PacLII Home | Databases | WorldLII | Search | Feedback

National Court of Papua New Guinea

You are here:  PacLII >> Databases >> National Court of Papua New Guinea >> 2016 >> [2016] PGNC 195

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Temu v Lua [2016] PGNC 195; N6388 (19 August 2016)

N6388


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS (JR) NO. 2 OF 2015


BETWEEN


THE HONOURABLE SIR PUKA TEMU, Minister for Public Service and JOHN KALI, Secretary, Department of Personnel Management and Chairman of Government Office Accommodation Committee
First Plaintiffs


AND
CENTRAL LAND LIMITED and NAIMA INVESTMENTS LIMITED
Second Plaintiffs


AND
RIGO A LUA, Chief Ombudsman, and PHOEBE SANGETARI, Ombudsman, Constituting the OMBUDSMAN COMMISSION OF PAPUA NEW GUINEA
Defendants


Waigani: Makail, J

2016: 11th March & 19th August


JUDICIAL REVIEW – Review of direction by Ombudsman Commission – Direction to refrain from, suspend or take any action – Work on proposed office complex – Direction issued pending investigation by Ombudsman Commission – Power to give direction – Excess of jurisdiction – Constitution – Sections 27 (4), 217 (6) & 224


Cases cited:


Ombudsman Commission v. Denis Donohoe [1985] PNGLR 348
Albert Karo v. Ombudsman Commission (No. 1): OS No. 169 of 1994 (Unnumbered & Unreported Judgment by Salika J)


Counsel:


Mr. I. R. Molloy, for First Plaintiffs
Mr. L. Henao with Mr. G. Gaudi, for Second Plaintiffs
Mr. M. Efi, for Defendants


JUDGMENT

19th August, 2016


1. MAKAIL, J: In this application for judicial review under Order 16 of the National Court Rules, the Plaintiffs questioned the exercise of power by the Defendants under Section 27 (4) of the Constitution alleging that the direction issued by the Defendants was ultra vires their powers, in excess of jurisdiction, a misuse or abuse of power, unreasonable, in breach of natural justice, an error of law and biased.


2. 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.”


Background Facts


3. The review arose from the following facts, the National Executive Council (“NEC”) agreed in principle for the Second Plaintiffs to finance and construct a multi-story complex for the government departments and agencies.


4. On 25th September 2012 a Memorandum of Understanding (“MOU”) to that effect was executed by one of the Second Plaintiffs namely Naima Investment Limited and the National Government through the Government Office Allocation Committee. Subsequently, the First Plaintiffs, on behalf of the Government, and the Second Plaintiffs embarked on negotiations for the terms and conditions of a lease agreement between them.


5. The negotiations between the Plaintiffs was for the Second Plaintiff to construct a 29 storey building to be leased by various Government Departments to alleviate the current office accommodation problem experienced by the National Public Service and also arrest the substantial amounts spent in office rentals for the Public Sector. For 2015, it was budgeted that over K229 million would be paid to various private companies which were accommodating the Public Service.


6. On 28th March 2014, the Defendants issued the subject direction under Section 27 (4) of the Constitution to the First and Second Plaintiffs and 11 other persons to refrain, suspend or take any action in relation to the work in the proposed office complex. This direction was issued pending an investigation by the Defendants.


7. Requests by the First Plaintiffs for the Defendants to advise on the progress of its investigations or an expected completion date were to no avail until some ten (10) months later in December 2014 when the Defendants responded. The response did not indicate as to when its investigations would be completed. The Defendants only mentioned that a Provisional Report was near completion and when completed, will be provided to the Plaintiffs. To date no Report has been provided.


8. The investigation by the Defendants was purportedly for alleged improper awarding of a contract by the First Plaintiffs to the Second Plaintiffs. It is further alleged that the First Plaintiffs had signed a MOU with the Second Plaintiffs without considering the advice from the State Solicitor and the Chairman of the Central Supply and Tenders Board.


9. The Plaintiffs’ application for stay of the Defendants’ direction and also an injunction against the Defendants, their agents and servants from taking any action, including signing any document or giving any notice, obstructing or in any way interfering with the progression, contractual arrangements, obligations, plans or construction in respect of the proposed office complex referred to in the Defendants’ direction was refused on 12th March 2015.


Jurisdictional Argument


10. Mr. Efi of counsel for the Defendants in his submissions raised a jurisdictional issue by objecting on the ground that the Court’s jurisdiction to review the exercise of power by the Defendants in giving the direction to the Plaintiffs is restricted to where the Defendants exceed their jurisdiction. He submitted that Section 217 (6) of the Constitution restricted the Plaintiffs’ right to seek review of the direction because it provides that the proceedings of the Defendants are not subject to review in any way, except by the Supreme Court or the National Court on the ground that the Defendants have exceeded jurisdiction.


11. This estoppel or rather immunity is based on Section 224 of the Constitution which provides special provision for Constitutional Institutions to provide their own procedures for purposes of convenient exercise and performance of their powers, functions, duties and responsibilities where there are deficiencies.


12. However, I note that the jurisdictional issue was considered and decided in Ombudsman Commission v. Denis Donohoe [1985] PNGLR 348. The Supreme Court held that Section 217 (6) vest in the Ombudsman Commission a privilege or immunity from review by the courts except on grounds of excess of jurisdiction. It also vests jurisdiction in the courts and a right in individual persons to invoke that jurisdiction.


Excess of Jurisdiction


13. In this instance, the real question is whether the grounds of review establish excess of jurisdiction. Submissions made by Mr. Molloy of counsel for the First Plaintiffs and supported by Mr. Henao of counsel for the Second Plaintiffs came down to this, a narrow view of excess of jurisdiction is where the decision-maker lacked jurisdiction. This is often referred to as “narrow ultra vires”.The opposite of that is “wide ultra vires” where the decision maker has jurisdiction but went beyond it. For example, the decision was made with improper purpose or motive.


14. First, the direction under Section 27 (4) is tantamount to an injunction and the Defendants have no power to issue an injunction. Only the Court can. This is where the Defendants exceeded their jurisdiction. In the wider sense of ultra vires, the direction by the Defendants was motivated by some purpose than as intended. The direction interfered with two companies in a contractual arrangement with the Government. Instead of being used as an aid in the Defendants’ investigation, it has become an oppression and unreasonable. Two years and the Plaintiffs are still waiting for the Report.


15. Mr. Molloy further submitted that as the direction amounted to an injunction, principles of natural justice under Section 59 of the Constitution required that the Defendants give the Plaintiffs an opportunity to be heard prior to issuing the direction. That was not done and the Plaintiffs were denied natural justice.


16. For the Second Plaintiffs, Mr. Henao submitted that the direction included and named the Second Plaintiffs who are not subjected to the jurisdiction of the Defendants. They are private companies. They are fully funding the project at no expense to the Government. As a consequence of the direction they have suffered financially, about K50 million in costs incurred so far.


17. Mr. Efi submitted that the Defendants had wide powers and it included giving direction and are not subject to direction and control from anyone. He relied on the case of Albert Karo v. Ombudsman Commission (No. 1): OS No. 169 of 1994 (Unnumbered & Unreported Judgment by Salika J) and submitted that it was held that Section 27 (4) of the Constitution gives the Ombudsman Commission discretion to issue directions. The discretion is a wide one subject to Division III.2 of the Constitution and the Organic Law on Duties and Responsibilities of Leadership (“Leadership Code”). The direction must ensure the attainment of the object of responsibilities of office.


18. It was further held that the Ombudsman Commission has been given responsibility to ensure the attainment of the Leadership Code and must be allowed to attain that with no interference.


19. In this case, the Defendants obtained information giving rise to “serious concerns that there may have been some irregularities on the awarding of contract to Central Land Limited and Naima Investment Limited without going through the usual procurement process of public tendering by the Central Supply and Tenders Board and further no due diligence checks were carried out before awarding the contracts, contrary to financial procedures.” see para. 19 of Defendants’ written submission filed on 11th March 2016.


20. Finally, Mr. Efi submitted that under Section 17 (2) of the Organic Law on Ombudsman Commission and Section 20 (1) of the Leadership Code all investigations of the Ombudsman Commission are done in private. Therefore, details of the evidence, that it relied on to form the view that it should issue the direction, cannot be disclosed.


21. I have no difficulty with the Ombudsman Commission’s power to give direction to the Plaintiff to stop work on the project. The Defendants have that power and I am not satisfied that it is tantamount to an injunction. It is significant to note that the direction is peculiar because it is based on the Constitution. It is the Constitution that confers the power on the Ombudsman Commission to issue the direction. It follows I agree with Mr. Efi’s submission that Section 27 (4) gives wide powers to the Ombudsman Commission to ensure that it carries out its functions, duties and responsibilities thoroughly.


22. Where it is investigating suspected breaches by a person who comes under its jurisdiction, Section 27 (4) confers power on it to give direction to stop further suspected breaches until investigation is completed. In my view, the purpose of the direction is two-fold. One is to aid the Ombudsman Commission with its investigation and the other is to stop the subject of the investigation from committing further suspected breaches.


23. Given the two-fold purpose of a direction under Section 27 (4), I further find that the subject of the direction need not be heard prior to the Ombudsman Commission issuing it. I am of the further view that the direction is part of the investigation process and the subject will eventually be given an opportunity to be heard in relation to allegations against him or her when the investigation is completed.


24. In this instance, the Plaintiffs will eventually be given an opportunity to respond once the investigation is completed. I make mention too that the Defendants have indicated that they will invite the Plaintiffs to respond after the investigation is completed and a Report provided to them. For these reasons, I am not satisfied that the direction should be quashed because the Plaintiffs were denied natural justice or not heard.


25. However, I am of the view that the direction exceeded the jurisdiction of the Defendants within the meaning of Section 217 (6) of the Constitution. I agree with Mr. Molloy’s submission. The direction was motivated by some purpose than as intended. The direction interfered with two companies in a contractual arrangement with the Government. Instead of being used as an aid in the Defendants’ investigation, it has become an oppression and unreasonable. Two years on and the Plaintiffs are still waiting for the Report of the investigation.


26. Let me further explain. Following the direction on 28th March 2014 one of the First Plaintiffs Sir Puka Temo wrote to the Defendants on 7th April 2014 and explained the purpose for the propose office complex and requested the direction to be withdrawn.


27. Subsequent to that, there were further follow-up letters from the Plaintiffs to the Defendants on 23rd June, 29th August and 5th October of the same year. The Defendants did not respond until 17th December. In their letter they stated:


“.........we would like to advise you that a Provisional Report regarding the matter is near completion and will be forwarded to you which you will then be given the opportunity to comment if required and forward your response back to us. We will then decide the next course of action upon analyzing your response.


At this stage, the full investigation process is yet to be completed, hence you will be notified of the outcome when the investigation is fully finalized.”


28. Following this letter nothing further was heard from the Defendants as to when the Provisional Report they referred to in their letter would be available. While that Report is pending the Plaintiffs had already signed a MOU and based on it, the Second Plaintiffs:


“...had ramped up expediently preliminary early works activities like engineering, site preparation, works mobilization and contractual placement long lead delivery items. These include but not limited to both architectural and structural/civil engineering design refinements and finalization of materials and equipment orders as well as sourcing of various contractors, sub contractors and suppliers. In addition, preliminary site works had also commenced simultaneously


An interim estimate indicates that CCL has so far expended at least K50 million.” This is extracted from page 3 of the letter from Central Land Limited to Mr. John Kali dated 16th January 2015 found in the affidavit of Filbert R. Gaerlan filed on 21st January 2015.


29. There was no evidence and further, submission made as to how long the Ombudsman Commission would take to conduct and complete its investigation, for example, the average time spent on a given investigation, the nature, and complexity of the allegation against the subject. These matters might assist determine where this case might fall under and in turn the question of reasonableness of the direction. I make mention of these matters because I consider them relevant to counter the submission by the Plaintiffs that there has been inordinate delay and the direction has become an oppression rather than an aid to the investigation.


30. Based on the available evidence, even after the Defendants responded on 17th December 2014 they have not provided the Preliminary Report which they referred to in that letter. I find the advice in their letter open ended. While I accept Mr. Efi’s submission on the point that all investigations by the Ombudsman Commission are done in private, the Ombudsman Commission must also act reasonably when conducting the investigations.


31. In my view, it must act within a reasonable time and if it is not possible due to one reason or another, at least give an update of the progress of the investigation to the subject without disclosing the details so as to dispel any allegation of impropriety on its part. It is my further view that the open-endedness of the letter has kept the Plaintiffs in suspense. It has caused uncertainty and anxiety amongst them as to when the Report would be completed and provided to them and in turn the progress and completion of the project.


32. I find that the direction has become oppressive rather than an aid to the investigation by the Defendants. I find that it has taken too long for the Defendants to complete the investigation and the delay is unreasonable. The unreasonable delay renders the direction unreasonable.


33. Secondly, given the long delay, the inference open to draw is that the Defendants misused and abused their powers as the direction was given for an improper purpose in that it effectively restrained the Plaintiffs from complying with and carrying out the NEC decision. It stopped the Plaintiffs, particularly the Government from addressing the current office accommodation problem experienced by the National Public Service and arrest the substantial amounts spent in office rentals for the Public Sector.


34. In its supervisory jurisdiction, the Court is asked by an aggrieved party to review the exercise of power by a public official or decision-maker. The Court will not interfere with the exercise of power by the public official or decision-maker unless it is satisfied that he acted beyond his powers, abused it or it was unreasonable.


35. I am satisfied that the Plaintiffs have established that the Defendants acted in excess of their jurisdiction. Given this, it is not necessary to consider the other submissions of the Plaintiffs on error of law, bias and whether the direction applied to the Second Plaintiffs.


Relief


36. The main substantive relief sought by the Plaintiffs is an order in the nature of certiorari to quash the direction. Whether the Court will grant the relief sought remains a discretionary matter. The Plaintiffs submitted that it is open to the Court to quash the direction.


37. No alternative submission was made by Mr. Efi to the effect that if the Court was to find against the Defendants, that the order to quash the direction be refused and that the Defendants be given a fixed date to provide the Preliminary/Final Report to the Plaintiffs. I mention this because if the Defendants are serious about investigating possible breaches of the law by the Plaintiffs and all those involved and mentioned in the direction, and further to prevent further breaches, then they should and the Court is entitled to expect them to indicate when to complete and produce the Report to the Plaintiffs.


38. This submission was not forthcoming from the Defendants’ counsel, thus the Court is not provided with that information to determine whether granting some more time to the Defendants would be a fair outcome to the dispute. The Court’s discretion will be exercised in favour of the Plaintiffs then.


Order



39. The orders are:


  1. The application for judicial review is upheld.
  2. The direction issued by the Defendants on 28th March 2014 is quashed forthwith.
  3. The Defendants shall pay the costs of the proceedings, to be taxed, if not agreed.

________________________________________________________________
Henao Lawyers: Lawyers for the Plaintiffs
Legal Counsel: Lawyers for the Defendants


PacLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.paclii.org/pg/cases/PGNC/2016/195.html