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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (COMM) NO. 167 OF 2020
BETWEEN:
OIL SEARCH LIMITED
Plaintiff
V
ALEX TONGAYU
First Defendant
AND:
CHRISTOPHER HNANGUIE
Second Defendant
AND:
SECURITIES COMMISSION OF PAPUA NEW GUINEA
Third Defendant
AND:
PNGX MARKETS LIMITED
Fourth Defendant
Waigani: Anis J
2020: 31st August
2021: 29th March
ORIGINATING SUMMONS – Declaratory orders sought to affirm approvals and exemptions that had been granted by the Chairman of the Securities Commission of Papua New Guinea concerning capital raising – capital raising involved offering purchase of shares both within and offshore – grants or approvals by the Chairman were made pursuant to s. 116 and s. 138, Capital Market Act 2015 – power of Chairman derived from s, 10(2), Securities Commission Act 2015 - challenge only on whether the Chairman was the Chairman and as such had the power at the material times of the grants or approvals and subject to findings, its consequential effects if any
NOTICE OF MOTION - application to dismiss proceeding based on incompetency and time-bar issues – whether mode of proceedings wrong and should have been by way of appeal pursuant to s. 21(5), Capital Markets Act 2015 – whether cause of action statute barred pursuant to s. 115, Securities Commission Act 2015 – considerations – exercise of discretion
Cases Cited:
Michael Ramsay Ekri v. Courts (PNG) Ltd and Or (2019) SC 1825
Kawari Fortune Resources Ltd v Louis Limbo Apurel (2015) SC1614
Peter Makeng v Timbers (PNG) Limited (2008) N3317
State v. Downer Construction (PNG) Ltd (2009) SC979
Punagi v. Brown, Minister for Public Service (2004) N26611
Counsel:
Mr I Molloy, with counsel assisting D Hill and Ms I Guba, for the Plaintiff
Mr N Kopunye, for the First and Third Defendants
Mr B Lai, for the Second Defendant
Mr J Mesa, for the Fourth Defendant
JUDGMENT
29th March, 2021
1. ANIS J: This matter was trialed on 31 August 2020. The main contestants were the plaintiff, the 1st and 3rd defendants. The 2nd defendant supported the submissions and relief that were sought by the plaintiff. The 4th defendant maintained a neutral position on the matter but made submissions where it had expressed concern over the uncertainty to the post, Chairman of the Securities Commission of Papua New Guinea, which was claimed by both the 1st and 2nd defendants.
2. I heard and reserved my ruling to a date to be advised. Parties have been notified so I will rule on it now.
BACKGROUND
3. The plaintiff is registered in Papua New Guinea (PNG). Its business involves oil and gas exploration and production in PNG and abroad. It may be described as a multi-billion kina company with its shares listed both on the PNG National Stock Exchange (PNGSX) and the Australian Stock Exchange (ASX). In 2020, the plaintiff made a decision to undertake a capital raising, namely, to raise up to AUD 1.6 billion. And to do so would require offers made to (i) experienced investors overseas in Australia and New Zealand (Off-shore Offer) and (ii) its PNG registered shareholders (PNG-Offer). Capital raising as described required compliances with various legal regulatory processes in PNG and abroad.
4. In regard to compliances in PNG, the plaintiff required 2 approvals from the Securities Commission of Papua New Guinea (the Commission). That is, as for the Off-shore Offer for sale of its shares off-shore, the plaintiff required the approval of the Commission under s. 116 of the Capital Market Act 2015 (CM Act). That was followed by the plaintiff’s PNG-Offer whereby the plaintiff had also required the Commission’s approval, that is, under s. 129 of the CM Act. According to the plaintiff, the approvals were granted by the Commission. There were also exemptions required under s. 138 of the CM Act for both offers (PNG-Offer and Off-shore Offer), that is, relating to or concerning the on sale of shares after their issue under the capital raising. The plaintiff asserts that the exemptions were also granted by the Commission.
5. At the material times of these transactions and well before that, the position Chairman of the Securities Commission has been under dispute or challenge by the 1st and 2nd defendants. As a result, the 1st defendant took issue with the approvals and exemptions that had been obtained by the plaintiff from the Commission through the 2nd defendant as its Chairman. The 1st defendant claims that he was the legitimate Acting Chairman of the Commission at the material times and not the 2nd defendant, and that he did not grant the approvals and exemptions. So, on 2 June 2020, he issued an order which, amongst other things, directed the 4th defendant to suspend (suspension order) all trading on PNGSX of all the plaintiff’s shares. Two days later, the plaintiff’s shares were suspended from trading on PNGSX.
6. The plaintiff responded by filing this proceeding on 4 June 2020. On 5 June 2020, ex-parte interim injunction was granted effectively lifting the suspension order pending further orders or hearing of the substantive matter. The main relief sought in the originating summons are as follows:
(a) Letter / Exemption 001-2020 dated 31 March 2020; and
(b) Letter / Exemption 002-2020 dated 16 April 2020.
7. At trial, the 1st and 3rd defendants had by then filed a notice of motion seeking to dismiss the proceeding (NoM). It was agreed that the NoM will be dealt with together with the substantive proceeding, and so trial proceeded on that basis. The NoM seeks the following main relief:
(a) incompetency as the Plaintiff’s grievance should have been raised and or commenced by way of appeal to the National Court and not by originating summons and thereby contravening of section 21(5) of the Capital Market Act 2015;
(b) being statute barred as section 115 of the Securities Commission Act 2015 prohibits and bars the commencement of civil proceedings against the 1st Defendant.
PRELIMINARY ISSUES
8. There are various preliminary issues. At this juncture, I wish to firstly address the issues raised in the NoM. The first preliminary issue is competency, that is, whether the mode of proceeding used herein is wrong because it contravenes of s. 21(5) of the CM Act. The provision reads, (5) Any person who is aggrieved by any action taken by the Commission under this section may appeal to the National Court whose decision shall be final.
9. I note the submissions of the parties on this issue.
10. I make these observations. The situation that exists, which has caused the plaintiff to file this proceeding, relates to internal contentions between 2 individuals, namely, the 1st and 2nd defendants, as to who was the legitimate Chairman or Acting Chairman of the Commission at the material times that ought to have considered and made a decision whether to grant the approvals and exemptions that had been sought by the plaintiff. The 2nd defendant contends that he was (and still is) the Chairman of the Commission and that his decisions to grant the approvals and exemptions, which the plaintiff now seeks declarations of in this proceeding, were valid. The plaintiff had obtained its approvals and exemptions from the 2nd defendant early in 2020. The 1st defendant, on the other hand, contends that he was (and is) the legitimate Acting Chairman of the Commission at the material times and that he never granted the approvals and exemptions that had been sought by the plaintiff, therefore, he took steps to stop the capital raising processes under the various provisions of the CM Act and the SC Act. The plaintiff therefore seeks Court intervention to recognize the approvals and exemptions that had been purportedly granted by the 2nd defendant for the Commission. I therefore note that the plaintiff’s complaint herein is not based on it being aggrieved of an action taken by the Commission as referred to under s. 21(5) of the CM Act. Rather, the plaintiff is seeking declaratory and injunctive relief over what it claims were valid actions of the Commission that had been made to its various requests that it had sought for its capital raising in early March and April of 2020. As far as the plaintiff is aware, it contends that approvals and exemptions under the CM Act had been granted by the Commission.
11. I find the originating summons to be in order. I find that it is not filed because the plaintiff was aggrieved of a decision of the Commission, but rather, to seek confirmation or clarity on the decisions that the Commission had already made. I therefore find the competency argument by the 1st defendant misconceived and baseless. I will also add these as part of my reasonings. The use of the terms “appeal” and “may” in s. 21(5) suggest to me the following. Firstly, it appears that the term “appeal” is used generally. The legislators could have also easily used terms such as “challenge” or “review” similarly that would have the effect of enabling a dissatisfied party to challenge a decision that is made by the Commission. For example, the provision does not prevent an aggrieved party to file judicial review proceedings or proceedings by way of writ of summons or originating summons. And the use of the term “may” therein again and also suggest or implies, in my view, the extended options that an aggrieved party may use to raise its grievances, whether it be by way of appeal, judicial review or by other means or mode of proceedings that are available under law. The next thing I wish to say is this. The claim by the 1st defendant under s. 21(5) is premised on the basis that he was and still is, the duly appointed or legitimate Acting Chairman of the Commission and the 2nd defendant was or is not and therefore the decision of the Commission which was purportedly made by the 2nd defendant could not have been a valid decision of the Commission. This claim is disputed by the plaintiff in the substantive proceeding which I am being asked to consider and determine. So, to answer that, I may have to also consider the substantive issue.
12. The 1st defendant’s second preliminary argument is premised on s. 115 of the Securities Commission Act 2015 (SC Act). It claims that section 115 of the Securities Commission Act 2015 prohibits and bars the commencement of civil proceedings against the 1st Defendant.
13. Section 115 states:
115. Proceedings privilege.
(1) No civil or criminal proceedings shall be brought against —
(a) the Commission; or
(b) the Chairman or Registrar; or
(c) the Commissioners; or
(d) any employee of the Commission or Registrar; or
(e) any expert appointed by the Commission,
for anything, it or they may do or fail to do in the course of the exercise or intended exercise of its or their functions, unless it is shown that it or they acted in bad faith.
14. I note the submissions of the parties. To me, the provision protects the Commission and the Chairman and those that are employed therein, from or against liabilities based on criminal or civil claims or cause of actions. The present proceeding is civil in nature, but in my view, is not a cause of action that is filed against the Commission or the Chairman to hold them liable in damages as in the case of a claim. There are other statutes with similar provisions like for example s. 2 and s. 5 of the Claims By and Against the State Act 1996 and cases authorities that discusses them. See cases: State v. Downer Construction (PNG) Ltd (2009) SC979; Punagi v. Brown, Minister for Public Service (2004) N26611. However, in the present case, the relief sought are express as they seek declaratory orders to affirm decisions of the Commission which had been purportedly made by the 2nd defendant. The second reason why this argument shall fail is this. The present proceeding has no material pleading of acting in bad faith, which appears to be a mandatory pre-requisite for bringing a cause of action against the Commission under s. 115. This shows that no such intention was intended by the plaintiff when it filed the proceeding, that is, apart from the declaratory and injunctive orders which are pleaded which it may pursue in this manner. I also find the argument misconceived, that is, for one to say that s.115 is a time-bar provision. There is no time-limitation set under s. 115 for one to commence an action which had expired and which would have warranted the 1st defendant to make this argument. The section rather, as stated above, protects, or to be precise, restricts civil or criminal liabilities against the Commission and its members. ‘Statute or time-bar’ and ‘restrictions’ set or imposed under a statute or section, are two separate things. They are not the same. The former phrase is used to describe time limitation that is imposed by a section or statute whereby one is expected or required to commence a Court proceeding or lodge a complaint or comply with a mandatory pre-requisite time-line or limit that is set under the section or statute, and that failure to observe will attract the use of the phrase ‘time-barred or statute barred’ which would signify that a person is prevented from filing a court proceeding or taking a further step on a matter(s) that is affected by the section or statute. The phrase is used to connote demarcation of the jurisdictional tenures, lifespans, or boundaries of a matter, complaint, or grievance. The latter phrase or a restriction, on the other hand, restricts or sets conditions that are to be met, for example if a Court action is to be filed. It does not prevent or bar a person from pursuing his or her intention for example like filing a cause of action for negligence or breach of statutory provisions against the Commission. The protection that is provided under s. 115 of the SC Act falls into the latter phrase or description. For example, if a party intends to sue the Commission or its members for a tort or breach of statute, it may do so provided the person aggrieved can at the same time establish or prove to the Court that the Commission or the member responsible had acted in bad faith.
15. This argument is baseless and is dismissed.
MAIN ISSUE
16. The main issue, in my view, is this, whether the 2nd defendant’s actions in granting the approvals and exemptions to the plaintiff’s requests under the provisions of the CM Act, on 31 March and 16 April 2020 or at the material times in early 2020, were valid. Other issues as argued by the parties may follow subject to the Court’s findings on the main issue.
UNDISPUTED MATERIAL FACTS
17. The material facts are not in dispute. They consist of actions, court proceedings and Court Orders that have occurred and were obtained at the material times between the 1st and 2nd defendants.
18. The 1st defendant was appointed Acting Chairman of the Commission on 16 November 2012. On 20 October 2016, his appointment was revoked and Benny Popoitai was appointed as Acting Chairman of the Commission. On 14 November 2016, the 1st defendant commenced proceeding OS (JR) 777 of 2016 against his termination as Acting Chairman of the Commission. Leave to apply for judicial review was granted. Whilst the proceeding was pending, on 7 June 2017, Mr Popoitai’s appointment as Acting Chairman was revoked and the 1st defendant was appointed as Chairman of the Commission. On 19 July 2017, less than 2 months later, the 1st defendant’s appointment as Chairman was revoked and the 2nd defendant was appointed as Chairman of the Commission. On 4 April 2018, the judicial review Court in proceeding OS (JR) 777 of 2016 handed down its decision, that is, in relation to his termination as Acting Chairman and the appointment of Benny Popoitai as Acting Chairman on 20 October 2016. It ordered and I quote:
19. I observe that the said decision was made after these events: Firstly, or by the time of the Court’s final decision in proceeding OS (JR) 777 of 2016, the person whose appointment was challenged by the 1st defendant, had been terminated and the 1st defendant himself was re-appointed as Chairman of the Commission. But then shortly after, he was replaced by the 2nd defendant. Thirdly, the 1st defendant’s Acting appointment term of 5 years for the Chairman’s post, which had been before the Court for determination, had ended.
20. So, after the Court’s decision of 4 April 2018 in OS (JR) 777 of 2016, on 17 April 2018, the 2nd defendant’s appointment as Chairman of the Commission was revoked and the 1st defendant was appointed Chairman of the Commission. His appointment was retrospective to 19 October 2016.
21. That was not the end of the matter. On 3 May 2018, the 2nd defendant commenced a judicial review proceeding OS (JR) 277 of 2018 where he challenged his revocation and the appointment of the 1st defendant, as Chairman of the Commission. Leave to apply for judicial review was granted on 12 July 2018. Also granted was a stay order. The stay order reads in part:
Pursuant to Order 16 Rule 3(8)(a) of the National Court Rules the decision of the First Defendant made on 10 April 2018 in his capacity as the Minister for Commerce and industry to revoke the appointment of the Plaintiff as the Chairman of the Securities Commission of Papua New Guinea and his place appoint Mr Alex Tongayu, the Third Defendant is stayed pending determination of the substantive judicial review application by the Plaintiff.
22. I observe that 2 material events occurred thereafter. Four (4) months later, on 13 November 2018, the 1st defendant was purportedly appointed as Acting Chairman of the Commission. This was despite the fact that there was no vacancy in the position of Chairman of the Commission as it had already been occupied by the 1st defendant himself, but which was stayed by the National Court Stay Order of 12 July 2018 (Stay Order of 12 July). One may argue or say that the 1st defendant occupied the post of Chairman and Acting Chairman at the same time and perhaps in defiance of an existing Court Order.
23. On 23 November 2018, the 2nd defendant filed a second judicial review proceeding, this time challenging the Acting Appointment post of the 1st defendant, in proceeding OS (JR) 877 of 2018. Leave to apply for judicial review was granted by the Court on 25 April 2019. At the same time, the Court ordered a stay to the appointment of the 1st defendant as the Acting Chairman of the Commission. The 1st defendant appealed against the decision that granted leave to the 2nd defendant to apply for judicial review of 25 April 2019, to the Supreme Court in proceeding SCM 11 of 2019. Then the 1st defendant returned to the National Court in proceeding OS (JR) No. 877 of 2018 and moved its application to set-aside the stay order that was made against his Acting Appointment as Chairman. On 21 June 2018, the National Court granted his application and set aside its earlier stay order of 25 April 2019. The 1st defendant returned to the Supreme Court in SCM 11 of 2019 and requested the Court to grant a stay order against proceeding OS (JR) No. 877 of 2018. On 17 July 2019, the Supreme Court granted the application and stayed proceedings OS (JR) 877 of 2018. Its order reads in part:
Proceeding OS (JR) No. 877 of 2018 is stayed pursuant to section 19 of the Supreme Court Act (Chapter 37) and Order 13 Rule 14, 15 and 16 of the Supreme Court Rules.
24. The final uncontested material facts are these. On 3 September 2019, the 2nd defendant discontinued his latter judicial review proceeding, namely, OS (JR) 877 of 2018. That then concluded the proceedings in the National and Supreme Court. The only proceeding that remained on foot to date, is the earlier proceeding filed by the 2nd respondent, namely, OS (JR) 277 of 2018.
FINDINGS ON THE UNCONTESTED FACTS
25. Let me begin with this remark. I think it goes without saying that the 1st and 2nd defendants have and continue to fight tooth and nail over the position - Chairman of the Commission. And I think that in so doing, less regard may have been given to due process, Court Orders and if I may add, common sense. It also seems that they have forgotten, particularly for the 1st defendant, what orders were or are in place at this juncture and their consequences.
26. To me, the pressing question to ask and answer is easy after having highlighted the uncontested material facts. These undisputed facts are contained in the written submissions of the parties, and I make particular mention to the submissions of the plaintiff and the 1st defendant. They were also addressed orally in Court by the parties in their closing arguments.
27. The question I have is this. Is there an existing valid Court Order that stays the 1st defendant from the post, Chairman of the Commission? The answer to that is, “yes there is”. This is truly so in regard to proceeding OS (JR) 277 of 2018 and the Stay Order of 12 July. At that juncture, the decision to revoke the 2nd defendant’s substantive post as Chairman of the Commission and the decision to appoint the 1st defendant to the substantive post Chairman of the Commission, were stayed by the National Court. The status quo then was that the 2nd defendant would continue to act in his substantive post until the substantive matter was determined. The effect of a stay order I thought was summarized well by Chief Justice Sir Gibbs Salika in Michael Ramsay Ekri v. Courts (PNG) Ltd and Or (2019) SC 1825, where his Honour stated, A stay order in court proceedings generally preserves the original status quo of the applicant prior to the decision, which is the subject of the appeal pending determination of the substantive appeal. See also cases: Kawari Fortune Resources Ltd v Louis Limbo Apurel (2015) SC1614 and Peter Makeng v Timber (PNG) Limited (2008) N3317. His Honour also referred to the 2 cases, and at paragraph 13, stated:
With respect the authorities cited above relate to circumstances where the Court in general proceedings grants a stay order. The effect of the stay order is that it preserves the status quo until the final determination of the matter. The National Court in the Makeng case with respect adopted the statement from the text book. “De Smith, Wolf and Jowell Judicial Review of Administrative Action 5th Edition Sweet and Maxwell, 1995 at pages 670, paragraph 15 to 29. With respect, I agree with the proposition of the law there and I adopt that statement.
28. I must say that the confusion in the present case, it seems occurred when a purported gazettal appointment was made to the post of Acting Chairman of the Commission after the Stay Order of 12 July. The person who was purportedly appointed to the post, Acting Chairman of the Commission, is the same person, that is, Alex Tongayu, who was at the same time occupying the substantive post of Chairman of the Commission but whose position was stayed by the Stay Order of 12 July.
29. In my view, the said gazettal and purported appointment of the 1st Defendant as the Acting Chairman on 13 November 2018 was baseless and wrong on the face of it as there was no vacancy to the post of Chairman of the Commission at the material time. The status quo then was that although the 1st defendant was appointed as Chairman, the 2nd defendant, pursuant to the Stay Order of 12 July, would remain as Chairman of the Commission pending the outcome of proceeding OS(JR) 277 of 2018. That position remains to this day.
30. To me, that is where the parties are at. I can only remark without dwelling into the proceedings that were filed after proceeding OS (JR) 277 of 2018, that none of them matter because proceeding OS (JR) 277 of 2018 is still on foot and the Stay Order of 12 July has not been set-aside or appealed against, and it is therefore binding upon the parties. Arguments such as events have overtaken the initial facts or question regarding the term or tenure of appointments whether it be for the 1st or 2nd defendants, to me, are irrelevant at this juncture, and it is not for this Court to answer. These questions may be raised or argued before the same Court in proceeding OS (JR) 277 of 2018. But for argument’s sake, even if say the tenures of appointments of the 1st and 2nd defendants have expired, they are protected by the Stay Order of 12 July which remains binding, and it is for the parties, if they have issues on these, to appear before the said Court and present their arguments etc. It is not for me to decide on them here except to remark but perhaps most importantly, point to a valid Court Order which exist, and which is binding, that is, the Stay Order of 12 July.
31. In this case, I observe that there is no appeal filed by the 1st defendant in relation to the granted leave to apply for judicial review in proceeding OS (JR) 277 of 2018 which is pending hearing before the National Court. I also and again observe or note that the Stay Order of 12 July has not been set aside. The events of what had transpired in the other related National Court proceedings to as far as the appeals, I note, had, or have no bearings on the legality and enforceability of the Stay Order of 12 July. I also observe that withdrawal of proceeding OS (JR) 877 of 2018 by the 2nd defendant did not end or extinguish his rights nor his pending proceeding OS (JR) 277 of 2018 and the orders that are currently in place, which is a separate Court proceeding. To argue to the contrary or otherwise, is baseless and is contrary to the glaring pending status of the said proceeding and the Stay Order of 12 July.
32. My final or conclusive view is this. The 2nd defendant, pursuant to the Stay Order of 12 July, remains Chairman of the Commission until further orders or until the substantive judicial review application is heard and disposed of. I think the parties have gone off track or were misled by the subsequent purported decision that purports to appoint the 1st defendant as the Acting Chairman when there was already a valid Court Order in place at the material time including the fact that the position of the Chairman of the Commission was not vacant. Let me comment that the said purported Acting appointment of the 1st Defendant could easily be described as gross abuse of the Court process or perhaps also contemptuous. The obvious perception to draw from the said purported Acting Appointment post is that the 1st defendant or the appointing authority were perhaps trying to ‘get around’ the Stay Order of 12 July, and to put the 1st defendant in charge of the Commission on an interim basis when there was no legal basis to do so or when the due processes had not been followed. The due process would include setting aside of the Stay Order of 12 July.
APPROVAL & EXEMPTION DATES
33. Having reached the conclusions as I have above based on the material facts, the next question now is the date or dates when the approvals and exemptions were granted.
34. But I note that the dates when the 2nd defendant purportedly granted the approvals and exemptions are also not in dispute. In the pleadings, the 2 required approvals that had been granted and which the plaintiff seeks declaratory orders of, are and I quote,
35. The purported approvals have been admitted into evidence. With that, I make this finding, that is, the approvals and exemptions were granted or authorized by the Commission in March and April of 2020 or early 2020. The person who authorized them was the 2nd defendant who acted as Chairman of the Commission. Based on my findings above, the 2nd defendant, by virtue of the Stay Order of 12 July, continues to and remains the Chairman of the Commission. His approvals and exemptions, which he had granted for or on behalf of the Commission, were in order and valid. On that basis alone, the plaintiff, in my view, has made out its case and is entitled to the relief sought in the originating summons.
36. There are 2 further reasons why the 1st defendant’s arguments fail. His actions in attempting to stop or frustrate the capital raising process that had been conducted by the plaintiff, were based on his purported authority as the Acting Chairman of the Commission. His purported appointment was effected on 13 November 2018. So, even if I were to assume that to be the case, there is still nothing that would have prevented the 2nd defendant from acting as the Chairman of the Commission, that is, by virtue of the Stay Order of 12 July. What this scenario would mean would be that the Commission would have both a Chairman which would be the 2nd defendant whose appointment is recognized by the Stay Order of 12 July, and an Acting Chairman which would be the 1st defendant by virtue of the purported Gazettal appointment of 13 November 2018, and they would both be holding the substantive and acting post of the Chairman of the Commission. This, in my view, would appear ridiculous but assuming that that were to be the case (which is not), then the 2nd defendant as Chairman of the Commission, would still be duly authorized within his powers to grant the approval and exemption, as he had done. It seems that the 1st defendant may not have considered this part of the facts when he ran this argument thinking that his Acting Appointment has somewhat prevented the status quo in the operations of the Commission as granted by the National Court in its Order of 12 July 2018. In my view, his assumption is clearly misconceived.
37. The other reason is this. There was no vacancy to the position of Chairman of the Commission at the material time before the 1st defendant was purportedly appointed as Acting Chairman on 13 November 2018. The present status quo may be explained this way. The 1st defendant was successful with his judicial review challenge in proceeding OS (JR) 777 of 2016. On 4 April 2018, the judicial review Court reinstated him to his initial post of Acting Chairman of the Commission. On 17 April 2018, the 1st defendant was appointed Chairman of the Commission and the 2nd defendant’s appointment of the post was revoked. The 2nd defendant was aggrieved and filed proceeding OS (JR) 277 of 2018, and his substantive post as Chairman was preserved or retained, in the interim, by the Stay Order of 12 July, that is, until the outcome of the substantive matter. So, when you look at these, the legal challenge concerning the 2 substantive appointments to the post of Chairman of the Commission, by the 1st and 2nd defendants is alive or pending and it was at stake as at 12 July 2018.
38. I have had the benefit of perusing the SC Act. I note that the Act does not provide any provisions for appointment of an Acting Chairman of the Commission by any other persons apart from the existing Chairman himself or herself. This is provided for under s. 9(3) which states:
(3) The Chairman may appoint a person to act as the Chairman during any period or during all periods when he is absent from the office, other than in the case of his removal or resignation.
39. On that basis, the decision by the appointing committee or Minister to purportedly appoint the 1st defendant after he had already been given the substantive position which has since been the subject of challenge in proceeding OS (JR) 277 of 2018, appears to have been without any legal basis, and it also appears to breach provisions of the SC Act. Let me also add this. The question that surrounds the appointment of the 1st defendant as Acting Chairman has never been fully determined on its merits by a Court of law, that is, after the discontinuance of proceeding OS 877 of 2018 by the 2nd defendant. I therefore find no legal basis to support the 1st defendant’s claim that his Acting Appointment is valid. His purported appointment which was announced by publication in the National Gazette G741 on 13 November 2018 is invalid. I find that it was also made in breach of the SC Act in that the SC Act does not authorize such Acting Appointments. And finally, it also appears to be made in defiance of a valid Court Order which retains the 2nd defendant to the substantive post, that is, Chairman of the Commission.
SUMMARY/RELIEF
40. In summary, the plaintiff has proven its case. I must state that my considerations were based on the material facts which were not disputed, and these had to do with past proceedings and Court Orders and what they mean, for me to make these determinations.
41. The 1st defendant does not dispute his actions taken against the plaintiff which were the subject of this proceeding. His view then which he had maintained throughout the hearing of this matter, was that he was the duly appointed Acting Chairman of the Commission. Based on that, he argued or maintained that his actions, including the suspension order, were carried on the basis that he, as the duly appointed Acting Chairman of the Commission at the material time, did not grant the approvals and exemptions under the CM Act as alleged by the plaintiff. This led to the commencement of this proceeding. Evidence had been adduced by the plaintiff before the Court for the grant of the interim orders and in the substantive hearing, to prevent or put a stop to the actions of the 1st defendant (i) from presenting himself as the Acting Chairman of the Commission at the material time, (ii) from issuing a suspension order issued under s. 21 and 141 of the CM Act, and (iii), from publicizing his actions as valid or as being validly issued by the Commission. These actions had been taken by the 1st defendant which has led to this proceeding. As stated, the actions of the 1st defendants have not been denied; the parties have also acknowledged that these events have occurred prior to the issuance of the interim restraining orders by this Court of 5 June 2020. In conclusion, I must say that the injunctive relief sought have also been established and I am also minded to grant them.
42. With these, it is therefore not necessary for me to consider the other arguments raised including preliminary issues surrounding the veracity of evidence, or whether some of the parts of the tendered evidence regarding some of the facts should be struck out and related issues. Other issues in relation to the merits of the matter, in my view, are not necessary given the findings and conclusions that have been reached herein.
COST
43. An order for cost is discretionary. I do not see why I should not order cost using the standard costs scale. The 2nd defendant supported the plaintiff herein. As for the 4th defendant, it maintained a neutral position.
44. As for the 3rd defendant, I note that the plaintiff has taken issue of whether Kopunye Lawyers had instructions to also act for the 3rd defendant. Its position is based mainly on its argument that the 2nd defendant always remained as the legitimate Chairman of the Commission and of its position to not recognize the 1st defendant’s claims including his acting position with the 3rd defendant. I also take into account the fact that the 1st defendant has been appointed Chairman of the Commission after he successfully challenged his termination in proceeding OS (JR) 777 of 2016. And following that decision, he was appointed to the substantive post as Chairman of the Commission. That should have been the status quo of the matter as determined by the Court. However, that decision and the decision to remove the 2nd defendant as Chairman were stayed and are pending judicial review in proceeding OS 277 of 2018. Because no final decision has been made by the judicial review Court, it is possible that the 1st defendant may be confirmed as the legitimate Chairman of the Commission. And of course, the same may be said of the 2nd defendant. As such, it would, in my view, be unjust to order cost of the proceedings only against the 1st defendant.
45. In the exercise of my discretion, I am therefore inclined to order cost of the proceeding against both the 1st and 3rd defendants on a party/party basis which may be taxed if not agreed.
ORDERS OF THE COURT
46. I make the following orders:
(a) Letter / Exemption 001-2020 dated 31 March 2020; and
(b) Letter / Exemption 002-2020 dated 16 April 2020.
The Court orders accordingly.
________________________________________________________________
Allens: Lawyers for the Plaintiff
Kopunye Lawyers: Lawyers for the First and Third Defendants
B S Lai Lawyers: Lawyers for the Second Defendant
Corrs Chambers Westgarth Lawyers for the Fourth Defendant
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