IN THE SUPREME COURT OF NAURU
[CIVIL JURISDICTION]
Cases No 21 & 23 of 2014

BETWEEN

MANUELLA APPIN & MILO RENZO
PLAINTIFFS

And

SECRETARY FOR JUSTICE
FIRST DEFENDANT

And

NAURU PHOSPATE ROYALTIES TRUST
SECOND DEFENDANT

Before: Madraiwiwi CJ, Hamilton-White J and Khan J

For the Plaintiffs V Clodumar
For the First Defendant: Y Tom'tavala
For the Second Defendant: D Aingimea
Date of Hearing: 26, 29 September 2014

Date of Judgment: 1 October 2014

CATCHWORDS:

Constitution – Ronwan distribution Act 2013 sections 31.2 – Ronwan distribution Act 2014 section 23A – Republic of Nauru Proceedings Act 1972 section 13 (2) – Constitution inspection – Application of Articles 62 and 84 – Non-excision of section 31.2 – Section 31.2 RONWAN distribution Act ultra-vines Articles 62 and 84 

JUDGMENT

1. The Plaintiffs Manuella Appin and Milo Renzo instituted separate proceedings challenging the constitutional validity of sections 22 and 23 of the Ronwan Distribution Act 2013 (the "Act") and section 23A of the Ronwan Finalisation Act 2014. On 26 September 2014 the matters were consolidated pursuant to Order 12 rule 5 (2) of the Civil Procedure Rules 1972 as common questions of law and fact arose in both cases and the relief sought emanated out of the same transactions.

2. Section 19 subsections (6) (b) and (9) of the Nauru Phosphate Royalties Trust Act 1968 provide the basis for the Plaintiffs' claims. They state as follows-

"19. (6) (b) A person who is entitled to a life time interest only in any land as aforesaid is, while living, a beneficiary of the Fund, in respect of the Ronwan Interest, to the exclusion of the person who has the beneficial interest in that land.

(7) …

(8) …

(9) For the purpose of any written law and any custom of the Nauruan people, the interest of a beneficiary in the Fund is real property and of a beneficiary in the Ronwan Interest of the Fund is personal property."

The Plaintiffs are both widows and have a lifetime interest only in the Nauru Landowners Royalties Trust Fund (the "Fund" also referred to as Fund 2), established with royalties from land on which phosphate has been or is being mined. Their interests derive from their respective husbands as actual landowners entitled to the capital upon which the interest is paid to their spouses.

3. The Act purports to remove this entitlement by winding up the Fund and paying out the capital sum to the beneficiaries (i.e. the landowners) and thereby terminating the lifetime payments the Plaintiffs have hitherto enjoyed. Sections 22 and 23 of the Act state-

"22. Primary Vesting / Distribution of Capital

 On the Primary Vesting day, monies held by the Trust, which the Trust is not bound to retain shall be disbursed and paid by the Trust to the Beneficiaries and representatives of Beneficiaries. Other than Ronwan interest, no monies shall be payable or shall be paid from Fund 2, by virtue of, or in respect of, any lifetime interest in Phosphate Land.

23. Final Vesting

On 27 June 2014, or any later date stipulated under any Regulation made pursuant to this Act, all monies held by the Trust shall be disbursed and paid by the Trust to the Beneficiaries. Other than Ronwan interest, no monies shall be payable or shall be paid from Fund 2, by virtue of, any lifetime interest in Phosphate Land."

Section 23 A (as amended by section 4.9 of the Ronwan Finalisation Act 2014) is as follows-

"23A Distribution of any Subsequent Capital Receipts

23A.1 Within 2 months or any shorter or longer period stipulated under any Regulation made pursuant to this Act, after the receipt or realisation of money, after the Secondary Vesting Date, in respect of any capital of the Trust on behalf of Fund 2, in excess of $100,000 or any larger or lesser sum stipulated under any Regulation made pursuant to this Act, all surplus monies held by the Trust which are not required to meet the expenses and liabilities of the Trust, shall be paid and distributed to the Beneficiaries of such fund and where required the representatives of Beneficiaries of such fund, apportioned in accordance with the Beneficiaries' relative interests in Fund 2 as at 31 December 2013. Other than Ronwan interest, no monies shall be payable by virtue of, in respect of, or in respect of, any lifetime interest in Phosphate Land." 

4. The Plaintiffs allege those provisions contravene Article 8 of the Constitution of Nauru in depriving them of their property, a lifetime entitlement to the interest earned on the capital of the Fund. Further that section 31, in purporting to wind up the Long Term Investment Fund is in breach of Articles 62 and 84 of the Constitution.

5. The Defendants rely on section 3(2) of the Republic Proceedings Act 1972 which mandate cabinet approval of any suit brought against the Government of the Republic of Nauru or any of its instrumentalities.

Section 3(2) of the Republic Proceedings Act 1972 provides –

"No civil proceedings may be taken against the Republic to enforce a claim against the Republic unless: (a) before the commencement of proceedings Cabinet has given leave for them to be taken; or (b) the claim is of a kind mentioned in subsection 3."

 They also assert the statutory protections afforded under section 7(3) of the Act. 

Section 7(3) of the Act provides –

"No action, suit or prosecution or other proceedings shall be brought against any person in respect of any act done bone fide in pursuance or execution or intended pursuance or execution of the provisions of this act, The Nauru Phosphate Royalties Trust Act 1968 and / or the Nauru Phosphate Royalties (Payment and Investment) Act 1968."

6. In relation to the Long Term Investment fund section 31 of the Act provides-

"31.Winding up of Fund 1

 31.1 If the Trust holds any asset on the Primary Vesting Date on behalf of the Long Term Investment Fund (Fund 1), other than any debt relinquished, discharged or waived or to be relinquished, discharged or waived pursuant to section 16, the Trust shall transfer such asset to the Government of Nauru on the Primary Vesting Date.

31.2 Fund 1 shall be deemed to be wound-up for all purposes on 30 June 2014 or any later date stipulated under any Regulation made pursuant to this Act."

7. Section 4.18 of the Ronwan Finalisation Act seeks to repeal section 31.2 of the Act in the following terms-

"4.18 The original Sub-Section 31.2 of the Ronwan Distribution Act 2013 is repealed. To the extent possible, such repeal is deemed to have taken effect from the commencement of the Ronwan Distribution Act 2013."

8. The Court has gone to some lengths to cite the various provisions relied upon by the parties during the hearing because, despite the arguments marshalled in the proceedings, ultimately the case falls to be determined by a simple, almost trite, constitutional ground.

9. Section 31.2 of the Act invokes the Court's jurisdiction by triggering the application of Article 54-(1) of the Constitution which provides-

"Matters concerning the Constitution

54-(1.) The Supreme Court shall, to the exclusion of any other court, have original jurisdiction to determine any question arising under or involving the interpretation of any provision of this Constitution."

The concession made by counsel for the First Defendant of the constitutional implications of section 31.2, both in his written submissions and in open court, merely reinforces this conclusion. It also obviates the necessity of having to consider the statutory shields the Defendants have erected to pre-empt these proceedings.

10. A plain reading of section 31.2 clearly indicates the cessation of the Long Term Investment Fund established by Article 62-(1.) of the Constitution. The provision is in these terms-

"Long Term Investment Fund

62.-(1.) There shall be a Long Term Investment Fund constituted by moneys that immediately before the commencement of this Constitution constituted a fund called the Nauruan Community Long Term Investment Fund and by such other moneys as are appropriated by law for payment into the fund or are paid into the fund as provided by clause (2) of this Article."

11. The Defendants rely on section 4.18 of the Ronwan Finalisation Act to assert that any possible defect in section 31.2 of the Act (constitutional or otherwise), has been remedied by the purported repeal of the offending provision. Such a conclusion is, with respect, not tenable. By seeking to affect Article 62-(1.), section 4.18 fell within its ambit and set in motion the procedures prescribed in Article 84 and the Fifth Schedule of the Constitution.

12. Article 84 clauses (1.),(2.), (3.) and (5.) state-

"Amendment of the Constitution

84- (1.) This Constitution shall not be altered except in accordance with this Article.

(2.) This Constitution may be altered by law but a proposed law for that purpose shall not be passed by the Parliament unless-

(a) there has been an interval of not less than ninety days between the introduction of the proposed law in Parliament and the passing of the proposed law by Parliament; and

(b)it is approved by not less than two-thirds of the total number of members of Parliament.

(3.) A proposed law to alter or having the effect of altering the Fifth Schedule or any of the provisions of the Constitution specified in the Fifth Schedule shall not be submitted for the certificate of the Speaker under Article 47 unless, after it has been passed by Parliament, it has been approved by not less than two-thirds of all votes validly cast on a referendum held, subject to clause (4) of this Article, as prescribed by law.

(4.) …

(5.) A proposed law to alter this Constitution shall not receive the certificate of the Speaker under Article 47 unless it is accompanied by a certificate under the hand of the Clerk of the Parliament that the provisions of clause (2.) 0f this Article have been complied with and, if it is a proposed law top which clause (3.) of this Article applies, by a certificate under the hand of a person prescribed bylaw stating that it has been approved as provided by that clause."

13. Article 62 is contained in clause (v) of the Fifth Schedule to the Constitution which inter alia includes Articles 58, 59, 60 and 65.

14. By, albeit unintentionally, having the effect of amending Article 62-(1.) of the Constitution, section 31.2 of the Act brought Article 84 into play.

15. The Act was certified by the Speaker on the 24 December 2013 and there is no evidence before the Court nor is there any material in respect of which this court can take judicial notice to suggest that clauses (2.), (3.) and (5.) of Article 84 were observed in the enactment of the Act. In the court's opinion Article 84(3) is of particular relevance in that the Speaker is only entitled to certify the Act after the Act in the proposed form has been approved by not less than two-thirds of all votes validly cast at a referendum. Furthermore this certificate by the Speaker can only be issued following the procedures laid down in Article 84(5). The result of non-compliance with these Articles means that the Act did not come into being. 

16. . It necessarily follows that not only section 31.2 but the entire Act is ultra vires the Constitution. The provision cannot be excised to preserve the remainder of the Act, because the presence of section 31.2 activated the mechanisms extant in Article 84 and Schedule 5 of the Constitution

17.That being the case, the attempt by section 4.18 of the Ronwan Finalisation Act to repeal section 31.2 of the Act is of no effect as it sought to cure what was defective from the outset.

18. The Ronwan Distribution Act 2013 is therefore held to be ultra vires the Constitution of Nauru and void, the injunction is dissolved and costs are awarded to the Plaintiffs.

DATED this 1stday of October 2014

Chief Justice Joni Madraiwiwi

Justice Jane Hamilton-White

Justice Mohammed S Khan