Palaso v Kereme [2016] PGNC 381; N6638 (19 August 2016)

N6638
PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS No. 412 of 2014

BETWEEN:
BETTY PALASO, AS COMMISSIONER GENERAL OF INTERNAL REVENUE COMMISSION
Plaintiff

AND:
DR PHILLIP KEREME AS CHAIRMAN of
PUBLIC SERVICES COMMISSION
First Defendant

AND:
PUBLIC SERVICES COMMISSION
Second Defendant

AND:
BEN GARRY
Third Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

Waigani: Gavara-Nanu J

2015: 25^th September
2016: 19^th August

JUDICIAL REVIEW – Termination of employment – Application to the Public Services Commission to review termination – Personnel matters – Power of the Public Services Commission to review personnel matters – Public Services Management Act, 1995, s.18 (3) (a), (c) (ii) and (iii), (d) (i) – Requirement for the PSC to give its decisions within 90 days from the date of its receipt of complaints - Requirement directory not mandatory.

JUDICIAL REVIEW –Personnel matters – Review of personnel matters by the Public Services Commission a special constitutional function conferred by Constitution; s. 191 (1) - Public Services Management Act 1995; s.18 regulates the function – Constitution; s. 192 granting independence to the Public Services Commission a body comprised of three constitutional office holders – Spirit of Constitution ss. 191 and 192 - Public Services Commission a constitutional Office – Public Services Management Act, 1995; s. 18 (3) (d) (i) - Exercise of power by the Public Services Commission to extend the statutory period subjective not absolute - Extension of the statutory period made outside the statutory period not ultra vires.

JUDICIAL REVIEW – Public Services Commission decisions having the authority and the force of the Constitution – Such decisions should be respected and treated seriously and given due regard – Refusal to comply with the decisions by public bodies or authorities should be based on proper and valid grounds.

JUDICIAL REVIEW – Challenges to the validity of the Public Services Commission decisions – Such challenges should be based on grounds disclosing serious issues.

JUDICIAL REVIEW – Appropriate standard of proof in proceedings before both public bodies or authorities and the Public Services Commission – Standard of proof should be lower than the criminal standard but higher than the civil standard – Proof of a matter, including disciplinary charges laid against a person should be by cogent and convincing evidence.

Cases cited:

Eddie Gabir v. Richard Koronai [1988-89] PNGLR 406
Gari Baki v. Allan Kopi (2008) N4023
Henry Wavik v. Martin Balthasar, Acting Commissioner, Correctional Service & Ors N5272
Inakambi Singorom v. John Kalaut [1985] PNGLR 238
James Kond v. National Development Bank Ltd (2015) SC1432
Kuber Epi v. Tony Farapo (1983) SC247
NCDIC v. Crusoe Pty Ltd [1993] PNGLR 139
Peter Bon v. Mark Nagai (2001) PNGLR 18; N2123
Reference by the East Sepik Provincial Executive (2011) SC1154
Rural Development Bank Ltd v. James Kond (2010) N5876
Safe Lavao v. The Independent State of Papua New Guinea [1978] PNGLR 15
Salamo Elema, Insurance Commissioner v. Pacific MMI Insurance Limited (2011) SC1114
The State v. Downer Construction (PNG) Ltd (2009) SC979
The State v. Independent Tribunal; Ex Parte Sasakila [1976] PNGLR 491
The State v. Natpalau Tulong [1995] PNGLR 329

Other cases cited
SS Constructions Pty Ltd v. Ventura Motors Pty Ltd [1964] VicRp 32; [1964] VR 229

PNG Legislations; Sub-ordinate legislations and Other laws referred to
The Constitution of the Independent State of Papua New Guinea
Public Services Management Act, 1995
Public Service General Orders

Counsel:

S. Sinen, for the Plaintiff
Y. Kapili, for the first and second Defendants
B. Kulumbu, for the fourth Defendant

19^th August, 2016

1. GAVARA-NANU J: This is an application by the plaintiff seeking review of the second defendant’s decision given on 15^th May, 2014, to annul the termination of the third defendant from his employment as an auditor with the Internal Revenue Commission (IRC), and to order his reinstatement. The third defendant was terminated on serious disciplinary grounds.

2. In 2008, the IRC conducted an investigation into the work of its auditors, with special focus on those who audited businesses outside the National Capital District. In the investigation, searches were conducted at the Boroko Post Office to see if any of those auditors were receiving any suspicious cash payments from the businesses they audited, through the ‘Salim Moni Kwik’ (SMK) scheme. The investigation took 3 months from July to September, 2008.

3. The investigation revealed that the third defendant had received some cash payments from certain tax payers living in Lae and Alotau. The payments appeared suspicious, therefore to establish the true nature of those payments the tax payers and some Post PNG employees working at the Boroko Post Office, and the third defendant were interviewed by the IRC investigators. After considering a report from the IRC investigators and the recommendations of the IRC Internal Disciplinary Committee which also conducted its own hearing on the matter, the plaintiff on 18^th July, 2012, charged the third defendant with eight serious disciplinary offences. The charges were laid under s. 50 (h) of the Public Services Management Act, 1995, for soliciting and accepting rewards and receiving gratuity benefits or gifts in connection with the discharge of his official duties.

4. On 25 July, 2012, the third defendant responded to all the charges in which he admitted all the charges however; he gave a number of reasons for accepting money from the tax payers, viz; he was going to repay the money, he intended using the money to pay for a passport for a tax payer, he also accepted the money on behalf of some people, and besides he needed the money to pay for his children’s school fees.

5. The plaintiff was not convinced by these explanations and charged the third defendant with the disciplinary offences and eventually terminated him on 20^th August, 2012.

6. On 26^th September, 2012, the third defendant applied to the Public Services Commission (PSC) to review his termination (complaint). On 15^th May, 2014, the PSC informed the plaintiff of its decision pursuant to s. 18 (3) (c) (iii) of the Public Services Management Act.

7. The PSC gave following reasons for its decision. First, the plaintiff took too long in charging the third defendant for incidents which occurred between 2001 and 2007. Second, the charges were stale because they were not laid speedily. Third, the charges were defective and bad for duplicity. It should however be noted that at the trial, the PSC conceded that it erred in making this finding. Fourth, the plaintiff obtained the SMK receipts and records regarding cash payments the third defendant received from the tax payers from the Boroko Post Office, in breach of the Telecommunication Act. Fifth, the termination was harsh.

8. The plaintiff’s first ground of review against the PSC decision is that the decision is ultra vires because it was given outside the statutory period stated under s. 18 (3) (d) (i) of the Public Services Management Act, viz; 90 days from the date it received the third defendant’s application for review or complaint. The second ground of review is that the PSC erred in its finding that the charges were stale because they were not laid speedily, as there is no time limit given under the Public Services Management Act, within which such charges should be laid. The third ground of review is that the PSC erred in finding that the charges were defective and bad for duplicity. However, no issues arise under this ground because the PSC conceded that it erred in its finding. The fourth ground of review is that the PSC erred in finding that the SMK receipts and records of the money the third defendant received from the tax payers were illegally obtained because the IRC investigators obtained those receipts and records with a search warrant. The fifth ground of review is that the PSC ignored the fact that the plaintiff followed all the relevant processes and procedures set out under the Public Services Management Act, and the General Orders, in charging and terminating the third defendant. Furthermore, termination was warranted because the third defendant was found guilty of serious disciplinary offences.

9. The defendants having conceded the third ground of review, the Court only has to determine the remaining four grounds which are first, second, fourth and fifth.

10. The plaintiff’s first ground of review is based on her interpretation of s.18 (3) (d) (i) of the Public Services Management Act, which among other things states that the PSC “shall” make its decision within 90 days from the date it received a complaint. The plaintiff argued that this is a mandatory requirement because of the word “shall” in the provision and because the PSC gave its decision outside the statutory period, the decision is ultra vires.

11. It is helpful to set out the relevant parts of s. 18 which is in PART III of the Act, viz; Sub-section (3) (a), (c) (ii) and (iii) and (d), which read:

PART III. -REVIEW OF PERSONNEL MATTERS.

18. Review of Personnel Matters in Relation to Appointment, Selection or Discipline.
    

(3) The procedure to be followed in a review under this section is as follows:-
(a) The Commission shall summons –

(i) the Departmental Head of the Department of Personnel Management or his delegate; and

(ii) the Departmental Head of the Department in which the officer is or was employed, or his delegate, to represent that Department; and

(iii) the officer making the complaint, who may at his request and at his own cost, be represented by an industrial organization of which he is a member, or by a lawyer;

(c) The Commission shall –

(ii) make a decision to uphold, vary, or annul the decision the subject of the complaint;

(iii) give immediate notification of its decision to the persons summonsed under Paragraph (a);

(d) the decision of the Commission under Paragraph (c) (ii)-

(i) shall be made within 90 days from the date of receipt by the Commission of the complaint, but this period may be extended by the Commission where the reason for the delay is beyond the control of the Commission; and

(ii) shall become binding after a period of 30 days from the date of the decision.

12. As it can be seen from the terms of s. 18 (3) (d) (i), the plaintiff’s argument is based only on the first part of this provision, it ignores the second part, which reads:

“...but this period may be extended by the Commission where the reason for the delay is beyond the control of the Commission...”

13. Thus the second part of the provision allows and empowers the PSC to extend the statutory period if the reason or reasons for the delay were beyond its control. It is a firmly established principle of cardinal significance regarding statutory interpretation that when interpreting a statutory provision, it should be interpreted as a whole to see the provision in its true context and to appreciate its tenor. Applying the principle to this case, s. 18 (3) (d) (i) cannot be considered in a piece meal manner which in effect was the argument by the plaintiff. The argument goes against this cardinal principle, accepting it will result in the provision being misinterpreted and read out of context: The State v. Downer Construction (PNG) Ltd (2009), SC929. This principle was reiterated by Hartshorn J, in a more recent case of Rural Development Bank Ltd v. James Kond (2010) N5876, the decision was subsequently approved by the Supreme Court in James Kond v. National Development Bank Ltd (2015) SC1432. See also, Salamo Elema, Insurance Commissioner v. Pacific MMI Insurance Limited (2011) SC1114 and Gari Baki v. Allan Kopi (2008) N4023.

14. When s. 18 (3) (d) (i) is interpreted as a whole, it becomes clear that notwithstanding the word “shall” in its first part, the legislative intent derived from the language of the whole provision is that the requirement in the first part of the provision should be interpreted as directory. The threshold question for the Court is; what is the legislative intent for the provision viz; whether the provision is intended by the legislation to be interpreted as mandatory or directory. This exercise requires the Court to closely examine the scheme of the Public Services Management Act. This approach gives a clear guidance to the Court in determining this key issue: Safe Lavao v. The Independent State of Papua New Guinea [1978] PNGLR 15.

15. When s. 18 (3) (d) (i) is given proper interpretation, three key features which render it directory, emerge. First, the first part of the provision creates a public duty for the PSC to give its decisions within the statutory period. Second, no penalty is prescribed in the event of a failure by the PSC to perform the duty within the statutory period. Third, the second part of the provision allows the PSC to perform the duty outside the statutory period by empowering the PSC to extend the statutory period, if reasons for the delay were beyond its control. This allowance effectively renders the word “shall” in the first part of the provision to be interpreted as directory rather than mandatory. These features have a general application and in my view they constitute the relevant tests to be applied when deciding whether a certain statutory provision is mandatory or directory. The tests have been adopted by the courts in a long line of cases in this jurisdiction when deciding this pivotal issue. For example see NCDIC v. Crusoe Pty Ltd [1993] PNGLR 139; Reference by the East Sepik Provincial Executive (2011) SC1154; Rural Development Bank Ltd v. James Kond (supra); James Kond v. Nationall Development Bank Ltd (supra). I must say I find the observations made by Gillard J, in S S Constructions Pty Ltd v Ventura Motors Pty Ltd [1964] VicRp 32; [1964] VR 229, more appealing because in my view, they fully embrace these tests, his Honour at 237 said:

"In order to decide whether legislative provisions are mandatory or directory it would appear there are certain guides to indicate, but there is no conclusive test to decide into which category legislation may fall. The scope and object of the statute, it is said in the cases, are of primary and possibly of vital importance. Secondly, provisions creating public duties and those conferring private rights or granting powers must be distinguished. The former generally are regarded as directory, whereas the latter are generally accepted as mandatory, particularly where conditions are attached to the exercise of the duty or the power, as the case may be. Thirdly, in the absence of an express provision, the intention of the legislature has to be ascertained by weighing the consequences of holding a statute to be directory or imperative. 'When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, and at that same time would not promote the main object of the legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done': per Privy Council in Montreal Street Railway Co v Normandin [1917] UKPC 2; [1917] AC 170 at 175. See also Caldow v Pixell [1877] UKLawRpCP 29; (1877) 2 CPD 562; R v Lincolnshire Appeal Tribunal; ex parte Stubbins [1917] 1 KB 1 at 9; Pope v Clarke [1953] 2 All ER 704; Edward Ramia v African Woods [1960] 1 WLR 86 at 99; [1960] 1 All ER 627; Cullimore v Lymne Regis Corporation [1962] 1 QB 718; [1961] 3 All ER 1008; McCrudden v Borough of Horsham Waterworks Trust [1895] VicLawRp 66; (1895) 21 VLR 504 at 514; Tilbury & Lewis v Marzorini [1940] VicLawRp 10; [1940] VLR 245; Greenwood v Camberwell (City of) [1922] ArgusLawRp 5; [1922] VLR 177 at 185" (my underlining).

16. Under the terms of the second part of s. 18 (3) (d) (i), it is clear that for the PSC to validly exercise its power to extend the statutory period, there must first be an application for such an extension. The application should be accompanied by supporting evidence warranting the extension, viz; evidence showing that the matters or reasons causing the delay were beyond the control of the PSC. The PSC should be satisfied of these requirements before extending the statutory period. The exercise of the power to extend is therefore subjective. The application to extend the statutory period should be made by the officer of the PSC who is in-charge of the case. The officer can make the application either on his own initiative or at the prompting of the PSC. The application for an extension of the statutory period is therefore a condition precedent to a valid exercise of power by the PSC to extend the statutory period and the validity of the subsequent decisions of the PSC. This view is in harmony with the view expressed by Doherty J in The State v. Naptali Tulong [1995] PNGLR 329, where her Honour said:

“...Where the Act or thing required by statute is a condition precedent to the jurisdiction of a tribunal, compliance cannot be dispensed with and if it is not completed or is impossible to comply with the jurisdiction fails”.

17. Based on these observations, in my view any challenge to the decision of the PSC given outside the statutory period should be focused on the extension of the statutory period by the PSC and delay, if delay was inordinate. Such a challenge should aim at showing that the reasons for the delay for which the statutory period was extended, were not beyond the control of the PSC and that the delay was inordinate. The ultimate relief is a declaration that the extension of the statutory period had no basis and that the PSC lacked power to extend the statutory period, hence the subsequent decision of the PSC was ultra vires and null and void.

18. Whether the reasons for the delay were beyond the control of the PSC or not and whether the delay was inordinate are questions of fact which have to be decided on the merits of each individual case. The determination of these issues is entirely up to the discretion of the Court.

19. I should at this juncture stress that any challenge to a PSC decision should be based on the materials already provided by the PSC in its decision.

20. In this case, the third defendant’s application for review or complaint was received by the PSC on 26^th September, 2012. The PSC officer who was in-charge of the case applied for an extension of the statutory period on 18^th October, 2013. The application was granted by the PSC on the same day. The PSC gave its decision on 15^th April, 2014. The PSC told the Court that, although the application for the extension of the statutory period and the decision to grant the extension were made outside the statutory period, it had complied with the requirements of s. 18 (3) (d) (i) because the reasons for the delay were beyond its control, and that the delay was not inordinate. These claims have not really been contested by the plaintiff and there is material before the Court supporting these claims.

21. It is important to note that the PSC is a body duly established by the Constitution under s. 190, thus it is a constitutional body with special powers and functions conferred by the Constitution. It has a special review jurisdiction specifically conferred by the Constitution under s. 191 (1) to review personnel matters arising from actions taken by the public bodies or authorities in respect of matters that are connected with the National Public Service. Thus review of personnel matters is a constitutional function of the PSC, which is regulated by s. 18 of the Public Services Management Act. Section 18 therefore has to be read together with s. 191 (1) of the Constitution to appreciate its context and tenor: The State v. The Independent Tribunal: Ex Parte Sasakila [1976] PNGLR 492 at 506 to 597.

22. Section 192 of the Constitution gives independence to the PSC, thus the PSC is not subject to direction or control by anyone in carrying out its functions. These functions include those regulated by s.18 of the Public Services Management Act, including the exercise of power to extend the statutory period under s. 18 (3) (d) (i). These special powers and functions especially its review jurisdiction place the PSC at a higher level of authority than those public bodies or authorities such as the Heads of Departments and statutory bodies. This means these public bodies or authorities are bound to respect the PSC for its work. Such respect can be appropriately shown by these public bodies or authorities taking the decisions of the PSC seriously and refraining from launching unmeritorious and unnecessary challenges against the decisions or simply not complying with the decisions without any proper and valid reasons or without any reasons at all. Such attitude belittles and trivializes the work of the PSC and unnecessarily hinders and interferes with the PSC in carrying out its functions. Any legal challenge to the validity of the PSC decisions should be based on grounds disclosing serious issues.

23. An added point of significance to note is that the decisions of the PSC are in effect collective decisions of the three constitutional office holders who make up the PSC, headed by its Chairman, thus they carry lot of force and weight. It is important to note that, these decisions are given after due consideration of the evidence the PSC collects in the course of its investigations into complaints it receives from aggrieved public servants. These investigations sometime take months, even years to complete as in this case, and are mostly, if not, all complex and laborious. Therefore a greater responsibility falls on those public bodies or authorities whose decisions are reviewed by the PSC to treat the PSC decisions seriously and consider them carefully and thoroughly and if they decide to challenge the decisions, they should do so only if there are serious issues arising. An important part of this responsibility is for such public bodies or authorities to appreciate that the decisions are of a body established by the Constitution, thus by law, they should not be treated lightly and regarded with disdain, or dismissed in the wayside without any serious consideration and attention being given to them. In Peter Bon v. Mark Nakgai (2001) PNGLR 18, in stressing this point, I said:

“On this point, I feel compelled to offer some comments regarding the weight and the significance of the recommendations by the Commission under s.18 (2)(c) in judicial review matters. The Commission's recommendations are based on its investigations and reviews of personnel matters under ss.13 and 18 (2)(b) of the Act as sanctioned by s. 191 (a) of the Constitution, therefore although not binding, such recommendations carry the force and the weight of the Constitution, thus they must be given proper considerations by the Departmental Heads and if they are rejected, there must be valid reasons for such rejections because if the recommendations are simply rejected or dismissed in the way side without any valid reasons, or without any reasons at all, such decisions would be rendered arbitrary and be open for judicial review. Another reason why there must be valid reasons to reject the Commission's recommendations is that the power exercised by the Departmental Heads when terminating officers under the Act, is a public function, having public character by reason of the fact that the Departmental Heads hold public offices, which makes them accountable to the public and to the Public Service of which they are a part” (my underlining).

24. Of course at the time Peter Bon was decided, the PSC’s powers did not go beyond merely making commendations. That has changed under this Act, in that the PSC decisions are now legally binding and enforceable in a court of law after 30 days from the dates the decisions are given as provided under s.18 (3) (d) (ii). The binding nature of the PSC decisions places greater burden on the public bodies or authorities, including the Heads of Departments and statutory bodies affected by the decisions to be responsible and professional in their approach and be guided by law when challenging the decisions. The responsibility placed on those public bodies or authorities is greater and onerous. It behoves them to ensure that their decisions are based on matters raising serious issues and not just based on trivial administrative errors or omissions.

25. It is of course of equally paramount importance for the PSC to also appreciate that as a high Office, it has an equally higher responsibility to ensure that it performed its powers and functions properly and diligently according to law. Failure to do so will render its decisions unlawful thus leaving the decisions open to challenge by the public bodies or authorities affected by those decisions. Constant or regular challenges to bad and ill considered PSC decisions can affect the smooth and effective operations of the Public Service machinery, as that will create uncertainty among public servants and cause instability and unnecessary disruptions in the overall administration of the Public Service. To prevent unnecessary challenges to its decisions, the PSC must also, as required by law ensure that its decisions are above board and are properly and firmly based on law and evidence.

26. It is convenient that I express my view on what I consider is the appropriate standard of proof in proceedings before the public bodies or authorities and the PSC. The standard of proof should of course be lower than the criminal standard but higher than the civil standard. The appropriate standard of proof should therefore be proof by cogent and convincing evidence. This standard of proof is commensurate to the penalties that may be imposed, irrespective of whether the offences charged are criminal or disciplinary in nature, and whether they are serious or minor. What is of essence is that the person charged with a disciplinary offence will, if found guilty, suffer some form of penalty. The purpose and the object of the proposed standard of proof is to ensure that the person charged is not unfairly penalized. This standard of proof would also reflect and resonate with the principle that such proceedings are not before a court of law and the technical rules of evidence do not apply: Eddie Gabir v. Richard Koronai [1988-89] PNGLR 406. The standard of proof adopted here will in my view provide the balance required to account for this principle and to ensure and guarantee that the person charged with a disciplinary offence(s) is given a fair hearing and more importantly is accorded the full protection of the law: Henry Wavik v. Martin Balthasar, Acting Commissioner Correctional Service & Ors N5272.

27. In this case, there are two cogent reasons given by the PSC for giving its decision outside the statutory period, or for the delay. First, its officer who was looking after this case was overloaded with work after assuming extra work from another officer of the Commission who was suspended after being charged with disciplinary offences. The officer therefore could not fully attend to this case. Second, the term of its Chairman, Mr. Rigo Lua expired, thus causing serious disruptions to its work at the critical time.

28. It is also significant to note that in regard to the extension of the statutory period under s.18 (3) (d) (i), there is no requirement in the provision that the extension be given within the statutory period. The provision merely states that the period may be extended by the PSC, thus I am firmly of the view that the extension can be validly given outside the statutory period as happened in this case, as long as the PSC proved that the reasons for the delay were beyond its control. In this case, I am satisfied from the materials before the Court that the reasons for the delay were beyond the control of the PSC and that the delay has been sufficiently explained by the PSC. In any event the delay was not inordinate or undue.

29. The plaintiff for her first ground of review argued that the PSC acted ultra vires when it failed to give its decision within the statutory period. For the reasons given, this ground is clearly misconceived. The argument obviously does not take into account the second part of s. 18 (3) (d) (i), which allows the PSC to extend the statutory period. If I accepted the plaintiff’s argument, I would in effect be legislating and importing into consideration a matter which is not envisaged by the provision. I would also be acting against the intention and the scheme of the legislation: Rural Development Bank Ltd v. James Kond (supra) and James Kond v. National Development Bank Ltd (supra). My task here is to give s. 18 (3) (d) (i) the meaning intended by the Parliament, which for the purposes of this application should also harmonize with the spirit of ss.191 and 192 of the Constitution: The State v. Independent Tribunal; Ex Parte Sasakila (Supra).See also, Kuberi Epi v. Tony Farapo (1983) N247 and Inakambi Singorom v. John Kalaut [1985] PNGLR 238.

30. The end result is that the plaintiff’s first ground of review lacks merit and should be dismissed.

31. Turning now to the plaintiff’s remaining three grounds of review, viz; second, fourth and fifth, it is convenient that I consider these grounds together. I find the PSC’s finding that the charges laid against the third defendant were stale because they were not laid speedily, baseless and has no merit. I accept as reasonable the explanation given by the plaintiff that although the disciplinary offences were committed between 2001 and 2007, they were not discovered until 2008, when the IRC conducted its investigation. The delay in laying the charges is further explained by the fact that the investigation undertaken by the IRC took some time because the tax payers from whom the third defendant received money were based in Lae and Alotau. The IRC investigators had to travel to these towns to interview the tax payers. There were other witnesses who had to be interviewed as well, that also took time. Then the third defendant had to be interviewed following which charges were laid, more time was needed to carry out these tasks. Having said that, it is important to note that there is no statutory time limit within which such disciplinary charges should be laid. The Public Services Management Act and General Orders are both silent on this point, this was stressed and relied on by the plaintiff. In any event, there are explanations given by the plaintiff for the delay in the charges being laid against the third defendant. I find the explanations reasonable and I accept them.

32. It is also significant to note that the PSC did not make any adverse findings regarding the legality of the charges laid against the third defendant. The third defendant also made admissions in the record of interview conducted between him and the IRC investigators that he received cash payments from the tax payers. The admissions are clear and unequivocal.

33. More significantly, there was overwhelming evidence that the conduct of the third defendant constituted serious disciplinary offences under s.50 (h) (i) of the Public Services Management Act. The tax payers also confirmed that they gave the third defendant money because he asked them for financial assistance. There is evidence that the third defendant was either directly or indirectly involved in auditing these tax payers’ businesses. The taxpayers were not relatives of the third defendant so his relationships with them cannot be regarded as normal. Nor were the cash payments he received from the tax payers normal. His relationships with the tax payers were based purely on the work he did for them in auditing their businesses. That is the reason he asked the tax payers for money, and the cash payments he received from the tax payers were favours accorded to him for auditing their businesses.

34. Thus I find that the plaintiff had strong and clear grounds to lay charges against the third defendant and to terminate him. The charges related to very serious disciplinary offences. The termination was therefore in my opinion a fair and fitting punishment for the third defendant.

35. The defendants have also challenged the legality of the records the IRC investigators obtained from the Post PNG Ltd regarding monies the third defendant received from the taxpayers through the SMK scheme. However the IRC investigators had a search warrant to search and obtain those records, the defendants’ argument therefore has no merit. The third defendant was also given an opportunity to answer to the charges and was fully heard before his termination, thus no issues arise regarding natural justice. I am also satisfied that the plaintiff followed proper procedures in charging and terminating the plaintiff.

36. In the result, I find that the PSC acted beyond its powers or ultra vires in its decisions regarding the plaintiff’s remaining three grounds of review, including the annulment of the third defendant’s termination and ordering his reinstatement.

37. For the foregoing reasons, the punishment imposed on the third defendant was also not unreasonable or excessive or harsh.

38. The effect of the foregoing findings is that the plaintiff’s application succeeds.

39. Consequently, the Orders of the Court are as follows:

i. Application is granted.
ii. The decision of the PSC which was conveyed to the plaintiff in a letter dated 15^th May, 2014, is null and void and is quashed.
iii. The first and second defendants will pay the plaintiff’s costs of and incidental to the application.

iv. The third defendant will pay his own costs.

40. Orders accordingly,
_____________________________________________________________
Internal Revenue Commission In-House Lawyers: Lawyers for the Plaintiff
Solicitor General: Lawyers for the first and second Defendants
In person : Lawyers for the third Defendant