In re the Constitution, Application by the Speaker [2004] KIHC 161; Civil Case 12 of 2004 (28 June 2004)

IN THE HIGH COURT OF KIRIBATI
CIVIL JURISDICTION
HELD AT BETIO
REPUBLIC OF KIRIBATI

High Court Civil Case 12 of 2004

IN THE MATTER OF SECTION 88(6)(C) OF THE CONSTITUTION

AND

IN THE MATTER OF AN APPLICATION FOR AN INTERPRETATION OF SECTION 109(4) AND (5) OF THE CONSTITUTION

MR ETERA TEANGANA, THE HONOURABLE SPEAKER
OF THE MANEABA NI MAUNGATABU
APPLICANT

Date of Hearing: 22 June 2004

For the Applicant: Mr David James
For the Hon Attorney General: The Solicitor-General,
Mr David Lambourne

JUDGMENT

Section 88(6) of the Constitution:-

Subject to the provisions of this Constitution, the High Court shall have original jurisdiction to hear and determine any question as to the interpretation of this Constitution:

Provided that the following authorities only are entitled to make application to the High Court under this subsection –

(a) the Beretitenti, acting in accordance with the advice of the Cabinet;

(b) the Attorney-General; and

(c) the Speaker.

The Honourable the Speaker has applied to the Court for the consideration of the following questions of law:

1. Whereas, in the period between the Sixth and the Seventh Parliaments, the Minister of Finance and Economic Planning authorised unappropriated advances (“the Advances”) from the Consolidated Fund;
   

And whereas, a Supplementary Appropriation Bill, seeking appropriation of those advances, was defeated on 27 March 2003;

And whereas the Public Finance (Control and Audit) Ordinance (Cap. 79) section 9 places a limit of $1,000,000.00 on advances the Minister of Finance can authorise in anticipation of the grant of an appropriation by the Maneaba ni Maungatabu;

Do the Advances require due appropriation by the Maneaba ni Maungatabu under section 109(4) of the Constitution, before that Minister can authorise any new unappropriated advances, which inclusive of the Advances, will exceed the limit provided for in the Ordinance?

2. In what circumstances, if any, are unappropriated advances authorised by the Minister of Finance capable of falling into the category of moneys described in section 109(5) of the Constitution?
   

In an affidavit supporting his application the Speaker sets out the motion of the honourable member for South Tarawa, Mr Banuera Berina, requesting the Speaker to submit this question to the Court:-

Where the House has dissolved as a result of the House rejecting a Supplementary Appropriation Bill carrying with it an issue of confidence, is the Minister of Finance obliged to resubmit the said Bill for appropriation?

Instead of submitting Mr Berina’s question the Speaker submitted his own questions.

I have heard most helpful and lucid argument for two opposing interpretations of the relevant sections of the Constitution from Mr David James and from Mr David Lambourne.

Mr James contends the questions should be answered:-

1. No Minister of Finance may exceed the limit of sums he can authorise in anticipation of a grant of appropriation including the sums in a Bill to appropriate those advances which has not been approved by Parliament.
   
2. It must first be accepted by the Maneaba that the warrants of the Minister of Finance were void on some basis not available for consideration on the present proceeding.
   

Mr Lambourne contra:-

(1) Inclusion of the Advances in the Supplementary Appropriation Bill 2003 was sufficient to comply with the requirements of s.109(4) of the Constitution despite the defeat of that Bill. Consideration of the other matters raised by the Applicant is inappropriate in the circumstances.

(2) Any unappropriated advance will be either moneys expended in excess of the sum appropriated or moneys expended for a purpose for which no money has been appropriated, and therefore fall to be dealt with in accordance with s.109(5) of the Constitution.

Although I may need to refer to other sections, the sections of the Constitution most relevant are:-

106. No taxation shall be imposed or altered except by or under law.

108. (1) No money shall be issued from the Consolidated Fund except upon the authority of a warrant under the hand of the Minister of Finance.

(2) No warrant shall be issued by the Minister of Finance for the purpose of meeting any expenditure unless - ....

(b) the expenditure has been authorised in accordance with the provisions of section 109(4), 110 or 111 of this Constitution; ------

109. -----

(4) Where in respect of any financial year the Minister of Finance is satisfied that an urgent and unforeseen need has arisen to authorise for any purpose advances from the Consolidated Fund for expenditure in excess of the sum appropriated for that purpose by an Appropriation Act, or for a purpose for which no sum has been so appropriated, he may, subject to the provisions of any law in force in that regard, authorise such advances by warrant and shall include such amount in a Supplementary Appropriation Bill for appropriation at the meeting of the Maneaba next following the date on which the warrant was issued.

5. If at the close of account for any financial year it is found that any moneys have been expended on any head in excess of the sum appropriated for that head by an Appropriation Act or for a purpose for which no money has been appropriated, the excess or the sum expended but not appropriated as the case may be shall be included in a statement of heads in excess which, together with the report of the Public Accounts Committee thereon, shall be presented to the Maneaba.

Also relevant, section 9(1) and (2) of the Public Finance (Control and Audit) Ordinance.

(1) The provisions of this section take effect for the purposes of section 109(4) of the Constitution.

(2) Upon being satisfied that due to exceptional circumstances which could not have been foreseen an urgent need for expenditure has arisen –

• (a) for which no provision exists or for which the existing provision is insufficient; and
  

(b) for which funds cannot be provided under section 23; and

(c) which cannot be deferred without detriment to the public interest;

the Minister may by a Contingencies Warrant under his hand and in anticipation of the grant of an appropriation by the Maneaba ni Maungatabu authorise an advance from the Consolidated Fund to meet that need and shall, forthwith, report his action and the reasons therefore to the Cabinet:

Provided that the total of the sums so authorised to be advanced in anticipation of the grant of an appropriation shall not exceed at any one time an amount of $1,000,000.

Events giving rise to the Application

In the months of October to December 2002 Contingency Warrants were issued pursuant to section 109(4) of the Constitution and section 9(2) of the Public Finance (Control and Audit) Ordinance. The total amount warranted was $977,824.

A General Election for the Maneaba ni Maungatabu and a Presidential Election were held early in 2003. The new Maneaba met. On 27 March 2003 the Supplementary Appropriation Bill 2003 containing warrants amounting to $977,824 was, as required by section 109(4) of the Constitution, introduced. The Bill was opposed. Pursuant to section 33(2)(c) of the Constitution His Excellency the Beretitenti notified the Speaker that the vote on the Bill raised a matter of confidence. The Bill was defeated. Consequently, the Beretitenti ceased to be Beretitenti, the Ministers ceased to be Ministers (section 41(3)(e)), the Maneaba stood dissolved (section 78(1)(a)). Pursuant to section 49 the Council of State assumed the functions of Government and administered the Government until fresh elections for the Maneaba and for the Beretitenti had been held.

Since the Maneaba has met following the elections, the Supplementary Appropriation Bill 2003 has not been re-introduced.

Section 106

Mr James rested his argument quite strongly on section 106 of the Constitution, submitting that “taxation” should be given a broad interpretation to include the expenditure as well as the raising of moneys. Section 106, Mr James argued, embodies a fundamental principle of the Constitution – no expenditure without Parliamentary authority.

A tax is popularly regarded as a charge upon the people. The Concise Oxford English Dictionary defines “taxation” as “the imposition or payment of tax” and “tax” as “a contribution to State revenue compulsorily levied on individuals, property, or businesses”. Stroud (4th edition) defines tax as “a compulsory contribution imposed by the sovereign authority on, and required from, the general body of subjects or citizens ...”

I cannot find authority for Mr James’ submission that “taxation” should be given a wider meaning.

There is no doubt that under the system of parliamentary government which we enjoy in Kiribati, Parliament should and does exercise control over both the raising of revenue and its expenditure. That principle is not embodied in section 106: Section 106 contemplates the imposition of a charge: it does not extend to expenditure. Parliamentary control of expenditure is not the purpose of section 106.

The Public Finance Ordinance

Mr Lambourne contended that the Court may not in these proceedings construe section 9 of the Public Finance Ordinance. Questions of interpretation of the Ordinance should properly be raised in proceedings for judicial review.

However section 109(4) of the Constitution contains the words “subject to the provisions of any law in force in that regard”. This imports reference to legislation subsidiary to the subsection. There would be no point in the Court construing section 109(4) without reference to legislation subsidiary to it. The terms of section 9(1) of the Ordinance expressly make the section subsidiary to section 109(4) of the Constitution. Because section 109(4) contemplates a “law in force in that regard” and section 9 is such a law, the Court may construe section 9 of the Ordinance when construing section 109 of the Constitution.

The proviso to section 9(2) of the Ordinance puts the cap of $1,000,000 on the total of the sums which may be authorised by Contingency Warrants.

Mr James’ arguments

Having considered these two matters I come to the respective arguments put by Mr James and by Mr Lambourne.

The nub of Mr James’ argument is that the new Government has an obligation to re-introduce (and have passed) Supplementary Appropriation Bill 2003. Until it does, the Bill is unfinished business. Mr James relied heavily on section 106 but it does not support him as strongly as he argued. He did not refer to any particular section (apart from section 106) of the Constitution as supporting directly his proposition that the new Government has an obligation to re-introduce the Bill. He relied on general principles of good governance.

Although section 106 does not directly support Mr James’ case yet there is no doubt that Parliament should and does exercise control over both the raising of revenue and expenditure.

Mr James argued that the new Government has an obligation to re-introduce the Supplementary Appropriation Bill 2003 in the same way as it must honour the contracts entered into by previous governments. No moneys warranted by the Minister of Finance are proper and perfected until and unless they are recorded in an Appropriation Act or Supplementary Appropriation Act.

Mr James extended his argument to the proposition that until there is parliamentary authority, nunc pro tunc, for the expenditure of those Contingency Warrants, then the Minister of Finance may not issue fresh warrants for more than $22,176 for that would be to exceed the $1 million cap in section 9(2) of the Ordinance.

Contracts entered into by a government on behalf of Kiribati create legal, binding obligations; that there may be a subsequent change of government makes no difference: the obligations remain. Mr James has not suggested any section of the Constitution or any statute creating a legal, binding obligation to introduce again the Supplementary Appropriation Bill. That is the answer to Mr James’ proposition that the obligation to honour contracts already entered into is the same as the obligation to introduce again the Supplementary Appropriation Bill.

There is likewise an answer to Mr James’ proposition that the cap of $1,000,000 continues to apply. The answer is in the proviso to section 9(2) of the Ordinance:-

Provided that the total of the sums so authorised to be advanced in anticipation of the grant of an appropriation shall not exceed at any one time an amount of $1,000.000.

The words “at any one time” must have some work to do, must be given some meaning: otherwise they otiose, surplus. They can have no other meaning but that (in the circumstances we are considering) the proviso anticipates a number of times, of which the period covered by the 2002 warrants included in the Supplementary Appropriation Bill 2003 is but one. Warrants issued subsequently, say in 2003, are issued at another time: the total which may be issued in 2003 is not affected by the warrants issued in 2002. The Minister of Finance who took office after the last elections started with a clean slate.

Mr James’ argument finally comes down to reliance on convention: the right and proper course required by convention is to re-introduce and have passed the 2003 Bill.

Mr Lambourne’s arguments

Mr Lambourne was inclined to deny the power of convention under a written Constitution, arguing that conventions are appropriate in a country with an unwritten constitution such as the United Kingdom, whereas in Kiribati it is all in the written Constitution: it is unnecessary, indeed not permissible, to look outside the Constitution.

That is overstating the case. A consideration of the role of convention in the Australian Parliamentary system, even though Australian has a written constitution shews that. There is a good discussion on the existence of these conventions in “House of Representatives Practice” (edited by J A Pettifer) 1981 (especially at pages 79 to 80).

Although conventions in the Kiribati parliamentary system differ from those in Australia one cannot assume that everything required for good governance in Kiribati is contained within the four corners of the Constitution.

Nevertheless Mr Lambourne was on strong ground in taking a literalist approach to interpretation of the sections. He cited the decision of the Court of Appeal in civil appeal No. 1/2003, Willie Tokataake vs Attorney General:-

It is a well accepted principle that a constitution in the Westminster model (as this one is, notwithstanding that Kiribati is a republic) is to receive a generous interpretation; but “that does not require the Courts .... to reject the plain ordinary meaning of words”: Attorney-General of Fiji v Director of Public Prosecutions [1983] 2 AC 672.

This court is bound by that decision, a decision with which I respectfully agree.

Mr Lambourne’s argument is that section 109(4) merely requires that the Minister of Finance

“should include such amount in a Supplementary Appropriation Bill for appropriation at the meeting of the Maneaba next following the date on which the warrant was issued”.

The Minister of Finance in the old Government did that: all perfectly proper. There is no provision in the Constitution requiring anything else.

What should be done if the Bill is not passed (or never introduced) is set out in section 109(5):-

...the excess or the sum expended but not appropriated as the case may be shall be included in a statement of heads in excess which, together with the report of the Public Accounts Committee thereon, shall be presented to the Maneaba.

It is then for the Maneaba to take whatever action, if any, it sees fit: to “work the matter through”, the phrase used several times by Mr James. There is no obligation on the new Government to take any further action. The Report of the Public Accounts Committee may or may not be the end of it. That is a decision for the Maneaba.

Conclusion

Perhaps the uncertainty which the Speaker, prompted by Mr Berina’s motion, feels arises from the silence of section 109(4) about what happens when a Supplementary Appropriation Bill is introduced but not passed.

According to Erskine May (21st edition at page 709) in the United Kingdom, “the sums would have to be voted again in the next session before a legal appropriation could be affected”. The authors do not say whether this is by statute or by convention but from the phrasing of the sentence, I expect by convention.

In Kiribati we find the answer not in convention but in section 109(5): “the sum expended but not appropriated ....shall be included in the statement of heads .....” That is the Kiribati way of dealing with the situation. It is part of the mechanism through which Parliament exercises control of expenditure. A report is made to Parliament: it is then for Parliament to take what action, if any, it sees fit.

Even though section 109(4) does not provide for what happens if the Bill is not passed, section 109(5) provides for what is done when for any reason moneys remain unappropriated. If moneys may remain unappropriated either because a Supplementary Appropriation Bill has not been passed or for any other reason. S.109(5) is not concerned with why moneys are expended but not appropriated, only with what should be done about it.

Section 109(5) gives all the guidance needed to answer the Speaker’s questions.

If I were to answer Mr Berina’s question No. 27, I would answer, “No”.

The Answers

I answer the Speaker’s first question, “No”.

I am a little unwilling to answer the second question. It is hypothetical. The Court should not be asked to speculate on what may happen, the more so on what may happen in political affairs. The Executive, Legislature and Judiciary, the three separate arms of Government, should scrupulously observe the principle of the Separation of Powers and avoid if possible, commenting on the functions of each other.

I restrict myself by answering question 2 in this way,

“In the circumstances which have given rise to this reference for interpretation of section 109 of the Constitution, the unappropriated advances authorised by the then Minister of Finance fall into the category of moneys described in subsection (5) of that section”.

Dated the 28th day of June 2004

THE HON ROBIN MILLHOUSE QC
Chief Justice