Teannaki v Attorney-General [2001] KICA 8; Civil Appeal 11 of 2000 (5 April 2001)

IN THE KIRIBATI COURT OF APPEAL
CIVIL JURISDICTION
HELD AT BETIO, KIRIBATI

Civil Appeal No 11 of 2000

BETWEEN:

TEATAO TEANNAKI
Appellant

AND:

THE ATTORNEY GENERAL
ON BEHALF OF THE CABINET
Respondent

Before: Casey JA
Bisson JA
Tompkins JA

Counsel: Banuera Berina for appellant
David James for respondent

Date of Hearing: 30 March 2001
Date of Judgment: 5 April 2001

JUDGMENT OF THE COURT

[1] This appeal concerns the validity of a notice issued by the Cabinet to the appellant on 20 April 2000, pursuant to section 47A of the Public Finance (Control and Audit) Ordinance, Cap 79 ("the Act") that:

"Cabinet has reason to believe that in relation to travel in the period January 1991 to March 1994 you claimed and received payments and allowances from Public Funds to which you are not lawfully entitled, particulars of which are as follows:"

The particulars followed.

[2] The appellant applied to the High Court by originating summons for the determination of three questions:

1. Whether or not the effect of section 47A of the Act is discriminatory against the appellant and former members of his Cabinet.

2. Whether or not Cabinet having had its order relating to the surcharge of the appellant's salary on the ground that it is of the view that payments made to the appellant when he was a Cabinet Minister and Beretitenti were improper and/or unlawful quashed by the High Court, can have the matter reopened under the Public Finance and (Audit Control) Ordinance, Cap. 79 as amended, by issuing a fresh notice curing the defects in its first notice which caused such first notice to be quashed.

3. Whether or not Cabinet can claim recovery for monies paid to the appellant over six years ago having regard to the operation of the Statute of Limitation 1935 (UK).

[3] For reasons we need not detail, the appellant abandoned the third question. By his judgment delivered on 12 December 2000, the Chief Justice answered the first two questions by holding first, that s 47A of the Act is not discriminatory against the appellant and former members of the Cabinet and secondly, that the Cabinet can have the matter reopened under the Act as amended by issuing a fresh notice. The appellant has appealed against that judgment.

Application to strike out

[4] Mr. James for the respondent applied for an order that the appeal be struck out on the grounds that the appellant had failed to pay the costs of $500 awarded against him in the earlier proceedings on 12 December 2000, and further on the grounds that costs totalling $37,000 awarded in respect of other High Court proceedings remain unpaid. It was, he submitted, an abuse of process to allow the appeal to continue so that the appellant and others who may benefit from the Court ruling have the benefit of the Court's processes, with him being protected against the risk of a costs order in the event of an adverse ruling. Mr James advised that the costs of $500 have now been paid.

[5] We did not accept the submission. If there are costs outstanding in respect of the earlier proceedings, the proper course is for the respondent to take appropriate steps to enforce the costs orders. It is not appropriate for it to seek to obtain payment by applying to strike out this appeal on the grounds of non-payment. The Respondent's application to strike out was dismissed and the hearing of the appeal proceeded.

The statutory provision

47A(1) In this section, "a member" means a member of the Maneaba ni Maungatabu and includes a former member, the Speaker and any officer or member of a body or authority appointed pursuant to or under the Constitution.

(2) Where it appears to the Cabinet that a member-

(a) has claimed and been paid or received or spent any amount when he is not entitled to under the Salaries and Allowances of Members of Maneaba ni Maungatabu Act (Cap. 92A) or any other law;

(b) has claimed and been paid or received or spent any amount which a Commission of Inquiry established under the Commission of Inquiry Ordinance (Cap. 10) for the purpose of establishing the lawfulness or otherwise of such payment or expenditure, has found to have been paid, received or spent unlawfully;

(c) has been responsible for causing any financial loss to the Government through his failure to comply with any of the provisions of the Proceedings by and Against the Republic Ordinance (Cap. 76A) or any other law or proper and lawful directions of the Cabinet;

(d) has been responsible for any improper payment of public moneys or for any payment of public moneys that was not properly vouched, warranted or authorised;

(e) has failed to account for any moneys;

(f) has been responsible for any deficiency in or for the loss or destruction of or damage to any public moneys, stamps, securities stores or other state land or property; and

(g) has failed to account for an imprest issued to him within the time period as laid down in the relevant regulation.

(S. 47A inserted by No. 3 of 1996, S 4)

the Cabinet may subject to section 47B surcharge such member with a sum that does not exceed-

(h) any amount not entitled to or unlawfully paid;

(i) any amount of financial loss or improper payment suffered by the Government;

(j) any amount not accounted for or the amount of the deficiency;

(k) the value of the property lost or destroyed;

(l) the value of any properly damaged or in the discretion of the Cabinet the cost of repairs.

Procedure for imposition of surcharge

47B(1) Before imposing a surcharge under section 47A the Cabinet shall forward to the member against whom it is proposed to make a surcharge a notice in the prescribed form-

(a) describing with particularly the act that is the subject of the notice;

(b) demanding an explanation in writing within 30 days after on which the member receives the notice;

(c) stating that, in the absence of an exculpatory explaining satisfactory to the Cabinet, the member will be required to repay to the Government the amount involved and that such repayment may be effected by surcharge of any salary or other payment such may by the Government to such member; and

(d) describing the member's right to appeal against any decision by the Cabinet to the High Court.

(S. 47B inserted by No. 3 of 1996, S 4)

Recovery of amounts of surcharge

47C(1) If the Cabinet fails to receive a satisfactory explanation from any member notified under section 47B within 30 days of service of such notice on such member then and notwithstanding any other law in Cabinet shall commence recovery of the amount involved by directing such sums as are necessary to be withheld from such member's salary or other amounts payable to him by the Government.

Appeal against surcharge

47D(1) Any member against whom action is taken by the Cabinet under subsection (3) may appeal against the action of the Cabinet to the High Court at any time within 30 days after the Cabinet commences such action.

(2) The High Court may confirm, alter, or quash the surcharge and any such decision of the High Court shall be final.

The earlier proceedings

[6] These proceedings concerned an earlier notice issued by the Cabinet on 8 September 1998 pursuant to the same section of the Act. The appellant challenged the validity of that notice. In a judgement delivered on 18 February 2000, the Chief Justice held that the notice breached the rules of natural justice in that it did not describe why the payments claimed were unlawful and why the appellant was not entitled to them. The Chief Justice held that the Cabinet did not give any reasons at all as to why it appeared to it that the appellant was not entitled either to all or some or none of the particular amounts. He concluded:

"In all fairness the appellant was, and is, entitled to know the case he has to meet. Otherwise how can he defend having claimed and received the amounts? How can he give an exculpatory explanation? He cannot. He was entitled to the reasons, in the case of each amount, why the payments are considered to be unlawful."

[7] The Chief Justice referred to the Court having power to "confirm, alter or quash the surcharge" but not power to refer the matter back to the Cabinet to give its reasons for regarding the payments as unlawful. If he had the power to refer it back he would. Not being prepared either to confirm or alter the surcharge, all he could do was quash it.

The first ground of appeal

[8] Mr Berina relied on Section 15(1) of the Constitution. It provides:

"15(1) Subject to the provisions of subsections (4), (5), and (8) of this section, no law shall make any provision that is discriminatory either of itself or in its effect."

[9] He submitted that this provision protects the appellant and members of his Cabinet from discrimination, and that the notice as issued was discriminatory against them. He relied on a submission, supported by an affidavit from the appellant, that the present Beretitenti, before coming to power, had formed the view that certain payments made to the appellant as Beretitenti at the time were not proper or lawful, and that the Act was made to operate retrospectively to cover the whole period when the appellant first came to power. It was, he submitted, passed specifically to catch the appellant and members of his Cabinet. The Act has been applied only against the appellant and members of his Cabinet. The amendment to the Act to make it operate retrospectively from 1 January 1990 reinforces his submission that the Act was passed specifically to catch the appellant, Because the adjudicating body determining the right of the appellant is partial, the effect of the Act is discriminatory.

[10] In considering the meaning of discriminatory in the context of the Constitution generally and s 15 in particular, it is necessary to have regard to the definition in subs 5(3),

(3) In this section, the expression "discriminatory" means affording different treatment to different persons attributable wholly or mainly to their respective descriptions by race, place of origin, political opinions, colour or creed whereby persons of one such description are subjected to disabilities or restrictions to which persons of another such description are not made subject or are accorded privileges or advantages which are not accorded to persons of another such description."

[11] We are satisfied that Section 47A is not discriminatory against the appellant and members of his Cabinet. We reach that conclusion for these reasons.

[12] First, s 47(1) defines "a member" widely. The definition embraces not only a person who is a member or former member of the Maneaba ni Maungatabu, but also to "any officer or a member of a body or authority appointed pursuant to or under the Constitution". This part of the definition embraces for example members of the Judiciary or of the police. Thus the intention of the section is to give the Cabinet power to impose the surcharge in the circumstances defined on a large body of persons holding positions under the Constitution.

[13] Secondly, for a provision to be prohibited by s 15(1) of the Constitution it must be discriminatory within the definition in subs 3. That is, it must result in different treatment attributable to a description by race, place of origin, political opinions, colour or creed. Section 47 does not result in treatment to any person by any of those descriptions.

[14] Thirdly, the reason why the Maneaba ni Maungatabu passed any particular legislation is irrelevant. Whether or not a provision is or is not discriminatory is to be determined, not by the reason why the Cabinet introduced the law into the Maneaba ni Maungatabu, but by the words and meaning of the provision itself.

The second ground of appeal

[15] It was submitted on behalf of the appellant that the decision of the High Court delivered on 18 February 2000 quashing the earlier notice was, in accordance with Section 47B(2), final. Therefore, counsel submitted, no further notice can be issued in respect of the same subject matter.

[16] This submission turns on the meaning of "final" in subs (2). Does it mean that the decision of the High Court is final in the sense that it is a decision from which there can be no appeal? Or does it mean that the decision of the High Court is final in the sense that Cabinet then lacks jurisdiction to issue a further surcharge?

[17] When this section as a whole is considered, the answer is clear. The, power of Cabinet to impose a surcharge on the grounds set out in the section, is in the nature of an administrative power. It is, in effect, assessing an amount claimed to be due in the same way as the Internal Revenue Board issues a tax assessment. Any person on whom the Cabinet imposes a surcharge has a full and unrestricted right to appeal under section 47D. In stating that the decision of the High Court shall be final, the intention of the Maneaba ni Maungatabu clearly was just that, namely that there was to be no further right of appeal in respect of that decision. This is the meaning the expression is frequently given in statutes that limit appeal rights.

[18] This conclusion is reinforced by Section 10(2) of the Court of Appeal Act 1980 (Cap 16b). It provides that no appeal shall lie-

"(c) from the decision of the High Court or of any judge thereof where it is provided by any enactment that such decision is to be final;"

The Act is such an enactment. It is clear that subs (2) of s 47D has been enacted with this provision of the Court of Appeal Act in mind.

[19] Had the Maneaba ni Maungatabu intended that once a surcharge had been quashed, no further surcharge can be made by the Cabinet, it would have said so. The fact that the High Court does not have the power to refer the surcharge back to the Cabinet is consistent with the view that it was not the intention of the subsection to prevent Cabinet surcharging a member when a surcharge previously issued had been quashed.

[20] In the High Court it was contended that the doctrine of res judicata applied. As the appellant did not advance that contention in this Court, we need not examine it in detail. We agree with the conclusion reached by the Chief Justice that res judicata does not apply since, in the earlier case, he was concerned only with whether the procedure had been fair, not to adjudicate on the merits of the claim.

The result

[21] Neither ground of appeal can succeed. The appeal is dismissed. The respondent is entitled to costs to be agreed or taxed.

Casey JA
Bisson JA
Tompkins JA