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Application by Geno, In re [2016] PGSC 81; SC1581 (31 August 2016)

SC1581

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]


SCOS No. 6 OF 2014


IN THE MATTER OF THE CONSTITUTION SECTION 223(2)(b)


AND

SECTION 10 (2)(b)(ii), (4) and (5), OF THE ORGANIC LAW ON THE GUARANTEE OF THE RIGHTS AND INDEPENDENCE OF CONSTITUTIONAL OFFICE-HOLDERS


AND

SECTION 4 (2) and (3) OF THE CONSTITUTIONAL OFFICE-HOLDERS RETIREMENT BENEFITS ACT 1986


APPLICATION BY SIR MAKENA GENO, KBE


Waigani: Kirriwom, J Kandakasi, Lenalia, Manuh &Collier, J

2016: 26 April & 31 August


CONSTITUTIONAL LAW - Interpretation of - Act of Parliament setting limits to retirement benefits to COH - Inconsistency between Act of Parliament and Constitution, section 223(2)(b) - Only Organic Law can provide conditions on retirement benefits of COH - No ordinary Act of Parliament can limit conditions of retirement of COH provided by Constitutional laws - Act is unconstitutional and invalid.


Cases cited:
Asiki v Zurenuoc, Provincial Administrator [2005] SC797)
Statutes
Chris Haiveta v Paias Wingti (No. 3) [1994] PNGLR 192
Constitutional Office-Holders Retirement Benefits Act 1986
Constitution of Papua New Guinea
In re Application of Makena Geno [2015] SC1455
In the Matter of Section 18(1) of the Constitution and In the Matter of Application by Anderson Agiru [2001] SC671
Mathias v Protect Security & Communications Ltd [2013] SC1300
Organic Law on The Guarantee of The Rights and Independence of Constitutional Office -Holders
PLAR No. 1 of 1980 [1980] PNGLR 326,
Re Public Prosecutor's Power to Request the Chief Justice to Appoint a Leadership Tribunal [2008] SC1011
SCR No. 3 of 1986 Reference by Simbu Provincial Executive [1987] PNGLR 151,
SCR No 1 of 1978; Re Ombudsman Commission Investigations of the Public Solicitor [1978] PNGLR 345
SCR No. 2 of 1992, Special reference by the Public Prosecutor [1992] PNGLR 336,

Counsel:
T M Tamuta, for the Applicant, Sir Makena Geno KBE
Faith Barton-Keene, for the Attorney General


31 August, 2016


1. BY THE COURT: In this application the Supreme Court is asked to consider a Constitutional issue of importance in respect of the rights and entitlements of Constitutional Office Holders (COHs) in Papua New Guinea. Pursuant to section 18 (1) of the Constitution the applicant, Sir Makena Geno, seeks declaratory relief from the Court in respect of the following questions:


(a) Whether 223(2)(b) of the Constitution, provides guarantees that at the end of their periods in office, Constitutional Office Holders are entitled to adequate and suitable pensions or other retirement benefits, or both, and that should there be any conditions – such conditions are to be laid down by an Organic Law.

(b) Whether the Organic Law on the Guarantee of the Rights and Independence of Constitutional Office-Holders (OLGRI) does not lay down any reasonable conditions particularly age limitations, on adequate and suitable pensions or other retirement benefits for Constitutional Office Holders, after their tenure of office.

(c) Whether 10(2)(b)(ii), (4) and (5) of the Organic Law on the Guarantees to Constitutional Office-Holders, provides guarantees to Constitutional Office-Holders (COH’s) at the end of their periods of office, life-time pension benefits and or payments, irrespective of age limitations.

(d) Whether Section 4(2) and (3) of the Constitutional Office Holders Benefit Act 1986 is unconstitutional, in that it is inconsistent with section 223(2)(b) of the Constitution.

(e) Whether section 4(2) and (3) of the Constitutional Office-Holders Benefits Act 1986, is unconstitutional in that it is inconsistent with section 10(2)(b)(ii), (4) and (5) of the Organic Law on the Guarantee of the Rights and Independence of Constitutional Office-Holders.

2. In re Application of Makena Geno [2015] SC1455 the Supreme Court ruled that Sir Makena had standing to bring the current application in the Court.


3. The Attorney-General has intervened in this proceeding, and has assumed the role of contradictor to the application.


Background


4. Helpfully the parties agree on salient background facts. These facts are substantially set out in the application and are as follows:


5. It is common ground that, if the Act is valid, it applies to Sir Makena. It is also common ground that had Sir Makena remained in the Public Service until the age of 50 years, he would have been entitled to a life time pension pursuant to section 4 (2) and (3) of the Act.


It is also a further common ground that had this disputed or controversial legislation not been in force at the time of the expiry of his term, Section 10 of the Organic Law would have come into play and if Sir Makena was not re-employed in another Public Service position of equal rank and salary, and The Public Service Commission decided that he was suitable for retirement on pension, he would have been accorded pension for the duration of his lifetime irrespective of his age.


Relevant legislation


6. Determination of this application depends on the proper interpretation of section 223 (2)(b) of the Constitution and section 10 of the Organic Law on the Guarantee of the Rights and Independence of Constitutional Office-holders (“OLGRI”).


7. Relevantly section 223 provides:

(1) Subject to this Constitution, Organic Laws shall make provisions for and in respect of the qualifications, appointment and terms and conditions of employment of constitutional office-holders.

(2) In particular, Organic Laws shall make provisions guaranteeing the rights and independence of constitutional officer-holders by, amongst other things –
  1. Specifying the grounds on which, and the procedures by which, they may be dismissed or removed from office, but only by, or in accordance with the recommendation of an independent and impartial tribunal; and
  2. Providing that at the end of their periods of office they are entitled, unless they have be dismissed from office, to suitable further employment by a government body, or to adequate and suitable pensions or other retirement benefits, or both, subject to such reasonable requirements and conditions (if any) as are laid down by an Organic Law.

(3) A constitutional office-holder may not be suspended, dismissed or removed from office during his term of office except in accordance with a Constitutional Law.

...

...


8. Section 10 of the OLGRI provides:


RIGHTS ON TERMINATION OF EMPLOYMENT.


(1) This section does not apply to–

(a) a constitutional office-holder who has been removed from office under this Law or any other Organic Law or the Constitution; or


(b) a constitutional office-holder who is a non-citizen; or

(c) a first appointee to the constitutional office who was immediately prior to his appointment an officer of the pre-Independence Public Service.


(2) Where an Act of the Parliament does not provide for an adequate and suitable pension or other retirement benefit for a constitutional office-holder, the Public Services Commission shall, where the term of office of the constitutional office-holder has expired and he has not been re-appointed to the same or an equivalent position, offer to him–


(a) where he was, immediately before his appointment to the constitutional office, an officer of the National Public Service, re-employment in an office in the National Public Service at least equivalent in status and type of work to the office he occupied prior to his appointment and, notwithstanding the salary payable to any other person occupying that office, a salary equivalent to that which he was receiving as a constitutional office-holder immediately before the expiration of his term of office; or

(b) where he was, immediately before his appointment a person, other than a person referred to in paragraph (a)–

(A) in salary to the salary paid to him as a constitutional office-holder; and

(B) in status and type of work to the position he occupied prior to his appointment as a constitutional office-holder; and

(ii) an annual retirement pension equivalent to 70 per centum of the salary payable from time to time to the occupant of the constitutional office that he occupied immediately before the expiration of his term of office.


(4) Where in this section an equivalent of any matter has to be determined, that equivalent shall be determined by the Public Services Commission who, for the purposes of carrying out its functions under this section, is not subject to control or direction by any person or body.

(5) Where the Public Services Commission, in relation to a person referred to in Subsection (2)(a), determines that no equivalent office or position is available for the re-employment of that person, it shall grant to that person an annual pension equivalent to 70 per centum of the salary payable from time to time to the occupant of the constitutional office that he occupied immediately before the expiration of his term of office.

(5) A person referred to in Subsection (2)(b) shall, within a reasonable time after receiving the offer referred to in that subsection, accept one or other of the alternatives offered to him and where he fails to do so, the Public Services Commission shall grant to him the pension referred to in Subsection (2)(b)(ii).


9. It is useful at this point to also note relevant terms of the Act being challenged by Sir Makena.


10. The preamble to the Act reads:


Being an Act to establish a scheme to provide an adequate and suitable retirement benefit for constitutional office-holders as envisaged in the Organic Law on the Guarantee of the Rights and Independence of Constitutional Office-Holders.


11. Section 2 provides:


APPLICATION

This Act applies to constitutional office-holders who, on or after the date of coming into operation of this Act, become eligible for the payment of an adequate and suitable pension or other retirement benefit under Section 10 of the Organic Law.


12. Section 4 provides:


RETIREMENT BENEFITS FOR PERSONS WHO ARE NOT CONTRIBUTORS TO OTHER FUNDS.


(1) Subject to this section, a constitutional office-holder to whom Section 3 does not apply, is entitled to a pension equivalent to 75% of the salary payable from time to time to the occupant of the constitutional office that he occupied immediately before the expiration of his period of office.

(2) Subject to Subsection (3), a pension under Subsection (1) is payable annually from the date of expiration of the term of office for the period specified in column 2 below related to the number of years of tenure of the constitutional office-holder in the constitutional office set out in column 1 below–

Column 1
Years of tenure
Column 2
No. of years from the date of operation of the term of office.
(a) not exceeding 3 years
3 years
(b) exceeding 3 years but not exceeding 6 years
7 years
(c) exceeding 6 years but not exceeding 9 years
10 years
(d) exceeding 9 years
12 years

(3) Where the term of office in the constitutional office of a constitutional office-holder to whom this section applies–

(a) expired on his reaching the age of 50 years or above; and

(b) exceeded six years,

he shall be eligible for a pension as specified in Subsection (1) for his life time.


Submissions of the parties


13. Both parties to this proceeding were represented by Counsel. Their respective cases are straight forward and clear.


14. The case of Sir Makena is, in summary :

15. The position of the Auditor-General can be summarised as follows:



Consideration


16. Counsel for both parties advanced strong arguments in support of their respective positions. In our view, however, the following propositions are clear.


17. First, both the Constitution and the OLGRI recognise the fundamental principle that those who give service to the public as Constitutional Office Holders deserve recognition and protection for roles which simultaneously can be more restrictive and less remunerative than similar roles in the private sector. Indeed, the preamble to the OLGRI provides:


Being an Organic Law to implement Section 223(2) (general provision for constitutional office-holders) of the Constitution by providing guarantees as to the rights and independence of constitutional office-holders.

(emphasis added)


18. In this light we also note Chapter 14 of the Constitutional Planning Committee Report 1974 which lists COHs including the Auditor-General and states:

5. The persons appointed to all of these offices must be of undoubted integrity if they are to fulfil the trust that we believe should be placed in them. They, in turn, should be protected from external pressure, although not in such a way that they become remote from the society in which they work. A balance must be struck between the need for them to be able to perform their duties fearlessly and without hindrance, and the need to ensure that they carry out their work honestly and with due regard for the people of Papua New Guinea.


19. Second, section 223 (2) of the Constitution and section 10 of the OLGRI specifically provide for protection of entitlements of COHs. It is important to closely and carefully examine the terms of these provisions.


20. Section 223 (1) provides that, subject to the Constitution, Organic Laws shall make provision for and in respect of, inter alia, conditions of employment of COHs. More particularly, section 223 (2)(b) specifically states that Organic Laws shall make provision guaranteeing the rights and independence of constitutional office-holders by providing that at the end of their periods of office they are entitled, unless they have been dismissed from office, to suitable further employment by a governmental body, or to adequate and suitable pensions or other retirement benefits, or both, subject to such reasonable requirements and conditions (if any) as are laid down by an Organic Law.

(emphasis added)


21. Accordingly – section 223 specifically provides that COHs will receive adequate and suitable pensions. The section also contemplates that there could be reasonable requirements and conditions attached to these pensions prescribed by an Organic Law. Indeed, this is precisely what has happened in the form of the OLGRI.


22. Next, section 10 of the OLGRI prescribes a regime whereby, in circumstances “where an Act of the Parliament does not provide for an adequate and suitable pension or other retirement benefit for a constitutional office-holder”, the Public Service Commissioner is required to offer COHs re-employment or retirement benefits in accordance with terms of section 10. A number of points can be made about the provisions of section 10:


23. However a critical point of contention between the parties in respect of section 10 (2) lies in the proper interpretation of the introductory words of the subsection, namely:


Where an Act of the Parliament does not provide for an adequate and suitable pension or other retirement benefit for a constitutional office-holder....


24. Do these words provide the Constitutional foundation for the enactment of the Act, as submitted by the Attorney-General?


25. It is feasible that these introductory words to section 10 (2) do contemplate modification of the “default” position established by section 10 by a subsequent statute. We note, for example, that:


24. It is, we believe, desirable that the salary and conditions of all people in public employment in Papua New Guinea, including constitutional office-holders, should be set by the government. Those benefits should be appropriate to the circumstances of Papua New Guinea, and in accordance with the National Goals and Directive Principles. In time of trouble, the government should have the power to reduce all salaries and conditions according to law. Or there may be times when the National Parliament believes that salaries and conditions generally should be held down or even reduced as a matter of principle. But the salary, conditions and other benefits attached to each constitutional office should be reduced during a particular incumbent's tenure of office only if the reduction he suffers is common to all constitutional office-holders.


26. There are, however, a number of serious flaws in this proposition.


27. First, while section 10 (2) of the OLGRI refers in its introductory words to “an Act of Parliament” “providing” for an adequate and suitable pension, it is an unacceptable stretch for us to conclude that:


The question in the present case is, whether provision for withdrawal of powers of provincial governments may be made by an Act of Parliament? The answer to this inquiry is clearly negative. The Constitution, s 187E itself has made provision for supervisory powers of the NEC over the exercise of powers and functions of provincial governments. The Constitution has not authorized an Act of Parliament to make provisions for those powers. It follows from this that the New Organic Law is not authorized to enact Part III Div. 8 according to s 12 (3) (a) of the Constitution.


28. Similarly in this case the Constitution has stipulated that Organic Laws should make provision guaranteeing the rights and independence of COHs, including pension entitlements. The Constitution has not authorised ordinary statutes to make such provision.


29. Second, we see nothing in the deliberations of the Constitutional Planning Committee set out earlier in this judgment, supporting a reading of section 10 (2) of the OLGRI to confer constitutional validity on an ordinary statute amending Constitutionally guaranteed rights of COHs set out in an Organic Law. Certainly the comments of the Committee predated the OLGRI, whereby Parliament prescribed pension rights of COHs. Further, and in any event, any comments of the Committee which could be read to sanction the Act modifying benefits conferred by the Constitution and the OLGRI must be read subject to the provisions of the Constitution, in particular section 12 (2).


30. Third, we note the preamble to the Act which provides:


Being an Act to establish a scheme to provide an adequate and suitable retirement benefit for constitutional office-holders as envisaged in the Organic Law on the Guarantee of the Rights and Independence of Constitutional Office-Holders.


31. While of academic interest, the preamble does not confer constitutional validity where none exists.


32. In this respect, we note that whether the Act establishes an “adequate and suitable” pension scheme provided for by an Organic Law is dubious. Counsel for the Attorney-General argued that the scheme created by the Act was introduced in the interests of good public policy and good governance, and invited the Court to treat the issue as one where the Court should leave the adequacy and suitability of the scheme to the legislature. We have a number of difficulties with this approach. In particular:


33. Fourth, we note the proper approach to constitutional interpretation explained in Re Public Prosecutor's Power to Request the Chief Justice to Appoint a Leadership Tribunal [2008] SC1011 in the following terms:


22. The principles of constitutional interpretation are well established in this jurisdiction. In discharging its function of interpreting constitutional laws, the Court must give paramount consideration to the dispensation of justice: Constitution, s 158(2). In seeking to do justice, it must give a fair and liberal meaning to the constitutional provision in question, to ensure that the legislature’s intention, spirit and purpose expressed in the provision is achieved. The Court must adopt an expansive and purposive approach rather than a narrow and restrictive: PLAR No. 1 of 1980 [1980] PNGLR 326, SCR No. 2 of 1992, Special reference by the Public Prosecutor [1992] PNGLR 336, SCR No. 3 of 1986 Reference by Simbu Provincial Executive [1987] PNGLR 151, Chris Haiveta v Paias Wingti (No. 3) [1994] PNGLR 192.


(cf Mathias v Protect Security & Communications Ltd [2013] SC1300 at [12], Asiki v Zurenuoc, Provincial Administrator [2005] SC797).


34. In the case before us Sir Makena was retrenched from the Public Service five months before his pension entitlement would have vested for life. While there is no material before the Court to support a finding that the decision to retrench him was made deliberately with the potential detriment to his pension entitlements in mind, the consequence of the application of the Act to him has been a significant diminution of his pension position which previously existed under the Constitution and the OLGRI. No evidence was led, nor facts agreed, in respect of the number of COHs who have been adversely affected by the operation of the Act. We consider, however, that the injustice of the circumstances flowing from the application of the Act is relevant to the consideration of the issues before the Court.


35. Further, although the Act purports to establish a scheme for retirement benefits for COHs, the only possible authority for this position can be found in the introductory words to section 10 (2) – that is words which are expressed in the negative (namely “Where an Act of the Parliament does not provide for an adequate and suitable pension or other retirement benefit for a constitutional office-holder”). In giving paramount consideration to the dispensation of justice in accordance with section 158 (2) of the Constitution in considering the validity of the Act, we note the importance of upholding the principles of Constitutional amendment as provided in sections 12 and 13 of the Constitution. In our view there is no place for ambiguity in respect of alterations to either the Constitution or Organic Laws.


Conclusion


36. It follows from these reasons that, under section 223 (2) of the Constitution, COHs are entitled to adequate and suitable pensions or other retirement benefits, or both. Any conditions to be attached to such benefits can only be prescribed by an Organic Law. Section 10 of the OLGRI creates a scheme for adequate and suitable pensions in accordance with section 223 (2) of the Constitution. The OLGRI does not however impose any reasonable conditions, particularly age limitations, on adequate and suitable pensions or other retirement benefits for COHs after their tenure of office. The existence of the Act is certainly not a “reasonable condition”. The Act can only do better than OLGRI in the spirit of the Constitutional directive in section 223(3) and not the reverse or the opposite.


37. In our view the Act is unconstitutional as a whole.


38. Thus, our answers to the specific questions referred for the opinion of the Court are:

Question 1: Whether 223(2)(b) of the Constitution, provides guarantees that at the end of their periods in office, Constitutional Office Holders are entitled to adequate and suitable pensions or other retirement benefits, or both, and that should there be any conditions – such conditions are to be laid down by an Organic Law?.

Answer: YES.


Question 2: Whether the Organic Law on the Guarantee of the Rights and Independence of Constitutional Office-Holders (OLGRI) does lay down any reasonable conditions particularly age limitations, on adequate and suitable pensions or other retirement benefits for Constitutional Office Holders, after their tenure of office?.

Answer: NO.


Question 3: Whether 10(2)(b)(ii), (4) and (5) of the Organic Law on the Guarantees to Constitutional Office-Holders, provides guarantees to Constitutional Office-Holders (COH’s) at the end of their periods of office, life-time pension benefits and or payments, irrespective of age limitations?.

Answer: Pension for life time irrespective of age.


Question 4: Whether Section 4(2) and (3) of the Constitutional Office Holders Benefit Act 1986 is unconstitutional, in that it is inconsistent with section 223(2)(b) of the Constitution?.

Answer: It is unconstitutional.


Question 5: Whether section 4(2) and (3) of the Constitutional Office-Holders Benefits Act 1986, is unconstitutional in that it is inconsistent with section 10(2)(b)(ii), (4) and (5) of the Organic Law on the Guarantee of the Rights and Independence of Constitutional Office-Holders.

Answer: It is unconstitutional.

39. The Court therefore declares that:


The Constitutional Office Holders Benefit Act 1986 is unconstitutional, being inconsistent with section 223(2)(b) of the Constitution.


Kamuta's Legal Services : Lawyer for the Applicant
Solicitor General : Lawyer for the Contradictor


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