[54] Mr Arnold submitted that the general thrust of these authorities, which is to give constitutions a generous interpretation,
does not necessarily also guide interpretation in relation to limitations contained within these constitutions – limitations
which cut back the fundamental rights identified. Lord Reed in Bank t v HM Trea Treasury [2013] UKSC 39, [68] emphasised that fundamental rights should only be restrained as necessary – o further.
[55] Here, an important part of the contextual interpretation issue isue is to note that Article 64 is modelled on the Canadian Bill
of Rights 1960 (replaced by the Charter in 1982, as it happens). Both parties approach the case on the basis that Canadian jurisprudence
is important and that, it seems to me, must be so. The Canadian cases refer to the need to interpret a constitution as a living document
(as opposed to an historical artefact frozen in time). This is specifically acknowledged in the decision of the Supreme Court of
Canada in Gosselin v Quebec (Attorney General) [2002] 4 SCR 429, a decision strongly relied upon by the defendants in this case. While Gosselin is not the only source of such dicta, the majority decision at [82] can be noted for its reference to the need to interpret a constitution
as “a living tree capable of growth and expansion within its natural limits”.
[56] The dissenting Judge in that case, Arbour J, put it in thi:
“The doctrine of the constitution as a living tree mandates that narrow technical approache to be eschewed... It also suggests
that the past plays a critical but non-exclusive role iole in determining the content of the rights and freedoms granted by the Charter.
The tree is rooted in past and present institutions but must be capable of growth to meet the future.” (paragraph [317])
[57] In other words, it would be mistake to regard a constitution as frozen or its content as having been exhaustively defined in
earlier cases. Gosselin shows that the Supreme Court of Canada is inclined to keep an open mind about the future but, then, to choose its cases carefully.
Developments are not to be rushed.
[58] In other jurisdictions (the USA, for example) some Judges do not treat constitutions as living documents. Without engaging with
such reasoning, however, I state my preference for the Canadian approach which I adopt.
[59] Part of the relevant context, too, is that of international law. The Privy Council in Reyes v R [2002] UKPC 11 (a mandatory death penalty case) observed:
“....The Courts will not be astute to find that a Constitution fails to conform within international standards of humanity and
individual right, unless it is clear, on a proper interpretation of the Constitution, that it does.” (paragraph 28)
[60] While the double negative in the extract above presents its own difficulties, the short point is that a Court should assume
that a constitution is intended to conform with international standards of humanity and individual rights. I think it is common ground
that the Cook Islands Constitution should be interpreted in a way reflective of both international law and common law fundamental
rights.
[61] In summary, I believe the Constitution should be interpreted:
- [a] by reference to the words actually used and their context;
- [b] generously rather than legalistically;
- [c] as a living document;
- [d] consistently with international law and international standards of humanity.
[62] Turning, then, to the Act and its interpretation. The usual principles of statutory interpretation apply. Other than in relation
to section 21(2) there is no particular controversy in that regard, as will be seen shortly. But there is an overarching obligation
to interpret the Act, if at all possible, in a way consistent with the Constitution.
[63] Article 65, of course, applies to the interpretation of a statute. A statute is to be given a fair, large and liberal interpretation.
There is no particular controversy about that in this case.
[64] To what extent, if at all, should the Court defer to the legislature? In interpreting the Act, the Court is not expected to
defer to the legislature. As Bastarache J put it in Gosseliuebecuebec:
“....In this case, the Government claims that the group that it is in fact trying to protect is the very same group whose rights
have been infringed. This should militate against an overly deferential approach. If the Government wishes to help people by infringing
their constitutional rights, the Courts should not, given the peculiarities of such an approach, be overly deferential in assessing
the objective of the impugned provision or whether the means used were minimally impairing to the right in question.” (paragraph [262])
[65] The short point is that, if the Court concludes that the Act infringes the Constitution, it cannot shy away from that conclusion.
Notwithstanding the above, there is a suggestion that there should be some deference and this emerges from the Supreme Court of Zimbabwe
in Nyambirai v National Social Security Authority [1996] 1 LRC 64, 72. Mr Ruffin acc that if I found ound that the Act was unconstitutional then no rule of deference was available to save it.
The Act – interpretation
[66] The Cook Islands National Superannuation Act 2000, in conjunction with the relevant Trust Deed (discussed below), establishes
the Superannuation Fund. Although established by statute, the Fund itself is private in that it is organised by reference to the
Trust Deed and the Public Trustee (created by a New Zealand statute) is the trustee of that trust.
[67] Perhaps unsurprisingly, the Act is reasonably detailed and some parts might even be described as complex. But, with the exception
of section 21(2), there are no particular interpretation difficulties facing the Court. The defendants’ objections (discussed
below) are fairly evident and not in dispute (in an interpretation sense).
[68] The Superannuation Scheme is a defined contribution scheme in that the amount to be paid by employees and employers is defined
in the statute. It is not, though, a defined benefit scheme. Put simply, the various benefits available (section 18) will ultimately
depend upon the success of the Trustee’s investment skills.
[69] The Act defines the Fund in section 2 as meaning: “The Cook Islands National Superannuation Fund established by the Trust Deed.” Section 17 then provides that all contributions are to be paid into the Fund and “credited to the account of the contributor” and then used to make the section 18 benefits available to the member in due course.
[70] The provisions relating to employee contributions can be found in section 36 et seq. Section 36 provides that employees who
are employed in the Cook Islands by a Cook Island employer (or who are employed outside the Cook Islands while resident there) shall
make contributions to the Fund unless excluded by section 37. Section 38 provides for the transfer of existing employee superannuation
schemes to that created by the Act. As is noted below, the defendants are critical of the way in which the legislature sought to
squeeze out existing superannuation schemes. Section 39 sets out the percentage rate of contribution and section 41 provides that
employee contributions shall be made by way of deduction by the employer. If the employer does not do that, section 43 sets out the
obligations upon the employee to make the contributions directly.
[71] The obligation of employers is then set out in section 44 et seq. By the time of the hearing it was accepted that employer contributions,
made in relation to the employment of employees, were a term of individual employment contracts. In other words, at the point the
contribution was made by the employer, it became, strictly speaking, the employee’s property. That discussion over-simplifies
the position but it makes it clear that the Court is focusing primarily upon the employee rather than the employer.
[72] Section 53 provides that a contributor is not entitled to withdraw any amount from the Fund other than in terms of that contributor’s
entitlement to receive benefits. Section 53(3) provides an exception to this in the case of employees employed for terms of less
than three years in terms of section 52(2) (migrant workers). In their case, they can withdraw contributions when they leave the
country. The catch to this, though, is that the employer contributions then are paid into a reserve fund (which is described in the
Trust Deed).
[73] Migrant workers are not necessarily required to take this step. Section 54 provides that they have the option of leaving both
their contributions and those of their employer in the Fund notwithstanding that they have left the country. One of the criticisms
made by the defendants focuses upon what is said to be the plight of migrant workers which is caused by section 53. This is discussed
further below.
[74] The Act also contains provisions as to the content of the Trust Deed. For example, pursuant to section 20 there are various
provisions implied into the Trust Deed including that the Trustee shall exercise the usual care, diligence and skill of a prudent
and professional provider of Trustee services. Moreover, by means of regulation, there is scope for the legislature to imply further
terms into the Trust Deed. The scope to do this is of uncertain dimension but the potential certainly exists. I believe that the
power to regulate should be interpreted pursuant to the ejusdem generis rule by reference to sub-clauses (a) and (b) immediately preceding it. I do not need to reach a final view on this. The fact remains
that no such regulations have been promulgated.
[75] Section 21 allows the Trust Deed to be amended but section 21(2) contains a qualification upon that. This provides:
“An amendment to the Trust Deed shall not adversely affect a contributor’s right or claim to benefits or the amount of
those benefits that have accrued up until the date of the amendment...”
[76] The defendants submit that the above provision provides far less protection than, at first sight, it might be thought. The section
falls naturally into two parts. First, it says that amendments shall not adversely affect a contributor’s right or claim to
benefits. Mr Arnold rightly says thate iere is no entitlement to benefits until, prima facie, the contributor reaches retirement
age. Secondly, there is reference to the amount of benefits “that have accrued up until the date of the amendment”. This, too, said Mr Arnold, mufer to the perioderiod following retirement. Mr Ruffin, by contrsubmitted tted there were no such difficulties
in interpreting section 21(2). He said that once it was understood that the “right or claim to benefits&; included a future right the section made perfect sens sense. I accept his interpretation.
[77] As a consequence, I consider that Mr Arnold’s cisms of thif this section are overdone. I believe the section does provide
real protection, particularly when coupled with the provisions of the Constitution. I am reluctant, though, to defineextent of that
protection aion any more precisely in the absence of particular facts.
[78] Mr Ruffin emphasised section 30 of the Act, the effect of which is to make earnings in the Fund tax free. He spoke of this in
terms as a Government contribution to the superannuation scheme. I think that is a fair characterisation.
[79] Turning, then, to the Trust Deed which was executed as a deed on 19 September 2001. At this point of the discussion, I note
that I invited the plaintiff to contact the Public Trustee to see if he wished to be involved in this litigation. I was conscious
that I might be required to interpret some aspects of the Scheme and that I would be doing so in the absence both of the Trustee
and members. I am advised that the Public Trustee declined the Court’s invitation to have any role in the litigation.
[80] For the avoidance of doubt, I make it clear that although, necessarily, I am required to analyse the Act and the Trust Deed,
nothing that I say in this Judgment is binding upon the Public Trustee and members. If any particular issues arise in the future
then they will be resolved by the Court in the usual way.
[81] The Trust Deed provides that contributions are paid into the Fund (clauses 9 and 10). They are held to the account of the member
prior to that member’s entitlement to receive a benefit (clauses 15 and 18).
[82] The member has no right or interest in the Fund (clause 4) and has no right to withdraw (clause 47). Notwithstanding these limitations,
the members’ interest is described as “fully vested” (clause 69). Mr Arnold subd that this did ndid not mean fully vested in an equitable sense. Rather, this was said to be a term of
art in relation to supertion schemes. Mr Ruffin was inclto accept thpt that the reference to “fully vlly vested” should not be understood as an equity lawyer would do so. He submitted that an appropriate understanding of this provision is informed
by a consideration of the High Court of Australia decision in Finch v Telstra Super Pty Limited (2010) ALR 236 discussed below.
[83] The reserve account discussed above in paragraph [72] is spelled out in some detail (clauses 27, 28 and 66).
[84] Benefits are provided for in clauses 39, 42 and 44 in particular. There is provision in clause 67 by which benefits are forfeited.
[85] Finally, in this survey, I note that the rights and obligations of the Trustee, including to an indemnity, can be found in particular
in clauses 74, 76, 78 and 79.
[86] Based on the above, Mr Arnold for the defendants painted a fairly glum picture of vulnerable members ripe for exploitation either
by the Trustee or, perhaps more ominously, by the Government using powers to amend the legislation or otherwise. He also painted
a picture of members vulnerable to the vagaries of international investment. In theory, many (but not all) of the risks painted by
him exist and they are discussed in more detail below. But the fact remains that, over the last thirteen years, the Fund has been
reasonably successful notwithstanding the GFC. The Public Trustee is a highly reputable Trustee. The Government has not intervened,
despite its powers to do so. Theory needs to be tempered with reality.
Other Pacific Superannuation Schemes
[87] There were a number of Pacific superannuation schemes placed before the Court and the differences between those schemes, and
that of the Cook Islands, were strongly emphasised by Mr Arnold. I will shortfer to r to some of the main points made by him. First,
though, there is a note of caution to be sounded.
[88] Details of the different superannuation schemes were put before the Court mainly by means of attaching copies of relevant legislation
as exhibits to an affidavit. In addition, the deponent referred to some materials located on relevant websites. None of this material
was mediated through experts in the relevant law of the different countries and there can be no certainty that the various references
were complete.
[89] Having sounded that caution, though, some reasonably consistent themes emerged.
[90] First, other than Papua New Guinea (and, of course, the Cook Islands), all of the countries surveyed had some form of Government
underwriting or support for the relevant scheme. This support came in different shapes and sizes. At one end, perhaps, was that of
Tonga where the relevant provision provided that if there was a shortage of necessary funds then a request could be made to the Minister
for assistance. Other countries had more specific Government obligations. Vanuatu, for example, in section 18 of the relevant legislation
had this obligation:
“If the Board is at any time unable to pay any sum which is required to be paid under the provisions of this Act, the sum required
shall be advanced to the Board by the Government and the Board shall as soon as practicable repay to the Government the sum so advanced
if required to do so under the terms of the advance.”
[91] Many of these provisions are coupled with a minimum rate of return (for example 2½% or 4%). Strictly speaking, the combination
of these two factors do not amount to guarantees but they amount to a form of underwriting by the respective Governments. I think
it is appropriate to refer to the combination of these features as a guarantee and, as long as the term is understood in this sense,
I will continue to use such a label to describe this type of arrangement.
[92] Secondly, some of the countries excluded migrant workers from coverage of the scheme at all or contained provisions allowing
them to extract all relevant contributions upon leaving the country concerned.
[93] Thirdly, some of the countries allowed employees effective access to their superannuation funds to pay for education or by way
of loans to pay for housing.
[94] Fourthly, many of the countries allowed members of a scheme to take their contributions with them if permanently leaving the
country. For example, in Samoa, the “date of entitlement” arrives if a member intends to depart or has departed from Samoa to reside permanently outside Samoa.
[95] It should also be noted that Mr Arnole reference to the face fact that most other countries allowed for the existence of multiple
superannuation schemes and did not mandate the single compulsory scheme which is that now before thrt.
World Bank Report: Averting the Old Age Crisis – Policies to Protect the Old and Promote Growth, published by the World Bank,
1994 (OUP)
[96] Both parties referred the Court to the World Bank Report as it came to be called. This is a substantial document of some 200
pages. In particular, reference was made to what are called the three pillars of old age income security. The first pillar is that
of a mandatory publicly managed fund financed through tax. The sort of schemes discussed below by reference to Nyambirai and Apostolou are examples of this sort of old age social security.
[97] The second pillar is a mandatory but privately managed pillar and it is common ground that the Cook Islands Scheme is of this
nature.
[98] The third pillar is that of the voluntary scheme of which the New Zealand Kiwi Saver is the best example (although, strictly
speaking, the New Zealand arrangements are based on both the first and third pillars).
[99] The World Bank publication points out the risks of having single-pillar systems and says that no country has ever tried to use
them as such. In this context, Mr Arnold strongly empes that that the existing welfare scheme under the Welfare Act 1989 is intended
to end at some point. As things presently stand, the Welfare Act provides a first pillar support for the second r scheme now under
review. iew. For the reasons discussed above, continuation of this support cannot be assumed.
[100] Having reviewed the World Bank Report, and also the Constitutions of many Pacific countries, Mr Arnold confidently submitted
that the Cook Island Scheme was unique. There was no serious opposition to that submission.
Covenants
[101] In addition to referring to the World Bank Report, both parties also referred to the International Covenant on Economic, Social
and Cultural Rights to which the Cook Islands is a party.. I received extensive submissions on this covenant but, in the end, and
with respect, I do not feel the need to refer expressly to either the covenant or the submissions made in relation to it.
[102] Mr Arnold referred to another covenant being the International Covenant on the Protection of the Rights of all Migrant Workers
and Members of their Families. This has not been acceded to by the Cook Islands. Nevertheless, Mr Arnold submitted that Ar 32le 32
of this was relevant to the position of migrant workers. Article 32 provides:
“Upon the termination of their stay in the State of employment, migrant worand members of their familyamily shall have the right
to transfer their earnings and savings and, in accordance with the applicable legislation of the State’s concern, their personal
effects and belongings.”
[103] Mr Ruffin referred, also, to the International Covenant on Civil and Political Rights and the European Convention for the Protection
of Human Rights and Fundamental Freedoms.
An overview of the cases
The defendants’ case
[104] Mr Arnold argued that the Cook Islands Scheme is unique in its particular structure. He called it a flawed hybrid in that it
breached some of the principles in the International Covenant on Economic, Social and Cultural Rights introduced above, breached
some of the fundamental rights protected by the Constitution, was an ill-conceived departure from the multi-pillar approach advocated
by the World Bank, and was a second pillar structure contrary to the recommendations of the World Bank.
[105] The defendants’ fundamental objection to the Scheme is said to be as follows:
“It uses State compulsion to force contributions into a Fund that, itself, has inherent risk of partial or total failure –
without the State assuming any responsibility to contributors if that should occur.”
[106] Hand in hand with this fundamental objection, was said to be the lack of entrenchment. Even if there were a Government guarantee
then, in the absence of entrenchment, the protections might be illusory. So it was these two aspects – Government guarantee
and entrenchment – that the defendants emphasised. Mr Arnoldistically accepted thed that, in the Cook Islands, old age social
security is more likely to focus on the second pillar because gle first pillar approach would be beyond the financial means of the
country.
[10> [107] The defendants had other objections, too. First, there was the particular case of the migrant workers and what was said
to be prejudicial to them. Secondly, there was the ability of poorer members of society to make any contributions at all (and how
the requirement to make such contribution could prejudice their ability to feed themselves or their families). And, thirdly, there
was also the collapse of the existing schemes into this new scheme which was criticised. But all of these criticisms were subsidiary
to the main argument of lack of government guarantee and lack of entrenchment.
[108] Mr Arnold’s attack was focused in three particular ways. He started with Article 64(1)(a) and emphasised that the reference
to “security of the person” had a social welfare dimension about it. He argued for a positive duty to promote social welfare for the elderly as well as a negative
obligation not to deprive them of their autonomy to manage their own affairs. Mr Arnold readily acknged that that this argument had
emerged somewhat late in the piece and, indeed, it was still developing at the point of the hearing. While I do not say that is ticism,
it was not always entirely easy to place this argumargument and identify its individual components.
[109] Secondly, Mr Arnold focused on Artic(1)(4(1)(b) and the alleged inequality by reference to migrant workers. While he did not
ultimately resile from these arguments, Mr Arnold did not pursue them at the hearing, content to leave them to be taken as read.
Realistically, he accepted that this argument could more usefully be assessed as part of the third argument now discussed. That,
indee how I approach the argumengument and I will not specifically address the second argument reserving, to the extent necessary,
Mr Arnold the right to advance it more fully if he needs to do so on any subsequent appeal.
[110] Thirdly, Mr Arnold focupon taking or deor deprivation of property in terms of Articles 40(1) and 64(1)(c). Amongst other things,
this third argument ied consideration of a proportionality argument as already introduced.
[111] DurinDuring the course of argument, I put it to Mr Arnold that his first ant (ent (based upon “security of the person”) was in many ways radical. I suggested it was unlikely to succeed if he failed in relation to this third argument. In other words,
his third argument (based on property) was his strongest and he should focus his efforts upon that.
[112] Initially, Mr Arnold was not much persuaded by this and held to his first argument. Indeed, he argued that the first and third
arguments were strongly interdependent. He argued that the case was both about security of the person and the enjoyment of property
rights needed to achieve the constitutionally guaranteed right of security of the person. The two rights were mutually reinforcing,
he submitted. Over the course of the hearing, however, he retreated somewhat and came to accept that his property argument was his
strongest and, moreover, enabled him to advance his arguments as required.
[113] Finally, and if there were an unconstitutional taking under Article 40(1) (as he argued), Mr Arnold d that it was not a ot
a tax. In this, he was replying to the submissions of the plaintiff, now introduced.
Plaintiff’s case
[114] In dealing with Article 64(1)(a), Mr Ruffin focused upon the definition of “security of the person”. He submitted, in short, that it could not include dimensions of social welfarterms of Mr Arnold’s argumHe trav traversed the
relevant Canadian cases which wech were, he submitted, the best foundation that Mr Arnold could array. Nevlesseless, he said that
the Canadian Courts had not yet accepted the position contended for by Mr Arnold. He submitted that this Court should not go further.
Consequently, the argument based on Article 64(1)(a) should fail.
[115] Mr Ruffin spent more time addressing the property arguments advanced by reference to Articles 40(1) and 64(1)(c). He characterised
Article 40(1) as recognising the Government’s power of eminent domain. He emphasised the law in Australia which required, in
order for there to be an acquisition, that there should be an identifiable recipient (either the State or some other party). He said
there was no such recipient in this case.
[116] In terms of Article 64(1)(c) he submitted there was no deprivation. Certainly, he submitted there was no basis to argue that
the absence of a government guarantee (in the absence of identified loss in the Fund) was relevant to determining whether there was
a taking or deprivation. He accepted that the absence of a government guarantee might be relevant in undertaking the balancing act
under Article 64(2) but said it had no other part to play.
[117] He then submitted that if there were a breach of Article 40(1) by way of the Act, the acquisition (a necessary consequence
of such a finding) amounted to a tax and thus fell within one of the limited exceptions in Article 40(2). He said that this should
be a wide conception of tax. In particular, the reference in Article 40(2)(a) to a tax should not be limited by the requirements
of Article 69 (set out at [243] below).
[118] Finally, Mr Ruffin addressed the questfon of remedies and I discuss that below.
First issue – Article 64(1)(a) – security of the person
Introduction
[119] The parties stated their summary of this issue differently.
[120] For the plaintiff, it was a simple issue of whether Article 64(1)(a) was relevant to the constitutional challenge and if so
how.
[121] For the defendants, it was more nuanced and started by asking whether the Act engaged issues, in particular, of security of
the person within the meaning of Article 64(1)(a).
[122] Following on from that, the defendants asked whether the article conferred either a positive right to security of the person
or a right not to be deprived of security of the person except in accordance with law. In the case of the latter, the defendants
then asked whether there was a deprivation and whether, in the circumstances, there was a positive obligation on the State to guarantee
the losses which might be suffered by the Fund.
[123] As I understand it, this first issue comes down to two legal issues. First, whether the expression “security of the person” encompasses economic concepts of social security or whether it is more limited to issues associated with the administration of justice
in the sense of the integrity of the body. Secondly, whether, in addition to the negative right (not to be deprived etc) there is
also a positive right to security of the person.
Defendants’ arguments
[124] Mr Arnold’s main submission is that the Constitution confers a positive right to security of the person that obligates
the State, having “engaged” the right to security of the person by passing the Act, to guarantee the Fund so as to assure that security of the person. Closely
related to that is an argument that the Constitution confers a negative right not to be deprived of security of the person. That
right has been infringed by the Act in its compulsory taking of the property (both the employee’s and employer’s contributions)
that is intended for a person’s retirement, the partial or total loss of which cannot be made good by a retired or disabled
person without support from the Government.
[125] The defendants argued that the State guarantee mentioned earlier (see [90] and [91]) should extend to all funds credited to the account of a contributor, that a capital guarantee and modest inflation adjustment (it
is not clear whether this aspect is still pursued) is necessary, and that the absence of the guarantee is constitutionally objectionable.
[126] Put in other words, the key issue for the defendants:
“...is the State’s action in depriving persons of autonomy and control of their own property, yet refusing to stand by
the consequences of any loss that may result.”
[127] Mr Arnold accepted that the starting point for his argument is to ascertain the meaning of “security of the person”. He also accepted that neither the Act nor the Trust Deed speaks in terms of security. At this preliminary point it might be observed
that this can be contrasted with the situation in Apostolou v Republic of Cyprus [1985] LRC (Const) 851 in which the relevant Constitution provided: “Every person has the right to a decent existence and for social security. A law should provide for the protection of the workers,
assistance of the poor and for a system of social insurance.”
[128] Mr Arnold was not daunted by the absence of such an express provision in the Cook Islands Constitution, arguing that “security of the person” effectively leads to the same consequences..
[129] Following on from that, if “security of the person” does have the meaning contended for by Mr Arnold, hn formally asked wked whether Parliament engaged with it in legislating for the
Act. There seems little doubt that this was the case (all else to one side). In that instance, the question is whether Parliament
got it right from a constitutional perspective.
[130] While Mr Arnolw on a number of sourcsources for his submission that “security of the person” has a wider rather than narrower meaning, there were two main authorities. First, he relied upe commentaries of Blackstonkstone dating
from the eighteenth century. He said the Blackstone’s “genetic footprint” could be found in legal writing thereafter culminating in Article 64. Secondly, he relied upon Canadian jurisprudence and in particular
the decision of the Supreme Court of Canada in Gosselin.
[131] Mr Arnold made the beguiling submission that, “The Cook Islands’ right can be traced directly back from 1981 to 1840 and from there to Blackstone’s description
of it in 1766.”
[132] He went on to submit that:
“....the interrelationship of the rights of personal security and private property long predate Blackstone and his commentaries.
From his account, they would appear to have emerged over the 200 years prior as the statute and common law relating to the poor develop
from the early 1500s onwards.”
[133] Indeed, Mr Arnold went back further in time and ultimately went back to the Magna Carta.
[134] Despite Mr Arnold’s confidence that his argument was well founded, the fact is there is no clear acceptance of which
I am aware that the expression “security of the person” includes a negative right (let alone a positive right) so far as it concerns access to social security. I think Mr Arn8217;s submission
can, fan, fairly, be described as radical. In these circumstances, I questioned whether it was appropriate that a first instance
Judge should a conclusion simply on the basis of Blackstone’s coms commentaries. I put this proposition to Mr Arnold and he
was largelovenmoved by it. He pointed, as one example of Blackstone’s influence, the express reference by Lord Reed in the
very recedgment of the UK Supreme Court in Bank Mellat v HM Treasury [2013] UKSC 39, [68].
[135] Mr Arnold took the Court through extensive references to Blackstone. In short, he argued that “security of the person” was clearly understood by Blackstone as a reference to the relief of poverty and care of the poor.
[136] These deeply considered arguments then culminated in Mr Arnold’s reliance upon Canadian jurisprudence in relation to
the Canadian Bill of Rights 1960 which was, in 1982, superseded by the Charter of Rights and Freedoms. The high point of his argument
was the Supreme Courision of Gosselin ali> already mentioned. Mr Arnold arguet, in Canada, tda, the concept of “security of the person” has been held to extend to rights affecting a person’s body and health, and as a right that is protective ofphysiological integrity
of y of an individual. He submitted that Gosselin was a case regarding social welfare (that is correct) and that the circumstances in that case were, subject to two important distinctions,
directly relevant to the present case. He acknowledged the majority view in Gosselin (which is essentially unfavourable to him despite his endeavours to paint it in a positive light) and then placed considerable reliance
upon the dissenting decision of Arbour J from which he distilled eome eleven principles. This analysis culminated in a submission
that the dissenting Judge’s reasoning supported a submisthat there was no doubt that there was a positive right to security
of the person in the Cohe Cook Islands.
[137] There was considerable discussion between bench and bar in relation to whether there was both a positive and negative right.
Prima facie, the words in Article 64(1)(a) would suggest there are both. But a similar structure in the Canadian Charter has not
lead to that conclusion in that country. The majority view in Gosselin clearly shows reluctance on the part of the Court to embrace a positive right – no doubt, because that might have unfortunate
and unintended consequences.
[138] Mr Arnold then extensively discussed the negative right and also addressed the question of whether there needed to be actual
harm or whether reasonably apprehended harm was sufficient. He submitted it should be the latter.
Article 64(1)(a) - the plaintiff’s arguments
[139] Mr Ruffin’s submissions focused on the meaning of “security of the person”.. He submitted that, in accordance with Canadian jurisprudence, it should be interpreted to mean physical security of the person
or bodily integrity. But, however it was defined, it could not include economic notions of social welfare.
[140] He noted that some of the Canadian cases speak in terms of “well-being of a natural person” and he said that this, too, excluded any sense of social welfare obligations. He referred to a range of cases decided in Canada between
1979 (at the earliest) and 1993. He concluded this discussion by reference to the Supreme Court of Canada decision in Gosselin particularly at paragraphs [75]-[83]. These paragraphs are part of the Judgment of the majority in that case which, he submitted,
made it clear that the Supreme Court, first, did not accept any positive obligation and, secondly, had not yet accepted a meaning
of “security of the person” commensurate with Mr Arnold’s characterisation of that expression.
[141] Mr Ruffin joined with MrolArnold in accepting that the expression found in both Art 64(1)(a) and 64(1)(c) – “in accordance with law” - effectively mely meant in accordance with principles of mental justice as that term term appears in the Canadian Charter.
[142] Finally, Mr Rureferred to the Cook Isla Island legislation, Ministry of Finance and Economic Management Act 1995-1996, in the
context of Mr Ar#8217;s submission thare hare should be a government guarantee in the scheme. While thle this Act was discussed by
Mr Ruffin at point in his subm submissio am not convinced that this is the appropriate place to cono consider it. But, in any event,
I am not sure that it is particularly ret. This Act is concerned, inter alia, with whether the Gove Government can give guarantees
and indemnities (section 60). It does not, however, purport to deal with the situation of whether the Government, by statute, could
guarantee or somehow underwrite a superannuation scheme.
Article 64(1)(a) – discussion and decision
[143] I propose dealing with this issue relatively briefly, conscious of my subsequent conclusion that there has been a breach of
Article 64(1)(c). In those circumstances, I see no need to make a final decision in relation to an argument which, if accepted, would
amount to a significant development of the law. As I say below, I have reservations about the argument but I think it better to leave
a final decision to another case which more directly engages with the issue and where there are no other alternatives. Here, Mr Arnold’uments
more nare naturally fall to be determined by reference to Article 64(1)(c) and my preference is to address them at that s
[144] However, and in deference to Mr Arnold’s gly made arge argumentument, I do want to make some observations. I am also
conscious that this matter may go further and that it may be necessary for Mr Arnoldevisit the topic in a in an Court.
[145] Fir] First, I have reservations whether the framers of the Constitution intended the expression “sec of the person” to have the wide-ranging economicnomic dimension of social security. Mr Arnold has gone to much trouble to draw an historical thread
extending over a period of at least 300 years up to 1965 when the Constitution was adopted. Enligent writers plainly had notions
of old age security in mind in writing generally about fund fundamental human rights. William Blackstone in his Commentaries (Book
1, Chapter 1) referred to what he said were the three principal rights being the right of personal security, the right of personal
liberty and the right of private property. In relation to the first (the right of personal security) he said that this consisted
“in a person’s legal and uninterrupted enjoyment of his life, his limbs, his body, his health and his reputation.” He expanded upon this by saying: “The law not only regards life and member, and protects every man in the enjoyment of them, but also furnishes him with everything
necessary for their support.”
[146] The reference by Blackstone to a right to enjoyment of life finds echo in the other Enlightenment writers referred to by Mr
Arnold. Althnot mentioned bned by counsel it might be observed that there is an arch that extends from the Enlightenment to the present.
The late Ronald Dworkin, in his more recent writings, states that one of the two fundamental principles underpinning the law is that
each human life should succeed rather than fail – that people should live well.
[147] But all of that does not necessarily mean that an expression such as “life, liberty and security of the person” was intended to bring in economic or property concerns. I immediately accept that, in thinking about quality of life concerns, regard
needs to be paid to economic dimensions. But if “security of the person” is to extend beyond notions of bodily integrity (associated with health for example) it is difficult to see where the field ends.
Ultimately it might be argued that anything that impacts upon the life of a human being is thereby incorporated within Article 64(1)(a).
That seems an unlikely proposition.
[148] Secondly, I note the structure of Article 64(1) and, in particular, Article 64(1)(c) with its focus upon property rights. The
present case shows that at least some aspects of social security can be dealt with by reference to that Article. A broad interpretation
of Article 64(1)(a) arguably would replace the need for Article 64(1)(c). This sort of analysis suggests that the framers of the
Constitution intended that “security of the person” should be read in a narrower sense. I accept, of course, that a Constitution is to be interpreted both by reference to the framers’
intentions and as a living document.
[149] Thirdly, section 7 of the Canadian Charter is in the following terms:
“Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance
with the principles of fundamental justice.”
[150] This section in the Charter appears under the heading “Legal Rights”. Section 7 is followed by sections 8-14 dealing with protection against unreasonable search and seizure, arbitrary detention and
administration of justice topics of that dimension. The Canadian cases generally show a narrower interpretation of the expression
“security of the person” by reference to this context.. The same cases also discuss the deliberate decision, in wording section 7 of the Charter, to exclude
any reference to property which was contained in section 1(a) of the Canadian Bill of Rights 1960 which was the predecessor provision.
[151] A number of Canadian cases were cited to me but I propose discussing only the most recent in the series being the Supreme Court
of Canada decision in Gosselin v Quebec (Attorney General) [2002] 4 SCR 429. This decision is useful for a number of reasons. First, it directly concerns social security (although not old age security). Secondly,
it specifically addresses the meaning of “security of the person” by reference to social security. Thirdly, it contains a strongly reasoned dissent by Arbour J which, if it had pred, wod, would have
provided a foundation for the defendants’ case.
[152] The facts of the case were briefly this1984 the Quebec Government created a new social security scheme which set the base amount
ount of welfare payable to persons under the age of 30 at roughly one third of the base amount payable to those 30 and over. The
purpose of this was to get recipients under 30 into work and training programmes that would make up for the lower base payment received
by them while, at the same time, teaching them valuable skills in order to get permanent jobs. The applicant, a welfare recipient,
brought a class action challenging the scheme.
[153] The decision is lengthy. In relation to section 7 of the Charter, there was a 7-2 majority. Five of those majority Judges joined
in a joint Judgment written by the Chief Justice and the relevant discussion can be found in paragraphs [75]-[84]. This part of the
Judgment refers to the dominant strand of jurisprudence on section 7 as focusing on an individual’s interaction with the justice
system and its administration. At paragraph [77]:
“Under this narrow interpretation, s7 does not protect against all measures that might in some way impinge on life, liberty
or security, but only those that can be attributed to State action implicating the administration of justice.”
[154] Then, at paragraph [80], the Chief Justice noted that there was still an open question as to whether section 7 protected rights
or interests wholly unconnected to the administration of justice. For example, it was unresolved whether it might protect interests
central to personal autonomy such as privacy and economic rights fundamental to human survival.
[155] Having recorded those unresolved questions, the Judgment then addressed, from [81], whether section 7 also placed a positive
obligation on the State to ensure that each person enjoyed life, liberty or security of the person. While recognising that, one day,
section 7 might be interpreted to include positive obligations, the question was whether the present circumstances warranted “a novel application of s7” to found a positive obligation to guarantee adequate living standards. The Judgment, at [83], concluded that the circumstances did
not warrant this course.
[156] For the reasons briefly summarised above, and if required to do so, it is likely I would have rejected this argument. Ultimately,
though, I prefer to express no final view on it. I am conscious that in the area of constitutional rights, it is unwise to express
conclusive views unless that is clearly necessary. Here, it is not necessary and I say no more about it.
Second issue – Articles 40(1) and 64(1)(c) – Property
Definition of property
[157] Initially, there was dispute between the parties as to whether the superannuation contributions of the employer and the employee
were property in terms of the relevant Articles. By the time of the hearing, however, both parties accepted that they did amount
to property. Moreover, both the contributions of the employee and the employer amounted to property of the employee. I proceed on
that basis.
Defendants’ submissions
[158] While a number of authorities were relied upon by Mr Arnold, and are discussed later, the case at the centre of his argument
is the Privy Council decision already introduced, La Compagnie Sucriere v Mauritius [1995] 3 LRC 494. The relevant portions of the Mauritian Consion were similar although nugh not identical to the equivalent portions of the Cook Islands
Constitution.
[159] Mr Arnold’s argument was that the State-mandated superannuation Scheme amounted both to a taking (or acquisition) in terms
of Article 40(1) and a deprivation in terms of Article 64(1)(c). He referred to a number of authorities to support a proposition
that it was not necessary to rely upon one single restriction but, rather, upon an accumulation of minor restrictions. Sucriere discusses this at pages 501-503 by reference to a number of earlier authorities including the decision of the US Supreme Court in
Pennsylvania Coal v Mahon (1922) US 393, 415-416. There are similar statements of principle in more recent decisions of the Privy Council being Grape Bay v Attorney General (Bermuda) [1991] UKPC 43 and Campbell-Rodriques v Attorney General of Jamaica [2007] UKPC 65. Canadian authority such as the decision of Manitoba Fisheries v R [1979] 1 SCR 101 is to similar effect.
[160] Mr Arnold referred, also, to Australian authority, although made the point that care needed to be taken for several reasons
including the fact that, in Australia, the High Court of Australia had concluded that, in order to show an acquisition, it was necessary
that someone had received a corresponding benefit. Mr Arnold submitted that that was not a requirement of the common law and that
there might be a taking or acquisition of property without any other person actually acquiring it or using it. He spent some time,
in reply, developing this argument.
[161] He referred, in particular, to the Privy Council decision Societe United Docks v Government of Mauritius [1985] AC 585 and referred to Lord Templeman’s emphasis on the individual’s loss rather than the State’s gain. He referred, too,
to an article by Kevin Gray who said how the Australian jurisprudence had been “bedevilled” by the distinction in that country: (2007) 24 Environmental and Planning Law Journal 161. Mr Arnoen expanded upon that bhat by reference to two decisions of the High Court of Australia. He referred to Callinan J in Smith [2000] 000] HCA 58 pararly at paragraphs [155] and [157]. He also referred to theo the Chief Justice in Commonwealth v WMC Resources (1998) 194 CLR ese references, he said, showed that the Australian Judges dges themselves had considerable reservations and had effectively
read down the requirement. In Australia it was sufficient if there were some slight or insubstantial acquisition by the Commonwealth
or another.
[162] Furthermore, in reply, Mr Arnold rded to Mr Ruff;Ruffin’s art that that Article 40(1) on the one hand and Article 64(1)(c)
on the other were directed at different concerns. In effect, Mr R had argued that wo cos dios did not overlaperlap. Mr Arnold subd
this was fwas fwas fundamentally wrong. He illustrated his point by way of a Venn diagram outer and larger circle was that of deprivation.
Included uded within that larger set was a smaller subset of taking/acquisition.
[163] Based on the authority of Sucriere, and the other cases mentioned above in paragraph [159], Mr Arnold argued tha cumulativlative effect of the Scheme amounted to a taking (or acquisition) and also a deprivation. The argument
is multi-pronged. First, Mr Arnold characterise rights ghts that the members had in the scheme as those of “mere expectancy”. He referred to various materials, including by Tom Allen, noting that such rights do not amounproperty. Put in the languaanguage
of Callinan J in the High Cou Australiaralia (Smith v ANL at paragraph [194]) the property right possessed by the member before making the contribution was considerably more ample than it
was afterwards – pro contributed to the Scheme heme by way of contribution was replaced by a mere expectancy.
[164] Secondly, the State (represented variously by the Executive as well as Parliament) retained significant rights to alter the
scheme.
[165] Thirdly, the protection provided by section 21(2) was more illusory than real. I have already addressed that argument at [76] and [77] above.
[166] Fourthly, the Cook Islands scheme lacked those features otherwise available in the equivalent schemes of other Pacific countries
(see discussion above at paragraphs [87]-[95]).
[167] In reply, Mr Arnold developed these arguments in light of the possibility that he needed to show a taking in what he called
“the classic sense”. He developed this argument by referring to the compulsory nature of the transaction – what he called a forced exchange. The
employee’s existing property rights were extinguished and new property rights replaced them. I am by no means certain that
these are two discrete approaches. They seem to me simply different was of characterising the same fundamental issue.
[168] Against these submissions, Mr A submitted that each of Arof Articles 40(1) and 64(1)(c) was engaged. In terms of Article 40(1)
that then required consideration of the tax exception in Article 40(2). In relation to Article 6c), that then required cons consideration
of the balancing exercise inherent in Article 64(2).
[169] In relation to the latter, Mr Arnold focused his ssions aons around the very recent decision of the UK Supreme Court in Bank Mellat v HM Treasury [2013] UKHC 39. He emphasised, in particular, paragraphs [20]-[21] of Lord Sumption̵peech for the the majority. He also drew my attention to
paragraphs [68]-[76] of Lord Reed’s speech in dissent (which paragraphs, however, Lord Sumpspecily endorsed). Mr&# Mr ArnoldRparticular
flar flar focus was upon the third and fourth factors being whether a less intrumeasure could have been used without compromising
the achievement of the main objective ande and whether, in an overall balance of the severity of the measure on the right of persons
to whom it applied, that outweighed the importance of the objective. This was a comparison between the rights of the complainant
and the rights of others. While the State might be a proxy for the rights of others, ultimately this was not a comparison between
the State as some abstract entity and the complainant. Mr Arnold submitted for all tall the reasons set out above (see in particular
paragraphs [163]-[166]) the proportionality test failed.
Articles 40(1) and 64(1)(c) – plaintiff’s argument
[170] Mr Ruffin started by addressing Mr Arnold’s arg that, fit, first, there was a positive as well as a negative duty. In
that regard, Mr Ruffin red to the commentatentator, Van der Walt, who at page 12 of his book asked whether that proposition had any
real content. Mr in submitted there could be no such positive duty. The balance of his submissions focused osed on the alleged
negative duty.
[171] Mr Ruffin characterised Articles 40(1) and 64(1)(c) as two discrete rights intended to deal with different circumstances. I
asked him to picture these as Venn diagrams in the same way as had Mr Arnold. Mr R drew them as two entirelyirely separate circles
with no overlap. He acknowledged that an accumulation of factors making up a deprivation might, as a matter of and d, ultimately
become an acquisition. However, at t at that phat point, the relevant conduct could no longer be characterised as a deprivation but
would, rather, become an acquisition. His submission was that Mr Arnold’s should more more appropriately be thought of in terms
of Article 64(1)(c) rather than under Article 40(1) (although, of course, he did not concede that Article)(c) was breached).
[172] The plaintiff argued thed that Article 40(1) was concerned with the State’s power of eminent domain and was primarily
concerned with the taking of tangible property and the giving of compensation for it. The taking of land by the State under compulsory
powers – and in exchange giving compensation – was the straightforward example of such powers at work.
[173] Mr Ruffin emphasised tor therethere to be a taking or acquisition under Article 40(1) there needed to be a recipient. In that
regard, he reviewed the Australian authorities and in particular Commonwealth v WMC Rces [1998] HCA 8; (1998) 194 CLR 1. B 1. By reference to this (and other authorities) he submitted there could be no acquisition of property by the State without a distinct
financial benefit being conferred upon the State (or another party) involving some identifiable benefit or advantage relating to
the ownership or use of the property. He submitted that the acquisition, by the Trustee, of the legal interest in the contributions,
did not satisfy this requirement.
[174] He submitted that, in reading cases such as Sucriere or Nyambirai, it was necessary to appreciate that the Court was, in essence, dealing with applications for compensation in relation to constitutions
where the double property guarantee in each case required the payment of compensation. He contrasted that with the situation in the
Cook Islands where only Article 40(1) was directly linked to the payment of compensation. He submitted that this distinction meant
that dicta in these cases should be read carefully. It is by no means clear to me that each of Sucriere and Nyambirai did involve applications seeking the payment of compensation. In Sucriere, it seems that the applicants sought a declaration that the legislation contravened the Constitution. In Nyambirai, they sought redress under section 24(1) of the Constitution (although what that entailed is not clear from the Judgment). I agree,
though, that in each case, the relevant constitution did link compensation to each of the two property guarantees.
[175] Turning, then, to Article 64(1)(c), Mr Ruffin sued that the relevaelevant conduct did not amount to a deprivation. For example,
he argued that the absence of a Government guarantee was irrelevant in the absence of evidence of a loss (and thgument also applied
equallyually to Article 40). The act of deprivation (the compulsory making of a contribution in terms of section 36 of the Act, for
example) was the point at which the Court should focus. If there were to be a loss, in the future, then that was not relevant to
assessing whether there was an actual deprivation at the time of making the contribution.
[176] He challenged Mr Arnold’s cterisation tion of vulnerability on the part of contributors. He said that, based on the Australian
decision of Finch, as discussed in Professor Dal Pont’s text, Equity and Trustsustralia (5ed), chapter 28,r 28, members did have an equitable
interest which was something more than an expectancy. Certainly, their interest was something more than that of a discretionary beneficiary.
They could enforce the trust. He also emphasised the obligation upon the Public Trustee to act as a prudent person. He said this
obligation had real consequences.
[177] Mr Ruffin submitted that the protection in section 21(2), although not entrenched, was a real protection. He submitted that
if the State endeavoured to remove a member’s rights (putting that in the broadest sense) then the Court would be vigilant
to protect them including by reference to the Constitution.
[178] Mr Ruffin did discuss Article 40(2)(g). Under questioning by me, he accepted that, ultimately, its ambit was not entirely clear
and that his case did not rely on it. For example, he was not endeavouring to argue that the Act could be characterised as general
law relating to trusts and thus somehow sitting outside the effect of Article 40.
[179] By the end of the hearing, both counsel were substantially agreed as to the exercise of the proportionality assessment in terms
of Article 64(2). Mr Ruffin, although rejecting the absence of a guarantee as being relevant to assessing whether there is a deprivation
(see above) accepted that it might be relevant in the proportionality asset.
Articles 40(1) and 64(1)(c) R – discussion and decision
[180] The first issue is to identify the relationship of Articles 40(1) and 64(1)(c) one to the other. In broad terms, I need to
determine what each Article addresses and whether they are quite discrete or whether and to what extent they overlap. This exercise
needs to be undertaken because the defendants claim under both Articles without differentiation on the basis that the two Articles
overlap.
[181] Article 40 was in the Constitution when enacted. Article 64 was introduced some 15 years later as part of the ninth amendment.
This, it might be thought, supports an argument that the framers of the amendment had particular purposes in mind in introducing
it. It makes more sense to assume that Article 64(1)(c) was intended to deal with something other than the property concerns already
addressed by Article 40. Why else would it be added?
[182] I accept Mr Ruff217;s submissions that,that, prima facie, Article 40(1) is concerned with the doctrine of eminent domain –
the right of the State to take tangible propertject to the payment of compensation. That is its central fual function. That is not
especially controversial. What is more difficult is whether that also defines the boundaries of Article 40(1).
[183] Article 40’s use of language “taken possession of compulsorily” and “acquired compulsorily” can be contrasted with Article 64(1)(c)’s use of “deprived”.. It can properly be assumed that the framers of the various provisions chose their words carefully. Those words used in Article
40(1) are consistent with the expropriation cases of eminent domain. These words, too, are consistent with there being both a loss
(or deprivation) and a receipt. That can be contrasted with the use of “deprived” in Article 64(1)(c) which is more consistent with the notion of police powers where there is then a balancing exercise between the
rights of the individual and the rights and interests of the majority.
[184] The Australian Constitution in section 51(xxxi) speaks in terms of “acquisition of property”, broadly corresponding to our Article 40. The Australian Courts have generally interpreted “acquisition” to require a recipient of property. Simply being deprived of property, in the absence of any beneficiary of that, does not breach
the Australian Constitution.
[185] In a language sense, “deprived” appears to be a broader and more generous concept than that of “taking/acquisition”. And that lies behind Mr Arnold’s submission that taking/acquisition is a subset of deprivation. That approach, however, is
not supported by a close reading of the important Privy Council decision, La Compagucriere v Mauritius [1995] 3 LRC 494. The case concernecerned a new statutory obligation imposed upon landowners to re-let farmland (already subject to leases) to sugarcane
farmers. The purpose was to provide those farmers with some security of tenure. The landowners argued that the Mauritius Constitution
contained two relevant provisions which were breached. They sought a declaration to that effect.
[186] The two relevant provisions in the Mauritius Constitution were sections 3(c), broadly corresponding to Article 64(1)(c) in
our case, and section 8, broadly corresponding with Article 40(1) in our case. There was a material difference, though, because section
3(c) (Article 64(1)(c)) also contained a right to compensation. Ultimately, I do not think this difference material but it is always
important carefully to analyse relevant constitutions when referring to cases from other jurisdictions.
[187] Lord Woolf delivered the advice of the Board (interestingly, Hardie-Boys J then of the Naland Court ourt of Appeal also sat).
[188] The preliminary parts of the decision set out the statutory background andtext of sections 3(c) and 8. On page 500 there is
a discussion about interpretation principinciples which is then followed by a reference to Lord Templeman̵peech in S Societe United Docks v Government of Mauritius [1985] LRC (Const) 801 which had previously considered sections 3 and 8. An extract from Lord Templeman is set out culminating in this:
“Loss caused by deprivation and destruction is the same in quality and effect as loss caused by compulsory acquisition.”
[189] Mr Arnold placed considerable reliance upon this statement but, as I go on to discuss, subsequent Courts have not taken this
to mean that the notions of taking on the one hand and deprivation on the other are necessarily the same.
[190] Lord Woolf then discussed the relationship between sections 3 and 8. Notwithstanding Lord Temple8217;s observation abon about
the relationship between deprivation and acquisition, it is difficult to see that Lord Woolf ultim embraced such auch an approach.
He stated:
“The correct approach is therefore to read section 3(c) and section 8 together, with the relevant language of each section influencing
the interpretation of the other.”
[191] Pausing at that point, it might be respectfully observed that the direction to read the two provisions together provides no
real assistance. And it is not entirely consistent with the conclusion of that lengthy paragraph:
“There is therefore a significant distinction between the protection provided by section 3(c) and section 8, notwithstanding
their close relationship.”
[192] This is a critical paragraph in the decision. Lord Woolf speaks of section 3(c) (Article 64(1)(c)) as being a broader provision
than the other but also subject to a broader qualification. Part of that reasoning hinges on a slightly different definition of “property” in the Mauritius Constitution. Even taking that into account, Lord Woolll identifies an importmportant distinction between the two
approaches.
[193] Ultimately, the Privy Council approached section 3(c) and section 8 differently. At page 504, Lord Woolftified that the issue
ssue before the Court was more appropriately treated as depending on section 3 (Article 64(1)(c)) than section 8 (Article 40). Even
on a gus interpretation of section 8, it could not be said there here was a compulsory taking possession of or an acquiring.
[194] The Court ultimately focused on section 3 (Article 64(1)(c)). Later, on page 504 Lord Wooid:
“The ownership of land has a multiplicity of incidents and every regulation of those incidents in the public interest doe attract
a prima facie right to compensation... However, evr, even assuming that section 3 [Article 64(1)(c)] does apply because cumulatively
the controls in section 5A [the impugned legislation] amount to a constructive deprivation of property, it by no means follows that
section 5A contravenes section 3. The restrictions on the contract of Metayage [the relevant lease] only contravene the protection
provided by section 3 if, because of the lack of any provision for compensation, they do not achieve a fair balance between the interests
of the community and the rights of the individuals whose property interests are adversely affected.”
[195] The analysis in the case, and the subsequent conclusions, more closely support Mr Ruf8217;s approach than than that of Mr Arnold.
That is, Article 40(1) primarily focuses on a compulsory acquisition of tangible property plus compensation and Article 64(1)(c)
focuses upon vatioch may result frot from a multiplicity of factors in any given case. Broadly speaking, the the two situations
will not necessarily overlap. It is more likely that one Article will apply to a given situation and the other will not. Having said
that, I think it would be unwise to decide that the two are entirely discrete and will be so in all cases. The present facts can,
I think, be resolved without needing to reach any final decision on that point which should be left for a case where it must be decided
directly.
[196] I refer to two decisions of the Privy Council at this stage. First, Grape Bay Limited v Attorney General Bermuda [1999] UKPC 43, a decision concerning legislation preventing McDonalds setting up in Bermuda. The issue was whether legislation having that consequence
deprived the applicant of property in breach of the Constitution. The challenge ultimately failed on the facts of the case. The discussion
at paragraphs [27]-[29] is, with respect, useful and I now set it out.
27. It is well settled that restrictions on the use of property imposed in the public interest by general regulatory laws do not constitute
a deprivation of that property for which compensation should be paid. The best example is planning control (Westminster Bank Ltd.
v. Beverley Borough Council [1971] A.C. 508) or in American terminology, zoning laws (Village of Euclid v. Ambler Realty Company (1926) 272 U.S. 365). The give and take of civil society frequently requires that the exercise of private rights should be restricted in the general public
interest. The principles which underlie the right of the individual not to be deprived of his property without compensation are,
first, that some public interest is necessary to justify the taking of private property for the benefit of the state and, secondly,
that when the public interest does so require, the loss should not fall upon the individual whose property has been taken but should
be borne by the public as a whole. But these principles do not require the payment of compensation to anyone whose private rights
are restricted by legislation of general application which is enacted for the public benefit. This is so even if, as will inevitably
be the case, the legislation in general terms affects some people more than others. For example, rent control legislation restricts
only the rights of those who happen to be landlords but nevertheless falls within the general principle that compensation will not
be payable. Likewise in Penn Central Transportation Co. v. City of New York [1978] USSC 180; (1978) 438 U.S. 104, the New York City’s Landmarks Preservation Law restricted only the rights of those people whose buildings happened to have
been designated historic landmarks. Nevertheless the Supreme Court of the United States held that it was a general law passed in
the public interest which did not violate the Fifth Amendment prohibition on taking private property without compensation.
28. Whether a law or exercise of an administrative power does amount to a deprivation of property depends of course on the substance
of the matter rather than upon the form in which the law is drafted. In the leading Canadian case of Manitoba Fisheries Ltd. v. The
Queen (1978) 88 D.L.R. (3d) 462, the Canadian Freshwater Fish Marketing Act, R.S.C. 1970, C.F-13 conferred upon a statutory corporation the monopoly of exporting
fish from Manitoba. The appellants had previously been exporting fish and the effect of the Act was to destroy their business. The
Supreme Court of Canada held that they had been deprived of their property, namely, the goodwill of the business, even though that
goodwill had not been directly transferred to the corporation. The substantial effect was to enable the corporation to acquire their
previous customers. Societe United Docks v. Government of Mauritius [1985] A.C. 585, in which the plaintiffs alleged that their businesses had been destroyed by a monopoly of handling sugar for export conferred upon
a statutory corporation, was treated as being in principle a similar case, but the plaintiffs failed on the facts because they were
unable to show a causal connection between the establishment of the monopoly and the loss of their businesses.
29. Their Lordships consider that this case is clearly within the principle of general regulation in the public interest. The prohibition
on what for convenience their Lordships will call franchise restaurants applied to everyone in Bermuda. It was highly specific in
effect, not prohibiting restaurants or any other form of activity other than restaurants operated in a manner which fall within the
statutory definition. It affected Grape Bay more than others because they were actually engaged in negotiations with a view to setting
up a McDonald’s restaurant. But there was no existing business of which they were deprived, as in the Manitoba Fisheries case.
Still less was there, as in that case, what amounted in substance to an acquisition of that business by a public authority. And in
the present case, unlike the cases on planning control or landmark preservation orders, Grape Bay did not even own land affected
by the restriction. It merely had an option to take a lease.”
[197] A more recent decision of the Privy Council also provides insight. This is Campbell-Rodriquez v Attorney General of Jamaica [2007] UKPC 65 which concerned a toll road and whether the institution of a toll infringed the constitutional property protection. I set out paragraph
[17]:
“17. It has been generally recognised, both in a long series of cases in the United States and in other jurisdictions, that
taking is not limited to direct appropriation, but may encompass regulation of the use of land which adversely affects the owner
to a sufficiently serious degree: see, eg, Lucas v South Carolina Coastal Council, supra; Penn Central Transportation Company v New
York City [1978] USSC 180; (1978) 438 US 104. It is equally well recognised that states may pass legislation regulating the use of land in the public interest which does not carry
the right to compensation as a taking of property, even though it may have significant adverse economic effects for property owners.
The American cases are constantly cited in this context and examples may be found from other jurisdictions. It may be necessary to
use such authorities with a degree of caution, bearing in mind the differences in wording of the applicable constitutional provisions,
but a common thread is visible in a number of developed systems. The principle was approved by the House of Lords in Belfast Corporation
v OD Cars Ltd [1960] AC 490, which was concerned with planning restrictions on the use of land. Viscount Simonds, at p 519, cited with approbation a passage
from the judgment of Brandeis J in Pennsylvania Coal Co v Mahon [1922] USSC 193; (1922) 260 US 393, 417:
"Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some right theretofore
enjoyed, and is, in that sense, an abridgment by the State of rights in property without making compensation. But restriction imposed
to protect the public health, safety or morals from dangers threatened is not a taking. The restriction here in question is merely
the prohibition of a noxious use."
The qualification which Viscount Simonds made was that adumbrated by Holmes J in the same case [1922] USSC 193; (260 US 393, 415), that if regulation goes too far it will be recognised as a taking, it being a question of degree.”
[198] The relevant constitutional provision in that case was broadly equivalent to our Article 40 and this, of course, framed the
discussion.
[199] I rule a line at this point. It seems to me plain that there is a distinction between taking/acquisition on the one hand and
deprivation on the other. Therefore, I do not accept Mr Arnold’s submissiot that taking/acquisition is entirely a subset of
deprivation. That, though, does not necessarily mean that I agree with Mr Ruff217;s submission that that they are entirely separate
concepts with no overlap. I now address specific legal issues arising by reference to each of the two Articles.
[200] I start with Article 40(1). The first line of Article 40(1) speaks of property being taken possession of compulsorily. This
can be contrasted with the second line which goes on to provide that no right over or interest in any property shall be acquired
compulsorily. The position of the two approaches must be assumed to refer to different concepts. Why, otherwise, contain both? Mr
Ruffin subm that the first irst most sensibly refers to tangible property with the second referring to a broader range of property
types. I agree. The notion of taking poson of property makes most sense in the context of tangible ible property. The use of language
such as “right over or interest in...” shows the framers then addressing less tangible ownership. In my opinion, it is the second expression which is relevant to the present
case. Henceforth, I will talk in terms of compulsory acquisition rather than taking.
[201] At that point, it is necessary to address the Australian position that compulsory acquisition requires a recipient.. The first
case to address is Commonwealth v WMC Resources [1998] HCA 8; (1998) 194 CLR 1, a majority decision of the High Court of Australia, in the field of oil exploration permits. WMC, an oil explorer, sued the Commonwealth
seeking a declaration that the statutory attempt to excise certain areas from the permit area was in breach of paragraph 51(xxxi)
of the Constitution. In Australia it is established that unless the Commonwealth or some other person acquires proprietary rights
under a law of the Commonwealth there is no acquisition upon which paragraph 51(xxxi) attaches. In Toohey J’s Judgment, the
following can be found:
“At the same time, it is not necessary that what is acquired correspond precisely with what was taken. It is enif it be shown
that the Commonwealth acquired an interest iest in the property of WMC, even though the interest acquired be slight or insubstantial.”
[202] Two years later, this was followed by Smith v ANL Limited [2000] HCA 58, a case concerning the statutory withdrawal of common law rights in relation to accidents suffered by seafarers. This recorded, too,
the need for there to be actual acquisition of some sort. Callinan J at [157] set out an important discussion of section 51(xxxi).
He made the point that a narrow view should not be adopted and that the provision may extend to innominate and anomalous interests.
He emphasised that there need not be correspondence in appearance, value or characterisation between what has been lost and what
has been acquired.
[203] This illustrates that, even in Australia, the need for there to be some correspondence between what has been lost and what
has been acquired is approached broadly. But the issue remains. Should Article 40(1) be interpreted on this basis or should it focus
upon identifying the loss only?
[204] On the facts of the case, I do not believe it is necessary to reach a final view on this although, provisionally, I support
the Australian approach.. Here, as will be discussed, I believe it is possible to identify a receipt which, as it happens, is more
than slight or insubstantial (the Australian test). The more difficult (and critical) issue, though, is to assess whether these circumstances
amount to an acquisition in the sense contemplated by Article 40(1). It is a mixed question of law and fact which I will discuss
once I have addressed legal issues arising by reference to Article 64(1)(c). It is common ground that if there has been an acquisition
in terms of Article 40(1) then no compensation has been paid and that, subject to considering the tax argument under Article 40(2),
the Constitution has been breached by the Act.
[205] I now deal with the remaining legal issues arising under Article 64(1)(c). There appear to be two to be discussed. The first
concerns whether there is a positive right that is relevant in this case. Article 64(1)(c) speaks of a right to own property. Here,
that right is not challenged. The real issue is whether there has been a deprivation in terms of the balance of Article 64(1)(c).
Therefore, I do not believe it necessary to discuss whether there is a positive right because, even if there is, it is not relevant.
[206] Secondly, I address the meaning of the expression “except in accordance with law” which appears in Article 64(1)(c) – and also in Article 64(1)(a). As identified by the Court of Appeal in Clarke v Karika it clearly means more than whether the deprivation occurs pursuant to an act of Parliament. If that were all it meant then the protection
is essentially meaningless because it would be a simple matter of Parliament usurping the constitutional right by passing an enactment.
In the end, both parties reached the conclusion that the expression should be interpreted along the lines of the Canadian Charter
which uses the qualifier “except in accordance with the principles of fundamental justice”. By this, the Article would import both procedural and substantive protection. Mr Arnold argued that subraphsraphs (a) and (c) corresponded
with Blackstone’s absolute rights and contrasted the relative rights in the other subparagraphs in Article 64.
[208] Against that baund, it is necessary to analyse the factual matters complaimplained of by the defendants to ascertain whether
there is a deprivation, an acquisition, or both.
[209] As noted above, it is assumed that both the employee’s contribution and the employer’s contribution represent relevant
property of the employee. The contributions are made out of monies otherwise payable to the contributor for his or her employment.
Once the contributions are made to the Fund, the contributing member is left with a future contingent interest – a beneficial
interest in trust assets. The rights are comparatively limited but are greater than that of a discretionary beneficiary who simply
has a right to call for performance of a trust. In essence, I adopt Mr Ruffin’s argument set out at [176] above.
[210] Payment of the monies into the Fund constitutes the Trustee as legal owner subject to the terms of the Trust. Mr Arnold soughtake
much of thof this and it is true that the Trustee has rights to take fees and an indemnity in specified circumstances. Nevertheless,
there are significant restrictions upon the Trustee andacquisition of the legal tial title is not a licence to abuse those assets.
[211] It seems to me that, for an individual contributor, the loss of full ownership of the contributions in exchange for an equitable
interest arguably amounts to a deprivation. There is the loss of present enjoyment of the property. Certainly, that is the case in
relation to the member’s own contributions. It is not immediately obvious that the same conclusion arises in relation to employer
contributions. After all, in the absence of the Act, these would not be made at all. Nevertheless, I think that the employer contributions,
too, can properly be thought of in terms of deprivation. Although the obligation to pay them arises under the Act, they are a component
of the contract of employment.
[212] Having said that, any superannuation scheme, analysed simplistically, could be characterised in terms of deprivation. After
all, it is about deferring the present enjoyment of earnings in order to provide future benefits at retirement. There is a cost (the
deprivation) but there is also a benefit. In a well-designed superannuation scheme, thought must be given to the relationship between
the deferment of present expenditure in favour of the benefits of retirement income. In my opinion, the fact, alone, that a member
may exchange full ownership of contributions for an equitable interest in a fund is not, without more, usefully characterised as
a deprivation (or loss) for constitutional purposes. This assumes that the superannuation scheme has adequately met the balance between
the present and the future. I now address that..
[213] I start with the lack of a Government guarantee. Or, more precisely, the absence of provisions comparable to those in other
relevant constitutions in which the State will provide advances to the superannuation scheme in case of need. These powers are generally
coupled with a minimum rate of return. By a combination of these features, the member gains greater certainty of outcome than is
the case for the current Scheme which does not have these features. Of course, this assumes the Government can (and does) stand behind
its obligations in any given case. While that assumption needs to be made, I believe that such a guarantee does need to be assessed
in the mix. Coupled with this, is the lack of entrenchment. Even if the Act provided for a Government guarantee, that could be removed
by simple majority in the absence of entrenchment. Realistically, then, I think the two need to be considered together and I do so.
[214] Mr Ruffin strongly argued that the absence of a guarantee was not relevant to assessing whether there was a deprivation. He
said that until a loss occurred, the absence of the guarantee had no tangible effect. There was no loss. This, I think, is far too
literal. In simple economic terms, there is a difference between loaning money to someone without a guarantee and a situation where
the loan is supported by a guarantee. That hardly seems controversial. If it were otherwise, why would banks generally seek guarantees
of personal loans?
[215] In my opinion, it is largely irrelevant whether loss has actually occurred. That is a matter of quantification. Rather, what
we are talking about is economic risk. In my opinion, Mr Arnold is right to subhat that the lack of a guarantee, together with the
lack of entrenchment, is directly relevant to assessment of the defendants’ claim of deprivation.
[216] The other features r upon by the defendant were were said to be secondary to the above points but were, nonetheless, important.
First, there is the fact that a member’s contributions may be locked for a period of 40 years or more assuming the employee
becomes a member at the commencement of his or her employment. Unlike other Pacific schemes there is then no scope in the Cook Islands
Scheme for members to access funds for any purposes prior to their entitlement to a benefit at retirement. There is no scope to borrow
money for housing or to use money for education purposes.
[217] Secondly, a migrant worker leaving the jurisdiction can take their contributions but, in doing so, will lose those made by
the employer. As already noted, section 53(2) provides for the case of migrant workers. I gain the impression that the provisions
in section 53(3), which allow a migrant worker to take his or her contributions but not the employer’s, was actually seen as
a concession to the position of migrant workers. It recognised it would not be fair to lock them in. 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.
[218] A citizen who is permanently leaving the Cook Islands is not entitled to withdraw their contributions. They are locked in until
the age of retirement.
[219] Thirdly, for the poorer members of society it was said that making any payment at all would be a struggle and the resulting
benefit (in due course) would be equally small and of little value.
[220] Fourthly, members of previous schemes lost the benefits of those as a result of the collapse of their schemes by the Act.
[221] In different ways, these were aspects of what Mr Arnoldacterised a loss of a of autonomy. I think that is a fair characterisation
although some care needs to be taken. As the World Bank report shows, individual citineed some persuasion (or incentive) to save
for their retirretirement. There are always things in the short term which seem to take priority over the longer term goals of saving
for one’s retirement. That is why Governments tend to make retirement saving compulsory. It is, thus, unrealistic to assume
that employees automatically suffer some loss of choice or autonomy simply by being forced to participate in this Scheme. In the
absence of such compulsion, it is unlikely they would participate in any other. Mr Arnold, I think, recognihis this in accepting
that the Scheme was capable of being remedied – it was not irredeemably bad.
[222] Nevertheless, the sort of factors described immediately above, coupled with the more important features also described (lack
of guarantee and entrenchment), do in my opinion amount to a prima facie deprivation of property. I test this against the broad judgement
made by Callinan J in the High Cof Australiaralia discussed in paragraph [163] above. The employearted with something (theirtheir contributions) and have ended up with a diminished replacement. Certainly, they
still have rights and, in due course, are likely to benefit.
[223] While I think there is little doubt that these features prima facie amount to a deprivation in terms of Article 64(1)(c), it
is far more difficult to characterise them as an acquisition in terms of Article 40(1).. True, the Trustee acquires a legal interest.
But the other matters complained of seem even more removed from the notion of an acquisition. Ultimately, it seems to me, this must
be a matter of judgement informed by the relative purposes of Articles 40(1) and 64(1)(c). It is nonsensical to think that the Scheme
– if it amounts to a compulsory acquisition – would somehow be met by a payment of compensation (as required by Article
40(1)). That, of course, would entirely defeat the whole purpose of the Scheme which is to require individuals to save for their
retirement. The Crown contributes to this goal by way of the tax-free concession but that cannot amount to compensation and, perhaps
more importantly, is not intended to do so.
[224] Because Article 40(1) operates within a framework of a taking (or acquisition) of property in the context of compensation,
I think it is necessary closely to examine the character of the matters under consideration. In my opinion, it is simply not apt
to think of these in terms of Article 40(1).
[225] I recognise that this approach does not initially appear to be consistent with the assumption of the parties made in Nyambirai v National Social Security Authority [1996] 1 LRC 64 that the compulsory superannuation contributions in that case amounted to a compulsory acquisition of property. In that case, and
in contrast with the present circumstances, the contributions were paid to the State rather than to the Trustee on behalf of the
member. This does appear to be a material distinction between the two cases.
[226] While I have reached a prima facie conclusion of breach of Article 64(1)(c) I still need to address two issues. First, I need
to weigh the various features of the Act which have led to my conclusion that there has been a deprivation. Secondly, I need to address
whether the Act as a whole is prima facie unconstitutional or whether there are relevant provisions which can be severed and declared
to be invalid. Ultimately, these two issues are intertwined.
[227] It seems to me inevitable that my prima facie conclusion of unconstitutionality must affect the entire Act. That is because
the purpose of the Act is to establish the superannuation Scheme and the various provisions in that Act all go to establish that
one Scheme. It is an indivisible whole. The defendants’ complaints focus both on actual provisions as well as the absence of
other provisions. As I now describe, it is primarily the absence of those provisions which gives rise to my conclusion.
[228] I have little doubt that the absence of a Government guarantee (in the form described above), coupled with the absence of entrenchment,
is a significant flaw. That was the defendants’ primary argument and I uphold it. It undermines the trade-off inherent in a
superannuation scheme as discussed above. The Scheme is compulsory and is effectively the only one available. There is a risk that
a member’s contributions could be lost in the future – and at a time when the member has no realistic ability to recoup
those losses. Government-financed welfare cannot be assumed to be available to fill any gaps.. All of this amounts to a serious objection.
[229] It is more difficult to be precise about the next layer of objections. These focus upon the rights of migrant workers, upon
low paid poor persons (and their inability to make contributions) and the absence of any provision entitling contributors to access
their funds prior to their retirement.
[230] It seems to me that the combination of these factors is relevant to my assessment but they are, assessed cumulatively, of less
weight than the primary argument of the defendants. I do not think it appropriate that I should draw a bright line describing exactly
what amendment to these features would change my opinion of the constitutionality of the Act. Ultimately, that is within the province
of Parliament. I believe I have given enough indications of my concern which will enable Parliament, should it be so minded, to make
amendments to the Act. In doing so, I believe that Parliament will need to give consideration to the following:
- [a] the lack of a Government guarantee;
- [b] the lack of entrenchment;
- [c] whether migrant works should be subject to the Act at all or whether the existing provisions should be amended;
- [d] whether there should be some right on the part of contributors to access funds before retirement (for example if they leave the
Cook Islands permanently, or whether they are needed for housing or education purposes).
[231] For the avoidance of doubt, I do not think that other complaints raised by Mr Arnold must necily result iult in amendment to
avoid a conclusion of unconstitutionality. First, whether the poorer members of society can or should make contributions is, I be,
a matter more properly addressed by Parliament than the the Courts. Secondly, the fact that this Scheme is a statutory monopoly
is of less moment if the other complaints as above are addressed by Parliament.. Thirdly, the existing power of Parliament to amend
the Scheme unilaterally is inevitably diminished or removed in the face of entrenchment.
[232] Within the broad observations, however, I intend leaving room to Parliament to make appropriate decisions about what amendments
(if any) it believes it should make. My job is to assess whether the Act, in its current form, is prima facie unconstitutional. The
Court’s role does not extent to drafting amending legislation should Parliament choose to follow that route.
[233] I now turn to address the proportionality argument. This requires the Court to balance the prima facie breach of the Constitution
identified above against a broader context. For the reasons now set out, I do not believe that the prima facie breach is saved by
reference to a proportionality argument.
[234] This discussion starts by recognising that every citizen has duties to other citizens. In other words, although persons have
fundamental rights, they also have correlative duties. This underpins the balancing exercise then set out. A person claiming the
benefit of fundamental rights may be subject to an enactment (or rule of law) for protecting the rights of others or:
“in the interests of public safety, order, or morals, the general welfare, or the security of the Cook Islands.”
[235] In this case, the focus has come upon “the general welfare” of the Cook Islands as being the relevant portion of the above extract relied upon. That is, in establishing the Scheme, there needs
to be a balance between the rights of a member on the one hand and the general welfare of the Cook Islands on the other. It is common
ground that there is a public good in the form of a superannuation scheme. The defendants do not contend otherwise. There is much,
they say, in the Scheme to commend it. Their approach, rather, is to say that the Scheme needs to be fixed up.
[236] The balancing exercise inherent within Article 64(2) has been discussed in a number of cases. Initially, the defendants based
their approach on R v Oakes [1987] LRC (Const) 47, a decision of the Supreme Court of Canada. This identified three aspects of the balancing test. First, the measures adopted must
be carefully designed to achieve the objective in question – they should not be arbitrary, unfair or based on irrational considerations.
Secondly, they should impair as little as possible the right or freedom in question. Thirdly, there must be an overall proportionality
between the effects of the measures which are responsible for limiting the constitutional right or freedom and the objective which
has been identified as being of sufficient importance.
[237] The defendants argued that these considerations should effectively be read into Article 64(2). Shortly prior to the hearing,
however, the UK Supreme Court issued its decision in Bank Mellat v HM Treasury [2013] UKSC 39. Reference has already been made to this. This decision restated the various steps. Lord Sumption at paragraph set oset out the majority’s
test. Then, at [74] Lord Reeddissent) set out his fois formulation. In substance, this as to be the same as that adopted by Lord
Sumption but both counsel in the present case case preferred that formulation. I observt Lord Sumption specifpecifically endorsed
Lord Reed’s speech as part part. I set out paragraph [74] of the Judgment:
“7220;74. The judgment of Dickson CJ in Oakes provides the clearest and most influential judicial analysis of proonality within
the common lmon law tradition of legal reasoning. Its attraction as a heuristic tool is that, by breaking down an assessment of proportionality
into distinct elements, it can clarify different aspects of such an assessment, and make value judgments more explicit. The approach
adopted in Oakes can be summarised by saying that it is necessary to determine (1) whether the objective of the measure is sufficiently
important to justify the limitation of a protected right, (2) whether the measure is rationally connected to the objective, (3) whether
a less intrusive measure could have been used without unacceptably compromising the achievement of the objective, and (4) whether,
balancing the severity of the measure's effects on the rights of the persons to whom it applies against the importance of the objective,
to the extent that the measure will contribute to its achievement, the former outweighs the latter. The first three of these are
the criteria listed by Lord Clyde in De Freitas, and the fourth reflects the additional observation made in Huang. I have formulated
the fourth criterion in greater detail than Lord Sumption, but there is no difference of substance. In essence, the question at step
four is whether the impact of the rights infringement is disproportionate to the likely benefit of the impugned measure.”
[238] I now address the four steps. There is no particular dispute or controversy about the first two steps. It is accepted by the
defendants that the objective of the Act is sufficiently important to justify the limitation of a protected right. It is also accepted
that there is a rational connection between the Act and its objective. However, it is not accepted that less intrusive measures could
have been taken. This, directly, takes us back to the features discussed above which are said to amount to a deprivation. In my opinion,
it is quite clear that less intrusive measures could have been adopted. Most importantly, I believe that by giving a Government guarantee
and entrenching the Act, the impairment represented by the Scheme would have been minimised. I also think that the absence of any
ability to access the monies prior to retirement is too restrictive and the position, generally, of migrants is not satisfactory.
If these concerns are then tested by reference to the fourth factor, which is an overall assessment, I think it is possible to conclude
that the impact of the breach of fundamental rights (deprivation of property) is disproportionate to the likely benefit of the impugned
measure.
[239] I accept this can only be a matter of judgement but it seems to me that is inherent in a balancing exercise of this sort. In
short, then, I do not believe that the prima facie breach established by reference to Article 64(1)(c) is justified on a proportionality
basis. In my opinion, the Constitution is breached by the Scheme in its current form. I repeat that this is not a conclusion stating
that the entire Scheme is bad. Rather, the appropriate balance between present and future interests (see [212] above) has not been met in its current form.
Third issue – Article 40(2)(a) – Tax exception
An assumption
[240] In order to address this topic it is necessary to assume a breach of Article 40(1). That is, that there has been an acquisition
of property without compensation. By necessity, this also assumes a finding of compulsion which is then carried through into the
following analysis.
[241] Although probably self evident, this argument does not directly impact upon Article 64.
[242] In light of my findings as above, there is no need for me to reach a final view on this argument. However, in case the matter
goes further I set out some observations.
Further articles in the Constitution
[243] There are another three articles in the Constitution which are directly relevant to the tax argument. They are:
“67 There shall be a Cook Islands Government Account and such other public funds or accounts as may be provided by law.
68 No taxation shall be imposed except by law.
69 All taxes and other revenues and money raised or received by the Government of the Cook Islands shall be paid into the Cook Islands
Government Account unless required or permitted by law to be paid into any other public fund or account.”
Plaintiff’s submissions
[244] The burden of this argument is upon the plaintiff and I start with his submissions.
[245] Mr Ruffin commenced with a detailed examination of the Zimbabwean decision Nyambirai v National Security Authority [1996] 1 LRC 64, a decision of the Supreme Court of Zimbabwe delivered by Gubbay CJ. He described this >R>“the leading case in the point
under consideration”. I accept it as an important and relevant authority.
[246] Mr Ruffin also referred to other relevant authority including the European decisiecision X v The Netherlands [1971] YB 14 224. However, the majority of his focus came upon two Australian decisions being Air Caledonie International v Commonwealth of Australia [1988] HCA 61; (1988) 165 CLR 462 and the subsequent decision of Australian Tape Manufacturers Association v Commonwealth of Australia [1993] HCA 10; (1993) 176 CLR 480. He placed particular emphasis upon the latter, a case concerning the exaction of compulsory levies upon the sale of blank tapes distributed
to copyright holders (which the High Court of Australia said amounted to a tax). Mr Ruffin acknged that the more more recent decision
of the High Court of Australia in Roy Morgan Research Pty Limited v FCT [2011] HCA 35 had cast doubt on some aspects of those decisions but nevertheless he submitted they remained good law in relation to the definition
of tax.
[247] Mr Ruffin accepted that the well known dicta of Latham CJ in [1938] HCA 38; (1938) 60 CLR 263 still remained useful:
“The levy is, in mnion, plainly a tax. It is a compulsory exaction of money by a public authority for public blic purposes,
enforceable by law, and is not a payment for services rendered.”
[248] Mr Ruffin argued that all aspects of this were satisfied. He said that the exaction was undertaken by Parliament by means of
the Act. He said, too, it was for the public benefit in the sense identified in the World Bank Report that a public superannuation
scheme was a public good.
[249] He concluded by addressing all permutations of the different tests emphasising that there was a compulsory contribution or
exaction imposed on and required from the general body of citizens in order to support Government for a public purpose.
[250] Finally, Mr Ruffin was forced to accept that his definition of “tax” in Article 40(2)(a), based on the Australian authorities as above, was a broad one. He submitted it was broader than that used in
Article 69. Somewhat faintly he endeavoured to argue that, in Article 69, the adjective “public” did not qualify the noun “account”. If he were right in this, he submitted, then payment of the contributions into the Fund satisfied the constitutional reference to
an “account”.
The defendants’ argument
[251] Mr Arnold strongly attacked Mr Ruffin’s argument that “tax” in Article 40 was somehow different (broader) to “tax” in Article 69. He submitted that if he were right as to this, then that was the beginning and the end of the matter. He said it was
inconceivable that the drafters of the Constitution would use “tax” in two different senses. He also drew attention to the particular definition, in Australia, of the Consolidated Revenue Fund in section
81 of the Constitution. This defines the Consolidated Revenue Fund in a very inclusive manner less prescriptive than the equivalent
definition in the Cook Islands Constitution.
[252] Mr Arnold then addressed the remaining arguments on the assumption that the above proposition did not provide a complete answer.
He argued that the decisions of Air Caledonie and Australian Tape Manufacturers should be given little weight in light of the more recent decision of the same Court in Roy Morgan.
[253] Mr Arnold argued that the exception mentioned by Latham CJ in Mathewsicory s/i> set out above for the provision of services applied here. He said that a contributor effectively purchased insurance services.
[254] Mr Arnold then argued that it was not correct to submit, as Mr Rufad done, that there was was an exaction by Parliament. He
argued that the enforcement powers of the Board (e.g. section 51) meaat it was the body exacting the compulsory payments. He argued
it was not a public authorithority in terms of the relevant test.
[255] Overall, Mr Arnubmitted that it was necs necessary to stand back and test the sense in which the compulsory contributions were
said to be a tax. It is a matter of looking at the substance of the exaction rather than the label given to it. By way of illustration
he referred to the recent decision of the US Supreme Court in National Federation of Independent Business v Sibelius 648 F.3d 1235 dealing with the Obama health proposals. He submitted that the recognition evidenced in that decision that payments of this sort
did not amount to a tax was a helpful illustration.
[256] Mr Arnold tested his submission as above by arguing that if the various contributions did amount to a tax (contrary to his
submission) they were thereby the property of the State – which was entirely inconsistent with the Scheme and the intentions
of Parliamentarians in setting it up. He concluded by submitting that the plain words of the Act did not purport to impose a tax
and that Parliamentarians certainly did not speak in those terms when passing the Act. He noted that the funds are not paid into
the Cook Islands Government account (see Articles 67 and 69) but that, rather, funds are credited to an individual’s account
in the Fund in terms of section 17 of the Act. He entirely rejected any suggestion that the contributions amounted to a tax.
Tax – discussion and observations
[257] In light of my finding that Article 40(1) is not breached, it is strictly unnecessary for me to address the tax exception in
Article 40(2)(a). Nevertheless, and in case the matter goes further, I make some observations.
[258] I would not have found that the compulsory payment of contributions to the Fund amounted to a tax in terms of Article 40(2)(a).
[259] A useful starting point is the statement of principle by Lathham CJ in the Auian case Mati>Matthews v Chicory Marketing Board (Vic) [1938] HCA 38; (1938) 60 CLR 263, 276 who spoke of the three features necessary to stamp an exaction of money with the character of a tax:
“a compulsory exaction of money by a public authority for public purposes, enforceable by law, and... not a payment for services
rendered.”
[260] This, of course, is not a statutory definition but it is generally agreed that it highlights the factors that need to be thought
about.
[261] The various authorities were analysed by Gubbay CJ in Nyambirai v National Social Security Authority and the Chief Justice summarised the effect of these at page 71 as follows:
“From these authorities the following features which designate a tax may be said to emerge: (i) It is a compulsory and not an
optional contribution; (ii) Imposed by the legislature or other competent public authority; (iii) upon the public as a whole or a
substantial sector thereof; (iv) the revenue from which is to be utilised for the public benefit and to provide a service in the
public interest.”
[262] There was no real contest about the first feature. If a breach of Article 40(1) had been found then, by definition, there would
have been a compulsory acquisition. So the question of compulsion was not really in dispute.
[263] In relation to the second feature, it was accepted that the compulsory nature of the contributions flowed directly from the
Act. Mr Arnogued that this was not not an exaction by Parliament because the enforcement of contributions was left to the Board.
In my opinthat is not correct. This is not a case where the key decision-making and levying was left left to some other body with
a consequence that decisions would be required as to whether that body is a public authority. In the present case, the Act is the
authority for the making of compulsory contributions. The fact that the Board may subsequently be required to enforce those contributions,
if they are not made, is simply a machinery provision.
[264] The third feature, that it be imposed upon the public as a whole or as a substantial sector is, too, met in the present case.
A very substantial part of the population is intended to be subject to the Act.
[265] That leaves the fourth feature of the test as to whether the exaction is imposed for the public benefit. This, it seems to
me, is where the current issue falls to be decided. As will become apparent when I discuss the Australian authorities below, it appears
to be that, in Australia, there is seen to be a distinction between an exaction for public purposes (which may be a tax) and an exaction
said to be in the public interest (which is not necessarily a tax).
[266] While it is not a specific feature of the test as stated by Gubbay CJ, it seems to me ble that that there should be a final
step to be taken by the Court in any assessment which is to stand back and look at the overall character of the payment ind.
[267] The summary as above largely ignores thes the qualification introduced by Latham CJ referring to the provision of services
(see [259] above). Mr Ardid argue that that qualiqualification was engaged in d in the present case. By reference to Jones v AMP [1994] 1 NZLR 690 he characterised the contributions as the purchase of services being insurance services. This, I think, is too highly refined and
I reject it. But, for all that, I do think it is useful to consider the qualification because it forces a Court to look at the character
of the exaction.
[268] At this point, and before assessing the fourth Nyambirai feature, it is necessary to review the three Australian cases which occupied much time at the hearing. The first is that of Air Caledonie International v Commonwealth of Australia [1988] HCA 61; (1988) 82 ALR 385. The Commonwealth imposed an arrivals tax on all immigrants to Australia to be collected by the relevant airline. The appellant challenged
the constitutionality of this by reference to section 55 of the Constitution which requires that a taxation statute deal with no
more than taxation. This is a provision peculiar to Australia designed to avoid what is described as “tacking” (page 392). The particular constitutional objection is not relevant here but the characterisation of the clearance fee as a taxation
is material.
[269] At page 389 the Court acknowledged the dicta of Latham CJ mentioned above in paragraph [259].. It then added three com, the first of which is relevant:
&>“The first is that it should not be seen as providing an exhaustive definition of a tax. Thus, there is no reason in principle
a tax should not take a form other than the exaction of money or why the compulsory exaction of money under statutory powers could
not be properly seen as taxation notwithstanding that it was by a non-public authority or for purposes which could not properly be
described as public.”
[270] The conclusion, that the arrivals levy was a tax for constitutional purposes, does not appear to have been based on such reasoning.
That is, the above quoted extract is obiter. As I read page 390 of the report, the actual conclusion appears to have been based upon
reasonably orthodox grounds.
[271] The next decision of the High Court of Australia is Australian Tape Manufacturers v Commonwealth [1993] HCA 10. This decision was the high point for the plaintiff who argued that the conclusion in that case, that the relevant levies amounted
to a tax, was directly analogous to the present case.
[272] The facts were these. Pursuant to the terms of an enactment purchasers of blank tapes were levied a royalty payment and the
proceeds distributed by the statutory body (the collecting society) directly to copyright holders (and not to the Consolidated Revenue
Fund). This was intended as part of a legislative package whereby the copyright protection otherwise available to copyright owners
was removed in the case of home taping of sound recordings. For present purposes, the issue was whether the levy was a tax for the
purposes of section 55 of the Constitution. It was argued by the plaintiffs that the levy was not a tax on the basis that it was
not exacted by a public authority and neither was it exacted for public purposes: paragraph [11].
[273] The majority Judgment dealt, first, with whether it was necessary for the exaction to be undertaken by a public authority.
The Court concluded that the better view is was that this is not essential to the concept of a tax: paragraph [13]. The Court then
addressed whether it was necessary for the exaction to be for public purposes. The Court noted that, in Australia, payment into the
Consolidated Revenue Fund is regarded as conclusive evidence that a levy is exacted for public purposes. At paragraph [17] the majority
then said:
“But neither principle nor Australian authority provides any support for the converse proposition that an exaction is not a
tax if it is not paid into the Consolidated Revenue Fund. The requirement imposed by section 81 of the constitution that all revenue
or monies raised or received by the Executive Government form one Consolidated Revenue Fund is not, and cannot constitute, a criterion
for what is a tax.”
[274] At [20] the majority acknowledged that in one sense the purpose of the levy was private in that it concerned the interests
of the two groups only. It answered that, though, by saying that the legislative solution to the problem
“Proceeds on the footing that it is imposed in the public interest. Indeed, the purpose of directing the payment of the levy
to the collecting society for ultimate distribution of the net proceeds to the relevant copyright owners as a solution to a complex
problem of public importance is of necessity a public purpose.”
[275] The majority reached the conclusion that the levy was a tax and there was a breach of section 55 of the Constitution as a result.
[276] Two of the minority (Dawson and Toohey JJ) issued angly argued disd dissent. They concluded that the levy imposed by the legislation
was not an exaction by a public authority for c purposes. See discussion, in particular, at paragraphs [23], [24] and [29]. They
had rese reservations about the dicta quoted above from Air Caledonie: paragraphs [24]-[26]. They believed that the body performing the function (the collecting society) was not a public authority but
a private organisation.
[277] McHugh J issued a furdissenting Jung Judgment. He said that a compulsory exaction of money under statutory authority is not
by itself sufficient to constitute a payment of tax: para [3].. He described it as a private scheme designed to comp compensate the
copyright owners. That is, the end for which the payment is imposed, was private not public. The royalty formed no part of the revenues
of the Commonwealth: paragraph [8].
[278] Three years ago, the High Court of Australia returned to the issue in Roy Morgan Research v FCT [2011] HCA 35. This case concerned a superannuation scheme whereby employers were charged a Superannuation Guarantee Charge (SGC) if they did not
make superannuation payments on account of employees. The issue for decision was whether the SGC was a tax. The payment of the SGC
was to be made into the Consolidated Revenue Fund. The appeal to the High Court was to determine whether the payment was imposed
for public purposes because, it was submitted by the appellant employer, it conferred a private and direct benefit on employees.
The High Court rejected that argument.
[279] The majority (Heydon J issued a sepabut concurricurring decision) referred both to Air Caledonie and Australian Tape Manufacturers. Paragraph [37] of the majority decision is as foll
“The majority in Tape Manufacnufacturers suggested that it is not essential to the concept of a tax that the exaction should
be by a public authority. That suggestion would constitute a large and controversial step beyond what was said in Matthews. As the
reasons of the majority in Tape Manufacturers show, whether that step could or should be taken depends, at least in part, upon what
meaning would be given to the expression "non-public" authority if "one of its functions is to levy, demand or receive exactions
to be expended on public purposes". It was not necessary to decide that question in Tape Manufacturers and the majority in that case
did not do so. Nor is it necessary in this case, given the addition of the proceeds of the Charge to the Consolidated Revenue Fund,
to pursue that question, or any broader questions about whether it is essential to the concept of a tax that the exaction should
be by a public authority.”
[footnote references omitted]
[280] Mr Ruffin argued that this statement was limited to the consideration of exaction by a public authority (or not) and that it
was not directed at the notion of public purposes. On its face that appears to be correct. But, equally, I would not be confident
that Australian Tape Manufacturers, so far as it concerned the notion of “public purposes” is still regarded in Australia as good law. In that regard, I note paragraph [19] of the majority Judgment and paragraph [68] in
Heydon J’s separate (but cricurring) Judgment.
[281] The High Court rejected the notion that the SGC was invalid because the legislation conferred a private and direct benefit
upon employees. Ultimately, the payment of SGC into the Consolidated Revenue Fund was sufficient to conclude that the monies were
appropriated for public purposes.
[282] With respect, the position in Australia appears to be rather uncertain and I would be reluctant, on the basis of these cases,
to conclude that Australian Tape Manufacturers represents the current Australian approach to the assessment of public purposes for the purposes of characterising a tax.
[283] Mr Ruffin submitted that the Scheme was in the public interest because a mandatory public superannuation scheme is a public
good. That, of course, is true. In one sense, the submission could be criticised as it simply amounts to a proposition that any legislation
enacted by Parliament is assumed to be for the public benefit. However, as discussed in Nyambirai, it is plainly arguable that a mandatory public superannuation scheme is a public good. It is at this point that the distinction
drawn in Roy Morgan between an exaction in the public interest and an exaction for public purposes assumes some importance.
[284] As I understand it, this arises from the fact that it can be assumed that legislation will generally be in the public interest.
However, simply because a payment is compulsory pursuant to legislation does not, without more, make it a tax. To use “public interest” as the benchmark may then admit too wide a category of payments as taxes. This sort of thinking, it would seem, lies behind the use
of language by Latham CJ focusing on &#public blic purposes”.
[285] There is a risk, in all of this, of treating judicial dicta as if they were of tory significance. Consequently, there is a
risk, I think, in approaching the question of t of tax by way of a formulation from cases dealing with situations different to those
presently before the Court. In each case, it is necessary to look hard at the character of the payment made and the constitutional
arrangements in the relevant country. In undertaking that exercise here, there is something fundamentally counter-intuitive about
the plaintiff’s case: how can a payment made by a contributor into a trust fund to be held, ultimately, for the benefit of
that member, be characterised as a tax? To characterise this as a tax (which, if nothing else, has a notion of a redistributive transaction)
seems inapt. I do not believe that even Australian Tape Manufacturers would support such a conclusion.
[286] That, then, brings us, to Article 69 of the Constitution which requires a tax to be paid either into the Government Account
or, if permitted by law, into “any other public fund or account”. Mr Ruffin argued that “public” did not qualify “account”. I reject that. It would make no particular sense if payment into any account sufficed. That would defeat the whole purpose of the
provision. Perhaps recognising the likelihood of that conclusion, Mr Ruffin’s argument was that the notion of “tax” as in Article 40(2)(a) was broader than that in Article 69. That is, he argued it was not fatal to his argument that the compulsory
contributions were not paid into a public account designated as such by law.
[287] It seems to me inherently unlikely that “tax” would be used in two different senses within the abovementioned Articles. The tax exemption in Article 40(2)(a) is, with respect,
a sensible recognition that taxation does not amount to a compulsory acquisition in breach of the Constitution. Where that same Constitution,
in another provision, specifically provides for the payment of a tax, it seems sensible to regard these provisions as complementary
rather than independent. I would have upheld Mr Arnold’s primary ssioission that the plaintiff’s case on tax falls at
the first hurdle.
Fourth issue – Remedies
Parties’ submissions
[288] Mr Rumade helpful written subm submission on the topic of remedies referring, first, to a recent decision of Hugh Williams
J in the Hourt of the Cook Cook Islands, George v Attorney General(1/13, 28 August 2013) and, and, secondly, the recent New Zealand decision Spencer v Attorney General [2013] NZHC 2580, a decithe Chief High Court Judge,udge, Winkelmann J.
[289] Ise auth authorities one can find reference, first, to declarations of invalidity as being the appropriate judicial response
to unconstitutional legislation and, secondly, the possibility that declarations may be suspendspended for a period to allow Parliament
to take appropriate steps to cure any unconstitutional legislation. Other than drawing these authorities to my attention, however,
Mr Ruffin did not make ded subd submissions as to the appropriate remedies if some or all of Mr Arnold’s arguments upre upheld.
[290] Likewise, Mr Arnold said e about thediesedies. His primary position was that the Acte Act, as a whole, was unconstitutional
(as a fallback, he identified specsectihich were said toid to be unconstitutional). At the same time, though, he stressed that hist
his clients were not seeking the wholesale demolition of the superannuation Scheme. What he sought was to have Parliament legislate
to tidy up what he saw as the flaws in the existing Act. However, he made no submissions as to how remedies might be devised to achieve
this end.
[291] Mr Arnold drew my attention to a recent Canadian decision, Canada (Attorney General) v Hislop [2007] 1 SCR 429, which he subsequently supplied to me following the hearing. Neither he nor Mr Ruffin made submissions latrelation to Hislop.
[292] In short, neither counsel made comprehensive submissions as to the actual remedies which would be appropriate if turt upheld
some or all of Mr Arn8217;s arguments.ents. Ats. Although it was not explicit, I think that both assumed there would need to be a
further hearing at the point I issued this Judgment.
Discussion and decision
[293] In light of the fact that neither counsel fully addressed me on the topic of remedies I think it inevitable that there should
be another hearing in relation to remedies. This, though, needs to be carefully delineated because, in this Judgment, I have reached
certain conclusions which are intended to be definitive. There needs to be a clear demarcation between those conclusions (which are
now established) and the means by which effect is given to those conclusions (yet to be established).
[294] In order to put this in context I need to discuss the authorities. As Winkelmann J pointed out in Spev AG v AG, the Canadian cases show that when the Canadian Courts make an order suspending a declaration that is a shorthand for two quite distinct
things. First, there is a declaration of invalidity and that is accompanied by, secondly, a simultaneously issued declaration that
the Act is nevertheless deemed valid for a fixed period of time. She reviewed the authorities supporting this including the Supreme
Court of Canada decision Schachter v Canada [1992] 2 SCR 679.
[295] In Schachter, the Court said:
“Temporarily suspending the declaration of invalidity to give Parliament or the provincial legislature in question an opportunity
to bring the impugned legislation or legislative provision into line with its constitutional obligations will be warranted even where
striking down has been deemed the most appropriate option on the basis of one of the above criteria if:
A. stg down the legislation tion without enacting something in its place would pose a danger to the public;
B. sng down the legislatiohotiohout enacting something in its place would threaten the rule rule of law; or,
C. relevant]”
[296] The Court made it clear that these were guidelines only.
[297] The more recent decision of Hislop, another decision of the Supreme Court of Canada, contains a more detailed discussion of some of the problems facing a Court in declaring
an Act unconstitutional. Is the Act thereby a nullity from that time onward (prospective) or is it a nullity from the date of its
enactment (retroactive)? If a declaration of invalidity is retroactive it could have dramatic consequences for all those who have
acted in reliance upon the assumed validity of the relevant Act. While, in Hislop, there was a difference of reasoning as between the majority and Bastarache J, both agreed a declaratioration of invalidity was not
automatically to be assumed to be retroactive. The Court would actively need to engage with that issue. In appropriate circumstances
the normal retroaceffect of a judgment may beay be adjusted to protect other legitimate interests. The use of transition periods
and suspended declarations of invalidity are one way of temporarily limiting the retroactive effect of constitutional remedies. But,
further, the Court may actively require retroactivity to be limited. Issues such as reasonable reliance, good faith, fairness to
litigants and Parliament’s role are important considerations in making that assessment.
[298] I now turn to this case. First, I believe that my finding in relation to section 64(1)(c) would support a declaration of invalidity
of the Act. I will need to be addressed in relation to how such a declaration should be worded but, in broad terms, I believe that
such a declaration would be appropriate.
[299] Secondly, I believe that a suspension of such a declaration would be appropriate to allow Parliament to remedy the defects
identified by me. Of course, Parliament may choose not to do so in which case the declaration of invalidity would become effective.
[300] Thirdly, and this is perhaps the most difficult aspect, I would need to address whether the declaration should be retroactive.
In considering this issue, there may be a distinction to be drawn between the defendants (who are facing criminal proceedings as
a result of alleged breaches of the Act) and all other members of the Scheme. Because I believe the Scheme is, in substance, a public
good and that, with amendments, it can be made efficacious, I would be very reluctant to make a declaration of invalidity that would
unwind the Scheme back to 2000.
[301] The position of the defendants, though, is different. They are facing criminal proceedings for allegedly breaching the Act.
It may be necessary to declare that the declaration of invalidity is retroactive so far as they are concerned.
[302] I have not heard counsel on any of this. I would be most reluctant to reach any final view without full argument.
[303] It is, of course, possible that counsel may reach agreement as to the form of remedies without the need for further argument.
If that is so, I am prepared to receive a consent memorandum and, if necessary, convene a telephone conference to discuss same.
[304] I suspect, though, that such agreement may be difficult to achieve and that a hearing will be required. I cannot presently
see that I would be able to convene such a hearing before the September 2014 sitting in which I am otherwise scheduled to sit. I
am concerned about that delay but I cannot see any realistic alternatives if there is to be full argument by counsel in person (which
seems to me desirable if consensus is not reached).
[305] If the matter is to be delayed until then various consequences arise. First, I specifically acknowledge that Parliament may
take the opportunity, in the meantime, to remedy the Act. In that regard I note the following evidence before the Court.
[306] There are references in affidavits before the Court by Mr Rasn and Mr George in e in their Paentamentary capacities. These
state that the non-government members would likely support amnts along the lines submitted by Mr A. For example, at paragrapagraph
82(a) of his affs affidavit, Mr Rasmussen notes that the Opposition is united in the view that
“Legislation must be passed – constitutionally entrenched &# that recognises member’s accounts as being in the nature
of private property, incapancapable of being appropriated for other purposes by a Government act with anything less than a constitutional
mandate to do so.
The Government, in a constitutionally entrenched way, must guarantee the fund – as is the case with other similar funds in substantially
all other small Pacific Island States.”
[307] I emphasise that I would not see immediate Parliamentary amendment of the Act as a usurpation of the judicial function by Parliament.
Indeed, I respectfully believe that it would be an appropriate recognition that issues of constitutionality are prima facie matters
for Parliament to address.
[308] Secondly, I recognise that either or both parties may wish to appeal this decision notwithstanding the fact that remedies are
not yet complete. While it is a matter for the parties, and the Court of Appeal, I believe I would still need to resolve the question
of remedies if any appeal is brought.
[309] I direct counsel to confer and to advise the Court within fifteen working days (or such longer period as is agreed between
them) as to their preferred way forward. I am prepared to convene a telephone conference to discuss these issues if that would assist.
Costs
[310] The parties are agreed that costs are reserved for further consideration. It may be sensible for counsel to advise their positions
on the question of costs as part of the same process identified above.
Tom Weston
Chief Justice
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