State v Minister of Finance, Ex parte Bhim Raj [2009] FJHC 358; HBJ0034.2005 (13 March 2009)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

JUDICIAL REVIEW NO. HBJ 34J OF 2005S

IN THE MATTER of an application for Judicial
Review by BHIM RAJ under Order 53 of the
High Court Rules 1988,

AND

IN THE MATTER of the Decision made on the 12^th January 2005
by the MINISTER OF FINANCE& NATIONAL PLANNING
whereby he decided that he does not have any right to review the surcharge decision
and upheld surcharge of $4,576.35 over the misappropriation of FNPF trust monies
at the Ministry of Agriculture, Sugar and ALTA Resettlement.

THE STATE

AND:

MINISTER OF FINANCE & NATIONAL PLANNING
FIRST RESPONDENT

ATTORNEY GENERAL OF FIJI
SECOND RESPONDENT

EX-PARTE: BHIM RAJ
APPLICANT

Counsel for Appellant	:	Mr S Sharma	)	:	Patel & Sharma
	:	Mr Singh	)
Counsel for Respondents	:	Ms N Karan		:	Attorney General's Chamber

Date of Judgment: 13 March, 2009
Time of Judgment: 9.30a.m.

JUDGMENT

This is a claim for judicial review against the decision of the first respondent of 12 January 2005 stating that he did not have powers to review the surcharge decision he made against the Applicant on 4 December 2003. The decision was in accordance with section 63 of the Finance Act (Cap. 69) ("the Act").

The grounds relied upon by the Applicant are that the decision was unlawful and irregular, and that specifically the Respondent had erred in the manner of exercise of his discretion and/or jurisdiction in the exercise of his powers under sections 63 and 66 of the Act.

The reliefs sought by the Applicant includes an order of certiorari to remove into Court the decision and the same be quashed; a declaration that the decision was unlawful and irregular and an order that the Respondent reimburse the Applicant in the full amount in the surcharge which resulted in the deductions made from his salary.

The claim is opposed by the Respondent on firstly, and as a preliminary matter, the undue delay of more than one year before this claim was filed. On the substantive ground, the Respondent argue that he had acted legally as required under sections 63 and 66 of the Act, that he had given the reasons for the decision and that there was no irregularity or illegality in the decision made.

Background

The Applicant, at the time of the incident in 2000 was an accountant with the Ministry of Agriculture, Fisheries and Forest ("MAFF”). On 31 January 2000, an Internal Audit Team of MAFF reported misappropriation of Fiji National Provident Fund ("FNPF”) allocations from the Ministry. A total amount of $21,130.51 (less $3,681.08 unrepresented cheque), was reported missing representing encashed cheques by recipients who did not in fact do it. The report suggested that the evidence pointed to possible fraud and recommended that the matter be placed in the hands of the police.

The applicant, as the counter-signing officer of the FNPF cheques was, together with six (6) other officers of the Ministry, surcharged. By a memorandum dated 12 November, 2002 the Applicant was surcharged with $9152.72 representing 45.58 per cent of the total amount missing from the Ministry's FNPF Trust Account for the period February to November 1999. The decision to surcharge the Applicant was made in accordance with section 63 (b) of the Act. He was also advised of his right to appeal against the decision as contained under section 66, and should there be no appeal within one month of the notice, the Ministry of Multi-Ethnic Affairs, to which the Applicant has in the meantime been transferred to, through the Chief Accountant, will start recovering the surcharge amount from the Applicant's salary.

On 13 December 2002, the Applicant lodged his appeal to the Minister of Finance, setting out the grounds as to why the surcharge should be lifted. There is evidence that the officials of Ministry of Finance then carried out their own investigation upon receipt of the appeal, and made its report to the Minister. On 1 July, 2003 the Applicant was informed that his appeal was dismissed and the Chief Accountant was then instructed to begin deduction of $100.00 per fortnight from the Applicant's salary. The Applicant pleaded in his letter to the Minister of Finance ("ufs Minister of Multi-Ethnic Affairs"), that he should reconsider the surcharge decision. This was again refused conveyed in a memorandum to the Applicant dated 19 August, 2003. He then sought the assistance of his trade union resulting in the Fiji Public Service Association's letter to the Minister dated 25 August 2003. A further request for review by the Applicant on 21 October, 2003 finally received some favours. In a memorandum dated 4 December 2003, the Applicant was informed that upon further careful considerations, the Minister had decided that the surcharge be reduced by further 50 per cent to $4,576.36 and consequently the fortnightly deduction to $45.00.

Notwithstanding the reduction in the surcharge amount, the Applicant continued to appeal to the Minister. In an undated letter, which was received by the office of the Minister of Finance on 23 December, 2003, the Applicant again re-stated the circumstances surrounding the misappropriation, which one of his subordinate officers was implicated, and which his only role was as the supervising officer. He asked that the surcharge be cancelled. This appeal was later followed up by a letter from the FPSA dated 30 March, 2004, threatening "to pursue the matter further" if no reply was received within 14 days. A considerable of time of some 5 months lapsed before the FPSA attempted to report the matter to the Chief Executive Officer of the Ministry of Labour and Industrial Relations, as a trade dispute. In a letter of 14 September 2004, the Ministry rejected the report finding that the matter did not constitute a trade dispute within section 4(1)(b) of the Trade Dispute Act (Cap. 97). Finally, the Ministry of Finance closed the exchange in a memorandum dated 12 January, 2005 informing the Applicant that following legal advise, the Minister cannot change his decision. On 14^th February 2005, the Applicant's solicitors wrote to the Chief Executive of Ministry of Finance threatening legal proceedings if the deduction of the Applicant's salary did not cease immediately.

This judicially review claim was finally filed on 8 August 2005.

Undue Delay

The Respondents allege that there was unreasonable delay from 4 December 2003, the time the decision was made, to the filing of judicial review on 8 August 2005, a lapse of over 20 months. Under Order 53 of the High Court Rules, an application for judicial review should be made promptly and in any event within 3 months from the date of the decision, unless there is a good reason for the Court to extend the period.

The Applicant first argued that he had appealed further the Minister's decision of 4 December 2003. No response was received until he received a memorandum from the Ministry of Finance dated 12 January 2005, that the Minister's decision was final. That he had moved quickly to initiate judicial review proceedings following the rejection of his grievance as a trade dispute in September 2004 and the receipt of the 12 January 2005 memorandum.

The Respondents did not oppose the granting of leave. Notwithstanding that, Counsel submits that they are at liberty to argue at the substantive hearing, the issue of delay. Counsel relied on the Court's decision in State v. Public Service Commission, ex.p Olimivia Cagica HCJR No. 33/1996 where Scott J said,

"The purpose of obtaining leave before moving for judicial review is to eliminate frivolous, vexatious or hopeless application, as made clear by the Fiji Court of Appeal in Harikisun Ltd v. Dip Singh & Ors 1 CA Rep. 96/365. It is at this stage that the Court should first consider whether there has been undue delay in applying for leave (see RHC O.33 r.4) although where in-depth consideration of the questions of delay is require then such consideration should best be dealt with at the substantive hearing: leave should only be refused in obvious cases of unjustifiable delay."

In R v. Dairy Tribunal Exp. Caswell [1990] 2AC 738, Lord Goff of Chieveley put the question beyond doubt stating, at p.747:

"... the fact that the single judge had granted leave to the appellants to apply for judicial review despite the lapse (long before) of three months from the date when the ground for their application first arose, did not preclude the Court from subsequently refusing substantive relief on the ground of undue delay in the exercise of its discretion...."

Clearly then the Court is at liberty to address the question of delay at any stage of the proceedings. The chronology of events very clearly shows delays on both sides. The Respondents continued to entertain appeal after appeal and did not respond to the letter from FPSA of 30 March 2004 on behalf of the Applicant, until 12 January 2005, confirming the finality of the decision. It took the Applicant another month (14^th February, 2005) to pose an ultimatum through his solicitors, which the Respondents quite clearly ignored. Then it took another 6 months (7 months from the final decision) for the Applicant to file this judicial review.

Under Order 53 r.4, the Court has the discretion to refuse to grant leave or any relief sought if it considers that there has been undue delay in the making of the application. Undue delay means excessive, unjustifiable delay and going beyond what is appropriate, and in the context of O53 r4 (1) and at the hearing of the substantive application, the Court may consider 3 questions as posed in both Cagica and Harikisun decisions of Scott J, namely whether the grant would cause substantial hardship to any person, whether it will be prejudicial to the rights of others, and/or whether it would be detrimental to good administration.

As the Court has already observed, this case is characterised by long delays on both parties to respond to the other's requests coupled with inability of the first respondent to make a final decision as required under section 66 (2) of the Act. Be that as it may, the Court accepts that this final decision was conveyed to the Applicant on 12 January 2005, and that the Applicant did not file for judicial review until nearly 7 months later. The claim by the Applicant that he only applied for judicial review after being told by the Respondents does not hold water. He should have been aware of his rights. There is no doubt that the proceedings had been filed out of time. There is no question therefore that there has been delay. The only remaining issue is whether it amounted to "undue delay" to the extent that under O.53 r.4 (1) is deemed unjustified, and in all the circumstances, the Court should refuse the relief sought.

Would the grant of relief, in this case, the quashing of the Minister's decision cause hardship to any person? On the contrary, it would be favourable to the Applicant. Would it be prejudicial to right of any person? Again no, as far as the Applicant is concerned. The only party that can prove "hardship" and prejudice would be the Respondents. However the other important consideration is whether the grant of relief would be detrimental to good administration. As the Court stated in R v. Dairy Tribunal ex.p. Caswell (supra) the interest in good administration can be taken independently of hardship or prejudice to the rights of third parties. This element of the interest to good administration is explained by Lord Diplock in O'Reilly v. Mackman [1983] 2AC 237 as follows:

"The public interest in good administration requires the public authorities and third parties should not be kept in suspense as to the legal validity of a decision the authority has reached in exercise of decision-making powers for any longer period then is absolutely necessary in fairness to the person affected by the decision."

I am satisfied that in all the circumstances of this case, the 7 months delay from the time of the decision to the Applicant filing his claim, does in fact amount to undue delay that if leave were to be granted would be prejudicial to the Respondents and contrary to good administration.

However, even if the Court were to decide that the delay was reasonable, I remain unconvinced that the grounds advanced to review the Minister's decision have merits.

Illegality

The main argument upon which the Applicant's claim is based is that the Minister had acted unlawfully in surcharging the Applicant under section 63 (b) of the Act. Counsel contended that the provision can only apply to the Applicant if he was personally responsible for any improper payment. In this instance, the Applicant was not personally responsible and in any case, there was no improper payment as the charge against the Applicant was "misappropriation". In support, Counsel relied on the judgment in The State v. Minister of Finance & National Planning & Or ex. p. Commodore J.R. Bainimarama C.A. No. HBJ0007 of 2005.

Section 63 (b) of the Act under which the Applicant was surcharged states as follows:

"Power of the Minister to surcharge

63. Where it appears to the Minister that any person, while he was an officer-

(a) failed to collect any moneys owing to the Government for the collection of which he was responsible;

(b) was responsible for any improper payment of public moneys or for any payments of such moneys which was not duly vouched for;

(c) was responsible for any deficiency in public moneys or public stores or for the destruction or damage of any public stores; or

(d) failed to comply with any of the provisions of this Act or any instructions issued by the Minister under section 3,

and where, within such period as shall be specified by the Minister, an explanation, satisfactory to the Minister, has not been furnished to the Minister with respect to such act or omission, as the case maybe, the Minister may surcharge such person a sum not exceeding the value of any loss sustained by the Government resulting from such act or omission."

Section 63 sets out the extent of the powers of the Minister to surcharge a public officer in given situations where the action or non-action of the said officer is responsible for the loss in public moneys or public stores. The circumstances are specified at (a) to (d) above namely, failure to collect revenue, improper payment of public moneys, loss or destruction to public moneys or public stores, and failure to comply with the provisions of the Act or of Ministerial instructions.

The Applicant was surcharged under section 63 (b), improper payment of public moneys. According to the Applicant, he was not responsible for any of the improper payment to which section 63 (b) applies, on the ground that the improper payments were made by officers under him.

I do not think section 63 (b) was intended to be strictly construed that way. The provision is intended to cover both the person who was actually doing the act of payment as well as the person in charge or responsible for the former. This is clear from the plain reading of sub-section (b). In fact, the initial investigation report as well as the later reports and recommendations emphasised the fact that the Applicant was the person immediately in charge and responsible as the counter-signing officer of cheques that were being encashed. It is the recognition of this fact that is reflected I suggest, in the proportional amount of the surcharge levied against him.

Much reliance is placed by the Applicant on the decision in State v. Minister of Finance ex. p. Bainimarama (supra) in which my learned brother Honourable Mr Justice Singh analysed in some details Part X of the Act dealing with the powers of the Minister to surcharge. In that case the Applicant, had "busted" or over expended his Departmental budget without authority and as a result the Minister decided to surcharge him under section 63 (b). The court found that the action could not stand as clearly, payments were made by the Treasury and that the Applicant was only responsible for expenditure albeit over expenditure. "Improper Payments" under sub-section (b) therefore could not, if the argument is taken to its logical conclusion, be attributable to the Applicant as he was only the recipient. This court agrees with Honourable Mr Justice Singh's conclusion in that, in the cases of over expenditure, unless evidence is produced before the Court to show some element of abuse alleged in the appropriation of the Departmental budget, then it would be difficult to prove the ingredient of "improper payment" under S63 (b). This is especially so, given the fact that Treasury continued to issue monthly warrants in the full knowledge that RFMF was already overspent. It may very well be, given the facts of the case, that the Minister would have been well advised to exercise his surcharge powers under S63 (d) of the Act rather than S63 (b).

The facts of this case are quite different from the Bainimarama case. The action of payments, to whit, the signing and encashment of cheques originated and ended at the Applicant's office. He was responsible for and in charge of payments. And contrary to his argument the first limb of S63 (b) namely, that he was "responsible for any improper payment of public moneys" applied to him. On the facts alone, the Bainimarama case is easily distinguished.

The Court finds no merit in the Applicant's argument, that the Minister's action was illegal.

In his written submission, the Applicant raised two (2) other issues. First, the desirability of a hearing be given before the Minister makes a decision. In this case, the Minister gave more than adequate opportunities to the Applicant to be heard. On no less than six (6) separate occasions after the decision had been made, did the Applicant apply and was given another opportunity of his case being reviewed. These opportunities directly led to a further reduction of the surcharge levied.

The second issue is the finality of the Minister's decision. This arose after the Respondents had informed the Applicant on 12 January, 2005 of the Solicitor General's advice that the decision of the Minister under section 63 could not be amended and was irrevocable. The Minister's decision is final under section 63 only if the person surcharged does not appeal. If he does appeal then it becomes final under section 66 (2). In this case, the Minister's decision conveyed on 12 January 2005 and made pursuant to section 66 (2) was final.

In the final, even if the Court had found the delay reasonable, which it did not, it would still have dismissed the claim as without merits.

The application is dismissed.

No costs is awarded.

F Jitoko
JUDGE

At Suva
Friday, 13 March 2009