Bank of Papua New Guinea v Mai [2007] PGSC 19; SC862 (4 May 2007)

SC862

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 45 OF 2005

BANK OF PAPUA NEW GUINEA
Appellant

AND

EDDIE ORUBA MAI
Respondent

Waigani: Kirriwom, J., Lay J., David J.
2006: 28 June
2007: 4 May

SUPREME COURT – Banks and Financial Institutions Act, s.56 – meaning of "summary prosecution" – Central Bank authority to prosecute – when can prosecution commence by Information – when must prosecution commence by indictment.

Facts

The Appellant obtained leave of the National Court pursuant to s.616 of the Criminal Code (private prosecutions) and consent of the Public Prosecutor and commenced a prosecution by Information against the Respondent exercising its prosecution powers granted by Banks and Financial Institutions Act (BFIA) s.56. The Information was quashed on application made pursuant to s.558 of the Criminal Code, the National Court holding that prosecution in the National Court must be preceded by a committal proceeding.

Held

Affirming the orders of the National Court and refusing the appeal:

1. The Appellant can lay in Information in the National Court, pursuant to the powers granted to it by BFIA Section 56 without a committal proceeding or first seeking the approval of the Public Prosecutor or the Court, to prosecute a summary offence.

2. Indictable offences must be preceded by a committal proceeding;

3. Where the accused is committed for trial pursuant to a committal proceeding, whether instigated by the Appellant or some other party, the Appellant may present an indictment;

4 Counsel appearing to prosecute an Information or an indictment in the National Court must be counsel from the office of or approved by the Public Prosecutor;

5. The Public Prosecutor may take over a prosecution commenced by the Appellant by indictment within 14 days of service on him of a copy of the indictment.

6. All of the offences currently created by the BFIA are indictable offences which must be prosecuted by indictment, that is preceded by a committal proceeding.

Case Cited

SCR No. 13 of 1997 – An Application by Investment Promotion Authority and Palpal Seoul Pty. Ltd & Ors (29/10/1997)
Koai Keke v PNG Color Laboratories [1992] PNGLR 265
Masolyau Piakali v The State S.C. 771;
State v Tanedo [1975] PNGLR 395 referred to.

Legislation

Banks and Financial Institutions Act s.56
Central Banking Act 2000 s.101
Criminal Code s.558, s.616
Interpretation Act s.3,21
Investment Promotion Act s.44A
Life Insurance Act 2000 s.147
Public Prosecutor (Office and Functions) Act s.4
Superannuation (General Provisions) Act 2000 s.114

Overseas Legislations:

Corruption and Crime Commission Act 2003 (Australia) s.177A
Public Prosecutions Act (Northern Territory, Australia )s.13
Supreme Court (Summary Jurisdiction) Act (New South Wales, Australia)

Counsel
S. Nuttley, for the Appellant
S. Soi, for the Respondent

1. BY THE COURT: The Appellant appeals from a decision of the trial judge quashing an indictment and holding that the Appellant had erroneously come to the National Court through the provisions of section 616 (private prosecutions) of the Criminal Code in a prosecution of the Respondent that he:

"Count 1 .... On 20 September 2001 in Port Moresby, did engage in activities in the nature of carrying on banking business without being authorized as a licensed financial institution by the Central Bank of Papua New Guinea under section 10 thereby contravening Section 7 (2) (a) of the Banks and Financial Institutions Act " and " Count 2... that on the 20th of September 2001 (h) gave Information which he ought reasonably to have known to be misleading when he made the ought reasonably to have known to be misleading when he made the statement for the purpose of inducing another person, one Felix Cholai Ngih in depositing a sum of K1500 which Commerce Housing Finance, a subsidiary of Hosava Stock Limited with a promise that he was eligible for an investor’s partial payment of K35,000 for each K1500 deposited thereby contravening Section 51 (1) (a) of the Banks and Financial Institutions Act."

2. The history of the matter is that the Appellant made application to the National Court pursuant to Criminal Code Section 616 for leave to present an Information as a private prosecution. Leave was granted on 6 October 2004. The Appellant also obtained the approval of the Public Prosecutor to proceed with the prosecution by private counsel. Thereafter on the 7 October 2004 an Information by leave as a private prosecution was presented to the National Court in the above mentioned terms and with additional counts. The Respondent then made the application pursuant to Criminal Code Section 558 to quash the indictment.

Submissions

3. The Appellant has submitted that on the plain meaning of the words contained in the Banks and Financial Institutions Act Section 56 the Appellant is authorized to commence prosecutions and all prosecutions commenced by it must be commenced in the National Court. It argued that it was therefore contrary to the provisions of the Act to require the Appellant to commence the prosecution in the District Court as a committal proceeding. It was argued that it is clear that Appellant has authority to prosecute, all it needs to know is what the procedure should be used if the procedure it has followed is not correct.

4. Counsel for the Respondent, who had received no recent instructions, and had in fact filed a Notice of Ceasing to Act, assisted the Court and we are grateful for his contribution. His submissions were that:

1. The Bank should seek the Public Prosecutor’s authority to present an indictment pursuant to the Public Prosecutor (Office and Functions) Act;

2. the Bank correctly sought leave under Section 616 of the Criminal Code and should have complied with subsections (3) and (4);

3. the Bank, after leave was obtained, should have gone to the Committal Court (the District Court) with the approved Information and run a committal proceedings;

4. following committal the Bank may present an indictment;

5. if the Bank presents an indictment it must give a copy to the Public Prosecutor;

6. the Public Prosecuted may withdraw the indictment pursuant to BFIA Section 56 (3); alternatively,

7. the Public Prosecutor as sole prosecuting authority should present the indictment and inform the Court that the Bank will prosecute.

5. Counsel for the Respondent also submitted that the motion to quash the indictment in the court below was proper, the proceeding was not an indictment, the Appellant did not comply with the Criminal Code Section 616 (3) and (4). The trial judge was correct.

Our Reasons

6. The BFIA Section 56 provides as follows:

56. Prosecutions and other actions.

(1) The Central Bank may –

(a) prosecute any offence by a person against this Act, by summary prosecution or by prosecution as an indictable offence as the case may be; and

(b) commence a civil action against a person for any form of civil relief which is available in respect to the matters constituting the offence.

(2) Any prosecution or action commenced by the Central Bank in relation to an offence committed under this Act shall be heard by the National Court.

(3) Notwithstanding Section 524 of the Criminal Code Act (Chapter 262), following a committal for an offence under this Act the Central Bank is authorized to present an indictment against the accused, and a copy of any such indictment shall be served on the Public Prosecutor and the Public Prosecutor may withdraw the indictment within 14 days of service of the indictment on him.

(4) In any prosecution or action brought under this Act by the Central Bank or against the Central Bank, the Court may award costs against any party or claimant other than the Central Bank, which costs may be recovered by the Central Bank as a debt to the Central Bank.

(5) In any action brought by the Central Bank under this Act, the Court may, on application by the Central Bank whether as interlocutory or final relief, order a person to cease any activity until further order.

(6) Any order made by the Court under Subsection (5) shall be made on condition that the Central Bank is not responsible for any loss of income or profit which may be incurred by the enterprise as a consequence of that order.

(7) Any fine, to be paid by a person as a result of an action or prosecution by the Central Bank shall be paid to the Central Bank and, in addition to any other remedy, may be recovered by the Central Bank as a debt to the Central Bank.

7. The provision has not previously been the subject of any ruling by this Court. Not drawn to our attention by Counsel was that the identical wording appears in the Central Banking Act 2000 Section 101, the Life Insurance Act 2000 Section 147, and the Superannuation (General Provisions) Act 2000 Section 114.

8. The Investment Promotion Act (IPA Act) s44A contains some identical and some similar provisions to those in the BFIA s56. s44A has been the subject of a decision of this Court in SCR No. 13 of 1997 – An Application by Investment Promotion Authority and Palpal Seoul Pty Ltd & Ors (29/10/1997) Amet CJ, Los J and Kirriwom J. Neither the legislation, nor the decision were drawn to our attention by counsel.

9. IPA Act Subsections 44 A (3) to (6) are very similar (changed only to insert the description of the Authority rather than the Bank) to Subsections 56(4) to (7) of the BFIA. Section 56(2) of the BFIA and s44A (2) of the IPA Act are also very similar, the former referring to "prosecution or action" and the latter to "action". That in itself is significant in that in SCA No. 13 of 1997 the Court took the view that the proceedings under s 44A were more in the nature of a civil action, which is a view we consider not open when the BFIA legislation consistently uses the word "prosecution" and distinguishes between an action and a prosecution. S56(1) of the BFIA is quite different to s44A (1) of the IPA Act. There is no equivalent in the IPA Act to the provisions of s56(3) of the BFIA.

10. The different provisions in BFIA s56(1) and (3) from those contained in s44 of the IPA Act make a substantial difference to the interpretation of the whole provision. We are therefore of the view that the decision of this Court in SCA 13 of 1997 should be distinguished on that basis. We also note that the provisions of the Public Prosecutor (Office and Functions) Act do not appear to have been drawn to the attention of the Court in that case.

Summary Prosecution

11. The words "summary prosecution" as used in subsection 56 (1) (a) of the BFIA also appear in the Insurance Act Section 74 but that provision is otherwise quite different and relates only to the time within which a prosecution may be brought;. The words "summary prosecution" are not used in any other legislation in Papua New Guinea that our researches have been able to discover, and we were not referred to any.

12. The BFIA Section 56 (1) makes provision for prosecution by two methods, summary prosecution and prosecution by presentation of an indictment. Whichever method is chosen to proceed with a prosecution, the prosecution must take place in the National Court pursuant to Section 56(2).

13. The words "summary" and "summarily" are used in a large number of Acts in Papua New Guinea with reference to the conduct of proceedings in a "court of summary jurisdiction". The Interpretation Act Section 3 provides that a court of summary jurisdiction means the District Court, or if it has jurisdiction in the matter includes a Local court.

14. A short survey of Australian legislation shows that the terms "summary prosecution" is used in Australian legislation in two senses, first, as a shorthand reference to prosecution before a court ordinarily exercising summary jurisdiction (see for example Director of Public Prosecutions Act (Northern Territory) Section 13, the Corruption and Crime Commission Act 2003 Section 177A, and secondly, as a reference to prosecution before a Superior Court sitting without a jury: Supreme Court (Summary Jurisdiction) Act1967 (New South Wales) (now repealed).

15. None of those references assist with the interpretation or are consistent with the legislation under review. That leaves us to draw the conclusion that the words "summary prosecution" as used in this legislation are used in a new and different manner. In drawing that conclusion as to the meaning of that phrase in this act we note the following points:

1. A summary prosecution is not a prosecution following a committal proceeding;

2. Prosecutions commenced by the Appellant must be commenced in the National Court;

3. summary proceedings are generally commence by an Information;

4. an Information if presented to the National Court provides meaning to phrase "by summary prosecution" in subsection 56(1)(a) and does not offend subsection (2).

16. From those points we conclude that the Appellant may commence a prosecution in the National Court to summarily prosecute an offence under the Act by laying an Information in the National Court, where a summary prosecution is appropriate.

17. It would be highly desirable for regulations made under the Act to spell out the form of the Information and associated procedures and consistent with the provisions of Constitution Section 37 and the duty of the Court to act fairly. Until that is done the National Court will have to devise adhoc directions pursuant to the provisions of Constitution Section 185 and the National Court Act Section 9, to ensure fairness to the parties. We consider that there is no reason why a defendant to an Information laid under the BFIA should be any less informed of the case against him, than a defendant to an indictment laid after a committal proceeding. The Criminal Procedure Rules, where relevant might be used with appropriate adaptation.

Role of the Public Prosecutor

18. The Constitution Section 177 provides the following in relation to the functions of the Public Prosecutor:

177. Functions of the Public Prosecutor and the Public Solicitor.

(1) The functions of the Public Prosecutor are –

(a) in accordance with an Act of the Parliament and the Rules of Court of the Supreme Court and the National Court, to control the exercise and performance of the prosecution function (including appeals and the refusal to initiate and the discontinuance of prosecutions) before the Supreme Court and the National Court, and before other Courts as provided by or under Acts of the Parliament; and

(b) to bring or to decline to bring proceedings under Division III.2 (leadership code) for misconduct in office.

19. The provision contemplates that an Act of the Parliament will prescribe the manner in which the Public Prosecutor may control the exercise and performance of the prosecution function. That Act is the Public Prosecutor (Office and Functions) Act and it provides:

4. Functions, etc., of Public Prosecutor.

(1) The Public Prosecutor –

(a) .........

(b) .........

(c) shall control and exercise the prosecution function of the State; and

(d) may, and shall when requested to do so by the relevant person or body, advise –

(i) the State or any statutory authority or instrumentality of the State; and

(ii) ....

(iii) ....

(iv) ....

(v) ....

(vi) ....

on matters related to or concerning the commission of offences against any law; and

(e) shall provide Counsel –

(i) to prosecute persons charged with any criminal offence at their trial before the National Court; and

(ii) to appear on behalf of the State in any criminal appeal before the National or Supreme Court; and

(iii) to appear before the National Court or Supreme Court in any proceeding relating to a criminal matter in which the State has an interest; and

(f) ....

(g) shall, in his absolute discretion, give consent or refuse consent, to proceed with the prosecution of any criminal offence where his consent is by law required; and

(ga) ...

(h) ...

20. In our view there is no doubt that the offences created by the BFIA are criminal offences within the meaning of the Public Prosecutor (Office and Functions) Act. It is the function of the Public Prosecutor to provide a lawyer to prosecute any criminal offence in the National Court: See Public Prosecutor (Office and Functions) Act Section 4(e) (i). Where permission is sought from the Public Prosecutor for counsel not employed by his office to prosecute a criminal offence before the National Court, and that permission is granted, the Public Prosecutor discharges his function pursuant to Section 4(e)(i) by the counsel so approved. One of the considerations relevant to the Public Prosecutor in considering whether or not to grant such an approval was pointed out by Brown J. in the case of Koai Keke v PNG Color Laboratories [1992] PNGLR 265 where his Honour said:

"... but where criminal prosecutions are involved, the maintenance of the "rule of law" requires the involvement of the State, or where a private Prosecutor, a prosecutor qualified to appear in a court of law, conversant with the ethical considerations of his role, and the practice and procedure of the court, able to properly discharge his duty, both to his client and the court".

21. The scheme of the legislation relating to prosecutions of criminal offences in the superior courts was considered by this court in the context of who is entitled to sign an indictment in the case of Masolyau Piakali v The State S. C. 771 (Sevua, Kandakasi and Lenalia JJ) where the court said.

"When one views this legislative scheme closely, the intention of Parliament behind these provisions is clear. Only the Public Prosecutor and his State Prosecutors, have the sole authority to decided whether to proceed against a person who commits an indictable offence. The Public Prosecutor is not subject to any direction or control from anyone when it comes to the exercise of his powers and functions: Nelson N. Ngasele v. The State (03/10/03) SC731. No other persons can take out criminal proceedings before the National Court, except the leave of the Court in appropriate cases and where the Public Prosecutor directs or consents. This, in our view, is for the protection of people in the country from abusive, malicious and unauthorized prosecutions by persons acting independently of the office of the Public Prosecutor. Hence, in our view, it is not the intent of the legislature to prevent the Public Prosecutor from carrying out its duties and responsibilities on behalf of the people of Papua New Guinea. Instead, the legislature authorized the Public Prosecutor to engage counsel in addition to State Prosecutors and consent to private prosecutions in appropriate cases to assist in the prosecution of criminal cases."

22. We agree, that even where the express consent of the Public Prosecutor is not required to the prosecution, the consent of the Public Prosecutor is required for counsel other than the Public Prosecutor or one of his State Prosecutor’s to prosecute a criminal offence in the National Court. The Public Prosecutor in that way maintains some control over counsel prosecuting.

23. In Masolyau Piakali v The State (supra), the attention of the Court was necessarily not directed to the possibility of prosecutions in the National Court specifically authorized by statute, as it was irrelevant to the point under consideration. We do not consider that the Court’s comments were directed to that situation. In the case of an Information laid pursuant to BFIA Section 56, the information will be the Appellant in this appeal. The commencement of the prosecution by the laying of the Information or presentment of an indictment does not require the consent of the Public Prosecutor.

24. Whilst the Appellant is specifically authorized by BFIA s56(1) to lay and Information and by BFIA s56 (3) to present an indictment after committal proceedings, it can only do so by counsel. The consent of the Public Prosecutor is still required to engage counsel other than the office of the Public Prosecutor to prosecute the indictment, because providing counsel to prosecute criminal offences in the National Court is a function of the Public Prosecutor. However, even if the Public Prosecutor grants that approval, the BFIA gives the Public Prosecutor authority to take over the prosecution within 14 days of being served with a copy of the indictment.

Nature of Prosecution under BFIA
25. The Appellant took the view in the National Court that it was proceeding by way of private prosecution and sought and received approval pursuant to provisions of Criminal Code Section 616 which provides:

616 Information by leave of the Court by private prosecutors.

(1) Any person may by leave of the National Court present any Information against any other person for an indictable offence not punishable with death that is alleged to have been

committed by the other person.

(2) An Information presented under Subsection (1) shall be –

(a) signed by the person on whose application the leave is granted or some other person appointed by the National Court for the purpose; and

(b) filed in the National Court.

(3) The person who signs the Information is called the prosecutor.

(4) The Information is to be intituled "The Independent State of Papua New Guinea on the prosecution of the prosecutor (naming him) against he accused person (naming him)", and must state that the prosecutor informs the National court by leave of the Court.

(5) Excepts as otherwise expressly provided, the Information and the proceedings on it are subject to the same rules and incidents as an indictment presented by the Public Prosecutor and the proceedings on such indictment as set out in the proceedings provisions of this Code.

26. In our view, the laying of an Information or presentation of an indictment pursuant to authority specifically given to the Appellant by the BFIA, is not a private prosecution. The Appellant becomes a statutory Prosecutor. The Appellant is not "any person" within the meaning of Section 616 of the Criminal Code. The Appellant is a statutory authority given a statutory power of prosecution. It is therefore not necessary for the Appellant to seek consent pursuant to Section 616 prior to laying an Information or presentation of an indictment, as that section has no application to it.

27. Another reasons we are of this view is that Section 616 of the Criminal Code provides for the prosecutor to give security for the cost of the prosecution. The BFIA specifically provides that the Appellant will not be liable for costs. We conclude that Parliament, if it had intended that a Prosecution under the BFIA would be a private prosecution pursuant to Section 616 of the Criminal Code, would not provide a conflicting provision relating to costs in BFIA Section 56 from the provision in Criminal Code Section 616 without making some specific reference to its intention to over-ride the costs provision in Section 616.

28. The laying of the Information in summary prosecution is not required to be preceded by a committal proceeding. The BFIA Section 56 (3) deals with the position when there is a committal proceeding. The provisions does not require a committal proceeding. It is an enabling provision giving the Appellant power to present an indictment after committal. If there is a committal proceeding, the proceedings in the National Court are to be commenced by indictment which may be presented by the Appellant.

Choosing the Correct method of Prosecution – Information or Indictment

29. The next issue is when can the Appellant proceed summarily and when can it proceed by way of indictment? The answer to that question must lie in the nature of the offences themselves. There are a wide range of offences under the Act, but only two categories of penalty, which are provided by Schedule 5 to the Act. The first category are offences carrying a penalty of two years imprisonment or a maximum fine of K100,000. The second category are offences carrying a penalty of five years imprisonment or a maximum fine of K500,000. Are these summary offences or indictable offences? The Interpretation Act Section 21 and 22 make the following provisions in relation to the nature of offences:

"21. Indictment Offences.

An offence –

(a) declared to be treason, crime, misdemeanor or indictable offence; or

(b) punishable by imprisonment for a term exceeding 12 months, is an indictable offence.

22. Offences punishable on summary conviction.

An offence that is not an indictable offence is punishable on summary

conviction."

30. Both categories of offence under the BFIA provide for a term of imprisonment exceeding 12 months and it follows from the provisions of Interpretation Act that all of the offences created by the BFIA are indictable offences.

31. The words "as the case may be" in BFIA Section 56 (1) simply mean, whichever set of circumstances fit the prescribed alternative. That is, prosecution can be by Information in a summary way, for summary offences and by indictment for indictable offences.

32. We consider that it must follow that the offences created by the BFIA as it presently stands, must be prosecuted by way of indictment and an indictment must be preceded by a committal proceeding. The only indictable offences which can be proceeded with by summary prosecution are those for which specific provision is made in a law, such as in the Criminal Code Schedule 2, which does not include any of the offences created by the BFIA. Committal proceedings are by nature an administrative process to determine if there is a case to answer. It is an executive and not a judicial function: See the discussion in State v Tanedo [1975] PNGLR 395 (Prentice DCJ). Whilst committal proceedings commence the prosecution process in the courts, they are not the commencement of the prosecution, which does not occur until the indictment is presented in the National Court..) An accused is brought to his trial when the indictment is presented: The State v Frank Tase Yasim [1983] PNGLR 11 (Kapi DCJ as he then was) and Lindsay Kivia v State [1988] PNGLR 107 (Amet J). Requiring committal proceedings before presentation of an indictment does not offend the requirement of s56 that BFIA prosecutions must be commenced in the National Court.

Summary

33. In summary:

1. The Appellant can lay an Information in the National Court, pursuant to the powers granted to it by BFIA Section 56 without a committal proceedings of first seeking the approval of the Public Prosecutor or the Court, to prosecute a summary offence;

2. where the accused is committed for trial pursuant to a committal proceeding, whether instigated by the Appellant or some other party, the Appellant may present an indictment;

3. Counsel appearing to prosecute an Information or an indictment must be counsel from the office of, or approved by, the Public Prosecutor;

4. The Public Prosecutor may take over a prosecution commenced by the Appellant by indictment, within 14 days of service on him of a copy of the indictment.

5. All of the offences currently created by the BFIA are indictable offences, which must be prosecuted by indictment, which must be preceded by a committal proceeding.

Disposal of the Proceedings in the National Court

34. We are left to address what should happen with the proceedings in the court below. For reasons different to those of the trial judge we have essentially arrived at the same conclusion. That is, that the trial cannot proceed on the Information laid by the Appellant as a private prosecutor. The Respondent has been charged with indictable offences and the commencement of prosecution of those offences in the National Court by the Appellant must be preceded by a committal proceeding in the District Court.

35. For the reasons we refuse the appeal and confirm the orders of the trial judge.

36. In relation to costs the Supreme Court may only make those orders which the National Court could make. The National Court could not make an order for costs against the Appellant because the provisions of s56(4) of the BFIA. We therefore make no orders as to costs.
_____________________________________________________________

O’Brien’s Lawyers for the Appellant
S. Soi Lawyers for the Respondent