Kiponge v National Executive Council [2023] PGNC 456; N10603 (5 December 2023)

N10603

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO. 42 OF 2023

REX KIPONGE
Plaintiff

V
NATIONAL EXECUTIVE COUNCIL
First Defendant

And
PUBLIC SERVICE COMMISSION
Second Defendant

And
HON. WALTER SCHNAUBELT in his official capacity as Minister for Transport & Civil Aviation & Shareholder of National Airports Corporation Limited
Third Defendant

And
JOESPH KITAU in his capacity as the Acting Managing Director of National Airports Corporation Limited
Fourth Defendant

And
NATIONAL AIRPORTS CORPORATION LIMITED
Fifth Defendant

And
INDEPENDENT STATE OF PAPUA NEW GUINEA
Sixth Defendant

Waigani: Miviri J
2023: 20^th October, 5^th December

PRACTICE & PROCEDURE – Judicial Review & appeals – Substantive Notice of Motion – Order 16 Rule 5 (1) NCR – Application for Judicial Review – Certiorari – Against Decision of First Defendant of 20 April 2023 – Revocation of Appointment of Plaintiff MD &CEO National Airports Corporation – Section 147AG (4) & 147AF Civil Aviation (As Amended) Act – Sections 6 & 9 Regulatory Statutory Authorities (Appointment to Certain Offices) Act 2004 – Public Service Recommendation – Advice of NEC – Error of Law – Ultra Vires – Denial of Natural Justice – Balance Discharged Materials Relied – Judicial Review Made Out – Motion Granted – Costs Follow Event.

Cases Cited:
Curran v Independent State of Papua New Guinea, The Minister for Foreign Affairs and Arnold Marsipal, Bernard Narokobi and Lucas Waka as members of a Ministerial Committee of Review [1997] PGSC 16; SC531
Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122
District Land Court, Kimbe; Ex Parte Nuli, The State v [1981] PNGLR 192
Asiki v Zurenuoc, Provincial Administrator [2005] PGSC 27; SC797
Lupari v Somare [2008] PGNC 121; N3476
Kiap v Kasper [2023] PGSC 95; SC2435
Napitalai v PNG Ports Corporation Ltd [2010] PGSC 1; SC1016

Counsel:
M.L. Ako, for Plaintiff
K. Kipongi, for First & Sixth Defendant
M. Boas, for Third Defendants
L. Baida, for Fourth & Fifth Defendants

DECISION

05^th December 2023

1. MIVIRI, J: This is the decision on the Notice of Motion of the plaintiff for substantial Judicial review filed of the 06^th July 2023 pursuant to Order 16 Rule 5 (1) for Certiorari against the decision of the First Defendant’s decision of the 20^th April 2023 published in the National Gazette G302 dated 27^th April 2023.
   
2. That decision revoked the appointment of the plaintiff as Managing Director and Chief Executive Officer of the National Airports Corporation. In his place appointing as Acting Managing Director the Fourth Defendant. That decision was made pursuant to Sections 147AG (4) and 147AF of the Civil Aviation Act (Amendment No. 1) Act 2022 and sections 6 and 9 of the Regulatory Statutory Authorities (Appointment to Certain Offices Act 2004. It was based upon recommendations from the Public Services Commission.
   
3. The “Appointment of Managing Director- is pursuant to Section 147AF headed in that term. Specifically, it reads:
   

(1) There shall be a Managing Director who is the chief executive of the Company who shall be appointed in accordance with the procedures for the appointment, suspension and revocation of appointment of chief executive officers of Regulatory Statutory Authorities under the Regulatory Statutory Authorities (Appointment to Certain Offices) Act 2004.

(2) The Managing Director shall be appointed for a term of three years and is eligible for re-appointment subject to his performance in accordance with his contractual provisions.

(3) The terms and conditions of the Managing Director shall be as determined by the National Executive Council and contained in a written contract of employment which shall be signed by the Minister and by the Managing Director.

(4) The person considered for appointment as Managing Director shall –

(a) be the holder of an academic degree in a field, considered by the Public Service Commission to be related to the position, from an accredited university that is recognised by the department responsible for higher education; and

(b) has at least 10 years practical experience in a field considered by the Public Service Commission to be related to the position, at least five of which were in an executive managerial capacity equivalent to head or deputy head level of a reputable organisation; and

(c) be a fit and proper person, which includes -

(i) passing the fit and proper person test prescribed under Section 50 of the Act; and

(ii) medical clearance from a certified medical practitioner; and

(iii) police clearance.

(5) The Managing Director shall be terminated if he –

(a) fails one of the requirements under Subsection (4)(c); or

(b) becomes incapable of performing his duties; or

(c) other than with written consent of the Minister, engages in any paid employment or carries on business outside the duties of his office; or

(d) becomes bankrupt, applies for the relief of the law for bankrupt or insolvent debtors, compounds with his creditors or makes an assignment of his salary for their benefit; or

(e) is convicted of an offence that is punishable by law with a sentence of imprisonment; or

(f) ceases to be ordinarily resident in the country; or

(g) commits an offence against this Act.

4. The insertion of the fourth defendant as Acting Manager Director stems from section 147AG. APPOINTMENT OF ACTING MANAGING DIRECTOR. Relevantly that section is in the following terms:

(1) In the interest of the Aviation Sector, the Minister shall suspend the Managing Director, with or without cause, if –

(a) the Managing Director is absent from duty (from whatever cause arising); or

(b) there is a vacancy (whether by reason of death, resignation, or otherwise); or

(c) from time to time while the absence or vacancy continues, and appoint a senior person in the company in term of the number of years he has worked in the company or a suitable person to act in the position.

(2) The appointment process under section 147AF is not applicable to Subsection (1).

(3) The appointment made under Subsection (1) shall be for a maximum period of three months and shall be published in the National Gazette.

(4) Any extension of the period prescribed under Subsection (3) shall be made in accordance with Section 147AF.".

5. It is undisputed and clear that the plaintiff was appointed as Managing Director and Chief Executive Officer of the National Airports Corporation Limited (NACL) for a period of four (4) years effective of the 06^th December 2021 by the Board of that Company. And that relationship was formalized under a written Contract of Employment executed on the 06^th December 2021. Which carried into effect the Board resolution number 21-SP4-03 of the 03^rd December 2021 in accordance with clause 8.1(a) of the Constitution of the NACL. But that appointment shall be in accordance with the procedures for the appointment, suspension and revocation of appointment of chief executive officers of Regulatory Statutory Authorities under the Regulatory Statutory Authorities (Appointment to Certain Offices) Act 2004.
   
6. Plaintiff raises and disputes that the actions of defendants have no legitimacy with reference to the sections set out above. There was no process followed in law to come out with his revocation and subsequent termination as Managing Director and CEO of the NAC. He relies on his affidavit filed of 12^th May 2023. Of which annexure “A” is his contract of employment entered into with the NAC dated the 06^th December 2021. Annexure “B” is the Board Resolution appointing him in that position and “C” is the Company Constitution. Annexure “D” is copy of the National Gazette No. G914 dated the 02^nd December 2022. and “E” are the Civil Aviation (Amendment No.1). Annexure “F” is National Gazette No G930 suspending the Plaintiff and appointing Acting Managing Director Joesph Tupiri for three months effective from 05^th December 2022. And that is confirmed by annexure “G” extension of Tupiri’s term as Acting MD and extension of the suspension of the Plaintiff pursuant.
   
7. Annexure “J” is the revocation of the appointment of the Plaintiff as MD by National Gazette G302 dated the 27^th April 2023. The plaintiff deposes that no reasons were given him for his termination from that post. Nor when he was suspended on the 07^th December 2022. Further he was not accorded right to be heard pursuant to section 59 of the Constitution. No evidence has been placed that prior to his revocation and termination he was suspended and that he was being investigated. Plaintiff has not placed this evidence and the defendants have not rebutted given the fact of the revocation and termination of the plaintiff as MD and CEO of NAC. There is also no evidence by either side as to whether plaintiff was investigated pursuant to section 7 of the RSA Act 2004, “INVESTIGATIONS OF GROUNDS FOR DISMISSAL. That is specific provision that:

“(1) Where, in relation to a Regulatory Statutory Authority, the Board believes that grounds exist for the dismissal of the chief executive officer, it shall cause an investigation into the conduct, activities or performance of the chief executive officer.

(2) The grounds for dismissal referred to in Subsection (1) shall be consistent with the grounds for dismissal as specified in the chief executive officer’s contract of employment which include breach of contract, misconduct, poor performance, incompetence and ill health, as prescribed in the Regulations.

(3) Where the Board has made an investigation under Subsection (1), it shall submit a report on its investigation together with its recommendations to the Public Services Commission.

(4) On the receipt of a report under Subsection (3), the Public Services Commission –

(a) shall consider the evidence provided and the recommendations of the Board; and
(b) may make, or cause to be made, and consider such further investigations (if any) as it considers necessary; and
(c) shall, on the basis of the report and the results of further investigations (if any), inform the Board by way of a recommendation whether or not the appointment of the chief executive officer should be revoked.

(5) The Board shall convey its recommendation to the Minister and, in the event that the National Executive Council approves the recommendation of the Minister to revoke the appointment of the chief executive officer, the National Executive Council shall advise the Head of State to revoke the appointment of the chief executive officer.

8. The assertion of the plaintiff is that he was never investigated leading to his revocation and termination. The Board has filed no evidence as to the grounds which it believed existed for the termination of the plaintiff. And further it has not filed any evidence causing it to investigate the plaintiff. There is no evidence also from the Public Services Commission of it being in receipt of a report by the Board into the Plaintiff. And as to its views as to how to deal with the plaintiff given. And it is not the case that the subject report if it came into being went to the office of the Board and then to the Minister and to the NEC. It is not there. The allegation has been raised by the Plaintiff against. He bears that burden but does not place material that shifts that to the defendants. For instance, that he has taken out discovery to no avail to bring out those records peculiar within the confined knowledge possession of the defendants, as it is their records and evidence that have questioned. The Court will not conduct an inquiry of its own volition because it is always driven by the material that is placed before it. And these views are firm that it would be erroneous to count in evidence that is not before me. Because the burden is always on, he who alleges not the other way around.
   
9. “In my view the trial judge fell into error when he concluded that he could conduct an inquiry of his own, outside the normal rules of evidence under s. 41 of the Constitution. Under s. 41 (2), the burden of proof is expressly placed on the person who alleges an unlawful act and the standard of proof is on the balance of probabilities. The nature of this inquiry is no different to other civil proceedings. Section 41 does not give inquisitorial powers to the Court as is found in the European Continent, Curran v Independent State of Papua New Guinea, The Minister for Foreign Affairs and Arnold Marsipal, Bernard Narokobi and Lucas Waka as members of a Ministerial Committee of Review [1997] PGSC 16; SC531 (28 November 1997). What is normal within the rules of evidence is what evidence relied on by the plaintiff in the assertion he makes against the defendants. And these are set out above from his affidavit filed. That shows that he was suspended for three months, extended and then his appointment revoked, and he was terminated. Including extension of an acting Managing Director.
   
10. And the reasons for suspension by section 8. SUSPENSION OF A CHIEF EXECUTIVE OFFICER, of the RSA Act.

(1) Where a Board is to carry out an investigation into the conduct, activities or performance of a chief executive officer under Section 7(1) and is in receipt of material information from credible sources that the conduct of the chief executive officer is such that serious charges of misconduct may be brought against the chief executive officer, it shall determine whether grounds exist for the suspension of the chief executive officer during the period of the investigation.

(2) The grounds for the suspension of the chief executive officer shall be consistent with the grounds for dismissal or suspension as prescribed and contained in the chief executive officer’s contract of employment.

(3) Where the Board determines that grounds exist for the suspension of the chief executive officer, it shall advise the relevant Minister to recommend to the National Executive Council the suspension of the chief executive officer on full pay for the duration of the investigation.

(4) In the event that the National Executive Council approves the recommendation of the Minister for the suspension of the chief executive officer, it shall advise the Head of State to suspend the chief executive officer.”

11. Section 1 of the Regulatory Statutory Authority Act defines it as a body corporate “established by an Act of Parliament to perform specific statutory functions;”. Which is clearly the case of the National Airports Corporation. It is established by section 132 airport company of the Civil Aviation Act 2000. Its incorporation is under the Companies Act and would for all intent and purposes operate like a company, section 132 (1) (b) of that Act. And its powers as an airport authority is established by section 134 of that Act. By this reading the National Airports Corporation is a company, and its managing director or Chief Executive Officer is the principle of that Company. He is employed through the process that is laid out by an Act of Parliament, Regulatory Statutory Authorities (Appointment to Certain Offices) Act 2004.
    
12. Relevantly section 7 of that Act sets that if the Board “believes that grounds exist for the dismissal of the chief executive officer, it shall cause an investigation into the conduct, activities, or performance of the chief executive officer.” Plaintiff’s affidavit dated 12^th May 2023, annexure “A” true copy of the contract that he entered into with the National Airports Corporation (NAC). There is no evidence led by the defendants that grounds did exist the basis of which warranted the defendants to act as they did. He was not the subject of an investigation into his conduct, or his activities, or his performance as the Chief Executive Officer. There is evidence he was suspended but it is unclear that he was investigated. And if he was there is no report filed to that effect. There is no evidence of any material information that warranted his suspension for the purposes of an investigation which were eventually the basis leading to his revocation and termination. To my mind the gazettal G302 of the 27^th April 2023 does not come in sequenced to, and a flow on of the initial process laid out following the subject sections set out above. In my view it is not remote to deduce that this was an unlawful exercise of authority against the plaintiff at the hands of the defendants. Because if it was legal the actions are of the defendants, and they have not placed material that their actions against the plaintiff were legally constituted leading.
    
13. It is my view that it is safe given to infer that the process set out by law is not heeded by the defendants against the revocation termination of the plaintiff. Which accords that Judicial review would lie in favour of the plaintiff applicant. Judicial review is about the process that is taken to arrive at a decision: Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122. That is trite because when there is error in the process taken, certiorari lies, District Land Court, Kimbe; Ex Parte Nuli, The State v [1981] PNGLR 192. It is apparent and can be inferred because the assertion made by the plaintiff has not been refuted by the defendants. The plaintiff produces no evidence in this manner. He contends that he was not accorded so does not have it to bring out. And so, it follows that the defendant would bring it out to show that the Plaintiff has not placed the truth here. Given it is safe to assume and hold that He has been removed from his appointment to the position of the National Airports Corporation a company, as its Managing Director or Chief Executive Officer in breach of the process of law set out above. That removal will not stand in law. It is an unlawful decision to remove revoke and terminate his appointment which was for three years by law set out above. Consequently, I determine and hold that the plaintiff has discharged his revocation termination as MD and CEO was unlawful. That decision contained will be removed into this Court and quashed forthwith.
    
14. Because if the decision was made pursuant to Sections 147AG (4) and 147AF of the Civil Aviation Act (Amendment No. 1) Act 2022 and sections 6 and 9 of the Regulatory Statutory Authorities (Appointment to Certain Offices Act 2004, and based upon recommendations from the Public Services Commission, the defendants would have simply placed before this Court those official Government records to depict the lawful process. They are custodians of those government records because it is their action that has been questioned here. Government records will always be there and maintained. Here there is nothing filed to counter. It is safe to infer that the plaintiff was unlawfully revoked and terminated as MD and CEO of NAC.
    
15. And accordingly, I determine that the revocation termination of the Plaintiff by the defendants was in excess of its powers. Which are intricately set out by the various sections I set out above. And it is established by these that natural justice was not accorded the plaintiff. He was not accorded a right to be heard before the eventual. That to my mind discloses that no reasonable tribunal would have reached the decision that the defendants have reached in regard to the fate of the plaintiff. It is an abuse not to comply with the process procedures of the law. There is material before the Board warranting an investigation which has uncovered material against the continued occupation of the plaintiff in that seat. He has as a result being revoked and terminated. It has not been verified by the Public Services Commission who have no part by the evidence relied here. And it follows that the National Executive Council’s prerogative was not properly invoked for the revocation and termination of the plaintiff gazetted. Because it is not the board to the Minister and then to the NEC for it to be lawful. It means the actions of the First Defendant is unlawful, He has acted in excess or ultra vires, and the decision is void ab initio. These are all the circumstances in my view which give the basis that the plaintiff be accorded his substantive notice of motion: Asiki v Zurenuoc, Provincial Administrator [2005] PGSC 27; SC797 (28 October 2005).
    
16. But it will not be the case that he will be placed back into the seat he was derailed from, as events have since taken place which are no fault of the incumbent in that seat now. Rather than set in place a chain reaction, it is accepted that the plaintiff will be accorded liberty to apply to amend the proceedings to plead damages as a relief and litigate the question of damages. Alternatively, to commence fresh proceedings by writ of summons or originating summons seeking damages: Lupari v Somare [2008] PGNC 121; N3476 (22 September 2008). Which was recently followed in Kiap v Kasper [2023] PGSC 95; SC2435 (11 August 2023). This is not a case of employment straight out by contract of employment because Statute have played to engage the plaintiff which I set out above. It will not follow Napitalai v PNG Ports Corporation Ltd [2010] PGSC 1; SC1016 (8 February 2010).
    
17. The formal orders of the court are:
    
    • (1) The Substantive Notice of motion of the Plaintiff for Judicial Review is granted.
      
    • (2) An order in the nature of certiorari is granted bringing into this Court and quashing the decision of the First Defendant by Notice in the National Gazette G302 dated 27^th April 2023, in:
      
      • (a) revoking the appointment of the Plaintiff as Managing Director of the National Airports Corporation.
      • (b) Appointing the Fourth Defendant as the Acting Managing Director for a term of three (3) months until the substantive appointment is made.
        
    • (3) Liberty is granted the Plaintiff to amend these proceedings to plead damages as a relief and litigate the question of damages or alternatively to commence fresh proceedings by Writ of Summons or Originating Summons seeking damages.
      
    • (4) Time is abridged to the time of settlement which shall take place forthwith.
      
    • (5) The defendants shall pay the costs of this proceedings.
      

Orders Accordingly.
__________________________________________________________________
Kalit Legal Consulting: Lawyer for the Plaintiff/Applicant
Office of the Solicitor General: Lawyer for the First & Sixth Defendants
Kuman Lawyers: Lawyer for the Third Defendant
Nelson Lawyers: Lawyer for the Fourth & Fifth Defendants