O'Neil v Ombudsman Commission of Papua New Guinea [2014] PGNC 206; N5828 (3 December 2014)

N5828

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 383 OF 2014

BETWEEN

THE HONOURABLE PETER O'NEILL,
Prime Minister of Papua New Guinea
First Plaintiff

AND

MR DAIRI VELE,
Acting Secretary of the Department of Treasury
Second Plaintiff

AND

THE OMBUDSMAN COMMISSION OF PAPUA NEW GUINEA
First Defendant

AND

RIGO A. LUA, Chief Ombudsman
Second Defendant

AND

PHOEBE SANGETARI, Ombudsman
Third Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Makail, J
2014: 17th October & 03rd December

CONSTITUTIONAL LAW – PRACTICE & PROCEDURE – Application to refer questions to Supreme Court – Whether Constitutional questions arise – Questions arise from a direction issued by Ombudsman Commission under section 27(4) of the Constitution – Constitutionality of scope and nature of direction – Direction tantamount to an injunction – Failure to comply with direction – Whether failure to comply is misconduct in office – Questions raised are not trivial, vexatious or irrelevant – Whether questions require interpretation by Supreme Court – Application upheld – Questions referred to Supreme Court for interpretation – Constitution – Sections 18 & 27(4), 209 & 255 – Organic Law on Duties and Responsibilities of Leadership – Sections 23 & 27(5).

Cases cited:

Isaac Lupari v. Sir Michael Somare & Ors (2008) SC930
Sir Michael T. Somare v. Ila Geno & Ombudsman Commission (2007) N3139
Albert Karo v. Ombudsman Commission of PNG [1995] PNGLR 547
Peter Peipul v. Maurice Sheehan & Ors (2002) SC706
John Nilkare v. Ombudsman Commission [199] PNGLR 333
Sir Michael Somare v. Chronox Manek & Ors (2011) SC1118
The Public Prosecutor v Nahau Rooney (No.1) [1979] PNGLR 402
Damaru & Anor v. Vaki OS No. 484 of 2014
Vaki v. Eliakim & Ors OS (JR) No. 485 of 2014
Supreme Court References 01, 02 & 05 of 2014: Re; Powers, Functions, Duties and Responsibilities of the Police Commissioner in relation to Warrants of Arrest (2014) SC1388

Counsel:

Mr M. M. Varitimos QC with Ms L. David, for First Plaintiff
Ms T. T. Nonggorr, for Second Plaintiff
Mr M. Efi, for First, Second & Third Defendants
Mr T. Tanuvasa, for Fourth Defendant

RULING

03rd December, 2014

1. MAKAIL, J: Pursuant to a notice of motion, The Prime Minister, The Honourable Peter O'Neill, MP and the Acting Secretary of the Department of Treasury, Mr Dairi Vele sought to refer certain questions to the Supreme Court for interpretation pursuant to section 18 of the Constitution.

Proposed Questions

2. They claimed that the following questions arise in this proceeding:

2.1. Whether having regard to the provisions of the Constitution including Sections 27 and 219 thereof; the provisions of the Organic Law on the Duties and Responsibilities of Leadership including Sections 23 and 27 thereof; and the Organic Law on the Ombudsman Commission, the Ombudsman Commission has lawful authority, power and jurisdiction to have made a Decision and issue a Notice or Direction dated 14th March 2014 to the Prime Minister and others;

2.2. Whether a failure to comply with the Notice or Direction dated 14th March 2014 is misconduct in Office, on the proper interpretation and application of Section 27(5)(b) of the Constitution;

2.3. If the answer to questions (2.1) and (2.2) are "Yes", does the Ombudsman Commission have authority, power and jurisdiction to impose penalties under Section 28(1)(g)(ii) of the Constitution, Section 27(5) of the Organic Law on the Duties and Responsibilities of Leadership and Section 2 of the Leadership Code (Alternative Penalties) Act;

2.4. Whether the Ombudsman Commission is required to comply with Section 59 of the Constitution by providing the minimum requirement of natural justice to act fairly and, in principle, to be seen to act fairly before:

(a) making any decision affecting the rights or interests of a party, the Independent State of Papua New Guinea or its citizens;

(b) issuing a Notice or Direction under Section 27(4) of the Constitution;

(c) having made the Decision and issued the Notice or Direction dated 14th March 2014;

(d) issuing a letter dated 23rd May 2014 to Mr Dairi Vele, the Acting Secretary of the Department of Treasury; or

(e) referring a Leader for misconduct in Office pursuant to Section 27 of the Organic Law on the Duties and Responsibilities of Leadership.

2.5. Whether the Ombudsman Commission has lawful authority, power and jurisdiction to:

(a) make any decision affecting the rights or interests of a party, the Independent State of Papua New Guinea or its citizens;

(b) issue a Notice or Direction under Section 27(4) of the Constitution;

(c) make the Decision and issue the Notice or Direction dated 14th March 2014;

(d) issue a letter dated 23rd May 2014 to Mr Dairi Vele, the Acting Secretary of the Department of Treasury; or

(e) refer a Leader for misconduct in Office pursuant to Section 27 of the Organic Law on the Duties and Responsibilities of Leadership,

if a question or issue arising relates to the interpretation or application of any provision of a Constitutional Law, which has not been the subject of a determination consequent upon a Reference made pursuant to Section 18(2) of the Constitution or an opinion given pursuant to Section 19 of the Constitution.

2.6. Whether on the proper interpretation of Section 255 of the Constitution it is not a mandatory requirement, in all circumstances, that where a law provides for consultation between persons or bodies, or persons and bodies, the consultation must be meaningful and allow for a genuine interchange and consideration of views, particularly given the qualifying words "in principle" in Section 255 of the Constitution.

Jurisdiction

3. There is no dispute that the National Court may refer questions relating to the interpretation or application of the provisions of Constitutional Laws to the Supreme Court for interpretation pursuant to Section 18 of the Constitution. It states:

"18. Original interpretative jurisdiction of the Supreme Court.

(1) Subject to this Constitution, the Supreme Court has original jurisdiction, to the exclusion of other courts, as to any question relating to the interpretation or application of any provision of a Constitutional Law.

(2) Subject to this Constitution, where any question relating to the interpretation or application of any provision of a Constitutional Law arises in any court or tribunal, other than the Supreme Court, the court or tribunal shall, unless the question is trivial, vexatious or irrelevant, refer the matter to the Supreme Court, and take whatever other action (including the adjournment of proceedings) is appropriate."

Judicial Review Proceeding

4. Mr O'Neill and Mr Vele filed this proceeding to ask the Court to review the decision of the first, second and third defendants ("Ombudsman Commission") of 23rd May 2014 contained in a direction dated 14th March 2014 which inter alia, refused to allow them and other servants or agents of the State to make interest payments in accordance with the State's obligation pursuant to a UBS AG Loan agreement. The direction to the plaintiffs was issued under Section 27(4) of the Constitution. Section 27(4) states:

"(4) The Ombudsman Commission or other authority prescribed for the purpose under Section 28 (further provisions) may, subject to this Division and to any Organic Law made for the purposes of this Division, give directions, either generally or in a particular case, to ensure the attainment of the objects of this section."

5. The direction comprised of:

(a) a purported "Notice by the Ombudsman Commission pursuant to section 27(4) of the Constitution" dated 14th March 2014; and

(b) a letter dated 23rd May 2014 issued by the Ombudsman Commission advising that the Organic Law on Duties and Responsibilities of Leadership "also gives power and authority to the Ombudsman Commission to issue directions under Section 27(4) of the Constitution."

Constitutional Direction

6. According to the affidavit of Mr Vele filed on 06th June 2014, the undisputed facts are; the State obtained a AUD$1.239 billion loan ("UBS loan") from UBS AG (Australia Branch) ("UBS") with the aim of subscribing for 149.39 million shares in Oil Search Limited ("Oil Search shares").

7. Following completion of the transaction, the Ombudsman Commission issued the "Constitutional Direction under section 27(4) of the Constitution." The "Constitutional Direction" sought to restrain the State from making interest payments under the UBS loan agreements, despite advice that failure by the State to make the interest payments would result in the State defaulting under the UBS loan. The "Constitutional Direction" also sought to "freeze" certain other arrangements. It is expressed in these terms:

"EACH OF YOU IS HEREBY DIRECTED PURSUANT TO SECTION 27(4) OF THE CONSTITUTION TO, IMMEDIATELY UPON RECEIPT OF THIS DIRECTION:

1. STOP ALL FURTHER TRANSACTIONS IN RELATION TO THE LOAN ARRANGEMENTS WITH UBS NOMINEES PTY LTD ABN 32 001 450 522 AND UBS AG, AUSTRALIA BRANCH ABN 47 088 129 613 AND FREEZE THE ALLEGED LOAN ARRANGEMENT WITH UBS NOMINEES PTY LTD ABN 32 001 450 522 AND UBS AG, AUSTRALIA BRANCH ABN 47 088 129 613; AND
   

2. FREEZE ALL FURTHER LOAN ARRANGEMNETS WITH UBS NOMINEES PTY LTD ABN 32 001 450 522 AND UBS AG, AUSTRALIA BRANCH ABN 47 088 129 613 AND FREEZE THE ALLEGED LOAN ARRANGEMENT WITH UBS NOMINEES PTY LTD ABN 32 001 450 522 AND UBS AG, AUSTRALIA BRANCH ABN 47 088 129 613 AND THEIR AGENTS IN PNG AND ABROAD; AND

3. FREEZE ALL FURTHER CORRESPONDENCES ON THE ALLEGED LOAN ARRANGEMENTS WITH UBS NOMINEES PTY LTD ABN 32 001 450 522 AND UBS AG, AUSTRALIA BRANCH ABN 47 088 129 613; AND

4. FREEZE ALL FURTHER CORRESPONDENCES WITH UBS NOMINEES PTY LTD ABN 32 001 450 522 AND UBS AG, AUSTRALIA BRANCH ABN 47 088 129 613 IN PNG AND THEIR AGENTS ON THE ALLEGED LOAN ARRANGEMENTS WITH UBS INVESTMENT BANK; AND

5. TAKE ALL NECESSARY STEPS TO ENSURE THAT THE ALLEGED LOAN ARRANGEMENTS WITH UBS NOMINEES PTY LTD ABN 32 001 450 522 AND UBS AG, AUSTRALIA BRANCH ABN 47 088 129 613 DIRECTLY OR THROUGH THEIR AGENTS IN PNG AND ANYWHERE ABROAD AND DO NOT PROGRESS FURTHER IN ANY FORM, MANNER."

8. The UBS loan also resulted in the Honourable Mr Don Polye, MP filing a Supreme Court Application pursuant to Section 18(1) of the Constitution to interpret Section 209 of the Constitution and the Organic Law on the Sovereign Wealth Fund, 2012. On 11th June 2014, the Court granted leave to apply for judicial review of the Ombudsman Commission's decision and "Constitutional Direction" and granted a stay.

Whether questions require interpretation by the Supreme Court

9. I thank counsels for their well researched submissions both in written and oral form. I do not wish to restate them in full in this ruling except to canvas the main points in my consideration of the issues raised in this application. Firstly, I note that the submissions by Mr Varitimos of counsel for the Prime Minister were endorsed by Ms Nonggorr of counsel for Mr Vele. The gist of their joint submissions was that the proceeding raised questions relating to the interpretation and application of provisions of Constitutional Law in relation to the direction issued by the Ombudsman Commission and on this basis, this Court should refer them to the Supreme Court for an opinion.

10. This position is fortified by the Ombudsman Commission's concession and acceptance in its written submission filed on 17th September 2014, particularly, paragraphs 2, 23 and 27 that the proceeding raised questions relating to the interpretation and application of provisions of Constitutional Laws. The State also took the same position as the Ombudsman Commission, also conceding that the proceeding raised questions relating to the interpretation or application of provisions of Constitutional Laws which should be referred to the Supreme Court. In addition to that, there is and could not be any credible contention that the questions are trivial, vexatious or irrelevant.

11. Mr Efi of counsel for the Ombudsman Commission did not oppose Mr Varitimo's submission that the Ombudsman Commission conceded in its written submission that the proceeding raised questions relating to the interpretation or application of provisions of Constitutional Laws.

12. I accept Mr Varitimos' and Ms Nonggorr's submission that the Ombudsman Commission conceded that the proceeding raised constitutional questions and they are not trivial, vexatious or irrelevant. They raised serious legal issues in relation to the powers of the Ombudsman Commission to issue a direction to stop further dealings on the loan pending investigation by the Ombudsman Commission.

13. But I consider that the concession and acknowledgement by the Ombudsman Commission and the State does not necessarily mean that the discretion should be exercised in favour of a referral of those questions to the Supreme Court. The Court retains the discretion to decide whether the questions should be referred to the Supreme Court for an opinion. In Isaac Lupari v. Sir Michael Somare & Ors (2008) SC930 after reviewing past decisions on the question of referral, the Supreme Court suggested four requirements that must be met before the National Court may make a referral under Section 18 of the Constitution. The Supreme Court said:

"13. Our reading and consideration of the cases and the particular wording in s. 18 makes it very clear that, there can be a referral under s. 18 (2) only where:

(a) There is an issue as to the interpretation or application of a provision of a constitutional law;

(b) The question so arising is not trivial, vexatious or irrelevant;

(c) The Supreme Court has not previously finally and authoritatively interpreted and applied the particular constitutional provision;

(d) No other provisions of the Constitution or any other constitutional law give the National Court jurisdiction to interpret and apply a constitutional law."

14. Mr Efi submitted the Ombudsman Commission has wide powers under Section 27(4) of the Constitution and such included the direction it issued to the Prime Minister and Mr Vele to inter alia, stop all further transactions in relation to the UBS AG loan arrangements with UBS AG including the interest payments.

15. It was issued primarily to enable the Ombudsman Commission to conduct and complete its investigation in relation to whether there have been breaches of the law when the State obtained the loan and to enable it to make a decision whether there have been breaches of the law and misconduct in office by the Prime Minister, Mr Vele and others.

16. Counsel cited the case of Sir Michael T. Somare v. Ila Geno & Ombudsman Commission (2007) N3139 and Albert Karo v. Ombudsman Commission of PNG [1995] PNGLR 547 where it was held that Section 27(4) of the Constitution gives wide powers to the Ombudsman Commission to give direction, either generally or in a particular case to ensure that the objective and purpose of responsibilities of office are attained or the objectives of the Leadership Code are attained.

17. Mr Efi's submission that the power under Section 27(4) of the Constitution being wide is precisely the point of contention here. The "Constitutional Direction" is expressed in extremely wide terms, with serious consequence if the Ombudsman Commission had lawful authority, power and jurisdiction to make it. This was what Mr Varitimos and Ms Nonggorr emphasised in their submissions and I accept. Broadly put, the questions relate to or arise out of:

(a) the lawful authority, power and jurisdiction of the Ombudsman Commission to issue directions (and the scope and nature of such directions) under Section 27(4) of the Constitution (including Directions which are tantamount to injunctions);

(b) the proper principles and criteria to be applied before making or issuing any Constitutional Directions;

(c) the application of Section 59 of the Constitution in relation to the giving of a direction under Section 27(4) of the Constitution; and

(d) the lawful authority, power and jurisdiction of the Ombudsman Commission to interpret and apply provisions of the Constitution.

18. All these questions require, to properly determine them, an interpretation and application of provisions of Constitutional Laws. I am also satisfied it is arguable that the direction seeks to usurp the jurisdiction of this Honourable Court and may be unconstitutional. With respect, I say this because the Ombudsman Commission is not vested with judicial power and cannot exercise judicial power by, for example, making direction which is tantamount to an injunction.

19. In any event, I am satisfied the power given to the Ombudsman Commission to give directions is subject to a proper exercise of discretion. The principles and criteria to be applied in the proper exercise of the authority, power and jurisdiction to give direction has not been previously determined by the Supreme Court.

20. I mention this because as we shall see, there appears to be no Supreme Court authorities that have thoroughly interpreted or applied section 27(4) of the Constitution concerning both the scope of the power of the Ombudsman Commission to give directions and the nature of the directions that can be given, although there is a brief reference to such section in Peter Peipul v. Maurice Sheehan & Ors (2002) SC706. In Peipul (supra):

(a) the facts in such case were that the Ombudsman Commission had not given a direction under section 27(4) of the Constitution because the leader did not give the Ombudsman Commission an opportunity to do so;

(b) accordingly, unsurprisingly, most of the Court did not even consider section 27(4) of the Constitution. Kapi DCJ (as His Honour then was) made the most significant reference to the section but, in any event, only a cursory reference by way of obiter;

(c) the authority appears not to have been subsequently considered or applied by the National or Supreme Court (other than passing references not in relation to Section 27(4) of the Constitution, but in relation to other aspects of the case;

(d) it has briefly been mentioned in some Leadership Tribunal cases; and

(e) it is not a recent authority, having being decided in 2002.

21. There is also reference to Section 27(4) of the Constitution in Karo v. Ombudsman Commission of PNG (supra). The sole ground of appeal in that case was whether the learned trial judge erred in law in finding that the respondent had not exceeded its jurisdiction in issuing a direction to the appellant under Section 27(4) of the Constitution, in that the respondent was required to allow the appellant an opportunity to be heard before issuing the direction, but failed to do so. Although the direction was preliminary, as it affected proprietary interests, it was held that the appellant had the right to be heard before any decision was made. The case however did not expressly refer to or consider Section 59 of the Constitution.

22. Additionally, as to Karo v. Ombudsman Commission of PNG (supra), it should be noted that:

(a) the Court did not consider the scope of the power of the Ombudsman Commission to give Directions and the nature of Directions that could be given, particularly having regard to the jurisdiction being vested in the Supreme Court to interpret and apply provisions of the Constitution and that the judicial power is vested in the National Judicial System (which does not include the Ombudsman Commission);

(b) it was referred to John Nilkare v. Ombudsman Commission [1999] PNGLR 333 (Amet CJ; Kapi DCJ; Los and Injia JJ), questioned and not followed. Significantly, Nilkare (supra) did not however make any reference to Section 27(4) of the Constitution, let alone interpret or apply the section; and

(c) it was referred to by the National Court in Sir Michael T. Somare v Ila Geno & Ombudsman Commission (supra) (although the Court wondered in the course of writing the decision whether the Plaintiffs might have sought declarations to declare the directions unconstitutional or commenced proceedings under Sections 18 or 19 of the Constitution).

23. For this further reason, I am satisfied that the question of the lawful authority, power and jurisdiction of the Ombudsman Commission to give directions (and the scope and nature of such directions that can be given) on the proper interpretation of section 27(4) of the Constitution, has not been authoritatively decided by the Supreme Court particularly having regard to:

(a) the jurisdiction being vested in the Supreme Court (not the Ombudsman Commission) to interpret and apply provisions of the Constitution; and

(b) the judicial power vested in the National Judicial System (which does not include the Ombudsman Commission).

24. Additionally, it is arguable the Ombudsman Commission does not have judicial power to interpret and apply provisions of the Constitution. The Constitution envisages that the Ombudsman Commission may seek an opinion on a question relating to the interpretation or application of a provision of Constitutional Laws. In this regard, the Ombudsman Commission is recognised as an authority, by Section 19(3) of the Constitution that is entitled to make an application under Section 19(1) of the Constitution.

25. In other words, if a question relates to the interpretation or application of any provision of any Constitutional Law, with respect, it is not for the Ombudsman Commission to interpret or apply the provision and thereby usurp the jurisdiction of the Court. Rather, it must seek an opinion from the Supreme Court or refer the question to the Supreme Court.

26. It is in that respect that I can see and understand why Mr Vele in his letter to the Ombudsman Commission dated 05th June 2014 which may be found in his affidavit took exception to the direction when he said that the Ombudsman Commission:

(a) was not vested with judicial power and cannot exercise judicial power by, for example, making directions which are in the nature of injunctions; and

(b) did not have judicial power to interpret and apply provisions of the Constitution (which power is vested in the Supreme Court).

27. Additionally, apt to the current case, there is uncertainty regarding the proper interpretation and application of Section 59 of the Constitution in relation to the giving of a Constitutional Direction under Section 27(4). This is particularly so where, as in this case, directions have been given tantamount to injunctions enjoining or affecting non-leaders and companies that are neither resident nor incorporated in Papua New Guinea. I repeat the Supreme Court is yet to authoritatively consider and determine this issue.

28. Similarly, the Supreme Court appears not to have authoritatively interpreted and applied Section 255 of the Constitution in any detailed manner. This section is one of the central reason having been given and relied upon by the Ombudsman Commission to have given the direction purportedly pursuant to Section 27(4) of the Constitution, which is the subject of challenge in this judicial review proceeding.

29. The Ombudsman Commission also relied on Section 209 of the Constitution to have given the "Constitutional Direction." Hon. Don Polye has filed a Supreme Court Application pursuant to Section 18(1) of the Constitution limited to an application to interpret Section 209 of the Constitution and the Organic Law on the Sovereign Wealth Fund 2012, relating to the UBS loan. However, the Supreme Court Application has not been prosecuted in a timely fashion, nor does it seek the interpretation or application of the sections of the Constitution and Organic Laws now sought to be referred to the Supreme Court by this application. (See affidavit of Emmanuel P Asigau sworn and filed on 08th September 2014).

30. Summing up these discussions and applying the criteria in Isaac Lupari (supra), I accept the submission by Mr Varitimos and Ms Nonggorr that the "Constitutional Direction" was tantamount to an injunction as it froze all further progress on the UBS loan including interest payments.

31. The allegation of misconduct in office is against the Prime Minster for his involvement in securing the UBS loan but the issuance of the "Constitutional Direction" sought to stop the Prime Minister, the Acting Secretary of Department of Treasury and other officers of the State from meeting the State's obligation under the loan agreements, particularly the interest payments. The Constitutional Direction raise amongst other things, the question of its scope, that is, how far it can extend and what kind of cases can the Ombudsman Commission issue this kind of direction. I am satisfied the Prime Minister and Mr Vele have met the first three requirements.

Whether questions can be appropriately dealt with by the National Court

32. However, it is the fourth requirement that requires some careful consideration. Can the questions be appropriately dealt with by the National Court by way of judicial review? This was the issue which Mr Efi laboured in his submission. He urged the Court to find that the issues raised in the proceeding were within the jurisdiction of the National Court and the real motive behind the application was to delay the proceeding and in turn, delay the investigation of the Prime Minister and Mr Vele for alleged breaches of the law and misconduct in office in relation to their involvement in procuring the UBS loan.

33. This, he said is apparent from the grounds of review because when they are considered in the context of judicial review, the issues that the Prime Minister and Mr Vele raised are matters which could appropriately be dealt with by the National Court.

34. One ground of review is that the decision was beyond the jurisdiction of the Ombudsman Commission. The other is the breach of the principles of natural justice. Another is unreasonableness of the decision under the Wednesbury principle of unreasonableness.

35. Mr Efi's submission was that these grounds were debatable and the appropriate time to debate them would be at the substantive hearing and not by way of a Supreme Court Reference. At the substantive hearing, the Prime Minister and Mr Vele will be given the opportunity to show to the Court where exactly did the Ombudsman Commission exceeded its jurisdiction, denied them natural justice and the unreasonableness of the decision when it issued the direction and the proceeding must not be frustrated because of an unfounded and misconceived application. For these reasons, counsel urged the Court to refuse the application and allow the proceeding to progress to trial.

36. Some of the recognised grounds of judicial review are excess of jurisdiction, breach of principles of natural justice and unreasonable of the decision. These were and are the grounds that Prime Minister and Mr Vele relied on to mount this judicial review. I set them out in full below:

"(a) The decision and direction are founded on an investigation by the Ombudsman Commission into the constitutionality and legality of a loan transaction which are beyond the jurisdiction of the Ombudsman Commission being matters for the courts to determine including, in the case of the constitutional issues, the Supreme Court in its exclusive jurisdiction.

(b) The Defendants failed to take into account relevant facts or circumstances, namely, that the decision and direction if followed will put the State in default under the loan agreement, expose the State to significant loss and damage, and cause irreparable damage to the State's credit, standing and international reputation.

(c) The First and Second Defendants took into account an irrelevant or an erroneous consideration, namely, that the decision and direction were necessary so as to avoid interference with the due discharge of the Ombudsman Commission's constitutional functions and responsibilities.

(d) Alternatively, the First and Second Defendants failed to take into consideration that the decision and direction were unnecessary, in particular in respect of interest payments, to allow the Ombudsman Commission to continue to carry out its function and responsibilities.

(e) The decision and direction are Wednesbury unreasonable and thereby ultra vires.

(f) The decision and direction lack rational justification and are thereby ultra vires.

(g) The decision and direction were made in breach of the rules of natural justice and contrary to s 59 of the Constitution."

37. In addition to the grounds, I consider that when determining whether the questions could appropriately be determined by the National Court, regard must be had to the relief sought by the party applying for judicial review. In this case, the relief sought were:

"(a) An order in the nature of certiorari quashing the decision and/or direction of the First and Second Defendants as the Ombudsman Commission of Papua New Guinea contained in their Direction dated 14 March addressed inter alia to the First and Second Plaintiff, and referred to in their letter to the Second Plaintiff dated 23 May 2014, purportedly made under s 27 (4) of the Constitution, freezing inter alia any action in respect of a loan to the State from the Union Bank of Switzerland (UBS) AG including payment on behalf of the State of interest due under the loan agreement.

(b) Alternatively, an order in the nature of certiorari quashing the said decision and/or direction in so far as it purports to disallow the Plaintiffs or other officers, servants or agents of the State to make interest payments on behalf of the State due under the said loan agreement.

(c) Further or alternatively, a declaration that the said decision and/or direction are wholly (or alternatively partly) in excess of the jurisdiction of the Ombudsman Commission of Papua New Guinea and null and void.

(d) Further or alternatively, an injunction that the First and Second Defendants constituting the Ombudsman Commission of Papua New Guinea their officers, servants and agents be restrained from taking any action that may obstruct or jeopardise compliance with the State's obligations under the said loan transaction with Union Bank of Switzerland AG including payment of interest due thereafter.

(e) Such further or other relief as the Court considers appropriate."

38. If the relief sought, if granted, as it were, finally resolves the issue(s) in controversy between the parties, it would be appropriate to dealt with the questions in the judicial review proceeding. If not, it would be a matter for referral to the Supreme Court. In Sir Michael Somare v. Chronox Manek & Ors (2011) SC1118, the Supreme Court reaffirmed the position as envisaged by Section 217(6) of the Constitution that a person who wishes to challenge the decision of the Ombudsman Commission must seek judicial review on the ground that the Ombudsman Commission exceeded its jurisdiction.

39. In this case, while the grounds of review are clear and straight forward, in my respectful opinion, parties will be restricted to addressing the Court in relation to the issues raised in the grounds which are whether the Ombudsman Commission had power to issue the direction, whether it was obliged to give the plaintiffs an opportunity to be heard before the decision to issue the direction and whether the decision was unreasonable.

40. But the questions posed go further than these issues and amongst them which I have canvassed at para 17(a) to (d) above, is the scope and nature of the direction. How far can a direction extend and what type of cases can the Ombudsman Commission issue such a direction? The other issue is whether the subject of the direction should be accorded an opportunity to be heard before a decision is made as to whether a direction should be issued under Section 27(4). In my respectful opinion, these issues or questions will not be canvassed adequately or at all in this proceeding, and for this reason, they should be left for the Supreme Court to determine.

41. The other reason is this, if the orders sought by the plaintiffs were granted, they would not resolve the issues posed. For example, if the National Court were to uphold the judicial review on the ground that the Ombudsman Commission exceeded its power to issue the direction, the question of scope and nature of the direction will remain unanswered.

42. For these reasons, I am satisfied that the Prime Minister and Mr Vele have met the last requirement.

Referral to the Supreme Court

43. Given the mandatory terms expressed by Section 18(2), that the National Court must refer the questions to the Supreme Court and consistent with the language contained in Section 18(2) and Supreme Court authority, the National Court or tribunal (other than the Supreme Court), irrespective of the nature of the proceedings before the Court or tribunal must refer any questions relating to the interpretation or application of any provision of a Constitutional Law to the Supreme Court.

44. In The Public Prosecutor v Nahau Rooney (No.1) [1979] PNGLR 402 the Supreme Court considered a case where a Justice of the National Court had held that a constitutional question had arisen which should be referred to the Supreme Court pursuant to Section 18 of the Constitution. The Court was called upon to further consider where the proceedings were "pending" proceedings in the Supreme Court for the purposes of contempt proceedings.

45. Raine Dep CJ in Rooney (No.1)(supra) at page 406.6-406.8 held that the Constitutional point raised, although having failed, was certainly arguable. Having so held His Honour said:

"Thus, by reason of s. 18, it was inevitable that the Supreme Court would become involved. ... The Supreme Court simply had to become involved, the Constitution enjoins us to, it is our very duty, we are the only ones who can perform that duty." (Underlining added).

46. The Deputy Chief Justice also held:

"Pritchard J's finding that a constitutional situation had been revealed to him, and that it was arguable, opened or created a pipeline that led in only one direction and to one destination, the Supreme Court". (underlining added)

47. Saldanha, Wilson and Greville Smith JJ agreed with the Deputy Chief Justice in Rooney (No.1)(supra). Wilson J also held at page 418 that:

"...in my judgment proceedings become "pending" proceedings in the Supreme Court by operation of law as soon as 'any question relating to the interpretation or application of any provision of' the Constitution arises and when the court in which it arises is satisfied that the question is not 'trivial, vexatious or irrelevant'. The proceedings are "pending' proceedings in the Supreme Court as from that stage when the lower court (in this instance the National Court presided over by Pritchard J.) takes action whether by way of adjournment or otherwise in recognition of that situation. Notwithstanding Pritchard J's choice of words, there can be no doubt that as at 4th July, 1979, a constitutional reference was pending; the preparation of questions and the signing of the reference were purely procedural." (see also Somare v. Manek (2011) SC 1118 at 89, 91, 92 and 95).

48. In Somare v. Manek (supra) the Supreme Court held at [92]:

"Accordingly, we are of the view that the exclusive jurisdiction vested in the Supreme Court does not necessarily exclude where one can commence his or her proceedings which raises a question or constitional law interpretation and application. Strictly speaking therefore, in our view, this provision is not saying all matters in which there arises a question of interpretation and application of a constitutional law must only be filed in the Supreme Court. Instead, the provision envisages and does not prohibit the commencement of proceedings in lower courts or tribunals in which raises a question of interpretation and application of a constitutional law. Where such is the case, this provision requires the lower courts or tribunals to refer the matter to the Supreme Court, provided the lower court or tribunal is satisfied that the question is not trivial, vexatious or irrelevant."

49. Consistent with the reasoning in Somare v. Manek (supra), I am satisfied it is and was open for the Prime Minister and Mr Vele to commence the proceedings in the National Court which raise questions of interpretation or application of Constitutional Laws. It is and was open to subsequently seek to have such questions, as has now been done, referred to the Supreme Court. This course was also open for adoption in Somare v. Geno (supra), but in distinction to the present case, was not adopted by the parties.

50. Very recently, both the Chief Justice and Justice Gavara-Nanu had referred Constitutional questions to the Supreme Court pursuant to Section 18(2) of the Constitution for interpretation and application. Both National Court proceedings were before the Chief Justice and Justice Gavara-Nanu (OS No. 484 of 2014 and OS (JR) No. 485 of 2014), but did not proceed further pending the determination of the Constitutional questions referred by the National Court, which culminated in the Supreme Court decision in Supreme Court References 01, 02 & 05 of 2014: Re; Powers, Functions, Duties and Responsibilities of the Police Commissioner in relation to Warrants of Arrest (2014) SC1388.

51. Injia CJ said in Damaru & Anor v. Vaki OS No. 484 of 2014, unreported, 28th July 2014 at page 5:

"My decision to refer the Constitutional issue in this case is therefore in line with the judicial trend in recent times that important Constitutional questions that have emerged concerning the exercise of police powers in the investigation and prosecution of crime should be addressed and determined conclusively by the highest Court."

52. In Vaki v. Eliakim & Ors OS (JR) No. 485 of 2014, Gavara-Nanu J referred the Constitutional questions to the Supreme Court, after his Honour had granted leave to review a decision and stayed the decision. The current case has reached the same stage. That is, leave has been granted to review a decision and the decision has been stayed. Constitutional questions are now sought to be referred to the Supreme Court, as was done in OS (JR) No. 485 of 2014.

53. Once it becomes apparent to the Court, that any questions relating to the interpretation or application of any provision of a Constitutional Law arise, which are not trivial, vexatious or irrelevant, the "stage" is reached when the questions must be referred. It is not appropriate for the proceeding to proceed further before a determination by the Supreme Court of the Constitutional questions. The National Court is bound to refer the Constitutional questions and the Supreme Court is also bound to determine those questions.

54. With respect, it is wrong to contend, as the Ombudsman Commission has, that the National Court proceeding is and was "prematurely estopped" by invoking Section 18(2) for the purpose of interpreting Constitutional questions. The National Court proceeding was and will not be "prematurely estopped." The proceeding needs to await the outcome of the Supreme Court determination on the interpretation and application of Constitutional Laws. The Supreme Court is charged with the responsibility and the duty to make such determination under the Constitution.

Order
55. The orders are:

1. The application is upheld.

2. The proceeding is stayed.

3. Pursuant to Section 18(2) of the Constitution, the following questions are referred to the Supreme Court namely:

3.1. Whether having regard to the provisions of the Constitution including Sections 27 and 219 thereof; the provisions of the Organic Law on the Duties and Responsibilities of Leadership including Sections 23 and 27 thereof; and the Organic Law on the Ombudsman Commission, the Ombudsman Commission has lawful authority, power and jurisdiction to have made a Decision and issue a Notice or Direction dated 14th March 2014 to the Prime Minister and others;

3.2. Whether a failure to comply with the Notice or Direction dated 14th March 2014 is misconduct in Office, on the proper interpretation and application of Section 27(5)(b) of the Constitution;

3.3. If the answer to questions (3.1) and (3.2) are "Yes", does the Ombudsman Commission have authority, power and jurisdiction to impose penalties under Section 28(1)(g)(ii) of the Constitution, Section 27(5) of the Organic Law on the Duties and Responsibilities of Leadership and Section 2 of the Leadership Code (Alternative Penalties) Act;

3.4. Whether the Ombudsman Commission is required to comply with Section 59 of the Constitution by providing the minimum requirement of natural justice to act fairly and, in principle, to be seen to act fairly before:

(a) making any decision affecting the rights or interests of a party, the Independent State of Papua New Guinea or its citizens;

(b) issuing a Notice or Direction under Section 27(4) of the Constitution;

(c) having made the Decision and issued the Notice or Direction dated 14th March 2014;

(d) issuing a letter dated 23rd May 2014 to Mr Dairi Vele, the Acting Secretary of the Department of Treasury; or

(e) referring a Leader for misconduct in Office pursuant to Section 27 of the Organic Law on the Duties and Responsibilities of Leadership.

3.5. Whether the Ombudsman Commission has lawful authority, power and jurisdiction to:

(a) make any decision affecting the rights or interests of a party, the Independent State of Papua New Guinea or its citizens;

(b) issue a Notice or Direction under Section 27(4) of the Constitution;

(c) make the Decision and issue the Notice or Direction dated 14th March 2014;

(d) issue a letter dated 23rd May 2014 to Mr Dairi Vele, the Acting Secretary of the Department of Treasury; or

(e) refer a Leader for misconduct in Office pursuant to Section 27 of the Organic Law on the Duties and Responsibilities of Leadership,

if a question or issue arising relates to the interpretation or application of any provision of a Constitutional Law, which has not been the subject of a determination consequent upon a Reference made pursuant to Section 18(2) of the Constitution or an opinion given pursuant to Section 19 of the Constitution.

3.6. Whether on the proper interpretation of Section 255 of the Constitution it is not a mandatory requirement, in all circumstances, that where a law provides for consultation between persons or bodies, or persons and bodies, the consultation must be meaningful and allow for a genuine interchange and consideration of views, particularly given the qualifying words "in principle" in Section 255 of the Constitution.

4. Costs shall be in the cause.

5. Time shall be abridged.
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Pacific Legal Group Lawyers: Lawyers for the First Plaintiff
Twivey Lawyers: Lawyers for the Second Plaintiff
In House Counsel: Lawyers for the First, Second & Third Defendants
Acting Solicitor-General: Lawyers for the Fourth Defendant