of investments to which the Crown
already has a direct or ict exe, fo purpf lim the ure; and
(iip>(iii)i) ټ To i;To invest a proportion of the Fund not exceeding 20% within the Cook Islands.
(This direction can only be given after consultation with the Min).
(i) ټ < Taxation. By v rtueection tion 27 of the 2000 Act, the Trustee on behalf of the Fund and the Fue exempt from income tax. An employer’s contrinution is deductible for tax purpopurposes and an employee pays tax on the employee’s contribution to the Fund. Benefits received by a member are free of tax in the hands of the member.
(j) ҈ < Transferebetwunn F An empl employee who was in an existing superannuation fund may cease contributions to that fund if the fund so permits and transfer the employee’s benefit in the fund toFund.he eme’s ex;s existinisting supg superannuation fund does not permit withdrawal of funds to enable them to be transferred to the Fund, the employee is exempted from the provisions of the Act and is not obliged to be a contributor in the compulsory scheme.
(k) & W60;drathl. Tae only righ right to withdraw before reaching retirement age is where a person is resident in the Cook Islands for the sole purpose of being employed under a contract of service of not more than three years. If such a person so elects, he or she receives a refund of the employee contributions on the person’s permanent departure from the Cook Islands. The employer’s contributions are not paid to the employee but are transferred to the reserve account within the Fund. However, such a person may not make such an election, in which case he or she will retain the investments vested in them and will in due course receive a (no doubt very modest) pension in the same way as an employee who is a permanent resident of the Cook Islands - see section 53 of the 2000 Act.
(l) ـʔ Where a benefbeneficiary ceases to make contributions, the amount standing to his credit shall continue to accrue interest until it is applied to provibenefom thd - sction 54.
(m) #1660 Bene Benefits nits not available. Unless provided in the Act or the Trust Deed, in no event may any benefit be assigned or charged or attached or passed to any creditor or a contributor by operation of law. Nor shall anyy payable on the death of a of any contributor be assets for the payment of the deceased contributor’s debts or liabilities - see section 63.
6. &##60;&<;ɘʔ< ـʔSo far as Gove Government influence over the managemed invnt ofFund ncernhe Cof Appeferred to the fact that, when when speakspeaking ting to theo the seco second rend readingading of the Bill in November 2000, the Deputy Prime Minister said that the 2000 Act had been “designed to be completely above board and completely independent of Government interference” - see Cook IslHansard  23 November 200825. The Coue Court of Appeal then said this, which has not been challenged on this appeal:
“One of the Board’s functions is to ‘report to and to advise the Minister, e Minister requires’.217;. There is no general provision requiring the Board to comply with any Ministerial instruction or advice. There is the investment power ... where[by] the Board may, after consultation with the Minister, direct the Trustee to invest in certain funds. This is not an obligation to comply with any direction which the Minister may give and some of the restrictions on the exercise of this particular power suggest that they are designed to ensure that the Fund is not put at risk. The only provision which may carry an inference that the Government expects a certain type of investment is the requirement [referred to in para 5(g)(iii) above] to invest a proportion of the Fund not exceeding 20% within the Cook Islands. Once again, the restriction of 20% may be said to be designed to protect the Fund but at the same time give some impetus to local investment for the sake of the economy.
There is a right for the Minister with the concurrence of Cabinet to make representations to the Board in respect of the general policy of the Government as that policy may affect the Fund and which is not inconsistent with the Act or the Trust Deed. The Board is then required to consult with the Minister and may, but is not obliged to, have regard to any such representation. Such representation must be conveyed to the Board and Trustee in writing by the Minister. It must be tabled in Parliament within 14 sitting days of the representation being made and the response being provided to the Minister.”
7. &##60;&<;ɘʔ< The Cof A peal also gave thve this “overview” of the 2000 Act, which the Board considers to be accurate
&;The ontains the essential elements of the Scheme which is oed by a Board in accordance wnce with tith the tehe terms orms of the Trust Deed. It is a compulsory defined contribution Scheme with very limited rights of withdrawal before an employee reaches the age of retirement. The contributions of both the employer and the employee become the property of the employee. The limits on investing in the Cook Islands may be intended to reduce the possibility of making unwise investments similar to some past investments made by the Government [of the Cook Islands] ...”
The Trust Deed
8. &##160; < n&##10;& ; < ;ɘTh6 Trust Deed contecontemplated by the 2000 Act (as described in para 5(e) above) was execby thrd an Public Tr of Nalandch is now called the Public Trust, on 19 September 2001. The The PubliPublic Truc Trustee,stee, whic which remh remains the trustee, is based in New Zealand and the judge unsurprisingly described it as “a highly reputable trustee” (judgment, para 86) in a passage quoted by the Court of Appeal ([2014] CKCA 4, para 59).
9. ҈& < < &##10;& &##160; The0;The Court of Appeal ullpfully summarised the terms of the Trued, a14] C, par and oard adopts the sum withfications:
(a)p>(a)  &1160 #160;#160;   Contris’ accountsts are dealt in clauses 15-17.5-17.
(i) ټ&##160;; #1660 &##160; A member has pulompulsory aory account and if the member elects he or she lso h volu addil account. At the time the member is entitled to a pension, ton, that mhat memberember migh might also have a pension account. The mandated contributions of the employer and the employee go into the member’s compulsory account.
(ii) &##60;&<;ɘA 6emberember’s compulsory account is fully vested in the member - clause 69. There isuch sion ing t memb217;sntaryunt. ber&#s compulsorulsory accy account ount showsshows the the balanbalance vece vested sted in thin that member after crediting mandated contributions of both the employee and the employer, any amount transferred from another superannuation fund, any insured benefit which may be credited to that member, less any insurance premium paid on behalf of the member in accordance with the terms of the Trust Deed and an amount determined by the Trustee, subject to the consent of the Board, to be debited and paid to the reserve account to meet fund expenses.
(iii) &##160;;ɘ< < In addi thn,balance will bell be adjusted either positively or negatively annually with an amount calculated by applying the appropriate crediting rate he Fucount “crediting rate” is in effect based on thon the Fune FundRd’s performance and the value of their assets. Because the crediting rate may be negative and there will be deductions for managing the Fund and paying an insurance premium on behalf of the member, a member’s interest in the Fund may be less than the combined contributions of the member and the employer.
(b) Pensionuaccoarts eal dwith with in clause 20. When an employee is entitled to a benefit and retires the balance in the compulsory account is transferred to a pension account and used to provide a pension that may also be used to buy an annuity for the employee. After acquiring an actuarial report the Trustee in consultation with the Board may increase or reduce the pension factor and may make other alterations to the benefits payable to a member.
(c) ټ&#R60; veserve accouaccounts are dealt in clauses 27§ and 28. Thererovision for bfor both a general reserve account and a pension reserve accouunds nly bnsfero those reserve accounts, whi, which mach may only only be transferred from a member’8217;s compulsory account to meet the expenses of the Fund.
(d) ҈& B60;fitnefits paya payable are described in clauses 42-46. Subject to some specified exceptions, benefits are payable by way of pension. If the balance of a member’s compulsory accis lean $2, it mait may be y be paid paid as a lump sum. Apart from that, a member entitled to a pension may elect to take a cash sum of up to one-quarter of the balance in the member’s compulsory account. Benefits are usually paid when a member reaches normal retirement age, provided a member has not received earlier benefits from the Fund. There are provisions for earlier payment for total and permanent disablement and provisions for payment on the death of a member. There are also provisions for payment of a spousal benefit and payment of an insurance benefit in the case of premature death.
(e) &#A60; sttru#82e&;s i7demnidemnity is contained in clauses 79-81. The Trustee is indemnified against all liabilities and expenses incurred in the execution of its duties and will have a first anamounn on und for such inde indemnitymnity. The. The indemnity will not be available if the Trustee or a director of the Trustee fails to act in good faith or honestly in a matter concerning the Fund, or the acts or omissions of the Trustee or of that director are the result of wilful or negligent default or wilful or negligent breach of trust or the dishonesty or fraud of any of its directors, officers or other persons or persons appointed by the manager.
(f) ټ Powers of investment #160;are identified iuse 94se 94. The powers of investment vested in the Trustee are extensive and it has the same powers it would have as a beneficial owner of the Fund. These powers are subject to the provisionshe Act including the power ower of the Board after consultation with the Minister to make the directions referred to in para 5(g) above.
(g) &#D60; lusson oiothe und&#und is covered by clause 11e Fuhe Fund dissolves if it no longer has any members or on a date the Board determines in consultation the ee aninet.lso tates ay prior rior to thto the date date of e of expirexpiration of the perpetuity period but thut the definition of “perpetuity period” in effect means that it is in existence for very many years to come.
(h) &##160;; D60tribstribution tion on dissolution is the subject of clause 118. On dissolution, the funds are paid in accordance with the Trust Deed to the contributors entitled to them less the expense of dissolution. Any surplus does noto the Government of the Cook Islands. It may at the discretscretion of the Trustee be paid to members, former members or pensioners or other dependants by way of further benefits.
10. &##60;&<;ɘʔ< The Ctutiin is based on then the Westminster Model, whose character was explained by the Board in Hi The  [1977] AC 195, 213-214
11. ҈ &160; ¦҈&< < Article 4e(1) tively entrenntrenches the Constitution by requiring any legislation which amends the Constitution to “[receive] the affirmative of nss tho-thirds of the total membership (including vacancies) of t of the Pahe Parliamrliament” and to satisfy certain other requirements. (Article 41(2) imposes an additional requirement for some categories of legislation which amend the Constitution, but it is not relevant for present purposes).
12. ټ&##160;< < ټ &<;Ar60;Article 40 is h is headed “No property to be taken compulsorily without compensation”, and paragraph (1) is in these :
#8220roperty shall ben possession of compulsorilyorily, and, and no r no right ight over or interest in any property shall be acquired compulsorily, except under the law, which of itself or when read with any other law -(a) ;ټ Requirequires the the payment within a reasonable time of adequate compensation therefor; and
(b) ـ G6ves to ersonming ming compensation, a right of access, for thor the dete determinermination of his interest in the
property and the amount of compensation,he Hiurt; p> 13. &<;ɘʔ Art0;Article 64 is headed “Fundamental human rights and freedoms”. It provides as follows: “(1) ټ s herecognand nand declared that in the Cook Islanere exist, and shall continuetinue to e to exist,xist, with without
discrimination by reason of race, national origin, colour, religipiniolief, or sex, the, the following fundamental human rights ahts
and freedoms - (a) &ـ T60; The rige right of the individual to life, liberty, and security of the person, and the right not to be deprived
thereof except in accordance law; (b); The rige right ofht of thi individual to equality before thre the law and to the protection of the law; (c) ;ټ T60; The rige right of the individual to own property and the right not to be deprived thereof except in accordanth
la. (2) ; I60is h reby recognised ased and decl declared ared that every person has duties to others, and accordingly is subject in
the exercise of his rights and freedoms to such limitations as are imposed, by any enactment or rule of law for the time being in
force, for protecting the rights and freedoms of others or in the interests of public safety, order, or morals, the general welfare,
or the security of the Cook Islands.” 14. ـ < ҈ Article 6tes thas that, sub, subject to paragraph (2) of article 64, every enactment shall bstrue
applo as o abr, abror infring auth the ation, abri abridgemedgement ornt or infr infringemingement) ent) of anof any of y of the
rthe rights and freedoms mentioned in article 64(1). The arguments raised before the Board 15. &##60;&<;ɘʔ< The appellants, some of arem are employers, and the rest of whom are employees,usinecarri
in tok Is, conthat chemeset up by the 2000 Ac00 Act inft infringeringes thes the Cons Constituttitution, ion, and iand is therefore
invalid. Their argument raises three main contentions. 16. &##160; < n&##10;&
; < The first contenti this thet the mandatory contributory nature of the Scheme, which
requires employees to pay contrins, aerebye deprived propn of remuneration,tion, with without aout any realistic access to those
contributributionstions unti until retirement or death, is disproportionate, and therefore contrary to article 40(1) and/or article
64(1)(c) of the Constitution, given that there is (i) no Government guarantee or other underwriting of the Scheme (“a Guarantee”),
(ii) no entrenchment of the Scheme constitutionally (“Entrenchment”), and (iii) no right to make early withdrawals for
any reason (save under section 53, referred to in paras 5(k) above 18 below). This is essentially a proportionality attack: in the
absence of a Guarantee and Entrenchment, it is said that the deprivation of property resulting from implementation of the Scheme
is disproportionate. In this connection, the appellants contend that the Court of Appeal adopted the wrong approach to the question
of proportionality, and that, if the right approach is adopted, the Scheme fails the proportionality test. 17. ;ɘʔ ـ
The0;The Minister’se oase on this first contention is that the Court of Apapplie rigst intion
oportity, whether or not it did, the Sche Scheme asme as set set up byup by the the 2000 2000 Act iAct is proportionate despite
the absence of a Guarantee, Entrenchment, or right of early withdrawal of which the appellants complain. 18. ҈& < < &##10;& Secondly separatparately, tly, the appellants argue that the 200 infr article 40(1) and/or article
64(1) of the Constitution by virtue of its treatmenatment of t of migrant workers, in that section 53 (whose effect is summarised
in para 5(k) above) effectively forces them to forfeit the value of half their investment in the Fund (namely the employer’s
contributions), or alternatively because they are deprived of interest on their contributions when they are repaid. 19. ;ټ < n&#he0;Tnister contendntends that, on analysis, section 53 of the 2000 Act infringes neither of
the two articles of the Constitution. 20. &&##161660;    < #1660҈In t;In the coue courts below, various other points were taken, but those points are
now abandoned t is essarsay mbout
The constitutionality of the Scheme without Guarantee, Entrenchment or early withdrawal rights
Introductory
22. ҈&<;< < &##10;& As explained above, the Sche Scheme is said by the appellants to infringe article 40(1) and/or article)(c) e Contion e grothat disproportionate tate to deprive employees in the Cook IslanIslands ofds of a si a signifignificant cant proportion of their wages, with no guaranteed return and no significant means of access until retirement, given that there is no Guarantee or Entrenchment, and no right of early withdrawal.
23. &##160; < n&##10;& ; < The Board does notpt ceat ahat article 40(1) is engaged in this connection. There is no question of “property g] ta.. coorily̶s contionsnot taken from from an e an employmployee: rather they are invested for his his or heor her benr benefit, albeit compulsorily and in a manner outside the employee’s control. The fact that the fees and costs involved in administering the Scheme are taken from the aggregate contributions takes matters no further in this connection: it is an inevitable and plainly lawful incident of the existence of any superannuation scheme.
24. & &##60;& ; There isleat on the face oace of it, a somewhat more credible case for saying that the compulsory inent i Fundlves ompulacquin by the Trustees of the Fund Fund of a of a R “right over or interest” in t in the cohe contribntributions within article 40(1). However, all such contributions, and the resultant investments, remain vested in the employee who paid it (see paras 5(e)(ix) and 9(a)(i) and (ii) and 9(a) and (b) above), and the investments so vested will in due course be used for the benefit of the employee or his family. Accordingly, the Board rejects that contention also.
25. &##60;&<;ɘʔ< In ren tooarticle 64, by coby contrast, the Board agrees with the courts belat thellane rig conthat article 64(1)(c), is engaged by the operation oion of thef the Sche Scheme. Tme. The cohe compulsory extraction of contributions from an employee’s wages does represent a “deprivation” of those contributions, even though they (and any resulting investments) are held for the benefit of the employee, and the contributions (and investments) remain vested in him or her. This was rightly not disputed by the Minister, and it is therefore unnecessary to say more about it.
26. &##160;; < < & ; Acnordithe appelappellants&ants’ constitutional rights unrticl1)(c) are engaged, and it is therefore necessary to address the contention that that the Sche Scheme is unconstitutional on the ground that the interference with employees’ article 64(1)(c) rights is disproportionate, in the light of the absence of a Guarantee, Entrenchment or right of early withdrawal.
27. ;ټ < n&#o 0;S as the allegelleged lack of proportionality of the Scheme is concerned, both the Chief Justice and the Court of Appeal analyhe ret evi and law very fully and varefuMuch of the argumengument beft before tore the Bohe Board iard involved the appellants and the Minister respectively attacking and defending the analysis conducted by the Court of Appeal. In that connection, the Board considers that there is force in the appellants’ criticism that the Court of Appeal did apply the wrong test in two respects. First, it placed too much weight on the presumption of constitutionality. Secondly, it appears to have concluded that the question of proportionality in a case such as the present was substantially equivalent to “Wednesbury irrationality”.
28. &##60;&<;ɘAc6ordinordingly, the Board will first discuss thsumption of constitutionality and the applicable approach tach to proportionality, and it will then consider the central issue, namely whether the Scheme is indeed disproportionate.
The presumption of constitutionality
29. ҈& < < &##10;& So far a presumpesumption oion of constitutionality is concerned, the Court of Appeal said that d twoonente firs theciple a court shouldpossible, interpret a statute sute so thao that it t it does does not cnot conflionflict wict with any constitutional limitations - see Observer Publicationsv Md v Matthew [2001] UKPC 11, para 49. The second component which the Court of Appeal identified was that “[t]he constinality of a Parliamentary eary enactment is presumed unless it is shown to be unconstitutional” - see Public Service ApBoard vard v Omar Maraj [2010C 29, para 29.
30. ; n&##10; e Board has no doubt butt but that the first component is an important and valid principle
of statutory interpretation, and indeeds inc in tnstitution - see article 65. Ad Cooid in ObserObserver Pver Publicublicationationss, para 49, legislation should,ossipossible, be “read down” so as to comply with constitutional requirements. And, as Lady Hale said
more recently, “in interpreting [statutorovisions, the Board should presume that Parliament intendetended to legislate for
a purpose which is consistent with the fundamental rights and not in violation of them” - Public SerAppeal Board vard v Omar Maraj
31.&##160;; ـʔ er circumspectioection is r is required when it comes to the second component. The Board would accept that, save perhaps in extreme circumstances, a statute should be presumed to be constitutional until it is shown to be otherwise, that (in so far as it is helpful to speak of a burden in such circumstances) the burden is on the party alleging that a statute is unconstitutional, and that any court should be circumspect before deciding that a statute is unconstitutional.
32. ـ҈< < ـ &##60;&Ho60;However, the Bohe Board is not convinced that the second component of the presumption can normally reach any further than this (unless it is no more than the proportionalitrciser a dent name). Ie). It is t is true true that there are cases where the Board described the burden on a party who alleges that a statute is unconstitutional as “heavy”. However, where the issue is one of construction, that description is simply an application of the first, uncontroversial, component of the principle, as enunciated, for instance, by Lady Hale in Omar Maraj, in so faso far as the issue of constitutionality turns (as here) on proportionality, this second limb of the presumption normadds nothing to the ingredients of the proportionality exercise. However, it is right to acko acknowledge that the notion that there is a heavy burden on a party who alleges a statute is unconstitutional has obvious force where the allegation of unconstitutionality turns on issues of fact - eg the motive of the legislator (as was discussed in Hinds;at p 224).
.33. ـ҈< < ـ &##60;&In60;In the present sent case, the no significant issue of fact between the parties: the effe effect of the Scheme as set up by the 2000 Act is agreed, as is the fact that thereo Guae, Enhment or earr early wily withdrathdrawal right The issue is simply whether the absence of each of those three features means that the Scheme is disproportionate thereby rendering the 2000 Act unconstitutional. In those circumstances, in agreement with the Chief Justice, the Board considers that the presumption of constitutionality takes matters no further, unless it is treated as an aspect of proportionality, in which case it adds nothing and, indeed, merely serves to confuse. In that connection, when considering the second component of the presumption of constitutionality, the Court of Appeal does appear at times to have conflated it with the margin of judgment which the court accords to the legislature when considering the proportionality of a statute. Thus, in paras 45 and 46 of their judgment, in support of what they had concluded in connection with the presumption of constitutionality, the Court of Appeal quoted passages from judgments in La Cnie Sucrière e;re de Bel Ombre Ltee v Government of Mauritius [1995] 3 LRC 494, 503 and Grape Bay Ltd v Attorney General of Bermuda [1999] UKPC 43; [2000] 1 WLR 574, 585, both of which were exly coed with the ̶“margin of appreciation” whichwhich the court should accord the legislature.
The proper approach to proportionality
34. & < ټ So far as rtionationality iity is concerned, the Court of Appeal rightly referred to the judgments of Lord Sumption and Reed e Uniingdom SupCourthe ca Bank Mellat v HM Treasureasuryasury (No (No 2)) [2013] UKSC 39; [2014] AC 700, paras 20-21 and 68-76 respectivectively. However (drawing from its earliersion in Clarke v Ka v Karika<160 [1985] LRC (Const) 732, 746), the Court of Appeal suggested at para 39 of its judgment that the 2000 Act could only be impugned on grounds of disproportionality if it “does not rest upon any reasonable basis, but ientially arbitrary”. 21;. The test of arbitrariness was also treated as the appropriate test in a passage in Woods v Mir of Justice, ice, Legal and Parliamentary Affairs [1994] 1 59, 362 cited with with approval by the Court of Appeal in 49 of its judgment.
35. ـ &##10; h00;Tard considers that,that,that, in suggesting that the 2000 Act could only be declared unconstitutional on the grounds of disproportity icouldhown to be arbitrary, thet of l applied an inapprnappropriaopriate tete test. Tst. The tehe test of arbitrariness may well be an appropriate way of testing the lawfulness of at least some ordinary administrative decisions and actions, applying the so-called Wednesbury test. Howethe proportioortionality exercise is rather different, as indeed is clear from the two judgments in Bank Mellat>refeto above.
36. &##10;&; s, ra pa of20is jhdgmendgment, Lord Sumption explained that an issue of proportionality:
“depends on an exacting ans of actuae advanced in defence of the measur order to determine (i) whethwhether iter its objs objectivective is sufficiently important to justify the limitation of a fundamental right; (ii) whether it is rationally connected to the objective; (iii) whether a less intrusive measure could have been used; and (iv) whether, having regard to these matters and to the severity of the consequences, a fair balance has been struck between the rights of the individual and the interests of the community. These four requirements are logically separate, but in practice they inevitably overlap because the same facts are likely to be relevant to more than one of them.”
37. ҈&<;< < &##10;& As Lord Reed said in para 6ara 69 of his judgment in Bank Mellat,&“8220;the intensity [of a proportionality review] - that is to say, the degree of weight or respeven t asset of the primary decisdecision-mion-maker - depends on the context”. Thus, the intensity of the revi review which the court carries out in a proportionality exercise depends on a number of factors, including in particular the right involved, the nature of the issue and the identity of the decision maker.
38. ـʔ ـ As to the naof t e issue inue involved in this case, the 2000 Act was a measure of social policy with sigant meconomplics, anrticu bearing in mind the spee specificcific crit criticisms advanced by the appellants, wis, with coth considensiderable budgetary implications for the Government (which are anyway engaged, not least because of the tax foregone on contributions to the Scheme). Whether to introduce such a scheme, and, if so, what its general terms should be, and in particular whether they should include a Guarantee, Entrenchment and/or early withdrawal rights are, by their very nature, decisions as to which the courts should accord the Government a generous margin of judgment (or appreciation). When it comes to policy choices of a social and macro-economic nature, the courts should be particularly diffident about interfering, given the nature of the functions, expertise and experience of the judiciary as against the executive or (as in this case) the legislature - see eg R (Rotherham Molitan Born Borough Council) v Secretary of State for Business, Innovation and Skills [2015] UKSC 6; [2015] PTSR 322, paras 22-23 and 61-65.
39. ټ &҈ < So60;So 0;So far as the denision-maker is concerned, in this case it was Parliament. The legislature is entitled tider n of ent the exve. U a person exercising delg delegateegated powd powers, ers, the legislature has a wider range of e of optiooptions open to it, and, as a result of being elected it, enjoys democratic legitimacy and has direct democratic accountability. Further, as a practical matter, it is, normally at any rate, difficult to identify the motives of a legislature, given that different members may have different reasons for voting the way they did, and, in relation to a number of Bills, many of the members who vote in favour do not speak.
40. &##160; < n&##10;& ; < The constitutionalt rghsed ised in relation to this issue in the case is the right to property. While this is an important right, every interference witherty s musassessed on its facts. In this case an employee loses contrcontrol ofol of the the money which he contributes to the Fund, and there is a risk of its diminution or even its total loss. However, this is not a case of actual deprivation of money: it is more a case of enforced long term investment of money, albeit that the investment is one over which the owner of the money has not only no choice, but also very limited control, either over how the money is invested or when and how he or she can withdraw the eventual proceeds of the investment.
41. ټ&##60;&< < n&##160;In these circucircumstances, this case is very much at the lower end of the intensity of review spectrum. The nature of the decision (pularlthe cisms advanced by thellants plainly have macro-ecoo-economicnomic impl implicatiications), the identity of the decision-maker (the democratically elected legislature) and the nature of the interference with the constitutional right (which, while serious, is relatively mild) justify the argument that any court should be particularly diffident before acceding to the appellants’ case on this first issue. While the Court of Appeal was wrong to conclude that arbitrariness was the hurdle which any proportionality challenge had to cross, it is fair to say that any challenge to the constitutionality of the 2000 Act on the grounds alleged by the appellants faces an uphill task, and may not fall very far short of arbitrariness. However, as explained, arbitrariness is an unhelpful test in this context.
The alleged disproportionality of the Scheme: General
42. &##160;; < < & ; Asaexpl in para para 36 abo6 above, this question involves addrg foustions or requirements. It is rightly accepted by the appellants that the first arst and send second requirements of the four stage proportionality test are satisfied. The objective of the 2000 Act and the Scheme is to relieve poverty in the Cook Islands by providing substantially greater financial security than previously existed for those who have ceased to be economically active. That is plainly an important, indeed a laudable, aim, and it is one which is plainly sufficiently important to justify the limitation of the fundamental right contained in article 64(1)(c). It is also indisputable that the 2000 Act (and the Trust Deed) are rationally connected to this objective.
43. ;ɘʔ ـ It 0;It is argued on beof t of the appellants that their complaints about the lack of a Guarantee or Entrenchment comes in at either the third e fouf the stages of the proportionality analysnalysis. There is a potential degree of ovof overlaperlap between the two stages, and, at least in this case, there is no point in discussing which of the two stages is involved in the appellants’ arguments. The Board will consider the argument on the basis that applies at both stages.
44. &##160; &##160; So far as it itecond that that the Scheme fails on the ground that a less intrusive measure could have usedis trat itbe saat, i Scheme had included a Guaranuarantee atee and ifnd if it had been entrenched constitutionationally, lly, the dthe deprivation which it involves would have been less “intrusive” than it actually is. However, when it comes to the third stage in the proportionality analysis, as Lord Reed explained in Bank Mellat, para 75:
“the limitation of the protected right must be one that ‘it was reasonable for the legislature to impose’ and that the courts [are] ‘not called on to substitutecial opinions for legislatislative ones as to the place at which to draw a precise line’. This approach is unavoidable, if there is to be any real prospect of a limitation on rights being justified: ... a judge would be unimaginative indeed if he could not come up with something a little less drastic or a little less restrictive in almost any situation, and thereby enable himself to vote to strike legislation down ...; especially, ... if he is unaware of the relevant practicalities and indifferent to considerations of cost.”
45. ;ټ < n&#s 0;Athe fourth stah stage, it involves the court asking whether a fair balance has been struck. Is casat res thet to hethe absence of a Guarantee ntee and Entrenchment means that a fair bair balancelance, whi, which woch would ould otherwise be accepted as having been achieved, has not been achieved.
The alleged disproportionality of the Scheme: a Guarantee
46. & &##60;& ; As it waeldevd by Dr McCoy cCoy on behalf of the appellants, the contention that the Scheme is disproportionate because of the absence of a Guarantee appeared to involve two points. The first was thatarantuld e that ahat any deny defalcafalcations in relation to the assets in the Fund should be made good by the Government. The second was that the Guarantee should not be limited to making good defalcations, but should effectively involve the Government underwriting a minimum return to members of the Scheme.
47. ; &##60;&<; Soasar e notion of a simpleimple Guarantee to protect the members of the Scheme against defalcationsoncerit ap to tard thard gue that the protection afforafforded uded under the terms of the 2000 Act and thnd the True Trust Dest Deed (sed (see in particular the terms summarised in paras 5(c), (f), (g) and (h) and 9(a)(ii) above) are insufficient. The protection afforded to Scheme members appears to be the sort of protection which is given in any well-drafted private superannuation scheme. Accordingly, at least on the face of it, the Board cannot perceive any justification for the argument that it was positively disproportionate for the Cook Islands’ Parliament not to have included a simple government Guarantee to protect the members of the Scheme against defalcations.
48. &##60;&<;Dr60160;#cCoy cCoy argued with some force that the prospect of the Cook Islands’ Government seeking to take action which disadvantaged members ofSchem not ful. He said that “Governments [of the Cohe Cook Isok Islandslands] in the past had repeatedly plundered public and Governmental funds” and that there had been “past rampant government maladministration” in the Cook Islands. In particular, he pointed to the fact that governments of the Cook Islands in the past had a “history of misappropriating any accessible source of funds including the assets of the Government’s then superannuation scheme for public servants”, which occurred in the 1990s. Sadly, there is undoubtedly force in that point, as can be appreciated by reading paras 140-147 of the Court of Appeal judgment in this case, as well as the judgments in lm v Tanga [200>[2006] NZAR IHC) aHC) and George v Attornnerall OA No 1/2013, 22 2013. 013. Accordingly, Dr McCoy suggested that, even if a Guarantee would not otherwise be required to achieve proporlity,unfore histohistory of the Cook Islands indicated that that it was required in this case.
49. ;ټ < < ـ &##60;&It60;It is obviouslyously inimical to the rule of law for a court fuse to contemplate the possibility that the executive, or even the legislature, may imay in then the future act unlawfully or improperly. On the other hand, it is very difficult to see how there can be a coherent system of government and maintenance of the rule of law unless there is generally mutual respect and confidence between the legislature, the executive and the judiciary. The history of the governance and financial management of previous Cook Islands administrations does give cause for concern. But it does not appear to the Board that the unfortunate history upon which Dr McCoy understandably relies justifies concluding that proportionality requires a Guarantee, if (as the Board has cded) ded) it would otherwise not be required. As the Court of Appeal said in para 196 of its judgment, “for all its economic trials and tribulations, the Cook Islands has been, since Independence, a stable law-abiding democracy”.
50. &##160;;ɘ< < & ; More speaifically, as the Cthe Court of Appeal pointed out in para 198 of its judgment, the protection afforded under the Scheme (forance gh haan independent and rted te based in New Zeal Zealand, and, a Boaa Board onrd only only one of whose six members is appointed by the Government, and its assets vested in its members) is significantly greater, indeed of a wholly different order, from that which existed in relation to the scheme which was unlawfully plundered in the 1990s.
51. ;ټ < < ـ &##60;&Fu60;Furthermore, ife, if the real threat to the safety of the investments in the Fund comes from overn it id to ow a ntee the Governmentnment would add much, if anything to the pthe protecrotection tion afforafforded tded to Scheme members.
52. &##160;;ɘ< < & ; It is trae that (with one eone exception, where the scheme got into difficulties) in those other small Pacific Islands which have state-sponsored compulsory superannuation schemes uaranby thevant government.ment. It i It is alss also true that that a World Bank Report (Averting the Old Age Crisis: Policies to Protect the Old and Promote Growth, 1994) supports the notion that superannuation schemes should be guaranteed in some way so as to ensure a minimum return for members. However, those points do not take matters much further, other than to emphasise that it is perfectly reasonable to contend that the Scheme should have such a guarantee; but that is not the issue.
53. &##60;&<;ɘʔ< The contention that thernmeernment should guarantee a minimum return to Scheme members rests on the notion that compulsory use of 5% of an employee’s earnings for saving for his or her retirement cannot be jusd under a state-sponsored sred superannuation scheme if the employee is required to take the whole of the investment risk.
54. ـ < ҈ Whether o there here shouldhould be a sharing of the investment risk between employees and the Government, and, if so, how such sharing should be achieved, are eiallytionso the allocation of risk between two two groupgroups of s of people, namely members of the Scheme and Cook Islands’ taxpayers. It appears to the Board that it would require an exceptional case before a court could properly hold that a legislative decision on such an issue could be rejected as being disproportionate. Self-evidently, it is very difficult for a judge, who has relatively limited relevant experience and appreciation of the competing demands on the nation’s finances, to decide that the conclusion which the legislature reached on such a macro-economic, policy-based issue was unreasonable or disproportionate.
55. &##60;&<;Th60natu e of e of a defined contribution superannuation scheme is that the members’ contributions are invested, and that the eventual retirement benefits are dependent, to a substantial extent, on how the investments perform. Unlike the traditional, but now very rare, defined benefit schemes, there is no guaranteed level of retirement benefit. The very fact that the cost of such a guarantee was becoming very high, in many peoples’ view, prohibitively high, explains the almost universal closing of defined benefit schemes in much richer societies than that of the Cook Islands. It accordingly can be said with some force that, at least unless the level of guaranteed benefit is very low, the provision of a guarantee such as the appellants seek in this case would involve the Cook Islands’ Government running a real risk of creating economic problems for the future.
56. ҈&<;< < &##10;& Dr McCoy again relied on thon the recent unfortunate history of the Cook Islands, summarised in para 48 above, to support his case forarantinimuurn. The Board has sifficin seeing any relevrelevant cant conneconnection.tion. In a In any event, it can be said with some force that, if the previous financial problems in the Cook Islands are relevant, then, from the point of view of taxpayers, that represents a good reason for not entrenching the 2000 Act, and, even more powerfully, for not providing a Guarantee. If there is a risk of the financial difficulties recurring, that would suggest that the Government should avoid entering into any substantial commitment unless it has no alternative. This point ultimately simply serves to emphasise that the decision whether to provide a Guarantee involves balancing the competing interests of two substantial groups, Scheme members and taxpayers, and reaching what is very much a policy-based decision.
57. ; &##60;&<; Itlss arue that some of thef the state-sponsored superannuation schemes in other small Pacific islands have a government guarantee oinimuurn tbers. However, others do not. In annt, as explained in para 52 a 52 above,bove, the the pointpoint is of no real assistance to the appellants anyway.
58. ;ټ < n&#n 0;Iecting the appe appellants’ case for a Guarantee, the Court of Appeal also relied on an actuarial report, which concluded that, over its 14 years of existence, the Fund han finlly ssful, and assessesessed thed the chan chances of a cumulative loss over any five-year period as being 0.4%. In the Board’s view, this was something which can properly be taken into account when assessing the appellants’ claim that there should be a Guarantee.
The alleged disproportionality of the Scheme: Entrenchment
59. ـ &##60;&< n&#o 0;S as Entrenchmenchment is concerned, the appellants rightly accept thereothinthe Ctution which requires the 2000 Act to be constitutionally enty entrenchrenched. Ted. The Cohe Court of Appeal rightly observed at [2014] CIKA 4, para 190 that it would be unusual to entrench constitutionally legislation which did not “creat[e] the constitutional structure of a state, especially to preserve the specific rights and freedoms deemed by its Parliament to be sacrosanct.” This does not, of course mean that the appellants’ argument on Entrenchment must fail, but, given that they are seeking to persuade a court that lack of Entrenchment undermines the lawfulness of the Scheme as set up by the 2000 Act, it serves to increase the pitch of the uphill slope that they have to climb.
60. ـ҈< < ـ &##60;&Ho60;However, as Dr s Dr McCoy put the point on behalf of the appellants “if the threat or risk orivatn the of nturn rtialrn [of emof employeployees’ contributions] is put beyonbeyond easd easy reay reach bych by Entrenchment, then the degree of deprivation constituted by the initial capturing of compulsory contributions ..., is correspondingly lessened.” He makes the point that, in the absence of Entrenchment, legislation could, for instance, render the Fund taxable, increase the maximum proportion of the Fund to be invested in the Cook Islands, or increase the Government’s regulatory control over the terms of the Trust Deed.
61. &ـʔ< < ;d Nolethe tss, there is, as a as already mentioned, substantial protection afforded to Scheme members. All the assets in the Fund are in the of dependent trustee, a subjo the limited powerpowers of s of guidaguidance wnce which hich are conferred on the Board (see para 5(f) and (g) above). In addition, the trustee is based in New Zealand, and is highly reputable. Further, there is only one representative of the Minister, and no other Government representative on the Board (see para 5(c) and (d) above). In addition, the beneficial ownership in the assets acquired with an employee’s contributions are beneficially vested in the employee (see para 9(a) above). Accordingly, as the Court of Appeal rightly pointed out in para 199 of its judgment, the Government cannot decide to acquire control or ownership over any of the assets in the Fund without giving rise to a potential claim under article 40 or article 64 of the Constitution, and thereby ensuring judicial scrutiny of any such decision. In other words, any action by the Government which involved an infringement of article 40 or article 64 rights would be unconstitutional, and, to that extent, Entrenchment would take matters no further. In other words, the Scheme is in practice constitutionally entrenched, or at least constitutionally protected, to a significant extent.
62. &##160;; < < & ; Hasing that, it , it is plas plain that Entrenchment would give a degree of extra protection to those who have made contributio the To txtent, the Boarnot awith ourt of Appealppeal when when it s it said iaid in parn para 201a 201 of its judgment that it did “not consider that entrenchment of the Act would have produced a less intrusive deprivation” (although the Court made a fair point at para 200 when it suggested that Entrenchment could render it much more difficult to make beneficial changes to the Scheme). However, it remains the fact that it would not be a very substantial advance on the constitutional protection that such persons already enjoy under the Scheme. Quite apart from this, although the implementation of the Scheme does involve a deprivation of the contributions within the meaning of article 64(1)(c) of the Constitution, there is nothing expropriatory about the Scheme, which also weakens the case for Entrenchment.
63. ҈& < < &##10;& In suppo his args argument ment in support of Entrenchment, Dr McCoy again relied on the history summarised in para 48 above. Thrd dot con that this factn alte conon that the lahe lack ofck of Entr Entrenchmenchment dent does noes not render the Scheme disproportionate for the reasons given in paras 50 and 51, and to a lesser extent para 52, above.
The alleged disproportionality of the Scheme: Early withdrawal
64. &##60;&<;ɘʔ< In addition to re on ghe abhe absence of a Guarantee and of Entrenchment, the appellants say that the Scheme is disproportionate because of itlexib, in its terms do not permit members to acto access the funds vested in their names ames priorprior to retirement for purposes such as education or housing.
65. ;ټ < < ـ &##60;&Th60;The Board has lhas little hesitation in agreeing with the Court of Appeal that this line of attack on the proportionality of the Scheme must fail. It is hard to see hocan ccinglcontended to be i be inapprnappropriaopriate for a superannuation scheme to include terms which protect a member’s capital from being spent in the meantime, even for worthwhile purposes, so as to ensure that it is available to fund his or her needs in retirement. Indeed, such a contention appears to lie rather uneasily with some of the arguments raised by the appellants on the need for a Guarantee of a minimum return, which is based on the notion that employees in the Cook Islands should have a reasonably sized pension.
66. ټ ټ Whether toer to include tenms in the Scheme which permit early withdrawal, and the contents of any such terms, are issues which involve policices were much for the legislature as the decider oder of policy. At least in the absence of e of any gany good reason to the contrary, the Board sees no grounds for a court questioning the legislature’s decision that the Scheme should include no such rights.
Conclusion on the first issue
67. ټ ټ In conclusnclusion on thistfirst issue, while the Scheme could undoubtedly benefit from serious reconsideration so far as some of its provisire coed (a Court of Appeal rightly recognised - see see [2014] CKCA 4, para 217), the Board dard does noes not consider that the absence of a Guarantee, Entrenchment or right of early withdrawal renders it unconstitutional. The terms of the 2000 Act and the Trust Deed, as summarised in paras 5 and 9 above, ensure that the Scheme is sufficiently secure and sufficiently independent of Government interference to avoid the need for a Guarantee or for Entrenchment. Of course, no system can be devised to ensure that anyone’s money is completely safe from being lost or wrongly taken, but the terms of the 2000 Act (and the Trust Deed) provide sufficient protection of the rights of the Scheme members to ensure the Scheme’s constitutionality.
The constitutionality of the treatment of migrant workers
68. ـ &##60;&< n&#he0;Tard turns to t to the appellants’ challenge to the constitutionality of the treatment under section 53 of the 2000 Act of emes wh not nent residents in the Cooands. It is convenient at thit this pois point tont to set set out the relevant part of the 2000 Act containing section 53. It is headed “Preservation of rights” and consists of two sections, reading as follows:
“53. & ithdWawal
(2) ـ W60; Where a person is resident in the Cook Islands for the sole purpose of being employed under a contractervice of not more than three years and all of that persons employee contributions for the the time being to the credit of that person were made in respect of earnings paid under that contract of service then that person shall be entitled to receive a refund equal to the aggregate of those employee contributions on the persons permanent departure from the Cook Islands, subject to the provision of such evidence as the Board may require that the persons departure will be permanent.
(3) Where a person is piid h h or her employees contributions under subsection (2) then, the employers contributions shall be transd to eservount n Fun>
> Pre; Preservaservation tf n of riof rightb> - Except as otherwise provided, where at any time a person ceases contributing to the Fund, the amount to the credit of that person shall continue to attract interest until it is applied to pr a benefit from the Fund.”
69. &##60;&<;ɘʔ< In su, asyset out also in p in para 5(k) above, non-resident employees (“migrant workers”) who aploye up tee yeave ttribu the Scheme in the same same way away as employees who are permanently residresident ient in then the Cook Cook Islands (“resident workers”). However, unlike resident workers, migrant workers are entitled (but not obliged) to be repaid their contributions at the end of their employment, but this right only extends to their own contributions, and not to the contributions made for their benefit by their employers. In the event of a migrant employee making such an election, the employer’s contributions are transferred to the Fund’s reserve account (as to which see para 9(c) above). There, they inure to the benefit of other members of the superannuation fund (in practice, mainly Cook Islanders) and/or to the Cook Islands government which has in practice largely underwritten the fund’s expenses.
70. ҈&<;< < &##10;& The factual background to t to this issue is set out in an affidavit from the Executive Director and acutivber (ast Pent) e Cooands Chamber of Comf Commerce (Lynnette Margaret Samuela and and StephStephen Nien Nigel Agel Andersnderson). In their affidavit, they made clear that, while they did not support the challenge based on the arguments considered in paras 22-67 above, they took issue with the fairness of and justification for the provisions of section 53. Their affidavit describes the development over the years of extensive dependence of Cook Islands’ hotel and tourism businesses on migrant workers, the bulk of whom come from countries such as Fiji, the Philippines, Indonesia, Kiribati and are driven to work in the Cook Islands by economic pressures. It notes that migrant workers are “often only semi-skilled” and in general modestly paid; that it is Cook Islands policy to discourage migrant workers from long term residence (with section 17 of the Entry, Residence and Departure Act 1971-72 thus providing for every entry permit to expire after two or less years); and that many migrant workers aim to return home after maximising remittances while in the Cook Islands. The affidavit describes the limited portability of superannuation for foreign workers as “very unsatisfactory” and “the nett effect of the Act [as] constitut[ing] a ‘tax’ that falls disproportionately on these lower paid workers in a way that seems discriminatory”.
71. ټ < n&##160; As a matter of law, the appe appellant’s challenge to secti in its present form can be analysed as raising two complaints. The first complaint is that that section 53 involves unjustifiable discrimination against migrant workers, contrary to article 64(1) of the Constitution, because they are required to forego the benefit of their employer’s contributions. The second complaint is that, because the section requires migrant workers to forego the benefit of their employer’s contributions (which are vested in them), they are deprived of property without justification or compensation, contrary to article 40(1) and/or article 64(1)(c) of the Constitution (set out in paras 12 and 13 above). The Board considers it convenient to address these complaints together. There is no challenge to the finding by the Court of Appeal of deprivation of the claimants’ property within the meaning of article 64(1)(c) and the critical question is whether there is unjustifiable discrtion.
72. ҈ ҈ Under the 2000 mct, nt work workers become members of the Fund, and contributions have to be made in respect of them, in the same way athe cith aok Islands’ inhabitant. Under the 2000 Act and the Trust Deed, all call contriontributiobutions made in respect of and standing to the account of a particular employee are “fully vested” in that employee: see para 9(a)(ii) above. The employee earns the employers’ contributions by the work he does, just as he earns the benefit of his own contributions by deductions from the pay which he would otherwise receive for the same work. Migrants and ordinary inhabitants are to that extent in identical positions. But their position in practical terms is significantly different. Migrants are not expected to remain in the Islands or to live there during their retirement. It is not in their, or probably anyone’s, interests that they should be locked into a Cook Islands’ pension scheme until their retirement. After migrants leave the Islands, the prospects of their claiming any limited pension which they had earned there, perhaps decades earlier, are inevitably slight.
73. ҈ ҈ The Court of Apieal ra 9 of 9 of their judgment accurately described thd as 0;aim prov fina secufor Cslanders in their retirementnt”,221;, and and in pain para 12ra 12 they they quot quoted the Deputy Prime Minister as saying at the second reading of the Bill which became the Act that “the purpose of the Bill is to establish a compulsory National Superannuation Fund from which benefits are to be provided to employees upon their retirement from employment in the Cook Islands”. This was in the long term interests of the Islanders as individuals and of the Cook Islands’ community, which would otherwise face the problem of what to do about an elderly and in some cases indigent section of the community. This aim provided the rationale for two essential features of the Fund, namely that it was compulsory and that the ability of individuals to draw benefits before retirement was severely restricted. However, for reasons which the Board has set out, migrant workers are a distinct social group to whom that rationale does not apply. They are not Cook Islanders and are not expected to live in the Cook Islands until retirement. On the contrary, they fulfil a particular purpose for the Islands’ economy by being admitted for a short term only.
74. ټ&##60;&< < n&#wo decisions of thef the Grand Chamber of the European Court of Human Rights establish that “[t]he right not to be discriminated again. is violahen states without aective and reasonable justifistificatiocation fain fail to l to treat differently persons whose situations are significantly different”, and that discrimination can “take the form of disproportionately prejudicial effects of a general policy or measure which, though couched in neutral terms, discriminates against a group”: see Thnos v Greece& (2000E 31 15, para 44 and&#and DH v Czepublic #160; (2007) 47 EHRR 3a 184 184 respectively. It is torthe B#8217ew no anno answer to say that there has been been no discrimination because there woul would havd have been none if section 53 had not been ena(sinc treatment of migf migrant workers would have been identicantical to that of indigenous workers); and that far from section 53 being open to objection, it merely gives to migrant workers an extra choice and therefore a more privileged position. If section 53 had not been enacted, migrant workers would have been admitted to the Islands on a purely temporary basis and compelled to contribute to the Fund, but not allowed to remove what they had earned on their permanent departure from the Islands. This would in the Board’s view have been a good example of a disproportionately prejudicial effect of a general measure on a distinctly different group from those, ie indigenous workers, whose welfare in retirement constituted the aim behind the establishment of the Fund.
75. ټ&##160;< < ټ &<;In60;In these circumircumstances, the Cook Islands legislature in enacting the Scheme has recognised that fairness requires that special provision be made for the special positf migworkeowever, havi having reng recognicognised that the position of migrants cannot sensibly be equated with that of ordinary inhabitants, the Cook Islands legislature has, as the Board sees it, gone only half way in section 53 towards compensating for the difference. It entitles migrants to the return of half their interest in the Fund, while in effect giving the benefit of the other half of the migrants’ interest in the Fund to the Fund and/or other pension-right holders and/or (because the evidence is that the government has largely been funding the expenses of the Fund) to the benefit of the Cook Islands’ Government itself. Section 53 has left migrants with a choice between (a) a (little more than theoretical) right to claim a pension on the same basis as an ordinary inhabitant at a date which is likely to be years or decades in the future and (b) a (practical) right to return (without interest, though no specific complaint is made about this) of only half the pension contributions standing to their credit in the Fund on leaving the Cook Islands after two years.
76. ټ < n&##160; The that it is f is fairly irly standard for any pension scheme which entitles a member to raw hnds fhe scearlycontaprovision pena him for doing so, iso, is, in , in the Bthe Board&oard’#8217;s vi;s view, new, no anso answer to this. One is here concerned with a specific group of people who are required to be members of a scheme, and who either can be seen as people who ought not to have been required to be members, or who, by their circumstances, will be almost bound to wish to withdraw their funds early. That point is reinforced by the fact that, in this case, it is only migrant workers who are entitled to withdraw from the Scheme.
77. &##60;&<;ɘʔ< Section 53,xclueing the pore portability of the contributions originating with the employer treats the employee as if he had not earned theseributand athey were not vested in him. It recognises that in fairness, the empl employee oyee shoulshould not be deprived of accrued pension rights, but it fails to appreciate that these extend as much to the sums directly contributed by the employer (but earned by the employee) as to the sums directly contributed by the migrant employee. All the contributions, from whatever source, are in employment terms earned by, and in Trust Fund terms “fully vested” in, the relevant migrant workers.
78. &##160;;ɘ< < & ; The upsh t of section 53 is53 is, in practice, that advantage is takemigrarkers7; vested pension contributions to the benefit of the reserve fund, and, and so t so to theo the benefit either of the body of Cook Islands’ workers or of the Fund or the Cook Islands’ Government. Migrant workers are necessary for the Cook Islands’ economy, but they are not welcome for too long (hence the two-year entry permit limit). They are accepted as requiring special treatment in view of their special position. But the treatment offered (which they will and do in practice accept) treats them in effect as a class of worker who can be expected to work for less than the wages which Cook Islands’ inhabitants receive. On this basis, if it extended generally, a migrant worker working in various host countries for periods of two years throughout his life, would, for precisely the same work as the inhabitants of such countries, lose the benefit of in effe (assuminsuming para 5(b) above to reflect present Cook Islands’ contribution rates) of the equivalent of his or her totalme over over his or her worlife, compared with such inhabitants. According to the evid evidence of Mr Wilkie Rasmussen, leader of the Opposition in the Cook Isl the position differs in other Pacific countries, such as S as Samoa, Tonga, Fiji, the Solomon Islands, Tuvalu and Vanuatu. They are said to allow migrants who permanently depart a full return of pension contributions standing to their credit. That suggests that section 53 is internationally anomalous in practice.
79. ټ < n&##160; Thigestion is suis supporteported by the fact that there do appear to be international stan whicognis contecommions address toblemigrants’ socialocial bene benefits.fits. The The SecreSecretary-tary-GenerGeneral ofal of the United Nations, in his report to the General Assembly dated 18 May 2006 on international migration and development including benefits and the protection of migrants, A/60/871, para 98, addressed the need to enhance the portability of pensions by collaboration between countries of origin and destination, and continued:
“Best practices in this area include allowing the totalization of periods of contribution and ensuring that migrants receive a fair replacement rate from each of the pension systems to which they contributed.”
In paras 76 and 113 of a later report dated 25 July 2013, A/68/190, the Secretary-General again referred to the need to enhance the portability of social security and other acquired right for migrants.
80. ـ < ҈ The Internal Covl Covenant nant on Economic, Social and CultRights of 16 December 1966, records (in article 9 read with article 2(2)) the undertaking oing of states to guarantee the rights of everyone to social security without discrimination. The United Nations’ Economic and Social Council’s (“ECOSOC’s”) General Comment No 19 dated 4 February 2008 on article 9 explains that this means that
“Where non-nationals, including migrant workers, have contributed to a social security scheme, they should be able to benefit from that contribution or retrieve their contributions if they leave the country.”
A footnote in this connection refers to para 98 of the Secretary-General’s report A/60/871. It should perhaps be added that there is no justification for treating the reference to migrants receiving “their contributions if they leave the country” as contemplating so discriminatory a result as would obtain if it was taken as excluding employer’s accrued contributions.
81. ;ټ < n&#n 0;I Board’s217;s view, the limitation of recovery under section 53 is both anomalous and u. Thia viech ap in lmeasu have been shared by they the courts below - both consisting of juof judges dges closecloser to r to the Cthe Cook Islands and particularly well placed to make a judgment on such matters. At first instance, Weston CJ, correctly in the Board’s view, saw section 53 as recognising that it would not be fair to lock departing migrants in (para 217), and went on:
“But it is by no means clear to me why migrant workers should lose their employer contributions in those circumstances. Whatever the reason, dispossessing migrant workers of their employer contributions seems both unnecessary and unfair.”
82. &##60;&<;ɘTh6 Cour Court of Appeal (Williams P, Barker and Paterson JJA) referred to the “rather anomalous position of migrant workers not being allowed to access the employer’s contribution” as “one of the ‘strands in the rope’” (para 204). However, their judgment went on (para 205) to reject the challenge to section 53, for reasons which the Board cannot accept, namely because they thought that
“A citizen, not a migrant worker leaving the Cook Islands, is not entitled to withdraw contributions which are locked in until the age of retirement. Whatever the court may think of the fairness of such proposal [sic] it was well within the legislature’s power to legislate on such matters of social policy.”
It is not entirely clear what the “proposal” in question here was, but it was probably the submission that migrants should have been entitled to withdraw the whole of their contributions. On that basis, the comparison drawn with ordinary inhabitants simply ignores the differences between their positions, which section 53 aims but fails fully to address and redress.
83. &##160; < n&##10;& ; < The Court of Appeat oento r to refer to Pillai v Mudke #160;[on">[1953] AC 514 as a case wherewhere the Bohe BoardBoard held that “alleged discrimination at immigrants, namely Indianndian Tamils, was intra vires the Ceylon Legislature because it was based not on their nationality but on migratory habits”. T1;. This case has however no relevance at all to the present. It was concerned with primitive anti-discrimination legislation - the Ceylon (Constitution and Independence) Order in Council, 1946 as amended - which only precluded the imposition of “disabilities or restrictions to which persons of other communities ... are not made liable”, and all that it decided was that migrants were not a “community” under this Act and so not then protected from discrimination.
84. &##60;&<;ɘʔ< The Cof A peal next quoted oted a prior Cook Islands’ Court of Appeal decision, Clarke v Karika [1985] Const) 73 auth for rfor roposition that the constitutiright to equal treatment or n or non-dion-discrimscriminatiination was “offended only if the classification rests on grounds whirrel to the achievemeevement ofnt of the state’s purpose”. If that was ever the law in the Cook Islands, the Board considers that it certainly cannot be now. It represents a quite inadequate approach to the “exacting analysis” and determination required by the passage in Bank Mellat set out ia 36 above.
85. ҈&<;< < &##10;& The Board is also unable tole to accept the Court of Appeal&;s neragra which it sought to
rationalise its approach and conclusions, as follows (para 20ra 207):
“There is a legitimate purpose to the challenged provisions regarding migratory workers because they act as disincentive to
people migrating and depopulating the Cook Islands.” This suggestion appears to the Board both speculative and implausible. The only evidence that the Court of Appeal referred to in this
part of its judgment was that (adduced by the appellants) of Mr Trevor Clarke, Chairman and Chief Executive of Cook Islands’
Trading Corporation. His view was that the 2000 Act “appears to abuse the rights of outward emigrants, of contract workers,
and of employers”. As to the relationship between emigration and immigration, he explained that outward immigration - meaning
in context, clearly, of the indigenous population - was massively high, and that this had led to “increasing inward migration,
on a short term basis, of workers from overseas”. The problem of indigenous emigration has in short nothing to do with section
53. 86. ـʔ ـ
Not surprisi in ,hese circucircumstances, there is no support for the Court of Appeal’s
approach inresposRrittee befhe BoThe nearest this comes tmes to anyo any simi similar point is an unsupported speculatiulation
thon that
“the legislature may, rightly or wrongly, have thought that the return to the employer of the employer’s contribution
could act as an incentive to structure the workforce with short term contracts so as to recover contributions, thereby diminishing
the overall strength of the scheme, and horizontal equity between employers.” This is however addressing a hypothesis that section 53 might have provided for return of the employers’ contribution in respect
of any departing migrant to the employer. That would certainly give the employer an incentive to employ short term migrant labour,
and would be just as unfair to migrant workers as the present system. It offers no justification for depriving departing migrant
workers of the value of such contributions. They are a much needed part of the workforce, but have to leave after at most two years. 87. ـ҈< < ـ &##60;&In60;In the above cive circumstances, it is for the Board, in its role constonal court,
to evaluate the constitutionality of section 53, applying the approacproach indh indicated in Bank Me#160;so far afar as that raises issues of proportionality, and bearing in mind that the Scheme as a whole falls within the area of social
policy. In contrasthe position under the general challenge to constitutionalionality which the Board has rejected, the Board is here
concerned with a specific provision, bearing on the position, and vested rights, of a specific (and socially disadvantaged) category
of pension-right holders, migrants. That there is a valid and necessary objective behind a provision enabling migrant workers, who
are only permitted to stay for a short period of years, to recover (albeit without interest) pension contributions vested in them
is unquestionable. But the objective in excluding from such recovery the equivalent of employers’ contributions is unexplained,
save that it will obviously benefit other ordinary pension-fund holders, the Fund and/or the Cook Islands’ Government. No substantial
justification at all has been shown for such an exclusion. It is not, and could hardly be, suggested that the viability of the Scheme
depended on it. The Scheme as a whole could, so far as appears, have operated by enabling migrants to recoup (without interest) the
full value of the contributions vested in them. The benefit which section 53 in its present form gives to ordinary pension-right
holders and/or the Cook Islands’ Government was and is uncovenanted. It failed to strike a fair balance between migrants and
the Cook Islands’ community, and was disproportionate, to vest in the benefit of the employers’ contributions made in
respect of migrants leaving the Cook Islands and wishing to take with them their accrued pension rights. 88. ;ɘʔ ـ
No 0;No doubt it is trut scat schemes such as the present are primarily intended to be long term,
and it may be regarded as generally undesirab allo contions to be repaid before the long terg term picture of the development of
a Funa Fund sucd such as the present has emerged. But migrants in the Cook Islands are in a special position, where they are not
only needed in the Cook Islands’ economy, but are also required to participate, and so acquire vested interests, in the Fund,
while at the same time being expected and required to stay only short term. Section 53 recognises their special position, but only
partially. Its effect in its present form is, the Board concludes, both confiscatory, in that it deprives migrants of vested rights
without justification, and discriminatory, in that it fails to make appropriate adjustments to cater for their special circumstances
and needs. 89. ;ɘʔ ـ
It 0;It is true that it staa standard feature of pensions schemes that the inteof dint grmay
ho be ced, in thrd’s view, that generalisralisationation does does not not excluexclude thde the neee need to consider what
balancing (or other) factor may reasonably be considered to justify forfeiting part of a migrant worker’s earnings accrued
in the Fund on his permanent departure. None has been articulated and the Board can see none. 90. ;ɘʔ ـ
It 0;It is also true the Ache Act had democratic and bipartisan approval. Howevhat if-eviy insient
s ownenderovision constitutional, althougthough it h it is a is a factofactor whir which mach may havy have weight, particularly
in cases which are near the margin. One of the principal reasons for having constitutional rights is that the ordinary majoritarian
political process cannot necessarily be relied on to protect minorities. In the Board’s view, for the reasons already given,
the fact that the discriminatory provision has democratic support is not enough to justify its constitutionality. It is also perhaps
worth pointing out that a migrant worker would not be part of the electorate unless he was a Commonwealth citizen or a permanent
resident of the Cook Islands (article 28(1)(a) of the Constitution). Migrant workers are plainly not permanent residents, and the
Board has no information what proportion of them are likely to be Commonwealth citizens (although such evidence as there is as to
their origins suggests that the great majority would not be). 91. ټ < n&##160; Fore reasons, ths, the Boar Board is of the view that section 53 is unjustifiable in its pr formthe
gs thaunjusbly des migranters oir property consistinisting of g of the ethe employmployer coer contribntributionutions stas standing
to their credit and unjustifiably discriminates against them. The Board accordingly propos declare lare that section 53(2)he 2000
Act (set out iout in para 68 above) should be read and applied as if the word “employee” was struck out in each of the
two places where160;as before the word word “contributions” and that that section 53(3) should be treated as deleted,
but it will allow the parties 28 days after this judgment is handed down in which to make written submissions if they so wish about
the terms of declaratory relief. Conclusion 92. ҈ ҈
The appeal ther fores on thon the first ground relating to the overall constitutionality of the
Scheme whole succon thond g relato section 53. The Board will will humb humbly adly advise Her Majesty accordingly to dismidismisssmiss
thss this appeal in respect of the first ground and to allow it on the second ground by making a declaration in the terms proposed
in the immediately preceding paragraph or other terms as the Board mard may determine in the light of any submissions thereunder. 93. &ـ < < ;d Tht parares are requested tted to make submissions in writing athe tof rder iner including costs,
such submissions to be lodged with the Registrar (aar (and sind simultaneously served on the other party) 28 days after this judgmentanded
down. LORD SUMPTION: (dissenting in part) 94. &##60;&<;ɘʔ< I agree with the adviceh thch the majority proposes to tender to Her Majesty, e on oint,
relao thetmentigrankers ction 53 of the Act. Act. We arWe are note not on t on this ahis appealppeal conc concernederned with the
wisdom of the policy underlying section 53. Nor are we concerned to ask what is the best kind of pension scheme for a community like
the Cook Islands, or how treatment of migrant workers under this pension scheme compares with their treatment under other schemes
enacted in supposedly comparable communities. The only question before us is its constitutional validity. 95. ټ&##160;< < ټ &<;Mo60;Modern states ctes commonly legislate to compel those within theiisdicto spend
their money or apply their other property to purposes which are conceiveceived to d to be in the broader interests of the community.
The social and financial problems associated with rising life expectancy have led many states to adopt compulsory savings schemes
of one sort or another. These are generally very long term schemes covering an employed community comprising very diverse groups
with different and sometimes inconsistent interests. In the nature of things they may have features that incidentally favour some
groups more than others. They may favour long term members over early leavers, younger age groups over older ones, residents over
non-residents, high taxpayers over low taxpayers, and so on. The design of a major pension scheme commonly requires difficult choices
to be made. I do not doubt that a sufficiently gross measure of unfairness in the making of those choices might properly be struck
down as unconstitutional. But within broad limits, the way in which different societies resolve such dilemmas involves legitimate
policy choices. 96. ټ < n&##160; Theting point isnt is that that from the time that the employee’s and employer’s
contributions are credited to und, are hn trust fo empl He tore has an equitablitable inte interesterest in t in the fuhe fund, snd,
so far as it represents contributions from either source, albeit that in the case of migrant workers that interest is partially defeasible
in the event that he leaves the territory and elects to take his contributions out. It is partially defeasible because if he elects
to do that he will recover only his own contributions. He will lose the benefit of the employer’s contributions and of any
return that may have been made on the investment fund while he was a member. The appellants object to this on two grounds which,
although elided in argument and in the majority’s analysis, are actually distinct. The first is that it is discriminatory,
and the second that it is confiscatory. Different considerations apply to these two objections. 97. ҈&<;< < &##10;& In my opinion the treatmenttment of migrant workers who elect to take out their contributions
on leavie tery is iscriory. nt wo have all the same same rights as denizens, namely the right ight to a to a pensipension deon derivedrived
from both employer and employee contributions. The only difference is that they have an additional right, namely a right of early
withdrawal, which denizens do not have. It is entirely up to them to decide whether to exercise that right. To that extent, they
are treated more favourably than denizens. The only basis on which this could be said to discriminate against migrant workers is
that their different situation required them to be treated more favourably still, by being allowed to take out their entire fund
when they leave the islands. The difficulty about this argument is that it proves too much. If it is correct, then the Act would
be discriminatory even if section 53 had been omitted, and migrant workers had been required to take a pension deferred to retirement
like everybody else. So, implicit in the majority’s advice is the proposition that it is unconstitutional not to have a special
category of migrant workers entitled to withdraw their entire share of the fund when they leave. The basis of this proposition is
that it is unreasonable to expect a migrant worker to accept a deferred pension at retirement age. This seems to me to be a surprising
suggestion. Deferred pensions are a standard feature of occupational pension schemes whether private or state-sponsored. Before the
introduction by statute of portable pensions in the United Kingdom, deferred pensions were routine, and in effect mandated by statute
because it was a condition of Inland Revenue recognition of an occupational pension scheme that its terms prevented the taking of
benefits before a minimum stipulated retirement age. So far as this is a problem, it would be mitigated if the pension was portable.
But even portable pensions are deferred. Objectively, deferral has substantial advantages for the employee, including professional
investment and a measure of protection against short term fluctuations in returns affecting the value of the pensioner’s fund
at pension age. It is suggested that, reasonable or not, in practice migrant workers will not wait until pensionable age to claim
their entitlement. In fact, we have no idea whether this is so or not. There is not a shred of evidence on the point. 98. &##160; &##160;
Turning to ther theection tion to section 53, I agree that the loss upon early withdrawal of
the portion of the notional fund representhe eer contributions is confiscatory. But I think that this was legitimate even even
if itif it was was not admirable. The employer’s contributions are earned by the migrant’s services during the period
of his employment. But what is earned is a contribution to the fund on the basis that the employee will receive its value in the
form of a pension at pensionable age. This is the very thing that the employee renounces by leaving early. It would have been entirely
in accord with the Constitution for migrant workers to be exempted from the obligation to participate in the scheme. The reality
is that the migrant worker who elects to leave the scheme is put back in the same position as if he had never been required to join.
He will be paid a sum which reverses the interference with his property rights arising from his having been required to spend 5%
of his income on pension provision. Subject to the performance of the fund (which is a different issue), he is no worse off than
if his 5% had never been taken. 99. & < ټ No separatplaintlaint is mais made about the fact that aant worker withdrawing his contributions receives
them without interest of a proportionate nate share of any return made on the fund. Nor could it have been. Over a period as short
as three years, the fund may have achieved positive or negative returns. The migrant who withdraws his contributions on leaving does
not share in any positive return, but neither will he suffer from negative returns. This aspect of the scheme is well within the
range of policy solutions which could reasonably be adopted in the interests of the entire community of participants, including the
migrant workers themselves. 100. ҈ ne of this isis is affecaffected by the relevant international obligations of the Cook Islands. The International
Covenant on Economic,al anturalts ofecemb66 ispart of the muhe municipnicipal laal law of w of the Cthe Cook Iook Islands. Moreover,
article 2(3) of the Convention specifically reserves the right of developing countries, “with due regard to human rights and
their national economy”, to determine the extent to which they will apply the social or economic rights recognised by the Convention
to non-nationals. The official commentary observes (para 36) that non-nationals should nevertheless be entitled to benefit from their
own contributions, which is exactly what section 53 provides for. 101. ټ s appeal is l is conceroncerned with the policy choices made on a major issue of domestic social policy with
important budgetary implics. Thk Islare a smalmunith limited reso resourcesurces, whi, which hach has enas enacted cted these provisions
after careful consideration and with democratic and bipartisan approval. I can see why even short term migrants should be entitled
on leaving the scheme to recover the value of their own contributions, but I am not prepared to say that it is unconstitutional to
limit their rights to that, especially when they have the option of taking a deferred pension on the same basis as everyone else.
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